UEX's Lemaitre Talks Blue Chip Junior Strategy: Exploration Excellence

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After losing half of its value, the spot price of uranium has in recent weeks risen from less than $30 per pound to $42 per pound. Roger Lemaitre, President and CEO of UEX Corp., is pleased but not surprised, as a supply shortage looms, and sanctions against Russia are spooking utilities. In this interview with The Energy Report, Lemaitre explains how its substantial resources in Saskatchewan's Athabasca Basin have primed UEX to move forward when uranium prices rise to meet demand.

UEX Corp.

The Energy Report: UEX Corp. (UEX:TSX) describes itself as Canada's "blue chip" uranium junior. What makes it so?

Roger Lemaitre: We have acted like a blue chip throughout our history. There's a chart in our presentation demonstrating the close correlation of UEX's share price to uranium's spot price. Yes, junior companies tend to correlate well, but they also tend to be more volatile than we've been. The reason is that we're sitting on 86 million pounds (86 Mlb) of U308 that could be developed in a reasonable period of time in the world's best jurisdiction. We're a proxy for the uranium price for some investors, and we're cheaper than, say, Cameco Corp. (CCO:TSX; CCJ:NYSE).

TER: You were with Cameco for quite a few years, right?

RL: I've been focused on uranium exploration for the last 14 years. Twelve were with Cameco, where I was involved in the Rabbit Lake/Eagle Point extension/discovery that's kept that mine running for a dozen years longer than projected. I oversaw Cameco's exploration programs in Saskatchewan and globally. I was appointed president and CEO of UEX in December 2013.

TER: What's your professional training?

RL: I have a bachelor's degree in geological engineering from Queen's University, a master's degree in geology from McGill University and a master's degree in business administration from Athabasca University.

TER: Cameco owns 21.28% of UEX. How did that come about?

RL: Cameco was one of our founding shareholders in 2002, and contributed our Hidden Bay property in exchange for its initial share position.

TER: What are the advantages to UEX of Cameco's shareholding?

RL: Cameco has been involved in most of the equity financings we've done. The company helped us get up to speed on uranium exploration in the early days. We have had access to Cameco's technology and know-how, but Cameco doesn't meddle in our day-to-day affairs.

TER: How do the skills and experiences of the other managers at UEX complement yours?

RL: Ed Boney, our CFO, was controller at a junior with producing gold mines in Canada and Peru. He also worked for Deloitte & Touche, so he has practical experience in accounting and financing. Sierd Eriks, our vice president, exploration, has three decades of experience in the Athabasca Basin. And Nan Lee, our vice president, project development, is experienced in environmental engineering and mining. She covers the bases of the expertise needed to get UEX to the next milestones.

TER: Your Shea Creek property, the second largest uranium resource in the Athabasca Basin, is operated by, and owned 50.9% by, AREVA SA (AREVA:EPA). What are the advantages of this joint venture?

RL: AREVA is a world-class uranium company and a great partner, and has the skill set needed to mine uranium in the basin. AREVA knows the basin-specific mining technology and has great relationships with local stakeholders. We earned our 49.1% by investing $30 million ($30M) in exploration over a six-year period.

TER: What are the Inferred and Indicated resources at Shea Creek?

RL: Inferred and Indicated resources are 95 Mlb of U3O8, of which we own almost half, about 47 Mlb.

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Disclosure: Kevin Michael Grace conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The ...

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