Resource World Magazine

O C T O B E R / N O V E M B E R 2 0 1 8 www.resourceworld.com 37 physical uranium in the long term. On July 9, 2018, Kazatomprom announced that it has made the first delivery to London-based Yellow Cake under a long term contract between the two companies. The company reckons uranium is structurally mispriced and will make its money from stockpiling the radioactive metal, commodity streaming and royalties. KazAtomProm, which produces over 40% of the world's uranium, and which announced a surprise production cut in November 2017, is now preparing an IPO by year end. Rule said one of the companies that will immediately respond to any rise in the price of uranium is Uranium Energy Corp. [UEC-NYSE]. Rule described the company as a well-run US producer. Uranium Energy sees itself as having an infrastructure advantage with its state-of- the art fully licensed Hobson processing facility in South Texas. The company also holds 4 million pounds of permitted pro- duction in Texas and Wyoming, assets that could allow the company to ramp up production when the uranium price is right. In January 2017, the company raised $26 million through a public offer- ing of 17.3 million units priced at $1.50 per unit, money to advance a portfolio of uranium assets in Texas amenable to the low cost in-situ recovery method. However, Uranium Energy CEO, Amir Adnani, said the company prefers to leave its uranium resources in the ground and wait until prices are trading in the mid US $40/lb range. At that point, the company would consider restarting production in Texas. "When we were previously in pro- duction, our sales averaged about US $45/ lb," he said. That compared to a cash cost of under US $22/lb. Uranium Energy is backed by some high profile investors, including Toronto- based asset manager Sprott Inc., and CEF Capital Markets Ltd., an affiliate of the Hong Kong-based conglomerate CK Hutchison Group, which is chaired by Li Ka-shing. CEF's primary uranium investment is NexGen. In June 2016, CEF subscribed for US $60 million worth of convertible debentures in NexGen, then 12 months later subscribed for another US $60 mil- lion worth of convertibles and US $50 million worth of common stock. CEF's total investment in NexGen is US $170 million to date. SECTION 232 PROBE Wilbur Ross, U.S. Commerce Secretary, is launching a new national security inves- tigation into uranium imports that could lead to tariffs or quotas to limit them. The Section 232 probe, entitled, Current and Proposed Tariff Actions Administered by the Department of Commerce, was prompted by a petition filed by two US uranium min- ing companies, Energy Fuels Inc. URANIUM

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