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Uranium Energy Starts Uranium Production at Palangana Project, Texas

Uranium Energy Corp (NYSE AMEX: UEC) has announced that the Company has started uranium production using in-situ recovery methods at the Palangana Project in South Texas.

  • UEC launches first new ISR uranium mine in U.S. in 5 years
  • First production area comes on-line in South Texas below budget and on schedule

Phase I of three separate development phases of the wellfield at Production Area 1 (PAA-1) is 100% complete, with more than 45 injection wells and production wells drilled, cased and tested. The Company is very pleased with the water volume that each well has yielded during the testing phase. Now, gaseous oxygen and carbon dioxide are being added to the circulating ground water, which has activated the mining process of dissolving the uranium from surrounding sandstones.

Amir Adnani, President and CEO, stated, "We are exceedingly proud that Palangana is the first new ISR uranium mine to achieve production in the U.S. in over 5 years. Kudos are due to our many professionals who have been working very hard to reach this important milestone. Palangana is one of the Company's four projects in South Texas. This initial production is really just the first step in the Company's regional strategy of greatly expanding resources and production in the re-emerging South Texas Uranium Belt, with the next project, the nearby Goliad ISR project, anticipated to join Palangana as a producing asset next year."

Harry Anthony, Chief Operating Officer, added, "The next milestone will be the start of regular deliveries of uranium-loaded resin beads to our Hobson processing plant, scheduled to commence before month-end. Shortly thereafter, we will be marketing and delivering yellowcake, the Company's valuable final product. Hobson is a newly refurbished, state-of-the-art processing plant, and anchors the Company's South Texas regional strategy with up to 3.0 million pounds of annual capacity."

Phase 1 of the PAA-1 wellfield is in operation with 30 injection wells and 15 production wells on-line, with each being brought gradually up to maximum flow rates of approximately 50 gallons per minute.

Phases II and III of the PAA-1 wellfield each will contain 45 production and injection wells. All Phase II wells have been completed, and are targeted to commence mining in the first quarter of 2011. Installation of Phase III wells is underway with three rigs actively casing and then completing each well. The Company is scheduling these wells to come on-line and to start production during the second quarter of 2011. The average depth of wells throughout the PAA-1 wellfield is 450 feet.

Uranium Market

The spot uranium price continues to rise, presently at $59.50/lb. U3O8, up from a base set earlier this year just above $40/lb. The term or contract price is $62.00/lb. U3O8. Both prices are quotes from Ux Consulting, an industry price-publishing source. Uranium Energy Corp, as a new uranium-producing company, is ideally positioned with no debt and 100%-unhedged production.

About In-Situ Recovery (ISR) Mining

Uranium Energy Corp is employing in-situ recovery or ISR mining technology at the Palangana uranium project. ISR is injected-solution mining that reverses the natural process that deposited the uranium in the sandstones. On-site ground water is being fortified with gaseous oxygen and introduced to the uranium ore body through a pattern of injection wells. The solution dissolves the uranium from the sandstone host.

The uranium-bearing solution is brought back to surface through production wells where the uranium is concentrated on resin beads for trucking to the Company's Hobson processing plant to be concentrated further and dried into yellowcake for market. This pattern of injection and recovery wells, plus surrounding monitor wells that serve as a safeguard, is called a wellfield.

Source: Uranium Energy Corp.

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