|9 Months Ended|
Sep. 30, 2014
|Mineral Industries Disclosures [Abstract]|
8. Mineral Properties
The Company’s mineral properties consist of the following:
Lost Creek Property
The Company acquired certain Wyoming properties when Ur-Energy USA Inc. entered into the Membership Interest Purchase Agreement (“MIPA”) with New Frontiers Uranium, LLC in 2005. Under the terms of the MIPA, the Company purchased 100% of NFU Wyoming, LLC. Assets acquired in this transaction include the Lost Creek Project, other Wyoming properties and development databases. NFU Wyoming, LLC was acquired for aggregate consideration of $20 million plus interest. Since 2005, the Company has increased its holdings adjacent to the initial Lost Creek acquisition through staking additional claims and additional property purchases and leases.
There is a royalty on each of the State of Wyoming sections under lease at the Lost Creek, LC West and EN Projects, as required by law. Other royalties exist on certain mining claims at the LC South and EN Projects. There are no royalties on the mining claims in the LC North, LC East or LC West Projects.
The Company acquired additional Wyoming properties when Ur-Energy USA Inc. closed a Share Purchase Agreement (“SPA”) with an AREVA Mining affiliate in December 2013. Under the terms of the SPA, the Company purchased Pathfinder Mines Corporation (“Pathfinder”). Assets acquired in this transaction include the Shirley Basin Mine, portions of the Lucky Mc Mine, machinery and equipment, vehicles, office equipment and development databases. Pathfinder was acquired for aggregate consideration of $6.6 million, a 5% production royalty under certain circumstances and the assumption of certain asset reclamation obligations which were estimated by AREVA at $5.7 million. Additional royalties exist on certain of the mineral properties at Shirley Basin as described in the August 2014 NI 43-101 Technical Report. After subsequent review, the reclamation obligations are currently estimated to be $12.7 million. The original purchase price allocation attributed $5.7 million to asset retirement obligations, $3.3 million to deferred tax liabilities, $15.3 million to mineral properties and the balance to the remaining assets and liabilities.
The claims at Screech Lake and Bugs reached the point during 2014 where the Company needed to take one or both of the properties to lease under the mining regulations and invest in additional exploration or release the claims. The Company elected not to pursue further exploration at Screech Lake or Bugs. As a result, the claims were abandoned and the cost of the assets was written off.