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General Market Commentary
UEC CEO Interview: Big News in the “Budget for America's Future”
The Trump administration has just announced a 10-year, $150-million-per-year ($1.5 billion) request to purchase U.S.-mined uranium for a strategic national uranium reserve. The request is just the beginning of what will be a long process to diversify away from foreign and sometimes hostile sources of uranium.
I had the opportunity to speak with one of the most respected voices in the uranium space, UEC President and CEO Amir Adnani.
We discussed what the announcement means, what comes next, and how UEC had been waiting over 15 years for this moment. Enjoy.
To your wealth,
Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader
Gerardo Del Real: This is Gerardo Del Real with the Outsider Club. Joining me today is the President and CEO of Uranium Energy Corp. (NYSE American: UEC), Mr. Amir Adnani. Amir, this is overdue. How are you, sir?
Amir Adnani: Gerardo, I'm great. Nice to connect with you on a very important day. We have something very important to talk about. Right?
Gerardo Del Real: We absolutely do. We’ve experienced multiple head fakes — false starts — in the uranium space. We know that when this space turns, the gains can be life changing once a uranium bull market really gets going.
We had some really important news. President Trump and his administration, under the “Budget for America's Future”, are looking to provide a 10-year, $150-million-per-year program, and that part is important. It's a total of $1.5 billion to purchase U.S.-mined uranium for a strategic national Uranium Reserve.
Now, we know there's not a lot of good options out there when it comes to U.S.-mined uranium. But UEC obviously has to be excited, shareholders should be as well. Can you provide some details and some color there, Amir?
Amir Adnani: Well, let me just take a step back. If you think about it, President Trump and his administration should really be applauded for taking this action. It's also a very positive situation for our company and the domestic uranium mining industry. If you think about the annual presidential budget it is a big deal for the U.S. uranium industry to be included
Not too many industries or sectors are singled out so positively the way uranium is now singled out with the proposed budget amounts you talked about at $150 million a year over 10 years for a total of $1.5 billion.
This is a great first step forward. Especially when you think about this budget announcement in the context of where UEC and the U.S. market were 15 years ago. When the company was formed, the U.S. was importing 90% of its uranium requirements. We thought that didn't really make sense, and wasn't sustainable. We thought that should reverse and we would end up somewhere closer to where U.S. historical production levels had been.
In the '70s and '80s, the U.S. was one of the world's largest producers of uranium, then it went into a protracted decline. And 15 years later, things were not getting any better. Fast forward to today, basically all uranium mining in the U.S. has been shut down. Now the U.S. is importing 99% or you can really say 100% of its uranium requirements. So just when it seems the darkest, we can now see some light at the end of the tunnel for a turnaround. It's really quite an unprecedented action Gerardo, to have the federal government step in and look to buy uranium for a national Uranium Reserve to support national security objectives. This is not something that happens every year or every decade.
The last time the federal government bought uranium was back in the '60s and '70s. That was actually what kicked off and what ultimately became the bull market in the '70s. The all-time uranium price high, in fact, happened in the late '70s, adjusted for inflation. That is the kind of history we have here. Again, it's important to recognize that from the moment former Energy Secretary Perry came in, and then Secretary Brouillette, there has been a consistent direction following the mandate of energy dominance from this administration.
It seems quite clear that you can’t be energy dominant if you don't produce the basic fuel and the raw material to run the 96 reactors that we have in this country, not to mention the fuel needed for the nuclear propulsion program for all the aircraft carriers and submarines. It is encouraging that Energy Secretary Dan Brouillette said that this is the very beginning of a long process to revitalize the many aspects of the fuel cycle.
Not only that, but The key part is the president's budget request for $150 million to begin purchasing uranium is just the beginning. And in Brouillette's own words, “It won't stop there.” It'll be interesting to see in the coming weeks when the final report or recommendations by the president's Nuclear Fuel Working Group comes out. We'll obviously learn a lot more and hopefully we'll see what else might potentially be in store for us.
Gerardo Del Real: What comes next? Do you see bipartisan support?
Amir Adnani: Yes. Clearly, we hope Congress will support the administration's budget proposal and funding requests. The sooner they take action, the sooner we can get back to producing uranium. And I have to say, uranium is the fuel used in generating CO2-emission-free electricity from nuclear power and it has bipartisan support in Washington, DC. Both the Republicans and Democrats recognize nuclear power needs to be in the energy mix from the standpoints of climate change and reliable electricity generation.
This is not an issue or topic, in my opinion, that would fall in the great kind of political divisions that we see in Washington. More importantly, we're talking about a very vital commodity that we're entirely dependent on from foreign sources. So, I think that's something that should certainly be supported and have bipartisan support.
But to your earlier point, let's first see what other information comes out from the administration's Nuclear Fuel Working Group. Their priorities were to evaluate and make recommendations to the president to revitalize and expand the domestic nuclear fuel cycle, and that starts with uranium mining. President Trump’s budget plan to provide funding for domestic uranium mining is a great first step in the right direction.
Again, it's not every day. It's not every year. It's not even every decade that we see this type of recognition and strong support from an administration. This president says, "Yes, there is a problem. There is a problem with significant national security concerns from U.S. over-reliance on foreign sources. Let's do something about it." There will be more to come out on the NFWG and the Uranium Reserve and we will have to see how this develops over the coming weeks and months.
Gerardo Del Real: Amir, you mentioned earlier having the vision 15 years ago that the current situation back then was not sustainable. How have you positioned UEC shareholders and potential shareholders to benefit from any positive momentum that continues as a result of this first step as you called it?
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