Exhibit 99.1
Ur-Energy Releases 2020 Year End Results
Littleton, Colorado (ACCESSWIRE – February 26, 2021)
Ur-Energy Inc. (NYSE
American:URG)(TSX:URE) (“Ur-Energy” or the
“Company”) has filed the Company’s Annual Report
on Form 10-K, Consolidated Financial Statements, and
Management’s Discussion & Analysis, all for the year
ended December 31, 2020, with the U.S. Securities and Exchange
Commission on EDGAR at www.sec.gov/edgar.shtml
and with Canadian securities authorities on SEDAR at www.sedar.com.
These filings also may be accessed on the Company’s website
at www.ur-energy.com.
Shareholders of the Company may receive a hard copy of the
consolidated financial statements, free of charge, upon request to
the Company.
Ur-Energy
CEO, Jeff Klenda said: “We look forward to 2021 as a year
with numerous prospective catalysts for the domestic uranium
recovery industry – catalysts from which our proven
operational results at Lost Creek position us to benefit. We are
pleased that, already, the Biden Administration has committed to
integrate nuclear energy into its clean energy mandate, which is
coupled with its pledge, expressed just this week, to
‘expand and strengthen
domestic mining and processing capacity’ of the U.S. These
priorities, and the growing bipartisan support for nuclear energy,
will facilitate the formation of the national uranium reserve
approved in December 2020, as well as implementation of other
recommendations of the U.S. Nuclear Fuel Working
Group.
“At
February 24, we had $18.6 million in cash, allowing us to maintain
and strengthen our operational readiness at Lost Creek to return to
full production levels when conditions warrant. Additionally, we
have nearly 285,000 pounds U3O8 in inventory at
the conversion facility. Our experienced technical and operational
staff continues to optimize processes and future production plans
at the site. We await the formal establishment of the uranium
reserve to respond to the procurement process. We stand ready to
provide Lost Creek’s production inventory to the reserve to
further its purposes in protecting our energy and national
security.”
Financial Results
As of
December 31, 2020, we had cash resources consisting of cash and
cash equivalents of $4.3 million. Excluding NRV adjustments, we
recognized a gross profit related to U3O8 sales of $3.1
million, which represents a gross profit margin of approximately 38
percent. The Company realized an average price per pound
U3O8 sold of $41.50,
as compared to $48.50 in 2019. The sales were all from term
contracts.
Lost Creek Operations
As in
recent years, controlled production operations continued at Lost
Creek throughout 2020. The originally planned wells and HHs in MU1
and the first three HHs and the related wells in MU2 were available
for operation through much of 2020, until we further reduced our
production levels in Q3 2020.
During
2020, 10,789 pounds of U3O8 were captured
within the Lost Creek plant and 15,873 pounds U3O8 were packaged in
drums. At December 31, 2020, inventory at the conversion facility
was approximately 268,485 pounds. Subsequent to year-end, we
delivered an additional shipment to the conversion facility.
Currently, we have approximately 284,358 pounds in inventory at the
conversion facility.
Lost
Creek MU1 and MU2 have all appropriate operating permits. The main
trunkline that services the first five MU2 HHs has been installed,
and the entirety of MU2 has been fenced. In addition, during the
most recent development program, approximately 45% of the required
wells for HH2-4 have been drilled and cased. These earlier
development activities in MU2 will allow for a quick ramp up of
production once market fundamentals change.
The
following tables provide detailed financial information on our
sales, cost of sales, and production and ending inventory as they
relate to U3O8 pounds.
The
U3O8
and cost per
pound measures included in the following tables do not have a
standardized meaning within US GAAP or a defined basis of
calculation. These measures are used by management to assess
business performance and determine production and pricing
strategies. They may also be used by certain investors to evaluate
performance. Where applicable, reconciliation of these measures to
US GAAP financial statement presentation are included within the
respective table.
Sales
|
Unit
|
|
|
|
|
|
|
|
|
U3O8
Sales Reconcilation (1)
|
|
|
|
|
|
|
|
|
|
Sales per financial
statements
|
$000
|
$8,316
|
$32,255
|
$23,496
|
Disposal
fees
|
$000
|
$(16)
|
$(4)
|
$(43)
|
U3O8
sales
|
$000
|
$8,300
|
$32,251
|
$23,453
|
U3O8 pounds
sold
|
lb
|
200,000
|
665,000
|
480,000
|
U3O8 price per pound
sold
|
$/lb
|
$41.50
|
$48.50
|
$48.86
|
U3O8
Sales by
Product
U3O8
Sales
|
|
|
|
|
Produced
|
$000
|
$-
|
$9,889
|
$238
|
Purchased
|
$000
|
$8,300
|
$22,362
|
$23,215
|
|
$000
|
$8,300
|
$32,251
|
$23,453
|
|
|
|
|
|
U3O8
Pounds Sold
|
|
|
|
|
Produced
|
lb
|
-
|
213,750
|
10,000
|
Purchased
|
lb
|
200,000
|
451,250
|
470,000
|
|
lb
|
200,000
|
665,000
|
480,000
|
|
|
|
|
|
U3O8
Price per Pounds Sold
|
|
|
|
|
Produced
|
$/lb
|
$-
|
$46.26
|
$23.80
|
Purchased
|
$/lb
|
$41.50
|
$49.56
|
$49.39
|
|
$/lb
|
$41.50
|
$48.50
|
$48.86
|
|
|
|
|
Note:
1.
Sales per the
financial statements include revenues from disposal fees received
at Shirley Basin. The disposal fees do not relate to U3O8 pounds sold and
are excluded from the U3O8 sales and
U3O8 price per pound
sold figures.
Cost of Sales
|
Unit
|
|
|
|
|
|
|
|
|
U3O8
Cost of Sales Reconciliation (1)
|
|
|
|
|
|
|
|
|
|
Cost of sales per
financial statements
|
$000
|
$12,968
|
$30,274
|
$12,203
|
Lower of cost or
NRV adjustment
|
$000
|
$(7,802)
|
$(10,264)
|
$(318)
|
U3O8 cost of
sales
|
$000
|
$5,166
|
$20,010
|
$11,885
|
U3O8 pounds
sold
|
lb
|
200,000
|
665,000
|
480,000
|
U3O8 cost per pound
sold
|
$/lb
|
$25.83
|
$30.09
|
$24.76
|
U3O8
Cost of Sales by
Product
U3O8
Cost of Sales
|
|
|
|
|
Ad valorem and
severance taxes
|
$000
|
$29
|
$82
|
$423
|
Wellfield cash
costs
|
$000
|
$422
|
$882
|
$2,068
|
Wellfield non-cash
costs
|
$000
|
$2,289
|
$2,445
|
$1,603
|
Plant cash
costs
|
$000
|
$3,393
|
$4,395
|
$4,719
|
Plant non-cash
costs
|
$000
|
$1,958
|
$1,954
|
$1,955
|
Distribution
costs
|
$000
|
$1
|
$71
|
$136
|
Inventory
change
|
$000
|
$(8,092)
|
$(1,744)
|
$(10,495)
|
Produced
|
$000
|
$-
|
$8,085
|
$409
|
Purchased
|
$000
|
$5,166
|
$11,925
|
$11,476
|
|
$000
|
$5,166
|
$20,010
|
$11,885
|
|
|
|
|
|
U3O8
Pounds Sold
|
|
|
|
|
Produced
|
lb
|
-
|
213,750
|
10,000
|
Purchased
|
lb
|
200,000
|
451,250
|
470,000
|
|
lb
|
200,000
|
665,000
|
480,000
|
|
|
|
|
|
U3O8
Cost per Pound Sold
|
|
|
|
|
Produced
|
$/lb
|
$-
|
$37.82
|
$40.90
|
Purchased
|
$/lb
|
$25.83
|
$26.43
|
$24.42
|
|
$/lb
|
$25.83
|
$30.09
|
$24.76
|
Note:
1.
Cost of sales per
the financial statements include lower of cost or net realizable
value ("NRV") adjustments. The NRV adjustments do not relate to
U3O8 pounds sold and
are excluded from the U3O8 cost of sales and
U3O8 cost per pound
sold figures.
Cost of
sales per the financial statements includes ad valorem and
severance taxes related to the extraction of uranium, all costs of
wellfield and plant 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. The resulting inventoried cost per
pound is compared to the NRV of the product, which is based on the
estimated sales price of the product, net of any remaining costs to
finish the product. Any inventory value in excess of the NRV is
charged to cost of sales per the financial statements. These NRV
adjustments are excluded from the U3O8 cost of sales and
U3O8 cost per pound
sold figures because they relate to the pounds of U3O8 in ending
inventory and do not relate to the pounds of U3O8 sold during the
period.
U3O8 Production and
Ending Inventory
|
Unit
|
|
|
|
U3O8
Production
|
|
|
|
|
|
|
|
|
|
Pounds
captured
|
lb
|
10,789
|
47,957
|
302,164
|
Pounds
drummed
|
lb
|
15,873
|
50,794
|
286,357
|
Pounds
shipped
|
lb
|
-
|
58,353
|
287,873
|
Pounds
purchased
|
lb
|
200,000
|
500,000
|
470,000
|
|
|
|
|
|
|
|
|
|
|
U3O8
Ending Inventory
|
|
|
|
|
|
|
|
|
|
Pounds
|
|
|
|
|
In-process
inventory
|
lb
|
303
|
5,396
|
9,134
|
Plant
inventory
|
lb
|
15,873
|
-
|
7,559
|
Conversion
inventory - produced
|
lb
|
219,735
|
220,053
|
375,803
|
Conversion
inventory - purchased
|
lb
|
48,750
|
48,750
|
-
|
|
lb
|
284,661
|
274,199
|
392,496
|
|
|
|
|
|
Value
|
|
|
|
|
In-process
inventory
|
$000
|
$-
|
$-
|
$160
|
Plant
inventory
|
$000
|
$463
|
$-
|
$345
|
Conversion
inventory - produced
|
$000
|
$6,083
|
$6,250
|
$14,187
|
Conversion
inventory - purchased
|
$000
|
$1,268
|
$1,176
|
$-
|
|
$000
|
$7,814
|
$7,426
|
$14,692
|
|
|
|
|
|
Cost
per Pound
|
|
|
|
|
In-process
inventory
|
$/lb
|
$-
|
$-
|
$17.52
|
Plant
inventory
|
$/lb
|
$29.17
|
$-
|
$45.64
|
Conversion
inventory - produced
|
$/lb
|
$27.68
|
$28.40
|
$37.75
|
Conversion
inventory - purchased
|
$/lb
|
$26.01
|
$24.12
|
$-
|
|
$/lb
|
$27.45
|
$27.08
|
$37.43
|
|
|
|
|
|
Produced conversion
inventory detail:
|
|
|
|
|
Ad valorem and
severance tax
|
$/lb
|
$0.75
|
$0.77
|
$1.52
|
Cash
cost
|
$/lb
|
$17.50
|
$17.95
|
$23.85
|
Non-cash
cost
|
$/lb
|
$9.43
|
$9.68
|
$12.38
|
|
$/lb
|
$27.68
|
$28.40
|
$37.75
|
During
2020, we took steps to further reduce production operations at Lost
Creek and adjust to the continued depressed state of the uranium
markets while we awaited the recommended relief from the Working
Group and further positive developments in the uranium markets. As
a result, production rates at Lost Creek declined during the year.
Pounds captured decreased nearly 80 percent during the year and
will remain low until a decision to ramp up is made. Pounds drummed
decreased similarly. There were no shipments in 2020 as we
accumulated enough product for the next shipment, which was made in
January 2021.
At the
end of the year, we had approximately 268,485 pounds of
U3O8 at the conversion
facility including 219,735 produced pounds at an average cost per
pound of $27.68, and 48,750 purchased pounds at an average cost of
$26.01 per pound. Including the January 2021 shipment, we have
approximately 284,358 pounds of U3O8 at the conversion
facility including 235,608 produced pounds.
Year Ended December 31, 2020 Compared to Year Ended December 31,
2019
The
following table summarizes the results of operations for the years
ended December 31, 2020 and 2019:
(expressed in thousands of U.S. dollars, except per share and pound
data)
|
|
|
|
|
|
|
|
|
|
Sales
|
8,316
|
32,255
|
Cost of
sales
|
(12,968)
|
(30,275)
|
Gross profit
(loss)
|
(4,652)
|
1,980
|
|
|
|
Operating
costs
|
(8,689)
|
(10,258)
|
Profit (loss) from
operations
|
(13,341)
|
(8,278)
|
|
|
|
Net interest
expense
|
(710)
|
(668)
|
Warrant mark to
market gain
|
(680)
|
524
|
Foreign exchange
gain (loss)
|
(72)
|
(28)
|
Other income
(expense)
|
18
|
32
|
Net
income (loss)
|
(14,785)
|
(8,418)
|
|
|
|
Foreign currency
translation adjustment
|
53
|
(16)
|
Comprehensive
income (loss)
|
(14,732)
|
(8,434)
|
|
|
|
Income (loss) per
common share:
|
|
|
Basic
|
(0.09)
|
(0.05)
|
Diluted
|
(0.09)
|
(0.05)
|
|
|
|
U3O8 pounds
sold
|
200,000
|
665,000
|
|
|
|
U3O8 price per pounds
sold
|
41.50
|
48.50
|
|
|
|
U3O8 cost per pounds
sold
|
25.83
|
30.09
|
|
|
|
U3O8 gross per pounds
sold
|
15.67
|
18.41
|
2021 Guidance
Following
multiple announcements of industry production suspensions and
reductions in 2020, U3O8 spot prices
increased to $33 per pound, but subsequently decreased to
approximately $30 per pound at year-end. More recently, recognition
of nuclear power's role in achieving net-zero carbon emissions
goals has seen a renewed interest in the uranium sector. The Paris
Climate Agreement calls for net-zero carbon emissions by 2050 and
the U.S. has rejoined the agreement under the Biden Administration,
which has indicated support for the nuclear industry.
In
February 2021, we raised gross proceeds of $15.2 million through an
underwritten public offering. Our current cash position as of
February 24, 2021, is $18.6 million. In addition to our strong cash
position, we have nearly 285,000 pounds of finished, ready-to-sell
inventory, worth $8.0 million at recent spot prices. The financing
provides us adequate funds to maintain and enhance operational
readiness, for possible future acquisitions, and for general
working capital purposes, including the preservation of our
existing inventory for higher prices.
In
addition to the restructuring of the State Bond Loan, we
implemented other Company-wide cost-saving measures during 2020. We
further reduced production operations at Lost Creek to
market-appropriate levels. The reduced production levels allowed us
to make further operating cost reductions at Lost Creek and related
support cost reductions at the corporate office. The cost
reductions include savings from additional reductions in force and
other cost containment measures. Together with the further deferral
of principal payments on the State Bond Loan, these measures will
result in substantial savings to the Company, estimated to exceed
$7 million and $4 million in calendar years 2021 and 2022,
respectively.
Our
remaining highly experienced technical and operational staff will
continue to optimize processes and refine production plans, which
strengthens our operational readiness at the fully permitted Lost
Creek mine and plant. The Lost Creek facility has the constructed
and licensed capacity to process up to two million pounds of
U3O8 per year and
previously reported mineral resources to feed the processing plant
for many years to come. A ramp-up of production at Lost Creek would
initially include further development work in the first two mine
units, followed by the ten additional mining areas as defined in
the Lost Creek Property Preliminary Economic Assessment, as
amended. In 2021, we expect to receive all permits and
authorizations to recover uranium from the adjacent LC East project
where certain of those additional mining areas are
located.
We
remain prepared to expand uranium production at Lost Creek to an
annualized run rate of one million pounds. With future development
and construction in mind, our current staff members were retained
as having the greatest level of experience and adaptability
allowing for an easier transition back to full operations. Lost
Creek operations can increase to full production rates in as little
as six months following a go decision, simply by developing
additional header houses within the fully permitted MU2.
Development expenses during this six-month ramp up period are
estimated to be approximately $14 million and are almost entirely
related to MU2 drilling and header house construction costs. We are
prepared to ramp up and to deliver our Lost Creek production
inventory to the new national uranium reserve.
Additionally,
we stand ready to construct our Shirley Basin mine, where we
estimate up to nine years production based upon the mineral
resources reported in the Shirley Basin Preliminary Economic
Assessment. All remaining permits and authorizations to construct
and operate this in situ recovery site are expected to be received
in 2021 H1.
We will
continue to closely monitor the uranium market and any actions or
remedies resulting from the Working Group's report, the
implementation of the uranium reserve program, or any further
legislative actions, which may positively impact the uranium
production industry. Until such time, we will continue to minimize
costs and maximize the ‘runway' to maintain our current
operations and the operational readiness needed to ramp-up
production when called upon.
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 2.6 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 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 & CE
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., what the catalysts for the
uranium recovery industry will be in 2021 and when any of them may
be realized; our ability to control production operations at lower
levels at Lost Creek in a safe and compliant manner; ability and
timing to receive all remaining permits and authorizations related
to our LC East and Shirley Basin projects; the timing to determine
future development and construction priorities, and the ability to
readily and cost-effectively ramp-up production operations when
market and other conditions warrant; the ability of the Biden
Administration to advance their climate change and clean energy
agenda, its timing and whether meaningful changes for nuclear power
positively affect the domestic uranium recovery industry; the
timing and program details for establishment of the new national
uranium reserve and continuing budget appropriations for the
ten-year program; and further implementation of recommendations
from the U.S. Nuclear Fuel Working Group, including the timeline
and scope of proposed remedies and related budget appropriations
processes) 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.