Uranium Energy Corp Reports Fiscal 2012 Q1 Production Results and Provides Operations Update

Uranium Energy Corp

is pleased to report financial and production results for the first quarter ended October 31, 2011. Major first quarter highlights include the following: The Company completed its first uranium sale: UEC recorded revenue of $3.1 million resulting from the sale of 60,000 pounds of U3O8 at an average sales price of $52 per pound with an average cash cost per pound sold of $14; Production for the Quarter: Production from Palangana totaled 67,000 pounds and the Hobson facility processed 69,000 pounds of U3O8 for a cumulative cash cost of $18 per pound; Exploration and development activities at Palangana and Salvo continue; Coronel Oviedo Uranium Project in Paraguay: The Company initiated a 10,000-meter drilling program at its Coronel Oviedo Project in Paraguay; The acquisition of the Anderson Project in Arizona was completed; The Workman Creek Project in Arizona was acquired; and The Company's balance sheet remains strong: As of October 31, 2011, UEC had $23.7 million of cash in the treasury and 134,000 lbs. of U3O8 available for sale in inventory with a market value of $7.0 million. During the three months ended October 31, 2011, the Palangana Mine produced 67,000 pounds of U3O8. The Hobson facility processed 69,000 pounds of U3O8 for a cumulative cash cost(1) of $18 per pound, with a total of 194,000 pounds processed since the commencement of production to October 31, 2011. The Company had 134,000 pounds of U3O8 available for sale in inventory produced at an average cash cost (1) of $16 per pound, with a market value of $7.0 million based on the average of the spot prices for uranium at October 31, 2011. The three-phase startup of Production Area-1 at the Palangana Mine is continuing with the average depth of the wells at approximately 450 feet. Production initially commenced at the Phase I wellfield (22 production and 27 injection wells) in November 2010, followed by the Phase II wellfield (32 production and 22 injection wells) in April 2011, with the final Phase III wellfield (21 production and 18 injection wells) having commenced production in early October 2011. Field crews are continuing to address performance variations with some wells in the Phase I wellfield. A number of injection and production wells here are being recompleted, and new wells are being drilled to assist in extraction efficiencies. In Phase II, the wellfield is being evaluated to improve production from areas that have remaining resources yet to be recovered. As noted above, the Phase III wellfield commenced operations in early October 2011 and is ramping up. Production Area-2 wellfield drilling and casing commenced in November 2011. A total of 72 wells are planned (36 injection and 36 production wells). The first of two phases at PAA-2 is planned to start up in April 2012. Palangana - Ongoing Exploration and Development Exploration drilling continued throughout the first quarter at the Palangana Project, with four drill rigs targeting several lightly explored areas. Three mineralized trends were further delineated by drilling 66 holes. Ore-quality mineralization in these trends occurs between 300' to 600' in depth. Additional delineation drilling and coring are scheduled to be conducted in these areas in the near future. Additionally, four drill rigs completed delineation of the future Production Area-3 wellfield during the first quarter. Thirty-three delineation holes were drilled, followed by the installation of 18 perimeter monitor wells and 12 interior monitor wells in preparation for a pump test which was conducted in November, with analytical results anticipated in December. Goliad Development Update The Texas Commission on Environmental Quality (TCEQ) has continued to make progress with the one remaining license needed to initiate construction at the Goliad project, the Radioactive Materials License (RML). The Company expects to have an update on the status of this license before the end of the calendar year. Before the Company initiates in-situ recovery of uranium at Goliad's Production Area One, the regional Environmental Protection Agency must complete its review of and concur with the Aquifer Exemption which has already been granted to the Company by TCEQ. Salvo Exploration Drilling resumed at the Salvo Project in October 2011 with two drill rigs completing four exploration holes offsetting known mineralization. During the first quarter, six additional leases were acquired totaling 724 acres. Drilling is scheduled to continue throughout the year, and metallurgical and other tests are also being performed to reaffirm ISR amenability at Salvo. Management anticipates releasing drill results by March 2012.