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Friday
Jul282017

Ur-Energy Releases 2017 Q2 Results

Ur-Energy Releases 2017 Q2 Results 

Littleton, Colorado (PR Newswire – July 28, 2017) Ur-Energy Inc. (NYSE American:URG, TSX:URE)  (“Ur-Energy” or the “Company”) has filed the Company’s Form 10-Q for the quarter ended June 30, 2017, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedar.com

Ur-Energy Chairman Jeff Klenda observed, “Once again, we lowered our average cost per pound sold by supplementing production with low-cost purchases and delivering those pounds into our high-priced, long-term, sales contracts. This strategy has enabled us to build inventory, generate cash and develop our second mine unit, which is on time and under budget. In times of persistently low uranium prices, we have and will continue to take full advantage of our high-priced sales contracts, which continue into the next decade.” 

Lost Creek Production and Sales

During the three months ended June 30, 2017, a total of 65,257 pounds of U3O8 were captured within the Lost Creek plant. 70,833 pounds were packaged in drums and 74,406 pounds of the drummed inventory were shipped to the conversion facility. We sold 241,000 pounds of U3O8 during the period of which 210,000 pounds were purchased. Inventory, production and sales figures for the Lost Creek Project are presented in the following tables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2017 Q2

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2017 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 65,257

 

 

 79,340

 

 

 103,558

 

 

 141,774

 

 

 144,597

 

Ad valorem and severance tax

 

$000

 

$

 227

 

$

 241

 

$

 247

 

$

 552

 

$

 468

 

Wellfield cash cost (1)

 

$000

 

$

 599

 

$

 889

 

$

 864

 

$

 858

 

$

 1,488

 

Wellfield non-cash cost (2)

 

$000

 

$

 780

 

$

 776

 

$

 777

 

$

 778

 

$

 1,556

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 3.48

 

$

 3.04

 

$

 2.39

 

$

 3.89

 

$

 3.23

 

Cash cost per pound captured

 

$/lb

 

$

 9.18

 

$

 11.20

 

$

 8.34

 

$

 6.05

 

$

 10.29

 

Non-cash cost per pound captured

 

$/lb

 

$

 11.95

 

$

 9.78

 

$

 7.50

 

$

 5.49

 

$

 10.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 70,833

 

 

 74,382

 

 

 111,049

 

 

 145,893

 

 

 145,215

 

Plant cash cost (3)

 

$000

 

$

 1,270

 

$

 1,488

 

$

 1,336

 

$

 1,564

 

$

 2,758

 

Plant non-cash cost (2)

 

$000

 

$

 491

 

$

 491

 

$

 493

 

$

 495

 

$

 982

 

Cash cost per pound drummed

 

$/lb

 

$

 17.89

 

$

 20.00

 

$

 12.03

 

$

 10.72

 

$

 18.99

 

Non-cash cost per pound drummed

 

$/lb

 

$

 6.93

 

$

 6.60

 

$

 4.44

 

$

 3.40

 

$

 6.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 74,406

 

 

 72,643

 

 

 98,775

 

 

 149,540

 

 

 147,049

 

Distribution cash cost (4)

 

$000

 

$

 26

 

$

 47

 

$

 68

 

$

 86

 

$

 73

 

Cash cost per pound shipped

 

$/lb

 

$

 0.35

 

$

 0.65

 

$

 0.69

 

$

 0.58

 

$

 0.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds purchased

 

lb

 

 

 210,000

 

 

 200,000

 

 

 -

 

 

 -

 

 

 410,000

 

Purchase costs

 

$000

 

$

 4,870

 

$

 4,015

 

$

 -

 

$

 -

 

$

 8,885

 

Cash cost per pound purchased

 

$/lb

 

$

 23.19

 

$

 20.08

 

$

 -

 

$

 -

 

$

 21.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

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

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

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

    

Unit

    

2017 Q2

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2017 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

lb

 

 

 241,000

 

 

 250,000

 

 

 100,000

 

 

 200,000

 

 

 491,000

 

U3O8 sales

 

$000

 

$

 11,797

 

$

 14,819

 

$

 3,270

 

$

 9,471

 

$

 26,616

 

Average contract price

 

$/lb

 

$

 48.95

 

$

 59.28

 

$

 32.70

 

$

 47.36

 

$

 54.21

 

Average spot price

 

$/lb

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

Average price per pound sold

 

$/lb

 

$

 48.95

 

$

 59.28

 

$

 32.70

 

$

 47.36

 

$

 54.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

$000

 

$

 6,573

 

$

 6,295

 

$

 3,082

 

$

 5,818

 

$

 12,868

 

Ad valorem and severance tax cost per pound sold

 

$/lb

 

$

 4.26

 

$

 4.00

 

$

 2.98

 

$

 3.09

 

$

 4.09

 

Cash cost per pound sold

 

$/lb

 

$

 31.54

 

$

 26.12

 

$

 18.27

 

$

 17.50

 

$

 28.18

 

Non-cash cost per pound sold

 

$/lb

 

$

 19.13

 

$

 15.48

 

$

 9.57

 

$

 8.50

 

$

 16.90

 

Cost per pound sold - produced

 

$/lb

 

$

 54.93

 

$

 45.60

 

$

 30.82

 

$

 29.09

 

 

 49.15

 

Cost per pound sold - purchased

 

$/lb

 

$

 23.19

 

$

 20.08

 

$

 -

 

$

 -

 

 

 21.67

 

Average cost per pound sold

 

$/lb

 

$

 27.26

 

$

 25.18

 

$

 30.82

 

$

 29.09

 

$

 26.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

$000

 

$

 5,224

 

$

 8,524

 

$

 188

 

$

 3,653

 

 

 13,748

 

Gross profit per pound sold

 

$/lb

 

$

 21.68

 

$

 34.10

 

$

 1.88

 

$

 18.27

 

 

 28.00

 

Gross profit margin

 

%

 

 

44.3%

 

 

57.5%

 

 

5.7%

 

 

38.6%

 

 

51.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

lb

 

 

 19,010

 

 

 28,164

 

 

 29,891

 

 

 57,647

 

 

 

 

Plant inventory

 

lb

 

 

 10,446

 

 

 14,019

 

 

 12,274

 

 

 -

 

 

 

 

Conversion facility inventory

 

lb

 

 

 160,094

 

 

 113,528

 

 

 84,689

 

 

 84,808

 

 

 

 

Total inventory

 

lb

 

 

 189,550

 

 

 155,711

 

 

 126,854

 

 

 142,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$000

 

$

 352

 

$

 712

 

$

 897

 

$

 866

 

 

 

 

Plant inventory

 

$000

 

$

 479

 

$

 670

 

$

 461

 

$

 -

 

 

 

 

Conversion facility inventory

 

$000

 

$

 6,620

 

$

 4,379

 

$

 2,751

 

$

 2,539

 

 

 

 

Total inventory

 

$000

 

$

 7,451

 

$

 5,761

 

$

 4,109

 

$

 3,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$/lb

 

$

 18.46

 

$

 25.28

 

$

 30.01

 

$

 15.02

 

 

 

 

Plant inventory

 

$/lb

 

$

 45.85

 

$

 47.79

 

$

 37.56

 

$

 -

 

 

 

 

Conversion facility inventory

 

$/lb

 

$

 41.35

 

$

 38.57

 

$

 32.48

 

$

 29.94

 

 

 

 

 

Note:

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

U3O8 sales of $11.8 million for 2017 Q2 were based on selling 241,000 pounds at an average price of $48.95 into term contract deliveries.  We did not make any spot sales during the quarter. Of the 241,000 pounds sold, 31,000 were from produced inventory at a cost per pound sold of $54.93 and 210,000 were sold from purchased inventory at a cost per pound sold of $23.19.  For the quarter, our cost of sales totaled $6.6 million at an average cost of $27.26 per pound.

The $54.93 cost per pound sold from produced inventory included a lower of cost or net realizable value $456 thousand adjustment to our combined inventory during the quarter. The adjustment was largely driven by the fixed nature of our non-cash costs, which do not change regardless of the quantity of pounds produced, and was charged to the cost of sales for the quarter.  During the quarter, we only sold 31,000 pounds from production and the charge amounted to an additional $14.71 per pound sold from produced inventory. Before the adjustment, our total cost per pound sold from produced inventory was $40.13 and the cash cost component was $24.16 per pound sold.

The gross profit from the sale of produced uranium for the quarter was $0.1 million, which represents a gross profit margin of approximately four percent. Gross profit from the sale of purchased uranium was $5.1 million, which represents a gross margin of approximately 51%.  Total gross profit was $5.2 million, or approximately 44%.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost Per Pound Sold

Reconciliation 1

    

Unit

 

2017 Q2

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2017 YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 227

 

$

 241

 

$

 247

 

$

 552

 

$

 468

Wellfield costs

 

$000

 

$

 1,379

 

$

 1,665

 

$

 1,641

 

$

 1,636

 

$

 3,044

Plant and site costs

 

$000

 

$

 1,761

 

$

 1,979

 

$

 1,829

 

$

 2,059

 

$

 37,408

Distribution costs

 

$000

 

$

 26

 

$

 47

 

$

 68

 

$

 86

 

 

 73

Inventory change

 

$000

 

$

 (1,690)

 

$

 (1,652)

 

$

 (703)

 

$

 1,485

 

$

 (3,342)

Cost of sales - produced

 

$000

 

$

 1,703

 

$

 2,280

 

$

 3,082

 

$

 5,818

 

$

 3,983

Cost of sales - purchased

 

$000

 

$

 4,870

 

$

 4,015

 

$

 —

 

$

 —

 

 

 8,885

Total cost of sales

 

$000

 

$

 6,573

 

$

 6,295

 

$

 3,082

 

$

 5,818

 

 

 12,868

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold produced

 

lb

 

 

 31,000

 

 

 50,000

 

 

 100,000

 

 

 200,000

 

 

 81,000

Pounds sold purchased

 

lb

 

 

 210,000

 

 

 200,000

 

 

 —

 

 

 —

 

 

 410,000

Total pounds sold

 

lb

 

 

 241,000

 

 

 250,000

 

 

 100,000

 

 

 200,000

 

 

 491,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per pound sold - produced (1)

 

$/lb

 

$

 54.93

 

$

 45.60

 

$

 30.82

 

$

 29.09

 

$

 49.17

Average cost per pound sold - purchased

 

$/lb

 

$

 23.19

 

$

 20.08

 

$

 -

 

$

 -

 

$

 21.67

Total average cost per pound sold

 

$/lb

 

$

 27.27

 

$

 25.18

 

$

 30.82

 

$

 29.09

 

$

 26.21

 

 

Note:

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

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

Continuing Guidance for 2017

At the end of the second quarter of 2017, the average spot price of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $20.15 per pound. Market fundamentals have not changed sufficiently to warrant the accelerated development of Mine Unit 2 (“MU2”). We are developing MU2 at a controlled rate as approved by our Board of Directors in the first quarter which will allow us to produce at a level that will satisfy a portion of our term contracts. 

For 2017, we have 600,000 pounds of U3O8 under contract at an average price of approximately $51 per pound.  We purchased 410,000 pounds during the first two quarters of the year and will purchase 109,000 pounds in the third quarter for a total of 519,000 purchased pounds at an average cost of $21 per pound. The remaining 81,000 pounds were delivered from our produced inventory during the first two quarters of the year. We may make one small spot sale later this year, which will be delivered from Lost Creek production.  The spot sale will significantly lower the average sales price from produced inventory that will be used to calculate the 2017 ad valorem and severance taxes, which are based on total mine production for the year, and thereby significantly lower the amount of taxes to be paid.

The 2017 Q3 production target for Lost Creek is between 60,000 and 70,000 pounds U3O8 dried and drummed.  Full year 2017 production guidance is unchanged at between 250,000 and 300,000 pounds. We do expect to bring the first MU2 header house on line in 2017 Q3, but our production rate may be adjusted based on continuing operational matters and other indicators in the market.

As at July 26, 2017, our unrestricted cash position was $7.6 million

 

About Ur-Energy 

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

 

FOR FURTHER INFORMATION, PLEASE CONTACT 

Jeffrey Klenda, Chair and CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

 

 

Cautionary Note Regarding Forward-Looking Information

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

Thursday
Jul132017

Ur-Energy Provides 2017 Q2 Operational Results

 

Littleton, Colorado (PR Newswire – July 13, 2017) Ur-Energy Inc. (NYSE MKT:URG, TSX:URE) (the “Company” or “Ur-Energy”) is pleased to provide the following operational results for second quarter 2017.

 

Highlights

 

Lost Creek Operations

 

Units

2017 Q1

 

2017 Q2

 

2017 YTD

 

 

 

 

 

 

 

U3O8 Captured

(‘000 lbs)

79.3

 

65.3

 

144.6

U3O8 Dried & Drummed

(‘000 lbs)

74.4

 

70.8

 

145.2

U3O8 Sold (produced)

(‘000 lbs)

50.0

 

31.0

 

81.0

U3O8 Sold (purchased)

(‘000 lbs)

200.0

 

210.0

 

410.0

 

 

 

 

 

 

 

Average Flow Rate

(gpm)

 2,403

 

       2,378

 

2,391

U3O8 Head Grade

(mg/l)

       32

 

           27

 

              30

 

Lost Creek Uranium Production and Sales

Production rates at Lost Creek continued in line with guidance for the quarter. For the quarter, 65,257 pounds of U3O8 were captured within the Lost Creek plant. 70,833 pounds of U3O8 were packaged in drums and 74,406 pounds of U3O8 drummed inventory were shipped out of the Lost Creek processing plant. At June 30, 2017, inventory at the conversion facility was approximately 160,094 pounds U3O8.  During the quarter, sales totaled $11.8 million on contract sales of 241,000 pounds at an average price of $48.95 per pound, which was 135% above the average spot price for the same period of $20.79 per pound. We purchased 210,000 pounds, of the 241,000 pounds delivered into our contractual commitments, at an average cost of $23.19 per pound. The remaining 31,000 pounds were delivered from Lost Creek production.

Following advance purchasing and planning activities in March, drilling and other construction work to develop the first three header houses in Mine Unit 2 (“MU2”) commenced in early April. This development work continues on schedule, with the first of these header houses anticipated to come online Q3. The second and third header houses will follow, with operations anticipated to commence for both in during Q4.

Vice President Operations, Steve Hatten was expectedly pleased with the reliable production from Lost Creek stating “August 2, 2017 will mark the fourth anniversary of the start of production at Lost Creek.  Our team continues to meet, and in many cases exceed, expectations in both production and development with more than two million pounds U3O8 shipped to date.”

Continuing Guidance for 2017 

2017 Q3 contract sales are anticipated to be 109,000 pounds U3O8 at an average price of $36 per pound.  The pounds were contracted to be purchased at an average cost of $20 per pound. The 2017 Q3 production target for Lost Creek is between 60,000 and 70,000 pounds dried and drummed. Our production rate may be adjusted based on continuing operational matters and other indicators in the market.

We will provide further guidance for the remainder of 2017 in our Form 10-Q, which is currently anticipated to be filed on Friday, July 28, 2017.

 

About Ur-Energy

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

 

FOR FURTHER INFORMATION, PLEASE CONTACT

Jeffrey Klenda, Chair and CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

 

 

Cautionary Note Regarding Forward-Looking Information

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

Friday
May192017

Ur-Energy Reports Results of Annual and Special Shareholders’ Meeting

Ur-Energy Reports Results of Annual and Special Shareholders’ Meeting

Littleton, Colorado (PR Newswire – May 19, 2017) Ur-Energy Inc. (NYSE MKT:URG, TSX:URE)  (the “Company” or “Ur-Energy”) announces the results of the Company’s Annual and Special Meeting of Shareholders held May 18, 2017, including the election of Directors.

Each of the nominee Directors listed in the Company's management proxy circular dated April 13, 2017 was elected as a Director. The Company received proxies with regard to voting on the six Directors nominated for election, as follows:

Nominee

Vote For

%

Votes Withheld

%

Jeffrey T. Klenda

45,967,692

99.53%

218,900

0.47%

James M. Franklin

41,184,798

89.17%

5,001,794

10.83%

Paul Macdonell

41,113,863

89.02%

5,072,729

10.98%

W. William Boberg

42,601,967

92.24%

3,584,625

7.76%

Thomas Parker

41,229,928

89.27%

4,956,664

10.73%

Gary C. Huber

42,383,774

91.77%

3,802,818

8.23%

 

Additionally, there were 45,907,361 non-votes in the election.

The Company’s independent auditors PricewaterhouseCoopers LLP were reappointed by the Shareholders and the Directors of the Company were authorized to fix the remuneration of the auditors.

The “say on pay” vote to approve executive compensation was approved with 90.16% of the votes cast voting for the non-binding advisory vote. 

The renewal of the Ur-Energy Inc. Stock Option Plan was approved by a majority of the votes represented (79.17%), after the exclusion of votes held by certain insiders and their affiliates. 

 

About Ur-Energy

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

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT 

Jeffrey Klenda, Chair & CEO

866-981-4588    

Jeff.Klenda@ur-energy.com

 

Cautionary Note Regarding ForwardLooking Information

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

Friday
May052017

Ur-Energy Releases 2017 Q1 Results

Ur-Energy Releases 2017 Q1 Results 

Littleton, Colorado (PR Newswire – May 5, 2017) Ur-Energy Inc. (NYSE MKT:URG TSX:URE)  (“Ur-Energy” or the “Company”) has filed the Company’s Form 10-Q for the quarter ended March 31, 2017, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedar.com

Chairman of the Company, Jeff Klenda noted “We continue to execute on our strategy to satisfy our 2017 deliveries through a combination of purchased and produced pounds. In the first quarter, we purchased 200,000 pounds at an average cost of $20 per pound, which led to gross profit margins in excess of 57 percent and cash flows from operations of $6.5 million. We did this while at the same time reaching the safety milestone of 12 months with no lost-time accidents. I couldn’t be more proud of our team.”

Lost Creek Uranium Production and Sales

During the three months ended March 31, 2017, a total of 79,340 pounds of U3O8 was captured within the Lost Creek plant. 74,382 pounds were packaged in drums and 72,643 pounds of drummed inventory were shipped to the conversion facility. We sold 250,000 pounds of U3O8 during the period, of which 50,000 pounds were from produced inventory and 200,000 pounds were from purchased U3O8. Inventory, production and sales figures for the Lost Creek Project are presented in the following tables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2016 Q2

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 79,340

 

 

 103,558

 

 

 141,774

 

 

 133,341

 

 

Ad valorem and severance tax

 

$000

 

$

 241

 

$

 247

 

$

 552

 

$

 304

 

 

Wellfield cash cost (1)

 

$000

 

$

 889

 

$

 864

 

$

 858

 

$

 846

 

 

Wellfield non-cash cost (2)

 

$000

 

$

 776

 

$

 777

 

$

 778

 

$

 778

 

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 3.04

 

$

 2.39

 

$

 3.89

 

$

 2.28

 

 

Cash cost per pound captured

 

$/lb

 

$

 11.20

 

$

 8.34

 

$

 6.05

 

$

 6.34

 

 

Non-cash cost per pound captured

 

$/lb

 

$

 9.78

 

$

 7.50

 

$

 5.49

 

$

 5.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 74,382

 

 

 111,049

 

 

 145,893

 

 

 130,308

 

 

Plant cash cost (3)

 

$000

 

$

 1,488

 

$

 1,336

 

$

 1,564

 

$

 1,505

 

 

Plant non-cash cost (2)

 

$000

 

$

 491

 

$

 493

 

$

 495

 

$

 494

 

 

Cash cost per pound drummed

 

$/lb

 

$

 20.00

 

$

 12.03

 

$

 10.72

 

$

 11.55

 

 

Non-cash cost per pound drummed

 

$/lb

 

$

 6.60

 

$

 4.44

 

$

 3.40

 

$

 3.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 72,643

 

 

 98,775

 

 

 149,540

 

 

 148,714

 

 

Distribution cash cost (4)

 

$000

 

$

 47

 

$

 68

 

$

 86

 

$

 123

 

 

Cash cost per pound shipped

 

$/lb

 

$

 0.65

 

$

 0.69

 

$

 0.58

 

$

 0.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds purchased

 

lb

 

 

 200,000

 

 

 -

 

 

 -

 

 

 -

 

 

Purchase costs

 

$000

 

$

 4,015

 

$

 -

 

$

 -

 

$

 -

 

 

Cash cost per pound purchased

 

$/lb

 

$

 20.08

 

$

 -

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

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

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

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

    

Unit

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2016 Q2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

lb

 

 

 250,000

 

 

 100,000

 

 

 200,000

 

 

 187,000

U3O8 sales

 

$000

 

$

 14,819

 

$

 3,270

 

$

 9,471

 

$

 6,741

Average contract price

 

$/lb

 

$

 59.28

 

$

 32.70

 

$

 47.36

 

$

 39.35

Average spot price

 

$/lb

 

$

 -

 

$

 -

 

$

 -

 

$

 27.00

Average price per pound sold

 

$/lb

 

$

 59.28

 

$

 32.70

 

$

 47.36

 

$

 36.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

$000

 

$

 6,295

 

$

 3,082

 

$

 5,818

 

$

 5,094

Ad valorem and severance tax cost per pound sold

 

$/lb

 

$

 4.00

 

$

 2.98

 

$

 3.09

 

$

 2.65

Cash cost per pound sold

 

$/lb

 

$

 26.12

 

$

 18.27

 

$

 17.50

 

$

 16.88

Non-cash cost per pound sold

 

$/lb

 

$

 15.48

 

$

 9.57

 

$

 8.50

 

$

 7.71

Cost per pound sold - produced

 

$/lb

 

$

 45.60

 

$

 30.82

 

$

 29.09

 

$

 27.24

Cost per pound sold - purchased

 

$/lb

 

$

 20.08

 

$

 -

 

$

 -

 

$

 -

Average cost per pound sold

 

$/lb

 

$

 25.18

 

$

 30.82

 

$

 29.09

 

$

 27.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

$000

 

$

 8,524

 

$

 188

 

$

 3,653

 

$

 1,647

Gross profit per pound sold

 

$/lb

 

$

 34.10

 

$

 1.88

 

$

 18.27

 

$

 8.81

Gross profit margin

 

%

 

 

57.5%

 

 

5.7%

 

 

38.6%

 

 

24.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

lb

 

 

 28,164

 

 

 29,891

 

 

 57,647

 

 

 62,028

Plant inventory

 

lb

 

 

 14,019

 

 

 12,274

 

 

 -

 

 

 3,654

Conversion facility inventory

 

lb

 

 

 113,528

 

 

 84,689

 

 

 84,808

 

 

 135,723

Total inventory

 

lb

 

 

 155,711

 

 

 126,854

 

 

 142,455

 

 

 201,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$000

 

$

 712

 

$

 897

 

$

 866

 

$

 929

Plant inventory

 

$000

 

$

 670

 

$

 461

 

$

 -

 

$

 115

Conversion facility inventory

 

$000

 

$

 4,379

 

$

 2,751

 

$

 2,539

 

$

 3,846

Total inventory

 

$000

 

$

 5,761

 

$

 4,109

 

$

 3,405

 

$

 4,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$/lb

 

$

 25.28

 

$

 30.01

 

$

 15.02

 

$

 14.98

Plant inventory

 

$/lb

 

$

 47.79

 

$

 37.56

 

$

 -

 

$

 31.47

Conversion facility inventory

 

$/lb

 

$

 38.57

 

$

 32.48

 

$

 29.94

 

$

 28.34

 

 

 

Notes:

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

U3O8 sales of $14.8 million for 2017 Q1 were based on selling 250,000 pounds at an average price of $59.28 into term contract deliveries. We did not make any spot sales during the quarter. Of the 250,000 pounds sold, 50,000 were from produced inventory and 200,000 were from purchased U3O8. For the quarter, our cost of sales totaled $6.3 million at an average cost of $25.18 per pound.

The gross profit from the sale of produced uranium for the quarter was $0.8 million, which represents a gross profit margin of approximately 27%. Gross profit from the sale of purchased uranium was $7.7 million, which represents a gross margin of approximately 66%. Total gross profit was $8.5 million, or approximately 58%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost Per Pound Sold
 Reconciliation 1

    

Unit

 

2017 Q1

    

2016 Q4

    

2016 Q3

    

2016 Q2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 241

 

$

 247

 

$

 552

 

$

 304

Wellfield costs

 

$000

 

$

 1,665

 

$

 1,641

 

$

 1,636

 

$

 1,624

Plant and site costs

 

$000

 

$

 1,979

 

$

 1,829

 

$

 2,059

 

$

 1,998

Distribution costs

 

$000

 

$

 47

 

$

 68

 

$

 86

 

$

 123

Inventory change

 

$000

 

$

 (1,652)

 

$

 (703)

 

$

 1,485

 

$

 1,045

Cost of sales - produced

 

$000

 

$

 2,280

 

$

 3,082

 

$

 5,818

 

$

 5,094

Cost of sales - purchased

 

$000

 

$

 4,015

 

$

 —

 

$

 —

 

$

 —

Total cost of sales

 

$000

 

$

 6,295

 

$

 3,082

 

$

 5,818

 

$

 5,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold produced

 

lb

 

 

 50,000

 

 

 100,000

 

 

 200,000

 

 

 187,000

Pounds sold purchased

 

lb

 

 

 200,000

 

 

 —

 

 

 —

 

 

 —

Total pounds sold

 

lb

 

 

 250,000

 

 

 100,000

 

 

 200,000

 

 

 187,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per pound sold - produced (1)

 

$/lb

 

$

 45.60

 

$

 30.82

 

$

 29.09

 

$

 27.24

Average cost per pound sold - purchased

 

$/lb

 

$

 20.08

 

$

 -

 

$

 -

 

$

 -

Total average cost per pound sold

 

$/lb

 

$

 25.18

 

$

 30.82

 

$

 29.09

 

$

 27.24

 

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

 

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

 

Continuing Guidance for 2017

At the end of the first quarter of 2017, the average spot price per pound of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $23.88. Market fundamentals have not changed sufficiently to warrant the accelerated development of mine unit two (“MU2”). In response, we will instead develop MU2 at a controlled rate, which will allow us to produce at a level that will satisfy a portion of our term contracts. 

 

In 2017, we have 600,000 pounds of U3O8 under contract at an average price of approximately $51 per pound.  We have made arrangements to purchase 410,000 pounds at an average cost of $22 per pound. The remaining pounds can readily be delivered from our current inventory and anticipated production. We are not forecasting any spot sales at this time, given the current spot market environment.

 

We expect to have contract sales of 241,000 pounds U3O8 in 2017 Q2 at an average price of $49 per pound. We have contracted to purchase 210,000 of those pounds at an average cost of $23 per pound. The balance will be delivered from Lost Creek production.

The 2017 Q2 production target for Lost Creek is between 60,000 and 75,000 pounds U3O8 dried and drummed.  Full year 2017 production guidance is unchanged at between 250,000 and 300,000 pounds. Our production rate may be adjusted based on continuing operational matters and other indicators in the market.

Following advance purchasing and planning activities in March, drilling and other construction work to develop the first three header houses in MU2 commenced in early April.  We expect to bring the first MU2 header house on line in 2017 Q3. Development expenditures are expected to increase as a result.

As at May 3, 2017, our unrestricted cash position was $8.5 million.

 

About Ur-Energy

 

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

FOR FURTHER INFORMATION, PLEASE CONTACT

 

Jeffrey Klenda, Chair and CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

 

Cautionary Note Regarding Forward-Looking Information

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

Ur-Energy Releases 2017 Q1 Results

Littleton, Colorado (PR Newswire – May 5, 2017) Ur-Energy Inc. (NYSE MKT:URG TSX:URE)  (“Ur-Energy” or the “Company”) has filed the Company’s Form 10-Q for the quarter ended March 31, 2017, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedar.com

Chairman of the Company, Jeff Klenda noted “We continue to execute on our strategy to satisfy our 2017 deliveries through a combination of purchased and produced pounds. In the first quarter, we purchased 200,000 pounds at an average cost of $20 per pound, which led to gross profit margins in excess of 57 percent and cash flows from operations of $6.5 million. We did this while at the same time reaching the safety milestone of 12 months with no lost-time accidents. I couldn’t be more proud of our team.”

Lost Creek Uranium Production and Sales

During the three months ended March 31, 2017, a total of 79,340 pounds of U3O8 was captured within the Lost Creek plant. 74,382 pounds were packaged in drums and 72,643 pounds of drummed inventory were shipped to the conversion facility. We sold 250,000 pounds of U3O8 during the period, of which 50,000 pounds were from produced inventory and 200,000 pounds were from purchased U3O8. Inventory, production and sales figures for the Lost Creek Project are presented in the following tables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2016 Q2

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 79,340

 

 

 103,558

 

 

 141,774

 

 

 133,341

 

 

Ad valorem and severance tax

 

$000

 

$

 241

 

$

 247

 

$

 552

 

$

 304

 

 

Wellfield cash cost (1)

 

$000

 

$

 889

 

$

 864

 

$

 858

 

$

 846

 

 

Wellfield non-cash cost (2)

 

$000

 

$

 776

 

$

 777

 

$

 778

 

$

 778

 

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 3.04

 

$

 2.39

 

$

 3.89

 

$

 2.28

 

 

Cash cost per pound captured

 

$/lb

 

$

 11.20

 

$

 8.34

 

$

 6.05

 

$

 6.34

 

 

Non-cash cost per pound captured

 

$/lb

 

$

 9.78

 

$

 7.50

 

$

 5.49

 

$

 5.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 74,382

 

 

 111,049

 

 

 145,893

 

 

 130,308

 

 

Plant cash cost (3)

 

$000

 

$

 1,488

 

$

 1,336

 

$

 1,564

 

$

 1,505

 

 

Plant non-cash cost (2)

 

$000

 

$

 491

 

$

 493

 

$

 495

 

$

 494

 

 

Cash cost per pound drummed

 

$/lb

 

$

 20.00

 

$

 12.03

 

$

 10.72

 

$

 11.55

 

 

Non-cash cost per pound drummed

 

$/lb

 

$

 6.60

 

$

 4.44

 

$

 3.40

 

$

 3.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 72,643

 

 

 98,775

 

 

 149,540

 

 

 148,714

 

 

Distribution cash cost (4)

 

$000

 

$

 47

 

$

 68

 

$

 86

 

$

 123

 

 

Cash cost per pound shipped

 

$/lb

 

$

 0.65

 

$

 0.69

 

$

 0.58

 

$

 0.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds purchased

 

lb

 

 

 200,000

 

 

 -

 

 

 -

 

 

 -

 

 

Purchase costs

 

$000

 

$

 4,015

 

$

 -

 

$

 -

 

$

 -

 

 

Cash cost per pound purchased

 

$/lb

 

$

 20.08

 

$

 -

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

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

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

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

    

Unit

    

2017 Q1

    

2016 Q4

    

2016 Q3

    

2016 Q2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

lb

 

 

 250,000

 

 

 100,000

 

 

 200,000

 

 

 187,000

U3O8 sales

 

$000

 

$

 14,819

 

$

 3,270

 

$

 9,471

 

$

 6,741

Average contract price

 

$/lb

 

$

 59.28

 

$

 32.70

 

$

 47.36

 

$

 39.35

Average spot price

 

$/lb

 

$

 -

 

$

 -

 

$

 -

 

$

 27.00

Average price per pound sold

 

$/lb

 

$

 59.28

 

$

 32.70

 

$

 47.36

 

$

 36.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

$000

 

$

 6,295

 

$

 3,082

 

$

 5,818

 

$

 5,094

Ad valorem and severance tax cost per pound sold

 

$/lb

 

$

 4.00

 

$

 2.98

 

$

 3.09

 

$

 2.65

Cash cost per pound sold

 

$/lb

 

$

 26.12

 

$

 18.27

 

$

 17.50

 

$

 16.88

Non-cash cost per pound sold

 

$/lb

 

$

 15.48

 

$

 9.57

 

$

 8.50

 

$

 7.71

Cost per pound sold - produced

 

$/lb

 

$

 45.60

 

$

 30.82

 

$

 29.09

 

$

 27.24

Cost per pound sold - purchased

 

$/lb

 

$

 20.08

 

$

 -

 

$

 -

 

$

 -

Average cost per pound sold

 

$/lb

 

$

 25.18

 

$

 30.82

 

$

 29.09

 

$

 27.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

$000

 

$

 8,524

 

$

 188

 

$

 3,653

 

$

 1,647

Gross profit per pound sold

 

$/lb

 

$

 34.10

 

$

 1.88

 

$

 18.27

 

$

 8.81

Gross profit margin

 

%

 

 

57.5%

 

 

5.7%

 

 

38.6%

 

 

24.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

lb

 

 

 28,164

 

 

 29,891

 

 

 57,647

 

 

 62,028

Plant inventory

 

lb

 

 

 14,019

 

 

 12,274

 

 

 -

 

 

 3,654

Conversion facility inventory

 

lb

 

 

 113,528

 

 

 84,689

 

 

 84,808

 

 

 135,723

Total inventory

 

lb

 

 

 155,711

 

 

 126,854

 

 

 142,455

 

 

 201,405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$000

 

$

 712

 

$

 897

 

$

 866

 

$

 929

Plant inventory

 

$000

 

$

 670

 

$

 461

 

$

 -

 

$

 115

Conversion facility inventory

 

$000

 

$

 4,379

 

$

 2,751

 

$

 2,539

 

$

 3,846

Total inventory

 

$000

 

$

 5,761

 

$

 4,109

 

$

 3,405

 

$

 4,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$/lb

 

$

 25.28

 

$

 30.01

 

$

 15.02

 

$

 14.98

Plant inventory

 

$/lb

 

$

 47.79

 

$

 37.56

 

$

 -

 

$

 31.47

Conversion facility inventory

 

$/lb

 

$

 38.57

 

$

 32.48

 

$

 29.94

 

$

 28.34

 

 

 

Notes:

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

 

U3O8 sales of $14.8 million for 2017 Q1 were based on selling 250,000 pounds at an average price of $59.28 into term contract deliveries. We did not make any spot sales during the quarter. Of the 250,000 pounds sold, 50,000 were from produced inventory and 200,000 were from purchased U3O8. For the quarter, our cost of sales totaled $6.3 million at an average cost of $25.18 per pound.

 

The gross profit from the sale of produced uranium for the quarter was $0.8 million, which represents a gross profit margin of approximately 27%. Gross profit from the sale of purchased uranium was $7.7 million, which represents a gross margin of approximately 66%. Total gross profit was $8.5 million, or approximately 58%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost Per Pound Sold
 Reconciliation 1

    

Unit

 

2017 Q1

    

2016 Q4

    

2016 Q3

    

2016 Q2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 241

 

$

 247

 

$

 552

 

$

 304

Wellfield costs

 

$000

 

$

 1,665

 

$

 1,641

 

$

 1,636

 

$

 1,624

Plant and site costs

 

$000

 

$

 1,979

 

$

 1,829

 

$

 2,059

 

$

 1,998

Distribution costs

 

$000

 

$

 47

 

$

 68

 

$

 86

 

$

 123

Inventory change

 

$000

 

$

 (1,652)

 

$

 (703)

 

$

 1,485

 

$

 1,045

Cost of sales - produced

 

$000

 

$

 2,280

 

$

 3,082

 

$

 5,818

 

$

 5,094

Cost of sales - purchased

 

$000

 

$

 4,015

 

$

 —

 

$

 —

 

$

 —

Total cost of sales

 

$000

 

$

 6,295

 

$

 3,082

 

$

 5,818

 

$

 5,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold produced

 

lb

 

 

 50,000

 

 

 100,000

 

 

 200,000

 

 

 187,000

Pounds sold purchased

 

lb

 

 

 200,000

 

 

 —

 

 

 —

 

 

 —

Total pounds sold

 

lb

 

 

 250,000

 

 

 100,000

 

 

 200,000

 

 

 187,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per pound sold - produced (1)

 

$/lb

 

$

 45.60

 

$

 30.82

 

$

 29.09

 

$

 27.24

Average cost per pound sold - purchased

 

$/lb

 

$

 20.08

 

$

 -

 

$

 -

 

$

 -

Total average cost per pound sold

 

$/lb

 

$

 25.18

 

$

 30.82

 

$

 29.09

 

$

 27.24

 

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

 

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

 

Continuing Guidance for 2017

At the end of the first quarter of 2017, the average spot price per pound of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $23.88. Market fundamentals have not changed sufficiently to warrant the accelerated development of mine unit two (“MU2”). In response, we will instead develop MU2 at a controlled rate, which will allow us to produce at a level that will satisfy a portion of our term contracts. 

 

In 2017, we have 600,000 pounds of U3O8 under contract at an average price of approximately $51 per pound.  We have made arrangements to purchase 410,000 pounds at an average cost of $22 per pound. The remaining pounds can readily be delivered from our current inventory and anticipated production. We are not forecasting any spot sales at this time, given the current spot market environment.

 

We expect to have contract sales of 241,000 pounds U3O8 in 2017 Q2 at an average price of $49 per pound. We have contracted to purchase 210,000 of those pounds at an average cost of $23 per pound. The balance will be delivered from Lost Creek production.

 

The 2017 Q2 production target for Lost Creek is between 60,000 and 75,000 pounds U3O8 dried and drummed.  Full year 2017 production guidance is unchanged at between 250,000 and 300,000 pounds. Our production rate may be adjusted based on continuing operational matters and other indicators in the market.

 

Following advance purchasing and planning activities in March, drilling and other construction work to develop the first three header houses in MU2 commenced in early April.  We expect to bring the first MU2 header house on line in 2017 Q3. Development expenditures are expected to increase as a result.

 

As at May 3, 2017, our unrestricted cash position was $8.5 million.

 

About Ur-Energy

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

FOR FURTHER INFORMATION, PLEASE CONTACT

 

Jeffrey Klenda, Chair and CEO

 

866-981-4588

 

Jeff.Klenda@ur-energy.com

 

Cautionary Note Regarding Forward-Looking Information

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

Monday
Mar062017

Ur-Energy Releases 2016 Year End Results

Littleton, Colorado (PR Newswire – March 3, 2017) Ur-Energy Inc. (NYSE MKT:URG TSX:URE)  (“Ur-Energy” or the “Company”) has filed the Company’s Annual Report on Form 10-K, Consolidated Financial Statements, and Management’s Discussion & Analysis, all for the year ended December 31, 2016, with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedar.com. These filings also may be accessed on the Company’s website at www.ur-energy.com. Shareholders of the Company may receive a hard copy of the consolidated financial statements, free of charge, upon request to the Company.

Ur-Energy CEO, Jeff Klenda provided the following on the Company’s 2016 performance: “In a year which ended with difficult market conditions, our company distinguished itself by routinely meeting production expectations and providing consistent cash flow from operations. Our first mine unit at Lost Creek continues to outperform original expectations delivering its two millionth drummed pound to the convertor allowing us to continue filling our long term sales commitments.”  

Financial Results

The Company ended the year with a cash and cash equivalents balance of $1.6 million. We recognized a gross profit of $11.5 million on sales of $27.3 million during 2016. The gross profit from uranium sales was $6.3 million in 2016,  which represents a gross profit margin of approximately 29%.  The Company realized an average price per pound sold of $39.49, as compared to $45.20 in 2015. The decrease was primarily due to lower priced spot sales made in 2016. Our cash cost per pound sold for the year was $17.15 while our total cost per pound sold was $28.20.  Respectively, this compares to $16.27 and $29.53 in 2015. During 2016, we assigned two contract deliveries totaling 200,000 pounds of U3O8 to a third-party trader. The deliveries were made during the year and we recognized $5.1 million in sales from those contracts.

We recorded $0.3 million income from operations after deducting total operating expenses of $11.2 million, which includes exploration and evaluation expenses, development expenses and general and administrative expenses. After recording interest and other expenses, the net loss before income taxes for the year was $3.0 million, as compared to $4.1 million in 2015.  As at March 2, 2017, our unrestricted cash position was $11.3 million. 

Lost Creek Operations

During 2016, the Company began the year with 662,000 pounds under contract at an average price of $47.58 per pound.  Two, 100,000-pound, contract deliveries were assigned to a third party for cash proceeds of $5.1 million in response to unexpected delivery date changes by a customer. After the assignments, we delivered 462,000 pounds from production into the remaining contracts at an average price of $41.38 per pound. In addition, we sold 100,000 pounds into the spot market at an average price of $30.75 per pound.  In total, we sold 562,000 pounds from production at an average price of $39.49 per pound.

During 2016, 538,004 pounds of U3O8 were captured within the Lost Creek plant. 561,094 pounds were packaged in drums and 579,179 pounds of drummed inventory were shipped to the conversion facility.   The cash cost per pound and non-cash cost per pound for produced uranium presented in the following Production Costs and U3O8 Sales and Cost of Sales tables are non-US GAAP measures. These measures do not have a standardized meaning within US GAAP or a defined basis of calculation. Reconciliations of these measures to the US GAAP compliant financial statements follow the Production Costs and U3O8 Sales and Cost of Sales tables.

Production figures for the Lost Creek Project are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Production Costs

    

Unit

    

2016 Q4

    

2016 Q3

    

2016 Q2

    

2016 Q1

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 103,558

 

 

 141,774

 

 

 133,341

 

 

 159,331

 

 

 538,004

 

Ad valorem and severance tax

 

$000

 

$

 247

 

$

 552

 

$

 304

 

$

 420

 

$

 1,523

 

Wellfield cash cost (1)

 

$000

 

$

 864

 

$

 858

 

$

 846

 

$

 1,013

 

$

 3,581

 

Wellfield non-cash cost (2)

 

$000

 

$

 777

 

$

 778

 

$

 778

 

$

 731

 

$

 3,064

 

Ad valorem and severance tax per pound captured

 

$/lb

 

$

 2.39

 

$

 3.89

 

$

 2.28

 

$

 2.64

 

$

 2.83

 

Cash cost per pound captured

 

$/lb

 

$

 8.34

 

$

 6.05

 

$

 6.34

 

$

 6.36

 

$

 6.66

 

Non-cash cost per pound captured

 

$/lb

 

$

 7.50

 

$

 5.49

 

$

 5.83

 

$

 4.59

 

$

 5.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds drummed

 

lb

 

 

 111,049

 

 

 145,893

 

 

 130,308

 

 

 173,844

 

 

 561,094

 

Plant cash cost (3)

 

$000

 

$

 1,336

 

$

 1,564

 

$

 1,505

 

$

 1,696

 

$

 6,101

 

Plant non-cash cost (2)

 

$000

 

$

 493

 

$

 494

 

$

 494

 

$

 497

 

$

 1,978

 

Cash cost per pound drummed

 

$/lb

 

$

 12.03

 

$

 10.72

 

$

 11.55

 

$

 9.76

 

$

 10.87

 

Non-cash cost per pound drummed

 

$/lb

 

$

 4.44

 

$

 3.39

 

$

 3.79

 

$

 2.86

 

$

 3.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds shipped to conversion facility

 

lb

 

 

 98,775

 

 

 149,540

 

 

 148,714

 

 

 182,150

 

 

 579,179

 

Distribution cash cost (4)

 

$000

 

$

 68

 

$

 86

 

$

 123

 

$

 88

 

$

 365

 

Cash cost per pound shipped

 

$/lb

 

$

 0.69

 

$

 0.58

 

$

 0.83

 

$

 0.48

 

$

 0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

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

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

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

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

Production costs have remained fairly consistent over the past four quarters while the production costs per pound generally increased during the year. In total, wellfield, plant and distribution cash costs were very consistent quarter on quarter during 2016. The respective cash costs per pound increased overall during the year and the increases were primarily driven by decreasing levels of production.

U3O8 Sales and Cost of Sales

Sales and cost of sales figures for the Lost Creek Project are presented in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and cost of sales

    

Unit

    

2016 Q4

    

2016 Q3

    

2016 Q2

    

2016 Q1

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds sold

 

lb

 

 

 100,000

 

 

 200,000

 

 

 187,000

 

 

 75,000

 

 

 562,000

U3O8 sales

 

$000

 

$

 3,270

 

$

 9,471

 

$

 6,741

 

$

 2,709

 

$

 22,191

Average contract price

 

$/lb

 

$

 32.70

 

$

 47.36

 

$

 39.35

 

$

 39.35

 

$

 41.38

Average spot price

 

$/lb

 

$

 -

 

$

 -

 

$

 27.00

 

$

 34.50

 

$

 30.75

Average price per pound sold

 

$/lb

 

$

 32.70

 

$

 47.36

 

$

 36.05

 

$

 36.12

 

$

 39.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 cost of sales (1)

 

$000

 

$

 3,082

 

$

 5,818

 

$

 5,094

 

$

 1,855

 

$

 15,849

Ad valorem and severance tax cost per pound sold

 

$/lb

 

$

 2.98

 

$

 3.09

 

$

 2.65

 

$

 2.61

 

$

 2.86

Cash cost per pound sold

 

$/lb

 

$

 18.27

 

$

 17.50

 

$

 16.88

 

$

 15.41

 

$

 17.15

Non-cash cost per pound sold

 

$/lb

 

$

 9.57

 

$

 8.50

 

$

 7.71

 

$

 6.71

 

$

 8.19

Average cost per pound sold

 

$/lb

 

$

 30.82

 

$

 29.09

 

$

 27.24

 

$

 24.73

 

$

 28.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 gross profit

 

$000

 

$

 188

 

$

 3,653

 

$

 1,647

 

$

 854

 

$

 6,342

Gross profit per pound sold

 

$/lb

 

$

 1.88

 

$

 18.27

 

$

 8.81

 

$

 11.39

 

$

 11.29

Gross profit margin

 

%

 

 

5.7%

 

 

38.6%

 

 

24.4%

 

 

31.5%

 

 

28.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Inventory Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

lb

 

 

 29,891

 

 

 57,647

 

 

 62,028

 

 

 71,602

 

 

 

Plant inventory

 

lb

 

 

 12,274

 

 

 -

 

 

 3,654

 

 

 22,062

 

 

 

Conversion facility inventory

 

lb

 

 

 84,689

 

 

 84,808

 

 

135,723

 

 

173,178

 

 

 

Total inventory

 

lb

 

 

 126,854

 

 

142,455

 

 

201,405

 

 

266,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$000

 

$

 897

 

$

 866

 

$

 929

 

$

 977

 

 

 

Plant inventory

 

$000

 

$

 461

 

$

 -

 

$

 115

 

$

 569

 

 

 

Conversion facility inventory

 

$000

 

$

 2,751

 

$

 2,539

 

$

 3,846

 

$

 4,388

 

 

 

Total inventory

 

$000

 

$

 4,109

 

$

 3,405

 

$

 4,890

 

$

 5,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost per pound

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-process inventory

 

$/lb

 

$

 30.01

 

$

 15.02

 

$

 14.98

 

$

 13.64

 

 

 

Plant inventory

 

$/lb

 

$

 37.56

 

$

 -

 

$

 31.47

 

$

 25.79

 

 

 

Conversion facility inventory

 

$/lb

 

$

 32.48

 

$

 29.94

 

$

 28.32

 

$

 25.34

 

 

 

 

Notes:

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

U3O8 sales in 2016 Q4 were based on selling 100,000 pounds at an average price per pound of $32.70. The sale was in to one of our lower-priced contracts for the year. For the year, we sold 562,000 pounds at an average price per pound of $39.49 for total uranium sales of $22.2 million.  Total 2016 contract deliveries were 662,000 pounds at an average price per pound of $47.58.  As discussed above, two, 100,000 pound, contracts at $62 per pound were assigned to a third party for net cash proceeds of $5.1 million. Additionally, we recognized $20 thousand of disposal fees at the Shirley Basin Project. This resulted in total sales of $27.3 million as reported in the financial statements.

At the end of the year, we had approximately 84,689 pounds of U3O8 at the conversion facility at an average cost per pound of $32.48.  The increase from the previous year’s $25.23 is mainly due to reduced production levels accounting for a greater unit cost in both the cash and non-cash categories.

The following table shows the average cost per pound of the conversion facility pounds.

 

 

 

 

 

 

 

 

Ending Conversion Facility Inventory Cost Per Pound Summary

 

Unit

 

2016

2015

 

 

 

 

 

 

 

 

Ad valorem and severance tax cost per pound

 

$/lb

 

$

 2.72

        2.66

Cash cost per pound

 

$/lb

 

$

 19.44

15.39

Non-cash cost per pound

 

$/lb

 

$

 10.32

7.18

Total cost per pound

 

$/lb

 

$

 32.48

25.23

                 

 

 

US GAAP Reconciliations

Cash costs, non-cash costs and per pound calculations are non-US GAAP measures we use to assess business performance. To facilitate a better understanding of these measures, the tables below present a reconciliation of these measures to the financial results as presented in our financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Price Per Pound Sold Reconciliation

 

Unit

 

2016 Q4

 

2016 Q3

 

2016 Q2

 

2016 Q1

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales per financial statements

 

$000

 

$

 5,776

 

$

 12,068

 

$

 6,747

 

$

 2,714

 

$

 27,305

Less disposal fees

 

$000

 

$

 (9)

 

$

 (9)

 

$

 (6)

 

$

 (5)

 

$

 (29)

Less revenue from sale of deliveries under contract

 

$000

 

$

 (2,497)

 

$

 (2,588)

 

$

 -

 

$

 -

 

$

 (5,085)

U3O8 sales

 

$000

 

$

 3,270

 

$

 9,471

 

$

 6,741

 

$

 2,709

 

$

 22,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total pounds sold

 

lb

 

 

 100,000

 

 

 200,000

 

 

 187,000

 

 

 75,000

 

 

 562,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average price per pound sold

 

$/lb

 

$

 32.70

 

$

 47.36

 

$

 36.05

 

$

 36.12

 

$

 39.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cost Per Pound Sold

Reconciliation 1

    

Unit

 

2016 Q4

 

2016 Q3

 

2016 Q2

 

2016 Q1

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem & severance taxes

 

$000

 

$

 247

 

$

 552

 

$

 304

 

$

 420

 

$

 1,523

 

Wellfield costs

 

$000

 

$

 1,641

 

$

 1,636

 

$

 1,624

 

$

 1,744

 

$

 6,645

 

Plant and site costs

 

$000

 

$

 1,829

 

$

 2,059

 

$

 1,998

 

$

 2,193

 

$

 8,079

 

Distribution costs

 

$000

 

$

 68

 

$

 86

 

$

 123

 

$

 88

 

$

 365

 

Inventory change

 

$000

 

$

 (704)

 

$

 1,485

 

$

 1,045

 

$

 (2,590)

 

$

 (764)

 

Total cost of sales

 

$000

 

$

 3,081

 

$

 5,818

 

$

 5,094

 

$

 1,855

 

$

 15,848

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total pounds sold

 

lb

 

 

 100,000

 

 

 200,000

 

 

 187,000

 

 

 75,000

 

 

 562,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average cost per pound sold

 

$/lb

 

$

 30.82

 

$

 29.09

 

$

 27.24

 

$

 24.73

 

$

 28.20

 

                                                               

 

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

 

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

The following table summarizes the results of operations for the years ended December 31, 2016 and 2015 (in thousands of U.S. dollars):

 

 

 

 

 

 

 

Year ended December 31,

 

2016

 

2015

 

$

 

$

 

 

 

 

Sales

 27,305

 

 41,877

Cost of sales

 (15,848)

 

 (29,292)

Gross profit

 11,457

 

 12,585

Exploration and evaluation expense

 (2,964)

 

 (2,853)

Development expense

 (2,886)

 

 (5,358)

General and administrative expense

 (4,740)

 

 (5,715)

Accretion expense

 (534)

 

 (515)

Write-off of mineral properties

 (62)

 

 -

Net profit (loss) from operations

 271

 

 (1,856)

Interest expense (net)

 (1,977)

 

 (2,557)

Warrant mark to market gain

 36

 

 307

Loss from equity investment

 (5)

 

 (8)

Write-off of equity investments

 (1,089)

 

 -

Foreign exchange loss

 (278)

 

 (1)

Other income

 15

 

 5

Loss before income taxes

 (3,027)

 

 (4,110)

Income tax recovery (net)

 17

 

 3,315

Net loss

 (3,010)

 

 (795)

 

 

 

 

Loss per share – basic and diluted

 (0.02)

 

 (0.01)

 

 

 

 

Revenue per pound sold

 39.49

 

 45.20

 

 

 

 

Total cost per pound sold

 28.20

 

 31.67

 

 

 

 

Gross profit per pound sold

 11.29

 

 13.53

 

 

Guidance for 2017

In 2016, the average spot price per pound of U3O8, as reported by Ux Consulting Company, LLC and TradeTech, LLC, decreased approximately 47% to about $18.00 per pound in November.  As a result, we deliberately reduced costs and slowed development activities at MU2, and focused on enhancing production efficiencies from our operating MU1 header houses.

Thus far in 2017, the average spot price per pound of U3O8 increased to about $26.50, but subsequently decreased to $23.00 as of February 27, indicating the fundamentals of market pricing have not changed sufficiently to warrant the accelerated development of MU2. In response, we will instead develop MU2 at a controlled rate, which will allow us to produce at a level that will satisfy a portion of our sales contracts.

 

In addition, we will further reduce costs by implementing a limited reduction in force, which will serve to further streamline our operations. The reduction in force affects personnel in all three company locations and is primarily focused on those departments not directly related to production.  It is expected to reduce our labor costs by approximately $0.8 million per year. 

In 2017, we have 600,000 pounds of U3O8 under contract at an average price of approximately $51 per pound. We expect 2017 production from MU1 and MU2 to be between 250,000 and 300,000 pounds.  We have taken advantage of the low prices at the end of 2016 and in early 2017 to enter into purchase agreements for 410,000 pounds at an average cost of $22 per pound. We have already delivered a portion of these pounds and can readily deliver the remaining pounds from our current inventory and anticipated production.

Together, these actions will give the Company the additional flexibility necessary to quickly react to changing market conditions and accelerate the further development of MU2 when warranted.

We are not forecasting any spot sales at this time, although we may choose to do so if market conditions improve. We estimate the cost per pound sold from inventory will be higher in 2017 because we are producing at lower rates, which will lead to a higher cost per pound sold from production. This will continue to be the case until MU2 becomes operational and production rates increase again. We expect our average gross profit in 2017 to be between $13 and $15 million, which represents a gross profit margin of between 45% and 50%. On a cash basis, we expect our gross profit margin to be between 50% and 55%.

Operating costs in 2017 are expected to be higher than 2016 because of the controlled development of MU2, which is expected to result in the first three header houses of MU2 becoming operational in the second half of the year.  Other costs including capital expenditures and loan repayments will be similar to 2016, with the exception of the RMB loan facility, which was paid off in December 2016.

As at March 2, 2017, our unrestricted cash position was $11.3 million. Given our current cash resources, contracted sales positions and expected margins, we do not anticipate the need for additional funding in the near term unless it is advantageous to do so. 

As discussed above, the Company has contractual sales commitments of 600,000 pounds during 2017, at an average price of approximately $51 per pound. We have established the schedule for those commitments and determined that an effective model for dealing with the current pricing environment is to maximize production from our fully operational first mine unit, and to begin production from the first three header houses of our second mine unit, which have already been partially developed.  This operating strategy for Lost Creek, coupled with cost effective purchases of uranium from the market, will allow us to control costs, minimize development expenditures and maximize cash flow. 

 

About Ur-Energy

Ur-Energy is a junior uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. The Lost Creek processing facility has a two million pounds per year nameplate capacity.  The Company has begun to submit applications for permits and licenses to operate Shirley Basin.  Ur-Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Shares of Ur-Energy trade on the NYSE MKT under the symbol “URG” and on the Toronto Stock Exchange under the symbol “URE.” All currency figures in this announcement are in US dollars unless otherwise stated. Ur-Energy’s corporate office is located in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy’s website is www.ur-energy.com. 

 

FOR FURTHER INFORMATION, PLEASE CONTACT

 

Jeffrey Klenda, Chair & CEO

866-981-4588     

Jeff.Klenda@ur-energy.com

 

Cautionary Note Regarding Forward-Looking Information

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