The Superbowl of mining events took place in Toronto this week. Explorers, drillers, miners, bankers, lawyers, investors and one Fool gathered to make this year’s Prospectors and Developers Association of Canada event one of the biggest ever.
The mass of humanity (+30,000 strong) flies somewhat in the face of the well documented issues that the resource industry currently has. Chiefly, exploration and drilling finance has dried up, leaving many a junior mining company grasping for whatever dollars might come its way.
Uranium Energy Corp. (NYSEMKT:UEC)
A similar story to Uranerz, UEC has operations in south Texas and is the newest uranium producer in North America. The company’s operating mine sold 270,000 lbs of uranium in fiscal 2012 and generated revenues of $13.8 million at a cost per pound of $18. This compares nicely to the current spot of $42/lb, a figure many believe can’t go lower. Like Uranerz, UEC uses the “in situ” method to extract uranium. It’s mine only required $10 million to construct and operating costs are obviously low.
More UEC mines in south Texas are coming. In addition, the company controls about 1,000,000 acres in Paraguay for exploration. This compares nicely to the 48,000 acres in Texas that the company has to work with. There is no debt on the balance sheet and insiders own 20%. Lot’s to like, on the surface, about this name.
The Foolish Bottom Line
Even though times are tough in the resource industry, opportunities to make money exist. Sticking to a story like uranium, with a solid supply/demand dynamic working in its favour, will help better your odds of success if you are looking at ways to play the current industry wide downturn.