http://www.dyor.de/uranium-energy-corp/i...


1.To start-off, please tell us what the implications are for last week's announcement (Uranium One deal)?

On October 14th, Uranium Energy Corp announced the acquisition of South Texas Mining Venture, which includes a fully licensed uranium processing facility, a fully permitted ISR uranium project, and a portfolio of exploration properties in Texas from Uranium One (UUU) and Everest exploration for $10million in stock plus $1mm cash.

The major implications of this acquisition are that with a fully licensed and permitted processing facility, the company will have an initial production capacity of 1M lbs per year with the ability to increase to 2 M lbs per year. This will become the basis of a new regional mining strategy in which a number of satellite projects, all less than 100 miles away, will feed the Hobson plant.

The acquisition positions UEC with near-term, permitted production visibility in the USA and revenues from low-cost ISR operations with potential for additional production growth. Additionally, UEC doubles its 43-101 compliant resource base in Texas.

Ultimately, the transaction makes UEC the only new producer with a fully licensed processing facility while extracting uranium from two separate satellite facilities in the next 12-15 months.

2. What strategic considerations or motivations led Uranium One (UUU) to make this deal with UEC?

Uranium One decided that their Texas resource base did not provide them with a long-enough mine life to justify starting operations. Furthermore, their core focus is currently in Kazakhstan, South Australia and Wyoming, hence they did not want to dilute their efforts. They saw a win-win situation in divesting of their Texas portfolio to UEC, since combining UUU and UEC resources leads to a very attractive resource profile in Texas and UEC has the necessary management and expertise to advance these assets to production. Uranium One’s confidence in UEC is supported by the fact that they were happy to take shares in this deal, they see considerable upside in UEC shares (they took $10MM in UEC shares for assets that carried a $93MM book-value).

3. Why are production licenses so rare in the U.S.?

After the cold war ended and USA/Russia signed the HEU Agreement, down-blended Russian nuclear weapons became the main supply source of uranium fuel for the US utilities. As result, from 1989 onwards the US uranium industry basically vanished; US went from producing 40mm lbs of U3O8 annually to just around 4mm lbs of annual production. Hence, much of the infrastructure and permitted processing facilities were shut-down and reclaimed. The only operations that survived this long period of in-activity were the low-cost ISR operations of Texas and Wyoming. Hence, today there are only a few permitted ISR plants active or available in the US and Hobson happens to be one of them.

4. How does this acquisition improve your timing to production, when's the earliest date you can start production and which project will go first?

The Hobson ISR Plant is fully permitted, as is mine unit #1 at Palangana, which
allows UEC to initiate production at Hobson via satellite facilities in the region. This
move lowers UEC’s reliance on permitting timelines for Goliad, in particular the award
of a Radioactive Materials License, and also reduces capital expenditures requirements to complete a new processing plant. The acquisition positions the
company to become the only new producer with a fully licensed processing facility and extracting uranium from 2 separate satellite facilities in the next 12-15 months.
We expect Palangana to start production in Q3/10 and Goliad coming online in late
Q4/10.




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