What changed in this filing

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Item 1. Business

2023-09-29 compared with 2022-09-29 · 206 added, 155 removed, 265 unchanged (58% of the section changed)

Uranium Energy Corp.

NYSE AMERICAN) is a fast growing, uranium mining company listed on the NYSE American.

is a fast growing, uranium mining company listed on the NYSE American.

UEC is working towards fueling the global demand for carbon-free nuclear energy, a key solution to climate change, and energy source for the low-carbon future.

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(“AUC”).

On January 31, 2018, we incorporated a wholly-owned subsidiary, UEC Resources (SK) Corp., under the laws of the Province of Saskatchewan, Canada. On December 17, 2021, we acquired a 100% interest in Uranium One Americas, Inc.

(“U1A”) (now UEC Wyoming Corp.).

Our principal office is located at 1030 West Georgia Street, Suite 1830, Vancouver, British Columbia, Canada, V6E 2Y3.

On January 31, 2018, we incorporated a wholly-owned subsidiary, UEC Resources (SK) Corp.

(“UEC SK”), under the laws of the Province of Saskatchewan, Canada. On December 17, 2021, we acquired a 100% interest in Uranium One Americas, Inc.

(“U1A”) (now UEC Wyoming Corp.). On August 19, 2022, we, through UEC 2022 Acquisition Co.

(“UEC Acquisition Co.”) (now UEX Corporation), acquired all of the issued and outstanding common shares of UEX Corporation (“UEX”), which we did not already own, by way of a statutory plan of arrangement (the “Arrangement”) under the 

Canada Business Corporations Act .

As part of the final steps of the Arrangement, UEC Acquisition Co.

and UEX amalgamated to continue as one corporation under the name UEX Corporation.

UEX Corporation holds a development stage uranium property portfolio in Saskatchewan, Canada, and Nunavut, Canada.

On October 14, 2022, we acquired, through UEC SK, Roughrider Mineral Holdings Inc., a Saskatchewan corporation and wholly-owned subsidiary of Rio Tinto Fer Et Titane Inc., which, in turn, owns all of the issued and outstanding shares of Roughrider Mineral Assets Inc., also a Saskatchewan corporation, that holds certain mineral leases totaling approximately 598 hectares in northern Saskatchewan that is commonly referred to as the “Roughrider Project”

located in the Athabasca Basin in Saskatchewan, Canada.

Our principal executive office (U.S.

corporate headquarters) is located at 500 North Shoreline, Ste.

800, Corpus Christi, Texas, 78401, and our administrative office (Canadian corporate headquarters) is located at 1188 West Georgia Street, Suite 1830, Vancouver, British Columbia, Canada, V6E 4A2.

General Business

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We do not expect, however, to utilize ISR mining for all of our uranium projects in which case we would expect to rely on conventional open pit and/or underground mining techniques. 

We have one uranium mine located in the State of Texas, our Palangana Mine, which utilizes ISR mining and commenced extraction of uranium oxide (“U 3 O 8 ”), or yellowcake, in November 2010.

We have one uranium mine located in the State of Texas, our Palangana Mine, which utilizes ISR mining and commenced extraction of U 3 O 8 , or yellowcake, in November 2010.

We have one uranium processing facility located in the State of Texas, our Hobson Processing Facility, which processes material from our ISR Mines into drums of U 3 O 8 , our only sales product and source of revenue, for shipping to a third-party storage and sales facility. 

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As at July 31, 2023, we had no uranium supply or “off-take”

agreements in place.

agreements in place. Future sales of U 3 O 8 are therefore expected to generally occur through the uranium spot market, with any fluctuations in the market price continuing to have a direct impact on our revenues and cash flows.

Our fully-licensed and 100%-owned Hobson Processing Facility forms the basis for our regional operating strategy in the State of Texas, specifically in the South Texas Uranium Belt, where we utilize ISR mining.

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strategy whereby the Hobson Processing Facility acts as the central processing site (the “hub”) for our Palangana Mine and future satellite uranium mining activities, such as our Burke Hollow and Goliad Projects, located within the South Texas Uranium Belt (the “spokes”).

The Hobson Processing Facility has a physical capacity to process uranium-loaded resins up to a total of two million pounds of U 3 O 8 annually and is licensed to process up to one million pounds of U 3 O 8 annually.

The Hobson Processing Facility has a physical capacity to process uranium-loaded resins up to a total of two million pounds of U 3 O 8 annually and is licensed to process up to four million pounds of U 3 O 8 annually.

With the acquisition of U1A in Fiscal 2022, the Irigaray Processing Facility forms the focus of our regional operating strategy in the Powder River and Great Divide uranium districts in the state of Wyoming.

The Irigaray plant has a licensed capacity of 2.5 million pounds of U 3 O 8  per year, with the potential to process uranium from eleven satellite ISR projects in the state, including four fully permitted projects.

Recently, we acquired a substantial portfolio of projects in Canada, with the purchase of UEX and the Roughrider Project from a subsidiary of Rio Tinto plc (“Rio Tinto”).

The UEX portfolio consists of a mix of uranium deposits, primarily focused on the Athabasca Basin uranium district in Saskatchewan, Canada.

This includes interests in the Shea Creek, Christie Lake, Horseshoe Raven, Millennium and Wheeler River projects.

In addition to advancing its uranium development projects through its ownership interest in JCU (Canada) Exploration Company, Limited, UEX was advancing several other uranium deposits in the Athabasca Basin which include the Paul Bay, Ken Pen and Ōrora deposits at the Christie Lake Project, the Kianna, Anne, Colette and 58B deposits at its currently 49.1%-owned Shea Creek Project, and the Horseshoe and Raven deposits located on its 100%-owned Horseshoe-Raven Project.

The Roughrider Project is an exploration stage asset, having been advanced by Rio Tinto over a decade of work.

The acquisition brought in an exploration stage, high-grade, conventional asset into UEC’s portfolio that, along with the UEX acquisition, begins to develop a critical mass of 100% owned resources in the Athabasca Basin to accelerate extraction and/or production plans.

The two transactions provide a portfolio of medium to long term, high-grade, conventional projects that complement our nearer term, U.S.

In August 2023, we acquired a portfolio of exploration-stage projects in the Athabasca Basin, Saskatchewan, Canada, for CAD$1.5 million from Rio Tinto Exploration Canada Inc., a subsidiary of Rio Tinto, whereby we acquired a 60% equity stake in the Henday Lake joint venture, 100% of the Milliken project and a 50% equity stake in the Carswell joint venture project. 

With this transaction, we added an additional 44,444 acres of prospective ground in the Athabasca Basin to our existing portfolio.

As at July 31, 2023, we hold certain mineral rights in various stages in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in Canada and in the Republic of Paraguay, many of which are located in historically successful mining areas and have been the subject of past exploration and pre-extraction activities by other mining companies.

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Despite our focus on low cost ISR mining with its low capital requirements, we saw a unique opportunity to purchase drummed uranium at prevailing spot prices which are below most global industry mining costs.

Hence, we established a physical uranium portfolio (the “Physical Uranium Program”) and, as of the date of this Annual Report, have entered into agreements to purchase 5.5 million pounds of U.S.

warehoused uranium of which various deliveries have, or are scheduled to occur, in March 2022 to December 2025 at the ConverDyn conversion facility located in Metropolis, Illinois, at a volume weighted average price of approximately $37.30 per pound.

Hence, we established a physical uranium portfolio (the “Physical Uranium Program”) and, as of July 31, 2023, we had entered into agreements to purchase 1,695,000 pounds of U.S.

warehoused uranium from Fiscal 2024 to Fiscal 2026 at the ConverDyn conversion facility located in Metropolis, Illinois, at a volume weighted average price of approximately $42.78 per pound.

During Fiscal 2023, we generated revenue of $164.0 million from sales of 3,150,000 pounds of uranium, which included $17.85 million from sales of 300,000 pounds of U.S.

origin uranium concentrates to the U.S.

Department of Energy.

Our Physical Uranium Program will support three objectives for our Company:

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origin specific opportunity is the Company’s plan to participate in supplying the Uranium Reserve, as outlined in the Nuclear Fuel Working Group report published by the U.S.

Department of Energy (the “UR”). 

During the year ended July 31, 2022 (“Fiscal 2022”), we made significant advancements in various aspects of our operations, including:

we completed the acquisition of Uranium One Americas, Inc.

(“U1A”) on December 17, 2021, pursuant to a Share Purchase Agreement dated November 8, 2021 (the “U1A Acquisition”).

The acquisition of U1A (now UEC Wyoming Corp.) represented a unique opportunity to acquire an advanced asset base from a subsidiary of Uranium One Inc., one of the global leaders in the nuclear industry, and to double the Company’s production capacity in three key categories:

total number of permitted U.S.

ISR projects;

and processing infrastructure;

we repaid the remaining $10 million balance of our secured credit facility on January 31, 2022 and are now completely debt free;

we completed and filed technical report summaries (each, a “TRS report”) in accordance with Item 1302 of Regulation S-K (the “S-K 1300”) disclosing mineral resources for each of our Reno Creek, Wyoming ISR Hub and Spoke, Anderson and Yuty Projects on February 8, 2022, April 4, 2022, July 12, 2022 and July 19, 2022, respectively.

we launched our environmental, social and governance (“ESG”) program and achieved several key milestones;

we completed installation of the monitor well ring at Production Area 1 of our Burke Hollow Project;

the Company’s shares remain included on the Russell 2000 and Russell 3000 indexes;

we secured an additional 1,816,000 pounds of U.S.

warehoused uranium, expanding our Physical Uranium Program to 5.5 million pounds U 3 O 8 , with delivery dates out to December 2025 at a volume weighted average price of approximately $37.30 per pound.

Uranium Industry Background

Since the ratification of the Paris Agreement;

a legally binding international treaty on climate change that was adopted by 196 parties in Paris on December 15, 2015 and entered into on November 6, 2016;

the global community has embarked on a challenging but necessary journey to decarbonize the global energy mix in order to limit global warming to well below a two degree scenario compared to pre-industrial levels.

The Paris Agreement reaffirms that developed countries should take the lead in providing financial assistance to countries that are less endowed and more vulnerable, while for the first time also encouraging voluntary contributions by other parties.

Climate finance is needed for mitigation, because large-scale investments are required to significantly reduce emissions.

According to the International Energy Agency (“IEA”), in order to meet net-zero by 2050 global goals, the global community will need to halt sales of new internal combustion engine passenger cars by 2035, and phase out all unabated coal and oil power plants by 2040.

Nuclear energy will play a key role in the future energy mix, due to its consistency and reliability, which other carbon-free energy sources are unable to provide in their current form.

According to research conducted by Harvard University, the Massachusetts Institute of Technology and the Organization for Economic Cooperation and Development, powering the grid with 100% renewables is not the most affordable path towards creating a carbon-free grid.

Instead, this research has concluded that the best way to achieve net-zero emissions from the grid is to combine intermittent low-carbon sources, such as wind and solar, with one or more “firm”

zero-carbon sources, such as nuclear energy (source:

Nuclear Energy:

Essential Clean Energy For a Low Carbon Economy, Nuclear Energy Institute).

The need for safe, reliable, pollution-free electricity continues to rise as the world’s population grows to new record levels.

The world’s population of 8 billion in 2022 is projected to increase over 1% per year to a population near 8.6 billion by 2030.

The need for more electricity and efforts to reach global climate change goals with clean energy sources are increasingly important drivers for the projected long-term increase in nuclear power and uranium demand.

There has been a new and vibrant interest in nuclear power as more countries realize that nuclear power is indispensable for decarbonizing the globe, stabilizing electrical grids and supplementing intermittent power sources.

Elevated interest in nuclear power has also been one of the results of the Russian invasion of Ukraine with Russia cutting off gas supplies to Western Europe.

The lack of alternative energy sources has exposed the risks to national security for these countries as a result of their Russian over dependency, and indigenous nuclear power is proving to be a good option to mitigate that threat.

The world’s current operating fleet of nuclear power plants, in addition to the global growth in new reactors under construction and those planned, is testimony to the confidence in nuclear power to provide safe, highly reliable, economic and carbon free electricity as part of an overall energy supply mix.

The World Nuclear Association (“WNA”) reported:

“nuclear reactors generated a total of 2653 TWh in 2021, up 100 TWh from 2553 TWh in 2020.

This is the third highest ever total for global generation from nuclear…

and reestablishes the upward trend in nuclear generation seen since 2012.”

The IEA World Energy Outlook in 2021 projected “electricity generation growth of between 75% and 116% over 2020-2050 across its three main scenarios.

In the report’s Sustainable Development Scenario, “nuclear generation increases by 2022 TWh (75%) over the same period, requiring capacity growth of about 254 GW, or 61%.”

As of July 31, 2022, the IAEA Power Reactor Information System shows more than 6 GWe of new nuclear capacity has been added in 2022 while 1.85 GWe has been retired, and construction has begun on four new reactors this year with a total capacity of 4.6 GWe. 

As of July 2022, WNA data showed a total of 443 nuclear reactors operable in 32 countries, with a combined capacity of about 394 GWe.

Their data also showed 59 new reactors under construction, 89 reactors planned or on order and another 340 proposed.

While most of the growth in nuclear power is coming from countries like China and Russia, there is also notable growth in other countries, including India and the United Arab Emirates.

Some of these countries have embarked on sovereign-backed uranium acquisition programs, building inventory stockpiles for their future requirements.

This also includes substantial long-term contracting with western suppliers and taking controlling interests in individual mines.

In addition, Russia, China and South Korea are aggressively pursuing programs to sell their reactors around the globe.

In many cases the sales agreements contain turnkey provisions, including uranium supply as a component of the reactor package that will require far more uranium than they currently produce.

As such, they will need to carve out large supply sources in the coming years.

While global generation from nuclear power has eclipsed pre-Fukushima levels, Japan restarts have been slower than expected.

As of August 1, 2022, a total of 26 reactors had applied for restart, including ten reactors that have restarted.

More restarts are expected as Japan completes additional safety programs and ramps back up towards a policy goal of 20 to 22 percent of their total electrical generation from nuclear power by 2030.

Japanese Prime Minister Fumio Kishida recently said he has asked for as many as nine nuclear reactors to be online this coming winter to help offset expected power shortages.

The United States has the world’s largest nuclear fleet and produces about 30% of the world’s nuclear generation.

Department of Energy (“DOE”) Energy Information Administration reported U.S.

nuclear plants continued to be the nation’s most reliable energy source with an average capacity factor of more than 93 percent this past year.

For context, capacity factors for other sources of energy were natural gas (54%), coal (49%), wind (35%) and solar (25%).

In 2021, nuclear plants provided more than half of U.S carbon free energy and about 20% of its total generation.

As of August 2022, the operating U.S.

reactor fleet stands at 92 reactors, with two new commercial reactors under construction (Vogtle 3 and 4 in Georgia).

While some U.S.

reactors have been shut down prematurely, the overall generating capacity remains strong as a result of plant reactor upgrade programs and license extensions.

In terms of uranium demand, the U.S.

nuclear fleet is the world’s largest uranium consumer and has averaged about 46 million pounds of uranium a year over the past decade.

Regarding uranium supply, the WNA’s 2021 Fuel Report noted:

“regardless of the particular scenario in the long term, the industry needs to at least double its development pipeline of new projects by 2040”.

And they also noted:

“Over the longer term, the Reference Scenario shows demand for uranium growing by 3.1% compound average growth rate.”

The 2021 report also noted that in all scenarios “world reactor requirements for uranium in 2040 are approximately 12% higher”

than in the previous 2019 report.

World base case uranium demand is forecasted to be about 204 million pounds U 3 O 8 in 2022, exceeding the 134 million pounds of projected production by about 70 million pounds (source:

UxC 2022 Q2 UMO).

While the difference between primary production and reactor demand is currently being filled with secondary market supplies, this is not a sustainable long-term supply source.

Projections from UxC 2022 Q2 MO show secondary market supplies dropping to less than 24 million pounds per year over the next 4 years.

uranium mining industry was formerly the world’s largest producer but is now producing virtually no uranium.

The United States has become almost entirely dependent on foreign supply, with about 60% being imported from State Owned Enterprises (“SOE”) in Russia and other former Soviet Union (“FSU”) countries, including Kazakhstan and Uzbekistan.

However, actions taken by the U.S.

federal government over the past couple of years have culminated in a foundation for the industry to recover.

Most notably, the prior administration established the U.S.

Nuclear Fuel Working Group (“NFWG”) comprised of various government agencies “to develop recommendations for reviving and expanding domestic nuclear fuel production”.

The NFWG recommendations were released in a report entitled, “Restoring America’s Competitive Nuclear Energy Advantage”.

The report broadly advocates for increased U.S.

leadership in nuclear energy, both at home and abroad, with a focus on U.S.

national security objectives that includes lessening dependence on SOE supply.

Uranium mining is the starting point in the strategy with a program to purchase 17 to 19 million pounds of U.S.

uranium for a strategic Uranium Reserve.

That Administration’s policy outlined a 10-year, $1.5 billion UR program. 

In 2020, the U.S.

Congress approved $75 million for initial funding for fiscal year 2021.

In July of 2022, the DOE National Nuclear Security Administration (“NNSA”) issued Requests for Proposals (“RFP”) to the U.S.

producers that had produced uranium since 2009, for an initial quantity of up to 1 million pounds of domestic uranium.

Results of the NNSA RFP are expected to be known this year at the end of September.

The global uranium market suffered a long downturn after peaking in 2007 at $138 per pound U 3 O 8 that was followed by a rebound and then a subsequent drop of about 75% from early 2011 into the 2016 low of $17.75 per pound. 

However, the market has been showing a slow recovery since, and was up by approximately 175% going into August 2022 from the 2016 low.

Global fundamentals are in process of rebalancing the uranium market and driving an improvement in the price of uranium.

Significant purchasing by producers to fill long-term supply contracts, as well as financial entities buying significant quantities of uranium for appreciation purposes, have all been contributing to the upward movement in uranium prices.

Other factors that have affected global production include production shutdowns or reductions as a result of the COVID-19 pandemic that removed almost 20 million pounds of production in 2020 that will not be made up.

While most of the impacted mines have or are in the process of ramping back up operations, there are still lingering factors affecting production.

In early August, the world’s largest producer (Kazatomprom) announced the pandemic “disrupted the overall production supply chain in 2021, resulting in a shortage of certain production materials, such as reagents and piping which led to a shift in the commissioning schedule for new wellfields.”

This year the nuclear fuel markets have experienced a fundamental change after Russia invaded Ukraine with western utilities beginning an almost immediate shift away from Russian supply.

Industry consultant “TradeTech”

reported that the new trend “is foreshadowing a potential bifurcation in the nuclear fuel markets.”

While the markets are still sorting out what all the impacts might be, one of the more likely postulated outcomes is a western market that will not receive much if any supply from suppliers in the Commonwealth of Independent States (the “CIS”).

The CIS includes Russia, Kazakhstan and Uzbekistan that together supplied about 60% of U.S.

uranium requirements in 2021, a new record high from these FSU countries.

Most western utilities with suppliers in the CIS are already pursing increased diversification strategies with supply options from the U.S and its allies that are in more stable jurisdictions.

While sanctions banning some Russian energy sources have been implemented in the U.S., there has not been a ban placed on Russian uranium to date, although legislation has been introduced to do so.

Transportation issues are also impacting uranium supply with routes through Russian ports or supply on Russian vessels running into legal constraints.

While alternate routes are being worked on (i.e.

the Caspian Sea), to date these routes are not fully functioning. 

As a result, there has been additional buying on the spot market by the impacted suppliers.

Ultimately, the forces of supply and demand will dictate the uranium market’s future direction.

While the global market has clearly improved since the 2016 low, we still expect several major drivers to further bolster prices.

Higher priced contracts that have supported high production costs have largely rolled out of producer and utility supply portfolios.

These higher priced contracts are not expected to be replaceable with current market prices still below levels needed to sustain profitable mining operations for many western producers.

Several projects that have produced significant quantities of uranium for many years have been shut down as a result of resource depletion and the WNA notes:

“more mines are expected to close over the next decade”.

SOE supply is also likely to be reduced in the U.S.

and Western European markets with the fallout from Russia’s invasion of Ukraine that has exposed serious national security risks to those countries with overdependence on Russian energy sources.

Global supply demand numbers are showing a cumulative structural supply deficit of approximately 440 M lbs in 2022 through 2032, despite several new production projects expected to come online.

The supply dynamics in western countries are still unfolding, as western utilities look to explore and secure alternative supply options in more stable jurisdictions.

On the demand side of the equation, further upside market pressure also appears likely to evolve as utilities return to a longer-term contracting cycle to replace expiring contracts.

Utilities will most likely need to do a lot more contracting in upcoming years with more than 50% of their requirements showing uncommitted by 2029.

That factor and the growing recognition that nuclear power will need to be part of the solution to meet climate change objectives underpin a solid growth story for long term uranium producers.

As these and other market forces unfold, the secondary market supply is forecasted to become a less important driver, paving the way for a more production cost driven market.

Lead times for new production typically range from seven to 10 years or longer.

The market appears to be within the time frames required for investment to bring new supply online to meet those lead times.

While some producers have announced restart plans, prices are not yet at levels that incentivize future production for many producers, increasing the probability of the potential for less supply than the market is currently pricing in.

Department of Energy. 

During Fiscal 2023, we made significant advancements in various aspects of our operations, including:

we completed and filed TRS reports in accordance with S-K 1300 disclosing mineral resources for each of our Texas ISR Hub and Spoke, updated Wyoming ISR Hub and Spoke, Shea Creek, Horseshoe-Raven, Workman Creek and Roughrider Projects on August 11, 2022, September 14, 2022, January 13, 2023, January 24, 2023, March 16, 2023 and May 2, 2023, respectively;

we completed the acquisition of UEX on August 19, 2022, making us one of the largest diversified North American focused uranium companies;

we completed the acquisition of the Roughrider Project on October 14, 2022.

The acquisition of the Roughrider Project represented an opportunity to scale-up in the high-grade Eastern Athabasca Basin of Saskatchewan, Canada;

we generated revenue of $164.0 million from sales of 3,150,000 pounds of uranium, which included $17.85 million from sales of 300,000 pounds of U.S.

origin uranium concentrates to the U.S.

Department of Energy;

we published our inaugural sustainability report;

we expanded licensed capacity to four million pounds of U 3 O 8  annually at our Hobson Processing Facility, distinguishing the plant as having the largest licensed capacity in Texas and the second largest in the United States;

we commenced a drilling campaign at our 82.77% owned Christie Lake Project and drilled 19,778.9 meters.

Uranium Market Developments

Over the past few years, global uranium market fundamentals have been improving as the market transitions from an inventory driven market to a production driven market.

The spot market bottomed in November 2016 at about $17.75 per pound U 3 O 8  and stood at $56.25 per pound on July 31, 2023 (UxC U 3 O 8  Daily Spot Price).

Production dropped to a multi-year low in 2020 at about 122 million pounds but began to recover in 2021 and totalled about 129 million pounds in 2022, still well below reactor requirements.

Global supply and demand projections show a structural deficit between production and utility requirements averaging over 44 million pounds a year over the next 10 years and increasing thereafter (UxC 2023 Q2 Uranium Market Outlook).

The current gap is being filled with secondary market sources, including finite inventory that is projected to decline in coming years.

As secondary supplies diminish, and as existing mines deplete their resources, new production will be needed to meet utility demand.

This will require higher prices to stimulate new mining investment but market prices are still below the incentive prices for many producers.

Uranium supply has become more complicated due to Russia’s invasion of Ukraine as Russia is a significant supplier of nuclear fuel around the globe.

Economic sanctions, transportation restrictions, pending legislation and buyer avoidance of Russian fuel is causing a fundamental change to the nuclear fuel markets.

We believe this is resulting in a bifurcation of the uranium market, increasing an already notable supply gap for western utilities.

More recently, the coup in Niger has raised questions about uranium supply from that country that provided about 25% of European supply this past year. 

Secondary supply is also likely to be further reduced with western enrichers reversing operations from underfeeding to overfeeding that requires more uranium to increase the production of enrichment services.

While these situations are still unfolding, new trends appear to be pointing towards U.S.

and European utilities beginning to shift more focus to security of supply with production from areas of low geopolitical risk.

On the demand side of the equation, the global nuclear energy industry continues robust growth, with 69 new reactors connected to the grid since 2013 and another 59 reactors under construction as of August 2023 (PRIS and WNA August 2023 data). 

In October 2022, World Nuclear News reported that:

“The International Energy Agency projects more than a doubling of nuclear generation by 2050 with at least 30 countries increasing their use of nuclear power, in the Net Zero Emissions by 2050 scenario of its latest World Energy Outlook”.

Additional upside market pressure is also emerging as utilities return to a longer-term contracting cycle to replace expiring contracts;

something the market has not experienced for several years. 

Increasing demand has also occurred with financial entities and various producers, including our Company, purchasing significant quantities of drummed uranium inventory, further removing excess near term supplies.

Titanium (TiO2) Industry Updates

During Fiscal 2022, the market fundamentals for titanium dioxide remained positive.

During Fiscal 2023, the market fundamentals for titanium dioxide remained positive although some softening is expected during the latter part of 2023.

There is no economical substitute or environmentally safe alternative to titanium dioxide.

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products for which demand historically has been linked to global gross domestic product (“GDP”), ongoing urbanization trends and discretionary spending. 

90% of all the mined titanium feedstocks are used to manufacture pure titanium dioxides –

90% of all the mined titanium feedstocks are used to manufacture pure titanium dioxide –

a pigment that enhances brightness and opacity in paints, inks, paper, plastics, food products and cosmetics.

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The global titanium pigment demand fundamentals are underpinned by urbanization and rising living standards and as such the long-term demand fundamentals remain robust.

Demand for titanium pigment rebounded strongly during the first half of 2022 due to global economic growth, while the supply of titanium dioxide feedstock was impacted due to difficulties encountered by some producers which had a direct effect on prices.

Existing producers continue to report increasing ilmenite prices due to low inventories throughout the supply chain with prices and demand expected to remain robust throughout 2022.

In addition to above mentioned supply constraints, the nature of feedstock supply is also changing.

China, the world’s largest feedstock market, is increasingly more reliant on higher quality feedstocks. Chinese domestic ilmenite is mainly unsuitable for processing under the stricter environmental regulations and, as such, the long-term global shift towards chloride pigment production will continue to drive overall high-quality feedstock demand and prices.  

In our view, what appear to be longer-term supply and demand fundamentals and, more specifically, the long-term global shift towards higher grade feedstocks, have the potential to keep upward pressure on high-quality feedstock prices.

Demand for titanium pigment is expected to soften during the latter half of 2023 mainly due to slower growth in China.

During 2023, China has seen increasing competition for pigment sales in both the domestic and export markets which has led to reduced pigment production from some operations and in turn has impacted the demand for ilmenite during the first part of the year.

Longer-term, China, the world’s largest feedstock market, is becoming increasingly more reliant on higher quality imported feedstocks. Chinese domestic ilmenite is mainly unsuitable for processing under the stricter environmental regulations and, as such, the long-term global shift towards chloride pigment production will continue to drive overall high-quality feedstock demand and prices.  

In-Situ Recovery (ISR) Mining

We utilize in-situ recovery or ISR uranium mining for our South Texas projects as well as our Reno Creek Project in Wyoming, and will continue to utilize ISR mining whenever such alternative is available to conventional mining.

We utilize in-situ recovery or ISR uranium mining for our South Texas projects as well as our Reno Creek Project in Wyoming, and will continue to utilize ISR mining whenever such an alternative is available to conventional mining.

When compared to conventional mining, ISR mining requires lower capital expenditures, has a reduced impact on the environment and results in a shorter lead time to uranium recovery.

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On December 18, 2009, we acquired the Hobson Processing Facility as part of our acquisition of STMV.

With a physical capacity to process uranium-loaded resins up to a total of two million pounds of U 3 O 8 annually and licensed to process up to one million pounds of U 3 O 8 annually, our fully-licensed and 100%-owned Hobson Processing Facility forms the basis for our “hub-and-spoke”

With a physical capacity to process uranium-loaded resins up to a total of two million pounds of U 3 O 8 annually and licensed to process up to four million pounds of U 3 O 8 annually, our fully-licensed and 100%-owned Hobson Processing Facility forms the basis for our “hub-and-spoke”

strategy in the State of Texas, specifically in the South Texas Uranium Belt, where we utilize ISR mining.

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These leases provide for uranium and certain other specified mineral rights only, including surface access rights, subject to production royalties, ranging from an initial term of five to seven years and renewal for a second five-year to seven-year term, and some of which have an initial term of 20 years.

Under the mining laws of Saskatchewan, Canada, title to mineral rights for our Diabase Project is held through The Crown Minerals Act of the Province of Saskatchewan. 

Under the mining laws of Saskatchewan, Canada, title to mineral rights for our projects in Saskatchewan is held through The Crown Minerals Act of the Province of Saskatchewan. 

In addition, The Mineral Resources Act, 1985 and The Mineral Tenure Registry Regulations affect the rights and administration of mineral tenure in Saskatchewan.

Our Diabase Project lands are currently claimed as “Crown dispositions”

Our lands of Saskatchewan projects are currently claimed as “Crown dispositions”

or “mineral dispositions”.

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Adherence to and performance against this policy will be reviewed by our Board of Directors’

Sustainability Committee annually.

(the “Board of Directors”

or “Board”) Sustainability Committee annually.

Environmental Regulations

We believe that we comply with all federal, state and local applicable laws and regulations which govern environmental quality and pollution control. 

Our operations are subject to stringent environmental regulation by state and federal authorities including the Railroad Commission of Texas (“RCT”), the Texas Commission on Environmental Quality (“TCEQ”), the Wyoming Department of Environmental Quality (“WDEQ”) Land, Water and Air Quality Divisions, the United States BLM(Wyoming) and the United States Environmental Protection Agency (“EPA”).

In Texas, where the Company’s hub-and-spoke operations are anchored by the fully-licensed Hobson Processing Facility, surface extraction and exploration for uranium is regulated by the RCT, while ISR uranium extraction is regulated by the TCEQ.

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As at July 31, 2023, we held four PAA permits for our Palangana Mine and one for our Goliad Project.

An application for PAA-1 at Burke Hollow was submitted in February 2023.

A Class I disposal well permit application is also required for submission to the TCEQ for authorization for deep underground wastewater injection.

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As at July 31, 2023, we held an Aquifer Exemption for each of our Palangana Mine and our Goliad and Burke Hollow Projects.

In Wyoming ISR mining activities are regulated by the Wyoming Department of Environmental Quality (“WDEQ”), Land Quality Division (“LQD”), under Wyoming Administrative Code §35-11-401 through §35-11-437.

Before ISR uranium mining is allowed to proceed in Wyoming, certain permits and licenses must be granted by WDEQ, which are subject to financial assurance plans to ensure anticipated future costs for decontamination, decommissioning, reclamation, groundwater restoration, disposal, or any other reclamation requirements are adequately funded.

Bonding regulations for ISR facilities are discussed in §35-11-417 of the Wyoming Administrative Code and further in WDEQ/LQD regulations contained in Non-Coal Chapters 1 through 13.  

There are two major permits/licenses required for ISR uranium mining in Wyoming. 

The first is the Permit to Mine, issued by the WDEQ/LQD. 

The second is the RML, previously issued by the U.S.

Nuclear Regulatory Commission (“NRC”), now issued by the WDEQ/LQD Uranium Recovery Program (“URP”).

In 2018 the State of Wyoming became an NRC agreement state for the licensing of uranium recovery operations. 

RMLs are now issued and regulated by the WDEQ/LQD/URP. 

Annual financial surety updates are required on the Mine Permit anniversary date and are reviewed by both the WDEQ/LQD and WDEQ/LQD/URP as part of the approval process. 

As at July 31, 2023, UEC held Permits to Mine and RMLs for each of its Christensen Ranch, Irigaray, Ludeman, Moore Ranch and Reno Creek Projects.   

In Wyoming, a Class I disposal well permit is required for deep underground wastewater injection (same process as in Texas).

It is the primary method for disposing of excess fluid from the extraction areas and for reverse osmosis concentrate during the restoration phase.

Permits for Class I Injection wells are authorized by the WDEQ Water Quality Division who has primacy for this program under EPA. 

In Wyoming, as at July 31, 2023, UEC holds Class I Injection well permits for four disposal wells at the Christensen Ranch Project, two disposal wells at the Irigaray Project, four disposal wells at the Moore Ranch Project and four disposal wells at its Reno Creek Project. 

Exploration drilling outside of areas within a Permit to Mine is regulated by the WDEQ LQD.

To conduct exploration drilling, an application must be filed with LQD that provides location details of the areas to be explored, the number of drill holes anticipated, the methods of drill hole abandonment to be used;

location of access roads to be used or constructed, and an estimate of the cost to reclaim all drill holes and surfaces impacted by the drilling program. 

If approved, LQD will approve the reclamation cost estimate and the company will post a bond or other financial assurance instrument acceptable to LQD. 

After the financial assurance instrument is approved by LQD, they will issue a Drilling Notification permit to the company to conduct the exploration drilling. 

After reclamation is completed, LQD will inspect the drill hole sites and either approve the reclamation and release the bond, or make recommendations for further corrective action. 

As at July 31, 2023, UEC holds three Drilling Notification Permits, two for various exploration projects in the Powder River Basin and one for exploration in the Great Divide Basin of Wyoming. 

Under the WDEQ the Bonding Provisions (§35-11-417) and regulations for Financial Assurance Requirements for Closure, Post Closure, and Corrective Action outlines financial assurance for in-situ uranium sites to include costs relating to:

decommissioning, decontamination, demolition and waste disposal for buildings, structures, foundations, equipment and utilities;

well plugging and abandonment;

surface reclamation of operating areas, roads, wellfields and surface impoundments;

groundwater restoration in mining areas;

and radiological surveying for final release of the lands.

Funding for the financial assurance is in the form of cash, reclamation bonds, letters of credit, and other mechanisms approved by the WDEQ. 

The financial assurance calculations include an excess of 15% for contingencies and 10% for overhead, adjusted annually for inflation.

As at July 31, 2023, UEC held reclamation bonds for all of the Permits to Mine and RMLs Licenses plus three Drilling Notifications (exploration by drilling permits). 

As in Texas, the State of Wyoming is allowed to issue UIC permits under two conditions:

the state’s program must have been granted primacy;

and the EPA must have granted an aquifer exemption upon the state’s request (an Aquifer Exemption).

Wyoming issues UIC Class I permits (disposal wells) and UIC Class III permits for ISR wells. 

Wyoming requests the official aquifer exemption from the EPA for these permits.

As at July 31, 2023, UEC held Aquifer Exemptions for each of its Christensen Ranch, Irigaray, Ludeman, Moore Ranch and Reno Creek Projects, as well as the Christensen Ranch Class I disposal wells. 

Canada Environmental Regulations

Uranium mining and milling projects in Canada are among the most heavily regulated types of projects in the country with full regulatory oversight from both the federal and provincial levels of government.

That full regulatory oversight includes a strong, independent federal nuclear regulator, the Canadian Nuclear Safety Commission (“CNSC”), which is charged with regulating all aspects of nuclear activities in Canada.

Modern uranium mines, despite their strong safety and environmental protection record, operate in this heavily regulated environment effectively using integrated management systems maintain compliance and extensive reporting to demonstrate ongoing compliance.

Monitoring includes community groups (e.g., North Environmental Quality Committee), First Nations, periodic state of the environment reporting and occasional independent third-party monitoring funded by the CNSC. 

For mining in Saskatchewan, a surface lease is required prior to work commencing on site.

The surface lease will generally cover all areas that are predicted to be disturbed and accrues annual fees per hectare.

Surface leases are coordinated through the Ministry of Government Relations, Northern Engagement Branch, and the Ministry of Environment (“MOE”), Lands Branch, and includes input from other government agencies where appropriate.

While negotiations can start early, and in parallel with a provincial Environmental Impact Assessment (“EIA”) process, a precondition of the issuance of a surface lease is the successful outcome of the EIA process.

In Saskatchewan, the EIA and licensing process are sequential, as the EIA process must be completed prior to the issuance of specific leases, licenses and permits. 

To require an EIA, a project must be deemed a Development per section 2(d) of the Saskatchewan Environmental Assessment Act (“EAA”) and a formal Ministerial Determination to that effect.

The work required for an EIA includes any delegated Duty to Consult engagement and consultation along with environmental baseline work. 

Once an EIA is submitted and the provincial internal reviews are finished, the EASB compiles the comments and produces the technical review comments (“TRC”) document.

If there are deficiencies in the EIA, the proponent will be required to address them before the TRC document and the final EIS are placed into public review.

Public review is generally 30 or 60 days.

When the public comments period is complete, EASB will produce an EIA decision document for the Minister of Environment.

While there are three outcomes possible, the likely outcome for a project that gets to this stage is approval of the EIA with conditions.

With approval of the EIA, licensing and permitting can be completed. 

While the EIA is in progress, the proponent can develop the surface lease application, and other provincial licensing packages for review by the government, although approval of these cannot occur until the EIA process is completed and a positive outcome obtained.

Provincially, the licensing is through the MOE Environmental Protection Branch, which largely provides a one window approach for mining project licensing on behalf of other branches and ministries.

There will be other ministries and permitting required related to health and safety, labour, employment, and royalties.

Overall, a number of permissions, of one form or another, are required to complete the project, but when compared to the EIA process, they are rarely material to the schedule or budget if organized properly.

Most ministries will indicate their interest and the need for any permits at the Technical Proposal and EIA review stages and those comments will come forward in the TRC.  

The federal Impact Assessment Act, 2019 (“IAA”) and the need to produce an Impact Assessment (“IA”) can be triggered in two ways.

The first is by triggering one of the activity thresholds in the Physical Activities Regulations, 2019 , and the second is that the project can be designated by the federal Minister of Environment and Climate Change (the “Minister”) in response to a request to designate the project and a supporting recommendation from the Canadian Impact Assessment Agency (“CIAA”).

Currently, the proposed project does not trigger any thresholds in the Physical Activities Regulations. 

The CNSC and Saskatchewan MOE have historically worked closely together and the CNSC will have the ability to review the provincial EIA.

The regulators have demonstrated recently that they can cooperate in their review of projects despite the expiration of their cooperation agreement.

The CNSC can review and provide comments on any submission to EASB.

In addition, the CNSC will act as a technical advisor and is a participant in the EIA process;

however, the provincial EIA decision is independent of the federal government. 

The main federal licensing agency for the Project, the CNSC, will need to be satisfied that the environment, writ large, is protected.

The CNSC will conduct an environmental protection review (“EPR”) for the license application in accordance with their mandate under the NSCA to ensure the protection of the environment and the health of persons.

The CNSC follows the federal mandates with respect to Indigenous peoples and other initiatives such as Climate Change. 

The CNSC and Saskatchewan MOE have historically worked closely together and the CNSC will have the ability to review the provincial EIA.

The regulators have demonstrated recently that they can cooperate in their review of projects despite the expiration of their cooperation agreement.

The CNSC can review and provide comments on any submission to EASB.

In addition, the CNSC will act as a technical advisor and is a participant in the EIA process;

however, the provincial EIA decision is independent of the federal government. 

Per the NSCA, a project needs to initiate the licensing process in order to have meaningful discussions with the CNSC and early discussions with the CNSC on the licensing process, engagement and consultation expectations, and the scope of the Project’s licensing are meaningful to help advance a project.

While the option of sequentially doing the provincial EIA and the CNSC licensing is available to the proponent, the CNSC suggests doing these two distinct processes in parallel to save time.

Effectively, while the EIA process is proceeding, the development and submission of the provincial and CNSC licensing packages can proceed in parallel.

It is assumed that a successful outcome for the provincial EIA would be an important part of the CNSC’s EPR, which would be presented to the Commission Tribunal as part of the licensing reviews.

As for Saskatchewan, a positive environmental decision is required prior to the Commission approving any licensing packages.

The CNSC’s licensing and oversight processes are done on a cost recovery basis through the Cost Recovery Fees Regulations. 

In support of licensing, proponents are required to develop management systems complete with policies, systems/programs, procedures, and monitoring commensurate with the proposed scope of activities.

To protect human health and the environment, the CNSC focusses on their regulated areas of safety and control in their assessment of projects, including areas of higher risk such as quality management, occupational health and safety, environmental protection, radiation protection, tailings management, and safeguards and non-proliferation, to name a few. 

There may be a need to engage with Fisheries and Oceans Canada (under the Fisheries Act) regarding treated effluent discharge or pump stations for fresh water.

Transport Canada authorization may be required if there are any in-water works with a potential to impact navigation (under the Canadian Navigable Waters Act or under the Canadian Aviation Regulations ).

Water quality and the monitoring of biological effects will be governed by the Metal and Diamond Mining Effluent Regulations to the Fisheries Act, in addition to any provincial requirements.

Other federal legislation of importance to a project will be compliance with the Species at Risk Act (e.g.

the need for a woodland caribou management plan) and the Migratory Birds Convention Act .

It is not clear whether the proposed federal Policy on Biodiversity will have an impact on the project, but if enacted, it could mean more bio-physical offsets will be required for disturbed ground. 

As part of the environmental assessment process, projects are required to develop conceptual decommissioning plans for inclusion in the EIA, which detail the steps to be taken to decommission project facilities and reclaim the land at the end of project life.

As part of licensing, the conceptual plan is expanded into a more detailed Preliminary Decommissioning Plan (“PDP”) and a cost estimate for implementation is prepared from that:

The Preliminary Decommissioning Cost (“PDC”).

The Company will then be required to provide some form of surety or bond to cover the cost of carrying out the PDP.

The surety is designed to cover the unlikely situation whereby the proponent is unable to complete the decommissioning and reclamation and the government must step in to complete the work in a ‘decommission tomorrow’

While salvage of some materials is likely, these cannot be considered in the PDC.

The plan and costs are periodically reviewed and updated and can be scaled to reflect the current state of a project.

As operations progress, progressive decommissioning is encouraged as it lowers close-out liabilities, which, in turn, can reduce the amount of a surety bond, and often reduces the cost of disturbed-land lease fees. 

For a uranium mining and milling project, once operations have stopped, the first step is to conduct systematic surveys to determine the extent of contamination, if any.

Contamination may be chemical or radiological.

Areas that can be decontaminated will be cleaned and re-surveyed to ensure that the clean-up criteria are met.

Material that cannot be decontaminated to release standards would be disposed of on site or at an approved off-site disposal facility.

The remainder of the site will be decommissioned as the facilities are no longer required with the material salvaged for reuse, recycling, or disposal.  

In Saskatchewan, reclaimed land can be returned to the Crown under The Reclaimed Industrial Sites Act and The Reclaimed Industrial Sites Regulations , which establish an Institutional Control Program.

This program is implemented once a decommissioned site has been deemed to be reclaimed in a stable, self-sustaining and non-polluting manner.

The property can then be transferred back to the province for monitoring and maintenance.

For this to happen, the proponent pays a calculated sum into the Institutional Control Monitoring and Maintenance Fund, and the Institutional Control Unforeseen Events Fund for long term monitoring of the property and maintenance, if required.

In the unlikely event that the site does not behave as predicted, the government can seek redress from the proponent if the costs exceed the funds available. 

Indigenous Engagement  

in Saskatchewan

For both the federal and provincial EIA and permitting/licensing processes, engagement and consultation are required with Indigenous groups.

Engagement in Saskatchewan consists of the Crown’s Duty to Consult, a legal requirement, and interest-based engagement, which is essential to a Project’s social license.

Both levels of government (‘the Crown’) have a Duty to Consult First Nations and Métis groups on any decision within their purview with the potential to affect Aboriginal or Treaty Rights.

As the project progresses through the regulatory process, several provincial and federal decisions will be made that must be informed by engagement and consultation.

Implementation of the Duty to Consult is guided by a combination of provincial and federal regulatory requirements and guidance documents (e.g.

Section 35, The Constitution Act, 1982 ).  

Although the Duty to Consult lies with the federal and provincial governments, the procedural aspects of the Duty to Consult are frequently delegated to the proponent to undertake.

This often results in the proponent entering into engagement agreements with some First Nations and Metis governments to do studies to identify any potential impacts to rights.

Companies are expected to meet with each potentially affected community to discuss engagement plans and an appropriate budget for the communities to complete the necessary meetings and studies, although the level of effort is generally commensurate with proximity to the site.

The engagement plan should include opportunities to inform communities of the nature of the proposed activities, the potential impacts of a project, and proposed mitigation strategies.

The purpose is to receive feedback or information on current traditional land uses and potential impacts to Treaty and Aboriginal rights.

Companies are expected to work with the communities to determine the impacts of the projects and mitigation strategies.

Waste Disposal

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Therefore, over the next several years, we will begin a process to understand our emissions profile, as well as identify and implement opportunities to reduce emissions, where and when possible.

We have created an emissions inventory of all sources (mobile and stationary) for each Texas project and we have initiated fuel consumption tracking by individual source at each project. We have created tracking mechanisms for all Scope 1 and 2 emissions for our Texas projects, which includes fuel consumption and mileage for the Texas fleet and stationary sources as well as electrical energy consumption at each Texas project. Scope 1 emissions covers direct emissions from owned or controlled sources.

In 2022, we have created an emissions inventory of all sources (mobile and stationary) for each Texas project, including tracking fuel consumption by individual source at each project. In Fiscal 2023, we expanded our emissions measurement approach to cover all sites, including Wyoming, Saskatchewan and Paraguay. Scope 1 emissions covers direct emissions from owned or controlled sources.

Scope 2 emissions covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the Company.

Through developing this inventory, we have been able to identify, assess and conduct a cost benefit analysis for emission reduction opportunities at UEC’s Texas projects. Such opportunities include exploring ways to upgrade our Hobson plant into a zero-emissions processing plant. 

Aligned to responsibly managing our emissions in the short-term, we have purchased carbon offset credits for our Scope 1 and 2 emissions for our Texas sites.

Aligned to responsibly managing our emissions in the short-term, we will look to purchase carbon offset credits for our Scope 1 and 2 emissions for our corporate sites.

Health and Safety

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Other services are provided by outsourcing and consulting and special purpose contracts.

As of July 31, 2022, we had 63 persons employed on a full-time basis and four individuals providing services on a contractual basis.

As of July 31, 2023, we had 83 persons employed on a full-time basis and 9 individuals providing services on a contractual basis.

Human Capital

As of July 31, 2022, our employee population consisted of 63 individuals working for us and our consolidated subsidiaries, 38 of whom were located in the United States, 13 in Canada and 12 in Paraguay.

As of July 31, 2023, our employee population consisted of 83 individuals working for us and our consolidated subsidiaries, 43 of whom were located in the United States, 25 in Canada and 15 in Paraguay.

Our Company is committed to attracting and retaining talented and experienced individuals to manage and support our operations. 

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business