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

On March 15, UEC reported its 2Q21 results. UEC recorded a net loss of $3.5M, or ($0.02) per share, which compares to a net loss of $1.9M, or ($0.01) per share, in 2Q20, as the company did not generate revenue in either period. The wider net loss was mostly due to income from equity-accounted investments falling to $0.6M from $2.7M in 2Q20, as well as mineral property expenses declining to $1.0M from $1.3M. These losses were partially offset by a gain on loan extinguishment of $0.3M in 2Q21 compared to nil in 2Q20. In our opinion, these results are largely irrelevant given UEC's non-producing nature, and we instead focus on the bright outlook for the firm and domestically sourced uranium in general. We are reiterating our Buy rating on UEC shares while raising our PT to $5.00 from $3.60. Our higher price target is mostly based on an increased per lb valuation for UEC's resources outside of Texas, which we have raised to $7.00/lb from $3.50/lb, based on current industry trends. In short, this step has raised our valuation for these assets to $610.4M from $305.2M. Our valuation remains based on a DCF of future operations for the firm utilizing a recently revised 7.5% discount rate. We then add an in situ value of $75.0M (prior: $50.0M) for UEC's Reno Creek assets, $41.5M for Alto Parana's resources, and an additional $40.0M for Paraguay and UEC's other exploration stage assets. In short, we believe that these figures remain inline with similar projects throughout our coverage universe to which we assign equal geopolitical risk factors. Near-term catalysts. Going forward, we maintain our longer-term expectation that current global developments should drive higher future uranium prices that could eventually support favorable production decisions at one or more properties in UEC's portfolio of assets. This is particularly pertinent given the recent announcement concerning a restart of wellfield development amid definition drilling to support a meaningful production ramp-up at Burke Hollow. We highlight that Burke Hollow already maintains all four major permits for uranium extraction. Finally, we now expect the new physical uranium purchasing initiative to add incremental value through the potential for higher future uranium prices, while also freeing up production capacity at its operations to support the U.S. UR. Risks. (1) Uranium price risk; (2) operating and technical risk; (3) political risk; and (4) financial risk. Uranium Energy Corp. March 25, 2021 H.C. WAINWRIGHT & CO. EQUITY RESEARCH 2