LITTLETON, Colo., May 5, 2017 /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 March 31, 2017, with the U.S. Securities and
Exchange Commission at www.sec.gov/edgar.shtml and with Canadian
securities authorities on SEDAR at www.sedar.com.
Chairman of the Company, Jeff
Klenda noted,"We continue to execute on our strategy to
satisfy our 2017 deliveries through a combination of purchased and
produced pounds. In the first quarter, we purchased 200,000 pounds
at an average cost of $20 per pound,
which led to gross profit margins in excess of 57 percent and cash
flows from operations of $6.5
million. We did this while at the same time reaching the
safety milestone of 12 months with no lost-time accidents. I
couldn't be more proud of our team."
Lost Creek Uranium Production and Sales
During the three months ended March 31,
2017, a total of 79,340 pounds of U3O8
was captured within the Lost Creek plant. 74,382 pounds were
packaged in drums and 72,643 pounds of drummed inventory were
shipped to the conversion facility. We sold 250,000 pounds of
U3O8 during the period, of which 50,000
pounds were from produced inventory and 200,000 pounds were from
purchased U3O8. Inventory, production and
sales figures for the Lost Creek Project are presented in the
following tables.
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Production and
Production Costs
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Unit
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2017
Q1
|
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2016
Q4
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2016
Q3
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2016
Q2
|
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|
|
|
|
|
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Pounds
captured
|
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lb
|
|
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79,340
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|
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103,558
|
|
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141,774
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|
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133,341
|
|
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Ad valorem and
severance tax
|
|
$000
|
|
$
|
241
|
|
$
|
247
|
|
$
|
552
|
|
$
|
304
|
|
|
Wellfield cash cost
(1)
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$000
|
|
$
|
889
|
|
$
|
864
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|
$
|
858
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|
$
|
846
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Wellfield non-cash
cost (2)
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$000
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$
|
776
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$
|
777
|
|
$
|
778
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$
|
778
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Ad valorem and
severance tax per pound captured
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$/lb
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|
$
|
3.04
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$
|
2.39
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|
$
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3.89
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$
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2.28
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Cash cost per pound
captured
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$/lb
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$
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11.20
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$
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8.34
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$
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6.05
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$
|
6.34
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Non-cash cost per
pound captured
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$/lb
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|
$
|
9.78
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$
|
7.50
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|
$
|
5.49
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$
|
5.83
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Pounds
drummed
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lb
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74,382
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111,049
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145,893
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130,308
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Plant cash cost
(3)
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$000
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$
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1,488
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$
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1,336
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$
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1,564
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$
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1,505
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Plant non-cash cost
(2)
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$000
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$
|
491
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$
|
493
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$
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495
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$
|
494
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Cash cost per pound
drummed
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$/lb
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$
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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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11.55
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Non-cash cost per
pound drummed
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$/lb
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$
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6.60
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$
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4.44
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$
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3.40
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$
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3.77
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Pounds shipped to
conversion facility
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lb
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72,643
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98,775
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149,540
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148,714
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Distribution cash cost
(4)
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$000
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$
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47
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$
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68
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$
|
86
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$
|
123
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Cash cost per pound
shipped
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$/lb
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$
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0.65
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$
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0.69
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$
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0.58
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$
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0.83
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Pounds
purchased
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lb
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200,000
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-
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-
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-
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Purchase
costs
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$000
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$
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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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-
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Cash cost per pound
purchased
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$/lb
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$
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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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-
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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
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2017
Q1
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2016
Q4
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2016
Q3
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2016
Q2
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Pounds
sold
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lb
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250,000
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100,000
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200,000
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187,000
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U3O8 sales
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$000
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$
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14,819
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$
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3,270
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$
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9,471
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$
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6,741
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Average contract
price
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$/lb
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$
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59.28
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$
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32.70
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$
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47.36
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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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-
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$
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-
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$
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-
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$
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27.00
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Average price per
pound sold
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$/lb
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$
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59.28
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$
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32.70
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$
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47.36
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$
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36.05
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U3O8 cost of sales
(1)
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$000
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$
|
6,295
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$
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3,082
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$
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5,818
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$
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5,094
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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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4.00
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$
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2.98
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$
|
3.09
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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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26.12
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$
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18.27
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$
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17.50
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$
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16.88
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Non-cash cost per
pound sold
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$/lb
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$
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15.48
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$
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9.57
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$
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8.50
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$
|
7.71
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Cost per pound sold -
produced
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$/lb
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$
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45.60
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$
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30.82
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$
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29.09
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$
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27.24
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Cost per pound sold -
purchased
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$/lb
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$
|
20.08
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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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25.18
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$
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30.82
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$
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29.09
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$
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27.24
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U3O8 gross
profit
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$000
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$
|
8,524
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$
|
188
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$
|
3,653
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$
|
1,647
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Gross profit per pound
sold
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$/lb
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$
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34.10
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$
|
1.88
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$
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18.27
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$
|
8.81
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Gross profit
margin
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%
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57.5%
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5.7%
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38.6%
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24.4%
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|
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Ending Inventory
Balances
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Pounds
|
|
|
|
|
|
|
|
|
|
|
|
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In-process inventory
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lb
|
|
|
28,164
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|
|
29,891
|
|
|
57,647
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|
|
62,028
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Plant
inventory
|
|
lb
|
|
|
14,019
|
|
|
12,274
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|
|
-
|
|
|
3,654
|
Conversion facility inventory
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lb
|
|
|
113,528
|
|
|
84,689
|
|
|
84,808
|
|
|
135,723
|
Total
inventory
|
|
lb
|
|
|
155,711
|
|
|
126,854
|
|
|
142,455
|
|
|
201,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process inventory
|
|
$000
|
|
$
|
712
|
|
$
|
897
|
|
$
|
866
|
|
$
|
929
|
Plant
inventory
|
|
$000
|
|
$
|
670
|
|
$
|
461
|
|
$
|
-
|
|
$
|
115
|
Conversion facility inventory
|
|
$000
|
|
$
|
4,379
|
|
$
|
2,751
|
|
$
|
2,539
|
|
$
|
3,846
|
Total
inventory
|
|
$000
|
|
$
|
5,761
|
|
$
|
4,109
|
|
$
|
3,405
|
|
$
|
4,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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In-process inventory
|
|
$/lb
|
|
$
|
25.28
|
|
$
|
30.01
|
|
$
|
15.02
|
|
$
|
14.98
|
Plant
inventory
|
|
$/lb
|
|
$
|
47.79
|
|
$
|
37.56
|
|
$
|
-
|
|
$
|
31.47
|
Conversion facility inventory
|
|
$/lb
|
|
$
|
38.57
|
|
$
|
32.48
|
|
$
|
29.94
|
|
$
|
28.34
|
|
Notes:
|
1
|
Cost of sales include
all production costs (notes 1, 2, 3 and 4 in the previous
Production and Production Cost table) adjusted for changes in
inventory values.
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U3O8 sales of $14.8
million for 2017 Q1 were based on selling 250,000 pounds at
an average price of $59.28 into term
contract deliveries. We did not make any spot sales during the
quarter. Of the 250,000 pounds sold, 50,000 were from produced
inventory and 200,000 were from purchased
U3O8. For the quarter, our cost of sales
totaled $6.3 million at an average
cost of $25.18 per pound.
The gross profit from the sale of produced uranium for the
quarter was $0.8 million, which
represents a gross profit margin of approximately 27%. Gross profit
from the sale of purchased uranium was $7.7
million, which represents a gross margin of approximately
66%. Total gross profit was $8.5
million, or approximately 58%.
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|
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|
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Total
Cost Per Pound Sold
Reconciliation
1
|
|
Unit
|
|
2017
Q1
|
|
2016
Q4
|
|
2016
Q3
|
|
2016
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
241
|
|
$
|
247
|
|
$
|
552
|
|
$
|
304
|
Wellfield
costs
|
|
$000
|
|
$
|
1,665
|
|
$
|
1,641
|
|
$
|
1,636
|
|
$
|
1,624
|
Plant and site
costs
|
|
$000
|
|
$
|
1,979
|
|
$
|
1,829
|
|
$
|
2,059
|
|
$
|
1,998
|
Distribution
costs
|
|
$000
|
|
$
|
47
|
|
$
|
68
|
|
$
|
86
|
|
$
|
123
|
Inventory
change
|
|
$000
|
|
$
|
(1,652)
|
|
$
|
(703)
|
|
$
|
1,485
|
|
$
|
1,045
|
Cost of sales -
produced
|
|
$000
|
|
$
|
2,280
|
|
$
|
3,082
|
|
$
|
5,818
|
|
$
|
5,094
|
Cost of sales -
purchased
|
|
$000
|
|
$
|
4,015
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Total cost of
sales
|
|
$000
|
|
$
|
6,295
|
|
$
|
3,082
|
|
$
|
5,818
|
|
$
|
5,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
produced
|
|
lb
|
|
|
50,000
|
|
|
100,000
|
|
|
200,000
|
|
|
187,000
|
Pounds
sold purchased
|
|
lb
|
|
|
200,000
|
|
|
—
|
|
|
—
|
|
|
—
|
Total pounds
sold
|
|
lb
|
|
|
250,000
|
|
|
100,000
|
|
|
200,000
|
|
|
187,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per pound
sold - produced (1)
|
|
$/lb
|
|
$
|
45.60
|
|
$
|
30.82
|
|
$
|
29.09
|
|
$
|
27.24
|
Average cost per pound
sold - purchased
|
|
$/lb
|
|
$
|
20.08
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
25.18
|
|
$
|
30.82
|
|
$
|
29.09
|
|
$
|
27.24
|
|
1
|
The cost per pound
sold reflects both cash and non-cash costs, which are combined as
cost of sales in the statement of operations included in this
filing. The cash and non-cash cost components are identified in the
above inventory, production and sales table.
|
The cost of sales includes ad valorem and severance taxes
related to the extraction of uranium, all costs of wellfield, plant
and site operations including the related depreciation and
amortization of capitalized assets, reclamation and mineral
property costs, plus product distribution costs. These costs are
also used to value inventory and the resulting inventoried cost per
pound is compared to the estimated sales prices based on the
contracts or spot sales anticipated for the distribution of the
product. Any costs in excess of the calculated market value are
charged to cost of sales.
Continuing Guidance for 2017
At the end of the first
quarter of 2017, the average spot price per pound of
U3O8, as reported by Ux Consulting Company,
LLC and TradeTech, LLC, was approximately $23.88. Market fundamentals have not changed
sufficiently to warrant the accelerated development of mine unit
two ("MU2"). In response, we will instead develop MU2 at a
controlled rate, which will allow us to produce at a level that
will satisfy a portion of our term contracts.
In 2017, we have 600,000 pounds of U3O8
under contract at an average price of approximately $51 per pound. We have made arrangements to
purchase 410,000 pounds at an average cost of $22 per pound. The remaining pounds can readily
be delivered from our current inventory and anticipated production.
We are not forecasting any spot sales at this time, given the
current spot market environment.
We expect to have contract sales of 241,000 pounds
U3O8 in 2017 Q2 at an average price of
$49 per pound. We have contracted to
purchase 210,000 of those pounds at an average cost of $23 per pound. The balance will be delivered from
Lost Creek production.
The 2017 Q2 production target for Lost Creek is between 60,000
and 75,000 pounds U3O8 dried and drummed.
Full year 2017 production guidance is unchanged at between
250,000 and 300,000 pounds. Our production rate may be adjusted
based on continuing operational matters and other indicators in the
market.
Following advance purchasing and planning activities in March,
drilling and other construction work to develop the first three
header houses in MU2 commenced in early April. We expect to
bring the first MU2 header house on line in 2017 Q3. Development
expenditures are expected to increase as a result.
As at May 3, 2017, our
unrestricted cash position was $8.5
million.
About Ur-Energy
Ur-Energy is a uranium mining company
operating the Lost Creek in-situ recovery uranium facility
in south-central Wyoming. We have
produced, packaged and shipped more than two million pounds from
Lost Creek since the commencement of operations. Applications are
under review by various agencies to incorporate our LC East project
area into the Lost Creek permits, and we have begun to submit
applications for permits and licenses to construct and operate at
our Shirley Basin Project. Ur-Energy is engaged in uranium mining,
recovery and processing activities, including the acquisition,
exploration, development and operation of uranium mineral
properties in the United States.
Shares of Ur-Energy trade on the NYSE MKT under the symbol "URG"
and on the Toronto Stock Exchange under the symbol "URE."
Ur-Energy's corporate office is located in Littleton, Colorado; its registered office is
in Ottawa, Ontario. Ur-Energy's
website is www.ur-energy.com.
FOR FURTHER INFORMATION, PLEASE CONTACT
Jeffrey Klenda, Chair
and CEO
|
|
866-981-4588
|
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Jeff.Klenda@ur-energy.com
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Cautionary Note Regarding Forward-Looking
Information
This release may contain "forward-looking
statements" within the meaning of applicable securities laws
regarding events or conditions that may occur in the future
(e.g., results of production and continued maintenance of
controlled production and development at Lost Creek; ability to
deliver into existing contractual obligations through a balance of
production and purchased pounds; and whether the Company's long
term contracts adequately protect against market volatility) and
are based on current expectations that, while considered reasonable
by management at this time, inherently involve a number of
significant business, economic and competitive risks, uncertainties
and contingencies. Factors that could cause actual results to
differ materially from any forward-looking statements include, but
are not limited to, capital and other costs varying significantly
from estimates; failure to establish estimated resources and
reserves; the grade and recovery of ore which is mined varying from
estimates; production rates, methods and amounts varying from
estimates; delays in obtaining or failures to obtain required
governmental, environmental or other project approvals; inflation;
changes in exchange rates; fluctuations in commodity prices; delays
in development and other factors described in the public filings
made by the Company at www.sedar.com and www.sec.gov. Readers
should not place undue reliance on forward-looking statements. The
forward-looking statements contained herein are based on the
beliefs, expectations and opinions of management as of the date
hereof and Ur-Energy disclaims any intent or obligation to update
them or revise them to reflect any change in circumstances or in
management's beliefs, expectations or opinions that occur in the
future.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ur-energy-releases-2017-q1-results-300452560.html
SOURCE Ur-Energy Inc.