Uranium Energy (NYSE American: UEC), a uranium producer and explorer based in Texas, USA, announced today its acquisition of Rio Tinto’s (ASX, LON, NYSE: RIO) uranium assets in Wyoming for $175 million in cash. This includes the fully-owned and licensed Sweetwater plant and several uranium projects with approximately 175 million pounds of historical resources.
Following the announcement, UEC’s stock price rose by 11% to $6.16 per share.
In the press release, UEC stated that it currently controls 12 uranium projects in Wyoming’s Great Divide Basin. The acquisition of these strategic assets will not only enhance the company’s production but also provide opportunities for operational synergies with other projects in the Great Divide Basin, creating the third hub-and-spoke production platform in the United States.
TD Cowen maintained a “buy” rating on Uranium Energy’s stock, citing the opportunity to create another hub-and-spoke production complex.
Back in 2021, Uranium Energy acquired Uranium One Americas. Just a few weeks ago, the company signed a stock purchase agreement to acquire all shares of Kennecott Uranium Company and Wyoming Coal Resources Company, which together hold a 50% interest in the Green Mountain Mining Venture. Through a series of acquisitions, Uranium Energy has further solidified its position as a leading uranium developer in Wyoming and the United States.
Uranium Energy estimates that this transaction will be completed in the fourth quarter of 2024.
In the new geopolitical environment, with the rapid development of clean energy and artificial intelligence (AI), the demand for uranium and nuclear energy is expected to reach unprecedented levels, posing significant challenges to the supply of this clean energy. The USA, Japan, South Korea, and 19 other countries have pledged to double global nuclear energy by 2050. To achieve this goal, the supply of fuel (i.e., uranium) for power plants must also increase.
Against this backdrop, uranium prices have begun to soar, ending a decade-long bear market after reaching a historical peak in 2007. Since early 2020, international uranium prices have tripled. From July 2023 to January 2024, prices have more than doubled, exceeding $100 at their peak.
