PROJECT UPDATE: Uranerz Closes in on Production with $20-million State Loan

It looks like the United States is one step closer to getting a new uranium producer.

Wyoming-focused Uranerz Energy (NYSEMKT:URZ) is nearer to its short-term production target now that it has closed a $20-million loan from the Wyoming Industrial Development Revenue Bond. The news is very good for the company as it provides it with enough liquidity and capital to move into its next phase: production. Uranerz is targeting in situ uranium production in Q1 of 2014.

Speaking for the company, CEO Glenn Catchpole said that the funding will allow Uranerz to initiate production at the Nichols Ranch project, adding “[w]e are grateful that the State of Wyoming supports economic development and employment in Wyoming through the Industrial Development Revenue Bond program.”

According to Uranerz’s press release, the loan has an annual interest rate of 5.75 percent and is repayable over seven years. And, should Uranerz choose, it can repay the loan earlier than its maturity date. The loan calls for payment of interest only for the first year, with the amortization of principal plus interest over the remaining six years.

Uranerz is currently constructing its ISR processing facility as well as installing the initial production well field for operations at Nichols Ranch in Wyoming’s Powder River Basin. Uranerz has a processing agreement with Cameco (TSX:CCO) and has entered into a long-term uranium sales contract for a portion of its planned production with two of the largest nuclear utilities in the United States.

Uranerz has seen some positive movements in trading, with a climb of 5.22 percent. The company closed for the day at $1.21.

Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.