LITTLETON, Colo., July 28, 2017 /CNW/ -- 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.
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Production and
Production Costs
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Unit
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2017
Q2
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2017
Q1
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2016
Q4
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|
2016
Q3
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2017
YTD
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Pounds
captured
|
|
lb
|
|
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65,257
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79,340
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103,558
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|
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141,774
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|
|
144,597
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|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
227
|
|
$
|
241
|
|
$
|
247
|
|
$
|
552
|
|
$
|
468
|
|
Wellfield cash cost
(1)
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$000
|
|
$
|
599
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|
$
|
889
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|
$
|
864
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|
$
|
858
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$
|
1,488
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Wellfield non-cash
cost (2)
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$000
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|
$
|
780
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|
$
|
776
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|
$
|
777
|
|
$
|
778
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$
|
1,556
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Ad valorem and
severance tax per pound captured
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$/lb
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$
|
3.48
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$
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3.04
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$
|
2.39
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$
|
3.89
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|
$
|
3.23
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Cash cost per pound
captured
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$/lb
|
|
$
|
9.18
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$
|
11.20
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$
|
8.34
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|
$
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6.05
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|
$
|
10.29
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Non-cash cost per
pound captured
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$/lb
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$
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11.95
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|
$
|
9.78
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|
$
|
7.50
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|
$
|
5.49
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|
$
|
10.76
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Pounds
drummed
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lb
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70,833
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74,382
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111,049
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145,893
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145,215
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Plant cash cost
(3)
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$000
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$
|
1,270
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$
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1,488
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|
$
|
1,336
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$
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1,564
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$
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2,758
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Plant non-cash cost
(2)
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$000
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$
|
491
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$
|
491
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$
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493
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$
|
495
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$
|
982
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Cash cost per pound
drummed
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$/lb
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$
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17.89
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$
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20.00
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$
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12.03
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$
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10.72
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$
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18.99
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Non-cash cost per
pound drummed
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$/lb
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$
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6.93
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$
|
6.60
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$
|
4.44
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$
|
3.40
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$
|
6.77
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Pounds shipped to
conversion facility
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lb
|
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74,406
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72,643
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98,775
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149,540
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147,049
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Distribution cash cost
(4)
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$000
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$
|
26
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|
$
|
47
|
|
$
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68
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|
$
|
86
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|
$
|
73
|
|
Cash cost per pound
shipped
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$/lb
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$
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0.35
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$
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0.65
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$
|
0.69
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$
|
0.58
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$
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0.50
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Pounds
purchased
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lb
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210,000
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200,000
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-
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-
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410,000
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Purchase
costs
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$000
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$
|
4,870
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$
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4,015
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$
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-
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$
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-
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$
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8,885
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Cash cost per pound
purchased
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$/lb
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$
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23.19
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$
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20.08
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$
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-
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|
$
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-
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$
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21.67
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Notes:
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1
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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.
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2
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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.
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3
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Plant cash costs
include all plant operating costs and site overhead
costs.
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4
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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.
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Sales and cost of
sales
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Unit
|
|
2017
Q2
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2017
Q1
|
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2016
Q4
|
|
2016
Q3
|
|
2017
YTD
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Pounds
sold
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|
lb
|
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|
241,000
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|
250,000
|
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100,000
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200,000
|
|
|
491,000
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|
U3O8 sales
|
|
$000
|
|
$
|
11,797
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|
$
|
14,819
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$
|
3,270
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|
$
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9,471
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|
$
|
26,616
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Average contract
price
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$/lb
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$
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48.95
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$
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59.28
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|
$
|
32.70
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|
$
|
47.36
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|
$
|
54.21
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Average spot
price
|
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$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
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|
Average price per
pound sold
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$/lb
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|
$
|
48.95
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|
$
|
59.28
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|
$
|
32.70
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|
$
|
47.36
|
|
$
|
54.21
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|
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|
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U3O8 cost of sales
(1)
|
|
$000
|
|
$
|
6,573
|
|
$
|
6,295
|
|
$
|
3,082
|
|
$
|
5,818
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|
$
|
12,868
|
|
Ad valorem and
severance tax cost per pound sold
|
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$/lb
|
|
$
|
4.26
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$
|
4.00
|
|
$
|
2.98
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|
$
|
3.09
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|
$
|
4.09
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Cash cost per pound
sold
|
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$/lb
|
|
$
|
31.54
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$
|
26.12
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|
$
|
18.27
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|
$
|
17.50
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|
$
|
28.18
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Non-cash cost per
pound sold
|
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$/lb
|
|
$
|
19.13
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$
|
15.48
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|
$
|
9.57
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|
$
|
8.50
|
|
$
|
16.90
|
|
Cost per pound sold -
produced
|
|
$/lb
|
|
$
|
54.93
|
|
$
|
45.60
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|
$
|
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
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
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 $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.
View original content with
multimedia:http://www.prnewswire.com/news-releases/ur-energy-releases-2017-q2-results-300496220.html
SOURCE Ur-Energy Inc.