Uranium Energy Corp signs unhedged contracts for 1.1M pounds
Two U.S. utilities will take annual deliveries through 2032 at prevailing spot prices, with no pricing floors, ceilings or discounts.
Mara Quinlan
Uranium Energy Corp NYSEAMERICANUEC said on Thursday it signed long-term sales agreements with two U.S. utilities for 1.1 million pounds of uranium concentrates. The contracts secure demand through 2032 without a minimum selling price, leaving shareholders exposed to falling as well as rising uranium prices.
Shares closed lower at US$7.19 on NYSE American on Nov. 4 at 4:00 p.m. EST NYSEAMERICANUEC. That close preceded the announcement and does not reflect trading on the contracts.
One agreement calls for deliveries of 100,000 pounds annually from 2027 through 2032. The other requires the same annual volume from 2028 through 2032, bringing combined deliveries to 200,000 pounds a year once both contracts are running.
Each delivery will be priced at prevailing spot market prices, with no floors, ceilings, discounts or fixed pricing. UEC US Uranium LLC, the company's subsidiary, entered the definitive agreements; the release did not identify the utilities.
"These contract terms reflect our patient and disciplined unhedged sales approach, which has delivered peer-leading realized pricing and gives our shareholders further exposure to tightening market conditions," executive vice-president Scott Melbye said in the release.
The delivery schedule establishes volumes to be sold, while the pricing formula leaves the eventual revenue dependent on the market at delivery. The agreements therefore provide no contractual price cushion if uranium prices decline, and no ceiling limiting receipts if prices rise.
UEC's Sept. 29 fiscal results showed sales of 400,000 pounds from inventory at a weighted average realized price of US$93.13 per pound in the year ended July 31. Those sales generated US$37.3 million in revenue and US$16.9 million in gross profit.
The U.S. producer operates in Wyoming and South Texas and is expanding its wellfields. Its fiscal 2026 production totalled 229,294 pounds of precipitated uranium and dried and drummed uranium oxide, a separate measure from pounds sold out of inventory.
Fourth-quarter production at Christensen Ranch doubled to 65,392 pounds, according to the September results. Burke Hollow contributed 17,352 pounds in its first full quarter of operation.
UEC also reported 1.256 million pounds of uranium inventory at July 31. That figure excluded precipitated uranium and dried and drummed material at its processing plants.
Cameco Corporation TSECCO NYSECCJ describes a different balance in its contracting framework, combining base-escalated and market-related pricing. Cameco says its market-related uranium contracts typically include floors or ceilings, and may provide discounts, giving its portfolio protection against declining prices alongside exposure to increases.
Read more: American Lithium lifts Macusani measured and indicated uranium to 57.16M pounds
The first UEC contract begins deliveries in 2027, with the second starting in 2028.
