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UEC expands licensed capacity at Hobson plant; nears initial production in Texas

Drilling in South Texas. Credit: UEC

Uranium Energy (NYSE American: UEC) announced Thursday that the Texas Commission on Environmental Quality (TCEQ) has approved its submission for a renewed and expanded radioactive material licence (RML) for the Hobson central processing plant.

The Hobson plant serves as the anchor of UEC’s hub-and-spoke in-situ recovery (ISR) production platform in South Texas, and will be used to process uranium loaded resin recovered from multiple satellite projects including Palangana and Burke Hollow.

The amended RML from the TCEQ would increase Hobson’s licensed production capacity by four-fold to 4 million pounds of U3O8 annually, distinguishing the plant as having the largest licensed capacity in Texas and the second largest in the US.

“We continue to execute on our strategy of growing UEC’s leadership as a pure-play, un-hedged uranium supplier in politically stable jurisdictions. Today’s achievement increases and advances our production capabilities in South Texas as we work towards the company’s return to production,” UEC CEO Amir Adnani said in a media statement.

South Texas is one of two production-ready ISR hub and spoke platforms held by UEC, the other being Wyoming. Together, the two platforms contain 12 satellite projects, seven of which are fully licensed, with over 71 million lb. of measured and indicated resources and 17 million lb. of inferred resources in place.

According to the August 2022 S-K 1300 technical report, the South Texas projects are estimated to contain a combined measured and indicated resource of 9.12 million lb. (4.74 million tonnes grading 0.10% U3O8) and 9.92 million lb. inferred (5.47 million tonnes grading 0.12% U3O8).

Of the three South Texas properties explored by UEC, the most recent drilling was done at Burke Hollow from 2019-2021, where the company has completed baseline sampling at the first production area and successfully conducted the production area pump test. This brings UEC one step closer to initiating production at Burke Hollow, which it describes as the newest and largest ISR wellfield being developed in the US.

In a separate announcement, UEC has also completed its acquisition of the Roughrider project in Saskatchewan from a subsidiary of Rio Tinto. In the press release, Adnani said that the Roughrider project “will anchor our Canadian high-grade conventional business and allow us to unlock value from the portfolio recently acquired from UEX.”

The development-stage Roughrider project has a non-current, historic resource of 58 million lb. at an average grade of 4.73% U3O8 in the eastern Athabasca Basin region, where 10% of global uranium production was sourced in 2021.

As previously announced in October, total consideration paid for the uranium development asset is C$150 million ($112.5m).