UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended April 30, 2024
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: 001-33706
URANIUM ENERGY CORP.
(Exact name of registrant as specified in its charter)
Nevada | 98-0399476 | |
(State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) | |
500 North Shoreline, Ste. 800, Corpus Christi, Texas, U.S.A. | 78401 | |
(U.S. corporate headquarters) | (Zip Code) | |
| 1830 – 1188 West Georgia Street Vancouver, British Columbia, Canada (Canadian corporate headquarters) | V6E 4A2
(Zip Code) |
(Address of principal executive offices)
(361) 888-8235 | ||
(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 |
Common Stock | UEC | NYSE American |
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.
Yes ☒ No ☐
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). Yes ☒ No ☐
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.
☒ Large accelerated filer ☐ Accelerated filer
☐ Non-accelerated filer ☐ Smaller reporting company
☐ Emerging growth company
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 ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 408,778,351 shares of common stock outstanding as of June 7, 2024.
TABLE OF CONTENTS
| 4 | ||
Item 1. | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | ||
Item 4. | ||
| 36 | ||
Item 1. | ||
Item 1A. | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 48 |
Item 3. | 49 | |
Item 4. | 49 | |
Item 5. | 49 | |
Item 6. | 49 | |
| 50 | |
PART I – FINANCIAL INFORMATION
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE three and nine months ended April 30, 2024
(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, 2024 | July 31, 2023 | |||||||||
CURRENT ASSETS | |||||||||||
Cash and cash equivalents | $ | 87,726 | $ | 45,614 | |||||||
Inventories | 3 | 63,387 | 6,207 | ||||||||
Prepaid expenses and deposits | 3,407 | 2,682 | |||||||||
Other current assets | 954 | 702 | |||||||||
TOTAL CURRENT ASSETS | 155,474 | 55,205 | |||||||||
MINERAL RIGHTS AND PROPERTIES | 4 | 558,436 | 565,560 | ||||||||
PROPERTY, PLANT AND EQUIPMENT | 5 | 19,959 | 19,728 | ||||||||
RESTRICTED CASH | 6 | 7,251 | 7,251 | ||||||||
EQUITY-ACCOUNTED INVESTMENTS | 7 | 62,548 | 48,110 | ||||||||
INVESTMENT IN EQUITY SECURITIES | 8 | 71,343 | 38,656 | ||||||||
OTHER NON-CURRENT ASSETS | 3,257 | 3,079 | |||||||||
TOTAL ASSETS | $ | 878,268 | $ | 737,589 | |||||||
CURRENT LIABILITIES | |||||||||||
Accounts payable and accrued liabilities | $ | 4,486 | $ | 10,525 | |||||||
Asset retirement obligations - current | 9 | 1,481 | 1,515 | ||||||||
Derivative liabilities | 10 | 8,068 | - | ||||||||
Other current liabilities | 277 | 154 | |||||||||
TOTAL CURRENT LIABILITIES | 14,312 | 12,194 | |||||||||
ASSET RETIREMENT OBLIGATIONS | 9 | 17,893 | 17,155 | ||||||||
OTHER NON-CURRENT LIABILITIES | 1,521 | 1,020 | |||||||||
DERIVATIVE LIABILITIES | 10 | - | 4,313 | ||||||||
DEFERRED TAX LIABILITIES | 65,902 | 71,080 | |||||||||
TOTAL LIABILITIES | 99,628 | 105,762 | |||||||||
STOCKHOLDERS’ EQUITY | |||||||||||
Capital stock | |||||||||||
Common stock $0.001 par value: 750,000,000 shares authorized, 405,951,114 shares issued and outstanding (July 31, 2023 - 378,452,864) | 11 | 406 | 378 | ||||||||
Additional paid-in capital | 1,094,795 | 924,737 | |||||||||
Accumulated deficit | (303,786 | ) | (289,680 | ) | |||||||
Accumulated other comprehensive loss | (12,775 | ) | (3,608 | ) | |||||||
TOTAL EQUITY | 778,640 | 631,827 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 878,268 | $ | 737,589 | |||||||
COMMITMENTS AND CONTINGENCIES | 3,9 | ||||||||||
SUBSEQUENT EVENTS | 11 | ||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited – Expressed in thousands of U.S. dollars, except share and per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||||||
April 30, | April 30, | |||||||||||||||||||
Notes | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
SALES AND SERVICE REVENUE | 13 | $ | - | $ | 20,217 | $ | 224 | $ | 125,440 | |||||||||||
COST OF SALES AND SERVICES | 13 | - | (13,998 | ) | (187 | ) | (90,793 | ) | ||||||||||||
GROSS PROFIT | - | 6,219 | 37 | 34,647 | ||||||||||||||||
OPERATING COSTS | ||||||||||||||||||||
Mineral property expenditures | 9,071 | 5,452 | 21,448 | 13,650 | ||||||||||||||||
General and administrative | 4,219 | 3,745 | 14,314 | 14,296 | ||||||||||||||||
Depreciation, amortization and accretion | 4,5,9 | 551 | 506 | 1,620 | 1,504 | |||||||||||||||
TOTAL OPERATING COSTS | 13,841 | 9,703 | 37,382 | 29,450 | ||||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (13,841 | ) | (3,484 | ) | (37,345 | ) | 5,197 | |||||||||||||
OTHER (EXPENSES) INCOME | ||||||||||||||||||||
Interest expenses and finance costs | (205 | ) | (202 | ) | (620 | ) | (596 | ) | ||||||||||||
Income (loss) from equity-accounted investments | 7 | 3,306 | (900 | ) | 4,958 | (985 | ) | |||||||||||||
(Loss) gain on disposition of assets | (46 | ) | - | (33 | ) | 2 | ||||||||||||||
(Loss) gain on revaluation of equity securities | 8 | (13,804 | ) | (12,649 | ) | 23,585 | (12,992 | ) | ||||||||||||
Gain (loss) on revaluation of derivative liabilities | 10 | 2,071 | 5,550 | (9,892 | ) | 4,651 | ||||||||||||||
Gain on settlement of liabilities | - | 235 | - | 427 | ||||||||||||||||
Other income (expenses) | 1,011 | 155 | 1,608 | (308 | ) | |||||||||||||||
OTHER (EXPENSES) INCOME | (7,667 | ) | (7,811 | ) | 19,606 | (9,801 | ) | |||||||||||||
LOSS BEFORE INCOME TAXES | (21,508 | ) | (11,295 | ) | (17,739 | ) | (4,604 | ) | ||||||||||||
DEFERRED TAX RECOVERY | 1,831 | 335 | 3,633 | 780 | ||||||||||||||||
NET LOSS FOR THE PERIOD | (19,677 | ) | (10,960 | ) | (14,106 | ) | (3,824 | ) | ||||||||||||
OTHER COMPREHENSIVE LOSS | ||||||||||||||||||||
Translation loss | (5,850 | ) | (3,589 | ) | (9,167 | ) | (9,740 | ) | ||||||||||||
TOTAL OTHER COMPREHENSIVE LOSS | (5,850 | ) | (3,589 | ) | (9,167 | ) | (9,740 | ) | ||||||||||||
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD | $ | (25,527 | ) | $ | (14,549 | ) | $ | (23,273 | ) | $ | (13,564 | ) | ||||||||
NET LOSS PER SHARE | 14 | |||||||||||||||||||
Basic | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.01 | ) | ||||||||
Diluted | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.01 | ) | ||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, | ||||||||||||||||||||
Basic | 404,104,490 | 375,759,521 | 393,425,716 | 360,554,427 | ||||||||||||||||
Diluted | 404,104,490 | 375,759,521 | 393,425,716 | 360,554,427 | ||||||||||||||||
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 of U.S. dollars)
Nine Months Ended April 30, | |||||||
Notes | 2024 | 2023 | |||||
NET CASH PROVIDED BY (USED IN): | |||||||
OPERATING ACTIVITIES | |||||||
Net loss for the period | $ | (14,106 | ) | $ | (3,824 | ) | |
Adjustments to reconcile net loss to cash flows in operating activities | |||||||
Stock-based compensation | 12 | 3,987 | 4,455 | ||||
Depreciation, amortization and accretion | 4,5,9 | 1,620 | 1,504 | ||||
(Income) loss from equity-accounted investment | 7 | (4,958 | ) | 985 | |||
Loss (gain) on disposition of assets | 33 | (2 | ) | ||||
(Gain) loss on revaluation of equity securities | 8 | (23,585 | ) | 12,992 | |||
Loss (gain) on revaluation of derivative liabilities | 10 | 9,892 | (4,651 | ) | |||
Deferred tax recovery | (3,633 | ) | (780 | ) | |||
Gain on settlement of liabilities | - | (427 | ) | ||||
Changes in operating assets and liabilities | |||||||
Inventories | (57,179 | ) | 39,933 | ||||
Prepaid expenses and deposits | (318 | ) | 838 | ||||
Other current assets | (262 | ) | (646 | ) | |||
Accounts payable and accrued liabilities | (5,389 | ) | (6,598 | ) | |||
Other liabilities | 27 | (1 | ) | ||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (93,871 | ) | 43,778 | ||||
FINANCING ACTIVITIES | |||||||
Proceeds from share issuances, net of issuance costs | 11,12 | 160,239 | 64,853 | ||||
Repayments of other loans | - | (66 | ) | ||||
Cash paid for withholding amounts on option exercise | (947 | ) | (147 | ) | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 159,292 | 64,640 | |||||
INVESTING ACTIVITIES | |||||||
Acquisition of UEX, net of cash acquired | - | 1,984 | |||||
Acquisition of Roughrider | - | (82,117 | ) | ||||
Investment in mineral rights and properties | (1,391 | ) | (51 | ) | |||
Capital contribution to equity-accounted investment | 7 | (2,388 | ) | (595 | ) | ||
Purchase of additional interest in equity-accounted investment | 7 | (9,238 | ) | - | |||
Investment in equity securities | 8 | (12,115 | ) | (42,219 | ) | ||
Proceeds from sale of equity securities | 8 | 3,008 | - | ||||
Purchase of property, plant and equipment | (1,166 | ) | (337 | ) | |||
Proceeds from disposition of assets | 8 | 8 | 2 | ||||
NET CASH USED IN INVESTING ACTIVITIES | (23,282 | ) | (123,333 | ) | |||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 42,139 | (14,915 | ) | ||||
FOREIGN EXCHANGE DIFFERENCE ON CASH | (27 | ) | (158 | ) | |||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 52,865 | 39,787 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 94,977 | $ | 24,714 | |||
The accompanying notes are an integral part of these condensed consolidated financial statements.
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited - Expressed in thousands of U.S. dollars, except share data)
Common Stock | Additional Paid-in Capital | Share Issuance Obligation | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Stockholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance, July 31, 2023 | 378,452,864 | $ | 378 | $ | 924,737 | $ | - | $ | (289,680 | ) | $ | (3,608 | ) | $ | 631,827 | |||||||||||||
Common stock | ||||||||||||||||||||||||||||
Issued under ATM offerings, net of issuance costs | 10,770,000 | 11 | 56,259 | - | - | - | 56,270 | |||||||||||||||||||||
Issued upon exercise of stock options | 445,861 | 1 | 263 | - | - | - | 264 | |||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||
Amortization of stock-based compensation | - | - | 1,572 | - | - | - | 1,572 | |||||||||||||||||||||
Net income for the period | - | - | - | - | 3,321 | - | 3,321 | |||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (11,049 | ) | (11,049 | ) | |||||||||||||||||||
Balance, October 31, 2023 | 389,668,725 | $ | 390 | $ | 982,831 | $ | - | $ | (286,359 | ) | $ | (14,657 | ) | $ | 682,205 | |||||||||||||
Common stock | ||||||||||||||||||||||||||||
Issued under ATM offering, net of issuance costs | 10,418,029 | 10 | 73,228 | - | - | - | 73,238 | |||||||||||||||||||||
Issued upon exercise of stock options | 669,999 | 1 | (70 | ) | - | - | - | (69 | ) | |||||||||||||||||||
Issued upon exercise of warrants | 302,220 | - | 1,965 | 517 | - | - | 2,482 | |||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||
Amortization of stock-based compensation | - | - | 1,312 | - | - | - | 1,312 | |||||||||||||||||||||
Net income for the period | - | - | - | - | 2,250 | - | 2,250 | |||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | 7,732 | 7,732 | |||||||||||||||||||||
Balance, January 31, 2024 | 401,058,973 | $ | 401 | $ | 1,059,266 | $ | 517 | $ | (284,109 | ) | $ | (6,925 | ) | $ | 769,150 | |||||||||||||
Common stock | ||||||||||||||||||||||||||||
Issued under ATM offering, net of issuance costs | 3,396,370 | 3 | 25,539 | - | - | - | 25,542 | |||||||||||||||||||||
Issued upon exercise of stock options | 345,077 | 1 | 209 | - | - | - | 210 | |||||||||||||||||||||
Issued upon exercise of warrants | 1,150,694 | 1 | 8,678 | (517 | ) | - | - | 8,162 | ||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||
Amortization of stock-based compensation | - | - | 1,103 | - | - | - | 1,103 | |||||||||||||||||||||
Net loss for the period | - | - | - | - | (19,677 | ) | - | (19,677 | ) | |||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (5,850 | ) | (5,850 | ) | |||||||||||||||||||
Balance, April 30, 2024 | 405,951,114 | $ | 406 | $ | 1,094,795 | $ | - | $ | (303,786 | ) | $ | (12,775 | ) | $ | 778,640 | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
URANIUM ENERGY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited - Expressed in thousands of U.S. dollars, except share data)
Common Stock | Additional Paid-in Capital | Share Issuance Obligation | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Stockholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance, July 31, 2022 | 289,638,307 | $ | 289 | $ | 613,179 | $ | - | $ | (286,373 | ) | $ | (186 | ) | $ | 326,909 | |||||||||||||
Common stock | ||||||||||||||||||||||||||||
Issued for acquisition of UEX and Roughrider | 66,324,560 | 66 | 235,306 | - | - | - | 235,372 | |||||||||||||||||||||
Issued under ATM offerings, net of issuance costs | 5,218,890 | 5 | 21,709 | - | - | - | 21,714 | |||||||||||||||||||||
Issued upon exercise of stock options | 1,404,601 | 2 | 58 | - | - | - | 60 | |||||||||||||||||||||
Issued upon exercise of warrants | 3,410,898 | 4 | 6,136 | - | - | - | 6,140 | |||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||
Common stock issued for consulting services | 4,179 | - | 17 | - | - | - | 17 | |||||||||||||||||||||
Common stock issued under Stock Incentive Plan | 73,618 | - | 299 | - | - | - | 299 | |||||||||||||||||||||
Amortization of stock-based compensation | - | - | 1,426 | - | - | - | 1,426 | |||||||||||||||||||||
Replacement options issued for acquisition of UEX | - | - | 4,026 | - | - | - | 4,026 | |||||||||||||||||||||
Net loss for the period | - | - | - | - | (3,756 | ) | - | (3,756 | ) | |||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (10,768 | ) | (10,768 | ) | |||||||||||||||||||
Balance, October 31, 2022 | 366,075,053 | $ | 366 | $ | 882,156 | $ | - | $ | (290,129 | ) | $ | (10,954 | ) | $ | 581,439 | |||||||||||||
Common stock | ||||||||||||||||||||||||||||
Issued under ATM offering, net of issuance costs | 7,040,363 | 7 | 26,099 | - | - | - | 26,106 | |||||||||||||||||||||
Issued upon exercise of stock options | 94,302 | - | - | - | - | - | - | |||||||||||||||||||||
Issued upon exercise of warrants | 45,000 | - | 66 | - | - | - | 66 | |||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||
Common stock issued for consulting services | 49,228 | - | 201 | - | - | - | 201 | |||||||||||||||||||||
Common stock issued under Stock Incentive Plan | 66,471 | - | 262 | - | - | - | 262 | |||||||||||||||||||||
Amortization of stock-based compensation | - | - | 1,085 | - | - | - | 1,085 | |||||||||||||||||||||
Net income for the period | - | - | - | - | 10,892 | - | 10,892 | |||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | 4,617 | 4,617 | |||||||||||||||||||||
Balance, January 31, 2023 | 373,370,417 | $ | 373 | $ | 909,869 | $ | - | $ | (279,237 | ) | $ | (6,337 | ) | $ | 624,668 | |||||||||||||
Common stock | ||||||||||||||||||||||||||||
Issued under ATM offering, net of issuance costs | 2,912,000 | 4 | 10,595 | - | - | - | 10,599 | |||||||||||||||||||||
Issued upon exercise of stock options | 204,693 | - | - | - | - | - | - | |||||||||||||||||||||
Issued upon exercise of warrants | - | - | - | 22 | - | - | 22 | |||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||
Common stock issued under Stock Incentive Plan | 60,784 | - | 211 | - | - | - | 211 | |||||||||||||||||||||
Amortization of stock-based compensation | - | - | 887 | - | - | - | 887 | |||||||||||||||||||||
Net loss for the period | - | - | - | - | (10,960 | ) | - | (10,960 | ) | |||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (3,589 | ) | (3,589 | ) | |||||||||||||||||||
Balance, April 30, 2023 | 376,547,894 | $ | 377 | $ | 921,562 | $ | 22 | $ | (290,197 | ) | $ | (9,926 | ) | $ | 621,838 | |||||||||||||
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, 2024, we had working capital (current assets less current liabilities) of $141,162 including cash and cash equivalents of $87,726 and purchased uranium inventories of $63,019. We believe our existing cash resources and, if necessary, cash generated from the sale of the Company’s uranium inventories, will provide sufficient funds to carry out our planned operations for 12 months from the date that these interim condensed consolidated financial statements are issued. Our continuation as a going concern for a period beyond those 12 months will be dependent upon our ability to achieve consistent positive cash flow from the sale of our uranium inventories and to obtain adequate additional financing, as our operations are capital intensive and future capital expenditures are expected to be substantial.
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, 2023 (“Fiscal 2023”). 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, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2024 (“Fiscal 2024”).
Exploration Stage
We have established the existence of mineralized materials for certain uranium projects, including our Palangana Mine, Christensen Ranch Mine (collectively, the “ISR Mines”) and our Roughrider and Christie Lake Projects. 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 the uranium projects we operate, including our ISR Mines. Furthermore, we have no present 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 issuer, as defined by the SEC, and will continue to remain as an Exploration Stage issuer until such time proven or probable reserves have been established.
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 the 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 when the underlying property is converted to the Production Stage. As a result, our consolidated financial statements may not be directly comparable to the financial statements of companies in the Production Stage.
Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under this ASU are also required for public entities with a single reportable segment. This ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2025, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU expands public entities’ income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This ASU will be effective for fiscal years beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures
In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements. This ASU contains amendments to the Codification that remove references to various FASB Concepts Statements. The effort facilitates Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements. While the amendments are not expected to result in significant changes for most entities, the FASB provided transition guidance since some entities could be affected. This ASU will be effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
NOTE 3: | INVENTORIES |
As at April 30, 2024, we held 1,166,000 ( July 31, 2023: 171,000) pounds of purchased uranium concentrate inventory. Costs of inventories consist of the following:
April 30, 2024 | July 31, 2023 | |||||||
Material and supplies | $ | 190 | $ | 228 | ||||
Uranium concentrates from extraction | 178 | 178 | ||||||
Purchased uranium inventories | 63,019 | 5,801 | ||||||
| $ | 63,387 | $ | 6,207 | |||||
As of April 30, 2024, our uranium inventory purchase commitments for the next five fiscal years are as the follows:
Purchase Commitments | ||||||||
in Pounds | Purchase Price | |||||||
Fiscal 2024 | 300,000 | $ | 12,355 | |||||
Fiscal 2025 | 600,000 | 23,120 | ||||||
Fiscal 2026 | 100,000 | 3,620 | ||||||
Total | 1,000,000 | $ | 39,095 | |||||
NOTE 4: | MINERAL RIGHTS AND PROPERTIES |
Mineral Rights
As at April 30, 2024, we own mineral rights in the States of Arizona, New Mexico, Texas and Wyoming, 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 or titanium. As of April 30, 2024, annual maintenance payments of approximately $4,818 will be required to maintain these mineral rights.
As at April 30, 2024, the carrying value of our mineral rights and properties were as follows:
Costs | United States | Canada | Paraguay | Total | ||||||||||||
Balance, July 31, 2023 | $ | 172,440 | $ | 384,607 | $ | 15,014 | $ | 572,061 | ||||||||
Additions | 50 | 1,340 | - | 1,390 | ||||||||||||
Foreign exchange difference | - | (8,520 | ) | - | (8,520 | ) | ||||||||||
Balance, April 30, 2024 | 172,490 | 377,427 | 15,014 | 564,931 | ||||||||||||
Accumulated Amortization and Impairment | United States | Canada | Paraguay | Total | ||||||||||||
Balance, July 31, 2023 | (6,389 | ) | (112 | ) | - | (6,501 | ) | |||||||||
Foreign exchange difference | - | 6 | - | 6 | ||||||||||||
Balance, April 30, 2024 | (6,389 | ) | (106 | ) | - | (6,495 | ) | |||||||||
Carrying Value | ||||||||||||||||
Balance, July 31, 2023 | $ | 166,051 | $ | 384,495 | $ | 15,014 | $ | 565,560 | ||||||||
Balance, April 30, 2024 | $ | 166,101 | $ | 377,321 | $ | 15,014 | $ | 558,436 | ||||||||
NOTE 5: | PROPERTY, PLANT AND EQUIPMENT |
Property, plant and equipment consists of the following:
April 30, 2024 | July 31, 2023 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Depreciation | Value | Depreciation | Value | |||||||||||||||||||||
Plant and Processing Facilities | $ | 19,347 | $ | (2,528 | ) | $ | 16,819 | $ | 19,145 | $ | (1,998 | ) | $ | 17,147 | ||||||||||
Mining Equipment | 3,499 | (2,521 | ) | 978 | 2,915 | (2,478 | ) | 437 | ||||||||||||||||
Logging Equipment and Vehicles | 2,917 | (2,147 | ) | 770 | 2,799 | (1,989 | ) | 810 | ||||||||||||||||
Computer Equipment | 300 | (283 | ) | 17 | 306 | (280 | ) | 26 | ||||||||||||||||
Furniture and Fixtures | 243 | (187 | ) | 56 | 198 | (180 | ) | 18 | ||||||||||||||||
Buildings | 338 | (99 | ) | 239 | 297 | (87 | ) | 210 | ||||||||||||||||
Land | 1,080 | - | 1,080 | 1,080 | - | 1,080 | ||||||||||||||||||
| $ | 27,724 | $ | (7,765 | ) | $ | 19,959 | $ | 26,740 | $ | (7,012 | ) | $ | 19,728 | |||||||||||
NOTE 6: RESTRICTED CASH |
Restricted cash includes cash and cash equivalents and money market funds as collateral for various bonds posted in favor of applicable state regulatory agencies in Arizona, Texas and Wyoming, and for estimated reclamation costs associated with our plants, processing facilities and various projects. Restricted cash will be released upon completion of reclamation of a mineral property or restructuring of a surety and collateral arrangement.
Restricted cash consisted of the following:
April 30, 2024 | July 31, 2023 | |||||||
Balance, beginning of year | $ | 7,251 | $ | 7,251 | ||||
Balance, end of year | $ | 7,251 | $ | 7,251 | ||||
Cash, cash equivalents and restricted cash are included in the following accounts:
April 30, 2024 | July 31, 2023 | |||||||
| Cash and cash equivalents | $ | 87,726 | $ | 45,614 | ||||
| Restricted cash | 7,251 | 7,251 | ||||||
Total cash, cash equivalents and restricted cash | $ | 94,977 | $ | 52,865 | ||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and restricted cash. These assets include Canadian dollar and U.S. dollar denominated certificates of deposit, money market accounts and demand deposits. These instruments are maintained at financial institutions in Canada and the U.S. The maximum credit risk of these assets is the carrying amount less amount covered by the Canada Deposit Insurance Corporation, the Securities Investor Protection Corporation or the U.S. Federal Deposit Insurance Corporation, should the financial institutions with which these amounts are invested be rendered insolvent. As of April 30, 2024, approximately $73.6 million of our cash equivalents is held in a single financial institution at one of the largest banks in Canada and subject to concentration risk. The Company does not consider any of its financial assets to be impaired as of April 30, 2024.
NOTE 7: | EQUITY-ACCOUNTED INVESTMENTS |
During the nine months ended April 30, 2024, we participated in equity financings and acquired an additional 1,930,750 common shares of Uranium Royalty Corp. (“URC”) at a price of $2.94 per share for total consideration of $5,676 and an additional 1,047,614 common shares of URC at a price of $3.40 per share for total consideration of $3,562.
As at April 30, 2024, we owned 17,978,364 shares of URC, representing a 14.9% ( July 31, 2023: 14.9%) interest in URC. In addition, two of our officers are members of URC’s board of directors. Furthermore, one of these officers also holds an executive position within URC. As a consequence, our ability to exercise significant influence over URC’s operating and financing policies continued to exist during the three and nine months ended April 30, 2024. Should URC’s outstanding options and warrants be fully exercised, the Company’s ownership interest would decrease from 14.9% to 13.2%. URC is a public company listed on the Toronto Stock Exchange with the trading symbol “URC” and on NASDAQ with the trading symbol “UROY”. As at April 30, 2024, the fair value of our investment in URC was approximately $41.2 million ( July 31, 2023: $34.2 million) and the carrying amount of URC was $38.7 million ( July 31, 2023: $24.6 million).
As at April 30, 2024, we owned 50% of the outstanding shares of JCU (Canada) Exploration Company Limited (“JCU”) acquired through our acquisition of UEX Corporation completed on August 19, 2022 (the “UEX Acquisition”). JCU is a private Canadian company engaged in the exploration and development of uranium assets in Canada. The Company’s 50% interest in JCU is a joint venture, which is accounted for using the equity method.
We incurred $11 and $54 in exploration expenditures on behalf of JCU for the three and nine months ended April 30, 2024. As at April 30, 2024, the amount receivable from JCU totaled $3 ( July 31, 2023: $201).
During the nine months ended April 30, 2024, the changes in carrying value of our equity-accounted investments are summarized as follows:
Balance, July 31, 2023 | $ | 48,110 | ||
Addition in URC | 9,238 | |||
Capital contribution to JCU | 2,388 | |||
Share of income (loss) from URC and JCU | 1,325 | |||
Gain on dilution of ownership interest in URC | 3,633 | |||
Foreign exchange difference | (2,146 | ) | ||
Balance, April 30, 2024 | $ | 62,548 |
For the three and nine months ended April 30, 2024 and 2023, income (loss) from our equity-accounted investments consisted of the following:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Share of income (loss) | $ | 104 | $ | (908 | ) | $ | 1,325 | $ | (1,609 | ) | ||||||
Gain on dilution of ownership interest | 3,202 | 8 | 3,633 | 624 | ||||||||||||
Total | $ | 3,306 | $ | (900 | ) | $ | 4,958 | $ | (985 | ) | ||||||
NOTE 8: | INVESTMENTS IN EQUITY SECURITIES |
During the nine months ended April 30, 2024, the changes in our investments in equity securities are summarized as follows:
Balance, July 31, 2023 | $ | 38,656 | ||
Dispositions | (3,008 | ) | ||
Additions | 12,115 | |||
Gain on revaluation of equity securities | 23,585 | |||
Foreign exchange difference | (5 | ) | ||
Balance, April 30, 2024 | $ | 71,343 |
The cumulative revaluation adjustment since acquisition of the equity securities held as at April 30, 2024 is a gain of $8,555.
NOTE 9: | ASSET RETIREMENT OBLIGATIONS |
Asset retirement obligations (“ARO”s) relate to future remediation and decommissioning activities for our plants, processing facilities and various projects, and are summarized as follows:
Balance, July 31, 2023 | $ | 18,670 | ||
Accretion | 737 | |||
Liabilities settled in cash | (33 | ) | ||
Balance, April 30, 2024 | 19,374 | |||
Asset retirement obligations, current | 1,481 | |||
Asset retirement obligations, non-current | $ | 17,893 |
The estimated amounts and timing of cash flows and assumptions used for ARO estimates are as follows:
April 30, 2024 | July 31, 2023 | |||||||
Undiscounted amount of estimated cash flows | $ | 29,030 | $ | 29,064 | ||||
Payable in years | 1 to 23 | 1 to 23 | ||||||
Inflation rate | 1.56% to 5.32% | 1.56% to 5.32% | ||||||
Discount rate | 3.72% to 6.35% | 3.72% to 6.35% | ||||||
Our undiscounted amounts of estimated cash flows for the next five fiscal years and beyond are as follows:
Fiscal 2024 | $ | 1,481 | ||
Fiscal 2025 | 1,472 | |||
Fiscal 2026 | 2,489 | |||
Fiscal 2027 | 2,509 | |||
Fiscal 2028 | 1,990 | |||
Remaining balance | 19,089 | |||
| $ | 29,030 |
NOTE 10: | DERIVATIVE LIABILITIES |
On August 19, 2022, the Company issued replacement warrants (each, a “Replacement Warrant”) in connection with the UEX Acquisition. The Replacement Warrants are accounted for as derivative liabilities as the exercise prices of the Replacement Warrants are denominated in Canadian dollars which differs from our functional currency.
As at April 30, 2024, the fair value of the Replacement Warrants was estimated using the Black-Scholes model with the following assumptions, which is level 2 of the fair value measurement hierarchy:
Exercise Price in U.S. dollars | 2.455 to3.3737 | ||
Exercise Price in Canadian dollars | CA$3.22 to CA$4.44 | ||
Expected Risk Free Interest Rate | 5.38 | % | |
Expected Volatility | 51.23 | % | |
Expected Life in Years | 0.36 | ||
Expected Dividend Yield | 0 | % |
The movement in derivative liabilities during the period is as follows:
Balance, July 31, 2023 | $ | 4,313 | ||
Exercise of Replacement Warrants | (6,137 | ) | ||
Change in fair value during the period | 9,892 | |||
Balance, April 30, 2024 | $ | 8,068 |
As at April 30, 2024, the number of Replacement Warrants outstanding was 2,222,298 with an expiry date of September 7, 2024 (refer to Note 11).
NOTE 11: | CAPITAL STOCK |
Equity Financing
On May 17, 2021, we filed a Form S-3 shelf registration statement under the United States Securities Act of 1933, as amended (the “Securities Act”), which was declared effective by the SEC on June 1, 2021, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of up to an aggregate offering amount of $200 million (the “2021 Shelf”), which included an at-the-market offering agreement prospectus (the “May 2021 ATM Offering”) covering the offering, issuance and sale of up to a maximum offering of $100 million as part of the $200 million under the 2021 Shelf.
On May 14, 2021, we entered into an at-the-market offering agreement (the “2021 ATM Offering Agreement”) with H.C. Wainwright & Co., LLC and certain co-managers (collectively, the “2021 ATM Managers”) as set forth in the 2021 ATM Offering Agreement under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100 million through the 2021 ATM Managers selected by us.
On November 26, 2021, we filed a prospectus supplement to our 2021 Shelf with respect to the continuation of the May 2021 ATM Offering Agreement with the 2021 ATM Managers under which we may, if eligible, from time to time, sell shares of our common stock having an aggregate offering price of up to an additional $100 million for a total of $200 million through the 2021 ATM Managers selected by us (the “November 2021 ATM Offering”; and, collectively, with the May 2021 ATM Offering, the “2021 ATM Offering”).
On November 16, 2022, we filed a Form S-3 automatic shelf registration statement under the Securities Act, which became effective upon filing, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of an undetermined dollar value of common stock, debt securities, warrants to purchase common stock or debt securities, subscription receipts for and units which include common stock, debt securities, warrants or any combination thereof (the “2022 Shelf”), which included an at-the-market offering agreement prospectus (the “2022 ATM Offering”; and, collectively, with the 2021 ATM Offering, the “ATM Offerings”) covering the offering, issuance and sale of up to a maximum offering of $300 million under the 2022 Shelf.
On November 16, 2022, we also entered into an at-the-market offering agreement (the “2022 ATM Offering Agreement”) with H.C. Wainwright & Co., LLC and certain co-managers (collectively, the “2022 ATM Managers”) as set forth in the 2022 ATM Offering Agreement under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $300 million through the 2022 ATM Managers selected by us.
During the three and nine months ended April 30, 2024, we issued 3,396,370 and 24,584,399 shares of the Company’s common stock under the ATM Offerings for net cash proceeds of $25,542 and $155,050, respectively.
Subsequent to April 30, 2024, we issued a further 1,791,300 shares of the Company’s common stock under our ATM Offerings for net cash proceeds of $12,824.
Share Purchase Warrants
A continuity schedule of our outstanding share purchase warrants for the three and nine months ended April 30, 2024, is as follows:
Number of | Weighted Average | |||||||
Warrants | Exercise Price | |||||||
Balance, July 31, 2023 | 3,857,030 | $ | 3.31 | |||||
Exercised | (1,452,914 | ) | 3.20 | |||||
Balance, April 30, 2024 | 2,404,116 | $ | 3.38 | |||||
A summary of our share purchase warrants outstanding and exercisable as of April 30, 2024, is as follows:
Number of | Weighted Average Remaining | ||||||||||
Weighted Average | Warrants | Contractual | |||||||||
Exercise Price | Outstanding | Life (Years) | Expiry Date | ||||||||
| $ | 3.32 | 2,222,298 | 0.36 | September 7, 2024 | |||||||
| 4.13 | 181,818 | 1.93 | April 5, 2026 | ||||||||
| $ | 3.38 | 2,404,116 | 0.48 | ||||||||
During the three and nine months ended April 30, 2024, we received cash proceeds of $3,771 and $4,508, respectively, from the exercise of share purchase warrants.
Subsequent to April 30, 2024, 39,393 warrants with an expiry date of September 7, 2024 were exercised and proceeds of $93 were received.
NOTE 12: | STOCK-BASED COMPENSATION |
Stock Options
A continuity schedule of our outstanding stock options for the three and nine months ended April 30, 2024, is as follows:
Number of Stock | Weighted Average | |||||||
Options | Exercise Price | |||||||
Balance, July 31, 2023 | 8,326,983 | $ | 1.92 | |||||
Granted | 17,500 | 5.04 | ||||||
Exercised | (608,182 | ) | 1.69 | |||||
Cancelled/Forfeited | (191,259 | ) | 1.59 | |||||
Expired | (27,000 | ) | 3.69 | |||||
Balance, October 31, 2023 | 7,518,042 | 1.94 | ||||||
Granted | 10,000 | 7.63 | ||||||
Exercised | (878,503 | ) | 1.45 | |||||
Balance, January 31, 2024 | 6,649,539 | 2.01 | ||||||
Granted | 40,143 | 6.70 | ||||||
Exercised | (406,411 | ) | 1.61 | |||||
Cancelled/Forfeited | (8,600 | ) | 3.45 | |||||
Expired | (25,000 | ) | 1.44 | |||||
Balance, April 30, 2024 | 6,249,671 | 2.07 | ||||||
The table below sets forth the number of shares issued and cash received upon exercise of our stock options:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Number of Options Exercised on Cash Basis | 202,437 | - | 492,112 | 138,537 | ||||||||||||
Number of Options Exercised on Forfeiture Basis | 203,974 | 337,500 | 1,400,984 | 2,727,295 | ||||||||||||
Total Number of Options Exercised | 406,411 | 337,500 | 1,893,096 | 2,865,832 | ||||||||||||
Number of Shares Issued on Cash Exercise | 202,437 | - | 492,112 | 138,537 | ||||||||||||
Number of Shares Issued on Forfeiture Basis | 142,640 | 204,693 | 968,825 | 1,565,059 | ||||||||||||
Total Number of Shares Issued Upon Exercise of Options | 345,077 | 204,693 | 1,460,937 | 1,703,596 | ||||||||||||
Cash Received from Exercise of Stock Options | $ | 281 | $ | - | $ | 681 | $ | 206 | ||||||||
Total Intrinsic Value of Options Exercised | $ | 2,431 | $ | 858 | $ | 9,022 | $ | 6,834 | ||||||||
A continuity schedule of our outstanding unvested stock options as of April 30, 2024, and the changes during the period, is as follows:
Number of Unvested Stock Options | Weighted Average Grant-Date Fair Value | ||||
Balance, July 31, 2023 | 1,803,265 | $ | 2.28 | ||
Granted | 17,500 | 3.36 | |||
Cancelled/Forfeited | (12,300 | ) | 2.37 | ||
Vested | (133,062 | ) | 2.18 | ||
Balance, October 31, 2023 | 1,675,403 | 2.29 | |||
Granted | 10,000 | 5.05 | |||
Vested | (429,513 | ) | 2.39 | ||
Balance, January 31, 2024 | 1,255,890 | 2.28 | |||
Granted | 40,143 | 4.45 | |||
Cancelled/Forfeited | (8,600 | ) | 2.27 | ||
Vested | (29,687 | ) | 2.29 | ||
Balance, April 30, 2024 | 1,257,746 | 2.35 | |||
For the nine months ended April 30, 2024, the fair value of the stock options granted was estimated using the Black-Scholes model with the following assumptions, which is level 2 of the fair value measurement hierarchy:
Exercise Price | 4.722 to7.6363 |
Expected Risk Free Interest Rate | 3.99% to 4.67% |
Expected Volatility | 79.30% to 79.57% |
Expected Life in Years | 5 |
Expected Dividend Yield | 0.00% |
As at April 30, 2024, the aggregate intrinsic value of all of our outstanding stock options was estimated at $29,252 (vested: $25,374 and unvested: $3,878). As at April 30, 2024, our unrecognized compensation cost related to unvested stock options was $1,193, which is expected to be recognized over 0.98 years.
A summary of our stock options outstanding and exercisable as of April 30, 2024, is as follows:
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Range of | Weighted | Remaining | Weighted | Remaining | ||||||||||||||||||||
Exercise | Outstanding at | Average | Contractual | Exercisable at | Average | Contractual | ||||||||||||||||||
Prices | April 30, 2024 | Exercise Price | Term (Years) | April 30, 2024 | Exercise Price | Term (Years) | ||||||||||||||||||
$0.91 to $0.99 | 2,140,500 | $ | 0.92 | 5.83 | 2,140,500 | $ | 0.92 | 5.83 | ||||||||||||||||
$1.00 to $1.99 | 1,325,000 | 1.10 | 6.21 | 1,325,000 | 1.10 | 6.21 | ||||||||||||||||||
$2.00 to $2.99 | 537,149 | 2.26 | 7.18 | 537,149 | 2.26 | 7.18 | ||||||||||||||||||
$3.00 to $3.99 | 2,176,879 | 3.61 | 8.43 | 982,401 | 3.71 | 8.02 | ||||||||||||||||||
$4.00 to $4.99 | 7,500 | 4.56 | 9.06 | 2,500 | 4.48 | 8.92 | ||||||||||||||||||
$5.00 to $5.99 | 12,500 | 5.16 | 9.42 | 3,125 | 5.16 | 9.42 | ||||||||||||||||||
$6.00 to $6.99 | 40,143 | 6.70 | 9.89 | - | ||||||||||||||||||||
$7.00 to $7.63 | 10,000 | 7.63 | 9.73 | 1,250 | 7.63 | 9.73 | ||||||||||||||||||
| 6,249,671 | $ | 2.07 | 6.98 | 4,991,925 | $ | 1.67 | 6.51 | |||||||||||||||||
Restricted Stock Units
A summary of our outstanding and unvested restricted stock units (“RSU”s) as of April 30, 2024, is as follows:
Number of | ||||||||||||||||
Restricted Stock | Grant Date | Remaining Life | Aggregate | |||||||||||||
Grant Date | Units | Fair Value | (Years) | Intrinsic Value | ||||||||||||
July 21, 2021 | 135,875 | 2.15 | 0.31 | 917 | ||||||||||||
May 1, 2022 | 39,216 | 4.25 | 1.09 | 265 | ||||||||||||
July 29, 2022 | 184,023 | 3.98 | 1.33 | 1,242 | ||||||||||||
July 31, 2023 | 620,386 | 3.32 | 2.34 | 4,188 | ||||||||||||
January 2, 2024 | 1,166 | 6.44 | 2.76 | 8 | ||||||||||||
January 22, 2024 | 8,919 | 7.63 | 0.82 | 60 | ||||||||||||
March 13, 2024 | 2,288 | 6.49 | 0.95 | 15 | ||||||||||||
April 1, 2024 | 20,000 | 7.07 | 3.00 | 135 | ||||||||||||
| 1,011,873 | $ | 3.44 | 1.83 | $ | 6,830 | |||||||||||
During the three and nine months ended April 30, 2024, our stock-based compensation related to RSUs was $453 and $1,326 (three and nine months ended April 30, 2023: $283 and $869), respectively. As at April 30, 2024, our unrecognized compensation costs related to unvested RSUs totaled $1,562, which is expected to be recognized over a period of approximately 1.46 years.
Performance Based Restricted Stock Units
During the three and nine months ended April 30, 2024, our stock-based compensation related to the amortization of target performance based restricted stock units (“PRSU”s) totaled $176 and $529 (three and nine months ended April 30, 2023: $99 and $298), respectively. As at April 30, 2024, our unrecognized compensation costs relating to unvested PRSUs totaled $978, which is expected to be recognized over a period of approximately 1.93 years.
Stock-Based Compensation
A summary of our stock-based compensation expense as of April 30, 2024, is as follows:
Three Months Ended | Nine Months Ended | |||||||||||||||
April 30, | April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Stock-Based Compensation for Consultants | ||||||||||||||||
Common stock issued to consultants | $ | - | $ | 107 | $ | - | $ | 382 | ||||||||
Amortization of stock option expenses | 87 | 95 | 302 | 467 | ||||||||||||
| 87 | 202 | 302 | 849 | |||||||||||||
Stock-Based Compensation for Management | ||||||||||||||||
Amortization of stock option expenses | 120 | 95 | 488 | 323 | ||||||||||||
Amortization of RSU and PRSU expenses | 585 | 346 | 1,774 | 1,053 | ||||||||||||
| 705 | 441 | 2,262 | 1,376 | |||||||||||||
Stock-Based Compensation for Employees | ||||||||||||||||
Common stock issued to employees | - | 188 | - | 675 | ||||||||||||
Amortization of stock option expenses | 285 | 314 | 1,362 | 1,441 | ||||||||||||
Amortization of RSU expenses | 26 | 37 | 61 | 114 | ||||||||||||
| 311 | 539 | 1,423 | 2,230 | |||||||||||||
| $ | 1,103 | $ | 1,182 | $ | 3,987 | $ | 4,455 | |||||||||
NOTE 13: | SALES AND SERVICE REVENUE AND COST OF SALES AND SERVICES |
The table below provides a breakdown of our sales and service revenue and cost of sales and service revenue:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Sales of purchased uranium inventory | $ | - | $ | 20,095 | $ | - | $ | 125,140 | ||||||||
Revenue from toll processing services | - | 122 | 224 | 300 | ||||||||||||
Total sales and service revenue | $ | - | $ | 20,217 | $ | 224 | $ | 125,440 | ||||||||
Cost of purchased uranium inventory | $ | - | $ | (13,896 | ) | $ | - | $ | (90,543 | ) | ||||||
Cost of toll processing services | - | (102 | ) | (187 | ) | (250 | ) | |||||||||
Total cost of sales and services | $ | - | $ | (13,998 | ) | $ | (187 | ) | $ | (90,793 | ) | |||||
The table below provides a breakdown of major customers:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Customer A | 0 | % | 0 | % | 0 | % | 16 | % | ||||||||
Customer B | 0 | % | 0 | % | 0 | % | 20 | % | ||||||||
Customer C | 0 | % | 25 | % | 0 | % | 8 | % | ||||||||
Customer D | 0 | % | 50 | % | 0 | % | 16 | % | ||||||||
Customer E | 0 | % | 0 | % | 0 | % | 14 | % | ||||||||
Customer F | 0 | % | 24 | % | 0 | % | 10 | % | ||||||||
Customer G | 0 | % | 0 | % | 0 | % | 4 | % | ||||||||
Customer H | 0 | % | 1 | % | 100 | % | 12 | % | ||||||||
| 0 | % | 100 | % | 100 | % | 100 | % | |||||||||
NOTE 14: | LOSS PER SHARE |
The following table reconciles the weighted average number of shares used in the calculation of our basic and diluted loss per share:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
Numerator | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net Loss for the Period | $ | (19,677 | ) | $ | (10,960 | ) | $ | (14,106 | ) | $ | (3,824 | ) | ||||
Denominator | ||||||||||||||||
Basic Weighted Average Number of Shares | 404,104,490 | 375,759,521 | 393,425,716 | 360,554,427 | ||||||||||||
Dilutive Effect of Stock Awards and Warrants | - | - | - | - | ||||||||||||
Diluted Weighted Average Number of Shares | 404,104,490 | 375,759,521 | 393,425,716 | 360,554,427 | ||||||||||||
Net Loss Per Share - Basic | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.01 | ) | ||||
Net Loss Per Share - Diluted | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.01 | ) | ||||
NOTE 15: | SEGMENTED INFORMATION |
We currently operate in one reportable segment which is focused on uranium mining and related activities, including exploration, pre-extraction, extraction and processing of uranium concentrates.
The tables below provide a breakdown of the long-term assets by geographic area:
April 30, 2024 | ||||||||||||||||
Balance Sheet Items | United States | Canada | Paraguay | Total | ||||||||||||
Mineral Rights and Properties | $ | 166,101 | $ | 377,321 | $ | 15,014 | $ | 558,436 | ||||||||
Property, Plant and Equipment | 18,762 | 824 | 373 | 19,959 | ||||||||||||
Restricted Cash | 7,251 | - | - | 7,251 | ||||||||||||
Equity-Accounted Investments | - | 62,548 | - | 62,548 | ||||||||||||
Investment in Equity Securities | - | 71,343 | - | 71,343 | ||||||||||||
Other Non-Current Assets | 2,941 | 316 | - | 3,257 | ||||||||||||
Total Long-Term Assets | $ | 195,055 | $ | 512,352 | $ | 15,387 | $ | 722,794 | ||||||||
July 31, 2023 | ||||||||||||||||
Balance Sheet Items | United States | Canada | Paraguay | Total | ||||||||||||
Mineral Rights and Properties | $ | 166,051 | $ | 384,495 | $ | 15,014 | $ | 565,560 | ||||||||
Property, Plant and Equipment | 19,221 | 145 | 362 | 19,728 | ||||||||||||
Restricted Cash | 7,251 | - | - | 7,251 | ||||||||||||
Equity-Accounted Investment | - | 48,110 | - | 48,110 | ||||||||||||
Investment in Equity Securities | - | 38,656 | - | 38,656 | ||||||||||||
Other Non-Current Assets | 2,965 | 114 | - | 3,079 | ||||||||||||
Total Long-Term Assets | $ | 195,488 | $ | 471,520 | $ | 15,376 | $ | 682,384 | ||||||||
The table below provides a breakdown of our operating results by geographic area. All intercompany transactions have been eliminated.
Three Months Ended April 30, 2024 | ||||||||||||||||
Statement of Operations | United States | Canada | Paraguay | Total | ||||||||||||
Operating Costs: | ||||||||||||||||
Mineral property expenditures | $ | 5,767 | $ | 3,122 | $ | 182 | $ | 9,071 | ||||||||
General and administrative | 3,021 | 1,207 | (9 | ) | 4,219 | |||||||||||
Depreciation, amortization and accretion | 521 | 29 | 1 | 551 | ||||||||||||
Total operating costs | 9,309 | 4,358 | 174 | 13,841 | ||||||||||||
Loss from operations | (9,309 | ) | (4,358 | ) | (174 | ) | (13,841 | ) | ||||||||
Other expenses | (237 | ) | (7,430 | ) | - | (7,667 | ) | |||||||||
Loss before income taxes | $ | (9,546 | ) | $ | (11,788 | ) | $ | (174 | ) | $ | (21,508 | ) | ||||
Three Months Ended April 30, 2023 | ||||||||||||
Statement of Operations | United States | Canada | Paraguay | Total | ||||||||
Sales and service revenue | $ | 20,217 | $ | - | $ | - | $ | 20,217 | ||||
Cost of sales and services | (13,998 | ) | - | - | (13,998 | ) | ||||||
Gross profit | 6,219 | - | - | 6,219 | ||||||||
Operating Costs: | ||||||||||||
Mineral property expenditures | 3,451 | 1,711 | 290 | 5,452 | ||||||||
General and administrative | 2,680 | 1,054 | 11 | 3,745 | ||||||||
Depreciation, amortization and accretion | 501 | 4 | 1 | 506 | ||||||||
Total operating costs | 6,632 | 2,769 | 302 | 9,703 | ||||||||
Loss from operations | (413 | ) | (2,769 | ) | (302 | ) | (3,484 | ) | ||||
Other (expenses) income | (190 | ) | (7,622 | ) | 1 | (7,811 | ) | |||||
Loss before income taxes | $ | (603 | ) | $ | (10,391 | ) | $ | (301 | ) | $ | (11,295 | ) |
Nine Months Ended April 30, 2024 | ||||||||||||
Statement of Operations | United States | Canada | Paraguay | Total | ||||||||
Sales and service revenue | $ | 224 | $ | - | $ | - | $ | 224 | ||||
Cost of sales and services | (187 | ) | - | - | (187 | ) | ||||||
Gross profit | 37 | - | - | 37 | ||||||||
Operating Costs: | ||||||||||||
Mineral property expenditures | 13,281 | 7,563 | 604 | 21,448 | ||||||||
General and administrative | 10,171 | 4,107 | 36 | 14,314 | ||||||||
Depreciation, amortization and accretion | 1,554 | 63 | 3 | 1,620 | ||||||||
Total operating costs | 25,006 | 11,733 | 643 | 37,382 | ||||||||
Loss from operations | (24,969 | ) | (11,733 | ) | (643 | ) | (37,345 | ) | ||||
Other (expenses) income | (625 | ) | 20,223 | 8 | 19,606 | |||||||
(Loss) income before income taxes | $ | (25,594 | ) | $ | 8,490 | $ | (635 | ) | $ | (17,739 | ) | |
Nine Months Ended April 30, 2023 | ||||||||||||||||
Statement of Operations | United States | Canada | Paraguay | Total | ||||||||||||
Sales and service revenue | $ | 125,440 | $ | - | $ | - | $ | 125,440 | ||||||||
Cost of sales and services | (90,793 | ) | - | - | (90,793 | ) | ||||||||||
Gross profit | 34,647 | - | - | 34,647 | ||||||||||||
Operating Costs: | ||||||||||||||||
Mineral property expenditures | 9,047 | 3,546 | 1,057 | 13,650 | ||||||||||||
General and administrative | 10,606 | 3,647 | 43 | 14,296 | ||||||||||||
Depreciation, amortization and accretion | 1,486 | 14 | 4 | 1,504 | ||||||||||||
Total operating costs | 21,139 | 7,207 | 1,104 | 29,450 | ||||||||||||
Income (loss) from operations | 13,508 | (7,207 | ) | (1,104 | ) | 5,197 | ||||||||||
Other (expenses) income | (1,147 | ) | (8,655 | ) | 1 | (9,801 | ) | |||||||||
Income (loss) before income taxes | $ | 12,361 | $ | (15,862 | ) | $ | (1,103 | ) | $ | (4,604 | ) | |||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Expressed in thousands of U.S. dollars, except per share and per pound amounts)
The following management’s discussion and analysis of the Company’s financial condition and results of operations (the “MD&A”) contain forward-looking statements that involve risks, uncertainties and assumptions including, among others, statements regarding our capital needs, business plans and expectations. In evaluating these statements you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Form 10-Q Quarterly Report for the nine months ended April 30, 2024, and our Form 10-K Annual Report for Fiscal 2023, including the consolidated financial statements and related notes contained therein. These factors, or any one of them, may cause our actual results or actions in the future to differ materially from any forward-looking statement made in this Quarterly Report. Refer to “Cautionary Note Regarding Forward-looking Statements” as disclosed in our Form 10-K Annual Report for Fiscal 2023, and Item 1A, Risk Factors, under Part II - Other Information, of this Quarterly Report.
Introduction
This MD&A is focused on material changes in our financial condition from July 31, 2023, our most recently completed year end, to April 30, 2024, and our results of operations for the three and nine months ended April 30, 2024, and should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, as contained in our Form 10-K Annual Report for Fiscal 2023.
Business
We are engaged in uranium mining and related activities, including exploration, pre-extraction, extraction and processing, on uranium projects located in the United States, Canada and the Republic of Paraguay, as more fully described in our Form 10-K Annual Report for Fiscal 2023.
On January 16, 2024, we announced restarting uranium extraction at our fully permitted, and past producing, Christensen Ranch Mine ISR operation in Wyoming. The first extraction is expected during August 2024 and will be funded with existing cash on the Company’s balance sheet.
Uranium recovered from the Christensen Ranch Mine ISR Project will be processed at our Irigaray central processing plant (“CPP”). The Irigaray CPP is the hub central to our four fully permitted ISR projects located in the Powder River Basin of Wyoming, including our Christensen Ranch Mine, Reno Creek, Moore Ranch and Ludeman projects. An application to increase the licensed capacity of the Irigaray CPP from the 2.5 million pounds U3O8 per year to 4.0 million pounds U3O8 per year was submitted to the Wyoming Department of Environmental Quality in November 2023; and approval is expected later in 2024.
To enable a faster extraction restart, extensive preparations at the Christensen Ranch Mine wellfields and satellite processing plant were completed in 2023. This included the re-installation of equipment, re-attachment of piping and a variety of electrical testing, repairs and upgrades to the existing facilities. Since that time, additional work has progressed, including the hiring of additional operational personnel, preparation of a detailed wellfield startup plan, final preparations for plant and wellfield operations, and the installation of cased wells in two new wellfield header houses in Mine Unit 10 (Modules 10-7 and 10-8).
In Texas, our fully-licensed and 100% owned Hobson Processing Facility forms the basis for our regional operating strategy in the State of Texas, specifically the South Texas Uranium Belt where we utilize ISR mining. We utilize a “hub-and-spoke” strategy whereby the Hobson Processing Facility, which has a physical capacity to process uranium-loaded resins up to a total of two million pounds of U3O8 annually and is licensed to process up to four million pounds of U3O8 annually, acts as the central processing site (the “hub”) for our Palangana Mine, and future satellite uranium mining activities, such as our Burke Hollow and Goliad Projects, located within the South Texas Uranium Belt (the “spokes”).
On August 4, 2023, we acquired a portfolio of exploration-stage projects in the Athabasca Basin for CA$1.5 million from Rio Tinto Exploration Canada Inc., a subsidiary of Rio Tinto Inc. With this acquisition, we added an additional 44,444 acres of prospective ground in the Athabasca Basin to our existing portfolio.
We also hold certain mineral rights in various stages in the States of Arizona, New Mexico, Texas and Wyoming, and in Canada and in the Republic of Paraguay, many of which are located in historically successful mining areas and have been the subject of past exploration and pre-extraction activities by other mining companies.
Our operating and strategic framework is to become a leading low-cost North American focused uranium supplier based on expanding our uranium extraction activities, which includes advancing certain uranium projects with established mineralized materials towards uranium extraction and establishing additional mineralized materials on our existing uranium projects or through acquisition of additional uranium projects.
Key Issues
With the completion of the acquisition of Uranium One Americas, Inc. in December 2021 (the “U1A Acquisition”), we expanded our footprints in Wyoming with our Wyoming hub-and-spoke operations. The acquisition of UEX in August 2022 and the acquisition of Roughrider Mineral Holdings Inc. in October 2022 further expanded our footprint in Canada and, in particular, the Athabasca Basin in Saskatchewan. In the meantime, we continue to establish additional uranium mines through exploration and pre-extraction activities and direct acquisitions in both the U.S. and Paraguay, all of which require us to manage numerous challenges, risks and uncertainties inherent in our business and operations as more fully described in Item 1A. Risk Factors herein.
Our operations are capital intensive, and we will require significant additional financing to continue with our exploration and pre-extraction activities and acquire additional uranium projects. Historically, we have been reliant primarily on equity financings from the sale of our common stock in order to fund our operations. In the last two fiscal years, we have also relied on cash flows generated from the sales of our purchased uranium inventories under our physical uranium program to fund our operations, which resulted in $57.0 million in gross profits. However, we have yet to achieve consistent profitability or develop consistent positive cash flow from operations. Our reliance on equity and debt financings is expected to continue for the foreseeable future, and their availability whenever such additional financing is required will be dependent on many factors beyond our control including, but not limited to, the market price of uranium, the continuing public support of nuclear power as a viable source of electricity generation, the volatility in the global financial markets affecting our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access additional financing, including access to the equity and credit markets. We may also be required to seek other forms of financing, such as asset divestitures or additional joint venture arrangements, to continue advancing our uranium projects which would depend entirely on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage interest in the mineral project. However, there is no assurance that we will be successful in securing any form of additional financing when required and on terms favorable to us. Our inability to obtain additional financing would have a negative impact on our operations, including delays, curtailment or abandonment of any one or all of our uranium projects.
We have not established proven or probable reserves through the completion of a final or bankable feasibility study for any of the mineral projects we operate. We have established the existence of mineralized materials for certain uranium projects, including our ISR Mines. Since we commenced uranium extraction at our ISR Mines without having established proven or probable reserves, there may be greater inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated.
The economic viability of our mining activities, including the expected duration and profitability of our ISR Mines, of any future satellite ISR mines, such as our Burke Hollow, Goliad, Ludeman, Antelope and Charlie Projects, and of our recently acquired traditional uranium mines in the Athabasca Basin in Saskatchewan, Canada, has many risks and uncertainties. These include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct a mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected uranium extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of significantly more stringent regulatory laws and regulations. Our mining activities may change as a result of any one or more of these risks and uncertainties and there is no assurance that any ore body that we extract mineralized materials from will result in achieving and maintaining profitability and developing positive cash flow.
As at April 30, 2024, we had no uranium supply or off-take agreements in place. Future sales of U3O8 are therefore expected to generally occur through the uranium spot market, with any fluctuations in the market price continuing to have a direct impact on our revenues and cash flows.
Uranium Market Developments
The uranium market is currently being driven by a macro demand for more electricity generation and an unprecedented global push to decarbonize electrical grids, among other factors. There is noteworthy demand showing substantial growth is Artificial Intelligence and the electricity needed to power Data Centers. In the U.S. demand from this source, measured by power consumption, is expected to reach 35 GWe by 2030, up from 17 GWe in 2022 (Citi Data Center Demand and Nuclear Power: February 2024). There is a growing realization that the highly reliable, safe, baseload power nuclear energy provides should be a part of any clean energy platform. Governments around the globe are also pursuing strategies to increase energy independence for national security interests that dovetail well with nuclear power as a key component in their energy mix.
Over the past few years global uranium market fundamentals have improved as the market began a transition from being an inventory driven to a production driven market. The spot market bottomed out in November 2016 at about $17.75 per pound U3O8, but has since shown appreciation, reaching $107.00 per pound U3O8 on February 2, 2024. During the three and nine months ended April 30, 2024, uranium prices averaged $92.80 and $81.64 per pound U3O8, respectively. As at April 30, 2024, the uranium price was $90.00 per pound, representing an approximate 67% increase from April 30, 2023 when the price was $53.85 per pound U3O8. The period from February 2024 through April 2024 was marked by continued volatility as the price fluctuated between $85.00 and $107.00 per pound U3O8 (All price information is sourced from UxC LLC Historical Ux Daily Prices).
Underinvestment in uranium mining operations over the past decade has been a major factor contributing to a structural deficit between global production and uranium requirements. Reduced production from existing uranium mines has also been a contributing factor with some large producers cutting back and or unable to reach previously planned production levels. In 2024 and 2025 the mid-case gap between production and requirements is projected to be more than 66 million pounds U3O8, and by 2034 accumulates to a total above 400 million pounds U3O8 (UxC 2024 Q1 Uranium Market Outlook). For context, the U.S. reactor fleet consumes about 45 million pounds U3O8 per year (U.S. Energy Information Administration, June 13, 2023 - Uranium Marketing Annual Report). The current gap is being filled with secondary market sources, including finite inventory that has been declining and is projected to decline further in coming years. Secondary supply is also likely to be further reduced with western enrichers reversing operations from underfeeding to overfeeding that requires more uranium to increase the production of enrichment services. As secondary supplies continue to diminish, and as existing mines deplete resources, new production will be needed to meet existing and future utility demand. The timeline for new mining projects can be 10 years or longer and will require prices high enough to stimulate new mining investments.
Since 2022, uranium supply has become more complicated due to Russia's invasion of Ukraine with its State Atomic Energy Corporation, Rosatom, being a significant supplier of nuclear fuel around the globe. Economic sanctions, transportation restrictions and recent U.S. legislation banning the importation of Russian nuclear fuel is causing a fundamental change to the nuclear fuel markets. Additionally, the 2023 coup in Niger, and the new government’s demand for the U.S. and France to vacate the country, has underscored jurisdictional risk with that country accounting for about 5% of global uranium production and about 25% of European Union supply in 2022 (World Nuclear Association - Uranium in Niger May 7, 2024 / Reuters – “Russian troops enter base housing US military in Niger, US official says” - May 3, 2024 and “Niger has not banned uranium exports to France and EU” - August 18, 2023). U.S. and European utilities are shifting more focus to security of supply with production from areas of low geopolitical risk.
On the demand side of the equation, the global nuclear energy industry continues robust growth, with 70 new reactors connected to the grid from 2014 through April of 2024, and with another 59 reactors under construction. So far in 2024, four new reactors have been connected to the grid, and one reactor has been permanently shut down (International Atomic Energy Association Power Reactor Information System - May 28, 2024). Total nuclear generating capacity for the world’s 440 operable reactors as of May 7, 2024 stands at 396 GWe (World Nuclear Association). At COP28 United Nations Climate Change Conference, 22 countries, including the U.S., Canada, France, Japan and the United Kingdom, signed a declaration to triple nuclear energy by 2050, further supporting additional growth for the nuclear industry and uranium demand.
In the U.S., H.R. 1042, “The Prohibiting Russian Uranium Imports Act” was signed into law on May 13, 2024, goes into effect on August 11, 2024 and extends through 2040. The legislation bans Russian uranium imports but allows a U.S. Department of Energy (“DOE”) waiver process through 2027 in the event no alternative viable source of low-enriched uranium (“LEU”) is available to: (i) sustain the continued operation of a nuclear reactor or a U.S. nuclear energy company; or (ii) importation of Russian LEU is determined to be in the national interest. In a separate but related action, “The Nuclear Fuel Security Act” (“NFSA”) was enacted as part of the “National Defense Authorization Act” in December of 2023 and was designed to help rebuild the domestic nuclear fuel cycle, including uranium production, conversion and enrichment. The passage of H.R. 1042 unlocks $2.7 billion in funding under the NFSA and will be used by the DOE to acquire LEU and High Assay Low Enriched Uranium (“HALEU”) for advanced reactors. Under this program DOE will acquire LEU and HALEU with priority given to domestic sources of produced uranium, conversion and enrichment. In combination, the passage of these bills will help rebuild and restore a robust domestic fuel cycle in the U.S.
Additional upside market pressure is also occurring as utilities continue their return to a longer-term contracting cycle to replace expiring contracts. Cumulative uncommitted demand through 2034 totals approximately 926 million pounds U3O8 (UxC Uranium Market Overview Q1 2024). Increasing demand is also evident from financial entities and various producers continuing to purchase significant quantities of drummed uranium inventory, further removing near term supply and adding to the strong fundamentals supporting the uranium market.
Results of Operations
For the three and nine months ended April 30, 2024, we recorded sales and service revenue of $Nil and $224, and realized gross profit of $Nil and $37, respectively, from toll processing services. We did not sell purchased uranium inventory to date in Fiscal 2024. For the three and nine months ended April 30, 2023, we recorded sales and service revenue of $20,217 and $125,440 and realized gross profit of $6,219 and $34,647, respectively, from sales of purchased uranium inventory and toll processing services.
For the three and nine months ended April 30, 2024, we recorded a net loss of $19,677 ($0.05 per share) and $14,106 ($0.04 per share), and losses from operations of $13,841 and $37,345, respectively. During the three and nine months ended April 30, 2023, we recorded net loss of $10,960 ($0.03 per share) and $3,824 ($0.01 per share) and loss from operations of $3,484 and income from operations of $5,197, respectively.
While we remain in a state of operational readiness, uranium extraction expenditures incurred at our ISR Mines, which are directly related to regulatory/mine permit compliance, lease maintenance obligations and maintaining a necessary labor force, are being charged to our consolidated statement of operations.
We established our physical uranium program to purchase drummed uranium at prevailing spot prices which are below most global industry mining costs in Fiscal 2021 (the “Physical Uranium Program”). As of April 30, 2024, we have 1,000,000 pounds of uranium inventory purchase commitments outstanding for a total purchase price of $39,095. Various deliveries are scheduled to occur from Fiscal 2024 into Fiscal 2026 at a weighted average price of $39.10 per pound of uranium.
During the three and nine months ended April 30, 2024, as part of our Physical Uranium Program, we purchased 995,000 pounds of uranium concentrates with a total cost of $57,003. As of April 30, 2024, the carrying value of our uranium concentrate inventories was $63,019 (July 31, 2023: $5,801).
Sales and Service Revenue
For the three and nine months ended April 30, 2024, we recorded revenue from toll processing services of $Nil and $224, respectively, which was generated from processing uranium resins.
The table below provides a breakdown of our sales and service revenue and cost of sales and services:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Sales of purchased uranium inventory | $ | - | $ | 20,095 | $ | - | $ | 125,140 | ||||||||
Revenue from toll processing services | - | 122 | 224 | 300 | ||||||||||||
Total sales and service revenue | $ | - | $ | 20,217 | $ | 224 | $ | 125,440 | ||||||||
Cost of purchased uranium inventory | $ | - | $ | (13,896 | ) | $ | - | $ | (90,543 | ) | ||||||
Cost of toll processing services | - | (102 | ) | (187 | ) | (250 | ) | |||||||||
Total cost of sales and services | $ | - | $ | (13,998 | ) | $ | (187 | ) | $ | (90,793 | ) | |||||
Operating Costs
Mineral Property Expenditures
Mineral property expenditures primarily consisted of costs relating to permitting, property maintenance, exploration and pre-extraction activities and other non-extraction related activities on our mineral projects.
The following table provides the nature of mineral property expenditures for the periods indicated:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Permitting and compliance | $ | 394 | $ | 160 | $ | 1,733 | $ | 358 | ||||||||
Property maintenance | 1,073 | 967 | 3,020 | 2,701 | ||||||||||||
Exploration | 4,668 | 3,392 | 9,985 | 7,544 | ||||||||||||
Development | 1,769 | 34 | 3,414 | 427 | ||||||||||||
Extraction readiness | 1,167 | 899 | 3,296 | 2,620 | ||||||||||||
Total | $ | 9,071 | $ | 5,452 | $ | 21,448 | $ | 13,650 | ||||||||
During the three and nine months ended April 30, 2024, exploration expenditures, such as drilling and preliminary economic assessments, were primarily spent on the following projects:
● | Burke Hollow Project: $1,586 and $3,675 (April 30, 2023: $904 and $2,147), respectively; |
● | Roughrider Project: $2,358 and $3,616 (April 30, 2023: $219 and $230), respectively; and |
● | Christensen Ranch Mine: $170 and $1,030 (April 30, 2023: $160 and $207), respectively. |
During the three and nine months ended April 30, 2024, extraction readiness expenditures were primarily spent on the following projects:
● | Christensen Ranch Mine: $557 and $1,521 (April 30, 2023: $462 and $1,305), respectively; and |
● | Palangana Mine: $297 and $1,026 (April 30, 2023: $181 and $691), respectively. |
During the three and nine months ended April 30, 2024, property maintenance expenditures were primarily spent on the following projects:
● | Buke Hollow Project: $155 and $527 (April 30, 2023: $203 and $558), respectively; |
● | Reno Creek Project: $282 and $481 (April 30, 2023: $99 and $299), respectively; |
● | Christensen Ranch Mine: $90 and $278 (April 30, 2023: $103 and $246), respectively; |
● | Ludeman Project: $83 and $260 (April 30, 2023: $83 and $244), respectively; and |
● | Allemand Ross Project: $94 and $303 (April 30, 2023: $91 and $268), respectively. |
General and Administrative
During the three and nine months ended April 30, 2024, general and administrative expenses (“G&A”) totaled $4,219 and $14,314, respectively, compared to $3,745 and $14,296 for the three and nine months ended April 30, 2023. G&A expenses were comprised of the following:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Salaries and management fees | $ | 1,441 | $ | 739 | $ | 4,236 | $ | 2,942 | ||||||||
Office, IR, communication, insurance and travel | 1,161 | 1,178 | 3,783 | 5,220 | ||||||||||||
Foreign exchange loss | (32 | ) | 37 | 6 | 64 | |||||||||||
Professional fees | 545 | 640 | 2,301 | 1,714 | ||||||||||||
Sub-total | 3,115 | 2,594 | 10,326 | 9,940 | ||||||||||||
Stock-based compensation | 1,104 | 1,151 | 3,988 | 4,356 | ||||||||||||
Total general and administrative expenses | $ | 4,219 | $ | 3,745 | $ | 14,314 | $ | 14,296 | ||||||||
● | for the three and nine months ended April 30, 2024, office, insurance, filing and listing fees, investor relations, corporate development and travel expenses totaled $1,161 and $3,783, respectively, which decreased compared to $1,178 and $5,220 for the three and nine months ended April 30, 2023, respectively, which was primarily the result of decreases in investor relations and corporate development expenses; |
● | for the three and nine months ended April 30, 2024, professional fees totaled $545 and $2,301, respectively, which increased compared to $640 and $1,714 for the three and nine months ended April 30, 2023, respectively. Professional fees are comprised primarily of legal services related to transactional activities, regulatory compliance and for audit, accounting and tax compliance services. The overall increasing trend in professional fees is due to the growth in business activities and the expansion of our operations; and |
● | for the three and nine months ended April 30, 2024, salaries, wages and management fees totaled $1,441 and $4,236, respectively, which increased compared to $739 and $2,942 for the three and nine months ended April 30, 2023, respectively, which was primarily the result of an increase in personnel and corporate-wide salary increases to adjust for inflation. |
Income (Loss) from Equity-Accounted Investments
Income (loss) from equity-accounted investments was comprised of the following:
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Share of income (loss) | $ | 104 | $ | (908 | ) | $ | 1,325 | $ | (1,609 | ) | ||||||
Gain on dilution of ownership interest | 3,202 | 8 | 3,633 | 624 | ||||||||||||
Total | $ | 3,306 | $ | (900 | ) | $ | 4,958 | $ | (985 | ) | ||||||
During the three and nine months ended April 30, 2024 and 2023, we recorded a gain on dilution of ownership interest in URC as a result of URC issuing more shares from its equity financing and exercises of warrants and/or stock options. On October 17, 2023 and February 9, 2024, we participated in URC’s equity financings, which increased our ownership in URC from 15,000,000 shares to 16,930,750 shares and to 17,978,364 shares, respectively. As at April 30, 2024, we had a 14.9% of equity interest in URC compared to 14.9% as at July 31, 2023.
During the three and nine months ended April 30, 2024, we recorded a share of URC’s income of $520 and $2,397, respectively. During the three and nine months ended April 30, 2024, we also recorded a share of JCU’s losses of $416 and $1,072, respectively.
Gain (Loss) on Revaluation of Equity Securities
As at April 30, 2024, our investments in certain equity securities were revalued using the market values at period end, which resulted in an unrealized loss of $13,804 and gain of $23,585 on revaluation of equity securities, respectively, for the three and nine months ended April 30, 2024.
Gain (Loss) on Revaluation of Derivative Liabilities
In connection with the UEX Acquisition, we issued Replacement Warrants, which are accounted for as derivative liabilities as the exercise prices of the UEX warrants are denominated in Canadian dollars which differs from the functional currency of the Company. As at April 30, 2024, the Replacement Warrants were revalued, which resulted in a gain of $2,071 and a loss of $9,892, respectively, for the three and nine months ended April 30, 2024. Changes in fair value of derivative liabilities were primarily due to changes in our share price. During the three and nine months ended April 30, 2023, we recorded a gain on revaluation of derivative liabilities of $5,550 and $4,651, respectively.
Other income (expenses)
The following summary provides a discussion of the major categories of other income (expenses) including analyses of the factors that caused significant variances compared to the same period last year:
● | during the three and nine months ended April 30, 2024, interest income totaled $992 and $1,558, respectively, compared to $119 and $203, respectively, for the three and nine months ended April 30, 2023. The interest earned resulted from cash proceeds received from our ATM Offerings in 2024, which were invested in short-term GIC deposits; and |
● | during the three and nine months ended April 30, 2023, we entered into amendment agreements to amend certain uranium sales and purchase agreements with third parties. As a result, we paid a net amount of $585 for the differences between the gross purchase price and gross sales prices of the uranium, which were recorded as other expenses on our condensed consolidated financial statements. |
Summary of Quarterly Results
For the Quarters Ended | ||||||||||||||||
April 30, 2024 | January 31, 2024 | October 31, 2023 | July 31, 2023 | |||||||||||||
Sales and service revenue | $ | - | $ | 116 | $ | 108 | $ | 38,949 | ||||||||
Gross profit | - | 19 | 18 | 15,023 | ||||||||||||
Net income (loss) | (19,677 | ) | 2,250 | 3,321 | 517 | |||||||||||
Total comprehensive income (loss) | (25,527 | ) | 9,982 | (7,728 | ) | 6,835 | ||||||||||
Basic and diluted income (loss) per share | (0.05 | ) | 0.01 | 0.01 | - | |||||||||||
Total assets | 878,268 | 878,878 | 798,129 | 737,589 | ||||||||||||
For the Quarters Ended | ||||||||||||||||
April 30, 2023 | January 31, 2023 | October 31, 2022 | July 31, 2022 | |||||||||||||
Sales and service revenue | $ | 20,217 | $ | 47,931 | $ | 57,292 | $ | 78 | ||||||||
Gross profit | 6,219 | 14,570 | 13,858 | 13 | ||||||||||||
Net income (loss) | (10,960 | ) | 10,892 | (3,756 | ) | 5,455 | ||||||||||
Total comprehensive income (loss) | (14,549 | ) | 15,509 | (14,524 | ) | 5,390 | ||||||||||
Basic and diluted income (loss) per share | (0.03 | ) | 0.03 | (0.01 | ) | 0.02 | ||||||||||
Total assets | 722,148 | 733,315 | 695,487 | 354,247 | ||||||||||||
Liquidity and Capital Resources
April 30, 2024 | July 31, 2023 | |||||||
Cash and cash equivalents | $ | 87,726 | $ | 45,614 | ||||
Current assets | 155,474 | 55,205 | ||||||
Current liabilities | 14,312 | 12,194 | ||||||
Working capital | 141,162 | 43,011 | ||||||
During the nine months ended April 30, 2024, we received net proceeds of $160,239 from our ATM Offerings and from exercises of stock options and share purchase warrants.
Subsequent to April 30, 2024, we received additional cash proceeds of $12,824 under our ATM Offerings.
We have a history of operating losses resulting in an accumulated deficit balance since inception. We recorded net losses in Fiscal 2023 and in all prior years, and we had an accumulated deficit balance of $303,786 as at April 30, 2024. Furthermore, we may not achieve and maintain profitability or develop positive cash flow from our operations in the near term.
Historically, we have been reliant primarily on equity financings from the sale of our common stock and on debt financing in order to fund our operations. We have yet to achieve consistent profitability or develop consistent positive cash flow from operations. Currently, we also rely on cash flows generated from the sales of our purchased uranium concentrates to fund our operations. Our reliance on equity and debt financings is expected to continue for the foreseeable future, and their availability whenever such additional financing is required will be dependent on many factors beyond our control and including, but not limited to, the market price of uranium, the continuing public support of nuclear power as a viable source of electricity generation, the volatility in the global financial markets affecting our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access additional financing, including access to the equity and credit markets. We may also be required to seek other forms of financing, such as asset divestitures or joint venture arrangements, to continue advancing our uranium projects which would depend entirely on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage interest in the mineral project. However, there is no assurance that we will be successful in securing any form of additional financing when required and on terms favorable to us.
Our operations are capital intensive and future capital expenditures are expected to be substantial. We will require significant additional financing to fund our operations, including continuing with our exploration and pre-extraction activities and acquiring additional uranium projects. In the absence of such additional financing, we would not be able to fund our operations, including continuing with our exploration and pre-extraction activities, which may result in delays, curtailment or abandonment of any one or all of our uranium projects.
We hold mineral rights in the States of Arizona, New Mexico, Texas and Wyoming, in Canada and in the Republic of Paraguay, with annual land-related payments totaling $4.8 million to maintain these rights in good standing.
Our anticipated operations, including exploration and pre-extraction activities, however, will be dependent on and may change as a result of our financial position, the market price of uranium and other considerations, and such changes may include accelerating the pace or broadening the scope of reducing our operations. Our ability to secure adequate funding for these activities will be impacted by our operating performance, other uses of cash, the market price of uranium, the market price of our common stock and other factors which may be beyond our control. Specific examples of such factors include, but are not limited to:
● | if the market price of uranium weakens; |
● | if the market price of our common stock weakens; and |
● | if a nuclear incident, such as the events that occurred in Japan in March 2011, were to occur, continuing public support of nuclear power as a viable source of electrical generation may be adversely affected, which may result in significant and adverse effects on both the nuclear and uranium industries. |
We believe our existing cash resources and, if necessary, cash generated from the sale of the Company’s liquid assets, will provide sufficient funds to carry out our planned operations for 12 months from the date that this Quarterly Report is issued. Our continuation as a going concern for a period beyond those 12 months will be dependent upon our ability to generate cash flow from the sales of our uranium inventories under our Physical Uranium Program and to obtain adequate additional financing, as our operations are capital intensive and future capital expenditures are expected to be substantial.
Our long-term success, including the recoverability of the carrying values of our assets and our ability to acquire additional uranium projects and continue with exploration and pre-extraction activities and mining activities on our existing uranium projects, will depend ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations by establishing ore bodies that contain commercially recoverable uranium and to develop these into profitable mining activities.
Equity Financings
On May 17, 2021, we filed a Form S-3 shelf registration statement under the Securities Act which was declared effective by the SEC on June 1, 2021, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of up to an aggregate offering amount of $200 million (the 2021 Shelf), which included an at-the-market offering agreement prospectus (the May 2021 ATM Offering) covering the offering, issuance and sale of up to a maximum offering of $100 million as part of the $200 million under the 2021 Shelf.
On May 14, 2021, we entered into an at-the-market offering agreement (the 2021 ATM Offering Agreement) with H.C. Wainwright & Co., LLC and certain co-managers (collectively, the 2021 ATM Manager) as set forth in the 2021 ATM Offering Agreement under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100 million through the 2021 ATM Managers selected by us.
On November 26, 2021, we filed a prospectus supplement to our 2021 Shelf with respect to the continuation of the May 2021 ATM Offering Agreement with the 2021 ATM Managers under which we may, if eligible, from time to time, sell shares of our common stock having an aggregate offering price of up to an additional $100 million for a total of $200 million through the 2021 ATM Managers selected by us (the November 2021 ATM Offering; and, collectively with the May 2021 ATM Offering, the 2021 ATM Offering).
On November 16, 2022, we filed a Form S-3 automatic shelf registration statement under the Securities Act, which became effective upon filing, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, of an undetermined dollar value of common stock, debt securities, warrants to purchase common stock or debt securities, subscription receipts for and units which include common stock, debt securities, warrants or any combination thereof (the 2022 Shelf), which included an at-the-market offering agreement prospectus (the 2022 ATM Offering; and, collectively, with the 2021 ATM Offering, the ATM Offerings) covering the offering, issuance and sale of up to a maximum offering of $300 million under the 2022 Shelf.
On November 16, 2022, we entered into an at-the-market offering agreement (the 2022 ATM Offering Agreement) with H.C. Wainwright & Co., LLC and certain co-managers (collectively, the 2022 ATM Managers) as set forth in the 2022 ATM Offering Agreement under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $300 million through the 2022 ATM Managers selected by us.
During the three and nine months ended April 30, 2024, we issued 3,396,370 and 24,584,399 shares of the Company’s common stock under our ATM Offerings for net cash proceeds of $25,543 and $155,050, respectively.
During the three and nine months ended April 30, 2024, we received cash proceeds totaling $3,771 and $4,508, respectively, from the exercise of share purchase warrants.
During the three and nine months ended April 30, 2024, we received cash proceeds totaling $281 and $681, respectively, from the exercise of stock options.
Subsequent to April 30, 2024, we issued a further 1,791,300 shares of the Company’s common stock under our ATM Offerings for net cash proceeds of $12,824.
Operating Activities
During the nine months ended April 30, 2024, net cash used in operating activities was $93,871, of which $57,179 was from the purchases of uranium concentrate inventory. During the nine months ended April 30, 2023, net cash provided by operating activities was $43,778, of which $39,933 was for the change in uranium concentrate inventory. Other significant operating expenditures included mineral property expenditures and G&A expenses.
Financing Activities
During the nine months ended April 30, 2024, net cash provided by financing activities totaled $159,292, comprised primarily of net proceeds from equity financings. During the nine months ended April 30, 2023, net cash provided by financing activities totaled $64,640, comprised primarily of net proceeds from equity financings.
Investing Activities
During the nine months ended April 30, 2024, net cash used in investing activities totaled $23,282, comprised of cash used in the acquisition of the Henday, Milliken and Carswell Projects of $1,334, a capital contribution to JCU of $2,388, cash used to purchase an additional interest in URC of $9,238, cash used in investment in equity securities of $12,115, proceeds from sale of equity securities of $3,008 and cash used for investment in mineral properties and the purchase of equipment of $2,557. During the nine months ended April 30, 2023, net cash used in investing activities totaled $123,333, comprised of cash used in the Roughrider Acquisition of $82,117, a capital contribution to JCU of $595, cash used in investment in equity securities of $42,219, cash used for investment in mineral properties and the purchase of equipment of $388 and net cash of $1,984 received from the UEX Acquisition.
Stock Options and Warrants
As of April 30, 2024, we had in-the-money stock options outstanding representing 6,249,671 shares at a weighted-average exercise price of $2.07 per share, and in-the-money share purchase warrants outstanding representing 2,404,116 shares at a weighted-average exercise price of $3.38 per share. As of April 30, 2024, outstanding in-the-money stock options and warrants represented a total 8,653,787 shares issuable for gross proceeds of approximately $21.1 million should these stock options and warrants be exercised in full on a cash basis. The exercise of stock options and warrants is at the discretion of their respective holders and, accordingly, there is no assurance that any of the stock options or warrants will be exercised in the future.
Transactions with Related Parties
During the three and nine months ended April 30, 2024, we incurred $11 and $54, respectively, in exploration expenditures on behalf of JCU. As at April 30, 2024, the amount receivable from JCU totaled $3 (July 31, 2023: $201).
During the three and nine months ended April 30, 2024, we incurred $2 and $27, respectively, and during the three and nine months ended April 30, 2023, we incurred $2 and $84, respectively, in general and administrative costs, paid to Blender Media Inc. (“Blender”), a company controlled by Arash Adnani, a direct family member of our President and Chief Executive Officer, for various services, including information technology, financial subscriptions, corporate branding, media, website design, maintenance and hosting, provided by Blender to the Company. As at April 30, 2024, the amount owing to Blender was $Nil (July 31, 2023: $Nil).
Material Commitments
As at April 30, 2024, significant payment obligations of the Company over the next five years and beyond are as follows:
Payment Due by Period | ||||||||||||||||||||
Less Than | 1-3 | 3-5 | More Than | |||||||||||||||||
Contractual Obligations | Total | 1 Year | Years | Years | 5 Years | |||||||||||||||
Asset Retirement Obligations | $ | 29,030 | $ | 1,481 | $ | 3,962 | $ | 4,498 | $ | 19,089 | ||||||||||
Operating Lease Obligations | 2,590 | 102 | 822 | 592 | 1,074 | |||||||||||||||
Uranium Inventory Purchase Obligations | 39,095 | 12,355 | 26,740 | - | - | |||||||||||||||
Total | $ | 70,715 | $ | 13,938 | $ | 31,524 | $ | 5,090 | $ | 20,163 | ||||||||||
As of April 30, 2024, we were renting or leasing office premises in the States of Texas, Arizona and Wyoming, British Columbia and Saskatchewan, Canada, and Paraguay, for total monthly payments of $34. Office lease agreements for the U.S. and Canada expire between July 2026 and November 2029.
Commitments for Management Services
As at April 30, 2024, we were committed to paying our key executives a total of $1,065 per year for management services.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies
For a complete summary of all of our significant accounting policies refer to Note 2: Summary of Significant Accounting Policies of the Notes to the consolidated financial statements as presented under Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for Fiscal 2023.
Refer to “Critical Accounting Policies” under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for Fiscal 2023.
Subsequent Events
Subsequent to April 30, 2024, we received additional cash proceeds of $12,824 under our ATM Offerings. In addition, 39,393 warrants with an expiry date of September 7, 2024 were exercised and proceeds of $93 were received.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Refer to Item 7A., Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for Fiscal 2023.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report, with the participation of the Principal Executive Officer and the Principal Financial Officer, the Company evaluated the effectiveness of its disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information the Company is required to disclose in reports that are filed or submitted under the Exchange Act: (1) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (2) is accumulated and communicated to Company management, including the Principal Executive Officer and the Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our quarter ended April 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
As of the date of this Quarterly Report, other than as disclosed below, there are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which our Company or any of our subsidiaries is a party or of which any of their property is subject, and no director, officer, affiliate or record or beneficial owner of more than 5% of our common stock, or any associate or any such director, officer, affiliate or security holder, is: (i) a party adverse to us or any of our subsidiaries in any legal proceeding; or (ii) has an adverse interest to us or any of our subsidiaries in any legal proceeding. Other than as disclosed below, management is not aware of any other material legal proceedings pending or that have been threatened against us or our properties.
On or about March 9, 2011, the Texas Commission on Environmental Quality (“TCEQ”) granted our Company’s applications for a Class III Injection Well Permit, Permit Area Authorization and Aquifer Exemption (“AE”) for our Goliad Project. On or about December 4, 2012, the Environmental Protection Agency (“EPA”) concurred with the TCEQ issuance of the AE permit. With the receipt of this concurrence, the final authorization required for uranium extraction, our Goliad Project achieved fully-permitted status. On or about May 24, 2011, a group of petitioners, inclusive of Goliad County, appealed the TCEQ action to the 250th District Court in Travis County, Texas. A motion filed by our Company to intervene in this matter was granted. The petitioners’ appeal lay dormant until on or about June 14, 2013, when the petitioners filed their initial brief in support of their position. On or about January 18, 2013, a different group of petitioners, exclusive of Goliad County, filed a petition for review with the Court of Appeals for the Fifth Circuit to appeal the EPA’s decision. On or about March 5, 2013, a motion filed by our Company to intervene in this matter was granted. The parties attempted to resolve both appeals, to facilitate discussions and avoid further legal costs. The parties jointly agreed, through mediation initially conducted through the Fifth Circuit on or about August 8, 2013, to abate the proceedings in the State District Court. On or about August 21, 2013, the State District Court agreed to abate the proceedings. The EPA subsequently filed a motion to remand without vacatur with the Fifth Circuit wherein the EPA’s stated purpose was to elicit additional public input and further explain its rationale for the approval. In requesting the remand without vacatur, which would allow the AE to remain in place during the review period, the EPA denied the existence of legal error and stated that it was unaware of any additional information that would merit reversal of the AE. We and the TCEQ filed a request to the Fifth Circuit for the motion to remand without vacatur, and if granted, to be limited to a 60-day review period. On December 9, 2013, by way of a procedural order from a three-judge panel of the Fifth Circuit, the Court granted the remand without vacatur and initially limited the review period to 60 days. In March of 2014, at the EPA’s request, the Fifth Circuit extended the EPA’s time period for review and additionally, during that same period, our Company conducted a joint groundwater survey of the site, the result of which reaffirmed our previously filed groundwater direction studies. On or about June 17, 2014, the EPA reaffirmed its earlier decision to uphold the granting of our existing AE, with the exception of a northwestern portion containing less than 10% of the uranium resource which was withdrawn, but not denied, from the AE area until additional information is provided in the normal course of mine development. On or about September 9, 2014, the petitioners filed a status report with the State District Court which included a request to remove the stay agreed to in August 2013 and to set a briefing schedule. In that Status Report the petitioners also stated that they had decided not to pursue their appeal at the Fifth Circuit.
A Class I renewal application for the Goliad Project disposal wells was received by the TCEQ on January 23, 2020 and declared administratively complete on April 27, 2020. The application went through technical review and, on September 13, 2022, the executive director of the TCEQ made a decision that the permit application met the requirements of the law. On or around October 4, 2022, petitioners in Goliad County requested a hearing and reconsideration on the renewal permits. The TCEQ considered the requests on December 14, 2022, during its open meeting, and denied the petitioner’s request for reconsideration but granted its request for hearing. The TCEQ referred the application to the State Office of Administrative Hearing (“SOAH”) to discuss three issues: (i) whether the permit application adequately characterizes the geology and identified and assessed faults in the vicinity of the proposed injections wells; (ii) whether the draft permit provides for adequate monitoring of migration of injected fluids in the vicinity of the proposed injection wells: and (iii) whether the location and design of the injection wells and pre-injection facilities are adequate. Closing statements were submitted by all parties to the SOAH Administrative Law Judges (“ALJs”) on February 5, 2024. On April 10, 2024, the ALJs made a recommendation to remand the matter to the executive director of the TCEQ for further examination, stating the Company failed to meet its burden of proof. The executive director, via Executive Director’s Exceptions to the Proposal for Decision (“PFD”), respectfully disagreed with the recommendation presented in the PFD to remand the application to the executive director for further consideration. The executive director commented that the ALJ’s PFD improperly broaden the scope of the refereed contested case hearing; misapplied the application requirements in commission rule for providing geoscientific information; mischaracterized the position of the executive director; and prematurely imposed monitoring or corrective action requirements before the subject injection wells were drilled, constructed and tested. The final decision on the Class I renewal application will be made by the TCEQ Commissioners in mid-June 2024. We continue to believe that the pending appeal is without merit and we are continuing as planned towards uranium extraction at our fully-permitted Goliad Project.
The Company has had communications and filings with the MOPC, the mining regulator in Paraguay, whereby the MOPC is taking the position that certain concessions forming part of the Company’s Yuty, Alto Parana and Colonel Oviedo Projects are not eligible for extension as to exploration or continuation to exploitation in their current stages. While we remain fully committed to our development path forward in Paraguay, we have filed certain applications and appeals in Paraguay to reverse the MOPC’s position in order to protect the Company’s continuing rights in those concessions.
In addition to the information contained in our Annual Report on Form 10-K for Fiscal 2023, and this Quarterly Report on Form 10-Q, we have identified the following material risks and uncertainties which reflect our outlook and conditions known to us as of the date of this Quarterly Report. These material risks and uncertainties should be carefully reviewed by our stockholders and any potential investors in evaluating the Company, our business and the market value of our common stock. Furthermore, any one of these material risks and uncertainties has the potential to cause actual results, performance, achievements or events to be materially different from any future results, performance, achievements or events implied, suggested or expressed by any forward-looking statements made by us or by persons acting on our behalf. Refer to “Cautionary Note Regarding Forward-looking Statements” as disclosed in our Annual Report on Form 10-K for Fiscal 2023.
There is no assurance that we will be successful in preventing the material adverse effects that any one or more of the following material risks and uncertainties may cause on our business, prospects, financial condition and operating results, which may result in a significant decrease in the market price of our common stock. Furthermore, there is no assurance that these material risks and uncertainties represent a complete list of the material risks and uncertainties facing us. There may be additional risks and uncertainties of a material nature that, as of the date of this Quarterly Report, we are unaware of or that we consider immaterial that may become material in the future, any one or more of which may result in a material adverse effect on us. You could lose all or a significant portion of your investment due to any one of these material risks and uncertainties.
Risks Related to Our Company and Business
Evaluating our future performance may be difficult since we have a limited financial and operating history, with significant negative operating cash flow and an accumulated deficit to date. Our long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from our mining activities.
As more fully described under Item 1, Business, in our Annual Report on Form 10-K for Fiscal 2023, we were incorporated under the laws of the State of Nevada on May 16, 2003 and, since 2004, we have been primarily engaged in uranium mining and related activities, including exploration, pre-extraction, extraction and processing, on projects located in the United States, Canada and the Republic of Paraguay. In November 2010, we commenced uranium extraction for the first time at our Palangana Mine utilizing ISR methods and processed those materials at our Hobson Processing Facility into drums of U3O8. We also hold uranium projects in various stages of exploration and pre-extraction in the States of Arizona, Colorado, New Mexico, Texas and Wyoming, in Canada and the Republic of Paraguay. Since we completed the acquisition of our Alto Paraná Project located in the Republic of Paraguay in July 2017, we are also involved in mining and related activities, including exploration, pre-extraction, extraction and processing, of titanium minerals.
As more fully described under “Liquidity and Capital Resources” of Item 2, Management’s Discussion and Analysis of Financial Condition and Result of Operations, herein, we have a history of significant negative cash flow and net losses, with an accumulated deficit balance of $303.8 million as of April 30, 2024. Historically, we have been reliant primarily on equity financings from the sale of our common stock and on debt financing in order to fund our operations. Although we generated revenues from sales of U3O8 we extracted during Fiscal 2015, Fiscal 2013 and Fiscal 2012 of $3.1 million, $9.0 million and $13.8 million, respectively, and generated revenues from sales of purchased uranium inventory and toll processing services totaling $0.2 million during the nine months ended April 30, 2024 and $164.4 million in Fiscal 2023, respectively, we have yet to achieve consistent profitability or develop consistent positive cash flow from our operations, and we do not expect to achieve consistent profitability or develop consistent positive cash flow from operations in the near term. As a result of our limited financial and operating history, including our significant negative cash flow from operations and net losses to date, it may be difficult to evaluate our future performance.
As of April 30, 2024, we had working capital (current assets less current liabilities) of $141.2 million including cash and cash equivalents of $87.7 million and uranium inventory holdings of $63.4 million. Subsequent to April 30, 2024, we received additional cash proceeds of $12.8 million under our ATM Offerings. We believe that our existing cash resources and, if necessary, cash generated from the sale of the Company’s liquid assets, will provide sufficient funds to carry out our planned operations for 12 months from the date of this Quarterly Report. Our continuation as a going concern for a period beyond those 12 months will be dependent upon our ability to obtain adequate additional financing, as our operations are capital intensive and future capital expenditures are expected to be substantial. 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.
Our reliance on equity and debt financings is expected to continue for the foreseeable future, and their availability whenever such additional financing is required will be dependent on many factors beyond our control including, but not limited to, the market price of uranium, the continuing public support of nuclear power as a viable source of electrical generation, the volatility in the global financial markets affecting our stock price and the status of the worldwide economy, any one of which may cause significant challenges in our ability to access additional financing, including access to the equity and credit markets. We may also be required to seek other forms of financing, such as asset divestitures or joint venture arrangements, to continue advancing our projects which would depend entirely on finding a suitable third party willing to enter into such an arrangement, typically involving an assignment of a percentage interest in the mineral project.
Our long-term success, including the recoverability of the carrying values of our assets and our ability to acquire additional uranium projects and continue with exploration and pre-extraction activities and mining activities on our existing uranium projects, will depend ultimately on our ability to achieve and maintain profitability and positive cash flow from our operations by establishing ore bodies that contain commercially recoverable uranium and to develop these into profitable mining activities. The economic viability of our mining activities, including the expected duration and profitability of our ISR Mines and of any future satellite ISR mines, such as our Burke Hollow and Goliad Projects located within the South Texas Uranium Belt, our Christensen Ranch Mine and Reno Creek Project located in the Powder River Basin, Wyoming, and our projects in Canada and in the Republic of Paraguay, have many risks and uncertainties. These include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium and titanium minerals; (ii) difficulty in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct a mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected mineral extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of significantly more stringent regulatory laws and regulations. Our mining activities may change as a result of any one or more of these risks and uncertainties and there is no assurance that any ore body that we extract mineralized materials from will result in achieving and maintaining profitability and developing positive cash flow.
Our operations are capital intensive and we will require significant additional financing to acquire additional mineral projects and continue with our exploration and pre-extraction activities on our existing projects.
Our operations are capital intensive and future capital expenditures are expected to be substantial. We will require significant additional financing to fund our operations, including acquiring additional mineral projects and continuing with our exploration and pre-extraction activities which include assaying, drilling, geological and geochemical analysis and mine construction costs. In the absence of such additional financing we would not be able to fund our operations or continue with our exploration and pre-extraction activities, which may result in delays, curtailment or abandonment of any one or all of our projects.
Our uranium extraction and sales history is limited. Our ability to generate revenue is subject to a number of factors, any one or more of which may adversely affect our financial condition and operating results.
We have a limited history of uranium extraction and generating revenue. In November 2010, we commenced uranium extraction at our Palangana Mine, which has been our sole source of revenues from the sales of produced U3O8 during Fiscal 2015, Fiscal 2013 and Fiscal 2012, with no revenues from sales of produced U3O8 during the nine months ended April 30, 2024, or any other fiscal years.
During the nine months ended April 30, 2024, we continued to remain in a state of operational readiness at our ISR Mines. This strategy has included the deferral of major pre-extraction expenditures and remaining in a state of operational readiness in anticipation of a recovery in uranium prices. Our ability to generate revenue from our Palangana and recently acquired Christensen Ranch Mines is subject to a number of factors which include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty in marketing and/or selling uranium concentrates; (iii) significantly higher than expected extraction costs; (iv) significantly lower than expected uranium extraction; (v) significant delays, reductions or stoppages of uranium extraction activities; and (vi) the introduction of significantly more stringent regulatory laws and regulations. Furthermore, continued mining activities at our ISR Mines will eventually deplete the mines or cause such activities to become uneconomical, and if we are unable to directly acquire or develop existing uranium projects, such as our Moore Ranch, Reno Creek, Burke Hollow and Goliad Projects, into additional uranium mines from which we can commence uranium extraction, it will negatively impact our ability to generate revenues. Any one or more of these occurrences may adversely affect our financial condition and operating results.
Exploration and pre-extraction programs and mining activities are inherently subject to numerous significant risks and uncertainties, and actual results may differ significantly from expectations or anticipated amounts. Furthermore, exploration programs conducted on our projects may not result in the establishment of ore bodies that contain commercially recoverable uranium.
Exploration and pre-extraction programs and mining activities are inherently subject to numerous significant risks and uncertainties, with many beyond our control and including, but not limited to: (i) unanticipated ground and water conditions and adverse claims to water rights; (ii) unusual or unexpected geological formations; (iii) metallurgical and other processing problems; (iv) the occurrence of unusual weather or operating conditions and other force majeure events; (v) lower than expected ore grades; (vi) industrial accidents; (vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) availability of contractors and labor; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials and equipment; and (xii) the failure of equipment or processes to operate in accordance with specifications or expectations. These risks and uncertainties could result in: (i) delays, reductions or stoppages in our mining activities; (ii) increased capital and/or extraction costs; (iii) damage to, or destruction of, our mineral projects, extraction facilities or other properties; (iv) personal injuries; (v) environmental damage; (vi) monetary losses; and (vii) legal claims.
Success in mineral exploration is dependent on many factors including, without limitation, the experience and capabilities of a company’s management, the availability of geological expertise and the availability of sufficient funds to conduct the exploration program. Even if an exploration program is successful and commercially recoverable material is established, it may take a number of years from the initial phases of drilling and identification of the mineralization until extraction is possible, during which time the economic feasibility of extraction may change such that the material ceases to be economically recoverable. Exploration is frequently non-productive due, for example, to poor exploration results or the inability to establish ore bodies that contain commercially recoverable material, in which case the project may be abandoned and written-off. Furthermore, we will not be able to benefit from our exploration efforts and recover the expenditures that we incur on our exploration programs if we do not establish ore bodies that contain commercially recoverable material and develop these projects into profitable mining activities, and there is no assurance that we will be successful in doing so for any of our projects.
Whether an ore body contains commercially recoverable material depends on many factors including, without limitation: (i) the particular attributes, including material changes to those attributes, of the ore body such as size, grade, recovery rates and proximity to infrastructure; (ii) the market price of uranium, which may be volatile; and (iii) government regulations and regulatory requirements including, without limitation, those relating to environmental protection, permitting and land use, taxes, land tenure and transportation.
We have not established proven or probable reserves through the completion of a final or bankable feasibility study for any of our 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 ISR mining, such as our ISR Mines. Since we commenced extraction of mineralized materials from our ISR Mines without having established proven or probable reserves, it may result in our mining activities at our ISR Mines, and at any future projects for which proven or probable reserves are not established, being inherently riskier than other mining activities for which proven or probable reserves have been established.
We have established the existence of mineralized materials for certain of our projects, including our ISR Mines. We have not established proven or probable reserves, as defined by the SEC, through the completion of a final or bankable feasibility study for any of our projects, including our ISR Mines. Furthermore, we have no present plans to establish proven or probable reserves for any of our projects for which we plan on utilizing ISR mining. Since we commenced the extraction of mineralized materials at our ISR Mines without having established proven or probable reserves, there may be greater inherent uncertainty as to whether or not any mineralized material can be economically extracted as originally planned and anticipated. 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.
On October 31, 2018, the SEC adopted the Modernization of Property Disclosures for Mining Registrants (the "New Rule"), introducing significant changes to the existing mining disclosure framework to better align it with international industry and regulatory practice. The New Rule became effective as of February 25, 2019, and issuers are required to comply with the New Rule as of the annual report for their first fiscal year beginning on or after January 1, 2021, and earlier in certain circumstances. The Company believes that it is presently in compliance with the New Rule.
Since we are in the Exploration Stage, pre-production expenditures including those related to pre-extraction activities are expensed as incurred, the effects of which may result in our consolidated financial statements not being directly comparable to the financial statements of companies in the Production Stage.
Despite the fact that we commenced uranium extraction at our ISR Mines, we remain in the Exploration Stage (as defined by the SEC) and will continue to remain in the Exploration Stage until such time as proven or probable reserves have been established, which may never occur. We prepare our consolidated financial statements in accordance with U.S. GAAP under which acquisition costs of mineral rights are initially capitalized as incurred while pre-production expenditures are expensed as incurred until such time as we exit the Exploration Stage. Expenditures relating to exploration activities are expensed as incurred and expenditures relating to pre-extraction activities are expensed as incurred until such time as proven or probable reserves are established for that uranium project, after which subsequent expenditures relating to mine development activities for that particular project are capitalized as incurred.
We have neither established nor have any present plans to establish proven or probable reserves for our uranium projects for which we plan on utilizing ISR mining. 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 inventory and, as that inventory is sold, to cost of goods sold. As we are in the Exploration Stage, it has resulted in us reporting larger losses than if we had been in the Production Stage due to the expensing, instead of capitalization, of expenditures relating to ongoing processing facility and mine pre-extraction activities. Additionally, there would be no corresponding amortization allocated to our future reporting periods 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 acquisition costs 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.
Estimated costs of future reclamation obligations may be significantly exceeded by actual costs incurred in the future. Furthermore, only a portion of the financial assurance required for the future reclamation obligations has been funded.
We are responsible for certain remediation and decommissioning activities in the future, primarily for our Hobson and Irigaray Processing Facilities, our ISR Mines and our recently acquired Roughrider Project, and have recorded a liability of $19.1 million on our balance sheet at April 30, 2024, to recognize the present value of the estimated costs of such reclamation obligations. Should the actual costs to fulfill these future reclamation obligations materially exceed these estimated costs, it may have an adverse effect on our financial condition and operating results, including not having the financial resources required to fulfill such obligations when required to do so.
During Fiscal 2015, we secured $5.6 million of surety bonds as an alternate source of financial assurance for the estimated costs of the reclamation obligations of our Hobson Processing Facility and Palangana Mine, of which we have $1.7 million funded and held as restricted cash for collateral purposes as required by the surety. In connection with the U1A Acquisition, we assumed $13.7 million of restricted cash as surety bond collateral for total estimated reclamation costs of $18.6 million for the Christensen Ranch Mine and Irigaray Processing Facility. During Fiscal 2022, $8.6 million of surety bond collateral related to the Christensen Ranch Mine and Irigaray Processing Facility was released. We may be required at any time to fund the remaining $17.4 million or any portion thereof for a number of reasons including, but not limited to, the following: (i) the terms of the surety bonds are amended, such as an increase in collateral requirements; (ii) we are in default with the terms of the surety bonds; (iii) the surety bonds are no longer acceptable as an alternate source of financial assurance by the regulatory authorities; or (iv) the surety encounters financial difficulties. Should any one or more of these events occur in the future, we may not have the financial resources to fund the remaining amount or any portion thereof when required to do so.
We cannot provide any assurance that our Physical Uranium Program involving the strategic acquisition of physical uranium will be successful, which may have an adverse effect on our results of operations.
We have used or allocated a large portion of our cash on hand in order to fund the acquisition of drummed uranium. This strategy will be subject to a number of risks and there is no assurance that the strategy will be successful. Future deliveries are subject to performance by other parties and there is a possibility of default by those parties, thus depriving us of potential benefits.
Due to the fluctuation of uranium prices, the price of uranium will fluctuate and we will be subject to losses should we ultimately determine to sell the uranium at prices lower than the acquisition cost. The primary risks associated with physical uranium will be the normal risks associated with supply and demand fundamentals affecting price movements.
We may be required to sell a portion or all of the physical uranium accumulated to fund our operations should other forms of financing not be available to meet our capital requirements.
Since there is no public market for uranium, selling the uranium may take extended periods of time and suitable purchasers may be difficult to find, which could have a material adverse effect on our financial condition and may have a material adverse effect on our securities.
There is no public market for the sale of uranium, although there are several trading and brokerage houses that serve the industry with bid and ask data as well as locations and quantities. The uranium futures market on the New York Mercantile Exchange does not provide for physical delivery of uranium, only cash on settlement, and that trading forum does not offer a formal market but rather facilitates the introduction of buyers to sellers.
The pool of potential purchasers and sellers is limited, and each transaction may require the negotiation of specific provisions. Accordingly, a sale may take several weeks or months to complete. If we determine to sell any physical uranium that we have acquired, we may likewise experience difficulties in finding purchasers that are able to accept a material quantity of physical uranium at a price and at a location that is compatible with our interests. The inability to sell on a timely basis in sufficient quantities and at a desired price and location could have a material adverse effect on our securities.
As part of our Physical Uranium Program, we have entered into commitments to purchase U3O8 and may purchase additional quantities. There is no certainty that any future purchases contemplated by us will be completed.
Storage arrangements, including the extension of storage arrangements, along with credit and operational risks of uranium storage facilities, may result in the loss or damage of our physical uranium which may not be covered by insurance or indemnity provisions and could have a material adverse effect on our financial condition.
By holding our uranium inventory at the ConverDyn conversion facility we are exposed to the credit and operational risks of the facility. There is no guarantee that we can fully recover all of our investment in uranium held with the facility in the event of a disruptive event. Failure to recover all uranium holdings could have a material adverse effect on our financial condition. Any loss or damage of the uranium may not be fully covered or absolved by contractual arrangements with ConverDyn or our insurance arrangements, and we may be financially and legally responsible for losses and/or damages not covered by indemnity provisions or insurance. Such responsibility could have a material adverse effect on our financial condition.
The uranium industry is subject to influential political and regulatory factors which could have a material adverse effect on our business and financial condition.
The international uranium industry, including the supply of uranium concentrates, is relatively small, competitive and heavily regulated. Worldwide demand for uranium is directly tied to the demand for electricity produced by the nuclear power industry, which is also subject to extensive government regulation and policies. In addition, the international marketing and trade of uranium is subject to political changes in governmental policies, regulatory requirements and international trade restrictions (including trade agreements, customs, duties and/or taxes). International agreements, governmental policies and trade restrictions are beyond our control. Changes in regulatory requirements, customs, duties or taxes may affect the availability of uranium, which could have a material adverse effect on our business and financial condition.
We do not insure against all of the risks we face in our operations.
In general, where coverage is available and not prohibitively expensive relative to the perceived risk, we will maintain insurance against such risk, subject to exclusions and limitations. We currently maintain insurance against certain risks, including securities and general commercial liability claims and certain physical assets used in our operations, subject to exclusions and limitations, however, we do not maintain insurance to cover all of the potential risks and hazards associated with our operations. We may be subject to liability for environmental, pollution or other hazards associated with our exploration, pre-extraction and extraction activities, which we may not be insured against, which may exceed the limits of our insurance coverage or which we may elect not to insure against because of high premiums or other reasons. Furthermore, we cannot provide assurance that any insurance coverage we currently have will continue to be available at reasonable premiums or that such insurance will adequately cover any resulting liability.
Acquisitions that we may make from time to time could have an adverse impact on us.
In general, where coverage is available and not prohibitively expensive relative to the perceived risk, we will maintain insurance against such risk, subject to exclusions and limitations. We currently maintain insurance against certain risks, including securities and general commercial liability claims and certain physical assets used in our operations, subject to exclusions and limitations, however, we do not maintain insurance to cover all of the potential risks and hazards associated with our operations. We may be subject to liability for environmental, pollution or other hazards associated with our exploration, pre-extraction and extraction activities, which we may not be insured against, which may exceed the limits of our insurance coverage or which we may elect not to insure against because of high premiums or other reasons. Furthermore, we cannot provide assurance that any insurance coverage we currently have will continue to be available at reasonable premiums or that such insurance will adequately cover any resulting liability.
Acquisitions that we may make from time to time could have an adverse impact on us.
From time to time we examine opportunities to acquire additional mining assets and businesses. Any acquisition that we may choose to complete may be of a significant size, may change the scale of our business and operations and may expose us to new geographic, political, operating, financial and geological risks. Our success in our acquisition activities depends on our ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition and integrate the acquired operations successfully with those of our Company. Any acquisitions would be accompanied by risks which could have a material adverse effect on our business. For example: (i) there may be a significant change in commodity prices after we have committed to complete the transaction and established the purchase price or exchange ratio; (ii) a material ore body may prove to be below expectations; (iii) we may have difficulty integrating and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise and maintaining uniform standards, policies and controls across the organization; (iv) the integration of the acquired business or assets may disrupt our ongoing business and our relationships with employees, customers, suppliers and contractors; and (v) the acquired business or assets may have unknown liabilities which may be significant. In the event that we choose to raise debt capital to finance any such acquisition, our leverage will be increased. If we choose to use equity as consideration for such acquisition, existing shareholders may suffer dilution. Alternatively, we may choose to finance any such acquisition with our existing resources. There can be no assurance that we would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.
The uranium and titanium industries are subject to numerous stringent laws, regulations and standards, including environmental protection laws and regulations. If any changes occur that would make these laws, regulations and standards more stringent, it may require capital outlays in excess of those anticipated or cause substantial delays, which would have a material adverse effect on our operations.
Uranium and titanium exploration and pre-extraction programs and mining activities are subject to numerous stringent laws, regulations and standards at the federal, state and local levels governing permitting, pre-extraction, extraction, exports, taxes, labor standards, occupational health, waste disposal, protection and reclamation of the environment, protection of endangered and protected species, mine safety, hazardous substances and other matters. Our compliance with these requirements requires significant financial and personnel resources.
The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the U.S., or any other applicable jurisdiction, may change or be applied or interpreted in a manner which may also have a material adverse effect on our operations. The actions, policies or regulations, or changes thereto, of any government body or regulatory agency or special interest group may also have a material adverse effect on our operations.
Uranium and titanium exploration and pre-extraction programs and mining activities are subject to stringent environmental protection laws and regulations at the federal, state and local levels. These laws and regulations include permitting and reclamation requirements, regulate emissions, water storage and discharges and disposal of hazardous wastes. Uranium mining activities are also subject to laws and regulations which seek to maintain health and safety standards by regulating the design and use of mining methods. Various permits from governmental and regulatory bodies are required for mining to commence or continue, and no assurance can be provided that required permits will be received in a timely manner.
Our compliance costs, including the posting of surety bonds associated with environmental protection laws and regulations and health and safety standards, have been significant to date, and are expected to increase in scale and scope as we expand our operations in the future. Furthermore, environmental protection laws and regulations may become more stringent in the future, and compliance with such changes may require capital outlays in excess of those anticipated or cause substantial delays, which would have a material adverse effect on our operations.
While the very heart of our business – uranium extraction, which is the fuel for carbon-free, emission-free baseload nuclear power – and our recycling programs, help address global climate change and reduce air pollution, the world’s focus on addressing climate change will require the Company to continue to conduct all of its operations in a manner that minimizes the use of resources, including enhancing energy efficiency and reducing our reliance on fossil fuels, in order to continue to minimize air emissions at our facilities, which can also increase mine and facility, construction, development and operating costs. Regulatory and environmental standards may also change over time to address global climate change, which could further increase these costs.
To the best of our knowledge, our operations are in compliance, in all material respects, with all applicable laws, regulations and standards. If we become subject to liability for any violations, we may not be able or may elect not to insure against such risk due to high insurance premiums or other reasons. Where coverage is available and not prohibitively expensive relative to the perceived risk, we will maintain insurance against such risk, subject to exclusions and limitations. However, we cannot provide any assurance that such insurance will continue to be available at reasonable premiums or that such insurance will be adequate to cover any resulting liability.
We may not be able to obtain, maintain or amend rights, authorizations, licenses, permits or consents required for our operations.
Our exploration and mining activities are dependent upon the grant of appropriate rights, authorizations, licences, permits and consents, as well as continuation and amendment of these rights, authorizations, licences, permits and consents already granted, which may be granted for a defined period of time, or may not be granted or may be withdrawn or made subject to limitations. There can be no assurance that all necessary rights, authorizations, licences, permits and consents will be granted to us, or that authorizations, licences, permits and consents already granted will not be withdrawn or made subject to limitations.
Major nuclear and global market incidents may have adverse effects on the nuclear and uranium industries.
The nuclear incident that occurred in Japan in March 2011 had significant and adverse effects on both the nuclear and uranium industries. If another nuclear incident were to occur, it may have further adverse effects for both industries. Public opinion of nuclear power as a source of electrical generation may be adversely affected, which may cause governments of certain countries to further increase regulation for the nuclear industry, reduce or abandon current reliance on nuclear power or reduce or abandon existing plans for nuclear power expansion. Any one of these occurrences has the potential to reduce current and/or future demand for nuclear power, resulting in lower demand for uranium and lower market prices for uranium, adversely affecting the operations and prospects of our Company. Furthermore, the growth of the nuclear and uranium industries is dependent on continuing and growing public support of nuclear power as a viable source of electrical generation.
In March 2020 the COVID-19 pandemic resulted in a black swan event impacting about 50% of the world’s uranium production and has accelerated the market rebalancing. In 2020 significant production cuts were announced in response to the global COVID-19 pandemic, including uranium facilities in Canada, Kazakhstan and Namibia. In 2023, although most production impacted by COVID-19 has returned to an operating status, some production has continued to be affected. It is unknown at this time exactly how long all the impacts will last or how much uranium production will ultimately be removed from the market as a result of the COVID-19 pandemic. The Company also believes that a large degree of uncertainty exists in the market, primarily due to the size of mobile uranium inventories, transportation issues, premature reactor shutdowns in the U.S. and the length of time of any uranium mine, conversion or enrichment facility shutdowns.
The marketability of uranium concentrates will be affected by numerous factors beyond our control which may result in our inability to receive an adequate return on our invested capital.
The marketability of uranium concentrates extracted by us will be affected by numerous factors beyond our control. These factors include: (i) macroeconomic factors; (ii) fluctuations in the market price of uranium; (iii) governmental regulations; (iv) land tenure and use; (v) regulations concerning the importing and exporting of uranium; and (vi) environmental protection regulations. The future effects of these factors cannot be accurately predicted, but any one or a combination of these factors may result in our inability to receive an adequate return on our invested capital.
The titanium industry is affected by global economic factors, including risks associated with volatile economic conditions, and the market for many titanium products is cyclical and volatile, and we may experience depressed market conditions for such products.
Titanium is used in many “quality of life” products for which demand historically has been linked to global, regional and local GDP and discretionary spending, which can be negatively impacted by regional and world events or economic conditions. Such events are likely to cause a decrease in demand for products and, as a result, may have an adverse effect on our results of operations and financial condition. The timing and extent of any changes to currently prevailing market conditions is uncertain, and supply and demand may be unbalanced at any time. Uncertain economic conditions and market instability make it particularly difficult for us to forecast demand trends. As a consequence, we may not be able to accurately predict future economic conditions or the effect of such conditions on our financial condition or results of operations. We can give no assurances as to the timing, extent or duration of the current or future economic cycles impacting the industries in which we operate.
Historically, the market for large volume titanium applications, including coatings, paper and plastics, has experienced alternating periods of tight supply, causing prices and margins to increase, followed by periods of lower capacity utilization, resulting in declining prices and margins. The volatility this market experiences occurs as a result of significant changes in the demand for products as a consequence of global economic activity and changes in customers’ requirements. The supply-demand balance is also impacted by capacity additions or reductions that result in changes of utilization rates. In addition, titanium margins are impacted by significant changes in major input costs, such as energy and feedstock. Demand for titanium depends in part on the housing and construction industries. These industries are cyclical in nature and have historically been impacted by downturns in the economy. In addition, pricing may affect customer inventory levels as customers may from time to time accelerate purchases of titanium in advance of anticipated price increases or defer purchases of titanium in advance of anticipated price decreases. The cyclicality and volatility of the titanium industry results in significant fluctuations in profits and cash flow from period to period and over the business cycle.
The uranium industry is highly competitive and we may not be successful in acquiring additional projects.
The uranium industry is highly competitive, and our competition includes larger, more established companies with longer operating histories that not only explore for and produce uranium, but also market uranium and other products on a regional, national or worldwide basis. Due to their greater financial and technical resources, we may not be able to acquire additional uranium projects in a competitive bidding process involving such companies. Additionally, these larger companies have greater resources to continue with their operations during periods of depressed market conditions.
The titanium industry is concentrated and highly competitive, and we may not be able to compete effectively with our competitors that have greater financial resources or those that are vertically integrated, which could have a material adverse effect on our business, results of operations and financial condition.
The global titanium market is highly competitive, with the top six producers accounting for approximately 60% of the world’s production capacity. Competition is based on a number of factors, such as price, product quality and service. Among our competitors are companies that are vertically-integrated (those that have their own raw material resources). Changes in the competitive landscape could make it difficult for us to retain our competitive position in various products and markets throughout the world. Our competitors with their own raw material resources may have a competitive advantage during periods of higher raw material prices. In addition, some of the companies with whom we compete may be able to produce products more economically than we can. Furthermore, some of our competitors have greater financial resources, which may enable them to invest significant capital into their businesses, including expenditures for research and development.
We hold mineral rights in foreign jurisdictions which could be subject to additional risks due to political, taxation, economic and cultural factors.
We hold certain mineral rights located in the Republic of Paraguay through Piedra Rica Mining S.A., Transandes Paraguay S.A., Trier S.A. and Metalicos Y No Metalicos Paraguay S.R.L., which are incorporated in Paraguay. Operations in foreign jurisdictions outside of the United States and Canada, especially in developing countries, may be subject to additional risks as they may have different political, regulatory, taxation, economic and cultural environments that may adversely affect the value or continued viability of our rights. These additional risks include, but are not limited to: (i) changes in governments or senior government officials; (ii) changes to existing laws or policies on foreign investments, environmental protection, mining and ownership of mineral interests; (iii) renegotiation, cancellation, expropriation and nationalization of existing permits or contracts; (iv) foreign currency controls and fluctuations; and (v) civil disturbances, terrorism and war.
In the event of a dispute arising at our foreign operations in Paraguay, we may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of the courts in the United States or Canada. We may also be hindered or prevented from enforcing our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity. Any adverse or arbitrary decision of a foreign court may have a material and adverse impact on our business, prospects, financial condition and results of operations.
The title to our mineral property interests may be challenged.
Although we have taken reasonable measures to ensure proper title to our interests in mineral properties and other assets, there is no guarantee that the title to any of such interests will not be challenged. No assurance can be given that we will be able to secure the grant or the renewal of existing mineral rights and tenures on terms satisfactory to us, or that governments in the jurisdictions in which we operate will not revoke or significantly alter such rights or tenures or that such rights or tenures will not be challenged or impugned by third parties, including local governments, aboriginal peoples or other claimants. The Company has had communications and filings with the MOPC, whereby the MOPC is taking the position that certain concessions forming part of the Company’s Yuty, Alto Parana and Colonel Oviedo Projects are not eligible for extension as to exploration or continuation to exploitation in their current stages. While we remain fully committed to our development path forward in Paraguay, we have filed certain applications and appeals in Paraguay to reverse the MOPC’s position in order to protect the Company’s continuing rights in those concessions. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. A successful challenge to the precise area and location of our claims could result in us being unable to operate on our properties as permitted or being unable to enforce our rights with respect to our properties.
Due to the nature of our business, we may be subject to legal proceedings which may divert management’s time and attention from our business and result in substantial damage awards.
Due to the nature of our business, we may be subject to numerous regulatory investigations, securities claims, civil claims, lawsuits and other proceedings in the ordinary course of our business including those described under Item 3, Legal Proceedings, herein. The outcome of these lawsuits is uncertain and subject to inherent uncertainties, and the actual costs to be incurred will depend upon many unknown factors. We may be forced to expend significant resources in the defense of these suits, and we may not prevail. Defending against these and other lawsuits in the future may not only require us to incur significant legal fees and expenses, but may become time-consuming for us and detract from our ability to fully focus our internal resources on our business activities. The results of any legal proceeding cannot be predicted with certainty due to the uncertainty inherent in litigation, the difficulty of predicting decisions of regulators, judges and juries and the possibility that decisions may be reversed on appeal. There can be no assurances that these matters will not have a material adverse effect on our business, financial position or operating results.
We depend on certain key personnel, and our success will depend on our continued ability to retain and attract such qualified personnel.
Our success is dependent on the efforts, abilities and continued service of certain senior officers and key employees and consultants. A number of our key employees and consultants have significant experience in the uranium industry. A loss of service from any one of these individuals may adversely affect our operations, and we may have difficulty or may not be able to locate and hire a suitable replacement.
Certain directors and officers may be subject to conflicts of interest.
The majority of our directors and officers are involved in other business ventures including similar capacities with other private or publicly-traded companies. Such individuals may have significant responsibilities to these other business ventures, including consulting relationships, which may require significant amounts of their available time. Conflicts of interest may include decisions on how much time to devote to our business affairs and what business opportunities should be presented to us. Our Code of Conduct and Ethics provides for guidance on conflicts of interest.
The laws of the State of Nevada and our Articles of Incorporation may protect our directors and officers from certain types of lawsuits.
The laws of the State of Nevada provide that our directors and officers will not be liable to our Company or to our stockholders for monetary damages for all but certain types of conduct as directors and officers. Our Bylaws provide for broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. These indemnification provisions may require us to use our limited assets to defend our directors and officers against claims, and may have the effect of preventing stockholders from recovering damages against our directors and officers caused by their negligence, poor judgment or other circumstances.
Several of our directors and officers are residents outside of the United States, and it may be difficult for stockholders to enforce within the United States any judgments obtained against such directors or officers.
Several of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside of the United States. As a result, it may be difficult for investors to effect service of process on such directors and officers, or enforce within the United States any judgments obtained against such directors and officers, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, stockholders may be effectively prevented from pursuing remedies against such directors and officers under United States federal securities laws. In addition, stockholders may not be able to commence an action in a Canadian court predicated upon the civil liability provisions under United States federal securities laws. The foregoing risks also apply to those experts identified in this document that are not residents of the United States.
Disclosure controls and procedures and internal control over financial reporting, no matter how well designed and operated, are designed to obtain reasonable, and not absolute, assurance as to its reliability and effectiveness.
Proposed and new legislation in the U.S. Congress, including changes in U.S. tax law, may adversely impact the Company and the value of shares of our common stock.
Changes to U.S. tax laws (which changes may have retroactive application) could adversely affect the Company or holders of shares of our common stock. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.
The U.S. Congress passed and is currently considering numerous items of legislation which may be enacted prospectively or with retroactive effect, and which legislation could adversely impact the Company’s financial performance and the value of shares of our common stock. In particular, we understand that new legislation known as the “Build Back Better Act” has been passed by both houses of the U.S. Congress. The legislation includes, without limitation, new corporate minimum income taxes. We understand that the proposals would be effective for 2022 or later years.
In addition, the Inflation Reduction Act of 2022 was recently signed into law and includes provisions that will impact the U.S. federal income taxation of corporations. Among other items, this legislation includes provisions that will impose a minimum tax on the book income of certain large corporations and an excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock. It is unclear how this legislation will be implemented by the U.S. Department of the Treasury and the Company cannot predict how this legislation or any future changes in tax laws might affect the Company or purchasers of our common stock.
Risks Related to Our Common Stock
Historically, the market price of our common stock has been and may continue to fluctuate significantly.
On September 28, 2007, our common stock commenced trading on the NYSE American (formerly known as the American Stock Exchange, the NYSE Amex Equities Exchange and the NYSE MKT) and prior to that, traded on the OTC Bulletin Board.
The global markets have experienced significant and increased volatility in the past, and have been impacted by the effects of mass sub-prime mortgage defaults and liquidity problems of the asset-backed commercial paper market, resulting in a number of large financial institutions requiring government bailouts or filing for bankruptcy. The effects of these past events and any similar events in the future may continue to or further affect the global markets, which may directly affect the market price of our common stock and our accessibility for additional financing. Although this volatility may be unrelated to specific company performance, it can have an adverse effect on the market price of our shares which, historically, has fluctuated significantly and may continue to do so in the future.
In addition to the volatility associated with general economic trends and market conditions, the market price of our common stock could decline significantly due to the impact of any one or more events including, but not limited to, the following: (i) volatility in the uranium market; (ii) occurrence of a major nuclear incident such as the events in Japan in March 2011; (iii) changes in the outlook for the nuclear power and uranium industries; (iv) failure to meet market expectations on our exploration, pre-extraction or extraction activities, including abandonment of key uranium projects; (v) sales of a large number of our shares held by certain stockholders including institutions and insiders; (vi) downward revisions to previous estimates on us by analysts; (vii) removal from market indices; (viii) legal claims brought forth against us; and (ix) introduction of technological innovations by competitors or in competing technologies.
A prolonged decline in the market price of our common stock could affect our ability to obtain additional financing which would adversely affect our operations.
Historically, we have relied on equity financing and, more recently, on debt financing, as primary sources of financing. A prolonged decline in the market price of our common stock or a reduction in our accessibility to the global markets may result in our inability to secure additional financing which would have an adverse effect on our operations.
Additional issuances of our common stock may result in significant dilution to our existing shareholders and reduce the market value of their investment.
We are authorized to issue 750,000,000 shares of common stock of which 405,951,114 shares were issued and outstanding as of April 30, 2024. Future issuances for financings, mergers and acquisitions, exercise of stock options and share purchase warrants and for other reasons may result in significant dilution to and be issued at prices substantially below the price paid for our shares held by our existing stockholders. Significant dilution would reduce the proportionate ownership and voting power held by our existing stockholders and may result in a decrease in the market price of our shares.
We are subject to the Continued Listing Criteria of the NYSE American and our failure to satisfy these criteria may result in delisting of our common stock.
Our common stock is currently listed on the NYSE American. In order to maintain this listing, we must maintain certain share prices, financial and share distribution targets, including maintaining a minimum amount of shareholders’ equity and a minimum number of public shareholders. In addition to these objective standards, the NYSE American may delist the securities of any issuer: (i) if in its opinion, the issuer’s financial condition and/or operating results appear unsatisfactory; (ii) if it appears that the extent of public distribution or the aggregate market value of the security has become so reduced as to make continued listing on the NYSE American inadvisable; (iii) if the issuer sells or disposes of principal operating assets or ceases to be an operating company; (iv) if an issuer fails to comply with the NYSE American’s listing requirements; (v) if an issuer’s common stock sells at what the NYSE American considers a “low selling price” and the issuer fails to correct this via a reverse split of shares after notification by the NYSE American; or (vi) if any other event occurs or any condition exists which makes continued listing on the NYSE American, in its opinion, inadvisable.
If the NYSE American delists our common stock, investors may face material adverse consequences including, but not limited to, a lack of trading market for our securities, reduced liquidity, decreased analyst coverage of our securities, and an inability for us to obtain additional financing to fund our operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On February 8, 2024, we issued 1,552 shares of common stock pursuant to the exercise of warrants at a price of CA$4.44 per share. We relied upon the exemption from the registration requirements under the Securities Act provided by Rule 903 of Regulation S with respect to the issuance of these shares.
On February 16, 2024, we issued 931,050 shares of common stock pursuant to the exercise of warrants at a price of CA$4.44 per share. We relied upon the exemption from the registration requirements under the Securities Act provided by Rule 903 of Regulation S with respect to the issuance of these shares.
On February 23, 2024, we issued 62,100 shares of common stock pursuant to the exercise of warrants at a price of CA$4.44 per share. We relied upon the exemption from the registration requirements under the Securities Act provided by Rule 903 of Regulation S with respect to the issuance of these shares.
On February 27, 2024, we issued 155,205 shares of common stock pursuant to the exercise of warrants at a price of CA$4.44 per share. We relied upon the exemption from the registration requirements under the Securities Act provided by Rule 903 of Regulation S with respect to the issuance of these shares.
On March 12, 2024, we issued 787 shares of common stock pursuant to the exercise of warrants at a price of CA$4.44 per share. We relied upon the exemption from the registration requirements under the Securities Act provided by Rule 903 of Regulation S with respect to the issuance of these shares.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States, and that is subject to regulation by the Federal Mine Safety and Health Administration under the Mine Safety and Health Act of 1977 (the “Mine Safety Act”), are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the quarter ended April 30, 2024, our ISR Mines were not subject to regulation by the Federal Mine Safety and Health Administration under the Mine Safety Act.
During our fiscal quarter ended April 30, 2024, none of our directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.
The following exhibits are included with this Quarterly Report:
Exhibit | Description of Exhibit |
31.1 | |
31.2 | |
32.1 | |
| 101.1NS | Inline XBRL Instance Document |
101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definitions Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.
| URANIUM ENERGY CORP. |
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| By: | /s/ Amir Adnani |
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| Amir Adnani |
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| President, Chief Executive Officer (Principal Executive Officer) and director |
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| Date: June 7, 2024 | |||
| By: | /s/ Pat Obara | ||
| Pat Obara | |||
| Chief Financial Officer (Principal Financial Officer) | |||
| Date: June 7, 2024 | |||