Uranium Energy Corp. (UEC) H.C. Wainwright & Co

Target Price Revision Metals and Mining March 25, 2021 Uranium Energy Corp. (UEC) Rating: Buy Heiko F. Ihle, CFA 212-356-0510 hihle@hcwresearch.com Tyler Bisset 646-975-6955 tbisset@hcwresearch.com Marcus Giannini 212-916-3978 mgiannini@hcwresearch.com Financing Closed to Support Physical Uranium Purchase Initiative; Developing Burke Hollow; Reiterate Buy; PT Higher Stock Data 03/24/2021 Price $2.65 Exchange NYSE American Price Target $5.00 52-Week High $3.67 52-Week Low $0.50 Enterprise Value (M) $545 Market Cap (M) $597 Public Market Float (M) 136.4 Shares Outstanding (M) 225.3 3 Month Avg Volume 6,197,787 Short Interest (M) 17.23 Shares Outstanding (M): pro forma for 10.0M shares issued under the $30.5M financing. Balance Sheet Metrics Cash (M) $61.5 Total Debt (M) $9.9 Total Cash/Share $0.27 Cash (M): pro forma for $30.5M financing, $28.2M received from ATM program, $2.0M from exercised stock options and warrants, and the $8.0M voluntary debt payment. Total Debt (M): pro forma for $8.0 voluntary debt payment. EPS ($) Diluted Full Year - Jul 2020A 2021E 2022E FY (0.08) (0.08) 0.02 Revenue ($M) Full Year - Jul 2020A 2021E 2022E FY 0.0 0.0 23.1 4 3 2 1 0 MAR-20 JUL-20 NOV-20 MAR-21 40 30 20 10 0 Vol. (mil) Price Financing to support physical uranium purchases. On March 22, Uranium Energy Corp. (UEC) announced that it had closed an offering for total gross proceeds of $30.5M after issuing 10.0M common shares at a price of $3.05 per share. These funds are expected to be used for additional uranium purchases, as well as general corporate and working capital requirements. Following this financing, UEC maintains about $61.0M in cash plus a variety of equity holdings. We highlight that UEC's physical uranium initiative, which we discuss in more detail below, is fully funded with its current cash position, and now includes 1.4M pounds (lbs) of U.S. warehoused uranium. We note that 1.0Mlbs are expected to be delivered in May 2021, with the remaining 0.4Mlbs to be delivered in March 2022. Establishing physical uranium purchases. While the company remains focused on developing its low-cost, in-situ recovery (ISR) mining capabilities, management has identified a unique opportunity to purchase drummed uranium at spot prices well below global industry mining costs. As a result, UEC is establishing a physical uranium inventory initiative based on an initial agreement with ConverDyn in Illinois to acquire 0.4Mlbs of U.S. warehoused uranium for a total cost of $10.9M. We note that ConverDyn is a general partnership between Honeywell (HON; not rated) and General Atomics (private). Management anticipates that this initiative can improve its balance sheet through uranium price appreciation and support future marketing efforts with utilities to accelerate cash flows. Looking ahead, this move should also increase the availability of Texas and Wyoming production capacity for emerging U.S. specific opportunities such as the U.S. Uranium Reserve (UR). Restart of wellfield development and definition drilling at Burke Hollow. On January 26, UEC announced that the company had commenced production area development at its Burke Hollow ISR project in Texas. We note that advancing and expanding resources is a critical step to supporting the company's plan to participate in supplying the U.S. UR. The UR includes purchases of newly mined domestic uranium over a 10-year period for an aggregate value of $1.5B. Additionally, the FY21 bipartisan omnibus spending bill currently includes $75M for domestically produced uranium. We highlight that the U.S. Department of Energy is currently developing a plan to implement this program, which UEC expects to be a competitive bid process focused on existing fully permitted and low-cost projects. For definitions and the distribution of analyst ratings, analyst certifications, and other disclosures, please refer to pages 4 - 5 of this report.