What happened
Uranium Energy (UEC 0.33%) stock surged Tuesday morning, rallying by as much as 13.2% as of 10 a.m. ET. The uranium miner hasn't generated any revenue since 2015, but it just made an important announcement that confirms how significant a recent acquisition will be to its future.
So what
On Tuesday, Uranium Energy reported that on Monday, it had filed a Technical Report Summary with the Securities and Exchange Commission, disclosing details about mineral resources at its Wyoming hub and spoke project.
Under Uranium Energy's business model, it operates mining projects that are clustered geographically, and selects one facility to be the central processing site (the "hub") for the rest of the group (the "spokes"). Previously, it only had one such hub -- in Hobson, Texas. Then, in December, the company acquired Uranium One, the world's fourth-largest uranium producer.
Image source: Getty Images.
This significant acquisition gave Uranium Energy access to several projects, including Irigaray, one of the largest uranium processing facilities in the U.S. The company has now made Irigaray a central hub for seven satellite uranium mining projects in Wyoming.
Mineral assets have to meet certain criteria and be material to a company's operations to be reported under an SK-1300 filing. Uranium Energy's latest filing, therefore, confirms that the Uranium One assets that it acquired are fully compliant SK-1300 resources.
More importantly, the filing revealed some big numbers for the Wyoming projects, including nearly 62 million pounds of measured and indicated mineral resources, and roughly 7 million pounds of inferred mineral resources.
Now what
Uranium Energy now has two production-ready hub-and-spoke projects. With the SK-1300 filed for Wyoming, I expect Uranium Energy will start to expand capacity at Irigaray to accommodate production as it begins at two of the fully permitted spokes.
Notably, this development comes at a time when uranium prices are surging due to a renewed focus on alternative energy. This seems to be driving investor interest even higher in Uranium Energy, as onlookers expect the company to start producing uranium to take advantage of high prices. Uranium was hovering at around $59.70 per pound, as last reported by TradingEconomics.com on Monday. That's not far from the 11-year high price of $60.40 per pound that uranium hit in early March.
