Prospectus Supplement
|
Filed Pursuant to Rule
424(b)(5)
|
(To prospectus dated May 27,
2020)
|
Registration No. 333-238324
|
Up to $50,000,000 Common
Shares
This
prospectus supplement updates, amends and supplements certain
information in the prospectus supplement of Ur-Energy Inc. dated
May 29, 2020 (the “May 2020 Prospectus Supplement”)
relating to the offer and sale of shares of our common stock
through B. Riley Securities, Inc. (formerly known as B. Riley FBR,
Inc.) (“B. Riley Securities”), as sales agent or
principal, through an at-the-market program (the “ATM
Program”). On
May 29, 2020, we entered into an At Market Issuance Sales Agreement
with B. Riley Securities relating to our common shares, no par
value per share, offered by the May 2020 Prospectus Supplement and
the accompanying prospectus. On June 7, 2021, we entered into an
amended and restated Sales Agreement to add Cantor Fitzgerald &
Co. (“Cantor” and together with B. Riley Securities,
the “Agents”) as a co-agent under the ATM Program (the
“Sales Agreement”). As of June 4, 2021, we issued and
sold 762,670 common shares having aggregate gross proceeds of
approximate $885,697 under the ATM Program. In accordance with the
terms of the Sales Agreement, we have increased the size of our ATM
Program and may now offer and sell common shares having a maximum
aggregate sales price of up to $50,000,000 from time to time
through or to the Agents, as sales agent or principal, in addition
to the amounts previously sold.
Our
common shares are listed on the NYSE American (“NYSE
American”) under the symbol “URG” and on the
Toronto Stock Exchange (“TSX”) under the symbol
“URE.” On June 4, 2021, the closing price of our common
shares on the NYSE American was $1.53 and on the TSX was
CDN$1.86.
Sales
of common shares, if any, may be made by any method permitted by
law deemed to be “at the market offerings” as defined
in Rule 415 under the Securities Act of 1933, as amended, or the
Securities Act. The Agents will use commercially reasonable efforts
to sell on our behalf all of the common shares requested to be sold
by us, consistent with its normal trading and sales practices, on
mutually agreed terms between the Agents and us. There is no
arrangement for funds to be received in any escrow, trust or
similar arrangement.
The
Agents will be entitled to compensation at a commission rate of up
to 3.0% of the gross sales price of all shares sold under the Sales
Agreement. In connection with the sale of common shares on our
behalf, the Agents will be deemed to be an
“underwriter” within the meaning of the Securities Act,
and the compensation of the Agents will be deemed to be
underwriting commissions or discounts. We have agreed to provide
indemnification and contribution to the Agents against certain
liabilities, including liabilities under the Securities
Act.
Investing in our common shares involves
significant risks. Before buying common shares, you should
carefully consider the risks described under the caption
“Risk Factors” beginning on page S-7 of this prospectus
supplement and in the documents incorporated by reference into this
prospectus supplement.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
B. Riley
Securities
Cantor
The date of this
prospectus supplement is June 8, 2021.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PROSPECTUS
i
ABOUT THIS PROSPECTUS
SUPPLEMENT
You
should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying
prospectus and any applicable free writing prospectus we issue. We
have not, and the Agents have not, authorized anyone else to
provide you with different or additional information. We are
offering to sell these securities and seeking offers to buy these
securities only in jurisdictions where offers and sales are
permitted.
We are
responsible for the information contained and incorporated by
reference in this prospectus supplement, the accompanying
prospectus and any applicable free writing prospectus we issue. We
have not, and the Agents have not, authorized anyone to give you
any other information. We and the Agents take no responsibility for
any other information that others may give you. This prospectus
supplement, the accompanying prospectus and any applicable free
writing prospectus we issue do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the
registered securities to which they relate, nor do this prospectus
supplement, the accompanying prospectus and any applicable free
writing prospectus we issue constitute an offer to sell or the
solicitation of an offer to buy securities in any jurisdiction to
any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. You should not assume that the
information contained in this prospectus supplement, the
accompanying prospectus and any applicable free writing prospectus
we issue is accurate on any date subsequent to the date set forth
on the front of the document or that any information we have
incorporated by reference is accurate on any date subsequent to the
date of the document incorporated by reference, even though this
prospectus supplement, the accompanying prospectus and any
applicable free writing prospectus we issue is delivered or
securities are sold on a later date. Our business, financial
condition, prospectus and results of operations may have changed
since those respective dates. You should assume that the
information appearing in this prospectus supplement, the
accompanying prospectus, any applicable free writing prospectus and
the documents incorporated by reference herein or therein is
accurate only as of their respective dates or on the date or dates
which are specified in these documents.
This document is in
two parts. The first part is this prospectus supplement, which
describes the specific terms of this offering and adds to, updates
and changes information contained in the accompanying prospectus
and the documents incorporated by reference into the accompanying
prospectus. The second part is the accompanying prospectus, which
gives more general information, some of which may not apply to this
offering. To the extent the information contained in this
prospectus supplement differs or varies from the information
contained in the accompanying prospectus or any document
incorporated by reference herein or therein that is filed with the
Securities and Exchange Commission (the “SEC”) prior to
the date of this prospectus supplement, the information in this
prospectus supplement will supersede such information. In addition,
to the extent that any information in a filing that we make with
the SEC adds to, updates or changes information contained in an
earlier filing we made with the SEC, the information in such later
filing shall be deemed to modify and supersede such information in
the earlier filing.
All references in
this prospectus supplement and the accompanying prospectus to
“we,” “us,” “our,” or similar
references refer to Ur-Energy Inc. and its subsidiaries on a
consolidated basis, except where the context otherwise requires or
as otherwise indicated.
FORWARD-LOOKING STATEMENTS
This prospectus
supplement and accompanying prospectus and the documents
incorporated herein and therein may contain forward-looking
statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. These forward-looking
statements can be identified by the use of words such as
“expect,” “anticipate,”
“estimate,” “believe,” “may,”
“potential,” “intends,” “plans”
and other similar expressions or statements that an action, event
or result “may,” “could” or
“should” be taken, occur or be achieved, or the
negative thereof or other similar statements, however the absence
of such words does not mean that a statement is not
forward-looking. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors which may
cause our actual results, performance or achievements, or industry
results, to be materially different from any future results,
performance, or achievements expressed or implied by these
forward-looking statements. Such statements include, but are not
limited to: (i) the ability to maintain controlled and reduced
level operations at Lost Creek in safe and compliant fashion,
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;
(ii) the continuing technical and economic viability of Lost Creek;
(iii) the timing and outcome of remaining permitting and regulatory
approvals of the amendments to the Lost Creek permits and licenses;
(iv) the ability and timing to complete additional favorable
uranium sales agreements including spot sales when; (v) the
production rates and life of the Lost Creek Project and subsequent
development of and production from adjoining projects within the
Lost Creek Property, including plans at LC East; (vi) the potential
of exploration targets throughout the Lost Creek Property
(including the ability to expand resources); (vii) the potential of
our other exploration and development projects, including Shirley
Basin, the projects in the Great Divide Basin and the Excel
project (viii) the technical and economic viability of Shirley
Basin; (ix) the timing and outcome for remaining regulatory
approvals to build and operate an in situ recovery mine at Shirley
Basin; (x) current and near-term market conditions including
without limitation supply and demand projections; (xi) further
action on the recommendations from the U.S. Nuclear Fuel Working
Group, including the timeline and scope of proposed remedies; and
(xii) outcome of the process to establish the national uranium
reserve program, including the procurement process and our role in
it, as well as further budget appropriations processes related to
the reserve.
Although we believe
that our plans, intentions and expectations reflected in these
forward-looking statements are reasonable, we cannot be certain
that these plans, intentions or expectations will be achieved.
Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the
forward-looking statements contained in this prospectus
supplement.
Forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties and other factors which could cause actual events or
results to differ from those expressed or implied by the
forward-looking statements, including, without limitation, risks
related to:
|
●
|
significant increases
or decreases in uranium prices;
|
|
●
|
future estimates for
production, development and production operations, capital
expenditures, operating costs, mineral resources, recovery rates,
grades and market prices;
|
|
●
|
business strategies
and measures to implement such strategies;
|
|
●
|
estimates of goals
for expansion and growth of the business and
operations;
|
|
●
|
plans and references
to our future successes;
|
|
●
|
our history of
operating losses and uncertainty of future
profitability;
|
|
●
|
status as an
exploration stage company;
|
|
●
|
the lack of mineral
reserves;
|
|
●
|
risks associated with
obtaining permits and other authorizations in the
U.S.;
|
|
●
|
risks associated with
current variable economic conditions;
|
|
●
|
challenges presented
by current inventories and largely unrestricted imports of uranium
products into the U.S.;
|
|
●
|
our ability to
service our debt and maintain compliance with all restrictive
covenants related to the debt facility and security
documents;
|
|
●
|
the possible impact
of future financings;
|
|
●
|
the hazards
associated with mining production;
|
|
●
|
compliance with environmental laws and
regulations;
|
|
●
|
uncertainty regarding the pricing and collection
of accounts;
|
|
●
|
the possibility for adverse results in potential
litigation;
|
|
●
|
uncertainties associated with changes in
government policy and regulation;
|
|
●
|
uncertainties associated with a Canada Revenue
Agency or U.S. Internal Revenue Service audit of any of our cross
border transactions;
|
|
●
|
adverse changes in general business conditions in
any of the countries in which we do
business;
|
|
●
|
changes in size and
structure;
|
|
●
|
the effectiveness of management and our strategic
relationships;
|
|
●
|
ability to attract and retain key
personnel;
|
|
●
|
uncertainties regarding the need for additional
capital;
|
|
●
|
uncertainty regarding the fluctuations of
quarterly results;
|
|
●
|
foreign currency exchange
risks;
|
|
●
|
ability to enforce civil liabilities under U.S.
securities laws outside the United
States;
|
|
●
|
ability to maintain our listing on the NYSE
American and TSX;
|
|
●
|
risks associated with the expected classification
as a “passive foreign investment company” under the
applicable provisions of the U.S. Internal Revenue Code of 1986, as
amended;
|
|
●
|
risks associated with our
investments;
|
|
●
|
risk factors described or referenced in this
prospectus; and
|
|
●
|
other factors, many of which are beyond our
control.
|
This list is not
exhaustive of the factors that may affect our forward-looking
statements. Some of the important risks and uncertainties that
could affect forward-looking statements are described further under
the section heading “Risk Factors” in this prospectus
supplement and the accompanying prospectus. Although we have
attempted to identify important factors that could cause actual
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. Should one
or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, believed, estimated or expected.
We caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made.
Except as required by law, we disclaim any obligation subsequently
to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events. We qualify all
of the forward-looking statements contained or incorporated by
reference in this prospectus supplement by the foregoing cautionary
statements.
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING
DISCLOSURE OF
MINERAL RESOURCES
Unless otherwise
indicated, all resource estimates, included or incorporated by
reference in this prospectus supplement and accompanying prospectus
and the documents incorporated herein and therein have been, and
will be, prepared in accordance with Canadian National Instrument
43-101 Standards of
Disclosure for Mineral Projects (“NI
43-101”) and the Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards for Mineral Resources and Mineral
Reserves (“CIM Definition Standards”). NI 43-101 is a
rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
NI 43-101 permits the disclosure of an historical estimate made
prior to the adoption of NI 43-101 that does not comply with NI
43-101 to be disclosed using the historical terminology if the
disclosure: (a) identifies the source and date of the historical
estimate; (b) comments on the relevance and reliability of the
historical estimate; (c) to the extent known, provides the key
assumptions, parameters and methods used to prepare the historical
estimate; (d) states whether the historical estimate uses
categories other than those prescribed by NI 43-101; and (e)
includes any more recent estimates or data available.
Canadian standards,
including NI 43-101, differ significantly from the requirements of
the SEC, and resource information contained or incorporated by
reference in this prospectus supplement and accompanying prospectus
and the documents incorporated herein and therein may not be
comparable to similar information disclosed by U.S. companies. In
particular, the term “resource” does not equate to the
term “‘reserves.” Under SEC Industry Guide 7,
mineralization may not be classified as a “reserve”
unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time
the reserve determination is made. SEC Industry Guide 7 does not
define and the SEC’s disclosure standards normally do not
permit the inclusion of information concerning “measured
mineral resources,” “indicated mineral resources”
or “inferred mineral resources” or other descriptions
of the amount of mineralization in mineral deposits that do not
constitute “reserves” by U.S. standards in documents
filed with the SEC. U.S. investors should also understand that
“inferred mineral resources” have a great amount of
uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or
any part of an “inferred mineral resource” will ever be
upgraded to a higher category. Under Canadian rules, estimated
“inferred mineral resources” may not form the basis of
feasibility or pre-feasibility studies except in rare cases.
Investors are cautioned not to assume that all or any part of an
“inferred mineral resource” exists or is economically
or legally mineable. Disclosure of “contained ounces”
in a resource is permitted disclosure under Canadian regulations;
however, under SEC Industry Guide 7 the SEC normally only permits
issuers to report mineralization that does not constitute
“reserves” by SEC standards as in-place tonnage and
grade without reference to unit measures. Accordingly, information
concerning mineral deposits set forth herein may not be comparable
to information made public by companies that report in accordance
with
SEC Industry Guide 7.
CURRENCY AND EXCHANGE RATES
Unless otherwise
indicated, all references to “$” or
“dollars” in this prospectus supplement and the
accompanying prospectus refer to United States dollars. References
to “Cdn$” in this prospectus supplement and the
accompanying prospectus refer to Canadian dollars.
The rate of
exchange on June 4, 2021, as reported by the Bank of Canada for the
conversion of Canadian dollars to U.S. dollars, was Cdn$1.00 equals
$0.8275 and, for the conversion of U.S. dollars to Canadian
dollars, was $1.00 equals Cdn$1.2084.
PROSPECTUS SUPPLEMENT
SUMMARY
This summary highlights information contained
elsewhere in this prospectus supplement and accompanying prospectus
or incorporated by reference herein. This summary is not complete
and may not contain all of the information that you should consider
before investing. You should read the entire prospectus supplement
and accompanying prospectus carefully, including the section
entitled “Risk Factors” beginning on page S-7 of this prospectus supplement, and
all other information included or incorporated by reference in this
prospectus supplement and accompanying prospectuses in its entirety
before you decide whether or invest. See “Where You Can Find
More Information” and “Incorporation of Certain
Documents by Reference.”
Our Company
Incorporated
on March 22, 2004, Ur-Energy is an exploration stage mining
company, as that term is defined in SEC Industry Guide 7. We are
engaged in uranium mining, recovery and processing activities,
including the acquisition, exploration, development and operation
of uranium mineral properties in the United States. Through our
Wyoming operating subsidiary, Lost Creek ISR, LLC, we began
operation of our first in situ recovery (ISR) uranium mine at our
Lost Creek Project in 2013. Ur-Energy is a corporation continued
under the Canada Business Corporations Act on August 8,
2006. Our common shares are listed on the NYSE American under the
symbol “URG” and on the TSX under the symbol
“URE.”
The
registered office of the Company is located at 55 Metcalfe Street,
Suite 1300, Ottawa, Ontario K1P 6L5, and the head office of the Company
is located at 10758 W. Centennial Road, Suite 200, Littleton,
Colorado 80127; telephone: 1-720-981-4588.
The address of the
Company's website is www.ur-energy.com. Information contained on
the Company's website is not part of this prospectus supplement nor
is it incorporated by reference herein.
Issuer
|
|
Ur-Energy
Inc.
|
|
|
|
Securities Being
Offered
|
|
Common shares, no par
value per share, having a maximum aggregate sales price of up to
$50,000,000.
|
|
|
|
Manner of
Offering
|
|
“At the
market offering” of common shares through or to B. Riley
Securities and Cantor, as sales agent or principal. See
“Plan of
Distribution” on page S-11 of this prospectus
supplement.
|
|
|
|
Use of
Proceeds
|
|
We intend to use
the net proceeds from this offering to maintain and enhance
operational readiness, for possible future acquisitions or other
strategic transactions and for working capital and general
corporate purposes. See “Use
of Proceeds” on page S-10 of this prospectus
supplement.
|
Trading
Symbol
|
|
Our common shares are
listed on the NYSE American under the symbol “URG” and
on the TSX under the symbol “URE.”
|
|
|
|
Risk
Factors
|
|
Investing in our
common shares involves significant risks. Please read the
information contained in and incorporated by reference under the
caption “Risk
Factors” beginning on page S-7 of this prospectus
supplement and page 8 of the accompanying prospectus.
|
|
|
|
Tax Considerations
|
|
Purchasing our common shares may have tax
consequences in the United States and Canada. This prospectus
supplement and the accompanying base shelf prospectus may not
describe these consequences fully for all investors. Investors
should read the tax discussion in the accompanying base shelf
prospectus and consult with their tax adviser. See “Certain
Canadian Federal Income Tax Considerations” and
“Certain U.S. Federal Income Tax Considerations” in the
accompanying base shelf prospectus.
|
|
|
|
Dividend
Policy
|
|
We have not paid
dividends on our common shares and do not intend to pay cash
dividends in the foreseeable future.
|
Prior to making an investment decision investors should consider
the investment risks set out below including those set out in our
most recent Annual Report on Form 10-K, our most recent Quarterly
Report on Form 10-Q and other filings or subsequent filings with
the SEC and incorporated herein by reference, which are in addition
to the usual risks associated with an investment in a business at
an early stage of development. If any of these risks materialize
into actual events or circumstances or other possible additional
risks and uncertainties of which the board of directors of the
Company are currently unaware or which they consider not to be
material in relation to the Company's business, actually occur, the
Company's assets, liabilities, financial condition, results of
operations (including future results of operations), business and
business prospects are likely to be materially and adversely
affected. You should also refer to the other information set forth
or incorporated by reference in this prospectus supplement and
accompanying base shelf prospectus, including our consolidated
financial statements and related notes.
Risks Related to Our Common Shares and This
Offering
The trading
price of the common shares may experience substantial
volatility.
The market price of
our common shares may experience substantial volatility that is
unrelated to the Company's financial condition or operations. The
trading price of
our common shares may also be significantly
affected by short-term changes in the price of uranium. The market
price of the Company's securities is affected by many other
variables which may be unrelated to our success and are, therefore,
not within our control. These include other developments that
affect the market for all resource sector-related securities,; the
breadth of the public market for the common shares; the
attractiveness of alternative investments.; market reaction to the
estimated fair value of our portfolio; rumors or dissemination of
false information; changes in coverage or earnings estimates by
analysts; our ability to meet analysts’ or market
expectations; and sales of common shares by existing shareholders.
The effect of these and other factors on the market price of the
common shares is expected to make the price of the common shares
volatile in the future, which may result in losses to
investors.
Management
will have broad discretion as to the use of the net proceeds from
this offering, and we may not use these proceeds
effectively.
The Company
currently intends to allocate the net proceeds it will receive from
the offering as described under the heading “Use of
Proceeds” below. However, management will have discretion in
the actual application of the net proceeds, and the Company may
elect to allocate proceeds differently from that described in
“Use of Proceeds” if the Company believes it would be
in its best interests to do so. Accordingly, you will be relying on
the judgment of our management with regard to the use of these net
proceeds, and you will not have the opportunity, as part of your
investment decision, to assess whether the proceeds are being used
appropriately. Our failure to apply these funds effectively could
have an adverse effect on our business and cause the price of our
common shares to decline.
Sales of a
significant number of common shares in the public markets, or the
perception that such sales could occur, could depress the market
price of our common shares.
Sales of a
significant number of our common shares in the public markets, or
the perception that such sales could occur as a result of our
utilization of a universal shelf registration statement or
otherwise could depress the market price of our common shares and
impair our ability to raise capital through the sale of additional
equity securities. We cannot predict the effect that future sales
of our common shares or the market perception that we are permitted
to sell a significant number of our securities would have on the
market price of our common shares.
The market
price of our common shares may fluctuate
significantly.
The market price of
our common shares has fluctuated and could fluctuate substantially
in the future. This volatility may subject our stock price to
material fluctuations due to the factors discussed under
“Risk Factors” in this prospectus supplement, the
accompanying prospectus and the documents incorporated herein by
reference, and other factors including market reaction to the
estimated fair value of our portfolio; rumors or dissemination of
false information; changes in coverage or earnings estimates by
analysts; our ability to meet analysts’ or market
expectations; and sales of common shares by existing
shareholders.
We have never paid
dividends and do not currently expect to do so in the near future.
Therefore, if our share price does not appreciate, our investors
may not gain and could potentially lose on their investment in our
shares.
We have
not
paid dividends on our common shares since our incorporation and do
not anticipate doing so in the foreseeable future. We currently
intend to retain all available funds and any future earnings to
fund the growth of our business. Payments of any dividends will be
at the discretion of our Board of Directors (“Board”)
after considering many factors, including our financial condition
and current and anticipated cash needs. As a result, capital
appreciation, if any, of our shares will be an investor’s
sole source of gain for the foreseeable future.
You may
experience immediate and substantial
dilution.
The offering price
per share in this offering may exceed the net tangible book value
per share of our common shares outstanding prior to this offering.
Assuming that an aggregate of 32,679,739 shares of our common
shares are sold at an assumed public offering price of $1.53 per
share, for aggregate gross proceeds of $50,000,000, and after
deducting commissions and estimated offering expenses payable by
us, you would experience immediate dilution of $1.13 per share,
representing the difference between our as adjusted net tangible
book value per share as of March 31, 2021, after giving effect
to this offering, and the assumed offering price. See the section
entitled "Dilution" below for a more detailed illustration of the
dilution you would incur if you participate in this offering.
Because the sales of the shares offered hereby will be made
directly into the market, the prices at which we sell these shares
will vary and these variations may be significant. Purchasers of
the shares we sell, as well as our existing shareholders, will
experience significant dilution if we sell shares at prices
significantly below the price at which they invested.
You may
experience future dilution as a result of future equity
offerings.
To raise additional
capital, we may in the future offer additional shares of our common
shares or other securities convertible into or exchangeable for our
common shares at prices that may not be the same as the price per
share in this offering. We may sell shares or other securities in
any other offering at a price per share that is less than the price
per share paid by investors in this offering, and investors
purchasing shares or other securities in the future could have
rights superior to existing stockholders. The price per share at
which we sell additional shares of our common shares, or securities
convertible or exchangeable into common shares, in future
transactions may be higher or lower than the price per share paid
by investors in this offering.
Our common stock may become the target of a “short
squeeze.”
In
2021, the securities of several companies have increasingly
experienced significant and extreme volatility in share price due
to short sellers of common stock and buy-and-hold decisions of
longer investors, resulting in what is sometimes described as a
“short squeeze.” Short squeezes have caused extreme
volatility in those companies and in the market and have led to the
price per share of those companies to trade at a significantly
inflated rate that is disconnected from the underlying value of the
company. Sharp rises in a company’s stock price may force
traders in a short position to buy the shares to avoid even greater
losses. Many investors who have purchased shares in those companies
at an inflated rate face the risk of losing a significant portion
of their original investment as the price per share has declined
steadily as interest in those shares have abated. We may be a
target of a short squeeze, and investors may lose a significant
portion or all of their investment if they purchase our shares at a
rate that is significantly disconnected from our underlying
value.
Purchasers of
common shares offered by this prospectus supplement and the
accompanying base prospectus may experience
immediate dilution in the net tangible book value of
their common shares from the price paid in the offering. The net
tangible book value of our common shares as of March 31, 2021 was
approximately $40,129,000 or $0.21 per share. Net tangible book
value per share is determined by dividing our total tangible
assets, less total liabilities, by the number of common shares
outstanding as of March 31, 2021.
Dilution per
share represents the difference between the public offering price
per common share and the adjusted net tangible book value per
common share after giving effect to this offering. After reflecting
the sale in this offering of 32,679,739 common shares at an assumed
public offering price of $1.53 per share, less commissions and
estimated offering expenses, the adjusted net tangible book value
of our common shares as of March 31, 2021 would have been
approximately $88,879,001, or approximately $0.40 per share. The
change represents an immediate increase in net tangible book value
per common share of $0.19 per share to existing stockholders and an
immediate dilution of $1.13 per share to new investors
purchasing the common shares in this offering. The following table
illustrates this per share dilution:
Assumed public
offering price per common share
|
|
$1.53
|
Net
tangible book value per share as of March 31, 2021
|
$0.21
|
|
Increase
per share attributable to this offering
|
$0.19
|
|
|
|
|
Adjusted net
tangible book value per share as of March 31, 2021
|
|
$0.40
|
Dilution per share
attributable to this offering
|
|
$1.13
|
The
foregoing calculations are based on 189,389,100 common shares
outstanding as of March 31, 2021 and exclude (i) 9,967,551 common
shares issuable upon the
exercise of outstanding stock options; (ii) 1,345,119 common shares
issuable upon redemption of outstanding restricted stock
units; and
(iii) 19,015,704 common shares subject to outstanding warrants
having a weighted average exercise price of $1.10 per full
share.
The
table above assumes for illustrative purposes that an aggregate of
32,679,739 common shares are sold during the term of the Sales
Agreement at a price of $1.53 per share for aggregate gross
proceeds of $50,000,000. In fact, the shares subject to the Sales
Agreement will be sold, if at all, from time to time at prices that
may vary. An increase of $0.40 per share in the price at which the
shares are sold from the assumed offering price of $1.53 per share
shown in the table above, assuming all of our common shares in the
aggregate amount of $50,000,000 during the term of the Sales
Agreement is sold at that price, would decrease the assumed number
of shares issued in the offering by 6,773,003 and increase our
adjusted net tangible book value per share after the offering to
$0.41 per share and would increase the dilution in net tangible
book value per share to new investors in this offering to $1.52
per share, after deducting
commissions and estimated aggregate offering expenses payable by
us. A decrease of $0.40 per share in the price at which the shares
are sold from the assumed offering price of $1.53 per share shown
in the table above, assuming all of our common shares in the
aggregate amount of $50,000,000 during the term of the Sales
Agreement is sold at that price, would increase the number of
shares issued in the offering by approximately 11,568,049, decrease
our adjusted net tangible book value per share after the offering
to $0.38 per share and would
decrease the dilution in net tangible book value per share to new
investors in this offering to $0.75 per share, after deducting commissions
and estimated aggregate offering expenses payable by us. This
information is supplied for illustrative purposes
only.
We are not
guaranteed to receive any particular amount of proceeds from this
offering. The amount of proceeds we receive from this offering, if
any, will depend upon the number of common shares sold and the
market price at which they are sold.
We intend to use
the net proceeds from this offering, after deducting the
Agent’s commission and our offering expenses, to maintain and
enhance operational readiness, for possible future acquisitions or
other strategic transactions, and for working capital and general
corporate purposes.
Our management will
have broad discretion in the application of the net proceeds of
this offering.
On May
29, 2020, we entered into an At Market Issuance Sales Agreement
with the B. Riley Securities Inc., under which we may issue and
sell common shares time to time through or to the Agent, as sales
agent or principal in such amounts as is set forth in a prospectus
supplement filed by us. On June 7, 2021, we entered into an amended
and restated Sales Agreement to add Cantor Fitzgerald & Co.
(“Cantor” and together with B. Riley Securities, Inc.,
the “Agents”) as a co-agent under the ATM Program (the
“Sales Agreement”). The Sales Agreement will be filed
as an exhibit to a report filed under the Exchange Act and
incorporated by reference in this prospectus supplement. The Agents
may sell the common shares by any method that is deemed to be an
“at the market offering” as defined in Rule 415
promulgated under the Securities Act. We may instruct the Agents
not to sell our common shares if the sales cannot be effected at or
above the price designated by us from time to time. We or the
Agents may suspend the offering of our common shares upon notice
and subject to other conditions. The Agents will not engage in any
transactions that stabilize the price of our common
shares.
From
time to time during the term of the Sales Agreement, we will notify
an Agent of the amount of shares to be sold, the dates on which
such sales are requested to be made, the minimum price below which
sales may not be made and any limitation on the number of shares
that may be sold in any one day. Once we have so instructed an
Agent, unless such Agent declines to accept the terms of such
notice or until such notice is terminated or suspended as permitted
by the Sales Agreement, such Agent shall use commercially
reasonable efforts consistent with its normal trading and sales
practices to sell such shares up to the amount specified on such
terms. The obligations of the Agents under the Sales Agreement are
subject to a number of customary conditions that we must
meet.
The
Agents will provide written confirmation to us no later than the
opening of the trading day following the trading day on which the
Agents have sold common shares for us under the Sales Agreement.
Each confirmation will include the number of shares sold on that
day, the aggregate compensation payable by us to the Agents in
connection with the sale and the net proceeds to us from the sale
of the shares.
Settlement for
sales of common shares will occur on the second trading day
following the date on which any sales are made or on such earlier
day as is then industry practice for regular-way trading, or on
some other date that is agreed upon by us and the Agents in
connection with a particular transaction, in return for payment of
the net proceeds to us. Sales of our common shares as contemplated
by this prospectus supplement will be settled through the
facilities of The Depositary Trust Company or by such other means
as we and the Agents may agree upon. There is no arrangement for
funds to be received in an escrow, trust or similar
arrangement.
We will
pay the Agents a commission of up to 3.0% of the gross proceeds we
receive from the sales of our common shares by the Agents. We
have also agreed to pay various fees and expenses related to this
offering, including certain of the Agents’ legal expenses up
to $50,000 in the aggregate incurred in connection with entering
into the transactions contemplated by the Sales Agreement and up to
$2,500 in the aggregate, per calendar quarter, for ongoing
diligence arising from the transactions contemplated by the Sales
Agreement. Because there is no minimum offering amount required as
a condition to close this offering, the actual total public
offering amount, commissions and proceeds to us, if any, are not
determinable at this time. In connection with the sale of common
shares on our behalf hereunder, the Agents will be deemed to be
“underwriters” within the meaning of the Securities
Act, and the compensation paid to the Agents will be deemed to be
underwriting commissions or discounts. We have agreed to provide
indemnification and contribution to the Agents against specified
liabilities, including liabilities under the Securities
Act.
The
offering of common shares pursuant to the Sales Agreement will
terminate upon the earlier of (i) the sale of all common shares
subject to the Sales Agreement or (ii) the termination of the Sales
Agreement by the Agents or us in accordance with the Sales
Agreement.
This
summary of the material provisions of the Sales Agreement does not
purport to be a complete statement of its terms and conditions. A
copy of the Sales Agreement is filed with the SEC and is
incorporated by reference into the registration statement of which
this prospectus is a part. See “Where You Can Find More
Information” below.
The
Agents and their respective affiliates may in the future provide
various investment banking and other financial services for us and
our affiliates, for which services they may in the future receive
customary fees. To the extent required by Regulation M, the Agents
will not engage in any market making or stabilizing activities
involving our common shares while the offering is ongoing under
this prospectus supplement and the accompanying
prospectus.
The validity of the
issuance of the securities offered hereby will be passed upon by
Fasken Martineau DuMoulin LLP, on behalf of the Company. Certain
U.S. legal matters will be passed upon for the Company by Davis
Graham & Stubbs LLP, Denver, Colorado, and for the Agents by
Duane Morris LLP, New York, New York.
The consolidated financial statements
of the Company included in the Annual Report
on Form 10-K incorporated by reference in this prospectus
supplement have been so
incorporated in reliance on the report of
PricewaterhouseCoopers LLP, Chartered Professional Accountants, of
Vancouver, British Columbia, Canada (“PwC”), an
independent registered public accounting firm, given on the
authority of said firm as experts in auditing and
accounting.
PwC are the
Company’s auditors and have advised that they are independent
from the Company within the meaning of the Code of Professional
Conduct of Chartered Professional Accountants of British Columbia,
Canada, and within the meaning of the U.S. Securities Act and
the applicable rules and regulations thereunder adopted by the
SEC. PricewaterhouseCoopers LLP is registered with the Public
Company Accounting Oversight Board (United States).
The mineral
resource estimate and related information of the Company’s
Lost Creek Property incorporated by reference herein are based upon
analyses performed or overseen by TREC, Inc. Such estimates
and related information have been incorporated by reference herein
in reliance upon the authority of such firm as experts in such
matters.
The mineral
resource estimate and related information of the Company’s
Shirley Basin Project incorporated by reference herein are based
upon analyses performed by Western Water Consultants, Inc.,
d/b/a WWC Engineers. Such estimates and related information have
been incorporated by reference herein in reliance upon the
authority of such firm as experts in such matters.
WHERE
YOU CAN FIND MORE INFORMATION
We are subject to
the informational requirements of the Securities Exchange Act of
1934, as amended, or the Exchange Act, and the rules and
regulations thereunder, and in accordance therewith, we file
periodic reports and proxy statements with the SEC, referred to in
this prospectus supplement as the SEC. All reports, proxy
statements and the other information that we file with the SEC may
be inspected and copied at the Public Reference Room maintained by
the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the Public
Reference Room. Our SEC filings are also available to the public
from the SEC’s website at www.sec.gov and our website at
www.ur-energy.com. Information on our website is not incorporated
by reference in this prospectus supplement.
We have filed with
the SEC a registration statement (of which this prospectus
supplement and the accompanying prospectus are a part) on Form S-3
under the Securities Act with respect to our securities. This
prospectus supplement and the accompanying prospectus do not
contain all of the information set forth in the registration
statement, including the exhibits and schedules thereto, certain
parts of which are omitted as permitted by the rules and
regulations of the SEC.
We also maintain an
Internet website at www.ur-energy.com, which provides additional
information about our company and through which you can also access
our SEC filings. Our website and the information contained in and
connected to it are not a part of or incorporated by reference into
this prospectus supplement or the accompanying
prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
This prospectus
supplement and the accompanying prospectus incorporate by reference
information we have filed with the SEC, which means that we can
disclose important information to you be referring you to those
documents. The information incorporated by reference is considered
to be part of this prospectus supplement and the accompanying
prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate
by reference the documents listed below and all documents that we
file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus supplement and prior
to the termination of this offering (other than information in
documents that is deemed not to be filed):
|
●
|
Our Annual Report on
Form 10-K for the year ended December 31, 2020 filed with the SEC
on
February 26, 2021;
|
|
●
|
The information
specifically incorporated by reference into our annual report on
Form 10-K for the year ended December 31, 2020 from our
Definitive Proxy Statement on Schedule 14A filed on
April 21, 2021 and from our Definitive Additional Materials on
Schedule 14A filed on
April 21, 2021;
|
|
●
|
Our Quarterly Report
on Form 10-Q for quarter ended March 31, 2021 filed with the SEC on
May 7, 2021;
|
|
●
|
Our Current Reports on
Form 8-K filed on
February 4, 2021, April
2, 2021,
April 16, 2021,
May 7, 2021,
May 14, 2021,
June 2, 2021 and
June 4, 2021 (excluding all information furnished in such
report under Item 2.02 or 9.01); and
|
|
●
|
The description of common shares
contained in our registration statement
on Form 40-F filed on
January 7, 2008, and as amended on
July 7, 2008, including any amendment or report filed for
purposes of updating such
description.
|
Any statement in a
document incorporated by reference in this prospectus supplement
will be deemed to be modified or superseded to the extent a
statement contained in this prospectus supplement or any other
subsequently filed document that is incorporated by reference in
this prospectus supplement modifies or supersedes such
statement.
You may obtain,
free of charge, a copy of any of these documents (other than
exhibits to these documents unless the exhibits specifically are
incorporated by reference into these documents or referred to in
this prospectus supplement) by writing or calling us at the
following address and telephone number:
Ur-Energy Inc.
10758 W. Centennial Road, Suite 200
Littleton, Colorado 80127
Attention: General
Counsel
(720) 981-4588
|
Filed pursuant to Rule 424(b)(3)
Registration No. 333-238324
|
PROSPECTUS
$100,000,000
Common Shares
Warrants
Units
Rights
Senior Debt Securities
Subordinated Debt
Securities
Ur-Energy Inc. (the
“Company,” “we,” “us,” or
“our”) may offer and sell from time to time, in one or
more offerings, in amounts, at prices and on terms determined at
the time of any such offering, of our common shares, no par value
(“Common Shares”), warrants to purchase Common Shares
(the “Warrants”), our senior and subordinated debt
securities, rights to purchase common shares and/or senior or
subordinated debt securities, units consisting of two or more of
these classes of securities or any combination thereof up to an
aggregate initial offering price of $100,000,000 (all of the
foregoing, collectively, the “Securities”). The prices
at which we may sell the Securities will be determined by the
prevailing market price for such Securities. We will bear all
expenses of registration incurred in connection with this
offering.
We will provide
specific terms of any offering of Securities in one or more
supplements to this prospectus. The Securities may be offered
separately or together in any combination and as separate series.
You should read this prospectus and any supplement carefully before
you invest. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read
this prospectus and the applicable prospectus supplement carefully
before you make your investment decision.
We may sell
securities directly to you, through agents we select, or through
underwriters or dealers we select. If we use agents, underwriters
or dealers to sell the Securities, we will name them and describe
their compensation in a prospectus supplement. The net proceeds we
expect to receive from an offering of Securities will be described
in the prospectus supplement.
Our registration of
the Securities covered by this prospectus does not mean that we
will offer or sell any of the Securities. We may sell the
Securities covered by this prospectus in a number of different ways
and at varying prices. We provide more information about how we may
sell the Securities in the section entitled “Plan of Distribution” beginning
on page 18.
Our Common Shares
are traded on the Toronto Stock Exchange (“TSX”) under
the symbol “URE” and on the NYSE American (“NYSE
American”) under the symbol “URG.” On May 14,
2020, the last reported sale price of the Common Shares on the NYSE
American was $0.50 per Common Share and on the TSX was Cdn$0.66 per
Common Share. Unless otherwise specified in the applicable
prospectus supplement, the Securities other than the Common Shares
will not be listed on any securities exchange.
There is currently no market through which the
Securities, other than the Common Shares, may be sold and you may
not be able to resell such Securities purchased under this
prospectus and any applicable prospectus supplement. This may
affect the pricing of such Securities in the secondary market, the
transparency and availability of trading prices, the liquidity of
the securities, and the extent of issuer
regulation.
INVESTING IN OUR SECURITIES INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY READ THE “RISK FACTORS” SECTION BEGINNING
ON PAGE 8 OF THIS PROSPECTUS.
Neither the U.S. Securities and Exchange
Commission nor any state securities commission has approved or
disapproved of these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this
prospectus is May 27, 2020.
TABLE OF CONTENTS
In this prospectus
and in any prospectus supplement, unless the context otherwise
requires, references to “Ur-Energy,” the
“Company,” “we,” “us” and
“our” refer to Ur-Energy Inc., either alone or together
with our subsidiaries as the context requires. When we refer to
“shares” throughout this prospectus, we include all
rights attaching to our Common Shares under any shareholder rights
plan then in effect.
This prospectus is
part of a registration statement that we filed with the Securities
and Exchange Commission, which we refer to as the “SEC”
or the “Commission,” using a “shelf”
registration process. Under the shelf registration, we may sell any
combination of the securities described in this prospectus in one
or more offerings. This prospectus provides you with a general
description of the securities that we may offer. Each time that we
sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The
prospectus supplement also may add, update or change information
contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information
incorporated by reference in this prospectus before making an
investment in our securities. See “Where You Can Find More
Information” for more information. We may use this
prospectus to sell securities only if it is accompanied by a
prospectus supplement.
You should not
assume that the information in this prospectus, any accompanying
prospectus supplement or any document incorporated by reference is
accurate as of any date other than the date of such
document.
WHERE YOU CAN FIND MORE
INFORMATION
We are subject to
the informational requirements of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and the rules
and regulations thereunder and, in accordance therewith, we file
periodic reports and proxy statements with the SEC. All reports,
proxy statements and the other information that we file with the
SEC may be inspected and copied at the Public Reference Room
maintained by the SEC at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. Our SEC filings are also
available to the public from the SEC's website at www.sec.gov and our website at
www.ur-energy.com.
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
The SEC allows us
to “incorporate by reference” information into this
prospectus and any accompanying prospectus supplement, which means
that we can disclose important information to you by referring you
to other documents filed separately with the SEC. The information
incorporated by reference is considered part of this prospectus,
and information filed with the SEC subsequent to this prospectus
and prior to the termination of the particular offering referred to
in such prospectus supplement will automatically be deemed to
update and supersede this information. We incorporate by reference
into this prospectus and any accompanying prospectus supplement the
documents listed below (excluding any portions of such documents
that have been “furnished” but not “filed”
for purposes of the Exchange Act):
|
(a)
|
Our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019 filed with
the SEC on
February 28, 2020;
|
|
(b)
|
Our Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2020 filed
with the SEC on
May 8, 2020;
|
|
(c)
|
|
|
(d)
|
The description of
common shares contained in our registration statement on Form 40-F
filed on
January 7, 2008, and as amended on
July 7, 2008, including any amendment or report filed for
purposes of updating such description; and
|
|
(e)
|
All other documents
filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, after the date of this prospectus but before
the end of the offering of the Common Shares made by this
prospectus.
|
We also incorporate
by reference all documents we subsequently file with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the initial filing of the registration statement of which
this prospectus is a part (including prior to the effectiveness of
the registration statement) and prior to the termination of the
offering. Any statement in a document incorporated by reference in
this prospectus will be deemed to be modified or superseded to the
extent a statement contained in this prospectus or any other
subsequently filed document that is incorporated by reference in
this prospectus modifies or supersedes such statement.
Unless specifically
stated to the contrary, none of the information that we disclose
under Items 2.02 or 7.01 or corresponding information furnished
under Item 9.01 or included as an exhibit of any Current Report on
Form 8-K that we may from time to time furnish to the SEC will be
incorporated by reference into, or otherwise included in, this
prospectus.
We will provide
without charge upon written or oral request, a copy of any or all
of the documents which are incorporated by reference into this
prospectus. Requests should be directed to:
Ur-Energy
Inc.
Attention:
Corporate Secretary
10758 W. Centennial
Road, Suite 200
Littleton, CO
80127
(720)
981-4588
Except as provided
above, no other information, including information on our website,
is incorporated by reference in this prospectus.
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING
DISCLOSURE OF MINERAL RESOURCES
Unless otherwise
indicated, all resource estimates, included or incorporated by
reference in this prospectus and any prospectus supplement have
been, and will be, prepared in accordance with Canadian National
Instrument 43-101 Standards
of Disclosure for Mineral Projects (“NI
43-101”) and the Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards for Mineral Resources and Mineral
Reserves (“CIM Definition Standards”). NI 43-101 is a
rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
NI 43-101 permits the disclosure of an historical estimate made
prior to the adoption of NI 43-101 that does not comply with NI
43-101 to be disclosed using the historical terminology if the
disclosure: (a) identifies the source and date of the historical
estimate; (b) comments on the relevance and reliability of the
historical estimate; (c) to the extent known, provides the key
assumptions, parameters and methods used to prepare the historical
estimate; (d) states whether the historical estimate uses
categories other than those prescribed by NI 43-101; and (e)
includes any more recent estimates or data available.
Canadian standards,
including NI 43-101, differ significantly from the requirements of
the SEC, and resource information contained or incorporated by
reference in this prospectus and any prospectus supplement may not
be comparable to similar information disclosed by U.S. companies.
In particular, the term “resource” does not equate to
the term “‘reserves.” Under SEC Industry Guide 7,
mineralization may not be classified as a “reserve”
unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time
the reserve determination is made. SEC Industry Guide 7 does not
define and the SEC’s disclosure standards normally do not
permit the inclusion of information concerning “measured
mineral resources,” “indicated mineral resources”
or “inferred mineral resources” or other descriptions
of the amount of mineralization in mineral deposits that do not
constitute “reserves” by U.S. standards in documents
filed with the SEC. U.S. investors should also understand that
“inferred mineral resources” have a great amount of
uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or
any part of an “inferred mineral resource” will ever be
upgraded to a higher category. Under Canadian rules, estimated
“inferred mineral resources” may not form the basis of
feasibility or pre-feasibility studies except in rare cases.
Investors are cautioned not to assume that all or any part of an
“inferred mineral resource” exists or is economically
or legally mineable. Disclosure of “contained ounces”
in a resource is permitted disclosure under Canadian regulations;
however, the SEC normally only permits issuers to report
mineralization that does not constitute “reserves” by
SEC standards as in-place tonnage and grade without reference to
unit measures. Accordingly, information concerning mineral deposits
set forth herein may not be comparable to information made public
by companies that report in accordance with U.S.
standards.
EXCHANGE RATE INFORMATION
Unless stated
otherwise or as the context otherwise requires, all references to
dollar amounts in this prospectus and any prospectus supplement are
references to United States dollars. References to “$”
or “US$” are to United States dollars and references to
“Cdn$” are to Canadian dollars.
The following
tables set forth (i) the rate of exchange for one U.S. dollar,
expressed in Canadian dollars, in effect at the end of the periods
indicated; (ii) the average exchange rates for one U.S. dollar, on
the last day of each month during such periods; and (iii) the high
and low exchange rates for one U.S. dollar, expressed in Canadian
dollars, during such periods, each based on the rate of exchange as
reported by the Bank of Canada.
|
|
Year Ended December 31
|
|
Canadian dollar
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
End of
period
|
|
$
|
1.3840
|
|
$
|
|
1.3427
|
|
$
|
|
1.2545
|
|
|
$
|
1.3642
|
|
|
$
|
1.2988
|
|
Average for the
period
|
|
$
|
1.2781
|
|
$
|
|
1.3256
|
|
$
|
|
1.2986
|
|
|
$
|
1.2957
|
|
|
$
|
1.3269
|
|
|
|
January
|
|
|
February
|
|
|
March
|
|
|
April
|
|
|
|
Canadian dollar
|
|
2020
|
|
|
2020
|
|
|
2020
|
|
|
2020
|
|
|
|
High for the
month
|
|
$
|
1.3233
|
|
|
$
|
1.3429
|
|
|
$
|
1.4496
|
|
|
$
|
1.4217
|
|
|
|
Low for the
month
|
|
$
|
1.2970
|
|
|
$
|
1.3224
|
|
|
$
|
1.3356
|
|
|
$
|
1.3904
|
|
|
|
The rate quoted by
the Bank of Canada for the conversion of United States dollars into
Canadian dollars on May 14, 2020 is Cdn$1.4090 =
US$1.00.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus,
and the documents incorporated by reference herein, contain
forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act, and
forward-looking information and forward-looking statements within
the meaning of applicable Canadian securities laws, with respect to
our financial condition, results of operations, business prospects,
plans, objectives, goals, strategies, future events, capital
expenditures, and exploration and development efforts. These
forward-looking statements can be identified by the use of words
such as “expect,” “anticipate,”
“estimate,” “believe,” “may,”
“potential,” “intends,” “plans”
and other similar expressions or statements that an action, event
or result “may,” “could” or
“should” be taken, occur or be achieved, or the
negative thereof or other similar statements, however the absence
of such words does not mean that a statement is not
forward-looking. These statements are only predictions and involve
known and unknown risks, uncertainties and other factors which may
cause our actual results, performance or achievements, or industry
results, to be materially different from any future results,
performance, or achievements expressed or implied by these
forward-looking statements. Such statements include, but are not
limited to: (i) the ability to maintain controlled-level operations
at Lost Creek, 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; (ii) the continuing technical and
economic viability of Lost Creek; (iii) the timing and outcome of
permitting and regulatory approvals of the amendments to the Lost
Creek permits and licenses; (iv) the ability to complete additional
favorable uranium sales agreements including spot sales when
warranted and production inventory is available; (v) the production
rates and life of the Lost Creek Project and subsequent development
of and production from adjoining projects within the Lost Creek
Property, including plans at LC East; (vi) the potential of
exploration targets throughout the Lost Creek Property (including
the ability to expand resources); (vii) the potential of our other
exploration and development projects, including Shirley Basin, the
projects in the Great Divide Basin and the Excel
project (viii) the technical and economic viability of Shirley
Basin; (ix) the timing and outcome of applications for regulatory
approval to build and operate an in situ recovery mine at Shirley
Basin; (x) the outcome of our production projections;
(xi) current market conditions including without limitation
supply and demand projections; and (xii) the outcome of the report
and recommendations from the U.S. Nuclear Fuel Working Group,
including the timeline and scope of proposed remedies, including
the budget appropriations process related to the establishment of
the national uranium reserve.
Although we believe
that our plans, intentions and expectations reflected in these
forward-looking statements are reasonable, we cannot be certain
that these plans, intentions or expectations will be achieved.
Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the
forward-looking statements contained in this
prospectus.
Forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties and other factors which could cause actual events or
results to differ from those expressed or implied by the
forward-looking statements, including, without limitation, risks
related to:
|
●
|
significant increases
or decreases in uranium prices;
|
|
●
|
future estimates for
production, development and production operations, capital
expenditures, operating costs, mineral resources, recovery rates,
grades and market prices;
|
|
●
|
business strategies
and measures to implement such strategies;
|
|
●
|
estimates of goals
for expansion and growth of the business and
operations;
|
|
●
|
plans and references
to our future successes;
|
|
●
|
our history of
operating losses and uncertainty of future
profitability;
|
|
●
|
status as an
exploration stage company;
|
|
●
|
the lack of mineral
reserves;
|
|
●
|
risks associated with
obtaining permits and other authorizations in the
U.S.;
|
|
●
|
risks associated with
current variable economic conditions;
|
|
●
|
challenges
presented by current inventories and largely unrestricted imports
of uranium products into the U.S.;
|
|
●
|
our ability to
service our debt and maintain compliance with all restrictive
covenants related to the debt facility and security
documents;
|
|
●
|
the possible impact
of future financings;
|
|
●
|
the hazards
associated with mining production;
|
|
●
|
compliance with
environmental laws and regulations;
|
|
●
|
uncertainty regarding
the pricing and collection of accounts;
|
|
●
|
the possibility for
adverse results in potential litigation;
|
|
●
|
uncertainties
associated with changes in government policy and
regulation;
|
|
●
|
uncertainties
associated with a Canada Revenue Agency or U.S. Internal Revenue
Service audit of any of our cross border transactions;
|
|
●
|
adverse changes in
general business conditions in any of the countries in which we do
business;
|
|
●
|
changes in size and
structure;
|
|
●
|
the effectiveness of
management and our strategic relationships;
|
|
●
|
ability to attract
and retain key personnel;
|
|
●
|
uncertainties
regarding the need for additional capital;
|
|
●
|
sufficiency of
insurance coverage;
|
|
●
|
uncertainty regarding
the fluctuations of quarterly results;
|
|
●
|
foreign currency
exchange risks;
|
|
●
|
ability to enforce
civil liabilities under U.S. securities laws outside the United
States;
|
|
●
|
ability to maintain
our listing on the NYSE American and TSX;
|
|
●
|
risks associated with
the expected classification as a “passive foreign investment
company” under the applicable provisions of the U.S. Internal
Revenue Code of 1986, as amended;
|
|
●
|
risks associated with
our investments;
|
|
●
|
risk factors
described or referenced in this prospectus; and
|
|
●
|
other factors, many
of which are beyond our control.
|
This list is not
exhaustive of the factors that may affect our forward-looking
statements. Some of the important risks and uncertainties that
could affect forward-looking statements are described further under
the section headings “Our
Business” and “Risk Factors” in this prospectus
and any additional risks or uncertainties described in any
prospectus supplements. Although we have attempted to identify
important factors that could cause actual results to differ
materially from those described in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those anticipated, believed, estimated or expected. We caution
readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. Except as
required by law, we disclaim any obligation subsequently to revise
any forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events. We qualify all of the forward-looking
statements contained or incorporated by reference in this
prospectus by the foregoing cautionary
statements.
Incorporated on
March 22, 2004, Ur-Energy is an exploration stage mining company,
as that term is defined in the SEC Industry Guide 7. We are engaged
in uranium mining, recovery and processing activities, including
the acquisition, exploration, development and operation of uranium
mineral properties in the U.S. Through our Wyoming operating
subsidiary, Lost Creek ISR, LLC, we began operating our first in
situ recovery uranium mine at our Lost Creek project in 2013.
Ur-Energy is a corporation continued under the Canada Business Corporations Act on
August 8, 2006. Our Common Shares are listed on the Toronto Stock
Exchange (the “TSX”) under the symbol “URE”
and on the NYSE American LLC (the “NYSE American”)
under the symbol “URG.”
Ur-Energy has one
direct wholly-owned subsidiary: Ur-Energy USA Inc., incorporated
under the laws of the State of Colorado. It has offices in Colorado
and Wyoming and has employees in both states, in addition to having
one employee based in Arizona.
Ur-Energy USA has
three wholly-owned subsidiaries: NFU Wyoming, LLC, a limited
liability company formed under the laws of the State of Wyoming to
facilitate acquisition of certain property and assets and,
currently, to act as our land holding and exploration entity; Lost
Creek ISR, LLC, a limited liability company formed under the laws
of the State of Wyoming to hold and operate our Lost Creek project
and certain other of our Lost Creek properties and assets; and
Pathfinder Mines Corporation (“Pathfinder”),
incorporated under the laws of the State of Delaware, which holds,
among other assets, the Shirley Basin and Lucky Mc properties in
Wyoming. Lost Creek ISR, LLC employs personnel at the Lost Creek
Project.
We utilize in situ
recovery (“ISR”) of the uranium at our flagship
project, Lost Creek, and will do so at other projects where
possible. The ISR technique is employed in uranium extraction
because it allows for an effective recovery of roll front uranium
mineralization at a lower cost. At Lost Creek, we extract and
process U3O8, for shipping
to a third-party conversion facility for further processing,
storage and sales.
Our Lost Creek
processing facility, which includes all circuits for the
production, drying and packaging of uranium for delivery into
sales, is designed and anticipated to process up to one million
pounds of U3O8 annually from
the Lost Creek mine. The processing facility has the physical
design capacity to process two million pounds of U3O8 annually, which
provides additional capacity to process material from other
sources. We expect that the Lost Creek processing facility may be
utilized to process captured U3O8 from our
Shirley Basin Project. However, the Shirley Basin permit
application contemplates the construction of a full processing
facility, providing greater construction and operating flexibility
as may be dictated by market conditions.
In this
prospectus and in any prospectus supplement, unless the context
otherwise requires, references to “Ur-Energy,” the
“Company,” “we,” “us” and
“our” refer to Ur-Energy Inc., either alone or together
with our subsidiaries as the context requires.
Our corporate
office is located at 10758 W. Centennial Road, Suite 200,
Littleton, CO 80127 and our telephone number is (720) 981-4588. Our
website address is www.ur-energy.com. The
information on our website is not part of this
prospectus.
The following sets forth certain risks and
uncertainties that could have a material adverse effect on our
business, financial condition and/or results of operations and the
trading price of our Common Shares, which may decline, and
investors may lose all or part of their investment. Additional
risks and uncertainties that we do not presently know or that we
currently deem immaterial also may impair our business operations.
We cannot assure you that we will successfully address these
risks. In addition, other unknown risks may exist that may
affect our business.
An investment in the Securities offered
in this prospectus involves a high degree of risk. For a discussion
of other factors you should carefully consider before deciding to
purchase these securities, please consider the risk factors
described in the documents we incorporate by reference, including
those in our Annual Report on Form 10-K for the year ended December
31, 2019 and our Quarterly Report on Form 10-Q for the period ended
March 31, 2020, as well as those that may be included in the
applicable prospectus supplement and other information incorporated
by reference in the applicable prospectus supplement. Also, please
read our “Cautionary Statement Regarding Forward-Looking
Statements.”
Risks Related to Our
Business
Largely unrestricted imports challenge the U.S. domestic uranium
industry.
Higher than normal
inventories and the production levels and costs of production in
and for countries such as Russia, Kazakhstan and Uzbekistan have
had a substantial impact on the U.S. uranium production industry
over the past several years. More recently, China has aggressively
expanded its role in the global uranium mining markets and in the
rest of the nuclear fuel cycle. If the imports from
government-subsidized production sites remain unchecked on a
continuing basis, there could be a significant continuing negative
impact to the uranium market which could adversely impact the
Company’s future profitability. In 2018, with a
co-petitioner, we jointly filed a petition for relief with the U.S.
Department of Commerce (DOC) under Section 232 of the Trade
Expansion Act of 1962 from imports of uranium products that
threaten U.S. national security. The petition sought a modest quota
which, in effect, would have reserved twenty-five percent of the
U.S. market for domestic uranium. Following the
statutorily-mandated investigation and report by the DOC, the
President took no direct action on the requested relief; instead,
he mandated the establishment of the U.S. Nuclear Fuel Working
Group (“Working Group”) to conduct a fuller analysis of
national security considerations with respect to the entire nuclear
fuel supply chain and, specifically, to develop recommendations for
reviving and expanding domestic uranium production.
The Working Group report was released on April 23,
2020. The report makes a series of recommendations which would
support the U.S. domestic uranium production industry, but at this
time there has been no action taken. The announcement of a federal
budget item for the establishment of a national uranium reserve is
related to one of the recommendations from the Working Group. This
and others of the recommendations will require appropriations for
implementation. There can be no certainty of the outcome of the
recommendations of the Working Group, or actions which may be taken
by the President, including the plan for a national uranium
reserve, and therefore the outcome of this process and its effects
on the U.S. uranium market is uncertain. Moreover, the
Company’s efforts seeking relief in the industry may have
unintended consequences that may affect our business relationships
with industry and consumers of uranium. These consequences,
together with the costs of continuing to pursue relief, may have
adverse impacts on us. It should be noted, as well, that without
regard to the outcome of the Working Group report and
recommendations, the Russian Suspension Agreement (RSA) currently
expires December 31, 2020. Since 1992, the RSA has limited imports
of uranium products from Russia to 20% of U.S. consumption. While
there has been some effort to negotiate an extension of the RSA or
a new agreement on the importation of uranium products from Russia,
at this time there is no mechanism in place to contain the level of
imports from Russia following the expiration of the RSA. If, after
the expiration of the RSA, there is no control over Russian imports
and other imports owned by Russian concerns (e.g., nearly 50% of Kazakh
production is Russian-owned), the uncontrolled importation of
state-sponsored uranium products will have a continuing negative
impact on U.S. uranium producers, including our
Company.
Our term sales
contracts for our production are expiring, and we may be unable to
enter into new term sales contracts on suitable terms and
conditions.
Our term sales
contracts, which have historically resulted in uranium sales at
prices in excess of spot prices, have fixed delivery terms. Most of
our contracts have delivery terms that have been completed, with no
renewal or future deliveries planned. We are contractually
committed to sell 200,000 pounds in 2020 (which have been
delivered), and 25,000 pounds in 2021. In each case, the sales
price of these contracts exceeds current spot prices. If market
conditions do not improve, and the U.S. utilities do not move away
from near-total reliance on imported product from Russia,
Kazakhstan and other state-supported operations, we do not expect
to continue to execute sales agreements at favorable prices with
U.S. utilities in the near future. The failure to enter into new
term sales contracts on suitable terms, could adversely impact our
operations and mining activity decisions, and resulting cash flows
and income.
The uranium market is volatile and has limited customers. Our
property interests and our projects are subject to volatility in
the price of uranium.
The price of
uranium is volatile and may experience significant price movements
over short periods of time. Factors beyond our control affect the
market, including demand for nuclear power; changes in public
acceptance of nuclear power generation, including the continuing
effects on the market due to the events following the March 2011
earthquake and tsunami in Japan; political and economic conditions
in uranium mining, producing and consuming countries; costs and
availability of financing of nuclear plants; changes in
governmental regulations; expectations of inflation; currency
exchange fluctuations; interest rates; global or regional
consumption patterns; speculative activities and increased
production due to new extraction developments and improved
production methods; the future viability and acceptance of small
modular reactors or micro-reactors and the related fuel
requirements for this new technology; reprocessing of spent fuel
and the re-enrichment of depleted uranium tails or waste. Any
future accidents or terrorism at nuclear facilities are likely to
also impact the conditions of uranium mining and the use and
acceptance of nuclear energy. The effect of these factors on the
price of uranium, and therefore on the economic viability of our
properties, cannot accurately be predicted.
Mining
operations involve a high degree of
risk.
Mining operations
generally involve a high degree of risk. We continue operations at
our first and, currently, only, uranium in situ recovery facility
at Lost Creek, where production activities commenced in the second
half of 2013. Our operations at the Lost Creek site, which is a
remote site in south-central Wyoming, and at other projects as they
continue in development, will be subject to all the hazards and
risks normally encountered at remote sites in Wyoming, including
safety in commuting and severe weather which can affect such
commutes and may slow operations, particularly during winter
weather conditions. Additionally, these operations are subject to
all the hazards and risks normally encountered in the production of
uranium by in situ methods of recovery, such as water management
and treatment, including wastewater disposal capacity (deep wells,
Class V wells, ponds or other methods; each of which requires
regulatory authorizations and varying levels of expense to install
and operate), unusual and unexpected geological formations,
unanticipated metallurgical difficulties, equipment malfunctions
and availability of parts, interruptions of electrical power
and communications, other conditions involved in the drilling and
removal of material through pressurized injection and production
wells, radiation safety, transportation and industrial accidents,
and natural disaster (e.g., fire, tornado), any of which
could result in damage to, or destruction of, production
facilities, damage to life or property, environmental damage and
possible legal liability. Adverse effects on operations and/or
further development of our projects could also adversely affect our
business, financial condition, results of operations and cash
flow.
Our business
is subject to extensive environmental and other regulations that
may make exploring, mining or related activities expensive, and
which may change at any time.
The mining industry
is subject to extensive environmental and other laws and
regulations, which may change at any time. Environmental
legislation and regulation are evolving in a manner which will
likely require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental
assessments of proposed projects and a heightened degree of
responsibility for companies and their officers, directors and
employees. Various rulemakings and other regulatory actions related
to the protection of the greater sage-grouse, for example, are
ongoing. EPA rulemakings which may have an impact on ISR projects
continue to occur from time to time and are likely to recur in
future administrations. Proposed CERCLA regulations, which would
have significantly increased financial obligations and surety
bonding and might have had a commensurate impact on ISR projects,
were not finalized. Although that administrative decision was
affirmed by the courts, following a legal challenge, similar
rulemakings may recur. These are not the only laws and regulations
which would result in restrictive changes. Moreover, compliance
with environmental quality requirements and reclamation laws
imposed by federal, state and local authorities may require
significant capital outlays, materially affect the economics of a
given property, cause material changes or delays in intended
activities, and potentially expose us to litigation and other legal
or administrative proceedings. We cannot accurately predict or
estimate the impact of any such future laws or regulations, or
future interpretations of existing laws and regulations, on our
operations. Historic exploration activities have occurred on many
of our properties, and mining and energy production activities have
occurred on or near certain of our properties. If such historic
activities have resulted in releases or threatened releases of
regulated substances to the environment, or historic activities
require remediation, potential for liability may exist under
federal or state remediation statutes.
The uranium
mining industry is capital intensive, and we may be unable to raise
necessary additional funding.
Additional funds
will be required to fund working capital or to fund exploration and
development activities at our properties including Lost Creek and
the adjoining projects at the Lost Creek Property, as well as the
development of our Shirley Basin Project. Potential sources of
future funds available to us, in addition to the sales proceeds
from Lost Creek production and current inventory, include the sale
of additional equity capital, proceeds from the exercise of
outstanding convertible equity instruments, borrowing of funds or
other debt structure, project
financing, or the sale of our interests in assets. There is no
assurance that such funding will be available to us to continue
development or future exploration. Furthermore, even if such
financing is successfully completed, there can be no assurance that
it will be obtained on terms favorable to us or will provide us
with sufficient funds to meet our objectives, which may adversely
affect our business and financial position. In addition, any
future equity financings may result in substantial dilution for our
existing shareholders.
Our mineral
resource estimates may not be reliable; there is risk and increased
uncertainty to commencing and conducting production without
established mineral reserves; and we need to develop additional
resources to sustain ongoing operations.
Our properties do
not contain mineral reserves as defined under Canadian National
Instrument 43-101 or SEC Industry Guide 7. See “Cautionary Note to United States
Investors Concerning Disclosure of Mineral
Resources” above. Until mineral reserves or
mineral resources are mined and processed, the quantity of mineral
resources and grades must be considered as estimates only. We have
established the existence of uranium resources for certain uranium
projects, including at the Lost Creek Property. We have not
established proven or probable reserves, as defined by Canadian
securities regulators or the SEC under Industry Guide 7, through
the completion of a feasibility study, for any of our uranium
projects, including the Lost Creek Property. Furthermore, we
currently have no plans to establish proven or probable reserves
for any of our uranium projects for which we plan to utilize in
situ recovery, such as the Lost Creek Property or the Shirley Basin
Project. As a result, and despite the fact that we commenced
recovery of U3O8 at the Lost
Creek Project in 2013, there is an increased uncertainty and risk
that may result in economic and technical failure which may
adversely impact our future profitability.
There are numerous
uncertainties inherent in estimating quantities of mineral
resources, including many factors beyond our control, and no
assurance can be given that the recovery of mineral resources, or
even estimated mineral reserves, will be realized. In general,
estimates of mineral resources are based upon several factors and
assumptions made as of the date on which the estimates were
determined, including:
|
●
|
geological and
engineering estimates that have inherent uncertainties and the
assumed effects of regulation by governmental
agencies;
|
|
●
|
the judgment of the
geologists, engineers and other professionals preparing the
estimate;
|
|
●
|
estimates of future
uranium prices and operating costs;
|
|
●
|
the quality and
quantity of available data;
|
|
●
|
the interpretation of
that data; and
|
|
●
|
the accuracy of
various mandated economic assumptions, all of which may vary
considerably from actual results.
|
All estimates are,
to some degree, uncertain; with in situ recovery, this is due in
part to limited sampling information collected prior to mining. For
these reasons, estimates of the recoverable mineral resources
prepared by different professionals or by the same professionals at
different times, may vary substantially. As such, there is
significant uncertainty in any mineral resource estimate and actual
deposits encountered and the economic viability of a deposit may
differ materially from our estimates.
Also, because we
are now in operation and are depleting our known resource at Lost
Creek, we must be able to continue to conduct exploration and
develop additional mineral resources. While there remain large
areas of our Lost Creek Property which require additional
exploration, we will need to continue to explore all areas of the
Lost Creek Property and our other mineral properties in Wyoming, or
acquire additional, known mineral resource properties to replenish
our mineral resources and sustain continued operations. We estimate
life of mine when we prepare our mineral resource estimates, but
such estimates may not be correct.
Production, capital and operating cost estimates may be
inaccurate.
We prepare
estimates of annual and future production, the attendant production
and operational costs and required working capital for such levels
of production, but there is no assurance that we will achieve those
estimates. These types of estimates are inherently uncertain and
may change materially over time. Operational cost estimates are
affected by changes in production levels and may be affected by a
need to utilize a greater level of contractor services if required
staffing is unavailable or cannot timely be hired and trained.
Availability and consistent pricing of materials necessary in the
installation of wells, surface production equipment, associated
infrastructure, chemicals for processing, and expendable materials
related to operations can be variable depending on economic
conditions locally and worldwide and may force changes in
operations and timing of resource production. In addition, we rely
on certain contractors related to the installation of wells and
technical services associated with that installation. Their
availability or cost of service can change depending on other local
market conditions and may therefore affect the installation and
production rates of mining.
If we are unable to service our debt, we could lose the assets
securing our indebtedness. Restrictive covenants in agreements
governing our indebtedness may restrict our ability to pursue our
business strategies.
Our State Bond
Loan, under which we originally received approximately $34 million
in debt financing, and currently owe approximately $12.4 million in
principal, includes restrictive covenants that, among other things,
limit our ability to sell the assets securing our indebtedness
(which include our Lost Creek Project and related assets). Our
ability to make scheduled payments and satisfy other covenants in
the State Bond Loan depends on our financial condition and
operating performance, which are subject to prevailing economic,
competitive, legislative and regulatory conditions beyond our
control. We may be unable to generate a level of cash flow from
operating activities sufficient to permit us to pay the principal,
interest and other fees on our indebtedness.
If we cannot make
scheduled payments on our debt, we will be in default which, if not
addressed or waived, could require accelerated repayment of our
indebtedness and the enforcement by the lender against the assets
securing our indebtedness. The secured collateral for the State
Bond Loan includes the Lost Creek Project and other related assets.
These are key assets on which our business is substantially
dependent and, as such, the enforcement against any one or all
these assets would have a material adverse effect on our operations
and financial condition.
Our mining
operations are subject to numerous environmental laws, regulations
and permitting requirements and bonding requirements that can delay
production and adversely affect operating and development
costs.
Our business is
subject to extensive federal, state and local laws governing all
stages of exploration, development and operations at our mineral
properties, taxes, labor standards and occupational health, mine
and radiation safety, toxic substances, endangered species
protections, and other matters. Exploration, development and
production operations are also subject to various federal, state
and local laws and regulations relating to the protection of the
environment. These laws impose high standards on the mining
industry, and particularly standards with respect to uranium
recovery, to monitor the discharge of wastewater and report the
results of such monitoring to regulatory authorities, to reduce or
eliminate certain effects on or into land, water or air, to
progressively restore mine properties, to manage hazardous wastes
and materials and to reduce the risk of worker accidents. A
violation of these laws may result in the imposition of substantial
fines and other penalties and potentially expose us to operational
restrictions, suspension, administrative proceedings or litigation.
Many of these laws and regulations have tended to become more
stringent over time. Any change in such laws could have a material
adverse effect on our financial condition, cash flow or results of
operations. There can be no assurance that we will be able to
meet all the regulatory requirements in a timely manner or without
significant expense or that the regulatory requirements will not
change to delay or prohibit us from proceeding with certain
exploration, development or operations. Further, there is no
assurance that we will not face new challenges by third parties to
regulatory decisions when made, which may cause additional delay
and substantial expense, or may cause a project to be permanently
halted.
Our operations
require licenses and permits from various governmental authorities.
We believe we hold all necessary licenses and permits to carry on
the activities which we are currently conducting or propose to
conduct under applicable laws and regulations. Such licenses and
permits are subject to changes in regulations and changes in
various operating circumstances. There can be no guarantee that we
will be able to obtain all necessary licenses and permits that may
be required to maintain our exploration and mining activities (or
amendments to expand or alter existing operations), including
constructing mines, milling or processing facilities and commencing
or continuing exploration or mining activities or operations at any
of our properties. In addition, if we proceed to production on any
other property or new geologic horizon, we must obtain and comply
with permits and licenses which will contain specific operating
conditions. There can be no assurance that we will be able to
obtain such permits and licenses or that we will be able to comply
with any and all such conditions.
The uranium
industry is highly competitive and is competitive with other energy
sources.
The national and
international uranium industry is highly competitive. Our
activities are directed toward the exploration for, evaluation,
acquisition and development of uranium deposits into production
operations. There is no certainty that any expenditures to be made
by us will result in discoveries of commercial quantities of
uranium production. There is aggressive competition within the
mining industry for the discovery, acquisition and development of
properties considered to have commercial potential. We compete with
other interests, many of which have greater financial resources
than we have, for the opportunity to participate in promising
projects. Similarly, we market our product in competition with
supplies from a very limited number of competitors, most of whom
currently are state-sponsored operations producing at lower,
subsidized costs.
Nuclear energy
competes with other sources of energy, including natural gas, oil,
coal, hydroelectricity and renewable energy sources. These other
energy sources are to some extent interchangeable with nuclear
energy, particularly in the long term. Lower prices of natural gas,
oil, coal and hydroelectricity may result in lower demand for
uranium concentrate and uranium conversion services. Technical
advances in and government support for renewable energy sources
could make these forms of energy more viable and have a greater
impact on nuclear fuel demands. Further, the growth of the uranium
and nuclear power industry beyond its current level will depend
upon continued and increased acceptance of nuclear technology as a
means of generating electricity. Because of unique political,
technological and environmental factors that affect the nuclear
industry, the industry is subject to public opinion risks which
could have an adverse impact on the demand for nuclear power,
whether through increased regulation or otherwise.
Requirements for
our products and services may be affected by technological changes
in nuclear reactors, enrichment, and used uranium fuel
reprocessing. These technological changes could reduce, or
increase, the demand for uranium. The cost competitiveness of our
operations may be impacted through development of new uranium
recovery and processing technologies. As a result, our competitors
may adopt technological advancements that provide them an advantage
over our operational and production costs.
The COVID-19
(Coronavirus) pandemic may adversely affect our business and
financial results and may have the effect of heightening others of
the risks set forth in this section.
COVID-19
(Coronavirus), declared a pandemic in March 2020, has had a
significant negative impact on the global economy and commodity and
equity markets, and the outlook remains uncertain. Although none of
our staff has yet been directly affected, falling ill, the pandemic
situation poses risk to our business and operations, and could
adversely impact our operations, business and financial
condition if our employees, regulators, suppliers or other business
partners are prevented from conducting routine operations for
periods of time. While we are monitoring these conditions including
government restrictions on movement and operations, it
is impossible to predict the extent of any such impact or
the levels of success of responsive actions to impacts, as the
circumstances continue to evolve, including in unforeseeable ways.
We are a highly-regulated industry and while the regulators are
standing by to address operational impacts from illness,
governmental restrictions and other effects, it remains uncertain
whether all impacts can be timely addressed with our operations and
with the regulators. We are and will remain fully engaged with our
employees in our efforts to protect their health and
safety.
To the extent
the COVID-19 (Coronavirus) pandemic may adversely affect our
business and financial results as discussed above, it may also have
the effect of heightening many of the other risks described in this
section “Risk Factors” such as those relating to our
ability to access additional capital, which could negatively affect
our business. Because of the highly uncertain and dynamic nature of
events relating to the COVID-19 (Coronavirus) pandemic, it is
not currently possible to estimate the impact of the pandemic on
our business. However, these effects could have a material impact
on our operations, and we will continue to monitor
the COVID-19 (Coronavirus) situation closely.
We depend on the services of our management, key personnel,
contractors and service providers.
Shareholders will
be relying on the good faith, experience and judgment of our
management and advisors providing for the effective management of
the business and our operations and in selecting and developing
future opportunities. We may need to recruit additional qualified
employees, contractors and service providers to supplement existing
management and personnel, the timely availability of which cannot
be assured in our industry, many aspects of which are highly
specialized. This is particularly true in the current labor markets
in which we recruit our employees and the remote locations for
which employees are needed. As well, the skilled professionals with
expertise in geologic, engineering and process aspects of in situ
recovery, radiation safety and other facets of our business are
currently in high demand, as there are relatively few such
professionals with both expertise and experience. The sustained
downturn of the uranium production industry in the past several
years makes these challenges even more pronounced. We will need to
hire additional employees if and as we ramp-up Lost Creek
operations and as we develop the Shirley Basin Project. We will
continue to be dependent on a relatively small number of key
persons, including key contractors, the loss of any one or several
of whom could have an adverse effect on our business and
operations. We do not hold key man insurance in respect of any of
our executive officers.
Lack of acceptance of or outright opposition to nuclear energy
could impede our business.
Our future business
prospects are tied to the electrical utility industry in the U.S.
and worldwide. Deregulation of the utility industry, particularly
in the U.S. and Europe, is expected to affect the market for
nuclear and other fuels for years to come and may result in a wide
range of outcomes including the expansion or the premature shutdown
of nuclear reactors. Maintaining the demand for uranium at current
levels and future growth in demand will depend upon the continued
acceptance of the nuclear technology as a means of generating
electricity. Lack of continued public acceptance of
nuclear technology would adversely affect the demand for nuclear
power and potentially increase the regulation of the nuclear power
industry. Following the events of March 2011 in Fukushima Japan,
worldwide reaction called into question the public’s
confidence in nuclear energy and technology, the effects of which
are still apparent in many countries. Additionally, media coverage
about uranium production and nuclear energy may be inaccurate or
non-objective and further negatively impact public perception of
our industry.
Our property title and rights may be uncertain and could be
challenged.
Although we have
obtained title opinions with respect to certain of our properties,
there is no guarantee that title to any of our properties will not
be challenged or impugned. Third parties may have valid claims
underlying portions of our interests. Our mineral properties in the
U.S. consist of leases covering state lands, unpatented mining
claims and patented mining claims. Many of our mining properties in
the U.S. are unpatented mining claims to which we have only
possessory title. Because title to unpatented mining claims is
subject to inherent uncertainties, it is difficult to determine
conclusively ownership of such claims. These uncertainties relate
to such things as sufficiency of mineral discovery, proper posting
and marking of boundaries and possible conflicts with other claims
not determinable from descriptions of record. The present status of
our unpatented mining claims located on public lands allows us the
exclusive right to mine and remove valuable minerals. We are
allowed to use the surface of the public lands solely for purposes
related to mining and processing the mineral-bearing ores. However,
legal ownership of the land remains with the U.S. We remain at risk
that the mining claims may be forfeited either to the U.S. or
to rival private claimants due to failure to comply with statutory
requirements. Certain of the changes which have been proposed in
recent years to amend or replace the General Mining Law of 1872, as
amended, could also have an impact on the rights we currently have
in our patented and unpatented mining claims. Similarly, we believe
that we have necessary rights to surface use and access in areas
for which we have mineral rights other than pursuant to a federal
unpatented mining claim. Those rights may also be challenged,
resulting in delay or additional cost to assert and confirm our
rights. We have taken or will take appropriate curative measures to
ensure proper title to our mineral properties and rights in surface
use or access, where necessary and where possible.
Possible
amendments to the General Mining Law could make it more difficult
or impossible for us to execute our business
plan.
Members of the U.S.
Congress have repeatedly introduced bills which would materially
amend or replace the provisions of the Mining Law of 1872, as
amended, including certain such bills proposed in 2019. Such bills
have proposed, among other things, to (i) significantly alter the
laws and regulations relating to uranium mineral development and
recovery from unpatented and patented mining claims; (ii) impose a
federal royalty on production from unpatented mining claims; (iii)
impose time limits on the effectiveness of plans of operation that
may not coincide with mine life; (iv) convert in part or in whole
the existing land holdings program, requiring unpatented mining
claims to be taken to lease in a new program under certain
circumstances and imposing other circumstances in which the
unpatented mining claim would have to be abandoned; (v) limit the
mineral property holdings of any single person or company under
various stages from prospecting through operations; (vi) impose
more stringent environmental compliance and reclamation
requirements on activities on unpatented mining claims; (vii) allow
states, localities and Native American tribes to petition for the
withdrawal of identified tracts of federal land from the operation
of the U.S. mining laws; (viii) eliminate or greatly limit the
right to a mineral patent; and (ix) allow for administrative
determinations that mining would not be allowed in situations where
undue degradation of the federal lands in question could not be
prevented.
If enacted, such
legislation could, among other effects, change the cost of holding
unpatented mining claims or leases or the duration for which the
claims or leases could be held without development, and could
significantly impact our ability to develop locatable mineral
resources on our patented and unpatented mining claims. Although it
is impossible to predict at this point what any legislated
royalties might be, enactment could adversely affect the potential
for development and the economics of existing operating mines.
Passage of such legislation could adversely affect our financial
performance, including that proposals imposing a royalty or
otherwise impacting holding and operational costs of mining claims,
if passed, could render mineral projects uneconomic.
Additionally, as
noted in other risk factors, there are ongoing withdrawals of
federal lands for the purposes of mineral location and development.
While certain of these proposals have been withdrawn, and others
are not final and, as yet, none directly affects at this time the
areas of Wyoming and Nevada in which we currently have land
holdings, they could have an adverse effect on our financial
performance if they are broadened in scope to directly affect the
areas in which we have properties. The reasons for withdrawals are
also being broadened in certain recent legislative
proposals.
The results of exploration and ultimate production are highly
uncertain.
The exploration
for, and development of, mineral deposits involves significant
risks which a combination of careful evaluation, experience and
knowledge may not eliminate. Few properties which are explored are
ultimately developed into producing mines. Major expenses may be
required to establish mineral resources or reserves, to develop
metallurgical processes and to construct mining and processing
facilities at a site. It is impossible to ensure that our current
exploration and development programs will result in profitable
commercial operations; this is true for our gold project as well as
our uranium mineral properties.
Whether a mineral
deposit will be commercially viable depends on a number of factors,
some of which are the particular attributes of the deposit, such as
size, grade and proximity to infrastructure, as well as uranium and
gold prices, which are highly cyclical, and government regulations,
including regulations relating to prices, taxes, royalties, land
tenure, land use, importing and exporting of uranium and
environmental protection. The exact effect of these factors cannot
be accurately predicted, but the combination of these factors may
result in us not receiving an adequate return on invested
capital.
Our insurance
coverage could be insufficient.
We currently carry
insurance coverage for general liability, property and casualty,
directors’ and officers’ liability and other matters.
We intend to carry insurance to protect against certain risks in
such amounts as we consider adequate. Certain insurances may be
cost prohibitive to maintain, and even if we carried all such
insurances, the nature of the risks we face in our exploration and
uranium production operations is such that liabilities could exceed
policy limits in any insurance policy or could be excluded from
coverage under an insurance policy. The potential costs that could
be associated with any liabilities not covered by insurance or in
excess of insurance coverage or compliance with applicable laws and
regulations may cause substantial delays and require significant
capital outlays, adversely affecting our business and financial
position. We cannot assure that even our current coverages will
continue to be available at acceptable cost or that coverage limits
will remain at current levels, any of which could result in adverse
effects upon our business and financial condition. Additionally, we
utilize a bonding surety program for our regulatory, reclamation
and restoration obligations at Lost Creek and the Pathfinder Mines
sites. Availability of and terms for such surety arrangements may
change in the future, resulting in adverse effects to our financial
condition.
We are subject to risks associated with governmental or regulatory
investigations or challenges, litigation and other legal
proceedings.
Defense and
settlement costs of legal claims can be substantial, even with
respect to claims that have no merit. From time to time, we may be
involved in disputes with other parties which may result in
litigation or other proceedings. Additionally, it is not unlikely
that we may find ourselves involved directly or indirectly in legal
proceedings, in the form of governmental or regulatory
investigations, administrative proceedings or litigation, arising
from challenges to regulatory actions as described elsewhere in
this annual report. In early 2019, for example, we received a
request from a Congressional committee seeking documents related to
our trade action as a part of an investigation of the current
administration’s actions regarding uranium. We provided a
written response to the committee. Nothing further has been sought.
Even this sort of proceeding may have unexpected consequences,
including the costs of responding to further requests or any
further actions by the committee. Such investigations,
administrative proceedings and litigation related to regulatory
matters may delay or halt exploration or development of our
projects. The results of litigation or any other proceedings cannot
be predicted with certainty. If we are unable to resolve any such
disputes favorably, it could have a material adverse effect on our
financial position, ability to operate, results of operations or
our property development.
Acquisitions and integration may disrupt our business, and we may
not obtain full anticipated value of certain acquisitions due to
the condition of the markets.
From time to time,
we examine opportunities to acquire additional mining assets and
businesses. Any acquisition that we may choose to complete may be
of significant size, may change the scale of our business and
operations, and/or may expose us to new geographic, political,
operating, financial and geological risks. Any acquisition would be
accompanied by risks. For example, there may be a significant
change in commodity prices after we have committed to complete the
transaction and established the purchase price or share exchange
ratio; a material ore body may prove to be below expectations; we
may have difficulty integrating and assimilating the operations and
personnel of an acquired company, realizing anticipated synergies
and maximizing the financial and strategic position of the combined
enterprise, and maintaining uniform standards, policies and
controls across the organization; the integration of the acquired
business or assets may disrupt our ongoing business and
relationships with employees, customers, suppliers and contractors;
and the acquired business or assets may have unknown liabilities
which may be significant. There can be no assurance that we would
be successful in overcoming these risks or any other problems
encountered in connection with such acquisitions.
We are
dependent on information technology systems, which are subject to
certain risks.
We depend upon
information technology systems in a variety of ways throughout our
operations. Any significant breakdown of those systems,
whether through virus, cyber-attack, security breach, theft, or
other destruction, invasion or interruption, or unauthorized access
to our systems, could negatively impact our business and
operations. To the extent that such invasion, cyber-attack or
similar security breach results in disruption to our operations,
loss or disclosure of, or damage to, our data and particularly our
confidential or proprietary information, our reputation, business,
results of operations and financial condition could be materially
adversely affected. Our systems, internal controls and
insurance for protecting against such cyber security risks may be
insufficient. Although to date we have experienced no
such attack resulting in material losses, we may suffer such losses
at any time in the future. We may be required to expend
significant additional resources to continue to modify and enhance
our protective measures or to investigate, restore or remediate any
information technology security vulnerabilities.
We have never paid dividends and do not currently expect to do so
in the near future.
We have not paid
dividends on our Common Shares since incorporation and do not
anticipate doing so in the foreseeable future. Payments of any
dividends will be at the discretion of our Board of Directors
(“Board”) after considering many factors, including our
financial condition and current and anticipated cash
needs.
Failure to meet the listing maintenance criteria of the NYSE
American may result in the delisting of our Common
Shares, which could result in lower trading volumes and liquidity,
lower prices of our Common Shares and make it more difficult for us
to raise capital.
Our Common Shares
are listed on the NYSE American and we are subject to its continued
listing requirements, including maintaining certain share prices
and a minimum amount of shareholder equity. The market price of our
Common Shares has been and may continue to be subject to
significant fluctuation. If we are unable to comply with the NYSE
American continued listing requirements, including its trading
price requirements, our Common Shares may be suspended from trading
on and/or delisted from the NYSE American. Although we have not
been notified of any delisting proceedings, there is no assurance
that we will not receive such notice in the future or that we will
be able to then comply with NYSE American listing standards. The
delisting of our Common Shares from the NYSE American may
materially impair our shareholders’ ability to buy and sell
our Common Shares and could have an adverse effect on the market
price of, and the efficiency of the trading market for, our Common
Shares. In addition, the delisting of our Common Shares could
significantly impair our ability to raise capital. Further, if our
Common Shares were delisted and determined to be a “penny
stock,” a broker-dealer may find it more difficult to trade
our Common Shares and an investor may find it more difficult to
acquire or dispose of our Common Shares on the secondary
market.
U.S. Federal Income Tax Consequences to U.S. Shareholders under the
Passive Foreign Investment Company Rules.
Investors in the
Common Shares of Ur-Energy that are U.S. taxpayers (referred to as
a U.S. shareholder) should be aware that we may be a
“passive foreign investment company” (a
“PFIC”) for the period ended December 31, 2019 and may
be a PFIC in subsequent years. If we are a PFIC for any year during
a U.S. shareholder’s holding period, then such U.S.
shareholders generally will be subject to a special, highly adverse
tax regime with respect to so-called “excess
distributions” received on our Common Shares. Gain realized
upon a disposition of our Common Shares (including upon certain
dispositions that would otherwise be tax-free) also will be treated
as an excess distribution. Excess distributions are punitively
taxed and are subject to additional interest
charges. Additional special adverse rules also apply to U.S.
shareholders who own our Common Shares if we are a PFIC and have a
non-U.S. subsidiary that is also a PFIC (a “lower-tier
PFIC”).
A U.S. shareholder
may make a timely "qualified electing fund" election (“QEF
election”) or a "mark-to-market" election with respect to our
Common Shares to mitigate the adverse tax rules that apply to
PFICs, but these elections may accelerate the recognition of
taxable income and may result in the recognition of ordinary
income. To be timely, a QEF election generally must be made for the
first year in the U.S. shareholder’s holding period in which
Ur-Energy is a PFIC. A U.S. shareholder may make a QEF
election only if the U.S. shareholder receives certain information
(known as a “PFIC annual information statement”) from
us annually. A U.S. shareholder may make a QEF election with
respect to a lower-tier PFIC only if it receives a PFIC annual
information statement with respect to the lower-tier PFIC.
The mark-to-market election is available only if our Common
Shares are considered regularly traded on a qualifying exchange,
which we cannot assure will be the case for years in which we may
be a PFIC. The mark-to-market election is not available for a
lower-tier PFIC.
We will use
commercially reasonable efforts to make available to U.S.
shareholders, upon their written request (a) timely and
accurate information as to our status as a PFIC and the PFIC status
of any subsidiary in which Ur-Energy owns more than 50% of such
subsidiary’s total aggregate voting power, and (b) for each
year in which Ur-Energy determines that it is a PFIC, upon written
request, a PFIC annual information statement with respect to
Ur-Energy and with respect to each such subsidiary that we
determine is a PFIC.
A U.S. shareholder
may not make a QEF election with respect to Warrants. As a result,
if we are a PFIC at any time when a U.S. shareholder owns Warrants,
the U.S. shareholder generally will not be able to make a normal
QEF election with respect to the Common Shares acquired upon
exercise of such Warrants. Such a U.S. shareholder could, however,
make a special “deemed sale” election with respect to
the Common Shares under which the U.S. shareholder would recognize
inherent gain in the Common Shares acquired on exercise of such
Warrants as an excess distribution at the time of the deemed sale
election. Such a deemed sale election generally can be made only if
the U.S. shareholder owns Common Shares on the first day of our
taxable year in which the election is to be effective.
A U.S. shareholder
also may not make a mark-to-market election with respect to
Warrants. A U.S. shareholder may be able to make a mark-to-market
election with respect to Common Shares acquired upon exercise of
such Warrants; however, this election would require the U.S.
shareholder to recognize inherent gain in the Common Shares
acquired on exercise of the Warrants as an excess distribution at
the time of the election.
Special adverse
rules that impact certain estate planning goals could apply to our
Common Shares if we are a PFIC. Each U.S. shareholder should
consult its own tax advisor regarding the U.S. federal, state and
local consequences of the PFIC rules, and regarding the QEF and
mark-to-market elections.
RATIO OF EARNINGS TO FIXED
CHARGES
We did not have
earnings for the three months ended March 31, 2020, or for the
years ended 2019, 2016, and 2015. Accordingly, we have no ratio of
earnings to fixed charges to illustrate for such
periods.
(Dollar amounts in
thousands)
|
|
THREE
MONTHS
ENDED
|
|
|
FISCAL YEAR ENDED
DECEMBER 31
|
|
|
|
MARCH
31, 2020
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Adjusted
Earnings/Deficiency
|
|
|
(3,301
|
)
|
|
|
(6,954
|
)
|
|
|
6,213
|
|
|
|
2,045
|
|
|
|
(514
|
)
|
|
|
(1,033
|
)
|
Fixed
Charges
|
|
|
340
|
|
|
|
1,464
|
|
|
|
1,679
|
|
|
|
1,969
|
|
|
|
2,513
|
|
|
|
3,077
|
|
Earnings/Deficiency
|
|
|
(3,641
|
)
|
|
|
(8,418
|
)
|
|
|
4,534
|
|
|
|
76
|
|
|
|
(3,027
|
)
|
|
|
(4,110
|
)
|
Ratio of Earnings to
Fixed Charges
|
|
|
*
|
|
|
|
*
|
|
|
|
3.7
|
|
|
|
1.0
|
|
|
|
*
|
|
|
|
*
|
|
* Ratio was less
than 1.0.
Unless otherwise
specified in a prospectus supplement, the net proceeds from the
sale of the Securities will be used for general corporate purposes
and working capital. Each prospectus supplement will contain
specific information concerning the use of proceeds from that sale
of the Securities.
We will bear all of
the expenses of the offering of the Securities, and such expenses
will be paid out of our general funds, unless otherwise stated in
the applicable prospectus supplement.
We are registering
the Securities with an aggregate offering price not to exceed
$100,000,000, to be sold by the Company under a “shelf”
registration process. If we offer any of the Securities under this
prospectus we will amend or supplement this prospectus by means of
an accompanying prospectus supplement setting forth the specific
terms and conditions and other information about that offering as
is required or necessary.
We may offer and
sell all or a portion of the Securities covered by this prospectus
from time to time, in one or more or any combination of the
following transactions:
|
|
ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
|
|
|
block trades in which
the broker-dealer will attempt to sell the shares as agent, but may
position and resell a portion of the block as principal to
facilitate the transaction;
|
|
|
purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
|
an exchange
distribution in accordance with the rules of the applicable
exchange;
|
|
|
privately negotiated
transactions;
|
|
|
short sales effected
after the date the registration statement of which this prospectus
is a part is declared effective by the SEC;
|
|
|
through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
|
|
|
broker-dealers may
agree to sell a specified number of such shares at a stipulated
price per share;
|
|
|
sales “at the
market” to or through a market maker or into an existing
trading market, on an exchange or otherwise;
|
|
|
a combination of any
such methods of sale; and
|
|
|
any other method
permitted by applicable law.
|
We may sell the
Securities at prices then prevailing or related to the then current
market price or at negotiated prices. The offering price of the
Securities from time to time will be determined by us, and, at the
time of the determination, may be higher or lower than the market
price of our Common Shares on the TSX, NYSE American, or any other
exchange or market.
In connection with
the sale of the Securities or interests therein, we may enter into
hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the
Securities in the course of hedging the positions they assume. We
may also sell the Securities short and deliver these Securities to
close out their short positions, or loan or pledge the Securities
to broker-dealers that in turn may sell these Securities. We may
also enter into option or other transactions with broker-dealers or
other financial institutions or the creation of one or more
derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by
this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction).
In connection with
an underwritten offering, underwriters or agents may receive
compensation in the form of discounts, concessions or commissions
from us or from purchasers of the offered shares for whom they may
act as agents. In addition, underwriters may sell the shares to or
through dealers, and those dealers may receive compensation in the
form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as
agents. Any underwriters, broker-dealers or agents that participate
in the sale of the Common Shares or interests therein may be
“underwriters” within the meaning of Section 2(11) of
the Securities Act. Any discounts, commissions, concessions or
profit they earn on any resale of the shares may be underwriting
discounts and commissions under the Securities Act. We will bear
all of the expenses of the offering of Securities.
We may agree to
indemnify an underwriter, broker-dealer or agent against certain
liabilities related to the selling of the Securities, including
liabilities arising under the Securities Act.
Except for the At
Market Issuance Sales Agreement entered into in connection with
Ur-Energy’s ATM program, we have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Securities. Upon entering
into any material arrangement with an underwriter or broker-dealer
for the sale of the Securities through a block trade, special
offering, exchange distribution, secondary distribution or a
purchase by an underwriter or broker-dealer, we will file a
prospectus supplement, if required, pursuant to Rule 424(b) under
the Securities Act, disclosing certain material information,
including:
|
|
the name of the applicable
seller;
|
|
|
the Securities being
offered;
|
|
|
the terms of the
offering;
|
|
|
the names of the participating underwriters,
broker-dealers or agents;
|
|
|
any discounts, commissions or other compensation
paid to underwriters or broker-dealers and any discounts,
commissions or concessions allowed or reallowed or paid by any
underwriters to dealers;
|
|
|
the purchase price of the Securities and the
proceeds to be received from the sale;
and
|
|
|
other material terms of the
offering.
|
We are subject to
the applicable provisions of the Exchange Act and the rules and
regulations under the Exchange Act, including Regulation M. This
regulation may limit the timing of purchases and sales of any of
the Securities offered in this prospectus. The anti-manipulation
rules under the Exchange Act may apply to sales of Securities in
the market and to our activities.
To the extent
required, this prospectus may be amended and/or supplemented from
time to time to describe a specific plan of distribution. Instead
of selling the Securities under this prospectus, we may sell the
Common Shares in compliance with the provisions of Rule 144 under
the Securities Act, if available, or pursuant to other available
exemptions from the registration requirements of the Securities
Act.
With respect to the
sale of any Securities under this prospectus, the maximum
commission or discount to be received by any member of the
Financial Industry Regulatory Authority, Inc. or any independent
broker or dealer will not be greater than eight percent
(8%).
DESCRIPTION OF SENIOR AND SUBORDINATED DEBT
SECURITIES
The following
description, together with the additional information we include in
any applicable prospectus supplements, summarizes the material
terms and provisions of the debt securities that we may offer under
this prospectus. While the terms we have summarized below will
apply generally to any future debt securities we may offer, we will
describe the particular terms of any debt securities that we may
offer in more detail in the applicable prospectus supplement.
Because the terms of a specific series of debt securities may vary
from the general information that we have provided below, you
should rely on information in the applicable prospectus supplement
that varies from any information below.
We may issue senior
notes under a senior indenture to be entered into among us and a
trustee to be named in the senior indenture. We may issue
subordinated notes under a subordinated indenture to be entered
into among us and a trustee to be named in the subordinated
indenture. We have filed forms of these documents as exhibits to
the registration statement which includes this prospectus. We use
the term “indentures” to refer to both the senior
indenture and the subordinated indenture. Unless otherwise
specified in the applicable prospectus supplement, the indentures
will be qualified under the Trust Indenture Act of 1939 (the
“Trust Indenture Act”). We use the term
“trustee” to refer to either the senior trustee or the
subordinated trustee, as applicable. We urge you to read the
indenture applicable to your investment, because the indenture, and
not this section, defines your rights as a holder of debt
securities.
The following
summaries of material provisions of senior notes, subordinated
notes and the indentures are subject to, and qualified in their
entirety by reference to, the provisions of the indenture
applicable to a particular series of debt securities. Except as we
may otherwise indicate, the terms of the senior indenture and the
subordinated indenture are identical in all material
respects.
General
The senior debt
securities will have the same ranking as all of our other unsecured
and unsubordinated debt. The subordinated debt securities will be
unsecured and will be subordinated and junior to all senior
indebtedness.
The debt securities
may be issued in one or more separate series of senior debt
securities and/or subordinated debt securities. The prospectus
supplement relating to the particular series of debt securities
being offered will specify the particular amounts, prices and terms
of those debt securities. These terms may include:
|
|
the title of the debt
securities;
|
|
|
any limit upon the aggregate principal amount of
the debt securities;
|
|
|
the date or dates, or the method of determining
the dates, on which the debt securities will
mature;
|
|
|
the interest rate or rates of the debt
securities, or the method of determining those rates, the interest
payment dates and, for registered debt securities, the regular
record dates;
|
|
|
if a debt security is issued with original issue
discount, the yield to maturity;
|
|
|
the places where payments may be made on the debt
securities;
|
|
|
any mandatory or optional redemption provisions
applicable to the debt securities;
|
|
|
any sinking fund or analogous provisions
applicable to the debt securities;
|
|
|
whether and on what terms we will pay additional
amounts to holders of the debt securities that are not U.S. persons
in respect of any tax, assessment or governmental charge withheld
or deducted and, if so, whether and on what terms we will have the
option to redeem the debt securities rather than pay the additional
amounts;
|
|
|
whether the notes will be senior or
subordinated;
|
|
|
any terms for the attachment to the debt
securities of warrants, options or other rights to purchase or sell
our securities;
|
|
|
the portion of the principal amount of the debt
security payable upon the acceleration of maturity if other than
the entire principal amount of the debt
securities;
|
|
|
any deletions of, or changes or additions to, the
events of default or covenants applicable to the debt
securities;
|
|
|
if other than U.S. dollars, the currency or
currencies in which payments of principal, premium and/or interest
on the debt securities will be payable and whether the holder may
elect payment to be made in a different
currency;
|
|
|
the method of determining the amount of any
payments on the debt securities which are linked to an
index;
|
|
|
whether the debt securities will be issued in
fully registered form without coupons;
|
|
|
or any combination of these, and whether they
will be issued in the form of one or more global securities in
temporary or definitive form;
|
|
|
whether the debt securities will be convertible
into or exchangeable for Common Shares or other debt securities and
the conversion price or exchange ratio, the conversion or exchange
period and any other conversion or exchange
provisions;
|
|
|
any terms relating to the delivery of the debt
securities if they are to be issued upon the exercise of warrants;
and
|
|
|
any other specific terms of the debt
securities.
|
Unless otherwise
specified in the applicable prospectus supplement, (1) the debt
securities will be registered debt securities, and (2) debt
securities denominated in U.S. dollars will be issued, in the case
of registered debt securities, in denominations of $1,000 or an
integral multiple of $1,000. Debt securities may bear legends
required by applicable United States and Canadian federal tax law
and regulations.
If any of the debt
securities are sold for any foreign currency or currency unit or if
any payments on the debt securities are payable in any foreign
currency or currency unit, the prospectus supplement will contain
any restrictions, elections, tax consequences, specific terms and
other information with respect to the debt securities and the
foreign currency or currency unit.
Some of the debt
securities may be issued as original issue discount debt
securities. Original issue discount securities bear no interest
during all or a part of the time that these debt securities are
outstanding or bear interest at below-market rates and will be sold
at a discount below their stated principal amount at maturity. The
prospectus supplement will also contain special tax, accounting or
other information relating to original issue discount securities or
relating to other kinds of debt securities that may be offered,
including debt securities linked to an index or payable in
currencies other than U.S. dollars.
Exchange, Registration and
Transfer
Debt securities may
be transferred or exchanged at the corporate trust office of the
security registrar or at any other office or agency maintained by
us or on our behalf for these purposes, without the payment of any
service charge, except for any tax or governmental charges. The
senior trustee initially will be the designated security registrar
in the United States or Canada for the senior debt securities. The
subordinated trustee initially will be the designated security
registrar in the United States or Canada for the subordinated debt
securities.
In the event of any
redemption in part of any class or series of debt securities, we
will not be required to:
|
|
issue, register the transfer of, or exchange,
debt securities of any series between the opening of business 15
days before any selection of debt securities of that series to be
redeemed and the close of business on the day of mailing of the
relevant notice of redemption; or
|
|
|
register the transfer of, or exchange, any
registered debt security selected for redemption, in whole or in
part, except the unredeemed portion of any registered debt security
being redeemed in part.
|
Payment and Paying Agent
We will pay
principal, interest and any premium on fully registered securities
in the designated currency or currency unit at the office of a
designated paying agent.
Global Securities
A global security
represents one or any other number of individual debt securities.
Generally, all debt securities represented by the same global
securities will have the same terms. Each debt security issued in
book-entry form will be represented by a global security that we
deposit with and register in the name of a financial institution or
its nominee that we select. The financial institution that we
select for this purpose is called the depositary. Unless we specify
otherwise in the applicable prospectus supplement, The Depository
Trust Company, New York, New York, known as DTC, will be the
depositary for all debt securities that are issued in book-entry
form.
A global security
may not be transferred to or registered in the name of anyone other
than the depositary or its nominee, unless special termination
situations arise. As a result of these arrangements, the
depositary, or its nominee, will be the sole registered holder of
all debt securities represented by a global security, and investors
will be permitted to own only beneficial interests in a global
security. Beneficial interests must be held by means of an account
with a broker, bank or other financial institution that in turn has
an account either with the depositary or with another institution
that has an account with the depositary. Thus, an investor whose
security is represented by a global security will not be registered
holder of the debt security, but an indirect holder of a beneficial
interest in the global security.
Definitive Global
Securities
Book-Entry Securities. Debt securities
of a series represented by a definitive global registered debt
security and deposited with or on behalf of a depositary in the
United States will be represented by a definitive global debt
security registered in the name of the depositary or its nominee.
Upon the issuance of a global debt security and the deposit of the
global debt security with the depositary, the depositary will
credit, on its book-entry registration and transfer system, the
respective principal amounts represented by that global debt
security to the accounts of participating institutions that have
accounts with the depositary or its nominee. The accounts to be
credited shall be designated by the underwriters or agents for the
sale of book-entry debt securities or by us, if these debt
securities are offered and sold directly by us.
Ownership of
book-entry debt securities will be limited to participants or
persons that may hold interests through participants. In addition,
ownership of book-entry debt securities will be evidenced only by,
and the transfer of that ownership will be effected only through,
records maintained by the depositary or its nominee for the
definitive global debt security or by participants or persons that
hold through participants.
So long as the
depositary or its nominee is the registered owner of a global debt
security, that depositary or nominee, as the case may be, will be
considered the sole owner or holder of the book-entry debt
securities represented by that global debt security for all
purposes under the indenture. Payment of principal of, and premium
and interest, if any, on, book-entry debt securities will be made
to the depositary or its nominee as the registered owner or the
holder of the global debt security representing the book-entry debt
securities. Owners of book-entry debt securities:
|
|
will not be entitled to have the debt securities
registered in their names;
|
|
|
will not be entitled to receive physical delivery
of the debt securities in definitive form;
and
|
|
|
will not be considered the owners or holders of
the debt securities under the indenture.
|
The laws of some
jurisdictions require that purchasers of securities take physical
delivery of securities in definitive form. These laws impair the
ability to purchase or transfer book-entry debt
securities.
We expect that the
depositary for book-entry debt securities of a series, upon receipt
of any payment of principal of, or premium or interest, if any, on,
the related definitive global debt security, will immediately
credit participants’ accounts with payments in amounts
proportionate to their respective beneficial interests in the
principal amount of the global debt security as shown on the
records of the depositary. We also expect that payments by
participants to owners of beneficial interests in a global debt
security held through those participants will be governed by
standing instructions and customary practices, and will be the
responsibility of those participants.
Consolidation, Merger, Sale or
Conveyance
We may, without the
consent of the holders of the debt securities, merge into,
amalgamate or consolidate with any other person, or convey or
transfer all or substantially all of our properties and assets to
another person provided that the successor assumes on the same
terms and conditions all the obligations under the debt securities
and the indentures.
The remaining or
acquiring person will be substituted for us in the indentures with
the same effect as if it had been an original party to the
indenture. A prospectus supplement will describe any other
limitations on our ability to merge into, amalgamate, consolidate
with, or convey or transfer all or substantially all of our
properties and assets to, another person.
Satisfaction and Discharge;
Defeasance
We may be
discharged from our obligations on the debt securities of any class
or series that have matured or will mature or be redeemed within
one year if we deposit with the trustee enough cash and/or U.S. or
Canadian government obligations to pay all the principal, interest
and any premium due to the stated maturity or redemption date of
the debt securities and comply with the other conditions set forth
in the applicable indenture, which will described in the applicable
prospectus supplement. The principal conditions that we must
satisfy to discharge our obligations on any debt securities are (1)
pay all other sums payable with respect to the applicable series of
debt securities and (2) deliver to the trustee an officers’
certificate and an opinion of counsel that state that the required
conditions have been satisfied.
Each indenture
contains a provision that permits us to elect to be discharged from
all of our obligations with respect to any class or series of debt
securities then outstanding. However, even if we affect a legal
defeasance, some of our obligations will continue, including
obligations to:
|
|
maintain and apply money in the defeasance
trust,
|
|
|
register the transfer or exchange of the debt
securities,
|
|
|
replace mutilated, destroyed, lost or stolen debt
securities, and
|
|
|
maintain a registrar and paying agent in respect
of the debt securities.
|
The indentures
specify the types of U.S. or Canadian government obligations that
we may deposit, which will be described in the applicable
prospectus supplement.
Events of Default, Notice and
Waiver
Except as may be
set forth in the applicable prospectus supplement, each indenture
defines an event of default with respect to any class or series of
debt securities as one or more of the following
events:
|
|
failure to pay interest on any debt security of
the class or series for 90 days when
due;
|
|
|
failure to pay the principal or any premium on
any debt securities of the class or series when
due;
|
|
|
failure to make any sinking fund payment when
due;
|
|
|
failure to perform any other covenant in the debt
securities of the series or in the applicable indenture with
respect to debt securities of the series for 90 days after being
given notice; and
|
|
|
occurrence of an event of bankruptcy, insolvency
or reorganization set forth in the
indenture.
|
An event of default
for a particular class or series of debt securities does not
necessarily constitute an event of default for any other class or
series of debt securities issued under an indenture.
If any event of
default as to a series of debt securities occurs and is continuing,
the trustee or the holders of at least 25% in principal amount of
the then outstanding debt securities of that series may declare all
the debt securities to be due and payable immediately.
The holders of a
majority in aggregate principal amount of the debt securities of
that series then outstanding by notice to the trustee may on behalf
of the holders of all of the debt securities of that series waive
any existing default or event of default and its consequences under
the applicable indenture except a continuing default or event of
default in the payment of interest on, or the principal of, the
debt securities of that series.
Each indenture
requires the trustee to, within 90 days after the occurrence of a
default known to it with respect to any outstanding series of debt
securities, give the holders of that class or series notice of the
default if uncured or not waived. However, the trustee may withhold
this notice if it determines in good faith that the withholding of
this notice is in the interest of those holders, except that the
trustee may not withhold this notice in the case of a payment
default. The term “default” for the purpose of this
provision means any event that is, or after notice or lapse of time
or both would become, an event of default with respect to debt
securities of that series.
Other than the duty
to act with the required standard of care during an event of
default, a trustee is not obligated to exercise any of its rights
or powers under the applicable indenture at the request or
direction of any of the holders of debt securities, unless the
holders have offered to the trustee reasonable security and
indemnity. Each indenture provides that the holders of a majority
in principal amount of outstanding debt securities of any series
may direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or exercising any trust or
other power conferred on the trustee if the direction would not
conflict with any rule of law or with the indenture. However, the
trustee may take any other action that it deems proper which is not
inconsistent with any direction and may decline to follow any
direction if it in good faith determines that the directed action
would involve it in personal liability.
Each indenture
includes a covenant that we will file annually with the trustee a
certificate of no default, or specifying any default that
exists.
Modification of the
Indentures
We and the
applicable trustee may modify an indenture without the consent of
the holders for limited purposes, including adding to our covenants
or events of default, establishing forms or terms of debt
securities, curing ambiguities and other purposes which do not
adversely affect the holders in any material respect.
We and the
applicable trustee may make modifications and amendments to an
indenture with the consent of the holders of a majority in
principal amount of the outstanding debt securities of all affected
series. However, without the consent of each affected holder, no
modification may:
|
|
change the stated maturity of any debt
security;
|
|
|
reduce the principal, premium, if any, or rate of
interest on any debt security; or
|
|
|
reduce the percentage of holders of outstanding
debt securities of any series required to consent to any
modification, amendment or waiver under the
indenture.
|
Notices
Notice to holders
of registered debt securities will be given by mail to the
addresses of those holders as they appear in the security
register.
Replacement of Securities
Coupons
Debt securities or
coupons that have been mutilated will be replaced by us at the
expense of the holder upon surrender of the mutilated debt security
or coupon to the security registrar. Debt securities or coupons
that become destroyed, stolen, or lost will be replaced by us at
the expense of the holder upon delivery to the security registrar
of evidence of its destruction, loss, or theft satisfactory to us
and the security registrar. In the case of a destroyed, lost, or
stolen debt security or coupon, the holder of the debt security or
coupon may be required to provide reasonable security or indemnity
to the trustee and us before a replacement debt security will be
issued.
Concerning the Trustees
We may from time to
time maintain lines of credit, and have other customary banking
relationships, with any of the trustees.
Senior Debt Securities
The senior debt
securities will rank equally with all of our other unsecured and
non-subordinated debt.
Certain Covenants in the Senior
Indenture
The prospectus
supplement relating to a series of senior debt securities will
describe any material covenants in respect of that series of senior
debt securities.
Subordinated Debt
Securities
The subordinated
debt securities will be unsecured. The subordinated debt securities
will be subordinate in right of payment to all senior indebtedness.
In addition, claims of creditors generally will have priority with
respect to the assets and earnings of our subsidiaries over the
claims of our creditors, including holders of the subordinated debt
securities, even though those obligations may not constitute senior
indebtedness. The subordinated debt securities, therefore, will be
effectively subordinated to creditors, including trade creditors
with regard to the assets of our subsidiaries. Creditors of our
subsidiaries include trade creditors, secured creditors and
creditors holding guarantees issued by our
subsidiaries.
Unless otherwise
specified in a prospectus supplement, senior indebtedness shall
mean the principal of, premium, if any, and interest on, all
indebtedness for money borrowed by us and any deferrals, renewals,
or extensions of any senior indebtedness. Indebtedness for money
borrowed by us includes all indebtedness of another person for
money borrowed that we guarantee, other than the subordinated debt
securities, whether outstanding on the date of execution of the
subordinated indenture or created, assumed or incurred after the
date of the subordinated indenture. However, senior indebtedness
will not include any indebtedness that expressly states to have the
same rank as the subordinated debt securities or to rank junior to
the subordinated debt securities. Senior indebtedness will also not
include any of our obligations to our subsidiaries.
The senior debt
securities constitute senior indebtedness under the subordinated
indenture. A prospectus supplement will describe the relative
ranking among different series of subordinated debt
securities.
Unless otherwise
specified in a prospectus supplement, we may not make any payment
on the subordinated debt securities and may not purchase, redeem,
or retire any subordinated debt securities if any senior
indebtedness is not paid when due or the maturity of any senior
indebtedness is accelerated as a result of a default, unless the
default has been cured or waived and the acceleration has been
rescinded or the senior indebtedness has been paid in full. We may,
however, pay the subordinated debt securities without regard to
these limitations if we or the subordinated trustee receive written
notice approving the payment from the representatives of the
holders of senior indebtedness with respect to which either of the
events set forth above has occurred and is continuing. Unless
otherwise specified in a prospectus supplement, during the
continuance of any default with respect to any designated senior
indebtedness under which its maturity may be accelerated
immediately without further notice or the expiration of any
applicable grace periods, we may not pay the subordinated debt
securities for 90 days after the receipt by the subordinated
trustee of written notice of a default from the representatives of
the holders of designated senior indebtedness. If the holders of
designated senior indebtedness or the representatives of those
holders have not accelerated the maturity of the designated senior
indebtedness at the end of the 90 day period, we may resume
payments on the subordinated debt securities. Only one notice may
be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to designated senior indebtedness
during that period.
In the event that
we pay or distribute our assets to creditors upon a total or
partial liquidation, dissolution or reorganization of our company
or our property, the holders of senior indebtedness will be
entitled to receive payment in full of the senior indebtedness
before the holders of subordinated debt securities are entitled to
receive any payment. Until the senior indebtedness is paid in full,
any payment or distribution to which holders of subordinated debt
securities would be entitled but for the subordination provisions
of the subordinated indenture will be made to holders of the senior
indebtedness as their interests may appear. However, holders of
subordinated debt securities will be permitted to receive
distributions of shares and debt securities subordinated to the
senior indebtedness. If a distribution is made to holders of
subordinated debt securities that, due to the subordination
provisions, should not have been made to them, the holders of
subordinated debt securities are required to hold it in trust for
the holders of senior indebtedness, and pay it over to them as
their interests may appear.
If payment of the
subordinated debt securities is accelerated because of an event of
default, either we or the subordinated trustee will promptly notify
the holders of senior indebtedness or the representatives of the
holders of the acceleration. We may not pay the subordinated debt
securities until five business days after the holders or the
representatives of the senior indebtedness receive notice of the
acceleration. Afterwards, we may pay the subordinated debt
securities only if the subordination provisions of the subordinated
indenture otherwise permit payment at that time.
As a result of the
subordination provisions contained in the subordinated indenture,
in the event of insolvency, our creditors who are holders of senior
indebtedness may recover more, ratably, than the holders of
subordinated debt securities. In addition, our creditors who are
not holders of senior indebtedness may recover less, ratably, than
holders of senior indebtedness and may recover more, ratably, than
the holders of subordinated indebtedness.
The prospectus
supplement relating to a series of subordinated debt securities
will describe any material covenants in respect of any series of
subordinated debt securities.
Conversion or Exchange
We may issue debt
securities that we may convert or exchange into Common Shares or
other securities, property or assets. If so, we will describe the
specific terms on which the debt securities may be converted or
exchanged in the applicable prospectus supplement. The conversion
or exchange may be mandatory, at your option, or at our option. The
applicable prospectus supplement will describe the manner in which
the Common Shares or other securities, property or assets you would
receive would be issued or delivered.
DESCRIPTION OF COMMON SHARES
Our authorized
share capital consists of an unlimited number of Common Shares
without par value. As at May 14, 2020 we had 160,478,059 Common
Shares outstanding.
Dividend Rights
Holders of Common
Shares are entitled to receive such dividends as may be declared
from time to time by our Board, in its discretion, out of funds
legally available therefore.
Voting Rights
Holders of Common
Shares are entitled to one vote for each share held of record on
all matters to be acted upon by the shareholders.
Election of Directors
The Company has
adopted a majority voting policy for the election of directors at
uncontested meetings which can be viewed on our website
www.ur-energy/corporategovernance.
The policy provides that, in an uncontested election, each director
will be elected by a majority of the votes cast with respect to
that director’s election. Votes will not be deemed cast if no
authority or discretion is given (for example, a broker non-vote,
failure to vote). If a director does not receive a majority (50% +
1) of the votes cast as to his election, he will forthwith submit
to the Board his resignation and shall not participate in any
meeting of the Board or any of its committees while the resignation
is considered. The Corporate Governance and Nominating Committee
(the “Committee”) will expeditiously consider the
candidate’s resignation and make recommendation to the Board
whether to accept it. In considering the candidate’s
resignation, the Committee and the Board shall only refuse to
accept such resignation if there are exceptional
circumstances.
Liquidation
Upon liquidation,
dissolution or winding up of the Company, holders of Common Shares
are entitled to receive pro rata the assets of the Company, if any,
remaining after payments of all debts and liabilities. All of the
Common Shares rank equally as to participation in a distribution of
our assets on a liquidation, dissolution or winding-up of the
Company and the entitlement to dividends.
Redemption
No shares have been
issued subject to call or assessment. There are no
pre-emptive or conversion rights and no provisions for redemption
or purchase for cancellation, surrender, or sinking or purchase
funds.
Advance Notice By-Law
By-Law No. 2
(Advance Notice) was approved by our Board on February 25, 2016 and
later approved by our shareholders at Ur-Energy’s annual and
special meeting of shareholders on May 5, 2016. The Advance
Notice By-Law requires shareholders to provide the
Company with advanced notice of persons the shareholder intends to
nominate for election to the Board. The Advance
Notice By-Law fixes a deadline by which director
nominations must be submitted to the Company prior to any annual or
special meeting of shareholders and sets forth the information that
a shareholder must include in the notice to the Company for it to
be in proper written form.
In the case of an
annual meeting of shareholders, notice to the Company must be made
not less than thirty (30) days prior to the date of the annual
meeting; provided, however, that if the first public
announcement of the date of the annual meeting is less than fifty
(50) days prior to the meeting, notice must be made not later than
the tenth (10th) day following such public
announcement.
In the case of a
special meeting (which is not also an annual meeting) of
shareholders called for the purpose of electing directors, notice
to the Company must be made not later than the close of business on
the fifteenth (15th) day following the day on which the first
public announcement of the date of the special meeting was
made.
Other Provisions
Provisions as to
the modification, amendment or variation of the rights attached to
the Common Shares are contained in our articles and the
Canada Business Corporations
Act. Generally speaking, substantive changes to the share
capital require the approval of the shareholders by special
resolution (at least two-thirds of the votes cast).
General
All outstanding
Common Shares are, and the Common Shares offered by this prospectus
or obtainable upon exercise or conversion of other securities
offered hereby, if issued in the manner described in this
prospectus and the applicable prospectus supplement, will be, fully
paid and non-assessable.
You should read the
prospectus supplement relating to any offering of Common Shares, or
of securities convertible, exchangeable or exercisable for Common
Shares, for the terms of the offering, including the number of
Common Shares offered, any initial offering price and market prices
relating to the Common Shares.
This section is a
summary and may not describe every aspect of our Common Shares that
may be important to you. We urge you to read applicable provisions
of the Canada Business
Corporations Act and our Articles of Continuance and
Articles of Amendment, because they, and not this description,
define your rights as a holder of our Common Shares. See
“Where You Can Find More
Information” for information on how to obtain copies
of these documents.
We may issue
Warrants for the purchase of debt securities, Common Shares or
other securities. Warrants may be issued independently or together
with debt securities, Common Shares or other securities offered by
any prospectus supplement and may be attached to or separate from
any such offered Securities. Series of Warrants may be issued under
a separate warrant agreement entered into between us and a bank or
trust company, as warrant agent, as will be set forth in the
prospectus supplement relating to the particular issue of Warrants.
The warrant agent would act solely as our agent in connection with
the Warrants and would not assume any obligation or relationship of
agency or trust for or with any holders of Warrants or beneficial
owners of Warrants.
You should refer to
the provisions of the warrant agreement that will be filed with the
SEC and any other applicable securities commissions or similar
regulatory authorities in connection with the offering of Warrants
for the complete terms of the warrant agreement.
Prior to the
exercise of any Warrants, holders of such Warrants will not have
any rights of holders of the securities purchasable upon such
exercise, including the right to receive payments of dividends or
the right to vote such underlying securities.
As specified in the
applicable prospectus supplement, we may issue units consisting of
one or more debt securities, Common Shares, Warrants or any
combination of such securities. In addition, the prospectus
supplement relating to units will describe the terms of any units
we issue, including as applicable:
|
|
the designation and terms of the units and the
securities included in the units;
|
|
|
any provision for the issuance, payment,
settlement, transfer or exchange of the
units;
|
|
|
the date, if any, on and after which the units
may be transferable separately;
|
|
|
whether we will apply to have the units traded on
a securities exchange or securities quotation
system;
|
|
|
any material Canadian and/or United States
federal income tax consequences; and
|
|
|
how, for Canadian and/or United States federal
income tax purposes, the purchase price paid for the units is to be
allocated among the component
securities.
|
We may issue rights
to purchase debt securities or Common Shares. These rights may be
issued independently or together with any other security offered
hereby and may or may not be transferable by the shareholder
receiving the rights in such offering. In connection with any
offering of such rights, we may enter into a standby arrangement
with one or more underwriters or other purchasers pursuant to which
the underwriters or other purchasers may be required to purchase
any securities remaining unsubscribed for after such
offering.
Each series of
rights will be issued under a separate rights agreement which we
will enter into with a bank or trust company, as rights agent, all
as set forth in the applicable prospectus supplement. The rights
agent will act solely as our agent in connection with the
certificates relating to the rights and will not assume any
obligation or relationship of agency or trust with any holders of
rights certificates or beneficial owners of rights. We will file
the rights agreement and the rights certificates relating to each
series of rights with the SEC, and incorporate them by reference as
an exhibit to the registration statement of which this prospectus
is a part on or before the time we issue a series of
rights.
The applicable
prospectus supplement will describe the specific terms of any
offering of rights for which this prospectus is being delivered,
including the following:
|
|
the date of determining the shareholders entitled
to the rights distribution;
|
|
|
the number of rights issued or to be issued to
each shareholder;
|
|
|
the exercise price payable for each share of debt
securities, common shares, or other securities upon the exercise of
the rights;
|
|
|
the number and terms of the shares of debt
securities, common shares, or other securities which may be
purchased per each right;
|
|
|
the extent to which the rights are
transferable;
|
|
|
the date on which the holder’s ability to
exercise the rights shall commence, and the date on which the
rights shall expire;
|
|
|
the extent to which the rights may include an
over-subscription privilege with respect to unsubscribed
securities;
|
|
|
if applicable, the material terms of any standby
underwriting or purchase arrangement entered into by us in
connection with the offering of such rights;
and
|
|
|
any other terms of the rights, including the
terms, procedures, conditions and limitations relating to the
exchange and exercise of the rights.
|
The description in
the applicable prospectus supplement of any rights that we may
offer will not necessarily be complete and will be qualified in its
entirety by reference to the applicable rights certificate, which
will be filed with the SEC.
DENOMINATIONS, REGISTRATION AND
TRANSFER
Other than in the
case of book-entry-only Securities, Securities may be presented for
registration of transfer (with the form of transfer endorsed
thereon duly executed) in the city specified for such purpose at
the office of the registrar or transfer agent designated by us for
such purpose with respect to any issue of Securities referred to in
a prospectus supplement. No service charge will be made for any
transfer, conversion or exchange of the Securities but we may
require payment of a sum to cover any transfer tax or other
governmental charge payable in connection therewith. Such transfer,
conversion or exchange will be effected upon such registrar or
transfer agent being satisfied with the documents of title and the
identity of the person making the request. If a prospectus
supplement refers to any registrar or transfer agent designated by
us with respect to any issue of Securities, we may at any time
rescind the designation of any such registrar or transfer agent and
appoint another in its place or approve any change in the location
through which such registrar or transfer agent acts.
In the case of
book-entry-only Securities, a global certificate or certificates
representing the Securities will be held by a designated depository
for its participants. The Securities must be purchased or
transferred through such participants, which includes securities
brokers and dealers, banks and trust companies. The depository will
establish and maintain book-entry accounts for its participants
acting on behalf of holders of the Securities. The interests of
such holders of Securities will be represented by entries in the
records maintained by the participants. Holders of Securities
issued in book-entry-only form will not be entitled to receive a
certificate or other instrument evidencing their ownership thereof,
except in limited circumstances. Each holder will receive a
customer confirmation of purchase from the participants from which
the Securities are purchased in accordance with the practices and
procedures of that participant.
CERTAIN CANADIAN FEDERAL INCOME TAX
CONSIDERATIONS
Non-Residents of Canada
The following is a
general summary of the principal Canadian federal income tax
considerations generally applicable under Income Tax Act (Canada) (the “Tax
Act”) to a holder who acquires Common Shares or Warrants as
beneficial owner pursuant to the prospectus and who, at all
relevant times, for the purposes of the Tax Act, holds such Common
Shares or Warrants as capital property, deals at arm’s length
with the Company, is not affiliated with the Company and, for
purposes of the Tax Act, is not, and is not deemed to be, a
resident of Canada and has not and will not use or hold or be
deemed to use or hold the Common Shares or Warrants in or in the
course of carrying on business in Canada (a “Non-Resident
Holder”). Special rules, which are not discussed below, may
apply to a non-resident of Canada that is an insurer which carries
on business in Canada and elsewhere. Such Non-Residents Holders
should consult their own tax advisors.
The Common Shares
and Warrants will generally be considered capital property to a
Non-Resident Holder unless either (i) the Non-Resident Holder holds
the Common Shares or Warrants in the course of carrying on a
business of buying and selling securities or (ii) the Non-Resident
Holder has acquired the Common Shares or Warrants in a transaction
or transactions considered to be an adventure in the nature of
trade.
The term “US
Holder,” for the purposes of this section, means a
Non-Resident Holder who, for purposes of the Canada-United States Tax Convention
(1980) as amended, (the “Convention”), is at all
relevant times a resident of the United States and is a
“qualifying person” within the meaning of the
Convention. In some circumstances, income or gains earned by
fiscally transparent entities (including limited liability
companies) will be eligible for benefits under the Convention. US
Holders are urged to consult with their own tax advisors to
determine their entitlement to benefits under the Convention based
on their particular circumstances.
This summary is
based on the current provisions of the Tax Act, the regulations
thereunder (the “Regulations”), the current provisions
of the Convention, and counsel’s understanding of the current
administrative policies and assessing practices of the Canada
Revenue Agency (the “CRA”) publicly available prior to
the date hereof.
This summary also
takes into account all specific proposals to amend the Tax Act and
Regulations publicly announced by or on behalf of the Minister of
Finance (Canada) prior to the date hereof (collectively, the
“Proposed Tax Amendments”). No assurances can be given
that the Proposed Tax Amendments will be enacted or will be enacted
as proposed. Other than the Proposed Tax Amendments, this summary
does not take into account or anticipate any changes in law or the
administration policies or assessing practice of CRA, whether by
judicial, legislative, governmental or administrative decision or
action, nor does it take into account provincial, territorial or
foreign income tax legislation or considerations, which may differ
significantly from those discussed herein.
This summary is of a general nature only and is
not intended to be, nor should it be construed to be, legal or tax
advice to any particular holder and no representations with respect
to the income tax consequences to any particular holder are made.
This summary is not exhaustive of all Canadian federal income tax
considerations. Accordingly, prospective investors in Common Shares
or Warrants should consult their own tax advisors with respect to
their own particular circumstances.
Currency Conversion
For purposes of the
Tax Act, all amounts relating to the acquisition, holding or
disposition of the Common Shares and Warrants, including dividends,
adjusted cost base and proceeds of disposition must be converted
into Canadian dollars using the rate of exchange quoted by the Bank
of Canada at noon on the date on which the amount first arose or
such other rate of exchange as is acceptable to the
CRA.
Exercise of Warrants
Upon the exercise
of a Warrant, there will be no income tax consequences for a
Non-Resident Holder. When a Warrant is exercised, the Non-Resident
Holder’s cost of the Common Share acquired thereby will be
the aggregate of the Non-Resident Holder’s adjusted cost base
of such Warrant and the exercise price paid for the Common Share.
The Non-Resident Holder’s adjusted cost base of the Common
Share so acquired will be determined by averaging such cost with
the adjusted cost base to the Non-Resident Holder of all Common
Shares held by the Non-Resident Holder as capital property
immediately prior to such acquisition.
Disposition of Common Shares and
Warrants
Generally, a
Non-Resident Holder will not be subject to tax under the Tax Act in
respect of any capital gain realized by such Non-Resident Holder on
a disposition of the Common Shares or Warrants, nor will capital
losses arising from the disposition be recognized under the Tax
Act, unless the Common Shares or Warrants constitute “taxable
Canadian property” (as defined in the Tax Act) of the
Non-Resident Holder at the time of disposition and the Non-Resident
Holder is not entitled to relief under an applicable income tax
treaty or convention. Provided the shares are listed on a
designated stock exchange (which currently includes the TSX and the
NYSE American) at the time of disposition, the Common Shares and
the Warrants generally will not constitute taxable Canadian
property of a Non-Resident Holder, unless at any time during the
60-month period immediately preceding the disposition the following
two conditions have been met concurrently: (i) the Non-Resident
Holder, persons with whom the Non-Resident Holder did not deal at
arm’s length, or the Non-Resident Holder together with all
such persons, owned or was considered to own 25% or more of the
issued shares of any class or series of shares of the capital stock
of the Company; and (ii) more than 50% of the fair market value of
the Common Shares was determined directly or indirectly from one or
any combination of real or immovable property situated in Canada,
“Canadian resource properties” (as determined in the
Tax Act), “timber resource properties” (as defined in
the Tax Act) or a options in respect of, or interests in, or civil
law rights in, such properties, whether or not such property
exists.
If the Common
Shares or Warrants are taxable Canadian property to a Non-Resident
Holder, any capital gain realized on the disposition or deemed
disposition of such shares, may not be subject to Canadian federal
income tax pursuant to the terms of an applicable income tax treaty
or convention between Canada and the country of residence of a
Non-Resident Holder.
A Non-Resident Holder whose shares are taxable
Canadian property should consult their own
advisors.
Dividends on Common Shares
Under the Tax Act,
dividends on shares paid or credited to a Non-Resident Holder will
be subject to Canadian withholding tax at the rate of 25% of the
gross amount of the dividends. This withholding tax may be reduced
pursuant to the terms of an applicable income tax treaty or
convention between Canada and the country of residence of a
Non-Resident Holder. Under the Convention, a US Holder will
generally be subject to Canadian withholding tax at a rate of 15%
of the amount of such dividends. In addition, under the Convention,
dividends may be exempt from Canadian non-resident withholding tax
if paid to certain US Holders that are qualifying religious,
scientific, literary, educational or charitable tax-exempt
organizations and qualifying trusts, companies, organizations or
arrangements operated exclusively to administer or provide pension,
retirement or employee benefits that are exempt from tax in the
United States and that have complied with specific administrative
procedures.
CERTAIN U.S. FEDERAL INCOME TAX
CONSIDERATIONS
The following is a
general summary of the anticipated U.S. federal income tax
considerations applicable to a U.S. Holder (as defined below)
arising from and relating to (i) the acquisition, ownership and
disposition of Common Shares or Warrants which the Company may
offer, either separately or in combination as a unit, from time to
time pursuant to terms described in an applicable prospectus
supplement, including Common Shares acquired upon exercise of a
Warrant; and (ii) the exercise, disposition, and lapse of Warrants
acquired in such an offering.
This summary is for
general information purposes only and does not purport to be a
complete analysis or listing of all potential U.S. federal income
tax considerations that may apply to a U.S. Holder as a result of
acquisition of Common Shares or Warrants pursuant to a prospectus
supplement. Additionally, this summary does not address the U.S.
federal tax consequences of acquiring, owning and disposing of the
other types of securities (including debt securities) that the
Company has the ability to offer based on this prospectus, and the
relevant prospectus supplement will contain additional or modified
disclosure concerning the anticipated U.S. federal income tax
consequences relevant to such other securities. Furthermore, this
summary does not take into account the individual facts and
circumstances of any particular U.S. Holder that may affect the
U.S. federal income tax considerations applicable to such U.S.
Holder at the time of a particular offering of Common Shares or
Warrants. Accordingly, this summary is not intended to be, and
should not be construed as, legal or U.S. federal income tax advice
with respect to any U.S. Holder. U.S. Holders should consult their
own tax advisors regarding the U.S. federal, U.S. state and local,
and foreign tax consequences relating to the acquisition, ownership
and disposition of Common Shares and/or Warrants in connection with
any offering pursuant to a prospectus supplement.
No ruling from the
U.S. Internal Revenue Service (the “IRS”) or legal
opinion has been requested, or will be obtained, regarding the
potential U.S. federal income tax considerations applicable to U.S.
Holders as discussed in this summary. This summary is not binding
on the IRS, and the IRS is not precluded from taking a position
that is different from, and contrary to, the positions taken in
this summary. In addition, because the authorities on which this
summary is based are subject to various interpretations, the IRS
and the U.S. courts could disagree with one or more of the
positions taken in this summary.
Scope of this Summary
Authorities
This summary is
based on the Internal Revenue Code of 1986, as amended (the
“Code”), regulations promulgated by the Department of
the Treasury (whether final, temporary or proposed)
(“Treasury Regulations”), U.S. court decisions,
published rulings and administrative positions of the IRS, and the
Convention, in each case, in effect as of the date of this
prospectus. Any of the authorities on which this summary is based
could be changed in a material and adverse manner, possibly with
retroactive effect, at any time, including between the date of this
prospectus and the date of any prospectus supplement pursuant to
which a U.S. Holder acquires Common Shares and/or Warrants.
Additionally, any such change could be applied on a retroactive
basis after a U.S. Holder has acquired Common Shares and/or
Warrants and could change the U.S. federal income tax
considerations described in this summary as applied to such U.S.
Holder in connection with a purchase of Common Shares and/or
Warrants pursuant to the applicable prospectus supplement. This
summary does not discuss the potential effects, whether adverse or
beneficial, of any proposed legislation that, if enacted, could be
applied on a retroactive basis.
U.S.
Holder
For purposes of
this section, a “U.S. Holder” is a beneficial owner of
Common Shares or Warrants acquired pursuant to a prospectus
supplement that is (a) an individual who is a citizen or resident
of the United States for U.S. federal income tax purposes; (b) a
corporation, or other entity treated as a corporation for U.S.
federal income tax purposes, that is created or organized in or
under the laws of the United States or any state in the United
States or the District of Columbia; (c) an estate if the income of
such estate is subject to U.S. federal income tax regardless of the
source of such income; or (d) a trust if (i) such trust has validly
elected to be treated as a U.S. person for U.S. federal income tax
purposes, or (ii) a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more
U.S. persons have the authority to control all substantial
decisions of such trust.
Non-U.S.
Holder
For purposes of
this summary, a “Non-U.S. Holder” is a beneficial owner
of Common Shares or Warrants that is neither a U.S. Holder nor a
partnership (or other “pass-through” entity). This
summary does not address the U.S. federal income tax considerations
applicable to Non-U.S. Holders relating to the acquisition,
ownership and disposition of Common Shares or Warrants.
Accordingly, Non-U.S. Holders should consult their own tax advisors
regarding the U.S. federal, U.S. state and local, and foreign tax
consequences (including the potential application of and operation
of the Convention or any other tax treaties) relating to the
acquisition, ownership, and disposition of Common Shares and
Warrants.
U.S. Holders
Subject to Special U.S. Federal Income Tax Rules Not
Addressed
This summary does
not address the U.S. federal income tax considerations applicable
to U.S. Holders that are subject to special provisions under the
Code, including (a) U.S. Holders that are tax-exempt organizations,
qualified retirement plans, individual retirement accounts or other
tax-deferred accounts; (b) U.S. Holders that are financial
institutions, underwriters, insurance companies, real estate
investment trusts or regulated investment companies or that are
broker-dealers, dealers, or traders in securities or currencies
that elect to apply a mark-to-market accounting method; (c) U.S.
Holders that have a “functional currency” other than
the U.S. dollar; (d) U.S. Holders that own Common Shares or
Warrants as part of a straddle, hedging transaction, conversion
transaction, constructive sale or other arrangement involving more
than one position; (e) U.S. Holders that acquired Common Shares or
Warrants in connection with the exercise of employee stock options
or otherwise as compensation for services; (f) U.S. Holders that
hold Common Shares or Warrants other than as a capital asset
(generally property held for investment purposes) within the
meaning of Section 1221 of the Code; or (g) U.S. Holders that own,
directly, indirectly or by attribution, 10% or more, by voting
power or value, of the outstanding shares of the Company. The
summary below also does not address the impact of an offering on
persons who are U.S. expatriates or former long-term residents of
the United States subject to Section 877 or 877A of the Code. U.S.
Holders and others that are subject to special provisions under the
Code, including U.S. Holders described immediately above, should
consult their own tax advisors regarding the U.S. federal income
tax consequences relating to the acquisition, ownership and
disposition of Common Shares and/or Warrants.
If an entity that
is classified as a partnership (or other “pass-through”
entity) for U.S. federal income tax purposes holds Common Shares or
Warrants, the U.S. federal income tax consequences applicable to
such partnership (or “pass-through” entity) and the
partners of such partnership (or owners of such
“pass-through” entity) generally will depend on the
activities of the partnership (or “pass-through”
entity) and the status of such partners (or owners). Partners of
entities that are classified as partnerships (and owners of other
“pass-through” entities) for U.S. federal income tax
purposes should consult their own tax advisors regarding the U.S.
federal income tax consequences relating to the acquisition,
ownership and disposition of Common Shares and/or
Warrants.
Tax
Consequences Other than U.S. Federal Income Tax Consequences Not
Addressed
This summary does
not address the U.S. state and local tax, U.S. estate, gift, and
generation-skipping tax, U.S. federal alternative minimum tax, or
foreign tax consequences to U.S. Holders relating to the
acquisition, ownership, and disposition of Common Shares and/or
Warrants. Each U.S. Holder should consult its own tax advisor
regarding the U.S. state and local tax, U.S. estate, gift, and
generation-skipping tax, U.S. federal alternative minimum tax and
foreign tax consequences relating to the acquisition, ownership,
and disposition of Common Shares and/or Warrants.
U.S. Federal Income Tax Consequences of Common
Shares and Warrants Offered as Part of a Unit
It is possible that
the Company will offer Common Shares and Warrants in combination to
be purchased as a unit. For U.S. federal income tax purposes, the
acquisition by a U.S. Holder of such a unit will be treated as the
acquisition of two separate instruments: an instrument consisting
of a Common Share or portion of such a Common Share and an
instrument consisting of a Warrant or portion of such a Warrant.
The purchase price for the unit will be allocated between these two
instruments in proportion to their relative fair market values at
the time the unit is purchased by the U.S. Holder. This allocation
of the purchase price for a unit will establish a U.S.
Holder’s initial tax basis for U.S. federal income tax
purposes in the Common Share and Warrant components that comprise
such unit.
If the Company
issues Common Shares and Warrants as part of a unit, it will inform
the U.S. Holder of the portion of the unit purchase price it
intends to allocate to each instrument in the applicable prospectus
supplement. However, the IRS will not be bound by the
Company’s allocation of the purchase price for units offered,
and therefore, the IRS or a U.S. court might not respect the
allocation provided by the Company. U.S. Holders should consult
their own tax advisors regarding the allocation of the purchase
price for any units purchased. A U.S. Holder’s holding period
for each instrument acquired in a unit will begin on the day after
the date of acquisition.
U.S. Federal Income Tax Consequences of the
Exercise and Disposition of Warrants
Exercise of
Warrants
A U.S. Holder
should not recognize gain or loss on the exercise of a Warrant and
related receipt of a Common Share (unless cash is received in lieu
of the issuance of a fractional Common Share). A U.S.
Holder’s initial tax basis in the Common Share received on
the exercise of a Warrant should be equal to the sum of (a) such
U.S. Holder’s tax basis in such Warrant plus (b) the exercise
price paid by such U.S. Holder on the exercise of such Warrant.
Subject to the PFIC rules discussed below, a U.S. Holder’s
holding period for the Common Share acquired on exercise of a
Warrant generally should begin on the day after the date on which
such U.S. Holder exercised the corresponding Warrant.
It is possible that
under the terms of the applicable prospectus supplement, a U.S.
Holder may be permitted to undertake a cashless exercise of a
Warrant into Common Shares. The U.S. federal income tax treatment
of a cashless exercise of Warrants into Common Shares is unclear,
and the tax consequences of a cashless exercise could differ from
the consequences upon the exercise of a Warrant described in the
preceding paragraph. U.S. Holders should consult their own tax
advisors regarding the U.S. federal income tax consequences of a
cashless exercise of Warrants, including whether taxable gain or
loss is recognized in connection with such a cashless exercise, if
a cashless exercise is permitted under the applicable prospectus
Supplement.
Disposition of
Warrants
A U.S. Holder will
recognize gain or loss on the sale or other taxable disposition of
a Warrant in an amount equal to the difference, if any, between (a)
the amount of cash plus the fair market value of any property
received and (b) such U.S. Holder’s tax basis in the Warrant
sold or otherwise disposed of. As noted below under “Sale or
Other Taxable Disposition of Common Shares,” such gain or
loss generally will be treated as “U.S. source” gain or
loss for purposes of U.S. foreign tax credit calculations. Subject
to the PFIC rules discussed below, any such gain or loss generally
should be a capital gain or loss (provided that the Common Shares
to be issued on the exercise of such Warrant would have been a
capital asset if acquired by the U.S. Holder). Any such gain or
loss will be long-term gain or loss if the Warrant disposed of was
held for more than one year.
Expiration of
Warrants without Exercise
Upon the lapse or
expiration of a Warrant a U.S. Holder will recognize a loss in an
amount equal to such U.S. Holder’s tax basis in the Warrant.
Any such loss generally will be a capital loss (provided that the
Common Shares to be issued on the exercise of such Warrant would
have been a capital asset if acquired by the U.S. Holder) and will
be long-term capital loss if the Warrant was held for more than one
year. Deductions for capital losses are subject to limitations
under the Code.
Certain
Adjustments to the Warrants
Under Section 305
of the Code, an adjustment to the number of Common Shares that are
to be issued on the exercise of Warrants purchased, or an
adjustment to the exercise price of such Warrants, may be treated
as a constructive distribution to a U.S. Holder of the Warrants if,
and to the extent that, such adjustment has the effect of
increasing such U.S. Holder’s proportionate interest in the
“earnings and profits” or assets of the Company,
depending on the circumstances of such adjustment (for example, if
such adjustment is to compensate for a distribution of cash or
other property to shareholders of the Company). Any constructive
distributions will generally be taxable (see a more detailed
discussion of the rules applicable to distributions made by the
Company at “Distributions on
Common Shares” below).
However,
adjustments to the exercise price of the Warrants made pursuant to
a bona fide reasonable adjustment formula that has the effect of
preventing the dilution of the interest of the holders of Warrants
will generally not be considered to result in a constructive
distribution to a U.S. Holder of Warrants. U.S. Holders should
carefully review the conversion rate adjustment provisions and
consult their own tax advisors with respect to the tax consequences
of any such adjustment.
U.S. Federal Income Tax Consequences of the
Acquisition, Ownership and Disposition of Common
Shares
Distributions
on Common Shares
Subject to the PFIC
rules discussed below, a U.S. Holder that receives a distribution,
including a constructive distribution, with respect to a Common
Share will be required to include the amount of such distribution
in gross income as a dividend (without reduction for any Canadian
income tax withheld from such distribution) to the extent of the
current or accumulated “earnings and profits” of the
Company, as computed for U.S. federal income tax purposes. To the
extent that a distribution exceeds the current and accumulated
“earnings and profits” of the Company, such
distribution will be treated first as a tax-free return of capital
to the extent of a U.S. Holder’s tax basis in the Common
Shares and thereafter as a gain from the sale or exchange of such
Common Shares (see “Sale or
Other Taxable Disposition of Common Shares” below).
However, the Company might not determine its current and
accumulated earnings and profits in accordance with U.S. federal
income tax principles, and U.S. Holders might therefore assume that
any distribution by the Company with respect to its Common Shares
will constitute dividend income. Dividends received on Common
Shares will not be eligible for the “dividends received
deduction”.
If we are not a
PFIC in the taxable year in which we pay a dividend or the
immediately preceding taxable year, dividends paid to a
non-corporate U.S. Holder in a taxable year will be taxed to such
U.S. Holder at the rates applicable to long-term capital gains as
“qualified dividend income” so long as our common
shares are readily tradable on an established securities exchange
within the United States or we are eligible for benefits under the
Convention. We will be eligible for benefits under the Convention
if the principal class of our shares is primarily and regularly
traded on one or more recognized stock exchanges. However, dividend
income will not be qualified dividend income (and will be taxed at
ordinary income rates) if (i) the U.S. Holder has not held its
common shares for at least 61 days during the 121-day period
beginning 60 days before the ex-dividend date; (ii) our common
shares are not readily tradable on an established securities
market; (iii) the company is a PFIC for the taxable year in which
the dividend is paid or in the preceding taxable year; or, (iv) we
are not eligible for benefits under the Convention and our stock is
not readily tradable on an established securities exchange within
the United States. If the Company is not a PFIC, dividends paid to
a U.S. Holder that do not result in qualified dividend income
generally will be taxed at ordinary income tax rates.
Sale or Other
Taxable Disposition of Common Shares
Subject to the PFIC
rules discussed below, upon the sale or other taxable disposition
of Common Shares, a U.S. Holder generally will recognize capital
gain or loss in an amount equal to the difference between (a) the
amount of cash plus the fair market value of any property received
and (b) its tax basis in such Common Shares sold or otherwise
disposed of. Such gain generally will be treated as “U.S.
source” for purposes of applying the U.S. foreign tax credit
rules unless the gain is subject to tax in Canada and is re-sourced
as “foreign source” under the Convention and such U.S.
Holder elects to treat such gain or loss as “foreign
source” (see a more detailed discussion at
“Foreign Tax
Credit” below).
Foreign Tax
Credit
A U.S. Holder who
pays (whether directly or through withholding) Canadian income tax
with respect to dividends paid on Common Shares generally may elect
to deduct or credit such tax. This election is made on a
year-by-year basis and applies to all foreign taxes paid (whether
directly or through withholding) by a U.S. Holder during a
year.
Complex limitations
apply to the foreign tax credit, including the general limitation
that the credit cannot exceed the proportionate share of a U.S.
Holder’s U.S. federal income tax liability that such U.S.
Holder’s “foreign source” taxable income bears to
such U.S. Holder’s worldwide taxable income. In applying this
limitation, a U.S. Holder’s various items of income and
deduction must be classified, under complex rules, as either
“foreign source” or “U.S. source.” In
addition, this limitation is calculated separately with respect to
specific categories of income. Dividends paid by the Company
generally will constitute “foreign source” income and
generally will be categorized as “passive category
income”. However, and subject to certain exceptions, a
portion of the dividends paid with respect to Common Shares will be
treated as U.S. source income for U.S. foreign tax credit purposes,
in proportion to its U.S. source earnings and profits, if United
States persons own, directly or indirectly, 50 percent or more of
the voting power or value of the foreign corporation’s
shares. A portion of any dividends paid with respect to Common
Shares may be treated as U.S. source income under these rules,
which may limit the ability of a U.S. Holder to claim a foreign tax
credit for any Canadian withholding taxes paid in respect of such
amount. Because the foreign tax credit rules are complex, U.S.
Holders should consult their own tax advisors regarding the foreign
tax credit rules, including the source of any dividends paid to
U.S. Holders.
Subject to certain
specific rules, foreign income and withholding taxes paid with
respect to any distribution in respect of stock in a PFIC should
qualify for the foreign tax credit. The rules relating to
distributions by a PFIC are complex, and a U.S. Holder should
consult with its own tax advisor with respect to any distribution
received from a PFIC.
Receipt of
Foreign Currency
The amount of any
distribution paid in foreign currency to a U.S. Holder in
connection with the ownership of Common Shares, or on the sale,
exchange or other taxable disposition of Common Shares or Warrants,
generally will be equal to the U.S. dollar value of such foreign
currency based on the exchange rate applicable on the date of
actual or constructive receipt (regardless of whether such foreign
currency is converted into U.S. dollars at that time). If the
foreign currency received is not converted into U.S. dollars on the
date of receipt, a U.S. Holder will have a basis in the foreign
currency equal to its U.S. dollar value on the date of receipt. A
U.S. Holder that receives foreign currency and converts such
foreign currency into U.S. dollars at a conversion rate other than
the rate in effect on the date of receipt may have a foreign
currency exchange gain or loss, which generally would be treated as
U.S. source ordinary income or loss for foreign tax credit
purposes. U.S. Holders should consult their own U.S. tax advisors
regarding the U.S. federal income tax consequences of receiving,
owning and disposing of foreign currency.
Surtax on
Unearned Income
A surtax at the
rate of 3.8% (the “unearned income Medicare contribution
tax”) is imposed on the “net investment income”
of certain U.S. citizens and resident aliens, and on the
undistributed ‘‘net investment income’’ of
certain estates and trusts, in each case in excess of a certain
threshold amount. Net investment income generally includes
interest, dividends, royalties, rents, gross income from a trade or
business involving “passive” activities, and net gains
from the disposition of property (other than property held in a
“non-passive” trade or business). Net investment income
is reduced by deductions that are properly allocable to such
income.
Passive
Foreign Investment Company Rules
If the Company is a
PFIC within the meaning of Section 1297 of the Code at any time
during a U.S. Holder’s holding period, then certain different
and potentially adverse tax consequences would apply to such U.S.
Holder’s acquisition, ownership and disposition of Common
Shares and Warrants.
PFIC Status of
the Company
The Company
generally will be a PFIC if, for a given tax year, (a) 75% or more
of the gross income of the Company for such tax year is passive
income or (b) 50% or more of the assets held by the Company either
produce passive income or are held for the production of passive
income, based on the fair market value of such assets. “Gross
income” generally includes all income less the cost of goods
sold, and “passive income” includes, for example,
dividends, interest, certain rents and royalties, certain gains
from the sale of stock and securities, and certain gains from
commodities transactions. Active business gains arising from the
sale of commodities generally are excluded from passive income if
substantially all (85% or more) of a foreign corporation’s
commodities are stock in trade or inventory, depreciable property
used in a trade or business, or supplies regularly used or consumed
in a trade or business.
For purposes of the
PFIC income test and asset test described above, if the Company
owns, directly or indirectly, 25% or more of the total value of the
outstanding shares of another corporation, the Company will be
treated as if it (a) held a proportionate share of the assets of
such other corporation and (b) received directly a proportionate
share of the income of such other corporation. In addition, for
purposes of the PFIC income test and asset test described above,
“passive income” does not include any interest,
dividends, rents or royalties that are received or accrued by the
Company from a “related person” (as defined in Section
954(d)(3) of the Code), to the extent such items are properly
allocable to the income of such related person that is not passive
income.
Under certain
attribution rules, if the Company is a PFIC, U.S. Holders will be
deemed to own their proportionate share of any subsidiary of the
Company which is also a PFIC (a “lower-tier PFIC”), and
will be subject to U.S. federal income tax on (a) a distribution on
the shares of a lower-tier PFIC and (b) a disposition of shares of
a lower-tier PFIC, both as if the U.S. Holder directly held the
shares of such lower-tier PFIC.
The Company may be
a PFIC for the tax year ended December 31, 2019 and may be a PFIC
in subsequent years. The determination of whether the Company (or a
subsidiary of the Company) was, or will be, a PFIC for a tax year
depends, in part, on the application of complex U.S. federal income
tax rules, which are subject to differing interpretations. In
addition, whether the Company (or subsidiary) will be a PFIC for
any tax year depends on the assets and income of the Company (and
each such subsidiary) over the course of each such tax year and, as
a result, cannot be predicted with certainty as of the date of this
document. Accordingly, there can be no assurance that the IRS will
not challenge any determination made by the Company (or subsidiary)
concerning its PFIC status or that the Company (and any subsidiary)
was not, or will not be, a PFIC for any tax year. U.S. Holders
should consult their own tax advisors regarding the PFIC status of
the Company and any subsidiary of the Company.
Default PFIC
Rules under Section 1291 of the Code
If the Company is a
PFIC, the U.S. federal income tax consequences to a U.S. Holder of
the acquisition, ownership and disposition of Common Shares and
Warrants will depend on whether such U.S. Holder makes a QEF
Election or makes a mark-to-market election under Section 1296 of
the Code (a “Mark-to-Market Election”) with respect to
Common Shares. A U.S. Holder that does not make either a QEF
Election or a Mark-to-Market Election will be referred to in this
summary as a “Non-Electing U.S. Holder.”
A Non-Electing U.S.
Holder will be subject to the rules of Section 1291 of the Code
with respect to (a) any gain recognized on the sale or other
taxable disposition of Common Shares or Warrants and (b) any excess
distribution paid on the Common Shares. A distribution generally
will be an “excess distribution” to the extent that
such distribution (together with all other distributions received
in the current tax year) exceeds 125% of the average distributions
received during the three preceding tax years (or during a U.S.
Holder’s holding period for the Common Shares, if
shorter).
If the Company is a
PFIC, under Section 1291 of the Code any gain recognized on the
sale or other taxable disposition of Common Shares or Warrants
(including an indirect disposition of shares of a lower-tier PFIC),
and any excess distribution paid on Common Shares (or a
distribution by a lower-tier PFIC to its shareholder that is deemed
to be received by a U.S. Holder) must be ratably allocated to each
day of a Non-Electing U.S. Holder’s holding period for the
Common Shares or Warrants, as applicable. The amount of any such
gain or excess distribution allocated to the tax year of
disposition or excess distribution and to years before the Company
became a PFIC, if any, would be taxed as ordinary income. The
amounts allocated to any other tax year would be subject to U.S.
federal income tax at the highest tax rate applicable to ordinary
income in each such year without regard to the U.S. Holder’s
other tax attributes, and an interest charge would be imposed on
the tax liability for each such year, calculated as if such tax
liability had been due in each such year. A Non-Electing U.S.
Holder that is not a corporation must treat any such interest paid
as “personal interest,” which is not
deductible.
If the Company is a
PFIC for any tax year during which a Non-Electing U.S. Holder holds
Common Shares or Warrants, the Company will continue to be treated
as a PFIC with respect to such Non-Electing U.S. Holder, regardless
of whether the Company ceases to be a PFIC in one or more
subsequent years. If the Company ceases to be a PFIC, a
Non-Electing U.S. Holder may terminate this deemed PFIC status with
respect to Common Shares by electing to recognize gain (which will
be taxed under the rules of Section 1291 of the Code discussed
above) as if such Common Shares were sold on the last day of the
last tax year for which the Company was a PFIC. No such election,
however, may be made with respect to Warrants.
Under proposed
Treasury Regulations, if a U.S. Holder has an option, warrant or
other right to acquire stock of a PFIC (such as Warrants), such
option, warrant or right is considered to be PFIC stock subject to
the default rules of Section 1291 of the Code. Under rules
described below, if the Company were a PFIC, the holding period for
Common Shares acquired on exercise of Warrants would begin on the
day after the date a U.S. Holder acquired the Warrants. This would
adversely affect the availability of the QEF Election and
Mark-to-Market Election with respect to such Common Shares. (See
discussion below under “QEF
Election” and “Market-to-Market
Election”.)
QEF
Election
If the Company is a
PFIC and a U.S. Holder makes a QEF Election for the first tax year
in which its holding period of its Common Shares begins, such U.S.
Holder generally will not be subject to the rules of Section 1291
of the Code discussed above with respect to its Common Shares.
However, a U.S. Holder that makes a QEF Election will be subject to
U.S. federal income tax on such U.S. Holder’s pro rata share
of (a) the net capital gain of the Company, which will be taxed as
long-term capital gain to such U.S. Holder, and (b) the ordinary
earnings of the Company, which will be taxed as ordinary income to
such U.S. Holder. Generally, “net capital gain” is the
excess of (a) net long-term capital gain over (b) net short-term
capital gain, and “ordinary earnings” are the excess of
(a) “earnings and profits” over (b) net capital gain. A
U.S. Holder that makes a QEF Election will be subject to U.S.
federal income tax on such amounts for each tax year in which the
Company is a PFIC, regardless of whether such amounts are actually
distributed to such U.S. Holder by the Company. However, a U.S.
Holder that makes a QEF Election may, subject to certain
limitations, elect to defer payment of current U.S. federal income
tax on such amounts, subject to an interest charge. If such U.S.
Holder is not a corporation, any such interest paid will be treated
as “personal interest,” which is not
deductible.
A U.S. Holder that
makes a QEF Election generally (a) may receive a tax-free
distribution from the Company to the extent that such distribution
represents “earnings and profits” of the Company that
were previously included in income by the U.S. Holder because of
such QEF Election and (b) will adjust such U.S. Holder’s tax
basis in the Common Shares to reflect the amount included in income
or allowed as a tax-free distribution because of such QEF Election.
In addition, a U.S. Holder that makes a QEF Election generally will
recognize capital gain or loss on the sale or other taxable
disposition of Common Shares.
The procedure for
making a QEF Election, and the U.S. federal income tax consequences
of making a QEF Election, will depend on whether such QEF Election
is timely. A QEF Election will be treated as timely if it is made
for the first year in the U.S. Holder’s holding period for
the Common Shares in which the Company was a PFIC. A U.S. Holder
may make a timely QEF Election by filing the appropriate QEF
Election documents at the time such U.S. Holder files a U.S.
federal income tax return for such year.
A QEF Election will
apply to the tax year for which such QEF Election is made and to
all subsequent tax years, unless such QEF Election is invalidated
or terminated or the IRS consents to revocation of such QEF
Election. If a U.S. Holder makes a QEF Election and, in a
subsequent tax year, the Company ceases to be a PFIC, the QEF
Election will remain in effect (although it will not be applicable)
during those tax years in which the Company is not a PFIC.
Accordingly, if the Company becomes a PFIC in a subsequent tax
year, the QEF Election will be effective, and the U.S. Holder will
be subject to the QEF rules described above during a subsequent tax
year in which the Company qualifies as a PFIC.
As discussed above,
under proposed Treasury Regulations, if a U.S. Holder has an
option, warrant or other right to acquire stock of a PFIC (such as
Warrants), such option, warrant or right is considered to be PFIC
stock subject to the default rules of Section 1291 of the Code on
its disposition. However, a holder of an option, warrant or other
right to acquire stock of a PFIC may not make a QEF Election that
will apply to the option, warrant or other right to acquire PFIC
stock. In addition, under proposed Treasury Regulations, if a U.S.
Holder holds an option, warrant or other right to acquire stock of
a PFIC, the holding period with respect to shares of stock of the
PFIC acquired upon exercise of such option, warrant or other right
will include the period that the option, warrant or other right was
held.
Consequently, if a
U.S. Holder of Common Shares makes a QEF Election, such election
generally will not be treated as a timely QEF Election with respect
to Common Shares subsequently acquired on the exercise of Warrants,
and the rules of Section 1291 of the Code discussed above will
continue to apply with respect to such U.S. Holder’s
previously owned Common Shares. However, a U.S. Holder of Common
Shares acquired on exercise of Warrants should be eligible to make
a timely QEF Election if such U.S. Holder elects in a tax year
throughout which such U.S. Holder owns such Common Shares to
recognize gain (which will be taxed under the rules of Section 1291
of the Code discussed above) as if such Common Shares were sold on
the first day of such year at fair market value. In addition, gain
recognized on the sale or other taxable disposition (other than by
exercise) of the Warrants by a U.S. Holder will be subject to the
rules of Section 1291 of the Code discussed above. U.S. Holders
should consult their own tax advisors regarding the application of
the PFIC rules to Warrants and Common Shares acquired upon exercise
of Warrants.
The Company will
use commercially reasonable efforts to make available to U.S.
Holders, upon their written request, timely and accurate
information as to its status as a PFIC and to provide to a U.S.
Holder all information and documentation that a U.S. Holder making
a QEF Election with respect to the Company, and any lower-tier PFIC
in which the Company owns, directly or indirectly, more than 50% of
such lower-tier PFIC’s total aggregate voting power, is
required to obtain for U.S. federal income tax purposes in the
event it is a PFIC. However, U.S. Holders should be aware that the
Company provides no assurances that it will attempt to provide any
such information relating to any lower-tier PFIC in which the
Company owns, directly or indirectly, 50% or less of such
lower-tier PFIC’s aggregate voting power. Because the Company
may own shares in one or more lower-tier PFICs, and may acquire
shares in one or more lower-tier PFICs in the future, they will
continue to be subject to the rules discussed above with respect to
the taxation of gains and excess distributions with respect to any
lower-tier PFIC for which the U.S. Holders do not obtain the
required information. U.S. Holders should consult their tax
advisors regarding the availability of, and procedure for making, a
QEF Election with respect to the Company and any lower-tier
PFIC.
Mark-to-Market
Election
A U.S. Holder may
make a Mark-to-Market Election only if the Common Shares are
marketable stock. The Common Shares generally will be
“marketable stock” if they are regularly traded on (a)
a national securities exchange that is registered with the SEC; (b)
the national market system established pursuant to section 11A of
the Securities and Exchange Act of 1934; or (c) a foreign
securities exchange that is regulated or supervised by a
governmental authority of the country in which the market is
located, provided that (i) such foreign exchange has trading
volume, listing, financial disclosure and other requirements and
the laws of the country in which such foreign exchange is located,
together with the rules of such foreign exchange, ensure that such
requirements are actually enforced; and (ii) the rules of such
foreign exchange ensure active trading of listed stocks. If such
stock is traded on such a qualified exchange or other market, such
stock generally will be “regularly traded” for any
calendar year during which such stock is traded, other than in de
minimis quantities, on at least 15 days during each calendar
quarter. Each U.S. Holder should consult its own tax advisor
regarding whether the Common Shares constitute marketable
stock.
A U.S. Holder that
makes a Mark-to-Market Election with respect to its Common Shares
generally will not be subject to the rules of Section 1291 of the
Code discussed above. However, if a U.S. Holder does not make a
Mark-to-Market Election beginning in the first tax year of such
U.S. Holder’s holding period for Common Shares or such U.S.
Holder has not made a timely QEF Election, the rules of Section
1291 of the Code discussed above will apply to certain dispositions
of, and distributions on, the Common Shares.
Any Mark-to-Market
Election made by a U.S. Holder for Common Shares will also apply to
such U.S. Holder’s Common Shares acquired upon exercise of
Warrants. As a result, if a Market-to-Market Election has been made
by a U.S. Holder with respect to Common Shares, any Common Shares
received on exercise of Warrants will automatically be
marked-to-market in the year of exercise. If the Company is a PFIC
at the time a U.S. Holder acquires Warrants, a U.S. Holder’s
holding period for Warrant Shares received on exercise will include
the period during which such U.S. Holder has held the Warrants. In
these circumstances, a U.S. Holder will be treated as making a
Mark-to-Market Election with respect to its Common Shares acquired
on exercise of the Warrants after the beginning of such U.S.
Holder’s holding period for such Common Shares, unless the
Common Shares are acquired in the same tax year as the year in
which the U.S. Holder acquired the corresponding Warrants, and the
tax regime and interest charge of Section 1291 described above
generally will apply to the mark-to-market gain realized in the tax
year in which the Common Shares are received. However, the general
mark-to-market rules will apply to subsequent tax
years.
A U.S. Holder that
makes a Mark-to-Market Election will include in ordinary income,
for each tax year in which the Company is a PFIC, an amount equal
to the excess, if any, of (a) the fair market value of the Common
Shares, as of the close of such tax year over (b) such U.S.
Holder’s tax basis in such Common Shares. A U.S. Holder that
makes a Mark-to-Market Election will be allowed a deduction in an
amount equal to the excess, if any, of (i) such U.S. Holder’s
adjusted tax basis in the Common Shares over (ii) the fair market
value of such Common Shares (but only to the extent of the net
amount of previously included income as a result of the
Mark-to-Market Election for prior tax years).
U.S. Holders that
make a Mark-to-Market Election generally also will adjust their tax
basis in the Common Shares to reflect the amount included in gross
income or allowed as a deduction because of such Mark-to-Market
Election. In addition, upon a sale or other taxable disposition of
Common Shares, a U.S. Holder that makes a Mark-to-Market Election
will recognize ordinary income or loss (not to exceed the excess,
if any, of (a) the amount included in ordinary income because of
such Mark-to-Market Election for prior tax years over (b) the
amount allowed as a deduction because of such Mark-to-Market
Election for prior tax years).
A Mark-to-Market
Election applies to the tax year in which such Mark-to-Market
Election is made and to each subsequent tax year, unless the Common
Shares cease to be “marketable stock” or the IRS
consents to revocation of such election. U.S. Holders should
consult their own tax advisors regarding the availability of, and
procedure for making, a Mark-to-Market Election.
Although a U.S.
Holder may be eligible to make a Mark-to-Market Election with
respect to Common Shares, no such election may be made with respect
to the stock of any lower-tier PFIC that a U.S. Holder is treated
as owning because such stock is not marketable. Hence, the
Mark-to-Market Election will not be effective to eliminate the
interest charge described above with respect to deemed dispositions
of lower-tier PFIC stock or distributions from a lower-tier
PFIC.
Other PFIC
Rules
Under Section
1291(f) of the Code, the IRS has issued proposed Treasury
Regulations that, subject to certain exceptions, would cause a U.S.
Holder that had not made a timely QEF Election to recognize gain
(but not loss) upon certain transfers of Common Shares that would
otherwise be tax-deferred (e.g., gifts and exchanges pursuant to
corporate reorganizations) in the event the Company is a PFIC
during such U.S. Holder’s holding period for the relevant
shares. However, the specific U.S. federal income tax consequences
to a U.S. Holder may vary based on the manner in which Common
Shares are transferred.
Certain additional
adverse rules will apply with respect to a U.S. Holder if the
Company is a PFIC, regardless of whether such U.S. Holder makes a
QEF Election. For example, under Section 1298(b)(6) of the Code, a
U.S. Holder that uses Common Shares or Warrants as security for a
loan will, except as may be provided in Treasury Regulations, be
treated as having made a taxable disposition of such Common Shares
or Warrants.
If the Company were
a PFIC, a U.S. Holder would be required to attach a completed IRS
Form 8621 to its tax return every year in which it recognized gain
on a disposition of the Common Shares or Warrants or received an
excess distribution. In addition, subject to certain rules intended
to avoid duplicative filings, U.S. Holders may also be required to
file an annual information return on IRS Form 8621 with respect to
each PFIC in which the U.S. Holder holds a direct or indirect
interest. U.S. Holders should consult their own tax advisors
regarding their filing obligations with respect to such information
returns.
In addition, a U.S.
Holder who acquires Common Shares or Warrants from a decedent will
not receive a “step up” in tax basis of such Common
Shares or Warrants to fair market value unless such decedent had a
timely and effective QEF Election in place.
Special rules also
apply to foreign tax credits that a U.S. Holder may claim on a
distribution from a PFIC.
The PFIC rules are
complex, and U.S. Holders should consult their own tax advisors
regarding the PFIC rules and how they may affect the U.S. federal
income tax consequences of the acquisition, ownership, and
disposition of Common Shares and Warrants in the event the Company
is a PFIC at any time during the holding period for such Common
Shares or Warrants.
Information Reporting and Backup
Withholding
Certain U.S.
Holders are required to report information relating to an interest
in Common Shares or Warrants, subject to certain exceptions
(including an exception for Common Shares and Warrants held in
accounts maintained by certain financial institutions), by
attaching a completed IRS Form 8938, Statement of Specified Foreign
Financial Assets, with their tax return for each year in which they
hold an interest in Common Shares or Warrants. U.S. Holders are
urged to consult their own tax advisors regarding information
reporting requirements relating to their ownership of the Common
Shares and Warrants.
Payments made
within the United States, or by a U.S. payor or U.S. middleman, of
dividends on Common Shares, and proceeds arising from certain sales
or other taxable dispositions of Common Shares or Warrants, may be
subject to information reporting and backup withholding tax, at the
rate of 24%, if a U.S. Holder (a) fails to furnish such U.S.
Holder’s correct U.S. social security or other taxpayer
identification number (generally on Form W-9); (b) furnishes an
incorrect U.S. taxpayer identification number; (c) is notified by
the IRS that such U.S. Holder has previously failed to properly
report items subject to backup withholding tax; or (d) fails under
certain circumstances to certify, under penalty of perjury, that
such U.S. Holder has furnished its correct U.S. taxpayer
identification number and that the IRS has not notified such U.S.
Holder that it is subject to backup withholding tax. However, U.S.
Holders that are corporations generally are excluded from these
information reporting and backup withholding rules. Any amounts
withheld under the U.S. backup withholding rules will be allowed as
a credit against a U.S. Holder’s U.S. federal income tax
liability, if any, or will be refunded, if such U.S. Holder timely
furnishes the required information to the IRS. U.S. Holders should
consult their own tax advisors regarding the information reporting
and backup withholding tax rules.
Fasken Martineau
DuMoulin LLP of Ottawa, Ontario, has provided its opinion on the
validity of the Securities offered by this prospectus.
The consolidated financial statements of the
Company and management’s assessment of the effectiveness of
the Company’s internal control over financial reporting
included in the Annual Report on Form 10-K incorporated
by reference in this
prospectus have been so
incorporated in reliance on the report of
PricewaterhouseCoopers LLP, Chartered Professional Accountants, of
Vancouver, British Columbia, Canada (“PwC”), an independent
registered public accounting firm, given on the authority of said
firm as experts in auditing and
accounting.
PwC are the Company’s
auditors and have advised that they are independent from the
Company within the meaning of the Code of Professional Conduct of
Chartered Professional Accountants of British Columbia, Canada, and
within the meaning of the U.S. Securities Act and the
applicable rules and regulations thereunder adopted by the
SEC. PricewaterhouseCoopers LLP is registered with the Public
Company Accounting Oversight Board (United
States).
The mineral
resource estimate and related information of the Company’s
Lost Creek property incorporated by reference herein are based upon
analyses performed or overseen by TREC, Inc. Such estimates
and related information have been incorporated by reference herein
in reliance upon the authority of such firm as experts in such
matters.
The mineral
resource estimate and related information of the Company’s
Shirley Basin Project incorporated by reference herein are based
upon analyses performed by Western Water Consultants, Inc.,
d/b/a WWC Engineers. Such estimates and related information have
been incorporated by reference herein in reliance upon the
authority of such firm as experts in such matters.
Up to
$50,000,000
Common Shares
Prospectus
Supplement
B. Riley
Securities
Cantor
June 8, 2021