LITTLETON, Colo., Nov.
1, 2019 /CNW/ -- Ur-Energy Inc. (NYSE
American:URG)
(TSX:URE) ("Company" or "Ur-Energy") has filed the Company's Form 10‐Q for the quarter ended September
30, 2019, with the U.S. Securities and Exchange
Commission at www.sec.gov/edgar.shtml and Canadian securities
authorities at www.sedar.com.
Ur-Energy CEO, Jeff Klenda, said,
"With $6.6 million in cash at
October 31, 90,000 pounds U3O8 to be
sold in December at $60 per pound,
and the benefit of our renegotiated State Bond Loan, we expect to
enter 2020 with a strong cash position and nearly 250,000 pounds of
product in inventory, ready to sell. We find ourselves in the
enviable position of awaiting the outcome of the U.S. Nuclear
Working Group without the need for near-term financing. With the
continued support of the State of
Wyoming and Sweetwater
County, which we greatly appreciate, we will defer six
quarters' principal payments on the State Bond Loan, while
continuing to make quarterly interest payments. The deferred
payments, beginning with the October
1 payment, represent approximately $8
million savings for that period. Considering our financial
position and the ability to ramp-up our operating, low-cost Lost
Creek mine quickly and cost-efficiently, we have a distinct
advantage over our peers."
Inventory, production and sales figures for the Lost Creek
Project are presented in the following tables:
Production and
Production Costs
|
|
Unit
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2018
Q4
|
|
2019
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
captured
|
|
lb
|
|
|
7,256
|
|
|
13,146
|
|
|
22,551
|
|
|
48,304
|
|
|
42,953
|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
(14)
|
|
$
|
17
|
|
$
|
57
|
|
$
|
30
|
|
$
|
60
|
Wellfield cash cost
(1)
|
|
$000
|
|
$
|
210
|
|
$
|
264
|
|
$
|
250
|
|
$
|
459
|
|
$
|
724
|
Wellfield non-cash
cost (2)
|
|
$000
|
|
$
|
611
|
|
$
|
612
|
|
$
|
612
|
|
$
|
400
|
|
$
|
1,835
|
Ad valorem and
severance tax per pound captured
|
|
$/lb
|
|
$
|
(1.93)
|
|
$
|
1.29
|
|
$
|
2.53
|
|
$
|
0.62
|
|
$
|
1.40
|
Cash cost per pound
captured
|
|
$/lb
|
|
$
|
28.94
|
|
$
|
20.08
|
|
$
|
11.09
|
|
$
|
9.50
|
|
$
|
16.86
|
Non-cash cost per
pound captured
|
|
$/lb
|
|
$
|
84.21
|
|
$
|
46.55
|
|
$
|
27.14
|
|
$
|
8.28
|
|
$
|
42.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
drummed
|
|
lb
|
|
|
9,367
|
|
|
13,296
|
|
|
21,015
|
|
|
53,654
|
|
|
43,678
|
Plant cash cost
(3)
|
|
$000
|
|
$
|
1,045
|
|
$
|
1,134
|
|
$
|
1,318
|
|
$
|
1,154
|
|
$
|
3,497
|
Plant non-cash cost
(2)
|
|
$000
|
|
$
|
490
|
|
$
|
490
|
|
$
|
480
|
|
$
|
484
|
|
$
|
1,460
|
Cash cost per pound
drummed
|
|
$/lb
|
|
$
|
111.56
|
|
$
|
85.29
|
|
$
|
62.72
|
|
$
|
21.51
|
|
$
|
80.06
|
Non-cash cost per
pound drummed
|
|
$/lb
|
|
$
|
52.31
|
|
$
|
36.85
|
|
$
|
22.84
|
|
$
|
9.02
|
|
$
|
33.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds shipped to
conversion facility
|
|
lb
|
|
|
37,710
|
|
|
—
|
|
|
—
|
|
|
67,040
|
|
|
37,710
|
Distribution cash cost
(4)
|
|
$000
|
|
$
|
12
|
|
$
|
27
|
|
$
|
6
|
|
$
|
47
|
|
$
|
45
|
Cash cost per pound
shipped
|
|
$/lb
|
|
$
|
0.32
|
|
$
|
-
|
|
$
|
-
|
|
$
|
0.70
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
purchased
|
|
lb
|
|
|
122,500
|
|
|
100,000
|
|
|
97,500
|
|
|
-
|
|
|
320,000
|
Purchase
costs
|
|
$000
|
|
$
|
3,391
|
|
$
|
2,795
|
|
$
|
2,681
|
|
$
|
-
|
|
$
|
8,867
|
Cash cost per pound
purchased
|
|
$/lb
|
|
$
|
27.68
|
|
$
|
27.95
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
27.71
|
|
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 expenses 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
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2018
Q4
|
|
2019
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
sold
|
|
lb
|
|
|
122,500
|
|
|
265,000
|
|
|
97,500
|
|
|
-
|
|
|
485,000
|
U3O8 sales
|
|
$000
|
|
$
|
5,115
|
|
$
|
11,477
|
|
$
|
4,812
|
|
$
|
-
|
|
$
|
21,404
|
Average contract
price
|
|
$/lb
|
|
$
|
41.76
|
|
$
|
43.31
|
|
$
|
49.35
|
|
$
|
-
|
|
$
|
44.13
|
Average spot
price
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
41.76
|
|
$
|
43.31
|
|
$
|
49.35
|
|
$
|
-
|
|
$
|
44.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost of sales
(1)
|
|
$000
|
|
$
|
7,515
|
|
$
|
11,163
|
|
$
|
5,146
|
|
$
|
50
|
|
$
|
23,824
|
Lower of cost or NRV
adjustment
|
|
|
|
$
|
(4,087)
|
|
$
|
(2,137)
|
|
$
|
(1,965)
|
|
$
|
(50)
|
|
$
|
(8,189)
|
U3O8 cost of
sales
|
|
|
|
$
|
3,428
|
|
$
|
9,026
|
|
$
|
3,181
|
|
$
|
-
|
|
$
|
15,635
|
Ad valorem and
severance tax cost per pound sold
|
|
$/lb
|
|
$
|
-
|
|
$
|
1.52
|
|
$
|
1.52
|
|
$
|
-
|
|
$
|
1.52
|
Cash cost per pound
sold
|
|
$/lb
|
|
$
|
-
|
|
$
|
23.95
|
|
$
|
23.86
|
|
$
|
-
|
|
$
|
23.93
|
Non-cash cost per
pound sold
|
|
$/lb
|
|
$
|
-
|
|
$
|
12.38
|
|
$
|
12.36
|
|
$
|
-
|
|
$
|
12.38
|
Cost per pound sold -
produced
|
|
$/lb
|
|
$
|
-
|
|
$
|
37.85
|
|
$
|
37.74
|
|
$
|
-
|
|
$
|
37.83
|
Cost per pound sold -
purchased
|
|
$/lb
|
|
$
|
27.98
|
|
$
|
27.80
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
27.83
|
Total average cost
per pound sold
|
|
$/lb
|
|
$
|
27.98
|
|
$
|
34.06
|
|
$
|
32.63
|
|
$
|
-
|
|
$
|
32.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross
profit
|
|
$000
|
|
$
|
1,687
|
|
$
|
2,451
|
|
$
|
1,631
|
|
$
|
-
|
|
$
|
5,769
|
Gross profit per
pound sold
|
|
$/lb
|
|
$
|
13.78
|
|
$
|
9.25
|
|
$
|
16.72
|
|
$
|
-
|
|
$
|
11.89
|
Gross profit
margin
|
|
%
|
|
|
33.0%
|
|
|
21.4%
|
|
|
33.9%
|
|
|
0.0%
|
|
|
26.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Inventory
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
lb
|
|
|
8,074
|
|
|
10,221
|
|
|
10,595
|
|
|
9,134
|
|
|
|
Plant
inventory
|
|
lb
|
|
|
13,526
|
|
|
41,871
|
|
|
28,574
|
|
|
7,559
|
|
|
|
Conversion facility
inventory produced
|
|
lb
|
|
|
199,411
|
|
|
161,700
|
|
|
327,053
|
|
|
375,803
|
|
|
|
Conversion facility
inventory purchased
|
|
lb
|
|
|
48,750
|
|
|
48,750
|
|
|
48,750
|
|
|
-
|
|
|
|
Total
inventory
|
|
lb
|
|
|
269,761
|
|
|
262,542
|
|
|
414,972
|
|
|
392,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$000
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
160
|
|
|
|
Plant
inventory
|
|
$000
|
|
$
|
384
|
|
$
|
1,638
|
|
$
|
1,259
|
|
$
|
345
|
|
|
|
Conversion facility
inventory produced
|
|
$000
|
|
$
|
5,721
|
|
$
|
6,134
|
|
$
|
12,352
|
|
$
|
14,187
|
|
|
|
Conversion facility
inventory purchased
|
|
$000
|
|
$
|
1,252
|
|
$
|
1,355
|
|
$
|
1,341
|
|
$
|
-
|
|
|
|
Total
inventory
|
|
$000
|
|
$
|
7,357
|
|
$
|
9,127
|
|
$
|
14,952
|
|
$
|
14,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
17.52
|
|
|
|
Plant
inventory
|
|
$/lb
|
|
$
|
28.39
|
|
$
|
39.12
|
|
$
|
44.06
|
|
$
|
45.64
|
|
|
|
Conversion facility
inventory produced
|
|
$/lb
|
|
$
|
28.69
|
|
$
|
37.93
|
|
$
|
37.77
|
|
$
|
37.75
|
|
|
|
Conversion facility
inventory purchased
|
|
$/lb
|
|
$
|
25.68
|
|
$
|
27.80
|
|
$
|
27.50
|
|
$
|
-
|
|
|
|
|
Note:
|
1
|
U3O8 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
and excludes NRV.
|
During the quarter we sold 122,500 purchased pounds under term
contracts at an average price of $41.76 per pound.
For the quarter, our uranium cost of sales totaled $3.4 million which all related to purchased
inventory. In 2019 Q3, we purchased 122,500 pounds at an average
price of $27.68 per pound. As we
already had some purchased inventory, the blended cost was
$27.98 per pound sold.
Excluding the NRV adjustment of $4.1
million, the gross profit from uranium sales for 2019 Q3 was
$1.7 million, which represents a
gross profit margin of approximately 33%.
Total
Cost Per Pound Sold
Reconciliation
(1)
|
|
Unit
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2018
Q4
|
|
2019
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales per
financial statements
|
|
|
|
$
|
7,515
|
|
$
|
11,163
|
|
$
|
5,146
|
|
$
|
50
|
|
$
|
23,824
|
Less adjustments
reflecting the lower of cost or NRV
|
|
|
|
$
|
(4,087)
|
|
$
|
(2,137)
|
|
$
|
(1,965)
|
|
$
|
(50)
|
|
$
|
(8,189)
|
U3O8 cost of sales
|
|
|
|
$
|
3,428
|
|
$
|
9,026
|
|
$
|
3,181
|
|
$
|
-
|
|
$
|
15,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
(14)
|
|
$
|
17
|
|
$
|
57
|
|
$
|
30
|
|
$
|
60
|
Wellfield
costs
|
|
$000
|
|
$
|
821
|
|
$
|
876
|
|
$
|
862
|
|
$
|
859
|
|
$
|
2,559
|
Plant and site
costs
|
|
$000
|
|
$
|
1,535
|
|
$
|
1,624
|
|
$
|
1,798
|
|
$
|
1,638
|
|
$
|
4,957
|
Distribution
costs
|
|
$000
|
|
$
|
12
|
|
$
|
27
|
|
$
|
6
|
|
$
|
47
|
|
$
|
45
|
Inventory
change
|
|
$000
|
|
$
|
(2,354)
|
|
$
|
3,702
|
|
$
|
(883)
|
|
$
|
(2,574)
|
|
$
|
465
|
Cost of sales -
produced
|
|
$000
|
|
$
|
—
|
|
$
|
6,246
|
|
$
|
1,840
|
|
$
|
—
|
|
$
|
8,086
|
Cost of sales -
purchased
|
|
$000
|
|
$
|
3,428
|
|
$
|
2,780
|
|
$
|
1,341
|
|
$
|
—
|
|
$
|
7,549
|
Total cost of
sales
|
|
$000
|
|
$
|
3,428
|
|
$
|
9,026
|
|
$
|
3,181
|
|
$
|
—
|
|
$
|
15,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
produced
|
|
lb
|
|
|
—
|
|
|
165,000
|
|
|
48,750
|
|
|
-
|
|
|
213,750
|
Pounds sold
purchased
|
|
lb
|
|
|
122,500
|
|
|
100,000
|
|
|
48,750
|
|
|
-
|
|
|
271,250
|
Total pounds
sold
|
|
lb
|
|
|
122,500
|
|
|
265,000
|
|
|
97,500
|
|
|
-
|
|
|
485,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per pound
sold - produced
|
|
$/lb
|
|
$
|
-
|
|
$
|
37.85
|
|
$
|
37.74
|
|
$
|
-
|
|
$
|
37.83
|
Average cost per pound
sold - purchased
|
|
$/lb
|
|
$
|
27.98
|
|
$
|
27.80
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
27.83
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
27.98
|
|
$
|
34.06
|
|
$
|
32.63
|
|
$
|
-
|
|
$
|
32.24
|
|
Note:
|
1.
|
The cost of sales per
the financial statements 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 realizable value are
charged to the cost of sales per the financial statements as
adjustments reflecting the lower of cost or NRV. These adjustments
are excluded from U3O8 cost of sales because
they relate to the pounds of U3O8 in ending
inventories and do not relate to the pounds of
U3O8 sold during the period.
|
Continuing Guidance for 2019
In 2019, we expect to
deliver 665,000 pounds related to term contracts at an average
price of approximately $48 per pound.
Through September 30, 2019, we have
sold 485,000 pounds of U3O8 at an average
price of $44.13 and in Q3 we sold
122,500 pounds at $41.76 for
$5.1 million in gross sales. Our
remaining 2019 contractual sales commitment is 180,000 pounds in Q4
at an expected average price of $60
per pound, of which 90,000 pounds were sold October 1, 2019.
For 2019, we put in place purchase contracts for 500,000 pounds
at an average cost of $26 per pound.
Our remaining 2019 purchase contract commitment is 180,000 pounds
in Q4 at an expected average cost of $24 per pound.
Gross profits from uranium sales are expected to be
approximately $6.3 million in Q4
excluding any net realizable value adjustments, which represent a
gross profit margin of approximately 59%.
As at October 31, 2019, our
unrestricted cash position was $6.6
million after collection of the October 1, 2019 sales proceeds.
At the end of the third quarter of 2019, the average spot price
of U3O8, as reported by UxC, LLC and
TradeTech, LLC, had climbed slightly to approximately $25.68 per pound in a market lagging because of
low volumes and uncertainty over the Working Group
recommendations.
Clearly, market fundamentals have not changed sufficiently to
warrant further development of MU2. As a result, we do not
anticipate any additional development for the remainder of this
year, and we have reduced our production guidance to between 40,000
and 50,000 pounds at Lost Creek.
In response to the persistently weak uranium market, which
continued as we awaited the outcome of the Section 232 Trade Action
and, subsequently, as we await the outcome of the U.S. Nuclear
Working Group, we took aggressive measures to control
costs.
In 2017, we deliberately slowed development activities at MU2,
reduced costs, focused on enhancing production efficiencies from
our operating MU1 header houses and complemented our production
with cost-effective purchases of uranium. In 2018, we implemented
further cost reductions, purchased 100% of the uranium necessary to
meet our 2018 contractual commitments, and increased our ending
inventory position.
In the first half of 2019, we suspended further MU2 development
activities, secured purchase contracts for 500,000 pounds of
uranium at favorable prices, and sold 165,000 pounds related to
2020 obligations under existing term agreements. More recently, in
response to the President's July 2019
decision regarding the Section 232 Trade Action, we once again took
aggressive cost cutting measures in the form of additional staffing
cuts and a renegotiation of the State Bond Loan to defer principal
payments for 18 months. Additionally, we put in place purchase
contracts for our 2020 contractual commitments, which leaves our
nearly 250,000 pounds of finished inventory available for sale at
our discretion.
The President's July 12,
2019 Memorandum established a Working Group to develop
recommendations for reviving and expanding domestic uranium
production. Currently, the Working Group is slated to report its
recommendations back to the President at or about November 9, 2019. There can be no certainty of
the outcome of the Working Group's findings and recommendations, if
any, or the impact of actions taken in response to those findings
and recommendations or the President's Memorandum, and therefore
the outcome of this continuing process and its effects on the U.S.
uranium market is uncertain.
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 approximately 2.5 million pounds
from Lost Creek since the commencement of operations. Applications
are under review by various agencies to incorporate our LC East
project area into the Lost Creek permits, and to 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
+1 720.981.4588
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; the
impact of the President's announcement to not take any action to
adjust trade to preserve the domestic uranium mining industry; what
recommendations will be made by the Working Group for the revival
and expansion of domestic nuclear fuel production and the timing
and impact of those recommendations, if any; projected sales
and costs of sales; whether the cost-savings measures taken will be
sufficient and will permit the Company to avoid further near-term
dilution to shareholders; and the ability and timing to ramp up
when 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,
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.
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SOURCE Ur-Energy Inc.