Uranium Energy Inks Deal to Buy Rio Tinto's Wyoming Uranium Assets
Uranium Energy UEC has signed an agreement to acquire Rio Tinto’s RIO Sweetwater Plant and uranium assets in Wyoming. This move will enable Uranium Energy to increase its production capacity.
Details of Uranium Energy’s Uranium Assets Acquisition
UEC will pay $175 million for Rio Tinto's Wyoming assets, which include the totally owned and fully licensed Sweetwater Plant, as well as the Red Desert and Green Mountain uranium mining projects. Upon completion, Uranium Energy will renew approximately $25 million in surety bonds to cover future reclamation costs. The transaction will be funded using the company's existing liquidity.
The Red Desert Project covers more than 20,000 acres, while the Green Mountain Project is approximately 32,040 acres long and includes sites suitable for in-situ recovery ("ISR") and conventional mining. The Sweetwater Plant can process 3,000 tons of uranium per day. It has a licensed capacity of 4.1 million pounds of uranium.
The transaction is expected to close in the fourth quarter of 2024.
UEC’s Benefits From the Deal
This acquisition is a significant step forward for Uranium Energy, following its 2021 acquisition of Uranium One Americas. The company expects these assets to generate substantial value by constructing its third hub-and-spoke production infrastructure. The deal will strengthen UEC's position as the top uranium developer in Wyoming and the United States.
Expanding production capacity in Wyoming, where the company recently began ISR production, also bodes well.
Uranium Energy Falls Short of Q3 Earnings Estimates
Uranium Energy reported its third-quarter fiscal 2024 adjusted loss per share of 5 cents, which missed the Zacks Consensus Estimate of earnings of 1 cent per share. The company had reported a loss of 2 cents per share in the year-ago quarter.
Uranium Energy did not generate any revenues as there was no sale of purchased uranium inventory during the period. Revenues from toll processing services were also nil. The Zacks Consensus Estimate for revenues was $20 million. In the third quarter of fiscal 2023, the company reported total revenues of $20.2 million, which included $20.1 million generated from sales of purchased uranium inventory, while revenues from toll processing services were $0.1 million.
UEC Share Price Performance
Shares of Uranium Energy have gained 19.5% in a year compared with the industry’s 0.5% growth.
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Uranium Energy’s Zacks Rank & Stocks to Consider
UEC currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO. Currently, CRS and EGO sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.09 per share. The consensus estimate for 2025 earnings has moved 7% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares have gained 128.8% in a year.
The Zacks Consensus Estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for 2024 earnings has moved 16% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO shares have gained 82.9% in a year.
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Rio Tinto PLC (RIO) : Free Stock Analysis Report
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