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Friday
May042018

Ur-Energy Releases 2018 Q1 Results

Ur-Energy Releases 2018 Q1 Results 

Littleton, Colorado (PR Newswire – May 4, 2018) Ur-Energy Inc. (NYSE American:URG TSX:URE)  (“Ur-Energy” or the “Company”) has filed the Company’s Form 10-Q for the quarter ended March 31, 2018, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedar.com

Chairman of Ur-Energy, Jeff Klenda said, “Delivering purchased pounds into our 2018 term contracts has permitted us to grow our inventory while also having strong cash flow. In the first quarter, we purchased 370,000 pounds at an average cost of $25.00 per pound, which allowed us to increase our ending inventory by 74,000 pounds  and led to gross profits $9.9 million, or gross profit margins of approximately 50%. Our strategy has allowed us to retain our most experienced operators, build inventory, and preserve our resources. In what we are convinced is a changing uranium market, this will position us to be able to quickly ramp up production to respond to improved market conditions at a time where operational and production leverage will have primary importance."

Lost Creek Uranium Production and Sales

During the three months ended March 31, 2018, a total of 84,047 pounds of U3O8 were captured within the Lost Creek plant. 79,961 pounds were packaged in drums and 73,515 pounds of the drummed inventory were shipped to the conversion facility. We sold 380,000 pounds of U3O8 during the period of which 370,000 pounds were purchased. Inventory, production and sales figures for the Lost Creek Project are presented in the following tables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2018 Q1

    

2017 Q4

    

2017 Q3

    

2017 Q2

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 84,047

 

 

 67,982

 

 

 52,812

 

 

 65,257

 

 

Ad valorem and severance tax

 

$000

 

$

 179

 

$

 160

 

$

 119

 

$

 227

 

 

Wellfield cash cost (1)

 

$000

 

$

 671

 

$

 686

 

$

 743

 

$

 599

 

 

Wellfield non-cash cost (2)

 

$000

 

$

 403

 

$

 575

 

$

 730

 

$

 780

 

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 2.13

 

$

 2.35

 

$

 2.25

 

$

 3.48

 

 

Cash cost per pound captured

 

$/lb

 

$

 7.98

 

$

 10.09

 

$

 14.07

 

$

 9.18

 

 

Non-cash cost per pound captured

 

$/lb

 

$

 4.79

 

$

 8.44

 

$

 13.82

 

$

 11.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 79,961

 

 

 60,461

 

 

 48,336

 

 

 70,833

 

 

Plant cash cost (3)

 

$000

 

$

 1,226

 

$

 1,210

 

$

 1,120

 

$

 1,267

 

 

Plant non-cash cost (2)

 

$000

 

$

 492

 

$

 493

 

$

 494

 

$

 491

 

 

Cash cost per pound drummed

 

$/lb

 

$

 15.33

 

$

 20.01

 

$

 23.17

 

$

 17.93

 

 

Non-cash cost per pound drummed

 

$/lb

 

$

 6.15

 

$

 8.15

 

$

 10.20

 

$

 6.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 73,515

 

 

 73,367

 

 

 36,797

 

 

 74,406

 

 

Distribution cash cost (4)

 

$000

 

$

 19

 

$

 48

 

$

 24

 

$

 26

 

 

Cash cost per pound shipped

 

$/lb

 

$

 0.26

 

$

 0.65

 

$

 0.65

 

$

 0.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds purchased

 

lb

 

 

 370,000

 

 

 -

 

 

 109,000

 

 

 210,000

 

 

Purchase costs

 

$000

 

$

 9,251

 

$

 -

 

$

 2,196

 

$

 4,870

 

 

Cash cost per pound purchased

 

$/lb

 

$

 25.00

 

$

 -

 

$

 20.15

 

$

 23.19

 

 

 

Notes:

Wellfield cash costs include all wellfield operating costs. Wellfield construction and development costs, which include wellfield drilling, header houses, pipelines, power lines, roads, fences and disposal wells, are treated as development expense and are not included in wellfield operating costs.

2  Non-cash costs include the amortization of the investment in the mineral property acquisition costs and the depreciation of plant equipment, and the depreciation of their related asset retirement obligation costs. The expenses are calculated on a straight line basis so the expenses are typically constant for each quarter. The cost per pound from these costs will therefore typically vary based on production levels only.

3   Plant cash costs include all plant operating costs and site overhead costs.

4  Distribution cash costs include all shipping costs and costs charged by the conversion facility for weighing, sampling, assaying and storing the U3O8 prior to sale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

 

   

Unit

   

2018 Q1

   

2017 Q4

   

2017 Q3

   

2017 Q2

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

 

lb

 

 

 380,000

 

 

 -

 

 

 289,000

 

 

 241,000

 

 

U3O8 sales

 

 

$000

 

$

 19,663

 

$

 -

 

$

 11,674

 

$

 11,797

 

 

Average contract price

 

 

$/lb

 

$

 52.50

 

$

 -

 

$

 40.39

 

$

 48.95

 

 

Average spot price

 

 

$/lb

 

$

 23.75

 

$

 -

 

$

 -

 

$

 -

 

 

Average price per pound sold

 

 

$/lb

 

$

 51.74

 

$

 -

 

$

 40.39

 

$

 48.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

 

$000

 

$

 9,758

 

$

 376

 

$

 11,157

 

$

 6,573

 

 

Ad valorem and severance tax cost per pound sold

 

 

$/lb

 

$

 2.30

 

$

 -

 

$

 3.15

 

$

 4.26

 

 

Cash cost per pound sold

 

 

$/lb

 

$

 31.20

 

$

 -

 

$

 29.11

 

$

 31.54

 

 

Non-cash cost per pound sold

 

 

$/lb

 

$

 17.20

 

$

 -

 

$

 17.52

 

$

 19.13

 

 

Cost per pound sold - produced

 

 

$/lb

 

$

 50.70

 

$

 -

 

$

 49.78

 

$

 54.93

 

 

Cost per pound sold - purchased

 

 

$/lb

 

$

 25.00

 

$

 -

 

$

 20.15

 

$

 23.19

 

 

Average cost per pound sold

 

 

$/lb

 

$

 25.68

 

$

 -

 

$

 38.61

 

$

 27.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

 

$000

 

$

 9,905

 

$

 (376)

 

$

 517

 

$

 5,224

 

 

Gross profit per pound sold

 

 

$/lb

 

$

 26.06

 

$

 -

 

$

 1.78

 

$

 21.68

 

 

Gross profit margin

 

 

%

 

 

50.4%

 

 

0.0%

 

 

4.4%

 

 

44.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

 

lb

 

 

 28,937

 

 

 26,796

 

 

 22,306

 

 

 19,010

 

 

Plant inventory

 

 

lb

 

 

 15,504

 

 

 9,043

 

 

 21,948

 

 

 10,446

 

 

Conversion facility inventory

 

 

lb

 

 

 159,296

 

 

 94,077

 

 

 17,813

 

 

 160,094

 

 

Total inventory

 

 

lb

 

 

 203,737

 

 

 129,916

 

 

 62,067

 

 

 189,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

 

$000

 

$

 416

 

$

 315

 

$

 221

 

$

 352

 

 

Plant inventory

 

 

$000

 

$

 538

 

$

 369

 

$

 824

 

$

 479

 

 

Conversion facility inventory

 

 

$000

 

$

 6,044

 

$

 3,831

 

$

 675

 

$

 6,620

 

 

Total inventory

 

 

$000

 

$

 6,998

 

$

 4,515

 

$

 1,720

 

$

 7,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

 

$/lb

 

$

 14.38

 

$

 11.76

 

$

 9.92

 

$

 18.46

 

 

Plant inventory

 

 

$/lb

 

$

 34.70

 

$

 40.81

 

$

 37.53

 

$

 45.85

 

 

Conversion facility inventory

 

 

$/lb

 

$

 37.94

 

$

 40.72

 

$

 37.89

 

$

 41.35

 

 

Notes:

1  Cost of sales include all production costs (notes 1, 2, 3 and 4 in the previous Production and Production Cost table) adjusted for changes in inventory values.

U3O8 sales of $19.7 million for 2018 Q1 were based on selling 380,000 pounds at an average price of $51.74.  We made one spot sale during the quarter for 10,000 pounds at $23.75 to establish our taxation basis for calculating severance and ad valorem taxes. The 370,000 pounds sold under term contracts were purchased for an average price of $25.00 per pound. For the quarter, our cost of sales totaled $9.8 million at an average cost of $25.68 per pound.

On a cash basis, the average cost per pound sold was $25.16, which yielded average cash margins of $26.58 per pound and generated cash gross profits of $10.1 million during the quarter.  The average cash cost per pound sold was composed of produced and purchased pounds. The cash cost per produced pound sold was $31.20 and the cash cost per purchased pound sold was $25.00. Total gross profit was $9.9 million, or a gross profit margin of approximately 50%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost Per Pound Sold
Reconciliation

    

Unit

 

2018 Q1

    

2017 Q4

    

2017 Q3

    

2017 Q2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 179

 

$

 160

 

$

 119

 

$

 227

Wellfield costs

 

$000

 

$

 1,074

 

$

 1,260

 

$

 1,473

 

$

 1,379

Plant and site costs

 

$000

 

$

 1,718

 

$

 1,703

 

$

 1,614

 

$

 1,761

Distribution costs

 

$000

 

$

 19

 

$

 48

 

$

 24

 

$

 26

Inventory change

 

$000

 

$

 (2,483)

 

$

 (2,795)

 

$

 5,731

 

$

 (1,690)

Cost of sales - produced

 

$000

 

$

 507

 

$

 376

 

$

 8,961

 

$

 1,703

Cost of sales - purchased

 

$000

 

$

 9,251

 

$

 —

 

$

 2,196

 

$

 4,870

Total cost of sales

 

$000

 

$

 9,758

 

$

 376

 

$

 11,157

 

$

 6,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold produced

 

lb

 

 

 10,000

 

 

 -

 

 

 180,000

 

 

 31,000

Pounds sold purchased

 

lb

 

 

 370,000

 

 

 -

 

 

 109,000

 

 

 210,000

Total pounds sold

 

lb

 

 

 380,000

 

 

 -

 

 

 289,000

 

 

 241,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per pound sold - produced (1)

 

$/lb

 

$

 50.70

 

$

 -

 

$

 49.78

 

$

 54.93

Average cost per pound sold - purchased

 

$/lb

 

$

 25.00

 

$

 -

 

$

 20.15

 

$

 23.19

Total average cost per pound sold

 

$/lb

 

$

 25.68

 

$

 -

 

$

 38.61

 

$

 27.27

 

1   The cost per pound sold reflects both cash and non-cash costs, which are combined as cost of sales in the statement of operations included in this filing.  The cash and non-cash cost components are identified in the above inventory, production and sales table.

The cost of sales includes ad valorem and severance taxes related to the extraction of uranium, all costs of wellfield, plant and site operations including the related depreciation and amortization of capitalized assets, reclamation and mineral property costs, plus product distribution costs. These costs are also used to value inventory and the resulting inventoried cost per pound is compared to the estimated sales prices based on the contracts or spot sales anticipated for the distribution of the product. Any costs in excess of the calculated market value are charged to cost of sales.

 

Continuing Guidance for 2018

At the end of the first quarter of 2018, the average spot price of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $21.05 per pound. Market fundamentals have not changed sufficiently to warrant the accelerated development of MU2. We anticipate completing the third planned header house in MU2 in early May 2018, which will allow us to meet our projected production level of 250,000 to 300,000 pounds drummed for the year.

Through March 31, 2018, we sold 370,000 pounds of U3O8 under term contracts at an average price of approximately $52.50 per pound and 10,000 pounds of U3O8 under a spot sale for $23.75 per pound. We purchased 370,000 pounds at an average cost of $25.00 per pound. The remaining 10,000 pounds were delivered from our produced inventory. We have one final term contract sale for 100,000 pounds at $37.90 scheduled to take place in early June 2018 for which we have a U3O8 purchase contract for 90,000 pounds at $22.25 per pound.

We expect to bring the third MU2 header house on line in Q2 2018 and the production target for that same period is between 85,000 and 95,000 pounds U3O8 dried and drummed. Full year 2018 guidance, similar to 2017, estimates production of between 250,000 and 300,000 pounds, but our production rate may be adjusted based on operational matters and other indicators in the market.

As at May 2, 2018, our unrestricted cash position was $6.3 million.

About Ur-Energy

 

Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged and shipped more than two million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate our LC East project area into the Lost Creek permits, and we have begun to submit applications for permits and licenses to construct and operate at our Shirley Basin Project. Ur-Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Shares of Ur-Energy trade on the NYSE American under the symbol “URG” and on the Toronto Stock Exchange under the symbol “URE.” Ur-Energy’s corporate office is located in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy’s website is www.ur-energy.com.

FOR FURTHER INFORMATION, PLEASE CONTACT

Jeffrey Klenda, Chair and CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

 

Cautionary Note Regarding Forward-Looking Information

This release may contain “forward-looking statements” within the meaning of applicable securities laws regarding events or conditions that may occur in the future (e.g., results of production; ability to deliver into existing contractual obligations; whether the Company’s long term contracts adequately protect against market volatility; and whether our overall strategy will permit ramp up to changing market conditions for greatest operational leverage) and are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to, capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of ore which is mined varying from estimates; production rates, methods and amounts varying from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; inflation; changes in exchange rates; fluctuations in commodity prices; delays in development and other factors described in the public filings made by the Company at www.sedar.com and www.sec.gov. Readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are based on the beliefs, expectations and opinions of management as of the date hereof and Ur-Energy disclaims any intent or obligation to update them or revise them to reflect any change in circumstances or in management’s beliefs, expectations or opinions that occur in the future.

Tuesday
Jan162018

Ur-Energy and Energy Fuels Jointly File Section 232 Petition with U.S. Commerce Department to Investigate Effects of Uranium Imports on U.S. National Security

Ur-Energy and Energy Fuels Jointly File Section 232 Petition with U.S. Commerce Department to Investigate Effects of Uranium Imports on U.S. National Security

Denver, Colorado – January 16, 2018

Ur-Energy Inc. (NYSE American: URG; TSX: URE) (“Ur-Energy”) and Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels”) today jointly submitted a Petition to the U.S. Department of Commerce (“DOC”) for Relief Under Section 232 of the Trade Expansion Act of 1962 (as amended) from Imports of Uranium Products that Threaten National Security (the “Petition”).

  • Imports of uranium from state-owned and state-subsidized enterprises in Russia, Kazakhstan, and Uzbekistan now fulfill nearly 40% of U.S. demand, while domestic production fulfills less than 5%.
  • Increasing levels of nuclear fuel are expected to be imported from Russia and China in the coming years, which will compete directly with U.S. uranium production.
  • In 2017, U.S. uranium production fell to near historic lows due in large part to uranium and nuclear fuel imported from state-subsidized foreign entities; 2018 domestic production is likely to be even lower.
  • A healthy uranium mining industry is vital to U.S. national security, because it supplies fuel for nuclear power plants that are a key component of the nation’s critical energy infrastructure and essential defense needs.
  • Ur-Energy and Energy Fuels, both headquartered in Denver, Colorado, are the two main U.S. uranium producers, together supplying more than half of all U.S. uranium in 2017.
  • Energy Fuels and Ur-Energy have filed a Section 232 Petition requesting (1) the Department of Commerce to investigate the effects of uranium imports on U.S. national security and (2) the President to use his authority to adjust imports to ensure the long-term viability of the U.S. uranium mining industry.
  • Energy Fuels and Ur-Energy have proposed sensible remedies that will support a viable domestic uranium mining industry with a negligible impact on U.S. nuclear utilities.

Uranium is primarily used as the fuel for non-emitting, zero-carbon nuclear energy, but also plays a key role in national defense. According to the Nuclear Energy Institute, nuclear energy provides about 20% of all electricity, and nearly 60% of the carbon-free electricity, generated in the U.S. Uranium is also the backbone of the U.S. nuclear deterrent and fuels ships and submarines in the U.S. Navy. Despite uranium’s critical role in supporting clean electricity and national defense, imports of cheap, foreign state-subsidized uranium have swelled in recent years to the point that domestic suppliers currently provide less than 5% of our nation’s demand. As recently as 1980, U.S. producers supplied nearly 100% of our domestic uranium needs, and in 1989 the DOC initiated a Section 232 investigation at the request of the U.S. Department of Energy (“DOE”) because of concerns that uranium imports exceeded 37.5% at that time. The problem is far worse now.

In 2016, the combined uranium imports from three geopolitically and commercially linked countries – Russia, Kazakhstan, and Uzbekistan – fulfilled nearly 40% of U.S. requirements. While the U.S. does not import significant quantities of uranium from China at this time, China has significantly grown their state-owned nuclear enterprises and announced that they intend to penetrate the U.S. nuclear market with nuclear fuel that will compete directly with U.S. uranium miners. Further, the approaching expiration of the Russian Suspension Agreement will remove existing limits on Russian uranium imports. This will create additional pressure on U.S. uranium producers, as Russia has announced plans to increase its U.S. market share after that agreement expires in 2020.

Today’s extreme dependence is not a matter of foreign competition legitimately underpricing domestic production. It is the result of certain foreign state-subsidy policies that undermine U.S. companies who could otherwise compete fairly on a global basis.

The Petition filed today is a response to this threat to U.S. energy and national security. The Petitioners urge Commerce Secretary Ross and President Trump to act decisively to help restore the long-term viability of the U.S. uranium mining industry. Without a viable nuclear fuel cycle, the commercial and nuclear capabilities of the U.S. will be diminished, and the nation is likely to become 100% dependent on foreign parties that compete with the U.S. for geopolitical influence and commercial advantage to fuel a majority of our clean, baseload electricity. Further, international treaties require that the uranium necessary for defense programs be sourced from the U.S. Unless steps are taken now to foster a healthy domestic uranium mining industry, the defense stockpiles currently held by the DOE will be depleted, and it is unlikely that domestic producers will have sufficient capabilities to meet our defense needs in the future.

Legal Basis and Process

The Petition was filed by Energy Fuels and Ur-Energy pursuant to the Trade Expansion Act of 1962, as amended (the “Act”), and 15 C.F.R. § 705.5. The Act was promulgated by Congress to protect essential national security industries whose survival is threatened by imports. As such, the Act authorizes the Secretary of Commerce (the “Secretary”) to conduct investigations to evaluate the effects of imports of any item on the national security of the U.S. In the Petition, Energy Fuels and Ur-Energy describe in detail how the loss of a viable U.S. uranium mining industry would have a significant detrimental impact on the national, energy, and economic security of the U.S. and the ability of the country to sustain an independent nuclear fuel cycle.

Once the DOC initiates an investigation, the Secretary has 270 days to prepare a report to the President. Following receipt of the Secretary’s report, the President then has 90 days to act on the Secretary’s recommendations, and if necessary take action to “adjust the imports of an article and its derivatives” and/or pursue other lawful non-trade related actions necessary to address the threat.

Benefits of Trade Remedies

The Petition seeks remedies which will set a quota to limit imports of uranium into the U.S., effectively reserving 25% of the U.S. nuclear market for U.S. uranium production. Additionally, the Petition suggests implementation of a requirement for U.S. federal utilities and agencies to buy U.S. uranium in accordance with the President’s Buy American Policy. These remedies are expected to result in U.S. utilities purchasing approximately 12 million pounds of uranium per year from U.S. production, based on recent data. This would be expected to create a healthy U.S. uranium mining industry, bolster national defense, and improve supply diversification for U.S. utilities and their customers. Greater diversification will lessen the exposure of the U.S. government, U.S. utilities and their customers to the policies of nations like Russia, Kazakhstan, and China. U.S. utilities and their customers will also receive greater protection from supply shocks, price increases, and other geopolitically motivated actions of foreign state-controlled uranium producers. Likewise, a strong domestic uranium mining industry will be able to reliably supply the required domestic uranium that is critical to our national defense programs. The U.S. government will provide support to a vital national security industry, while maintaining a high degree of competition that encourages innovation and lower prices. These remedies will reduce dependence on imports that fuel clean energy, and support reductions in air pollution and carbon emissions.

U.S. uranium producers will continue to compete with global uranium producers, but on a more level playing field. U.S. production will come from existing U.S. producers, from other U.S. producers that are on standby as a result of low uranium prices, and from new U.S. producers. Pricing for U.S. uranium would be expected to increase through domestic competition to levels more consistent with un-subsidized global costs of uranium production, but not to a level that will have a significant impact on the bottom lines of U.S. utilities or the rates their customers pay. An econometric model included in the Petition demonstrates that the average price impact to consumers will be negligible.

Additional information regarding the trade action, including the full text of the Section 232 Petition, can be found on the companies’ respective websites shown below. There can be no certainty of the outcome of the investigation or the recommendation of the Secretary, and therefore the outcome of this process is uncertain.

 

About Ur-Energy: Ur-Energy is a U.S. uranium mining company with corporate and operations offices in Denver, Colorado and Casper, Wyoming. Ur-Energy operates the Lost Creek in-situ recovery uranium facility in south-central Wyoming. Ur-Energy has produced, packaged and shipped more than two million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate Ur-Energy’s LC East project area into the Lost Creek permits, and the company has begun to submit applications for permits and licenses to construct and operate its Shirley Basin Project. Ur-Energy is engaged in uranium mining, recovery and processing activities in the United States, including the acquisition, exploration, development and operation of uranium mineral properties. The primary trading market for Ur-Energy’s common shares is the NYSE American under the trading symbol “URG;” Ur-Energy’s common shares also trade on the Toronto Stock Exchange under the trading symbol “URE.” Ur-Energy’s website is www.ur-energy.com.

 

About Energy Fuels: Energy Fuels is a leading integrated U.S. uranium mining company, supplying U3O8 to major nuclear utilities. Its corporate offices are in Denver, Colorado, and all of its assets and employees are in the western United States. Energy Fuels holds three of America’s key uranium production centers, the White Mesa Mill in Utah, the Nichols Ranch Processing Facility in Wyoming, and the Alta Mesa Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today and has a licensed capacity of over 8 million pounds of U3O8 per year. The Nichols Ranch Processing Facility is an in-situ recovery production center with a licensed capacity of 2 million pounds of U3O8 per year. Alta Mesa is an in-situ recovery production center with a licensed capacity of 1.5 million pounds of U3O8 per year, which is currently on care and maintenance due to low uranium prices. Energy Fuels also has the largest uranium resource portfolio in the U.S. among producers, and uranium mining projects located in a number of Western U.S. states, including one producing in-situ recovery project, mines on standby, and mineral properties in various stages of permitting and development. Energy Fuels also produces vanadium as a co-product of its uranium production from certain of its mines on the Colorado Plateau, as market conditions warrant. The primary trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol “UUUU”, and the Company’s common shares are also listed on the Toronto Stock Exchange under the trading symbol “EFR”. Energy Fuels’ website is www.energyfuels.com.

Cautionary Note Regarding Forward-Looking Statements: Certain information contained in this news release, including any information relating to: the expected increases in foreign state-subsidized imports of uranium in coming years; the expected further negative impacts of such imports on U.S. uranium production and national security, including the depletion of stockpiles held by the Department of Energy; the potential of the U.S. to be unable to sustain an independent nuclear fuel cycle and to become 100% dependent on foreign parties; the outcome of the Department of Commerce Section 232 investigation, including whether or not the Secretary of Commerce will make a recommendation to the President and the nature of the recommendation; whether or not the President will act on the recommendation and, if so, the nature of the action and remedy; the expected benefits of the proposed remedies, including: the expected impacts on U.S. production and the U.S. uranium mining industry, the expected impacts on purchases of U.S. production by U.S. utilities, the expected impacts on supply diversification and the expected benefits of such diversification on domestic utilities and national defense, the expected ability of the U.S. uranium mining industry to reliably supply the required domestic uranium production, the expected impact of the proposed remedy on improved competition, innovation and lower prices, and the reduction of dependence on imports; the expected impact on pricing for U.S. uranium production and the negligible price impact on electricity rates paid by consumers; and any other statements regarding Energy Fuels’ or Ur-Energy’s future expectations, beliefs, goals or prospects; constitute forward-looking information within the meaning of applicable securities legislation (collectively, "forward-looking statements"). All statements in this news release that are not statements of historical fact (including statements containing the words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions) should be considered forward-looking statements. All such forward-looking statements are subject to important risk factors and uncertainties, many of which are beyond Energy Fuels’ and Ur-Energy’s ability to control or predict. A number of important factors could cause actual results or events to differ materially from those indicated or implied by such forward-looking statements, including without limitation factors relating to: the expected increases in foreign state-subsidized imports of uranium in coming years; the expected further negative impacts of such imports on U.S. uranium production and national security, including the depletion of stockpiles held by the Department of Energy; the outcome of the Department of Commerce Section 232 investigation, including whether or not the Secretary of Commerce will make a recommendation to the President and the nature of the recommendation; whether or not the President will act on the recommendation and, if so, the nature of the action and remedy; the expected benefits of the proposed remedies; the expected impact on pricing for U.S. uranium production and the negligible price impact on electricity rates paid by consumers; and other risk factors as described in Energy Fuels’ and Ur-Energy’s most recent annual reports on Form 10-K and quarterly financial reports. Energy Fuels and Ur-Energy assume no obligation to update the information in this communication, except as otherwise required by law. Additional information identifying risks and uncertainties is contained in Energy Fuels’ and Ur-Energy’s filings with the various securities commissions which are available online at www.sec.gov and www.sedar.com. Forward-looking statements are provided for the purpose of providing information about the current expectations, beliefs and plans of the management of Energy Fuels and Ur-Energy relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. Readers are also cautioned not to place undue reliance on these forward-looking statements, that speak only as of the date hereof.

For Further Information, Please Contact:

Karen Heinold

kheinold@pcgpr.com

202.379.6358

Thursday
Jan112018

Ur-Energy Provides 2017 Q4 Operational Results and Announces January 19, 2018 Webcast

Ur-Energy Provides 2017 Q4 Operational Results and Announces January 19, 2018 Webcast on 2017 Operational Results

 

Littleton, Colorado (PR Newswire – January 11, 2018) Ur-Energy Inc. (NYSE American:URG, TSX:URE) (the “Company” or “Ur-Energy”) is pleased to provide the following operational results for fourth quarter 2017, and to announce a webcast regarding 2017 Operational Results and current events in the uranium industry, to be held on Friday, January 19, 2018, at 9:00 a.m. MT / 11:00 a.m. ET.

Highlights 

 

Lost Creek Operations 

 

Units

2017 Q1

 

2017 Q2

 

2017 Q3

 

2017 Q4

 

2017

 

 

 

 

 

 

 

 

 

 

 

U3O8 Captured

(‘000 lbs)

79.3

 

65.3

 

52.8

 

 68.0

 

 265.4

U3O8 Dried & Drummed

(‘000 lbs)

 

74.4

 

 

70.8

 

 

48.3

 

60.5

 

 254.0

U3O8 Sold

(from production)

(‘000 lbs)

 

50.0

 

 

31.0

 

 

180.0

 

 

0.0

 

 

261.0

U3O8 Sold (from purchased lbs)

(‘000 lbs)

 

200.0

 

 

210.0

 

 

109.0

 

 

0.0

 

 

519.0

 

 

 

 

 

 

 

 

 

 

 

Average Flow Rate

(gpm)

 

 2,403

 

2,378

 

 

2,188

 

2,244

 

 2,302

U3O8 Head Grade

(mg/l)

 32

 

 27

 

23

 

29

 

28

 

Lost Creek Uranium Production and Sales

For the quarter, 67,982 pounds of U3O8 were captured within the Lost Creek plant, 60,461 pounds of U3O8 were packaged in drums and 73,367 pounds of U3O8 drummed inventory were shipped out of the Lost Creek processing plant. At December 31, 2017, inventory at the conversion facility was approximately 94,077 pounds U3O8

In 2017, sales totaled $38.3 million from 780,000 pounds sold. Our overall price per pound sold averaged $49.09. There were no spot sales during the year. A total of 261,000 pounds were sold from Lost Creek production. Additionally, we delivered 519,000 purchased pounds into contractual obligations. Purchases for these deliveries averaged $21.35 per pound.

Lost Creek Production Operations in Mine Unit 1 and Development of Mine Unit 2

Lost Creek celebrated its fourth anniversary of operations in August. At year-end 2017, we have captured approximately 2.4 million pounds U3O8 and have delivered approximately 2.2 million pounds of Lost Creek production to our customers. At this time, our first mine unit (“MU1”) has recovered nearly 89% of the estimated under-pattern resource, based upon the revised and updated Lost Creek Preliminary Economic Assessment (as amended, February 2016, the “PEA”). This is compared to an accepted industry standard of 70% to 80% recovery of under-pattern resource. As well, project economics in the PEA were based on an 80% recovery.

Drilling and other construction work to develop the first three header houses in Mine Unit 2 (“MU2”) commenced in early April 2017, allowing us to bring the first header house online in late August. Operations in the second header house in MU2 are expected to commence this week; we anticipate the third header house will come online in Q1 2018. We are pleased to report that to date MU2 has exhibited similar production characteristics to MU1. In addition, operational modifications have allowed for higher sustained production flows supporting efficient future wellfield operations as well as optimum recovery rates.

Our Class V water system worked well throughout its first year of operations. This system is the first of its kind at an ISR uranium facility, having received all permitting and other authorizations at year-end 2016. Allowing for onsite disposal of fresh permeate (i.e., clean water) into shallow Class V wells, this system also permits us to recycle significant amounts of what would normally be considered waste water. Ultimately, the system reduces injection requirements in our Class I deep disposal wells and extends the life of those very valuable assets.

Guidance for 2018

 

For 2018, we expect to deliver 470,000 pounds into our term contracts at an average price of approximately $49 per pound. We have scheduled 370,000 pounds to be delivered in Q1 2018. We will provide further guidance for 2018 production and other operational matters in our Annual Report on Form 10-K, which is currently anticipated to be filed on Friday, March 2, 2018.

January 19, 2018 Webcast

A webcast and teleconference will be held on Friday, January 19, 2018 at 9:00 a.m. (MT) / 11:00 a.m. (ET) to provide an operational update and discuss current events in the uranium industry.  A Q&A session will follow the presentation. Those wishing to participate by phone can do so by calling:

US Toll-free Number                          1-877-226-2859

Canada Toll-free Number                   1-855-669-9657

International Number                        1-412-542-4134

Ask to be joined into the Ur-Energy call.

The call is being webcast by PR Newswire. The webcast can be accessed 10 minutes prior to the call. Pre-registration and participation access is available by clicking here or by copying the following URL into your web browser: https://www.webcaster4.com/Webcast/Page/1186/24157.

If you are unable to join the call, a link will be available following the webcast on the Company’s website www.ur-energy.com.

 

About Ur-Energy

Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged and shipped more than two million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate our LC East project area into the Lost Creek permits, and we have begun to submit applications for permits and licenses to operate at our Shirley Basin Project. Ur-Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Shares of Ur‑Energy trade on the NYSE American under the symbol “URG” and on the Toronto Stock Exchange under the symbol “URE.” Ur-Energy’s corporate office is in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy’s website is www.ur-energy.com.

 

FOR FURTHER INFORMATION, PLEASE CONTACT

 

Jeffrey Klenda, Chair and CEO

 

+1 720-981-4588

 

Jeff.Klenda@ur-energy.com

 

 

Cautionary Note Regarding Forward-Looking Information

This release may contain “forward-looking statements” within the meaning of applicable securities laws regarding events or conditions that may occur in the future (e.g., continuing results of Lost Creek operations; timing to bring the additional header houses in MU2 online; whether MU2 production results will compare with those in MU1 at Lost Creek; and whether adjustments of production rates will be necessary or appropriate) and are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to, fluctuations in commodity prices; capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of uranium which is mined varying from estimates; production rates, methods and amounts varying from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; inflation; delays in development and other factors described in the public filings made by the Company at www.sedar.com and www.sec.gov. Readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are based on the beliefs, expectations and opinions of management as of the date hereof and Ur-Energy disclaims any intent or obligation to update them or revise them to reflect any change in circumstances or in management’s beliefs, expectations or opinions that occur in the future.

Wednesday
Nov082017

Ur-Energy to Present November 16 at Southwest IDEAS Conference

Ur-Energy to Present November 16 at the Southwest IDEAS Investor Conference in Dallas

Littleton, Colorado (PR Newswire – November 8, 2017) Ur-Energy Inc. (NYSE American:URG, TSX:URE) announces that Jeffrey Klenda, Chairman and CEO, will present at the Southwest IDEAS Investor Conference taking place November 15-16, 2017 in Dallas, Texas.

Mr. Klenda will provide an overview of the Company’s business during the presentation and will be available to participate in one-on-one meetings with investors who are registered to attend the Conference.

Ur-Energy’s presentation will begin at 10:40 a.m. on Thursday, November 16, 2017. The presentation will be at the Westin Dallas Downtown, in Dallas, Texas. 

Unlike traditional bank-sponsored events, IDEAS Investor Conferences are “Sponsored BY the Buyside FOR the Buyside” and for the benefit of regional investment communities. Conference sponsors collectively have more than $200 billion in assets under management. The IDEAS Investor Conferences are held annually in Boston, Chicago and Dallas and are produced by Three Part Advisors, LLC. Additional information about the events can be located at www.IDEASconferences.com. If you are interested in attending or learning more about IDEAS Conferences, please contact Joe Noyons at 817-778-8424, or at jnoyons@threepa.com

 

About Ur-Energy

Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged and shipped more than two million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate our LC East project area into the Lost Creek permits, and we have begun to submit applications for permits and licenses to construct and operate at our Shirley Basin Project. Ur-Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Shares of Ur-Energy trade on NYSE American under the symbol “URG” and on the Toronto Stock Exchange under the symbol “URE.” Ur-Energy’s corporate office is in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy’s website is www.ur-energy.com.

 

FOR FURTHER INFORMATION, PLEASE CONTACT

 

Jeffrey Klenda, Chairman & CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

Wednesday
Nov082017

Ur‐Energy Releases 2017 Q3 Results

 

Ur-Energy Releases 2017 Q3 Results 

Littleton, Colorado (PR Newswire – October 27, 2017) Ur-Energy Inc. (NYSE American:URG, TSX:URE)  (“Ur-Energy” or the “Company”) has filed the Company’s Form 10-Q for the quarter ended September 30, 2017, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedar.com

Ur-Energy Chairman Jeff Klenda said, “During a quarter when uranium spot prices continued to face downward pressure, we were pleased to realize a $40 per pound average sales price and generate $3.9 million in cash from operating activities, including the sale 180,000 pounds of produced product for $7.8 million in cash late in the quarter.”

Lost Creek Production and Sales

During the three months ended September 30, 2017, a total of 52,812 pounds of U3O8 were captured within the Lost Creek plant. 48,336 pounds were packaged in drums and 36,797 pounds of the drummed inventory were shipped to the conversion facility. We sold 289,000 pounds of U3O8 during the period of which 109,000 pounds were purchased. Inventory, production and sales figures for the Lost Creek Project are presented in the following tables. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2017 Q3

    

2017 Q2

    

2017 Q1

    

2016 Q4

    

2017 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 52,812

 

 

 65,257

 

 

 79,340

 

 

 103,558

 

 

 197,409

 

Ad valorem and severance tax

 

$000

 

$

 119

 

$

 227

 

$

 241

 

$

 247

 

$

 587

 

Wellfield cash cost (1)

 

$000

 

$

 743

 

$

 599

 

$

 889

 

$

 864

 

$

 2,231

 

Wellfield non-cash cost (2)

 

$000

 

$

 730

 

$

 780

 

$

 776

 

$

 777

 

$

 2,286

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 2.25

 

$

 3.48

 

$

 3.04

 

$

 2.39

 

$

 2.97

 

Cash cost per pound captured

 

$/lb

 

$

 14.07

 

$

 9.18

 

$

 11.20

 

$

 8.34

 

$

 11.31

 

Non-cash cost per pound captured

 

$/lb

 

$

 13.82

 

$

 11.95

 

$

 9.78

 

$

 7.50

 

$

 11.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 48,336

 

 

 70,833

 

 

 74,382

 

 

 111,049

 

 

 193,551

 

Plant cash cost (3)

 

$000

 

$

 1,120

 

$

 1,270

 

$

 1,488

 

$

 1,336

 

$

 3,878

 

Plant non-cash cost (2)

 

$000

 

$

 493

 

$

 491

 

$

 491

 

$

 493

 

$

 1,475

 

Cash cost per pound drummed

 

$/lb

 

$

 23.17

 

$

 17.93

 

$

 20.00

 

$

 12.03

 

$

 20.04

 

Non-cash cost per pound drummed

 

$/lb

 

$

 10.20

 

$

 6.93

 

$

 6.61

 

$

 4.44

 

$

 7.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 36,797

 

 

 74,406

 

 

 72,643

 

 

 98,775

 

 

 183,846

 

Distribution cash cost (4)

 

$000

 

$

 24

 

$

 26

 

$

 47

 

$

 68

 

$

 97

 

Cash cost per pound shipped

 

$/lb

 

$

 0.65

 

$

 0.35

 

$

 0.65

 

$

 0.69

 

$

 0.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds purchased

 

lb

 

 

 109,000

 

 

 210,000

 

 

 200,000

 

 

 -

 

 

 519,000

 

Purchase costs

 

$000

 

$

 2,196

 

$

 4,870

 

$

 4,015

 

$

 -

 

$

 11,081

 

Cash cost per pound purchased

 

$/lb

 

$

 20.15

 

$

 23.19

 

$

 20.08

 

$

 -

 

$

 21.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

Wellfield cash costs include all wellfield operating costs. Wellfield construction and development costs, which include wellfield drilling, header houses, pipelines, power lines, roads, fences and disposal wells, are treated as development expense and are not included in wellfield operating costs.

2   Non-cash costs include the amortization of the investment in the mineral property acquisition costs and the depreciation of plant equipment, and the depreciation of their related asset retirement obligation costs. The expenses are calculated on a straight line basis so the expenses are typically constant for each quarter. The cost per pound from these costs will therefore typically vary based on production levels only.

3    Plant cash costs include all plant operating costs and site overhead costs.

4   Distribution cash costs include all shipping costs and costs charged by the conversion facility for weighing, sampling, assaying and storing the U3O8 prior to sale.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

    

Unit

    

2017 Q3

    

2017 Q2

    

2017 Q1

    

2016 Q4

    

2017 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

lb

 

 

 289,000

 

 

 241,000

 

 

 250,000

 

 

 100,000

 

 

 780,000

 

U3O8 sales

 

$000

 

$

 11,674

 

$

 11,797

 

$

 14,819

 

$

 3,270

 

$

 38,290

 

Average contract price

 

$/lb

 

$

 40.39

 

$

 48.95

 

$

 59.28

 

$

 32.70

 

$

 49.09

 

Average price per pound sold

 

$/lb

 

$

 40.39

 

$

 48.95

 

$

 59.28

 

$

 32.70

 

$

 49.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

$000

 

$

 11,157

 

$

 6,573

 

$

 6,295

 

$

 3,082

 

$

 24,025

 

Ad valorem and severance tax cost per pound sold

 

$/lb

 

$

 3.15

 

$

 4.26

 

$

 4.00

 

$

 2.98

 

$

 3.44

 

Cash cost per pound sold

 

$/lb

 

$

 29.11

 

$

 31.54

 

$

 26.12

 

$

 18.27

 

$

 28.82

 

Non-cash cost per pound sold

 

$/lb

 

$

 17.52

 

$

 19.13

 

$

 15.48

 

$

 9.57

 

$

 17.33

 

Cost per pound sold - produced

 

$/lb

 

$

 49.78

 

$

 54.93

 

$

 45.60

 

$

 30.82

 

 

 49.59

 

Cost per pound sold - purchased

 

$/lb

 

$

 20.15

 

$

 23.19

 

$

 20.08

 

$

 -

 

 

 21.35

 

Average cost per pound sold

 

$/lb

 

$

 38.61

 

$

 27.26

 

$

 25.18

 

$

 30.82

 

$

 30.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

$000

 

$

 517

 

$

 5,224

 

$

 8,524

 

$

 188

 

 

 14,265

 

Gross profit per pound sold

 

$/lb

 

$

 1.78

 

$

 21.68

 

$

 34.10

 

$

 1.88

 

 

 18.29

 

Gross profit margin

 

%

 

 

4.4%

 

 

44.3%

 

 

57.5%

 

 

5.7%

 

 

37.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

lb

 

 

 22,306

 

 

 19,010

 

 

 28,164

 

 

 29,891

 

 

 

 

Plant inventory

 

lb

 

 

 21,948

 

 

 10,446

 

 

 14,019

 

 

 12,274

 

 

 

 

Conversion facility inventory

 

lb

 

 

 17,813

 

 

 160,094

 

 

 113,528

 

 

 84,689

 

 

 

 

Total inventory

 

lb

 

 

 62,067

 

 

 189,550

 

 

 155,711

 

 

 126,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$000

 

$

 221

 

$

 352

 

$

 712

 

$

 897

 

 

 

 

Plant inventory

 

$000

 

$

 824

 

$

 479

 

$

 670

 

$

 461

 

 

 

 

Conversion facility inventory

 

$000

 

$

 675

 

$

 6,620

 

$

 4,379

 

$

 2,751

 

 

 

 

Total inventory

 

$000

 

$

 1,720

 

$

 7,451

 

$

 5,761

 

$

 4,109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$/lb

 

$

 9.92

 

$

 18.46

 

$

 25.28

 

$

 30.01

 

 

 

 

Plant inventory

 

$/lb

 

$

 37.53

 

$

 45.85

 

$

 47.79

 

$

 37.56

 

 

 

 

Conversion facility inventory

 

$/lb

 

$

 37.89

 

$

 41.35

 

$

 38.57

 

$

 32.48

 

 

 

 

 

 Notes:

Cost of sales include all production costs (notes 1, 2, 3 and 4 in the previous Production and Production Cost table) adjusted for changes in inventory values.

 

U3O8 sales of $11.7 million for 2017 Q3 were based on selling 289,000 pounds at an average price of $40.39.  We did not make any spot sales during the quarter. Of the 289,000 pounds sold, 180,000 were from produced inventory and 109,000 were from purchased U3O8. For the quarter, our cost of sales totaled $11.1 million at an average cost of $38.61 per pound.

On a cash basis, the average cost per pound sold was $27.69, which yielded average cash margins of $12.70 per pound and generated cash gross profits of $3.7 million during the quarter.  The average cash cost per pound sold was composed of produced and purchased pounds.  The cash cost per produced pound sold was $32.26, including ad valorem and severance taxes, and the cash cost per purchased pound sold was $20.15.

Due to our low production volumes, we have been experiencing lower of cost or net realizable value adjustments, which totaled $1.3 million for the quarter.  These costs are included in our cost of sales for the period and reduced the reported gross profit for the period. Total gross profit was $0.5 million, or approximately 4%.

At the end of the quarter, we had approximately 17,813 pounds of U3O8 at the conversion facility at an average cost per pound of $37.89, which reflects the net realizable value of the product at that location.  We intend to sell this product into our lowest priced, 2018 term contract in January.  While this assumption did increase the non-cash, net realizable value adjustment for the quarter, it will also lower the actual cash paid out for 2018 severance and ad valorem taxes, which are based on the sales value of the product.

 

Total Cost Per Pound Sold

Reconciliation 1

    

Unit

 

2017 Q3

    

2017 Q2

    

2017 Q1

    

2016 Q4

    

2017 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 119

 

$

 227

 

$

 241

 

$

 247

 

$

 587

Wellfield costs

 

$000

 

$

 1,473

 

$

 1,379

 

$

 1,665

 

$

 1,641

 

$

 4,517

Plant and site costs

 

$000

 

$

 1,614

 

$

 1,761

 

$

 1,979

 

$

 1,829

 

$

 5,354

Distribution costs

 

$000

 

$

 24

 

$

 26

 

$

 47

 

$

 68

 

 

 97

Inventory change

 

$000

 

$

 5,731

 

$

 (1,690)

 

$

 (1,652)

 

$

 (703)

 

$

 2,389

Cost of sales - produced

 

$000

 

$

 8,961

 

$

 1,703

 

$

 2,280

 

$

 3,082

 

$

 12,944

Cost of sales - purchased

 

$000

 

$

 2,196

 

$

 4,870

 

$

 4,015

 

$

 —

 

 

 11,081

Total cost of sales

 

$000

 

$

 11,157

 

$

 6,573

 

$

 6,295

 

$

 3,082

 

 

 24,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold produced

 

lb

 

 

 180,000

 

 

 31,000

 

 

 50,000

 

 

 100,000

 

 

 261,000

Pounds sold purchased

 

lb

 

 

 109,000

 

 

 210,000

 

 

 200,000

 

 

 —

 

 

 519,000

Total pounds sold

 

lb

 

 

 289,000

 

 

 241,000

 

 

 250,000

 

 

 100,000

 

 

 780,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per pound sold - produced (1)

 

$/lb

 

$

 49.78

 

$

 54.93

 

$

 45.60

 

$

 30.82

 

$

 49.59

Average cost per pound sold - purchased

 

$/lb

 

$

 20.15

 

$

 23.19

 

$

 20.08

 

$

 -

 

$

 21.35

Total average cost per pound sold

 

$/lb

 

$

 38.61

 

$

 27.27

 

$

 25.18

 

$

 30.82

 

$

 30.80

 

1    The cost per pound sold reflects both cash and non-cash costs, which are combined as cost of sales in the statement of operations included in this filing.  The cash and non-cash cost components are identified in the above inventory, production and sales table.

The cost of sales includes ad valorem and severance taxes related to the extraction of uranium, all costs of wellfield, plant and site operations including the related depreciation and amortization of capitalized assets, reclamation and mineral property costs, plus product distribution costs. These costs are also used to value inventory and the resulting inventoried cost per pound is compared to the estimated sales prices based on the contracts or spot sales anticipated for the distribution of the product. Any costs in excess of the calculated market value are charged to cost of sales.

Continuing Guidance

At the end of the third quarter of 2017, the average spot price of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $20.33 per pound. Market fundamentals have not changed sufficiently to warrant the accelerated development of MU2. We are developing MU2 at a controlled rate as approved by our Board of Directors in the first quarter, which will allow us to produce at a level that will satisfy a portion of our term contracts.

Through September 30, 2017, we sold 780,000 pounds of U3O8 under contract at an average price of approximately $49 per pound.  We purchased 519,000 pounds at an average cost of $21 per pound. The remaining 261,000 pounds were delivered from our produced inventory. We do not anticipate any further sales this year.

We expect to bring the second MU2 header house on line in 2017 Q4, and the 2017 Q4 production target for Lost Creek is between 65,000 and 75,000 pounds U3O8 dried and drummed. Full year 2017 production guidance is unchanged at between 250,000 and 300,000 pounds, but our production rate may be adjusted based on operational matters and other indicators in the market.

As at October 25, 2017, our unrestricted cash position was $9.1 million.

About Ur-Energy

 

Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged and shipped more than two million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate our LC East project area into the Lost Creek permits, and we have begun to submit applications for permits and licenses to construct and operate at our Shirley Basin Project. Ur-Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Shares of Ur-Energy trade on NYSE American under the symbol “URG” and on the Toronto Stock Exchange under the symbol “URE.” Ur-Energy’s corporate office is in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy’s website is www.ur-energy.com.

 

FOR FURTHER INFORMATION, PLEASE CONTACT

Jeffrey Klenda, Chair and CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

 

Cautionary Note Regarding Forward-Looking Information

This release may contain “forward-looking statements” within the meaning of applicable securities laws regarding events or conditions that may occur in the future (e.g., results of Lost Creek production, including meeting production projections; ability to maintain production levels and development at Lost Creek; ability to deliver into existing contractual obligations through a balance of production and purchased pounds) and are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to, capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of ore which is mined varying from estimates; production rates, methods and amounts varying from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; inflation; changes in exchange rates; fluctuations in commodity prices; delays in development and other factors described in the public filings made by the Company at www.sedar.com and www.sec.gov. Readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are based on the beliefs, expectations and opinions of management as of the date hereof and Ur-Energy disclaims any intent or obligation to update them or revise them to reflect any change in circumstances or in management’s beliefs, expectations or opinions that occur in the future.