LITTLETON, Colo., Oct. 28, 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 September 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
nine months ended September 30, 2016,
we captured 434,446 pounds of U3O8 within the
Lost Creek plant. 450,045 pounds were packaged in drums and 480,404
pounds of the drummed inventory were shipped to the conversion
facility. We sold 462,000 pounds of U3O8
during the nine-month period.
Chairman of the Company, Jeff
Klenda reiterates that "the Company's book of term-priced
contracts, which are in place through the end of the decade,
continues to protect the Company in the persistently depressed
uranium market. With the reliability of the Lost Creek operations,
at industry-leading costs of production, our contracts provide the
cashflow which makes Ur-Energy unique among uranium companies.
These factors together with the vigilance of our management and
operating teams provide us necessary flexibility in our
business."
Inventory, production and sales figures for the Lost Creek
Project are presented in the following tables.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and
Production Costs
|
|
Unit
|
|
2016
Q3
|
|
2016
Q2
|
|
2016
Q1
|
|
2015
Q4
|
|
Year to date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
captured
|
|
lb
|
|
|
141,774
|
|
|
133,341
|
|
|
159,331
|
|
|
211,717
|
|
|
434,446
|
|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
552
|
|
$
|
304
|
|
$
|
420
|
|
$
|
470
|
|
$
|
1,276
|
|
Wellfield cash cost
(1)
|
|
$000
|
|
$
|
858
|
|
$
|
846
|
|
$
|
1,013
|
|
$
|
1,017
|
|
$
|
2,717
|
|
Wellfield non-cash
cost (1)(2)
|
|
$000
|
|
$
|
778
|
|
$
|
778
|
|
$
|
731
|
|
$
|
619
|
|
$
|
2,287
|
|
Ad valorem and
severance tax per pound captured
|
|
$/lb
|
|
$
|
3.89
|
|
$
|
2.28
|
|
$
|
2.64
|
|
$
|
2.22
|
|
$
|
2.94
|
|
Cash cost per pound
captured
|
|
$/lb
|
|
$
|
6.05
|
|
$
|
6.34
|
|
$
|
6.36
|
|
$
|
4.80
|
|
$
|
6.25
|
|
Non-cash cost per
pound captured
|
|
$/lb
|
|
$
|
5.49
|
|
$
|
5.83
|
|
$
|
4.59
|
|
$
|
2.92
|
|
$
|
5.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
drummed
|
|
lb
|
|
|
145,893
|
|
|
130,308
|
|
|
173,844
|
|
|
189,480
|
|
|
450,045
|
|
Plant cash cost
(3)
|
|
$000
|
|
$
|
1,564
|
|
$
|
1,505
|
|
$
|
1,696
|
|
$
|
1,687
|
|
$
|
4,765
|
|
Plant non-cash cost
(2)(3)
|
|
$000
|
|
$
|
494
|
|
$
|
494
|
|
$
|
497
|
|
$
|
497
|
|
$
|
1,485
|
|
Cash cost per pound
drummed
|
|
$/lb
|
|
$
|
10.72
|
|
$
|
11.55
|
|
$
|
9.76
|
|
$
|
8.90
|
|
$
|
10.59
|
|
Non-cash cost per
pound drummed
|
|
$/lb
|
|
$
|
3.39
|
|
$
|
3.79
|
|
$
|
2.86
|
|
$
|
2.63
|
|
$
|
3.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds shipped to
conversion facility
|
|
lb
|
|
|
149,540
|
|
|
148,714
|
|
|
182,150
|
|
|
181,568
|
|
|
480,404
|
|
Distribution cash cost
(4)
|
|
$000
|
|
$
|
86
|
|
$
|
123
|
|
$
|
88
|
|
$
|
128
|
|
$
|
297
|
|
Cash cost per pound
shipped
|
|
$/lb
|
|
$
|
0.58
|
|
$
|
0.83
|
|
$
|
0.48
|
|
$
|
0.70
|
|
$
|
0.62
|
|
Notes:
|
1
|
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.
|
2
|
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.
|
3
|
Plant costs include
all plant operating costs, site overhead costs and depreciation of
the related plant construction and asset retirement obligation
costs.
|
4
|
Distribution 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
|
|
2016
Q3
|
|
2016
Q2
|
|
2016
Q1
|
|
2015
Q4
|
|
2016
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
sold
|
|
lb
|
|
|
200,000
|
|
|
187,000
|
|
|
75,000
|
|
|
225,000
|
|
|
462,000
|
U3O8 sales
|
|
$000
|
|
$
|
9,471
|
|
$
|
6,741
|
|
$
|
2,709
|
|
$
|
7,756
|
|
$
|
18,921
|
Average contract
price
|
|
$/lb
|
|
$
|
47.36
|
|
$
|
39.35
|
|
$
|
39.35
|
|
$
|
28.49
|
|
$
|
43.77
|
Average spot
price
|
|
$/lb
|
|
$
|
-
|
|
$
|
27.00
|
|
$
|
34.50
|
|
$
|
36.18
|
|
$
|
30.75
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
47.36
|
|
$
|
36.05
|
|
$
|
36.12
|
|
$
|
34.47
|
|
$
|
40.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost of sales
(1)
|
|
$000
|
|
$
|
5,818
|
|
$
|
5,094
|
|
$
|
1,855
|
|
$
|
5,931
|
|
$
|
12,767
|
Ad valorem and
severance tax cost per pound sold
|
|
$/lb
|
|
$
|
3.09
|
|
$
|
2.65
|
|
$
|
2.61
|
|
$
|
2.80
|
|
$
|
2.84
|
Cash cost per pound
sold
|
|
$/lb
|
|
$
|
17.50
|
|
$
|
16.88
|
|
$
|
15.41
|
|
$
|
15.42
|
|
$
|
16.91
|
Non-cash cost per
pound sold
|
|
$/lb
|
|
$
|
8.50
|
|
$
|
7.71
|
|
$
|
6.71
|
|
$
|
8.13
|
|
$
|
7.88
|
Average cost per pound
sold
|
|
$/lb
|
|
$
|
29.09
|
|
$
|
27.24
|
|
$
|
24.73
|
|
$
|
26.35
|
|
$
|
27.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross
profit
|
|
$000
|
|
$
|
3,653
|
|
$
|
1,647
|
|
$
|
854
|
|
$
|
1,825
|
|
$
|
6,154
|
Gross profit per pound
sold
|
|
$/lb
|
|
$
|
18.27
|
|
$
|
8.81
|
|
$
|
11.39
|
|
$
|
8.11
|
|
$
|
13.32
|
Gross profit
margin
|
|
%
|
|
|
38.6%
|
|
|
24.4%
|
|
|
31.5%
|
|
|
23.5%
|
|
|
32.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Inventory
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process inventory
|
|
lb
|
|
|
57,647
|
|
|
62,028
|
|
|
71,602
|
|
|
88,788
|
|
|
|
Plant
inventory
|
|
lb
|
|
|
-
|
|
|
3,654
|
|
|
22,062
|
|
|
30,367
|
|
|
|
Conversion facility inventory
|
|
lb
|
|
|
84,808
|
|
|
135,723
|
|
|
173,178
|
|
|
63,776
|
|
|
|
Total
inventory
|
|
lb
|
|
|
142,455
|
|
|
201,405
|
|
|
266,842
|
|
|
182,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process inventory
|
|
$000
|
|
$
|
866
|
|
$
|
929
|
|
$
|
977
|
|
$
|
994
|
|
|
|
Plant
inventory
|
|
$000
|
|
$
|
-
|
|
$
|
115
|
|
$
|
569
|
|
$
|
742
|
|
|
|
Conversion facility inventory
|
|
$000
|
|
$
|
2,539
|
|
$
|
3,846
|
|
$
|
4,388
|
|
$
|
1,609
|
|
|
|
Total
inventory
|
|
$000
|
|
$
|
3,405
|
|
$
|
4,890
|
|
$
|
5,934
|
|
$
|
3,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process inventory
|
|
$/lb
|
|
$
|
15.02
|
|
$
|
14.98
|
|
$
|
13.64
|
|
$
|
11.20
|
|
|
|
Plant
inventory
|
|
$/lb
|
|
$
|
-
|
|
$
|
31.47
|
|
$
|
25.79
|
|
$
|
24.43
|
|
|
|
Conversion facility inventory
|
|
$/lb
|
|
$
|
29.94
|
|
$
|
28.32
|
|
$
|
25.34
|
|
$
|
25.23
|
|
|
|
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 $9.5
million for 2016 Q3 were based on selling 200,000 pounds at
an average price of $47.36 into
regularly-scheduled contract deliveries. We did not make any spot
sales during the quarter.
For the quarter, our cost of sales totaled $5.8 million based on selling 200,000 pounds from
production at a total cost per pound of $29.09, up from $27.24 in the previous quarter as the higher
priced pounds from the first two quarters made up much of what was
sold in the current quarter.
At the end of the quarter, the average cash cost per pound in
the conversion facility ending inventory was $17.80, an increase from $17.50 at the end of the previous quarter, and is
reflective of the increased cost per pound produced for the
previous quarters which was again primarily driven by the lower
production levels.
The gross profit from the sale of produced uranium for the
quarter was $3.7 million, which
represents a gross profit margin of approximately 39%. This was
higher than the previous quarter due to a contract sale at a higher
price which occurred during the quarter.
Total
Cost Per Pound Sold Reconciliation 1
|
|
Unit
|
|
2016
Q3
|
|
2016
Q2
|
|
2016
Q1
|
|
2015
Q4
|
|
2016
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
552
|
|
$
|
304
|
|
$
|
420
|
|
$
|
470
|
|
$
|
1,276
|
Wellfield
costs
|
|
$000
|
|
$
|
1,636
|
|
$
|
1,624
|
|
$
|
1,744
|
|
$
|
1,636
|
|
$
|
5,004
|
Plant and site
costs
|
|
$000
|
|
$
|
2,059
|
|
$
|
1,998
|
|
$
|
2,193
|
|
$
|
2,184
|
|
$
|
6,250
|
Distribution
costs
|
|
$000
|
|
$
|
86
|
|
$
|
123
|
|
$
|
88
|
|
$
|
128
|
|
$
|
297
|
Inventory
change
|
|
$000
|
|
$
|
1,485
|
|
$
|
1,045
|
|
$
|
(2,590)
|
|
$
|
1,513
|
|
$
|
(60)
|
Total cost of
sales
|
|
$000
|
|
$
|
5,818
|
|
$
|
5,094
|
|
$
|
1,855
|
|
$
|
5,931
|
|
$
|
12,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total pounds
sold
|
|
lb
|
|
|
200,000
|
|
|
187,000
|
|
|
75,000
|
|
|
225,000
|
|
|
462,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
29.09
|
|
$
|
27.24
|
|
$
|
24.73
|
|
$
|
26.35
|
|
$
|
27.63
|
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
At the end of the second
quarter of 2016, the average spot price per pound of
U3O8, as reported by Ux Consulting Company,
LLC and TradeTech, LLC, had declined to approximately $26.70. As a result of that low spot price
environment, we implemented cost savings measures, including
workforce reductions at all three of our locations, and we
deliberately reduced our production rates to levels that would
satisfy the 2016 contractual sales obligations remaining at that
time.
The average reported spot price per pound of
U3O8 continued to decline during the third
quarter of 2016, to approximately $23.00 at the end of the quarter. For the
week of October 24, 2016, the average
reported price was $20.00 per pound
U3O8, which represents a decline of 42% since
January 1, 2016, when the price was
approximately $34.20.
In response, we have continued to monitor and prudently manage
our costs. We have also minimized development expense activities to
the extent possible without risking our ability to meet future
contractual commitments and have once again lowered our production
rates to levels that are consistent with our remaining 2016 and
anticipated 2017 contractual sales obligations.
During the quarter, we dried and drummed about 146,000 thousand
pounds U3O8, which was at the lower end of
the projected range for the quarter. Because of the
deteriorating spot price environment, we have lowered our
production forecast again and are now targeting to dry and drum
between 40,000 and 45,000 pounds per month in the fourth quarter,
which would bring the estimated final production for 2016 within
the range of 570,000 to 585,000 pounds.
During the nine months ended September
30, 2016, we sold 462,000 pounds of
U3O8 at an average price per pound of
$40.95. Our gross margin per pound
sold during the nine-month period was $13.32, or approximately 33%. We have one
remaining contractual delivery of 100,000 pounds at about
$33 per pound and, with it completed,
we continue to 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 Wednesday,
November 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 copying
the following URL into your web browser:
https://www.webcaster4.com/Webcast/Page/1186/17773
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., reliability of production, and ability to meet
production targets and to timely deliver into existing contractual
obligations; continued ability to produce at low-costs realized to
date) 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-q3-results-webcast-november-2-2016-300353644.html
SOURCE Ur-Energy Inc.