November 18, 2021
UEX Corp. (TSX:UEX, BUY, C$0.60 target, David A. Talbot) announced it has filed an updated resource estimate for the Horseshoe-Raven deposits in the eastern Athabasca Basin of northern Saskatchewan. This 2021 Technical Report will replace the 2011 PEA with an updated estimate of mineral resources in order to combat the passage of time. The new indicated resources at Horseshoe deposit total 4.98Mt at 0.215% for 23.59M lb U3O8, and at the Raven deposit resources total 5.37Mt at 0.117% for 13.83M lb U3O8. No inferred resources were estimated and a cut-off grade of 0.05% was used. We believe this is a solid estimate as the inverse squared methods used 715 core holes (210,385m) from its 2005-2011 drill programs. There has been no drilling at these deposits over the past decade, but the new resource does bring resources in-line with current regulations. Combined, the new 37.4M lb resource is in-line with previous resources of 37.7M lb. Grades are also in-line at a 0.16% versus 0.15% previously. We use an in situ valuation of US$1.50/lb for this project. We note that while the project is within 4km of the Rabbit Lake mill, this is a low-grade project for the Athabasca Basin. Looking ahead, we anticipate more attention to be paid to the Wheeler River JV, Christie Lake, and West Bear in the short term, as UEX looks to continue to make discoveries and expand resources. UEX currently trades at a significant discount to its peer group on a US$EV/lb at US$1.16 vs. global peers at US$3.58 and Athabasca Basin peers at US$5.28, partially given its extensive ~150M lb (historical and compliant) resource base. Read more
