Uranium Energy Corp. (NYSE American: UEC) has been awarded by the US Department of Energy (DOE) – National Nuclear Security Administration (NNSA) to supply 300,000 pounds of uranium concentrates at $59.50/lb. for a total of $17.85 million. The award is in response to the NNSA’s request for proposals to establish its strategic national Uranium Reserve program.
The Uranium Reserve was originally designed as a 10-year, $1.5 billion, plan to help revitalize the US uranium and conversion industry. The award under the RFP is part of the initial $75 million authorized by Congress in 2020 to advance the US government’s goal of supporting America’s nuclear fuel supply chain and capabilities.
The delivery will be made by book transfer to NNSA in the first quarter of 2023, with US origin uranium currently held in the accounts of UEC.
“We are honoured and delighted to be selected as a domestic producer for this purchase of uranium concentrates by the NNSA and look forward to the further expansion of the Uranium Reserve program in the coming years,” UEC CEO Amir Adnani said in a news release.
He noted that the US nuclear reactor fleet, which provides about 20% of America’s electricity production and over half of its clean energy, imports nearly 60% of its current uranium requirements from Russia, Kazakhstan and Uzbekistan.
“The US overdependence on these imports creates untenable energy and national security risks that need immediate high-priority attention from industry and the federal government,” Adnani said.
“The Uranium Reserve is an important step to help rebuild America’s nuclear fuel capabilities, not only as a backup to mitigate potential supply disruptions, but also to revitalize US capability to fuel the existing reactor fleet as well as new advanced reactors. We are looking forward to the continued improvement in the nuclear fuel markets and further expanding UEC’s production capabilities to help supply America’s uranium needs,” Spencer Abraham, UEC chairman and former US Energy Secretary, added.
UEC is currently the largest diversified uranium company in North America, with in-situ recovery (ISR) mining uranium projects in the US and high-grade conventional projects in Canada. It has two production-ready ISR hub-and-spoke platforms in southern Texas and Wyoming, both anchored by fully operational central processing plants and served by seven ISR uranium projects.
The company is closing in on initial production at its Texas platform following approval last month of an amended radioactive material licence (RML) for the Hobson central processing plant, which would see its capacity rise by four-fold to 4 million pounds of U3O8 (uranium oxide) annually, distinguishing the Hobson plant as having the largest licensed capacity in Texas and the second largest in the country.
Shares of UEC rose 5.4% on the NYSE by 11:20 a.m. ET Wednesday, giving the company a market capitalization of $1.35 billion.