LITTLETON, Colo., July 29, 2016 /CNW/ -- 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 June 30, 2016, 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.
Lost Creek Uranium Production and Sales
During the six
months ended June 30, 2016, we
captured 292,672 pounds of U3O8 within the
Lost Creek plant. 304,152 pounds were packaged in drums and 330,864
pounds of the drummed inventory were shipped to the conversion
facility. We sold 262,000 pounds of U3O8
during the period.
Steve Hatten, Vice President
Operations, confirms "The refinement of well installation and
construction methods in Header House 13 continues to be validated
in its first two months of production. Having substantiated the
value of the team's modifications, we will now begin to retrofit
aspects of the other header houses and pattern wells in order to
further extend the life of those twelve houses. Mine Unit 1
continues to exceed initial expectations as HH 1 is completing its
third year of production this week allowing us to maintain desired
production levels. With the commencement of operations at HH13
during the quarter, production figures are increasing again.
As of July 28, we have captured
47,899 pounds and drummed 50,076 pounds during the
month."
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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2016
Q2
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2016
Q1
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2015
Q4
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2015
Q3
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Year to date
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Pounds
captured
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lb
|
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133,341
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159,331
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211,717
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172,282
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292,672
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Ad valorem and
severance tax
|
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$000
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$
|
304
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$
|
420
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$
|
470
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$
|
674
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$
|
724
|
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Wellfield cash cost
(1)
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$000
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$
|
846
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$
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1,013
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$
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1,017
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$
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990
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$
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1,859
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Wellfield non-cash
cost (1)(2)
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$000
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$
|
778
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$
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731
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$
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619
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$
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1,087
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$
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1,509
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Ad valorem and
severance tax per pound captured
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$/lb
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$
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2.28
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$
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2.64
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$
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2.22
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$
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3.91
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$
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2.47
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Cash cost per pound
captured
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$/lb
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$
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6.34
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$
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6.36
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$
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4.80
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$
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5.75
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$
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6.35
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Non-cash cost per
pound captured
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$/lb
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$
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5.83
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$
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4.59
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$
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2.92
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$
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6.31
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$
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5.16
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Pounds
drummed
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lb
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130,308
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173,844
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189,480
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176,850
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304,152
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Plant cash cost
(3)
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$000
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$
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1,505
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$
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1,696
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$
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1,687
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$
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1,824
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$
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3,201
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Plant non-cash cost
(2)(3)
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$000
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$
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494
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$
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497
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$
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497
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$
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498
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$
|
991
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Cash cost per pound
drummed
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$/lb
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$
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11.55
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$
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9.76
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$
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8.90
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$
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10.31
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$
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10.52
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Non-cash cost per
pound drummed
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$/lb
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$
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3.79
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$
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2.86
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$
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2.63
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$
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2.82
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$
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3.25
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Pounds shipped to
conversion facility
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lb
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148,714
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182,150
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181,568
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184,380
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330,864
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Distribution cash cost
(4)
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$000
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$
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123
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$
|
88
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$
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128
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$
|
80
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$
|
211
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Cash cost per pound
shipped
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$/lb
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$
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0.83
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$
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0.48
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$
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0.70
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$
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0.43
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$
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0.64
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Notes:
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1
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Wellfield costs
include all wellfield operating costs plus amortization of the
related mineral property acquisition costs and depreciation of the
related asset retirement obligation 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 depreciation of plant equipment, capitalized ARO costs and
amortization of the investment in the mineral property acquisition
costs. The expenses are calculated on a straight line basis
so the expense is constant for each quarter. The cost per
pound from these costs will therefore vary based on production
levels only.
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3
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Plant costs include
all plant operating costs, site overhead costs and depreciation of
the related plant construction and asset retirement obligation
costs.
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4
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Distribution 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
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2016
Q2
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2016
Q1
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2015
Q4
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2015
Q3
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2016
YTD
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Pounds
sold
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lb
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187,000
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75,000
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225,000
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150,000
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262,000
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U3O8 sales
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$000
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$
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6,741
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$
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2,709
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$
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7,756
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$
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8,459
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$
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9,450
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Average contract
price
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$/lb
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$
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39.35
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$
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39.35
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$
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28.49
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$
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66.71
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$
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39.35
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Average spot
price
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$/lb
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$
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27.00
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$
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34.50
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$
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36.18
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$
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35.75
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$
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30.75
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Average price per
pound sold
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$/lb
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$
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36.05
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$
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36.12
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$
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34.47
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$
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56.39
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$
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36.07
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U3O8 cost of sales
(1)
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$000
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$
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5,094
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$
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1,855
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$
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5,931
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$
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4,180
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$
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6,949
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Ad valorem and
severance tax cost per pound sold
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$/lb
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$
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2.65
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$
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2.61
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$
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2.80
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$
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2.59
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$
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2.65
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Cash cost per pound
sold
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$/lb
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$
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16.88
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$
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15.41
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$
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15.42
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$
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15.19
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$
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16.46
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Non-cash cost per
pound sold
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$/lb
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$
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7.71
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$
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6.71
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$
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8.13
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$
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10.09
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$
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7.42
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Cost per pound sold -
produced
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$/lb
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$
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27.24
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$
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24.73
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$
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26.35
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$
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27.87
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$
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26.53
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Cost per pound sold -
purchased
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$/lb
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$
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-
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$
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-
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$
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-
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$
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-
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$
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-
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Average cost per pound
sold
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$/lb
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$
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27.24
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$
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24.73
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$
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26.35
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$
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27.87
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$
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26.52
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U3O8 gross
profit
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$000
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$
|
1,647
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$
|
854
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$
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1,825
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$
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4,279
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$
|
2,501
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Gross profit per pound
sold
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$/lb
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$
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8.81
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$
|
11.39
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$
|
8.11
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$
|
28.52
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$
|
9.55
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Gross profit
margin
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%
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24.4%
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31.5%
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23.5%
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50.6%
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26.5%
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Ending Inventory
Balances
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Pounds
|
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|
|
|
|
|
|
|
|
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In-process inventory
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lb
|
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62,028
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|
71,602
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|
88,788
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|
|
71,860
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|
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Plant
inventory
|
|
lb
|
|
|
3,654
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|
22,062
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|
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30,367
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22,455
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Conversion facility inventory
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|
lb
|
|
|
135,723
|
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|
173,178
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|
|
63,776
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|
|
102,782
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Total
inventory
|
|
lb
|
|
|
201,405
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|
|
266,842
|
|
|
182,931
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|
|
197,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process inventory
|
|
$000
|
|
$
|
929
|
|
$
|
977
|
|
$
|
994
|
|
$
|
1,121
|
|
|
|
|
Plant
inventory
|
|
$000
|
|
$
|
115
|
|
$
|
569
|
|
$
|
742
|
|
$
|
712
|
|
|
|
|
Conversion facility inventory
|
|
$000
|
|
$
|
3,846
|
|
$
|
4,388
|
|
$
|
1,609
|
|
$
|
3,025
|
|
|
|
|
Total
inventory
|
|
$000
|
|
$
|
4,890
|
|
$
|
5,934
|
|
$
|
3,345
|
|
$
|
4,858
|
|
|
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|
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Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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In-process inventory
|
|
$/lb
|
|
$
|
14.98
|
|
$
|
13.64
|
|
$
|
11.20
|
|
$
|
15.60
|
|
|
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|
Plant
inventory
|
|
$/lb
|
|
$
|
31.47
|
|
$
|
25.79
|
|
$
|
24.43
|
|
$
|
31.71
|
|
|
|
|
Conversion facility inventory
|
|
$/lb
|
|
$
|
28.32
|
|
$
|
25.34
|
|
$
|
25.23
|
|
$
|
29.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
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|
1
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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.
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U3O8 sales of $6.7
million for 2016 Q2 were based on selling 187,000 pounds at
an average price of $36.05, with
regularly-scheduled contract deliveries of 137,000 pounds and a
sale of 50,000 pounds on the spot market. For the quarter, our cost
of sales totaled $5.1 million based
on selling 187,000 pounds from production at a total cost per pound
of $27.24, up from $24.73 in the previous quarter but more in line
with the third and fourth quarters of 2015. The cost per
pound sold was reflective of the increased cost per pound produced
for the two quarters in 2016 which are primarily the result of
lower production.
At the end of the quarter, the average cash cost per pound in
the conversion facility ending inventory was $17.50, an increase from $15.85 at the end of the previous quarter, and is
reflective of the increased cost per pound produced for the past
two quarters, which was again primarily driven by the lower
production levels.
The gross profit from uranium sales for the quarter was
$1.6 million, which represents a
gross profit margin of approximately 24%. This was lower than the
previous quarter due to lower spot prices and an increase in costs
mainly associated with lower production levels for the year.
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|
|
|
|
|
|
|
|
|
|
Total
Cost Per Pound Sold
Reconciliation
|
|
Unit
|
|
2016
Q2
|
|
2016
Q1
|
|
2015
Q4
|
|
2015
Q3
|
|
2016
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
304
|
|
$
|
420
|
|
$
|
470
|
|
$
|
674
|
|
$
|
724
|
|
Wellfield
costs
|
|
$000
|
|
$
|
1,624
|
|
$
|
1,744
|
|
$
|
1,636
|
|
$
|
2,077
|
|
$
|
3,368
|
|
Plant and site
costs
|
|
$000
|
|
$
|
1,998
|
|
$
|
2,193
|
|
$
|
2,184
|
|
$
|
2,321
|
|
$
|
4,191
|
|
Distribution
costs
|
|
$000
|
|
$
|
123
|
|
$
|
88
|
|
$
|
128
|
|
$
|
80
|
|
$
|
211
|
|
Inventory
change
|
|
$000
|
|
$
|
1,045
|
|
$
|
(2,590)
|
|
$
|
1,513
|
|
$
|
(973)
|
|
$
|
(1,545)
|
|
Total cost of
sales
|
|
$000
|
|
$
|
5,094
|
|
$
|
1,855
|
|
$
|
5,931
|
|
$
|
4,179
|
|
$
|
6,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total pounds
sold
|
|
lb
|
|
|
187,000
|
|
|
75,000
|
|
|
225,000
|
|
|
150,000
|
|
|
262,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
27.24
|
|
$
|
24.73
|
|
$
|
26.35
|
|
$
|
27.87
|
|
$
|
26.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
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 2016
As a result of the
continuing low spot price environment, we anticipate that we will
continue to maintain production at levels that will be consistent
with our 2016 contractual sales obligations, which are 662,000
pounds at an average realizable price of $47.61 per pound (including the deliveries
assigned during the first quarter) in the current year.
The monthly 2016 production target for Lost Creek is to dry and
drum an average of 50,000 to 60,000 pounds
U3O8. Production at this level will permit
delivery into our remaining 2016 term contract commitment,
discretionary spot sales, and the continuing buildup of our
inventory, with an estimated final production for 2016 within the
range of 600,000 to 700,000 pounds U3O8. Our
production rate may be adjusted based on operational refinements,
and indicators in the market, including uranium spot market and
term pricing, and other factors. The assignment of delivery
obligations we made in March 2016
permits us greater flexibility to make such operational decisions
and/or to continue to build inventory.
Our projected deliveries for the balance of the year will be
into contracts generating higher prices than were realized on
average during this quarter, and we expect the profit margins for
the year 2016 to be between 25% and 30%.
Webcast and Teleconference
A webcast and
teleconference will be held on Tuesday,
August 2, 2016 at 9:00 a.m. MT
/ 11:00 a.m. ET to discuss the
results and provide an operational update. Those wishing to
participate by phone can do so by calling:
|
US Toll-free
Number
|
1-877-226-2859
|
|
Canada Toll-free
Number
|
1-855-669-9657
|
|
International Number
|
1-412-542-4134
|
|
Ask to be
joined into the Ur-Energy call.
|
The webcast can be accessed 10 minutes prior to the call.
Pre-registration and participation access is available by clicking
here or by copying the following URL into your web browser:
https://www.webcaster4.com/Webcast/Page/1186/16414
If you are unable to join the call, a link will be available
following the webcast on the Company's website
www.ur-energy.com.
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 T. Klenda,
Chair, Executive Director
|
|
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; ability to meet production
targets and to timely deliver into existing contractual obligations
and spot sales as warranted) 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.
Logo -
http://photos.prnewswire.com/prnh/20110913/LA67628LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ur-energy-releases-2016-q2-results-webcast-august-2-2016-300306470.html
SOURCE Ur-Energy Inc.