Uranium Energy Corp. (UEC) Mid-Year Report Bolster’s Confidence

The mid-year shareholder report recently issued by the CEO of Uranium Energy Corp., Amir Adnani, focused largely on the company’s updated uranium production numbers and its continued strong financial position, though perhaps the biggest news was UEC’s first multi-year uranium sales contract.

The recently announced sales contract calls for the delivery of 300,000 pounds of U308 over a period of three years, beginning in August of 2011. The U308 will come from UEC’s fully operational Hobson processing facility, between Corpus Christi and San Antonio in southeast Texas, one of the few fully licensed and permitted processing plants in the U.S. The delivered price for the uranium will be based on the published market price indicators at the time of delivery.

Uranium production at UEC’s Palangana Project in south Texas, approximately 100 miles south of the Hobson production facility, has more than doubled quarter over quarter, while production costs have declined. The site has already produced roughly 100,000 pounds of U308, and production ramp-up will continue as additional Palangana areas come on line.

In the meantime, development work continues to move forward on schedule at the company’s other sites. UEC expects their Goliad ISR (In-Situ Recovery) Project to become its second uranium producing asset in south Texas, with construction commencing as soon as they get final approval of the site’s RMS (Radioactive Materials License). The company’s Salvo Project, also in south Texas, is now undergoing Phase II drilling to confirm the current Inferred Resource Estimate, with drilling to continue throughout the summer. And finally, exploration is expected to begin within 90 days at UEC’s Coronel Oviedo site in Paraguay, South America.

Given that UEC now has close to 100,000 pounds of U3O8 in inventory, at a low cash operating expense, they are well positioned to generate cash flow from operations in 2011, and anticipate that any production will be sold through a combination of spot market sales and long-term contracts to help stabilize sales points and pricing.

The report’s conclusion that UEC is ideally positioned to participate in the recovery of the uranium sector is easy to support, given the company’s lack of debt, its proven ability to identify and develop some of the best uranium properties in the continental U.S., its verified capacity to cost effectively mine and process its own uranium, and now the company’s first major sale.

For more information on UEC, visit www.UraniumEnergy.com

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