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Monday
Sep242018

Ur‐Energy Releases 2018 Q2 Results

Ur‐Energy Releases 2018 Q2 Results

Littleton, Colorado (PR Newswire – July 27, 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 June 30, 2018, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and Canadian securities authorities on SEDAR at www.sedar.com.

Ur-Energy Chair and CEO, Jeffrey Klenda said, “In May, our third header house in mine unit two came on line. Initial production results are encouraging and indicate that the new mine unit appears to have similar performance characteristics to our prolific first mine unit. Additionally, we are pleased that the trade action investigation was initiated following the end of the quarter. We look forward to a prompt resolution.”

Lost Creek Uranium Production and Sales 

Inventory, production and sales figures for the Lost Creek Project are presented in the following tables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2018 Q2

    

2018 Q1

    

2017 Q4

    

2017 Q3

    

2018 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 89,209

 

 

 84,047

 

 

 67,982

 

 

 52,812

 

 

 173,256

 

Ad valorem and severance tax

 

$000

 

$

 133

 

$

 179

 

$

 160

 

$

 119

 

$

 312

 

Wellfield cash cost (1)

 

$000

 

$

 516

 

$

 671

 

$

 686

 

$

 743

 

$

 1,187

 

Wellfield non-cash cost (2)

 

$000

 

$

 400

 

$

 403

 

$

 575

 

$

 730

 

$

 803

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 1.49

 

$

 2.13

 

$

 2.35

 

$

 2.25

 

$

 1.80

 

Cash cost per pound captured

 

$/lb

 

$

 5.78

 

$

 7.98

 

$

 10.09

 

$

 14.07

 

$

 6.85

 

Non-cash cost per pound captured

 

$/lb

 

$

 4.48

 

$

 4.79

 

$

 8.44

 

$

 13.82

 

$

 4.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 74,302

 

 

 79,961

 

 

 60,461

 

 

 48,336

 

 

 154,263

 

Plant cash cost (3)

 

$000

 

$

 1,230

 

$

 1,226

 

$

 1,210

 

$

 1,120

 

$

 2,456

 

Plant non-cash cost (2)

 

$000

 

$

 493

 

$

 492

 

$

 493

 

$

 494

 

$

 985

 

Cash cost per pound drummed

 

$/lb

 

$

 16.57

 

$

 15.33

 

$

 20.01

 

$

 23.17

 

$

 15.92

 

Non-cash cost per pound drummed

 

$/lb

 

$

 6.64

 

$

 6.15

 

$

 8.15

 

$

 10.20

 

$

 6.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 74,416

 

 

 73,515

 

 

 73,367

 

 

 36,797

 

 

 147,931

 

Distribution cash cost (4)

 

$000

 

$

 34

 

$

 19

 

$

 48

 

$

 24

 

$

 53

 

Cash cost per pound shipped

 

$/lb

 

$

 0.46

 

$

 0.26

 

$

 0.65

 

$

 0.65

 

$

 0.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds purchased

 

lb

 

 

 100,000

 

 

 370,000

 

 

 -

 

 

 109,000

 

 

 470,000

 

Purchase costs

 

$000

 

$

 2,225

 

$

 9,251

 

$

 -

 

$

 2,196

 

$

 11,476

 

Cash cost per pound purchased

 

$/lb

 

$

 22.25

 

$

 25.00

 

$

 -

 

$

 20.15

 

$

 24.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

1           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.

 

During the three months ended June 30, 2018, a total of 89,209 pounds of U3O8 were captured within the Lost Creek plant. 74,302 pounds were packaged in drums and 74,416 pounds of the drummed inventory were shipped to the conversion facility. We sold 100,000 pounds of purchased U3O8 during the period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

   

Unit

   

2018 Q2

   

2018 Q1

   

2017 Q4

   

2017 Q3

   

2018 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

lb

 

 

 100,000

 

 

 380,000

 

 

 -

 

 

 289,000

 

 

 480,000

 

U3O8 sales

 

$000

 

$

 3,790

 

$

 19,663

 

$

 -

 

$

 11,674

 

$

 23,453

 

Average contract price

 

$/lb

 

$

 37.90

 

$

 52.50

 

$

 -

 

$

 40.39

 

$

 49.39

 

Average spot price

 

$/lb

 

$

 -

 

$

 23.75

 

$

 -

 

$

 -

 

$

 23.75

 

Average price per pound sold

 

$/lb

 

$

 37.90

 

$

 51.74

 

$

 -

 

$

 40.39

 

$

 48.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

$000

 

$

 2,225

 

$

 9,758

 

$

 376

 

$

 11,157

 

$

 11,983

 

Ad valorem and severance tax cost per pound sold

 

$/lb

 

$

 -

 

$

 2.30

 

$

 -

 

$

 3.15

 

$

 2.30

 

Cash cost per pound sold

 

$/lb

 

$

 -

 

$

 31.20

 

$

 -

 

$

 29.11

 

$

 31.20

 

Non-cash cost per pound sold

 

$/lb

 

$

 -

 

$

 17.20

 

$

 -

 

$

 17.52

 

$

 17.20

 

Cost per pound sold - produced

 

$/lb

 

$

 -

 

$

 50.70

 

$

 -

 

$

 49.78

 

$

 50.70

 

Cost per pound sold - purchased

 

$/lb

 

$

 22.25

 

$

 25.00

 

$

 -

 

$

 20.15

 

$

 24.42

 

Average cost per pound sold

 

$/lb

 

$

 22.25

 

$

 25.68

 

$

 -

 

$

 38.61

 

$

 24.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

$000

 

$

 1,565

 

$

 9,905

 

$

 (376)

 

$

 517

 

$

 11,470

 

Gross profit per pound sold

 

$/lb

 

$

 15.65

 

$

 26.06

 

$

 -

 

$

 1.78

 

$

 23.90

 

Gross profit margin

 

%

 

 

41.3%

 

 

50.4%

 

 

0.0%

 

 

4.4%

 

 

48.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

lb

 

 

 43,733

 

 

 28,937

 

 

 26,796

 

 

 22,306

 

 

 

 

Plant inventory

 

lb

 

 

 15,391

 

 

 15,504

 

 

 9,043

 

 

 21,948

 

 

 

 

Conversion facility inventory

 

lb

 

 

 233,712

 

 

 159,296

 

 

 94,077

 

 

 17,813

 

 

 

 

Total inventory

 

lb

 

 

 292,836

 

 

 203,737

 

 

 129,916

 

 

 62,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$000

 

$

 518

 

$

 416

 

$

 315

 

$

 221

 

 

 

 

Plant inventory

 

$000

 

$

 548

 

$

 538

 

$

 369

 

$

 824

 

 

 

 

Conversion facility inventory

 

$000

 

$

 8,738

 

$

 6,044

 

$

 3,831

 

$

 675

 

 

 

 

Total inventory

 

$000

 

$

 9,804

 

$

 6,998

 

$

 4,515

 

$

 1,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$/lb

 

$

 11.84

 

$

 14.38

 

$

 11.76

 

$

 9.92

 

 

 

 

Plant inventory

 

$/lb

 

$

 35.61

 

$

 34.70

 

$

 40.81

 

$

 37.53

 

 

 

 

Conversion facility inventory

 

$/lb

 

$

 37.39

 

$

 37.94

 

$

 40.72

 

$

 37.89

 

 

 

 

Note:

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 $3.8 million for 2018 Q2 were based on selling 100,000 pounds at an average price of $37.90.  The pounds were sold under term contracts and were purchased for an average price of $22.25 per pound for a total cost of sales of $2.2 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost Per Pound Sold
Reconciliation

    

Unit

 

2018 Q2

    

2018 Q1

    

2017 Q4

    

2017 Q3

    

2018 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 133

 

$

 179

 

$

 160

 

$

 119

 

$

 312

Wellfield costs

 

$000

 

$

 916

 

$

 1,074

 

$

 1,260

 

$

 1,473

 

$

 1,990

Plant and site costs

 

$000

 

$

 1,723

 

$

 1,718

 

$

 1,703

 

$

 1,614

 

$

 3,441

Distribution costs

 

$000

 

$

 34

 

$

 19

 

$

 48

 

$

 24

 

$

 53

Inventory change

 

$000

 

$

 (2,806)

 

$

 (2,483)

 

$

 (2,795)

 

$

 5,731

 

$

 (5,289)

Cost of sales - produced

 

$000

 

$

 —

 

$

 507

 

$

 376

 

$

 8,961

 

$

 507

Cost of sales - purchased

 

$000

 

$

 2,225

 

$

 9,251

 

$

 —

 

$

 2,196

 

$

 11,476

Total cost of sales

 

$000

 

$

 2,225

 

$

 9,758

 

$

 376

 

$

 11,157

 

$

 11,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold produced

 

lb

 

 

 —

 

 

 10,000.00

 

 

 —

 

 

 180,000

 

 

 10,000

Pounds sold purchased

 

lb

 

 

 100,000

 

 

 370,000.00

 

 

 —

 

 

 109,000

 

 

 470,000

Total pounds sold

 

lb

 

 

 100,000

 

 

 380,000.00

 

 

 —

 

 

 289,000

 

 

 480,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per pound sold - produced (1)

 

$/lb

 

$

 -

 

$

 50.70

 

$

 -

 

$

 49.78

 

$

 50.70

Average cost per pound sold - purchased

 

$/lb

 

$

 22.25

 

$

 25.00

 

$

 -

 

$

 20.15

 

$

 24.42

Total average cost per pound sold

 

$/lb

 

$

 22.25

 

$

 25.68

 

$

 -

 

$

 38.61

 

$

 24.96

Note:

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 second quarter of 2018, the average spot price of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $22.65 per pound. Market fundamentals have not changed sufficiently to warrant the accelerated development of MU2. We anticipate meeting our projected production level of 250,000 to 300,000 pounds drummed for the year.

Through June 30, 2018, we sold 470,000 pounds of U3O8 under term contracts at an average price of approximately $49.39 per pound and 10,000 pounds of U3O8 under a spot sale for $23.75 per pound. We purchased 470,000 pounds at an average cost of $24.42 per pound. The remaining 10,000 pounds were delivered from our produced inventory. We have no more contract sales scheduled in 2018.

The third of three planned MU2 header houses was brought into production in Q2. No additional new production areas are currently planned for the remainder of the year. Production guidance for Q3 is between 70,000 and 80,000 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 July 26, 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 2.4 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, including whether mine unit two continues to perform and realize production results similar to mine unit one; timing and results of our efforts to permit future operations at LC East and Shirley Basin) 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.

Monday
Sep242018

Ur-Energy and Energy Fuels Announce U.S. Department of Commerce Has Initiated Investigation into Effects of Uranium Imports on U.S. National Security

Ur-Energy and Energy Fuels Announce U.S. Department of Commerce  Has Initiated Investigation into Effects of Uranium Imports  on U.S. National Security

Ur-Energy Inc. (NYSE American: URG; TSX: URE) (“Ur-Energy”) and Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels”) are pleased to announce that on July 18, 2018, the U.S. Department of Commerce (“DOC”) initiated an investigation into the effects of uranium imports on U.S. national security. This investigation was requested by Ur-Energy and Energy Fuels in their Petition for Relief Under Section 232 of the Trade Expansion Act of 1962 (the “Petition”), which was filed jointly by the companies on January 16, 2018. 

The Secretary of Commerce (the “Secretary”) now has 270 days to conduct the investigation and submit a report to the President of the United States containing the Secretary’s findings and proposed remedy, if any. Following receipt of the Secretary’s report, the President then has up to 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 import threat.

Ur-Energy and Energy Fuels requested that the DOC conduct its investigation due to the following factors:

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, with Q1-2018 production being 50 percent lower than Q1-2017.

In 2017, imports of uranium from state-owned and state-subsidized enterprises in Russia, Kazakhstan, and Uzbekistan fulfilled about one-third of U.S. demand, while purchases of U.S. uranium by owners of U.S. nuclear reactors dropped by 46 percent. In 2018, domestic producers are projected to fulfill only about 2 percent of total U.S. commercial demand.While U.S. producers can fairly compete with foreign production on a level playing field, it is difficult for them to compete with heavily subsidized foreign production. Foreign policies of other nations should not be permitted to jeopardize this crucial U.S. industry

A sustainable domestic uranium mining industry is vital to U.S. national security because it supplies uranium for essential defense needs and fuel for nuclear power plants that are a key component of the nation’s critical clean energy infrastructure.

Ur-Energy and Energy Fuels, both headquartered in Denver, Colorado, are the two main U.S. uranium producers, together mining more than half of all U.S. uranium in 2017.

In the Petition, the companies proposed two complementary remedies: (1) a quota that limits imports of uranium into the U.S., effectively reserving 25 percent of the U.S. market for domestic uranium production, and (2) a requirement for U.S. federal utilities and agencies to buy U.S. uranium in accordance with the President’s Buy American Policy. The companies’ proposed remedies are expected to result in U.S. utilities purchasing approximately 12 million pounds of uranium per year from U.S. production.

The proposed remedies are expected to restore a sustainable U.S. uranium mining industry, bolster national defense, and support energy security through reduced reliance on state-subsidized uranium and nuclear fuel imports from nations that compete with the U.S. for geopolitical influence and commercial advantage. 

An econometric model prepared in connection with the Petition demonstrates that the effects of the proposed remedies on utilities and consumers are expected to be negligible.

Please refer to Energy Fuels’ and Ur-Energy’s press releases on January 16, 2018, for further information on the background and legal basis for the Petition. Additional information regarding the trade action can be found on the companies’ respective websites shown below. As with any governmental investigation, 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, respectively. Ur-Energy operates the Lost Creek in-situ recovery uranium facility in south-central Wyoming. Ur-Energy has produced, packaged and shipped more than 2 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 by-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; expected future U.S. uranium production and the further negative impacts of such imports on U.S. uranium production and national security; 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: restoring a sustainable U.S. uranium mining industry and the benefits of a sustainable domestic uranium mining industry to U.S. national security, bolstering national defense, and supporting energy security; the expected impacts on U.S. production and the U.S. uranium mining industry; the ability of U.S. producers to compete with foreign production on a level playing field; the reduction of dependence on imports; the negligible impact on U.S. utilities and 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; expected future U.S. uranium production and the further negative impacts of such imports on U.S. uranium production and national security; 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: restoring a sustainable U.S. uranium mining industry and the benefits of a sustainable domestic uranium mining industry to U.S. national security, bolstering national defense, and supporting energy security; the expected impacts on U.S. production and the U.S. uranium mining industry; the ability of U.S. producers to compete with foreign production on a level playing field; the reduction of dependence on imports; the negligible impact on U.S. utilities and consumers; and other risk factors as described in each of 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 respective 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:

Leonard Greenberger

lgreenberger@pcgpr.com

202.349.9672

Tuesday
Jul172018

Ur-Energy and Energy Fuels: Utility-sponsored Paper Misses the Mark On Economic Impact of Remedies Proposed in Section 232 Petition

Ur-Energy and Energy Fuels: Utility-sponsored Paper Misses the Mark

On Economic Impact of Remedies Proposed in Section 232 Petition

Paper Ignores Data Presented to U.S. Department of Commerce

Demonstrating That Industry Can Meet Increased Production Requirements

                                                                                                                                       

Denver, Colo. – July 17, 2018                                                                               

A utility-sponsored paper released yesterday misses the mark in its analysis of the remedies that Energy Fuels Inc. (NYSE American: UUUU; TSX: EFR) (“Energy Fuels”) and Ur-Energy Inc. (NYSE American: URG; TSX: URE) (“Ur-Energy”) proposed in their Section 232 petition to the U.S. Department of Commerce (DOC). For decades, the U.S. has increased its dependence on uranium from state-sponsored enterprises subject to neither environmental nor worker safety standards.

Energy Fuels and Ur-Energy welcome all interested parties, including utilities, to carefully analyze the economic impacts of the proposed remedies. We believe the remedies are sound and will result in minimal impacts to the U.S. nuclear utility industry and consumers of electricity, while also bolstering U.S. national security. However, the utilities’ analysis misses the mark on several fronts.

Most critically, the paper ignores evidence that Energy Fuels and Ur-Energy included in their petition for relief under Section 232 of the Trade Expansion Act of 1962 demonstrating that the industry has sufficient licensed capacity and resources – and all at a cost consistent with the unsubsidized global standard – to meet U.S. production requirements if the quotas recommended in the petition are imposed. The U.S. uranium industry has produced at well over those levels in the past, and the proposed remedies would allow the industry to get back to those production levels at minimal cost to the nuclear utility industry.

The paper also fails to address the serious threat to U.S. national security caused by our dependence on Russia and its allies for a significant portion of our uranium supply. Russia’s actions in Eastern Europe prove its willingness to use energy exports as a geopolitical weapon.

Finally, the authors at The NorthBridge Group did not consider or fully understand a number of exhibits the companies included in their petition for relief. The most relevant include:

  • Exhibit 17 of the petition shows that during a period of uranium price increases between 2007 and 2012, domestic uranium mining companies endeavored to bring considerable new production capacity online. Unfortunately, state and federal permitting delays forced U.S. companies to miss the price hike. Since that period, the industry has increased its licensed capacity by 74 percent, with additional capacity expected in the near term.
  • Exhibit 23 of the petition shows that the mining operations necessary to reach the required production rate are already in place and ready to resume production. In addition, the number of required facilities is relatively small and spread over several states – meaning that the industry can meet labor and other capacity needs.

In addition, the authors vastly overstate the costs to expand production to the level needed to support the quota, while ignoring the effect of direct and indirect subsidies received by state-sponsored enterprises in Russia, Kazakhstan, China and elsewhere. Domestic industry costs for current operating and near-term production are consistent with the worldwide, all-in production costs cited in Exhibit 3 of the petition.

Above all, the U.S. cannot and should not put a price on our national security. We must not surrender the entire front end of our nuclear fuel supply chain because of an addiction to government-subsidized uranium from Russia and its allies.

Energy Fuels’ and Ur-Energy’s January press releases provide further details on the background and legal basis for the petition. Additional information regarding the trade action, including the petition and its exhibits, can also be readily found on the companies’ websites (Energy Fuels and Ur-Energy).

In any governmental investigation, there can be no certainty of the outcome. The purpose of this investigation is to shine a light on the facts and discover the truth about the national security impact of uranium imports from state-sponsored enterprises in adversarial nations.

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 by-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.

About Ur-Energy: Ur-Energy is a U.S. uranium mining company with corporate and operations offices in Denver, Colorado, and Casper, Wyoming, respectively. Ur-Energy operates the Lost Creek in-situ recovery uranium facility in south-central Wyoming. Ur-Energy has produced, packaged and shipped more than 2 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.

Cautionary Note Regarding Forward-Looking Statements: Certain information contained in this news release, including any information relating to: the status of current or expected licensed U.S. production capacity and whether the industry has or will have sufficient licensed capacity to meet increased U.S. production requirements; expected costs of U.S. production and whether they will be consistent with world production costs; the status of construction of facilities; whether or not the industry can meet labor capacity needs; the economic impacts of the proposed remedies on nuclear utility industry requirements; threats to U.S. national security; 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; 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 status of current or expected licensed U.S. production capacity and whether the industry has or will have sufficient licensed capacity to meet increased U.S. production requirements; expected costs of U.S. production and whether they will be consistent with world production costs; the status of construction of facilities; whether or not the industry can meet labor capacity needs; the economic impacts of the proposed remedies on nuclear utility industry requirements; threats to U.S. national security; 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; and other risk factors as described in each of 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 respective 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:

Leonard Greenberger

lgreenberger@pcgpr.com

202.349.9672

Tuesday
Jul172018

Ur-Energy Provides 2018 Q2 Operational Results

Littleton, Colorado (PR Newswire – July 12, 2018) Ur-Energy Inc. (NYSE American:URG, TSX:URE) (the “Company” or “Ur-Energy”) is pleased to provide the following operational results for Q2 2018.

Highlights

Lost Creek Operations

 

Units

2018 Q1

 

2018 Q2

 

2018 YTD

 

 

 

 

 

 

 

U3O8 Captured

(‘000 lbs)

84.0

 

89.3

 

173.3

U3O8 Dried & Drummed

(‘000 lbs)

80.0

 

74.3

 

154.3

U3O8 Sold (produced)

(‘000 lbs)

10.0

 

0

 

10.0

U3O8 Sold (purchased)

(‘000 lbs)

370.0

 

100.0

 

470.0

 

 

 

 

 

 

 

Average Flow Rate

(gpm)

2,432

 

2,517

 

2,475

U3O8 Head Grade

(mg/l)

33

 

34

 

34

 

Lost Creek Uranium Production and Sales

For the quarter, 89,209 pounds of U3O8 were captured within the Lost Creek plant, 74,302 pounds of U3O8 were packaged in drums and 74,416 pounds of U3O8 drummed inventory were shipped out of the Lost Creek processing plant. At June 30, 2018, inventory at the conversion facility was approximately 233,712 pounds U3O8

During the quarter, sales totaled $3.79 million on 100,000 pounds at an average price of $37.90 per pound, which was 71% above the average spot price for the same period of $22.13 per pound. The 100,000 pounds were purchased at an average cost of $22.25 per pound.

During the period, the third of the first three header houses in the second mine unit (MU2) at Lost Creek commenced production. All three of the header houses are exceeding budgeted production expectations. With the addition of MU2 production, both grades and flow levels have continued to increase. 

Continuing Guidance for 2018

As indicated in our prior guidance, we have now completed all deliveries into our 2018 term contracts, which totaled 470,000 pounds at an average price of approximately $49 per pound. We will provide further guidance in our Form 10-Q, which is currently anticipated to be filed on Friday, July 27, 2018.

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 approximately 2.4 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; recovery results, including head grade and flow rates, from additional header houses in MU2 at Lost Creek) 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.

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.