Why Uranium Energy Stocks Soared 12% Monday

Growth by acquisition is a classic tactic used by companies. The latest such move Uranium energy (UEC 11.73%) it was announced on Monday and received consistent investor approval, valued at more than 10% of the stock price on the day. That increase was much greater than that of the bell S&P 500 the index, which increased by a much more modest 0.3%.

A $175 million deal

Wyoming-based Uranium Energy announced that it has reached an agreement to acquire a set of uranium assets from the global metals and mining giant. Rio Tintoits American arm. The agreed price is $175 million, to be paid in cash.

For its money, Uranium Energy is purchasing a facility in its home state, Rio Tinto America’s Sweetwater Plant. The buyer will also receive what it described as “a portfolio of uranium mining projects” comprising around £175m of resources.

In the press release promoting the acquisition, Uranium Energy framed it as a major step in the evolution of its business, stating that the arrangement “is highly strategic and allows UEC to unlock the development potential of the company’s extensive portfolio in the Great Divide Basin. creating a third US hub-and-spoke production platform within UEC’s pure-play uranium business.”

A self-funded purchase?

Uranium Energy added that it will fund the acquisition from “available liquidity.” Still, at the end of the most recently reported quarter, it had less than $88 million in cash and no short-term investments.

However, this purchase seems like just what the doctor ordered for Uranium Energy. In one fell swoop, it puts a set of highly strategic and complementary assets into its portfolio and pushes it closer to its goal of becoming an active and prominent miner of its namesake element.