UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission File Number:
URANIUM ENERGY CORP.
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) | |
| | | |
| (U.S. corporate headquarters) | (Zip Code) | |
| 1830 – 1030 West Georgia Street Vancouver, British Columbia, Canada (Canadian corporate headquarters) | V6E 2Y3
(Zip Code) |
(Address of principal executive offices)
| ( | ||
| (Registrant’s telephone number, including area code) | ||
| Not applicable | ||
| (Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒
☐ Non-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
URANIUM ENERGY CORP.
TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION |
4 | |
| Item 1. |
Financial Statements |
4 |
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 |
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
35 |
| Item 4. |
Controls and Procedures |
35 |
| PART II – OTHER INFORMATION |
37 | |
| Item 1. |
Legal Proceedings |
37 |
| Item 1A. |
Risk Factors |
37 |
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 49 |
| Item 3. |
Defaults Upon Senior Securities |
49 |
| Item 4. |
Mine Safety Disclosures |
49 |
| Item 5. |
Other Information |
49 |
| Item 6. |
Exhibits |
49 |
| SIGNATURES |
|
51 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2023
(Unaudited – Expressed in thousands of U.S. Dollars unless otherwise stated)
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited – Expressed in thousands of U.S. dollars)
| Notes | April 30, 2023 | July 31, 2022 | ||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||
| Inventories | 5 | |||||||||||
| Prepaid expenses and deposits | ||||||||||||
| Accounts and other receivables | ||||||||||||
| TOTAL CURRENT ASSETS | ||||||||||||
| MINERAL RIGHTS AND PROPERTIES | 6 | |||||||||||
| PROPERTY, PLANT AND EQUIPMENT | 7 | |||||||||||
| RESTRICTED CASH | ||||||||||||
| EQUITY-ACCOUNTED INVESTMENTS | 8 | |||||||||||
| INVESTMENT IN EQUITY SECURITIES | 9 | |||||||||||
| OTHER NON-CURRENT ASSETS | ||||||||||||
| TOTAL ASSETS | $ | $ | ||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||||||
| Asset retirement obligations - current | 11 | |||||||||||
| Derivative liabilities | 12 | |||||||||||
| Other current liabilities | ||||||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||||
| ASSET RETIREMENT OBLIGATIONS | 11 | |||||||||||
| OTHER NON-CURRENT LIABILITIES | ||||||||||||
| DERIVATIVE LIABILITIES | 12 | |||||||||||
| DEFERRED TAX LIABILITIES | ||||||||||||
| TOTAL LIABILITIES | ||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||
| Capital stock | ||||||||||||
| Common stock $ par value: shares authorized, shares issued and outstanding (July 31, 2022 - ) | 13 | |||||||||||
| Additional paid-in capital | ||||||||||||
| Share issuance obligation | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||||
| TOTAL EQUITY | ||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | $ | ||||||||||
| SUBSEQUENT EVENTS | 13,14 | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited – Expressed in thousands of U.S. dollars, except share and per share data)
| Three Months Ended April 30, |
Nine Months Ended April 30, |
|||||||||||||||||||
| Notes |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
| SALES AND SERVICE REVENUE |
14 | $ | $ | $ | $ | |||||||||||||||
| COST OF SALES AND SERVICES |
14 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
| GROSS PROFIT |
||||||||||||||||||||
| OPERATING COSTS |
||||||||||||||||||||
| Mineral property expenditures |
||||||||||||||||||||
| General and administrative |
||||||||||||||||||||
| Acquisition-related costs |
||||||||||||||||||||
| Depreciation, amortization and accretion |
6,7,11 | |||||||||||||||||||
| TOTAL OPERATING COSTS |
||||||||||||||||||||
| INCOME (LOSS) FROM OPERATIONS |
( |
) | ( |
) | ( |
) | ||||||||||||||
| OTHER INCOME (EXPENSES) |
||||||||||||||||||||
| Interest expenses and finance costs |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Income (loss) from equity-accounted investments |
8 | ( |
) | ( |
) | |||||||||||||||
| Debt receivable recovery |
||||||||||||||||||||
| Gain (loss) on revaluation of equity securities |
9 | ( |
) | ( |
) | |||||||||||||||
| Gain on revaluation of derivative liabilities |
12 | |||||||||||||||||||
| Other income (expenses) |
( |
) | ||||||||||||||||||
| Gain on settlement of liabilities |
||||||||||||||||||||
| OTHER INCOME (EXPENSES) |
( |
) | ( |
) | ||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES |
( |
) | ( |
) | ( |
) | ||||||||||||||
| DEFERRED TAX RECOVERY |
||||||||||||||||||||
| NET INCOME (LOSS) FOR THE PERIOD |
( |
) | ( |
) | ( |
) | ||||||||||||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||||||
| Translation loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| TOTAL OTHER COMPREHENSIVE LOSS |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| TOTAL COMPREHENSIVE INCOME (LOSS) |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||||||
| NET INCOME (LOSS) PER SHARE |
15 | |||||||||||||||||||
| Basic |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||||||
| Diluted |
$ | ( |
) | $ | $ | ( |
) | $ | ( |
) | ||||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, |
||||||||||||||||||||
| Basic |
||||||||||||||||||||
| Diluted |
||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited – Expressed in thousands U.S. dollars)
| Nine Months Ended April 30, |
||||||||
| Notes |
2023 |
2022 |
||||||
| NET CASH PROVIDED BY (USED IN): |
||||||||
| OPERATING ACTIVITIES |
||||||||
| Net loss for the period | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to cash flows in operating activities |
||||||||
| Stock-based compensation |
13 | |||||||
| Depreciation, amortization and accretion |
6,7,11 | |||||||
| Amortization of long-term debt discount |
||||||||
| (Income) loss from equity-accounted investment |
8 | ( |
) | |||||
| Gain on disposition of assets |
( |
) | ( |
) | ||||
| Loss (gain) on revaluation of equity securities |
9 | ( |
) | |||||
| Gain on revaluation of derivative liabilities |
12 | ( |
) | |||||
| Gain on settlement of liabilities |
( |
) | ||||||
| Deferred tax recovery |
( |
) | ( |
) | ||||
| Debt receivable recovery |
( |
) | ||||||
| Changes in operating assets and liabilities |
||||||||
| Inventories |
( |
) | ||||||
| Prepaid expenses and deposits |
( |
) | ||||||
| Accounts and other receivables |
( |
) | ( |
) | ||||
| Accounts payable and accrued liabilities |
( |
) | ||||||
| Other liabilities |
( |
) | ||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
( |
) | ||||||
| FINANCING ACTIVITIES |
||||||||
| Proceeds from share issuances, net of issuance costs |
13 | |||||||
| Repayments of long-term debt |
( |
) | ||||||
| Repayments of other loans |
( |
) | ( |
) | ||||
| Cash paid for withholding amounts on option exercise |
( |
) | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES |
||||||||
| INVESTING ACTIVITIES |
||||||||
| Net cash used in U1A Acquisition |
( |
) | ||||||
| Acquisition of UEX, net of cash acquired |
3 | |||||||
| Acquisition of Roughrider |
4 | ( |
) | |||||
| Investment in mineral rights and properties |
( |
) | ( |
) | ||||
| Capital contribution to equity-accounted investment |
8 | ( |
) | |||||
| Investment in equity securities |
9 | ( |
) | ( |
) | |||
| Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
| Proceeds from sales of equity securities |
||||||||
| Proceeds from disposition of assets |
||||||||
| NET CASH USED IN INVESTING ACTIVITIES |
( |
) | ( |
) | ||||
| NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
( |
) | ( |
) | ||||
| FOREIGN EXCHANGE DIFFERENCE ON CASH |
( |
) | ||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
$ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| URANIUM ENERGY CORP. |
||||||||||
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY |
||||||||||
| FROM MAY 16, 2003 (INCEPTION) TO April 30, 2023 |
||||||||||
| (Expressed in thousands) |
| Common Stock | Additional Paid-in Capital | Share Issuance Obligation | Accumulated Deficit | Accumulated Other Comprehensive Loss | Stockholders' Equity | |||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||
| Balance, July 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Common stock | ||||||||||||||||||||||||||||
| Issued for acquisition of UEX and Roughrider | ||||||||||||||||||||||||||||
| Issued under ATM offering, net of issuance costs | ||||||||||||||||||||||||||||
| Issued upon exercise of stock options | ||||||||||||||||||||||||||||
| Issued upon exercise of warrants | ||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||
| Common stock issued for consulting services | ||||||||||||||||||||||||||||
| Common stock issued under Stock Incentive Plan | ||||||||||||||||||||||||||||
| Amortization of stock-based compensation | - | |||||||||||||||||||||||||||
| Replacement options issued for acquisition of UEX | - | |||||||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, October 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Common stock | ||||||||||||||||||||||||||||
| Issued under ATM offering, net of issuance costs | ||||||||||||||||||||||||||||
| Issued upon exercise of stock options | ||||||||||||||||||||||||||||
| Issued upon exercise of warrants | ||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||
| Common stock issued for consulting services | ||||||||||||||||||||||||||||
| Common stock issued under Stock Incentive Plan | ||||||||||||||||||||||||||||
| Amortization of stock-based compensation | - | |||||||||||||||||||||||||||
| Net income for the period | - | |||||||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||
| Balance, January 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Common stock | ||||||||||||||||||||||||||||
| Issued under ATM offering, net of issuance costs | ||||||||||||||||||||||||||||
| Issued upon exercise of stock options | ||||||||||||||||||||||||||||
| Issued upon exercise of warrants | - | |||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||
| Common stock issued for consulting services | - | |||||||||||||||||||||||||||
| Common stock issued under Stock Incentive Plan | ||||||||||||||||||||||||||||
| Amortization of stock-based compensation | - | |||||||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Other comprehensive income | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, April 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| URANIUM ENERGY CORP. |
||||||||||
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY |
||||||||||
| FROM MAY 16, 2003 (INCEPTION) TO April 30, 2022 |
||||||||||
| (Expressed in thousands) |
| Common Stock |
Additional Paid-in Capital |
Share Issuance Obligation |
Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Stockholders' Equity |
|||||||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||||||||
| Balance, July 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
| Common stock |
||||||||||||||||||||||||||||
| Issued under ATM offering, net of issuance costs |
- | - | - | |||||||||||||||||||||||||
| Issued upon exercise of stock options |
- | - | - | |||||||||||||||||||||||||
| Issued upon exercise of warrants |
- | - | - | |||||||||||||||||||||||||
| Issued for acquisition of mineral properties |
||||||||||||||||||||||||||||
| Stock-based compensation |
||||||||||||||||||||||||||||
| Common stock issued for consulting services |
- | - | ||||||||||||||||||||||||||
| Common stock issued under Stock Incentive Plan |
- | - | ||||||||||||||||||||||||||
| Amortization of stock-based compensation |
- | - | - | - | - | |||||||||||||||||||||||
| Net loss for the period |
- | ( |
) | ( |
) | |||||||||||||||||||||||
| Other comprehensive income |
- | - | - | - | - | |||||||||||||||||||||||
| Balance, October 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
| Common stock |
||||||||||||||||||||||||||||
| Issued as anniversary fees for credit facility |
||||||||||||||||||||||||||||
| Issued under ATM offering, net of issuance costs |
||||||||||||||||||||||||||||
| Issued upon exercise of stock options |
||||||||||||||||||||||||||||
| Issued upon exercise of warrants |
||||||||||||||||||||||||||||
| Issued for acquisition of mineral properties |
||||||||||||||||||||||||||||
| Stock-based compensation |
||||||||||||||||||||||||||||
| Common stock issued for consulting services |
||||||||||||||||||||||||||||
| Common stock issued under Stock Incentive Plan |
||||||||||||||||||||||||||||
| Amortization of stock-based compensation |
- | |||||||||||||||||||||||||||
| Net loss for the period |
- | ( |
) | ( |
) | |||||||||||||||||||||||
| Other comprehensive loss |
- | ( |
) | ( |
) | |||||||||||||||||||||||
| Balance, January 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
| Common stock |
||||||||||||||||||||||||||||
| Issued under ATM offering, net of issuance costs |
||||||||||||||||||||||||||||
| Issued upon exercise of stock options |
||||||||||||||||||||||||||||
| Issued (accrued) upon exercise of warrants |
||||||||||||||||||||||||||||
| Stock-based compensation |
- | |||||||||||||||||||||||||||
| Common stock issued for consulting services |
||||||||||||||||||||||||||||
| Common stock issued under Stock Incentive Plan |
||||||||||||||||||||||||||||
| Amortization of stock-based compensation |
- | |||||||||||||||||||||||||||
| Net loss for the period |
- | |||||||||||||||||||||||||||
| Other comprehensive loss |
- | ( |
) | ( |
) | |||||||||||||||||||||||
| Balance, April 30, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| NOTE 1: | NATURE OF OPERATIONS |
Uranium Energy Corp. was incorporated in the State of Nevada on May 16, 2003. Uranium Energy Corp. and its subsidiary companies and a controlled partnership (collectively, the “Company” or “we”) are engaged in uranium and titanium mining and related activities, including exploration, pre-extraction, extraction and processing of uranium concentrates and titanium minerals, on projects located in the United States, Canada and the Republic of Paraguay.
As at April 30, 2023, we had working capital (current assets less current liabilities) of $
Historically, we have been reliant primarily on equity financings from the sale of our common stock and on debt financings in order to fund our operations, and this reliance is expected to continue for the foreseeable future. Our continued operations, including the recoverability of the carrying values of our assets, are dependent ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations.
| NOTE 2: | SUMMARY OF SIGNIFICANT POLICIES |
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in U.S. dollars. Accordingly, they do not include all of the information and footnotes required under U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended July 31, 2022 (“Fiscal 2022”). In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation have been made. Operating results for the nine months ended April 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2023 (“Fiscal 2023”).
Exploration Stage
We have established the existence of mineralized materials for certain uranium projects, including our Palangana and Christensen Ranch Mines (collectively, the “ISR Mines”). We have not established proven or probable reserves, as defined by the United States Securities and Exchange Commission (“SEC”) subpart 1300 of Regulation S-K (“S-K 1300”), through the completion of a “final” or “bankable” feasibility study for any of our uranium projects, including our ISR Mines. Furthermore, we have no plans to establish proven or probable reserves for any of our uranium projects for which we plan on utilizing in-situ recovery (“ISR”) mining, such as our ISR Mines. As a result, and despite the fact that we commenced extraction of mineralized materials at our ISR Mines, we remain an Exploration Stage company, as defined by the SEC, and will continue to remain as an Exploration Stage company until such time proven or probable reserves have been established.
Beginning with our Annual Report on Form 10-K for Fiscal 2022, we report our mineral holdings in accordance with the SEC’s S-K 1300.
Since we commenced extraction of mineralized materials at our ISR Mines without having established proven or probable reserves, any mineralized materials established or extracted from our ISR Mines should not in any way be associated with having established or produced from proven or probable reserves.
In accordance with U.S. GAAP, expenditures relating to the acquisition of mineral rights are initially capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time as we exit the Exploration Stage by establishing proven or probable reserves. Expenditures relating to exploration activities, such as drill programs to establish mineralized materials, are expensed as incurred. Expenditures relating to pre-extraction activities, such as the construction of mine wellfields, ion exchange facilities and disposal wells, are expensed as incurred until such time that proven or probable reserves are established for that project, after which expenditures relating to mine development activities for that particular project are capitalized as incurred.
Companies in the Production Stage, as defined by the SEC, having established proven and probable reserves and exited the Exploration Stage, typically capitalize expenditures relating to ongoing development activities, with corresponding depletion calculated over proven and probable reserves using the units-of-production method and allocated to future reporting periods to inventory and, as that inventory is sold, to cost of goods sold. We are in the Exploration Stage which has resulted in our Company reporting larger losses than if it had been in the Production Stage due to the expensing, instead of capitalization, of expenditures relating to ongoing mine development activities. Additionally, there would be no corresponding depletion allocated to future reporting periods of our Company since those costs would have been expensed previously, resulting in both lower inventory costs and cost of goods sold and results of operations with higher gross profits and lower losses than if we had been in the Production Stage. Any capitalized costs, such as expenditures relating to the acquisition of mineral rights, are depleted over the estimated extraction life using the straight-line method. As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies in the Production Stage.
| NOTE 3: | ACQUISITION OF UEX CORPORATION |
During Fiscal 2022, on June 13, 2022, we entered into a definitive agreement with UEX Corporation (“UEX” and the “UEX Agreement”) pursuant to which we would acquire all of the issued and outstanding common shares of UEX in an all-share transaction (the “UEX Acquisition”). On June 21, 2022, in accordance with the UEX Agreement, we completed a private placement in UEX, whereby we acquired
On August 19, 2022, we acquired all of the issued and outstanding common shares of UEX that we did not already own pursuant to the completion of the UEX Acquisition. Pursuant to the terms of the UEX Acquisition, UEX shareholders received
In connection with the UEX Acquisition, we also issued
The estimated fair value of the Replacement Options in the amount of $
| Exercise Price in U.S. dollars | | |||
| Exercise Price in Canadian dollars | CA$1.39 to CA$5.12 | |||
| Expected Risk Free Interest Rate | % | |||
| Expected Volatility | % | |||
| Expected Life in Years | ||||
| Expected Dividend Yield | % | |||
The estimated fair value of the Replacement Warrants in the amount of $
| Exercise Price in U.S. dollars | | |||
| Exercise Price in Canadian dollars | CA$1.44 to CA$4.44 | |||
| Expected Risk Free Interest Rate | % | |||
| Expected Volatility | % | |||
| Expected Life in Years | ||||
| Expected Dividend Yield | % | |||
The UEX Acquisition is accounted for as an acquisition of assets rather than a business as UEX does not meet the definition of a business in accordance with ASC 805 Business Combinations.
The following table summarizes the fair value of the consideration paid, and the fair value of the assets acquired and liabilities assumed, on the closing date of the UEX Acquisition:
| Consideration paid | ||||
| UEC shares issued | $ | |||
| Fair value of UEX shares acquired by UEC before acquisition | ||||
| Replacement options issued | ||||
| Replacement warrants issued | ||||
| Acquisition related costs | ||||
| Total consideration | $ | |||
| Assets acquired and liabilities assumed | ||||
| Cash and cash equivalents | $ | |||
| Prepaid expenses and deposits | ||||
| Accounts receivable | ||||
| Mineral rights and properties | ||||
| Equity-accounted investment | ||||
| Investment in equity securities | ||||
| Other non-current assets | ||||
| Total assets | ||||
| Accounts payable and accrued liabilities | ||||
| Other liabilities | ||||
| Asset retirement obligations (Note 11) | ||||
| Deferred tax liabilities | ||||
| Total liabilities | ||||
| Total net assets | $ |
Cash flow on acquisition:
| Cash acquired with the subsidiary | $ | |||
| Acquisition related costs | ( | ) | ||
| Acquisition of UEX, net of cash acquired | $ |
| NOTE 4: |
ACQUISITION OF THE ROUGHRIDER PROJECT |
On October 14, 2022, we completed the acquisition of all of the issued and outstanding shares of Roughrider Mineral Holdings Inc. (“Roughrider”), which owns the Roughrider uranium development project (the “Roughrider Project”) located in the Athabasca Basin, in Saskatchewan, Canada, from a subsidiary of Rio Tinto plc (the “Roughrider Acquisition”). The Roughrider Acquisition is accounted for as an acquisition of assets rather than a business as the Roughrider Project does not meet the definition of a business in accordance with ASC 805 Business Combinations.
The following table summarizes the fair value of the consideration paid, and the fair value of the assets acquired and liabilities assumed, on the closing date of the Roughrider Acquisition:
| Consideration paid | ||||
| Cash | $ | |||
| Fair value of UEC shares issued at $ per share | ||||
| Acquisition related costs | ||||
| Total consideration paid | $ | |||
| Assets acquired and liabilities assumed | ||||
| Mineral rights and properties | $ | |||
| Total assets | ||||
| Asset retirement obligations (Note 11) | ||||
| Deferred tax liabilities | ||||
| Total liabilities | ||||
| Total net assets | $ |
Cash flow on acquisition:
| Cash paid |
$ | ( |
) | |
| Acquisition related costs |
( |
) | ||
| Acquisition of Roughrider | $ | ( |
) |
| NOTE 5: | INVENTORIES |
As at April 30, 2023, we held
| April 30, 2023 | July 31, 2022 | |||||||
| Material and supplies | $ | $ | ||||||
| Uranium concentrates from production | ||||||||
| Purchased uranium inventories | ||||||||
| $ | $ | |||||||
As of April 30, 2023, our uranium inventory purchase commitments for the next five fiscal years are as the follows:
| Purchase Commitments | Purchase Price | |||||||
| Fiscal 2023 | $ | |||||||
| Fiscal 2024 | ||||||||
| Fiscal 2025 | ||||||||
| Fiscal 2026 | ||||||||
| Total | $ | |||||||
| NOTE 6: | MINERAL RIGHTS AND PROPERTIES |
Mineral Rights
As at April 30, 2023, we own mineral rights in the States of Arizona, New Mexico, Wyoming and Texas, in Canada and in the Republic of Paraguay. These mineral rights were acquired through staking, purchase or lease or option agreements and are subject to varying royalty interests, some of which are indexed to the sale price of uranium and titanium. As of April 30, 2023, annual maintenance payments of approximately $
As at April 30, 2023, the carrying value of our mineral rights and properties were as follows:
| Costs | United States | Canada | Paraguay | Total | ||||||||||||
| Balance, July 31, 2022 | $ | $ | $ | $ | ||||||||||||
| Additions (Note 3 and 4) | ||||||||||||||||
| Foreign exchange difference | ( | ) | ( | ) | ||||||||||||
| Balance, April 30, 2023 | ||||||||||||||||
| Accumulated Depletion and Amortization | United States | Canada | Paraguay | Total | ||||||||||||
| Balance, July 31, 2022 | ( | ) | ( | ) | ||||||||||||
| Additions | ( | ) | ( | ) | ||||||||||||
| Balance, April 30, 2023 | ( | ) | ( | ) | ||||||||||||
| Carrying Value | ||||||||||||||||
| Balance, July 31, 2022 | $ | $ | $ | $ | ||||||||||||
| Balance, April 30, 2023 | $ | $ | $ | $ | ||||||||||||
| NOTE 7: | PROPERTY, PLANT AND EQUIPMENT |
Property, plant and equipment consists of the following:
| April 30, 2023 | July 31, 2022 | |||||||||||||||||||||||
| Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
| Plant and Processing Facilities | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Mining Equipment | ( | ) | ( | ) | ||||||||||||||||||||
| Logging Equipment and Vehicles | ( | ) | ( | ) | ||||||||||||||||||||
| Computer Equipment | ( | ) | ||||||||||||||||||||||