Recent Commentary on Uranium Energy Corp

Dear Shareholder,

Thank you for your continued interest in Uranium Energy Corp. Last week, Uranium Energy’s V.P. of Sales and Marketing, Ed Brezinski, introduced UEC to group of potential investors. Subsequently, attendee Bill Cara wrote the following commentary on his investment blog:

Per UEC's Ed Brezinski, the US uses 55M lb. per year to fuel its 105 reactors, yet only produces 3M lbs.

In 2013, 24M lbs. will be withdrawn from the market, upon expiration of the US/Russia accord on Soviet warhead re-processing. Of planned nuclear expansion, only 3% is in G-7 countries. Most is in China, India, Russia and Korea - none of which face NIMBY or other PR issues anything the G-7. These are powerful facts, suggesting a strong future for uranium producers.

Yet, despite global needs and plans for nuclear power basically unchanged by Fukushima, uranium stocks are way down since mid-March: the largest uranium supplier, Cameco down 29%; the Uranium ETF down 32%; juniors by roughly 30-50%. They look like candidates for a rebound. But which appeals most?

I concentrate on juniors, where potential upside is greatest. So, I jumped at the chance to meet with UEC, whose 32 year old founder/CEO is on Doug Casey's list of "10 emerging Canadian mining titans". While Amir Adnani had no previous uranium experience, he entered the field in what I found to be a very shrewd way.

Most junior explorers have no “edge”. All have geologists, and prospective land. After surface studies, they raise capital to drill, to model, and to produce resource calculations. Then, they raise more capital. Their success depends upon investor patience, and geology -- neither of which are good bets. Per "Exploration Insights" editor Brent Cook, the odds of seemingly prospective land becoming a profitable mine are less than 1 in 1000.

Adnani shortened these long odds. He only sought deposits near surface (easier and cheaper to prove up) and only deposits amenable to "in situ recovery" (ISR) which offers 3 major benefits over conventional mining and mill processing:
- much lower capital costs (minimizing dilution)
- lower per pound cash costs (increasing margin)
- faster in-state Texas-only permitting, increasing project NPV’s

In situ recovery is complex. Adnani hired as COO one of the world experts in this technology. He also bought for $12M an ISR processing plant which in a 2007 acquisition had been valued at approximately $500M. Therefore, UEC was able to get into production last November with several equity offerings, but no debt on the company's balance sheet. I wonder if this had ever been achieved by a uranium startup.

As Brezinski , a uranium industry veteran, explained, hundreds of uranium junior explorers act like gold juniors -- as if there were many intermediate and senior producers to buy their deposits. Listed uranium producers per his presentation total 6 including UEC. So, an exit strategy of selling to a producer seems reckless. There’s more control over one’s destiny from becoming a producer, generating revenues and profits, instead of unending equity raises. It seems that Adnani -- a young entrepreneur new to the uranium business -- has positioned his company rather well.

UEC now has 4 properties in Texas, one of which is in production, the others to come on stream over a couple of years. "Satellite plants" at the mines will feed pre-processed material to the central ISR processing plant (whose capacity equals 3M lb/yr. -- total current US production). In Brzezinski’s words, this avoids "moving dirt" (as would be required with conventional mill processing) which means much cheaper transport -- of concentrated materials.

Cash costs for UEC (on their initial production) are lower than for any producer except Uranium One.

UEC had just announced one conventional deal in Arizona "too cheap to pass up", and in my meeting stated expectations of doubling their Texas land position by year’s end at a cost of $1.5M. For the longer term future, UEC just announced acquisition in Paraguay of 10 times their current Texas acreage and in very similar geology -- also amenable to ISR . This was after nearly two years of investigation and negotiation, and at very low cost: 225,000 shares issued and a royalty of 1.5% which may be reacquired.

I was mightily impressed by what I heard in terms of vision, strategy, execution and leadership. I have yet to do due diligence, and recommend readers do theirs too.

Disclosure: after the meeting I acquired an initial position in the stock; no other ties to the company.

Please contact me directly, if you have any questions.

Best Regards,

Stefanie Makagon
Manager, Investor Relations

Toll Free: (866) 748-1030
Direct: (604) 682-9775 x311
E-mail:

smakagon@uraniumenergy.com

About Uranium Energy Corp

Uranium Energy Corp (NYSE-AMEX: UEC) is a U.S.-based uranium production, development and exploration company operating North America’s newest emerging uranium mine. The Company’s fully licensed and permitted Hobson processing facility is central to all of its projects in South Texas, including the Palangana in-situ recovery project, which is ramping up to full production this year, and the Goliad in-situ recovery project which has been granted its Mine Permit and is in the final stages of mine permitting for production. The Company’s operations are managed by professionals with a recognized profile for excellence in their industry, a profile based on many decades of hands-on experience in the key facets of uranium exploration, development and mining.