Uranium Energy Hits Major Milestones At Palangana And Burke Hollow Projects
Uranium Energy has been granted all permits for the planned expansion of its Texas-based Palangana ISR mine and is now fully permitted for extraction in new resource areas. Additionally, it received disposal well draft permits for its Burke Hollow ISR project, also in Texas.
Uranium Energy (NYSEMKT:UEC) had a busy Wednesday, announcing that it's been granted all permits for the planned expansion of its Texas-based Palangana ISR mine and is now fully permitted for extraction in new resource areas. Additionally, it received disposal well draft permits for its Burke Hollow ISR project, also in Texas. The Palangana mine area has been increased from 6,200 acres to 8,722 acres, and now includes Production Area-4 (PA-4). To date, 296 drill holes have been completed inside PA-4, and they indicate three mineralized trends. Explaining why Uranium Energy needed to bring PA-4 into the fold, David Talbot of Dundee Capital Markets states in a research note, "[t]hey weren't drilled out when purchased from Uranium One, but now PAA 4 is defined by 296 drill holes. By leveraging existing mine infrastructure, it should be cheap to bring online quickly. Well field design is underway. PAA 5 still needs final permits, but it's already within the Mine Permit." He also notes that the three mineralized trends in PA-4 "show unusually high grade for ISR mining as the roll fronts are more robust and show better confinement." According to Talbot, Dundee accounted for PA-4 in its previous model for annual production numbers for the project; as such, the firm still believes it will put out 400,000 pounds per year. However, Dundee has now doubled its grade assumptions for Palangana, bringing the average grade up to 0.2 percent U3O8. The firm has also lowered its cost expectations from $35 per pound down to $28. Furthermore, it's now added Production Area-5 (PA-5) to its model — that should represent a three-year extension to Palangana's mine life assuming both PA-4 and PA-5 bring in 2 million pounds.