The information in this
preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying
prospectus are not an offer to sell nor do they seek an offer to buy these securities in any jurisdiction where the offer or sale
is not permitted.
Subject to completion,
dated September 20, 2018
PRELIMINARY
PROSPECTUS SUPPLEMENT
|
Filed pursuant to Rule 424(b)(5)
|
(to Prospectus dated August 3, 2017)
|
Registration No. 333-219433
|
Common Shares
Warrants to Purchase
Common Shares
We are offering common
shares and associated one-half common share warrants to purchase an aggregate of common shares.
Our common shares are
listed on the NYSE American (the “NYSE American”) under the symbol “URG” and on the Toronto Stock Exchange
(the “TSX”) under the symbol “URE.” On September 19, 2018, the last reported sale price of our common
shares on the NYSE American and the TSX was $0.89 per share and Cdn$1.15 per share, respectively. There is no established trading
market for the warrants and we do not expect a market to develop. In addition, we do not intend to list the warrants on any national
securities exchange or any other nationally recognized trading system.
We have granted the
underwriters an option for a period of 30 days to purchase (i) up to additional common shares and/or (ii) warrants to
purchase up to an aggregate of common shares from us on the same terms. The price of an option warrant if purchased without
an option share will be $ . If the underwriters exercise the option in full, the total proceeds
to us, before expenses, will be $ .
Investing in our
common shares and associated warrants involves risks. See “
Risk Factors
” beginning on page S-3 of this prospectus
supplement and page 8 of the accompanying prospectus to read about risks that you should consider before buying our common
shares and associated warrants. You should carefully read this prospectus supplement and the accompanying prospectus, together
with the documents we incorporate by reference, before you invest in our common shares and associated warrants.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
|
|
|
Price
per share and accompanying warrant
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
Public offering price
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting discounts and commissions (1)
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds, before expenses, to us
|
|
$
|
|
|
|
$
|
|
|
(1) See “
Underwriting
” beginning on page S-6 of this prospectus supplement for additional
information regarding the compensation payable to the underwriters in connection with this offering.
The securities will
be ready for delivery on or about September , 2018.
____________________________________________________________________________________________________
Sole Book-Running Manager
Cantor
The date of this prospectus supplement is
September , 2018.
Table of Contents
PROSPECTUS SUPPLEMENT
PROSPECTUS
ABOUT
THIS PROSPECTUS SUPPLEMENT
This prospectus supplement
relates to a prospectus which is part of a registration statement on Form S-3 (File No. 333-219433) that we have filed with the
SEC utilizing a “shelf” registration process.
Under this shelf registration process,
we may, from time to time, offer debt securities, common shares, warrants, units and rights.
We are responsible
for the information contained and incorporated by reference in this prospectus supplement, the accompanying prospectus and any
applicable free writing prospectus we issue. Neither we nor the underwriters have authorized anyone to give you any other information
and neither we nor the underwriters take any responsibility for any other information that others may give you.
We
are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume that the information
appearing in each of this prospectus supplement, the accompanying prospectus, the documents incorporated by reference into this
prospectus supplement and the accompanying prospectus and any related free writing prospectus is accurate as of the respective
dates of those documents.
Our business, financial
condition, prospectus and results of operations may have changed since those respective dates.
You
should read this prospectus supplement, the accompanying prospectus, the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus and any related free writing prospectus when making your investment decision.
This document is in
two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and adds to, updates
and changes information contained or incorporated by reference in the accompanying prospectus and the documents incorporated by
reference into the accompanying prospectus. The second part is the accompanying prospectus, which gives more general information,
some of which may not apply to this offering. To the extent the information contained or incorporated by reference in this prospectus
supplement differs or varies from the information contained or incorporated by reference in the accompanying prospectus or any
document incorporated by reference herein or therein that is filed with the Securities and Exchange Commission (the “SEC”)
prior to the date of this prospectus supplement, the information in this prospectus supplement will supersede such information.
In addition, to the extent that any information in a filing that we make with the SEC adds to, updates or changes information contained
or incorporated by reference in an earlier filing we made with the SEC, the information in such later filing shall be deemed to
modify and supersede such information in the earlier filing. Before investing in our common shares and warrants, you should read
both this prospectus supplement and the accompanying prospectus, as well as the additional information described under “
Where
You Can Find More Information
” on page S-14 of this prospectus supplement.
Unless otherwise stated,
information in this prospectus supplement assumes that the underwriters will not exercise their option to purchase additional common
shares and/or warrants and no other person will exercise any other outstanding options to purchase our common shares.
FORWARD-LOOKING
STATEMENTS
This prospectus supplement
and accompanying prospectus and the documents incorporated herein and therein may contain "forward-looking statements"
within the meaning of applicable United States (“U.S.”) and Canadian securities laws, and these forward-looking statements
can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,”
“may,” “potential,” “intends,” “plans” and other similar expressions or statements
that an action, event or result “may,” “could” or “should” be taken, occur or be achieved,
or the negative thereof or other similar statements. These statements are only predictions and involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially
different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Such
statements include, but are not limited to: (i) the ability to maintain controlled, steady-state operations at Lost Creek; (ii)
the outcome of our forecasts and production projections, including the anticipated production of Lost Creek for the remainder of
2018; (iii) the timing and outcome of permitting and regulatory approvals to permit uranium recovery at the LC East project; (iv)
the ability to complete additional favorable uranium sales agreements including spot sales if the market warrants and production
inventory is available; (v) the potential of our exploration and development projects; (vi) the timing and outcome of applications
for regulatory approval to build and operate an in situ recovery mine at Shirley Basin; (vii) resolution of the continuing challenges
within the uranium market, including supply and demand projections; (viii) the outcome of the Department of Commerce Section
232 investigation, including whether the Secretary of Commerce will make a recommendation to the U.S. President, and the nature
of the recommendation, whether the President will act on the recommendation and, if so, the nature of the action and remedy; (ix)
the expected benefits of the proposed remedies in the trade action; and (x) the expected impacts of any remedial measures from
the Section 232 action on U.S. production and the U.S. uranium mining industry.
Although we believe
that our plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot be certain
that these plans, intentions or expectations will be achieved. Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the forward-looking statements contained or incorporated by reference in this
prospectus supplement.
Forward-looking statements
are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results
to differ from those expressed or implied by the forward-looking statements, including, without limitation, risks related to:
|
·
|
significant increases or decreases in uranium prices;
|
|
·
|
future estimates for production;
|
|
·
|
business strategies and measures to implement such strategies;
|
|
·
|
estimates of goals for expansion and growth of the business and operations;
|
|
·
|
plans and references to our future successes;
|
|
·
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our history of operating losses and uncertainty of future profitability;
|
|
·
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status as an exploration stage company;
|
|
·
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the lack of mineral reserves;
|
|
·
|
risks associated with obtaining permits and other authorizations in the U.S.;
|
|
·
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risks associated with current variable economic conditions;
|
|
·
|
challenges presented by current inventories and largely unrestricted imports of uranium products
into the U.S.;
|
|
·
|
our ability to service our debt and maintain compliance with all restrictive covenants related
to the debt facility and security documents;
|
|
·
|
the possible impact of future debt or equity financings;
|
|
·
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the hazards associated with mining production; compliance with environmental laws and regulations;
|
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·
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uncertainty regarding the pricing and collection of accounts;
|
|
·
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the possibility for adverse results in potential litigation;
|
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·
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uncertainties associated with changes in law, government policy and regulation;
|
|
·
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uncertainties associated with a Canada Revenue Agency or U.S. Internal Revenue Service audit of
any of our cross border transactions;
|
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·
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adverse changes in general business conditions in any of the countries in which we do business;
|
|
·
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changes in size and structure;
|
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·
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the effectiveness of management and our strategic relationships;
|
|
·
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ability to attract and retain key personnel;
|
|
·
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uncertainties regarding the need for additional capital;
|
|
·
|
sufficiency of insurance coverages;
|
|
·
|
uncertainty regarding the fluctuations of quarterly results;
|
|
·
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foreign currency exchange risks;
|
|
·
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ability to enforce civil liabilities under U.S. securities laws outside the U.S.;
|
|
·
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ability to maintain our listing on the NYSE American and TSX;
|
|
·
|
risks associated with the expected classification as a “passive foreign investment company”
under the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended;
|
|
·
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risks associated with our investments;
|
|
·
|
other factors, many of which are beyond on our control; and
|
|
·
|
other risks and uncertainties
described elsewhere in this
prospectus supplement, the accompanying prospectus, our Annual Report on Form 10-K for the fiscal year ended December 31,
2017 and in other filings we make with the SEC.
|
This
list is not exhaustive of the factors that may affect our forward-looking statements. Although we have attempted to identify important
factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed,
estimated or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only
as of the date made. Except as required by law, we disclaim any obligation subsequently to revise any forward-looking statements
to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated
events. We qualify all of the forward-looking statements contained or incorporated by reference in this prospectus supplement
by the foregoing cautionary statements.
CAUTIONARY
NOTE TO U.S. INVESTORS CONCERNING DISCLOSURE OF
MINERAL RESOURCES
Unless otherwise indicated,
all resource estimates, included or incorporated by reference in this prospectus supplement and accompanying prospectus and the
documents incorporated herein and therein have been prepared in accordance with Canadian National Instrument 43-101
Standards
of Disclosure for Mineral Projects
(“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum
Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition Standards”). NI 43-101 is a rule developed
by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and
technical information concerning mineral projects.
Canadian standards,
including NI 43-101, differ significantly from the requirements of the SEC, and resource information contained or incorporated
by reference in this prospectus supplement and accompanying prospectus and the documents incorporated herein and therein may not
be comparable to similar information disclosed by U.S. companies. In particular, the term “resource” does not equate
to the term “reserves.” Under SEC Industry Guide 7, mineralization may not be classified as a “reserve”
unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time
the reserve determination is made. SEC Industry Guide 7 does not define and the SEC’s disclosure standards normally do not
permit the inclusion of information concerning “measured mineral resources,” “indicated mineral resources”
or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not
constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should also understand that
“inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever
be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis
of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an
“inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces”
in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization
that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures.
Accordingly, information concerning mineral deposits set forth in this prospectus supplement and accompanying prospectus and the
documents incorporated herein and therein may not be comparable to information made public by companies that report in accordance
with U.S. standards.
CURRENCY
AND EXCHANGE RATES
Unless otherwise indicated,
all references to “$” or “dollars” in this prospectus supplement and the accompanying prospectus refer
to U.S. dollars. References to “Cdn$” in this prospectus supplement and the accompanying prospectus refer to Canadian
dollars.
The rate of exchange
on September 19, 2018, as reported by the Bank of Canada for the conversion of Canadian dollars to U.S. dollars, was Cdn$1.00 equals
$0.7724 and, for the conversion of U.S. dollars to Canadian dollars, was $1.00 equals Cdn$1.2947.
PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights
selected information about Ur-Energy Inc. This summary does not contain all of the information that may be important to you in
making an investment decision. For a more complete understanding of Ur-Energy you should read carefully this entire prospectus
supplement and the accompanying prospectus, including the “Risk Factors” section and the other documents we refer to
and incorporate by reference. Unless otherwise indicated, “common shares” means our common shares, no par value, offered
by this prospectus supplement. As used in this prospectus supplement, unless otherwise indicated or the context otherwise requires,
the terms “Company”, “we”, “us” and “our” are used to refer to Ur-Energy Inc.
inclusive of our subsidiaries.
Overview
Incorporated
on March 22, 2004, Ur-Energy is an exploration stage mining company, as that term is defined in SEC Industry Guide 7. We are
engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation
of uranium mineral properties in the U.S. We are operating our first in situ recovery uranium mine at our Lost Creek Project
in Wyoming. Ur-Energy is a corporation continued under the
Canada Business Corporations Act
on August 8,
2006.
The
registered office of the Company is located at 55 Metcalfe Street, Suite 1300, Ottawa, Ontario K1P 6L5, and head
office of the Company is located at 10758 W. Centennial Road, Suite 200, Littleton, Colorado 80127; telephone: 1-720-981-4588.
The
address of the Company's website is www.ur-energy.com. Information contained on the Company’s website is not part of this
prospectus supplement nor is it incorporated by reference herein.
THE
OFFERING
Securities offered by us
|
common shares, no par value, and associated one-half common share warrants to purchase
an aggregate of common shares (collectively, the “Securities”). We have also granted to the underwriters
an option to purchase (i) up to common shares (the “Option Shares”) at a purchase price of
$ per Option Share and/or (ii) warrants to purchase up to an aggregate of common shares
(the “Option Warrants”) from us at a purchase price of $ per Option Warrant.
|
Common shares to be outstanding immediately after this offering (1)
|
shares ( shares if the underwriters exercise their option to purchase additional shares in full)
|
Use of Proceeds
|
We estimate that the net proceeds from the sale of the Securities that
we are offering, after deducting underwriting discounts and commissions and estimated offering expenses, will be
approximately $ million ($ million if the underwriters
exercise their option to purchase additional shares in full).
|
|
We intend to use the net proceeds of this offering
to maintain and enhance operational readiness, and for working capital and general corporate purposes
. See “
Use of Proceeds
” on page S-4 of this prospectus supplement.
|
Dividend Policy
|
We have not paid dividends on our common shares and do not intend to pay cash dividends in the foreseeable future.
|
Risk Factors
|
An investment in our securities involves risks. See “
Risk Factors
” on page S-3 of this prospectus supplement, page 8 of the accompanying prospectus and in the documents incorporated by reference herein for a description of certain of the risks you should consider before investing in our securities.
|
NYSE American and TSX Symbols
|
The common shares are listed under the symbols “URG” on the
NYSE American and “URE” on the TSX. The warrants will not be listed or
traded on any national securities exchange or other trading market.
|
|
(1)
|
The number of common shares that will be outstanding after the offering is based on 146,952,277 common shares outstanding as of September 19, 2018. This number excludes:
|
|
·
|
the common shares reserved for issuance under our equity compensation plans, of which 1,362,915 restricted stock units have been granted, each of which may result in one common share being issued in the future based on the
satisfaction of certain vesting criteria established pursuant to the respective awards;
|
|
·
|
the outstanding options to purchase 9,644,126 common shares;
|
|
·
|
common shares issuable upon
the exercise of the accompanying warrants issued in this offering; and
|
|
·
|
additional common shares issuable and common shares issuable upon exercise of warrants if the underwriters exercise their option to purchase additional shares and warrants in full.
|
RISK
FACTORS
An investment in
our securities involves a high degree of risk. You should carefully consider the risks described herein and those described under
“Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31,
2017, as well as the other information included or incorporated by reference in this prospectus supplement, before making an investment
decision. Our business, results of operations, cash flows and financial condition could be materially adversely affected by any
of these risks. The market or trading price of our securities could decline due to any of these risks. In addition, please read
“Forward-Looking Statements” on page S-i of this prospectus supplement, where we describe additional uncertainties
associated with our business and the forward-looking statements included or incorporated by reference in this prospectus supplement.
Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and
operations.
Additional Risks
Relating to this Offering
The trading price of our common shares
may experience substantial volatility.
Our common shares may
experience substantial volatility that is unrelated to the Company's financial condition or operations. The trading price of the
common shares may also be significantly affected by short-term changes in the price of uranium. The market price of the Company’s
securities is affected by many other variables which may be unrelated to its success and are, therefore, not within the Company’s
control. These include other developments that affect the market for all resource sector-related securities, the breadth of the
public market for the common shares and the attractiveness of alternative investments. The effect of these and other factors on
the market price of the common shares is expected to make the price of the common shares volatile in the future, which may result
in losses to investors.
Our management
will have broad discretion in the use of the net proceeds from this offering and may allocate the net proceeds from this offering
in ways that you and other shareholders may not approve.
The Company currently
intends to allocate the net proceeds it will receive from this offering as described under the heading "
Use of Proceeds
"
on page S-4 of this prospectus supplement. However, management will have discretion in the actual application of the net proceeds,
and the Company may elect to allocate proceeds differently from that described in “
Use of Proceeds
” if the Company
believes it would be in its best interests to do so. Accordingly, you will be relying on the judgment of our management with regard
to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether
the proceeds are being used appropriately. Our failure to apply these funds effectively could have an adverse effect on our business
and cause the price of our common shares to decline.
We may sell
additional equity or debt securities to fund our operations, which may result in dilution to our shareholders and impose restrictions
on our business.
In order to raise additional
funds to support our operations, we may sell additional equity or debt securities, which would result in dilution to all of our
shareholders or impose restrictive covenants that adversely impact our business. The incurrence of indebtedness would result in
increased fixed payment obligations and could also result in restrictive covenants, such as limitations on our ability to incur
additional debt and certain operating restrictions that could adversely impact our ability to conduct our business. If we are unable
to expand our operations or otherwise capitalize on our business opportunities, our business, financial condition and results of
operations could be materially adversely affected.
There is
currently no public market for the warrants and there is no guarantee that the warrants will be listed on any stock exchange.
There is currently
no public market for the warrants and there can be no assurance that an active public market will develop or be sustained after
completion of the offering. In the event a public market for the warrants does not develop or cannot be sustained, it is not possible
to predict the price at which the warrants will trade in the secondary market or whether such market will be liquid or illiquid.
To the extent the warrants are exercised, the number of warrants outstanding will decrease, resulting in diminished liquidity for
such remaining outstanding warrants. A decrease in the liquidity of the warrants may cause, in turn, an increase in the volatility
associated with the price of the warrants. To the extent that the warrants are or become illiquid, an investor may have to exercise
the warrants to realize value.
Investors will have no rights
as a shareholder with respect to their warrants until they exercise their warrants and acquire our common shares.
Until you acquire common
shares upon exercise of your warrants, you will have no rights with respect to the common shares underlying such warrants. Upon
exercise of your warrants, you will be entitled to exercise the rights of a shareholder only as to matters for which the record
date occurs after the exercise date.
Additional Risks Related to Our Business
Recent and future changes to U.S.
tax laws could materially adversely affect our company.
On December 22, 2017, new legislation was
signed into law (H.R. 1, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on
the budget for fiscal year 2018”, informally titled the Tax Cuts and Jobs Act, or the “Tax Act”) that significantly
revised the United States Internal Revenue Code of 1986, as amended (the “Code”). The Tax Act, among other things,
reduces the backup withholding tax rate from 28% to 24% and contains significant changes to corporate taxation, including reduction
of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense
to 30% of adjusted earnings (except for certain small businesses), implementation of a “base erosion anti-abuse tax”
which requires U.S. corporations to make an alternative determination of taxable income without regard to tax deductions for certain
payments to affiliates, taxation of certain non-U.S. corporations’ earnings considered to be “global intangible low
taxed income” repeal of the alternative minimum tax (“AMT”) for corporations and changes to a taxpayer’s
ability to either utilize or refund the AMT credits previously generated, revision in the attribution rules relating to shareholders
of certain “controlled foreign corporations”, limitation of the deduction for net operating losses to 80% of current
year taxable income and elimination of net operating loss carrybacks, one-time taxation of offshore earnings at reduced rates regardless
of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate
deductions for certain new investments instead of deductions for depreciation expense over time, and modification or elimination
of many business deductions and credits. Notwithstanding the reduction in the U.S. corporate income tax rate, the overall
impact of the Tax Act is uncertain and our business and financial condition could be adversely affected. The impact of the
Tax Act on holders of our common shares and warrants is also uncertain and could be adverse. For example, recent changes
in federal income tax law resulting in additional taxes owed by U.S. shareholders related to “controlled foreign corporations”
may discourage U.S. investors from owning or acquiring (directly, indirectly or constructively) 10% or greater of our outstanding
common shares, which other shareholders may have viewed as beneficial or may otherwise negatively impact the trading price of our
common shares. We are unable to predict what U.S. federal tax law may be proposed or enacted in the future or what effect
such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies
or practices, could affect our effective tax rates in the future where we have operations and have an adverse effect on our overall
tax rate in the future, along with increasing the complexity, burden and cost of tax compliance. We urge our shareholders
to consult with their legal and tax advisors with respect to this legislation and the potential tax consequences of investing in
or holding our common shares and warrants.
We may be a passive foreign investment company.
Investors in our securities that are U.S. taxpayers (referred to as a U.S. shareholder) should be aware
that we may be a “passive foreign investment company” (a “PFIC”) for the period ended December 31, 2017,
and may be a PFIC in subsequent years.
See “There
may be adverse U.S. federal income tax consequences to U.S. shareholders under the passive foreign investment company rules”
beginning on page 16 of the prospectus.
USE
OF PROCEEDS
We
estimate that the net proceeds from the sale of common shares and associated warrants that we are offering, after deducting
underwriting discounts and commissions and estimated offering expenses, will be approximately $
million
($ million if the underwriters exercise their
option to purchase additional common shares and warrants in full).
We
intend to use the net proceeds of this offering to maintain and enhance operational readiness, and for working capital and general
corporate purposes, although o
ur management will have broad discretion in the application of the net proceeds of this offering.
MARKET
PRICE OF OUR COMMON SHARES
Our common shares are
quoted on the NYSE American under the symbol “URG” and on the TSX under the symbol “URE.” The following
table sets forth for each of the quarterly periods indicated the range of high and low sales prices in U.S. dollars or Canadian
dollar of our common shares on the NYSE American and TSX, respectively.
|
|
NYSE American
|
|
|
TSX (C$)
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
0.70
|
|
|
$
|
0.44
|
|
|
$
|
0.98
|
|
|
$
|
0.61
|
|
Second Quarter
|
|
$
|
0.73
|
|
|
$
|
0.45
|
|
|
$
|
0.92
|
|
|
$
|
0.60
|
|
Third Quarter
|
|
$
|
0.64
|
|
|
$
|
0.47
|
|
|
$
|
0.82
|
|
|
$
|
0.63
|
|
Fourth Quarter
|
|
$
|
0.59
|
|
|
$
|
0.41
|
|
|
$
|
0.78
|
|
|
$
|
0.55
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
0.91
|
|
|
$
|
0.52
|
|
|
$
|
1.19
|
|
|
$
|
0.70
|
|
Second Quarter
|
|
$
|
0.72
|
|
|
$
|
0.50
|
|
|
$
|
0.97
|
|
|
$
|
0.67
|
|
Third Quarter
|
|
$
|
0.72
|
|
|
$
|
0.53
|
|
|
$
|
0.90
|
|
|
$
|
0.67
|
|
Fourth Quarter
|
|
$
|
0.73
|
|
|
$
|
0.50
|
|
|
$
|
0.93
|
|
|
$
|
0.62
|
|
Year Ending December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
0.79
|
|
|
$
|
0.57
|
|
|
$
|
0.98
|
|
|
$
|
0.75
|
|
Second Quarter
|
|
$
|
0.77
|
|
|
$
|
0.59
|
|
|
$
|
0.98
|
|
|
$
|
0.77
|
|
Third Quarter (through September 19, 2018)
|
|
$
|
0.91
|
|
|
$
|
0.66
|
|
|
$
|
1.15
|
|
|
$
|
0.86
|
|
On September 19,
2018, the closing sale price of our common shares as reported on the NYSE American was $0.89 per share and on the TSX was Cdn$
1.15 per share. On September 19, 2018, the number of our shareholders of record was approximately 13,298 and the number of outstanding
common shares was 146,952,277. Following completion of this offering, assuming no exercise of the option to purchase additional
shares or warrants by the underwriters, there will be common shares and of warrants outstanding.
DESCRIPTION
OF SECURITIES
Common Shares
See “Description
of Common Shares” beginning on page 28 of the accompanying prospectus.
Warrants
The following is a
brief summary of certain terms and conditions of the warrants being offered by this prospectus supplement. The following description
is subject in all respects to the provisions contained in the warrant agreements.
The warrants will be
issued as an individual warrant agreement to the investor. The warrants are exercisable at any time after their original issuance
and at any time up to September , 2021. The warrants will be exercisable, at the option of each holder, in whole or in part
by delivering to us a duly executed exercise notice and by payment in full in immediately available funds for the number of common
shares purchased upon such exercise. In the event the registration statement permitting the registered issuance of the warrant
shares is not then effective or the prospectus forming a part thereof is not then available, then the holder of the warrants may,
in its sole discretion, elect to exercise the warrant through a net share exercise, in which case the holder would receive upon
such exercise the net number of common shares determined according to the formula set forth in the warrant. No fractional common
shares will be issued in connection with the exercise of a warrant. In lieu of fractional shares, we will pay the holder an amount
in cash equal to the fair market value of the fractional share, calculated based on the trading price of our common shares.
The exercise price
per whole share purchasable upon the exercise of the warrants is $ per common share. The exercise price of the warrants is subject
to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications
or similar events affecting our common shares and also upon any distributions of assets, including cash, stock or other property
to our shareholders.
A holder will not have
the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess
of 4.99% of the number of shares of our common shares outstanding immediately after giving effect to the exercise, as such percentage
ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage
to any other percentage upon at least 61 days’ prior notice from the holder to us.
We do not plan on applying
to list the warrants on the NYSE American, TSX or any other national securities exchange or automated quotation system.
Subject to applicable
laws, the warrants may be offered for sale, sold, transferred or assigned without our consent.
In the event of a
fundamental transaction, as described in the warrants and generally including any reorganization, recapitalization or reclassification
of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group
becoming the beneficial owner of 50% of the voting power represented by our outstanding common shares, the holders of the warrants will be entitled to receive upon exercise of the warrants the kind and amount
of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to
such fundamental transaction.
Except by virtue of
such holder’s ownership of our common shares, the holder of a warrant does not have the rights or privileges of a holder
of our common shares, including any voting rights, until the holder exercises the warrant.
Additional Discussion of Tax Considerations
See
“Certain Canadian Federal Income Tax Considerations” beginning on page 32 of the accompanying prospectus
and “Certain U.S. Federal Income Tax Considerations” beginning on page 34 of the accompanying prospectus (as
modified by this prospectus supplement).
UNDERWRITING
Subject to the terms
and conditions set forth in the underwriting agreement, dated September , 2018, between us and Cantor Fitzgerald & Co.,
acting as the representative of the underwriters named below (collectively, the “underwriters”), we have agreed to
sell to the underwriters, and the underwriters have agreed to purchase from us, common shares and associated one-half
common share warrants to purchase an aggregate of common shares.
Underwriters
|
|
Number
of Shares and
Accompanying Warrants
|
|
Cantor Fitzgerald & Co.
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
The underwriting agreement
provides that the obligations of the underwriters are subject to certain conditions precedent such as the receipt by the underwriters
of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement
provides that the underwriters will purchase all of the common shares and associated warrants if any of them are purchased. We
have agreed to indemnify the underwriters and certain of their controlling persons and affiliates against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in
respect of those liabilities.
The underwriters reserve
the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
It is expected that
delivery of the shares and associated warrants will be made against payment therefor on or about September , 2018 (the “Closing
Date”), which is the second business day following the trade date of this offering (such settlement cycle being referred
to as “T+2”). Accordingly, investors who wish to trade the common shares on the date of the pricing will be required, by virtue
of the fact that the common shares initially will settle in T+2, to specify an alternative settlement cycle at the time of any
such trade to prevent failed settlement and should consult their own advisors.
The warrants will
be created and issued pursuant to the terms of a warrant (the “Warrant”), dated the Closing Date. Each whole
warrant will entitle the holder thereof to purchase one common share at a price of
$ at any time prior to 5:30 p.m. (New York
City time), on September , 2021, after which time the warrants will expire and be void and of no value. No fractional common
shares
will be issued upon the exercise of any warrants. There is no
established trading market for the warrants and we do not expect a market to develop. In addition, we do not intend to
list the warrants on any national securities exchange or any other nationally recognized trading system. Accordingly,
purchasers may not be able to resell the warrants purchased under this prospectus supplement. This may affect the price of
the warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the securities
and the extent of issuer regulation. See “
Risk Factors
” on page S-3 of this prospectus supplement.
Option to Purchase
Additional Securities
We have granted to
the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase, from time to
time, in whole or in part, (i) up to Option Shares at a purchase price of $ per
Option Share and/or (ii) Option Warrants from us at a purchase price of $
per Option Warrant.
Commission
and Expenses
The
underwriters have advised us that they propose to offer the common shares and associated warrants to the public at the public
offering price set forth on the cover page of this prospectus supplement and to certain dealers, which may include the underwriters,
at that price less a concession not in excess of $ per
common share and warrant. After the initial offering, Cantor Fitzgerald & Co. may change the offering price and other
selling terms.
The
following table shows the public offering price, the underwriting discounts and commissions that we are to pay the underwriters
and the proceeds, before expenses, to us in connection with this offering. Such amounts are shown assuming both no exercise
and full exercise of the underwriters' option to purchase additional common shares and/or warrants.
|
|
|
Per Share and Accompanying
Warrant
|
|
|
|
Total
|
|
|
|
|
Without
Option to
Purchase
Additional
Shares
and
Accompanying
Warrants
|
|
|
|
With
Option to
Purchase
Additional
Shares
and
Accompanying
Warrants
|
|
|
|
Without
Option to
Purchase
Additional
Shares
and
Accompanying
Warrants
|
|
|
|
With
Option to
Purchase
Additional
Shares
and
Accompanying
Warrants
|
|
Public offering price
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting discounts and commissions
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds to us, before expenses
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
We
estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions
referred to above, will be approximately $225,000 million. We have also agreed to reimburse the underwriters for up to
$100,000 for its counsel’s fees and expenses, which reimbursed fee is deemed underwriting compensation for this
offering by the Financial Industry Regulatory Authority, Inc.
Listing
Our common shares are
listed on the NYSE American under the symbol “URG” and on the TSX under the symbol “URE”.
No Sales of Similar
Securities
We and our
officers and our directors have agreed, subject to certain specified exceptions, not to directly or indirectly, for a period
of 90 days after the date of the underwriting agreement and without the prior written consent of Cantor Fitzgerald
& Co.:
|
·
|
offer, sell, contract to sell, pledge, transfer, assign or otherwise dispose of (including,
without limitation, by making any short sale, engage in any hedging, monetization or derivative transaction) or file (or
participate in the filing of) a registration statement or prospectus with the SEC in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC promulgated
thereunder with
respect to,
any common
shares or any
other of our
securities that are substantially similar to shares of our common shares, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing;
|
|
·
|
enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of common shares or any other of our securities that are substantially similar to common
shares, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase, the
foregoing, whether any such transaction is to be settled by delivery of common shares or such other securities, in cash or otherwise;
or
|
|
·
|
publicly announce an intention to do any of the foregoing.
|
In addition, we and
each such person agrees that, without the prior written consent of Cantor Fitzgerald & Co., we or such other person will not,
during the restricted period, make any demand for, or exercise any right with respect to, the registration of any common shares
or any security convertible into or exercisable or exchangeable for common shares.
Cantor Fitzgerald &
Co. may, in its sole discretion and at any time or from time to time before the termination of the 90-day period release all
or any portion of the securities subject to lock-up agreements.
Stabilization and
Other Transactions
The underwriters may make a market in the
common shares as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and the underwriters
may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can
be given as to the liquidity of the trading market for the common shares, that you will be able to sell any of the common shares
held by you at a particular time or that the prices that you receive when you sell will be favorable.
The underwriters have
advised us that it, pursuant to Regulation M under the Exchange Act, may engage in short sale transactions, stabilizing transactions,
syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the
effect of stabilizing or maintaining the market price of the common shares at a level above that which might otherwise prevail
in the open market. Establishing short sales positions may involve either “covered” short sales or “naked”
short sales.
“Covered”
short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares and
warrants of our common shares in this offering. The underwriters may close out any covered short position by either
exercising its option to purchase additional common shares or warrants or purchasing shares of our common shares in the
open market. In determining the source of shares to close out the covered short position, the underwriters will consider,
among other things, the price of shares available for purchase in the open market as compared to the price at which it may
purchase shares through the option to purchase additional shares or warrants.
“Naked”
short sales are sales in excess of the option to purchase additional common shares. The underwriters must close out
any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters
are concerned that there may be downward pressure on the price of the shares of our common shares in the open market after pricing
that could adversely affect investors who purchase in this offering.
A stabilizing bid is
a bid for the purchase of common shares on behalf of the underwriters for the purpose of fixing or maintaining the price of the
common shares. A syndicate covering transaction is the bid for or the purchase of common shares on behalf of the underwriters to
reduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions, the
underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price
of our common shares or preventing or retarding a decline in the market price of our common shares. As a result, the price of our
common shares may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting
the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if
the common shares originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have
not been effectively placed by such syndicate member.
Neither we nor the
underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described
above may have on the price of our common shares. The underwriters are not obligated to engage in these activities and, if commenced,
may end any of these activities at any time.
Passive Market Making
The underwriters may
also engage in passive market making transactions in our common shares on the NYSE American in accordance with Rule 103 of
Regulation M during a period before the commencement of offers or sales of shares of our common shares in this offering and
extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest
independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that
bid must then be lowered when specified purchase limits are exceeded. Passive market making may cause the price of our common shares
to be higher than the price that otherwise would exist in the open market in the absence of those transactions. The underwriters
are not required to engage in passive market making and, if commenced, may end passive market making activities at any time.
Electronic Distribution
A prospectus in electronic
format may be made available by e-mail or on the web sites or through online services maintained by t
he
underwriter, selling group members (if any) or their affiliates. The underwriters may agree with us to allocate a specific number
of common shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the
underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’
respective web sites and any information contained in any other web site maintained by the underwriters is not part of this prospectus
supplement, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.
Other Activities
and Relationships
The underwriters and
certain of their affiliates are full service financial institutions engaged in a wide range of activities for their own accounts
and the accounts of customers, which may include, among other things, corporate finance, mergers and acquisitions, merchant banking,
equity and fixed income sales, trading and research, derivatives, foreign exchange, futures, asset management, custody, clearance
and securities lending. The underwriters and certain of their affiliates have, from time to time, performed, and may in the future
perform, various investment banking and financial advisory services for us and our affiliates, for which it received or will receive
customary fees and expenses.
In addition, in the
ordinary course of its business, the underwriters and their affiliates may, directly or indirectly, hold long or short positions,
trade and otherwise conduct such activities in or with respect to debt or equity securities and/or bank debt of, and/or derivative
products. Such investment and securities activities may involve our securities and instruments. The underwriters and their affiliates
may also make investment recommendations or publish or express independent research views in respect of such securities or instruments
and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.
Stamp Taxes
If you purchase common
shares offered in this prospectus supplement, you may be required to pay stamp taxes and other charges under the laws and practices
of the country of purchase, in addition to the offering price listed on the cover page of this prospectus supplement.
Notice to Investors
Australia
This prospectus is
not a disclosure document for the purposes of Australia's Corporations Act 2001 (Cth) of Australia, or Corporations Act, has not
been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons
set out below. Accordingly, if you receive this prospectus in Australia:
You confirm and warrant
that you are either:
|
·
|
a “sophisticated investor”
under section 708(8)(a) or (b) of the Corporations Act;
|
|
·
|
a “sophisticated investor”
under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant's certificate to the company which
complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer
has been made; or
|
|
·
|
a “professional investor”
within the meaning of section 708(11)(a) or (b) of the Corporations Act.
|
To the extent that
you are unable to confirm or warrant that you are an exempt sophisticated investor or professional investor under the Corporations
Act any offer made to you under this prospectus is void and incapable of acceptance.
You warrant and agree
that you will not offer any of the securities issued to you pursuant to this prospectus for resale in Australia within 12 months
of those securities being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under
section 708 of the Corporations Act.
European Economic
Area
In relation to each
member state of the European Economic Area which has implemented the Prospectus Directive, each referred to herein as a Relevant
Member State, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member
State, referred to herein as the Relevant Implementation Date, no offer of any securities which are the subject of the offering
contemplated by this prospectus has been or will be made to the public in that Relevant Member State other than any offer where
a prospectus has been or will be published in relation to such securities that has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the relevant competent
authority in that Relevant Member State in accordance with the Prospectus Directive, except that with effect from and including
the Relevant Implementation Date, an offer of such securities may be made to the public in that Relevant Member State:
|
·
|
to any legal entity which is a “qualified
investor” as defined in the Prospectus Directive;
|
|
·
|
to fewer than 100 or, if the Relevant
Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than
qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining
the prior consent of the representatives of the underwriters for any such offer; or
|
|
·
|
in any other circumstances falling within
Article 3(2) of the Prospectus Directive
|
provided that no such offer of securities
shall require the Company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive
or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of
this provision, the expression an “offer to the public” in relation to any securities in any Relevant Member State
means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to
be offered so as to enable an investor to decide to purchase or subscribe the securities, as the same may be varied in that Relevant
Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus
Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented
in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010
PD Amending Directive” means Directive 2010/73/EU.
Hong Kong
No securities have
been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of any document, other than to persons whose
ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to “professional investors”
as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or in other
circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap.
32) of Hong Kong or which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32) of Hong
Kong. No document, invitation or advertisement relating to the securities has been issued or may be issued or may be in the possession
of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents
of which are likely to be accessed or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong)
other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to
“professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made
under that Ordinance.
This prospectus has
not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus may not be issued, circulated or
distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong. Each person
acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the
restriction on offers of the securities described in this prospectus and the relevant offering documents and that he is not acquiring,
and has not been offered any securities in circumstances that contravene any such restrictions.
Japan
The offering has not
been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 of Japan, as amended),
or FIEL, and the Initial Purchaser will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit
of, any resident of Japan (which term as used herein means, unless otherwise provided herein, any person resident in Japan, including
any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly,
in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance
with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.
Singapore
This prospectus has
not been and will not be lodged or registered with the Monetary Authority of Singapore. Accordingly, this prospectus and any other
document or material in connection with the offer or sale, or the invitation for subscription or purchase of the securities may
not be issued, circulated or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to the public or any member of the public in Singapore other than (i)
to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to
a relevant person as defined under Section 275(2), or any person pursuant to Section 275(1A) of the SFA, and in accordance with
the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of any
other applicable provision of the SFA.
Where the securities
are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
|
·
|
a corporation (which is not an accredited
investor as defined under Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital
of which is owned by one or more individuals, each of whom is an accredited investor; or
|
|
·
|
a trust (where the trustee is not an accredited
investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units
of shares and debentures of that corporation or the beneficiaries' rights and interest in that trust shall not be transferable
for six months after that corporation or that trust has acquired the Offer Shares under Section 275 of the SFA except:
|
|
o
|
to an institutional investor under Section 274 of the SFA or to a relevant person defined in Section
275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares
and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000
(or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of
securities or other assets, and further for corporations, in accordance with the conditions, specified in Section 275 of the SFA;
|
|
o
|
where no consideration is given for the transfer; or
|
|
o
|
where the transfer is by operation of law.
|
Switzerland
The securities may
not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange
or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for
issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses
under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the securities or the offering may be publicly
distributed or otherwise made publicly available in Switzerland.
Neither this prospectus
nor any other offering or marketing material relating to the offering, the Company or the securities have been or will be filed
with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of securities
will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, or FINMA, and the offer of securities has not
been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection
afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
Israel
This document does
not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or
approved by the Israel Securities Authority. In the State of Israel, this document is being distributed only to, and is directed
only at, and any offer of the shares is directed only at, investors listed in the first addendum, or the Addendum, to the Israeli
Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio
managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity
in excess of NIS 50 million and “qualified individuals”, each as defined in the Addendum (as it may be amended from
time to time), collectively referred to as qualified investors (in each case purchasing for their own account or, where permitted
under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors will be required
to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
United Kingdom
This prospectus is
only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors (as defined in the
Prospectus Directive) that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended, referred to herein as the Order, and/or (ii) high net worth entities falling
within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated. Each such person is referred
to herein as a Relevant Person.
This prospectus and
its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients
to any other persons in the United Kingdom. Any person in the United Kingdom that is not a Relevant Person should not act or rely
on this document or any of its contents.
LEGAL
MATTERS
The validity of the
issuance of the securities offered hereby will be passed upon by Fasken Martineau DuMoulin LLP, on behalf of the Company.
Certain legal matters will be passed upon for the underwriters by Stikeman Elliott LLP. Certain U.S. legal matters will be
passed upon for the company by Davis Graham & Stubbs LLP, Denver, Colorado. Cooley LLP, New York, New York, is counsel to the
underwriters in connection with this offering.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Company’s
auditors, for the Audited Financial Statements incorporated by reference in this prospectus supplement, PricewaterhouseCoopers
LLP, Chartered Professional Accountants, of Vancouver, British Columbia, report that they are independent from the Company
within the meaning of the Code of Professional Conduct of Chartered Professional Accountants of British Columbia, Canada, and are
independent public accountants with respect to the Company within the meaning of the Securities Act and the applicable rules
and regulations thereunder adopted by the SEC. PricewaterhouseCoopers LLP is registered with the Public Company Accounting
Oversight Board.
EXPERTS
The mineral resource
estimate and related information of the Company’s Lost Creek Property incorporated by reference herein are based upon analyses
performed or overseen by TREC, Inc. Such estimates and related information have been incorporated by reference herein in reliance
upon the authority of such firm as experts in such matters.
The mineral resource
estimate and related information of the Company’s Shirley Basin property incorporated by reference herein are based upon
analyses performed by Western Water Consultants, Inc., d/b/a WWC Engineering. Such estimates and related information have
been incorporated by reference herein in reliance upon the authority of such firm as experts in such matters.
WHERE
YOU CAN FIND MORE INFORMATION
We are subject to the
informational requirements of the Exchange Act, and the rules and regulations thereunder, and in accordance therewith, we file
periodic reports and proxy statements with the SEC. All reports, proxy statements and the other information that we file with the
SEC may be inspected and copied at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our SEC filings are also available
to the public from the SEC’s website at www.sec.gov and our website at www.ur-energy.com.
We have filed with
the SEC a registration statement (of which this prospectus supplement and the accompanying prospectus are a part) on Form S-3 under
the Securities Act with respect to our securities. This prospectus supplement and the accompanying prospectus do not contain all
of the information set forth in the registration statement, including the exhibits and schedules thereto, certain parts of which
are omitted as permitted by the rules and regulations of the SEC.
We also maintain an
Internet website at www.ur-energy.com, which provides additional information about our company and through which you can also access
our SEC filings. Our website and the information contained in and connected to it are not a part of or incorporated by reference
into this prospectus supplement or the accompanying prospectus.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The SEC allows us to
“incorporate by reference” the documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus
supplement, and information in documents that we file later with the SEC will automatically update and supersede information in
this prospectus supplement and the accompanying prospectus. We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, other than any portions of
the respective filings that were furnished, rather than filed, pursuant to Item 2.02 or Item 7.01 of Current Reports
on Form 8-K (including exhibits related thereto) or other applicable SEC rules, until the offering of our securities under
this registration statement is completed or withdrawn:
|
·
|
our Annual Report on Form 10-K for
the fiscal year ended December 31, 2017, filed on March 2, 2018;
|
|
·
|
the information specifically incorporated by reference into our Annual Report on Form 10-K for
the year ended December 31, 2017 from our Definitive Proxy Statement on Schedule 14A filed on April 6, 2018;
|
|
·
|
our Quarterly Reports on Form 10-Q
for the quarters ended March 31, 2018 and June 30, 2018, filed on May 4, 2018 and July 27, 2018, respectively;
|
|
·
|
our Current Reports on Form 8-K filed
on January 16, 2018, January 17, 2018, April 3, 2018, May 7, 2018 and July 18, 2018 (exclu
ding
any portions of such documents that have been "furnished" but not "filed" for purposes of the Exchange Act
);
|
|
·
|
the
description of common shares contained in our registration statements on
Form 40-F
filed
on March 18, 2011, March 5, 2012 and March 1, 2013, including any amendment or report filed for purposes of updating
such description; and
|
|
·
|
all
documents,
or portions thereof, filed by us subsequent to the date of this prospectus supplement, under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act prior to the termination of the offering made hereby.
|
Any statement in a
document incorporated by reference in this prospectus supplement will be deemed to be modified or superseded to the extent a statement
contained in this prospectus supplement or any other subsequently filed document that is incorporated by reference in this prospectus
supplement modifies or supersedes such statement.
You may obtain, free
of charge, a copy of any of these documents (other than exhibits to these documents unless the exhibits specifically are incorporated
by reference into these documents or referred to in this prospectus supplement) by writing or calling us at the following address
and telephone number:
Ur-Energy Inc.
10758 W. Centennial Road, Suite 200
Littleton, Colorado 80127
Attention: General Counsel
(720) 981-4588
PROSPECTUS
$100,000,000
Common Shares
Warrants
Units
Rights
Senior Debt Securities
Subordinated Debt Securities
Ur-Energy Inc. (the “Company,”
“we,” “us,” or “our”) may offer and sell from time to time, in one or more offerings, in amounts,
at prices and on terms determined at the time of any such offering, of our common shares, no par value (“Common Shares”),
warrants to purchase Common Shares (the “Warrants”), our senior and subordinated debt securities, rights to purchase
common shares and/or senior or subordinated debt securities, units consisting of two or more of these classes of securities or
any combination thereof up to an aggregate initial offering price of $100,000,000 (all of the foregoing, collectively, the “Securities”).
The prices at which we may sell the Securities will be determined by the prevailing market price for such Securities. We will bear
all expenses of registration incurred in connection with this offering.
We will provide specific
terms of any offering of Securities in one or more supplements to this prospectus. The Securities may be offered separately or
together in any combination and as separate series. You should read this prospectus and any supplement carefully before you invest.
The prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus
and the applicable prospectus supplement carefully before you make your investment decision.
We may sell securities
directly to you, through agents we select, or through underwriters or dealers we select. If we use agents, underwriters or dealers
to sell the Securities, we will name them and describe their compensation in a prospectus supplement. The net proceeds we expect
to receive from an offering of Securities will be described in the prospectus supplement.
Our registration of the
Securities covered by this prospectus does not mean that we will offer or sell any of the Securities. We may sell the Securities
covered by this prospectus in a number of different ways and at varying prices. We provide more information about how we may sell
the Securities in the section entitled “
Plan of Distribution
” beginning on page 19.
Our Common Shares are traded
on the Toronto Stock Exchange (“TSX”) under the symbol “URE” and on the NYSE American (“NYSE American”)
under the symbol “URG.” On July 21, 2017, the last reported sale price of the Common Shares on the NYSE American was $0.68
per Common Share and on the TSX was Cdn$0.84 per Common Share. Unless otherwise specified in the applicable prospectus supplement,
the Securities other than the Common Shares will not be listed on any securities exchange.
There is currently no
market through which the Securities, other than the Common Shares, may be sold and you may not be able to resell such Securities
purchased under this prospectus and any applicable prospectus supplement. This may affect the pricing of such Securities in the
secondary market, the transparency and availability of trading prices, the liquidity of the securities, and the extent of issuer
regulation.
INVESTING IN OUR SECURITIES
INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ THE “
RISK FACTORS
” SECTION BEGINNING ON PAGE 8 OF
THIS PROSPECTUS.
Neither the U.S. Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 3,
2017
TABLE OF CONTENTS
In this prospectus and in any prospectus supplement,
unless the context otherwise requires, references to “Ur-Energy,” the “Company,” “we,” “us”
and “our” refer to Ur-Energy Inc., either alone or together with our subsidiaries as the context requires. When we
refer to “shares” throughout this prospectus, we include all rights attaching to our Common Shares under any shareholder
rights plan then in effect.
ABOUT THIS PROSPECTUS
This prospectus is part
of a registration statement that we filed with the Securities and Exchange Commission, which we refer to as the “SEC”
or the “Commission,” using a “shelf” registration process. Under the shelf registration, we may sell any
combination of the securities described in this prospectus in one or more offerings. This prospectus provides you with a general
description of the securities that we may offer. Each time that we sell securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The prospectus supplement also may add, update or change information
contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information
incorporated by reference in this prospectus before making an investment in our securities. See “
Where You Can Find More
Information
” for more information. We may use this prospectus to sell securities only if it is accompanied by a prospectus
supplement.
You should not assume that
the information in this prospectus, any accompanying prospectus supplement or any document incorporated by reference is accurate
as of any date other than the date of such document.
WHERE YOU CAN FIND MORE INFORMATION
We
are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations thereunder and, in accordance therewith, we file periodic reports and proxy statements with the SEC.
All reports, proxy statements and the other information that we file with the SEC may be inspected and copied at the Public Reference
Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. Our SEC filings are also available to the public from the SEC's website at
www.sec.gov
and our website at
www.ur-energy.com
.
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
The SEC allows us to “incorporate
by reference” information into this prospectus and any accompanying prospectus supplement, which means that we can disclose
important information to you by referring you to other documents filed separately with the SEC. The information incorporated by
reference is considered part of this prospectus, and information filed with the SEC subsequent to this prospectus and prior to
the termination of the particular offering referred to in such prospectus supplement will automatically be deemed to update and
supersede this information. We incorporate by reference into this prospectus and any accompanying prospectus supplement the documents
listed below (excluding any portions of such documents that have been “furnished” but not “filed” for purposes
of the Exchange Act):
|
(a)
|
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on March 3, 2017;
|
|
|
|
|
(b)
|
Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 filed with the SEC on May 5, 2017;
|
|
|
|
|
(c)
|
Our Current Reports on Form 8-K as filed with the SEC on April 17, 2017 and May 23, 2017; all to the extent “filed” and not “furnished” pursuant to Section 13(a) of the Exchange Act;
|
|
|
|
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(d)
|
The description of common shares contained in our registration statement on Form 40-F filed on January 7, 2008, and as amended on July 7, 2008, including any amendment or report filed for purposes of updating such description; and
|
|
(e)
|
All other documents filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus but before the end of the offering of the Common Shares made by this prospectus.
|
We also incorporate by
reference all documents we subsequently file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the initial filing of the registration statement of which this prospectus is a part (including prior to the effectiveness of the
registration statement) and prior to the termination of the offering. Any statement in a document incorporated by reference in
this prospectus will be deemed to be modified or superseded to the extent a statement contained in this prospectus or any other
subsequently filed document that is incorporated by reference in this prospectus modifies or supersedes such statement.
Unless specifically stated
to the contrary, none of the information that we disclose under Items 2.02 or 7.01 or corresponding information furnished under
Item 9.01 or included as an exhibit of any Current Report on Form 8-K that we may from time to time furnish to the SEC will be
incorporated by reference into, or otherwise included in, this prospectus.
We will provide without
charge upon written or oral request, a copy of any or all of the documents which are incorporated by reference into this prospectus.
Requests should be directed to:
Ur-Energy Inc.
Attention: Corporate Secretary
10758 W. Centennial Road, Suite 200
Littleton, CO 80127
(720) 981-4588
Except as provided above,
no other information, including information on our website, is incorporated by reference in this prospectus.
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING
DISCLOSURE OF MINERAL RESOURCES
Unless otherwise indicated,
all resource estimates, included or incorporated by reference in this prospectus and any prospectus supplement have been, and will
be, prepared in accordance with Canadian National Instrument 43-101
Standards of Disclosure for Mineral Projects
(“NI
43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral
Reserves (“CIM Definition Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.
NI 43-101 permits the disclosure of an historical estimate made prior to the adoption of NI 43-101 that does not comply with NI
43-101 to be disclosed using the historical terminology if the disclosure: (a) identifies the source and date of the historical
estimate; (b) comments on the relevance and reliability of the historical estimate; (c) to the extent known, provides the key assumptions,
parameters and methods used to prepare the historical estimate; (d) states whether the historical estimate uses categories other
than those prescribed by NI 43-101; and (e) includes any more recent estimates or data available.
Canadian standards, including
NI 43-101, differ significantly from the requirements of the SEC, and resource information contained or incorporated by reference
in this prospectus and any prospectus supplement may not be comparable to similar information disclosed by U.S. companies. In particular,
the term “resource” does not equate to the term “‘reserves.” Under SEC Industry Guide 7, mineralization
may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination is made. SEC Industry Guide 7 does not define and the SEC’s
disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources,” “indicated
mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral
deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should
also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral
resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources”
may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that
all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained
ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers
to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without
reference to unit measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable to information
made public by companies that report in accordance with U.S. standards.
EXCHANGE RATE INFORMATION
Unless stated otherwise
or as the context otherwise requires, all references to dollar amounts in this prospectus and any prospectus supplement are references
to United States dollars. References to “$” or “US$” are to United States dollars and references to “Cdn$”
are to Canadian dollars.
The following tables set
forth (i) the rate of exchange for one U.S. dollar, expressed in Canadian dollars, in effect at the end of the periods indicated;
(ii) the average exchange rates for the U.S. dollar, on the last day of each month during such periods; and (iii) the high and
low exchange rates for one U.S. dollar, expressed in Canadian dollars, during such periods, each based on the rate of exchange
as reported by the Bank of Canada.
|
|
Year Ended December 31
|
|
Canadian dollar
|
|
2012
|
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
End of period
|
|
$
|
0.9969
|
|
|
$
|
1.0697
|
|
|
$
|
1.1629
|
|
|
$
|
1.3840
|
|
|
$
|
1.3427
|
|
Average for the period
|
|
$
|
0.9921
|
|
|
$
|
1.0300
|
|
|
$
|
1.1045
|
|
|
$
|
1.2781
|
|
|
$
|
1.3256
|
|
|
|
January
|
|
|
February
|
|
|
March
|
|
|
April
|
|
|
May
|
|
|
June
|
|
Canadian dollar
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
High for the month
|
|
$
|
1.3435
|
|
|
$
|
1.3249
|
|
|
$
|
1.3513
|
|
|
$
|
1.3662
|
|
|
$
|
1.3743
|
|
|
$
|
1.3504
|
|
Low for the month
|
|
$
|
1.3030
|
|
|
$
|
1.3016
|
|
|
$
|
1.3304
|
|
|
$
|
1.3275
|
|
|
$
|
1.3446
|
|
|
$
|
1.2977
|
|
The rate quoted by the
Bank of Canada for the conversion of United States dollars into Canadian dollars on July 21, 2017 is Cdn$1.2549 = US$1.00.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus, and the
documents incorporated by reference herein, contain forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, and forward-looking information and forward-looking statements within the meaning of applicable
Canadian securities laws, with respect to our financial condition, results of operations, business prospects, plans, objectives,
goals, strategies, future events, capital expenditures, and exploration and development efforts. These forward-looking statements
can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,”
“may,” “potential,” “intends,” “plans” and other similar expressions or statements
that an action, event or result “may,” “could” or “should” be taken, occur or be achieved,
or the negative thereof or other similar statements, however the absence of such words does not mean that a statement is not forward-looking.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or industry results, to be materially different from any future results, performance,
or achievements expressed or implied by these forward-looking statements. Such statements include, but are not limited to: (i)
the ability to maintain controlled, steady-state operations at Lost Creek, and to determine future development and construction
priorities; (ii) anticipated production of Lost Creek for 2017 (iii) the timing and outcome of permitting and regulatory approvals
of the amendment for LC East and the KM horizon; (iv) the ability to complete additional favorable uranium sales agreements including
spot sales if the market warrants and production inventory is available; (v) the potential of our exploration and development projects,
including Shirley Basin, as well as the technical and economic viability of Shirley Basin; (vi) the timing and outcome of applications
for regulatory approval to build and operate an in situ recovery mine at Shirley Basin; (vii) the outcome of our forecasts and
production projections; and (viii) resolution of the continuing challenges within the uranium market, including supply and
demand projections.
Although we believe that
our plans, intentions and expectations reflected in these forward-looking statements are reasonable, we cannot be certain that
these plans, intentions or expectations will be achieved. Actual results, performance or achievements could differ materially from
those contemplated, expressed or implied by the forward-looking statements contained in this prospectus.
Forward-looking statements
are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results
to differ from those expressed or implied by the forward-looking statements, including, without limitation, risks related to:
|
·
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significant increases or decreases in uranium prices;
|
|
·
|
future estimates for production, capital expenditures, operating costs, mineral resources,
recovery rates, grades and market prices;
|
|
·
|
business strategies and measures to implement such strategies;
|
|
·
|
estimates of goals for expansion and growth of the business and operations;
|
|
·
|
plans and references to our future successes;
|
|
·
|
our history of operating losses and uncertainty of future profitability;
|
|
·
|
status as an exploration stage company;
|
|
·
|
the lack of mineral reserves;
|
|
·
|
risks associated with obtaining permits and other authorizations in the U.S.;
|
|
·
|
risks associated with current variable economic conditions;
|
|
·
|
challenges presented by current inventories and largely unrestricted imports of uranium products
into the U.S.;
|
|
·
|
our ability to service our debt and maintain compliance with all restrictive covenants related
to the debt facility and security documents;
|
|
·
|
the possible impact of future debt or equity financings;
|
|
·
|
the hazards associated with mining production;
|
|
·
|
compliance with environmental laws and regulations;
|
|
·
|
uncertainty regarding the pricing and collection of accounts;
|
|
·
|
the possibility for adverse results in potential litigation;
|
|
·
|
uncertainties associated with changes in law, government policy and regulation;
|
|
·
|
uncertainties associated with a Canada Revenue Agency or U.S. Internal Revenue Service audit of
any of our cross border transactions;
|
|
·
|
adverse changes in general business conditions in any of the countries in which we do business;
|
|
·
|
changes in size and structure;
|
|
·
|
the effectiveness of management and our strategic relationships;
|
|
·
|
ability to attract and retain key personnel;
|
|
·
|
uncertainties regarding the need for additional capital;
|
|
·
|
sufficiency of insurance coverages;
|
|
·
|
uncertainty regarding the fluctuations of quarterly results;
|
|
·
|
foreign currency exchange risks;
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·
|
ability to enforce civil liabilities under U.S. securities laws outside the United States;
|
|
·
|
ability to maintain our listing on the NYSE American and TSX;
|
|
·
|
risks associated with the expected classification as a “passive foreign investment company”
under the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended;
|
|
·
|
risks associated with our investments;
|
|
·
|
risk factors described or referenced in this prospectus; and
|
|
·
|
other factors, many of which are beyond our control.
|
This list is not exhaustive
of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect
forward-looking statements are described further under the section headings “
Our Business
” and “
Risk
Factors
” in this prospectus and any additional risks or uncertainties described in any prospectus supplements. Although
we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking
statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, believed, estimated or expected. We caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. Except as required by law, we disclaim any obligation subsequently to revise
any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.
We qualify all of the forward-looking statements contained or incorporated by reference
in this prospectus by the foregoing cautionary statements.
OUR BUSINESS
Incorporated on March 22,
2004, Ur-Energy is an exploration stage mining company, as that term is defined in the SEC Industry Guide 7. We are engaged in
uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium
mineral properties in the U.S. We are operating our first in situ recovery uranium mine at our Lost Creek project in Wyoming. Ur-Energy
is a corporation continued under the
Canada Business Corporations Act
on August 8, 2006.
Ur-Energy has one wholly-owned
subsidiary: Ur-Energy USA Inc., incorporated under the laws of the State of Colorado. Ur-Energy USA has three wholly-owned subsidiaries:
NFU Wyoming, LLC, a limited liability company formed under the laws of the State of Wyoming which acts as our land holding and
exploration entity; Lost Creek ISR, LLC, a limited liability company formed under the laws of the State of Wyoming to operate our
Lost Creek project and hold our Lost Creek properties and assets; and Pathfinder Mines Corporation (“Pathfinder”), incorporated
under the laws of the State of Delaware, which holds, among other assets, the Shirley Basin and Lucky Mc properties in Wyoming.
We utilize in situ recovery
(“ISR”) of the uranium at our flagship project, Lost Creek, and will do so at other projects where possible. The ISR
technique is employed in uranium extraction because it allows for an effective recovery of roll front uranium mineralization at
a lower cost. At Lost Creek, we extract and process U
3
O
8,
for shipping to a third-party conversion facility
for further processing, storage and sales.
Our Lost Creek processing
facility, which includes all circuits for the production, drying and packaging of uranium for delivery into sales, is designed
and anticipated to process up to one million pounds of U
3
O
8
annually from the Lost Creek mine. The processing
facility has the physical design capacity to process two million pounds of U
3
O
8
annually, which provides
additional capacity to process material from other sources. We expect that the Lost Creek processing facility may be utilized to
process captured U
3
O
8
from our Shirley Basin project. However, the Shirley Basin permit application
contemplates the construction of a full processing facility, providing greater construction and operating flexibility as may be
dictated by market conditions.
In this prospectus
and in any prospectus supplement, unless the context otherwise requires, references to “Ur-Energy,” the “Company,”
“we,” “us” and “our” refer to Ur-Energy Inc., either alone or together with our subsidiaries
as the context requires.
Our corporate office is
located at 10758 W. Centennial Road, Suite 200, Littleton, CO 80127 and our telephone number is (720) 981-4588. Our website address
is
www.urenergy.com
. The information on our website is not part of this prospectus.
RISK FACTORS
The following sets forth
certain risks and uncertainties that could have a material adverse effect on our business, financial condition and/or results of
operations and the trading price of our Common Shares, which may decline, and investors may lose all or part of their investment.
Additional risks and uncertainties that we do not presently know or that we currently deem immaterial also may impair our business
operations. We cannot assure you that we will successfully address these risks. In addition, other unknown risks may
exist that may affect our business.
An investment in the
Securities offered in this prospectus involves a high degree of risk. For a discussion of other factors you should carefully consider
before deciding to purchase these securities, please consider the risk factors described in the documents we incorporate by reference,
including those in our Annual Report on Form 10-K for the year ended December 31, 2016 as well as those that may be included in
the applicable prospectus supplement and other information incorporated by reference in the applicable prospectus supplement. Also,
please read our “Cautionary Statement Regarding Forward-Looking Statements.”
Risks Related to Our Business
The uranium market is volatile and has
limited customers. Current inventories and largely unrestricted imports challenge the U.S. domestic industry.
The marketability of uranium
and acceptance of uranium mining is subject to numerous factors beyond our control. The price of uranium may experience volatile
and significant price movements over short periods of time. Factors affecting the market include demand for nuclear power; changes
in public acceptance of nuclear power generation as a result of any future accidents or terrorism at nuclear facilities, including
the continuing effects on the market due to the events following the earthquake and tsunami in Japan in March 2011; political and
economic conditions in uranium mining, producing and consuming countries; costs and availability of financing of nuclear plants;
reprocessing of spent fuel and the re-enrichment of depleted uranium tails or waste. Moreover, increasing inventories, sales of
excess civilian and military inventories (including from the dismantling of nuclear weapons) by governments and industry participants,
as well as the production levels and costs of production in countries such as Kazakhstan have had a substantial impact on the domestic
industry. If the higher inventories and the imports from Kazakhstan and other low-cost production sites remain unchecked
on a continuing basis, there could be a significant negative impact to the uranium market which could adversely impact the Company’s
future profitability.
Our property interests and our projects
are subject to volatility in the price of uranium.
The price of uranium is
volatile. Changes in the price of uranium depend on numerous factors beyond our control including international, economic and political
trends; changes in public acceptance of nuclear power generation as a result of any future accidents or terrorism at nuclear facilities,
including the longer-term effects on the market due to the events following the earthquake and tsunami affecting the Fukushima
Daiichi nuclear power station in Japan in 2011; changes in governmental regulations; expectations of inflation; currency exchange
fluctuations; interest rates; global or regional consumption patterns; speculative activities and increased production due to new
extraction developments and improved extraction and production methods. The effect of these factors on the price of uranium, and
therefore on the economic viability of our properties cannot accurately be predicted. Because most of our properties
are in exploration and development stage and Lost Creek commenced operations just over three years ago, it is not yet possible
for us to control the impact of fluctuations in the price of uranium.
Mining operations involve a high degree
of risk.
Mining operations generally
involve a high degree of risk. We continue operations at our first and, currently, only, uranium in situ recovery facility at Lost
Creek, where production activities commenced in the second half of 2013. Our operations at the Lost Creek site, which is a remote
site in south-central Wyoming, and at other projects as they continue in development will be subject to all the hazards and risks
normally encountered in the production of uranium by in situ methods of recovery, including unusual and unexpected geological formations,
unanticipated metallurgical difficulties, water management including waste water disposal capacity, equipment malfunctions and
parts unavailability, interruptions of electrical power and communications, other conditions involved in the drilling and removal
of material through pressurized injection and production wells, radiation safety, transportation and industrial accidents, any
of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental
damage and possible legal liability. Adverse effects on operations and/or further development of our projects could also adversely
affect our business, financial condition, results of operations and cash flow.
Our business is subject to extensive
environmental and other regulations that may make exploring, mining or related activities expensive, and which may change at any
time.
The mining industry is
subject to extensive environmental and other laws and regulations, which may change at any time. Environmental legislation and
regulation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance,
more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their
officers, directors and employees. In addition to the ESA decision made in 2015, to not list the greater sage-grouse as an endangered
species, other rulemakings and proposed legislation are ongoing. For example, the EPA continues with its rulemaking
on changes to Part 192, which sets forth groundwater restoration and stabilization requirements for ISR uranium projects. Other
EPA rulemakings relating to maintenance of tailings facilities and holding ponds, which may also have an impact on ISR projects,
including Lost Creek are at various stages (
e.g.,
UMTRCA, RCRA and SDWA restoration and stabilization requirements). The
changes currently proposed to CERCLA regulations, which would significantly increase financial obligations and surety bonding,
could also have a commensurate impact on ISR projects. These are not the only laws and regulations which are the subject of discussion
and proposed more restrictive changes. Moreover, compliance with environmental quality requirements and reclamation laws imposed
by federal, state and local governmental authorities may require significant capital outlays, materially affect the economics of
a given property, cause material changes or delays in intended activities, and potentially expose us to litigation and other legal
or administrative proceedings. We cannot accurately predict or estimate the impact of any such future laws or regulations, or future
interpretations of existing laws and regulations, on our operations. Historic exploration activities have occurred on many of our
properties and mining and energy production activities have occurred near certain of our properties. If such historic activities
have resulted in releases or threatened releases of regulated substances to the environment, or historic activities require remediation,
potential for liability may exist under federal or state remediation statutes.
The uranium mining industry is capital
intensive, and we may be unable to raise necessary additional funding.
Additional
funds likely may be required to fund working capital or to fund exploration and development activities at our properties
including Lost Creek and the adjoining projects at the Lost Creek property, as well as the development of our Shirley Basin
project. Potential sources of future funds available to us, in addition to the sales proceeds from greater Lost Creek
production, include the sale of additional equity capital, proceeds from the exercise of outstanding convertible equity
instruments, borrowing of funds or other debt structure, project financing, or the sale of our interests in
assets. There is no assurance that such funding will be available to us to continue development or future
exploration. Furthermore, even if such financing is successfully completed, there can be no assurance that it will be
obtained on terms favorable to us or will provide us with sufficient funds to meet our objectives, which may adversely affect
our business and financial position. In addition, any future equity financings may result in substantial dilution for
our existing shareholders.
Our mineral resource estimates may not
be reliable; there is risk and increased uncertainty to commencing and conducting production without established mineral reserves;
and we need to develop additional resources to sustain ongoing operations
.
Our properties do not contain
any mineral reserves as defined under SEC Industry Guide 7. See “
Cautionary Note to U.S. Investors Concerning Disclosure
of Mineral Resources
” above. Until mineral reserves or mineral resources are actually mined and processed, the quantity
of mineral resources and grades must be considered as estimates only. The Company has established the existence of uranium resources
for certain uranium projects, including the Lost Creek property. The Company has not established proven or probable reserves, as
defined by Canadian securities regulators or the SEC under Industry Guide 7, through the completion of a final or “bankable”
feasibility study for any of its uranium projects, including the Lost Creek property. Furthermore, the Company has no plans to
establish proven or probable reserves for any of its uranium projects for which the Company plans on utilizing ISR mining, such
as the Lost Creek project or the Shirley Basin project. As a result, and despite the fact that the Company commenced recovery of
U
3
O
8
at the Lost Creek project in August 2013, there is an increased uncertainty and risk that may result
in economic and technical failure which may adversely impact the Company’s future profitability.
There are numerous uncertainties
inherent in estimating quantities of mineral resources, including many factors beyond our control, and no assurance can be given
that the recovery of estimated mineral reserves or mineral resources will be realized. In general, estimates of mineral resources
are based upon a number of factors and assumptions made as of the date on which the estimates were determined, including:
|
·
|
geological and engineering estimates that have inherent uncertainties and the assumed effects of regulation by governmental agencies;
|
|
·
|
the judgment of the geologists, engineers and other professionals preparing the estimate;
|
|
·
|
estimates of future uranium prices and operating costs;
|
|
·
|
the quality and quantity of available data;
|
|
·
|
the interpretation of that data; and
|
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·
|
the accuracy of various mandated economic assumptions, all of which may vary considerably from actual results.
|
All estimates are, to some
degree, uncertain. For these reasons, estimates of the recoverable mineral resources prepared by different professionals or by
the same professionals at different times, may vary substantially. As such, there is significant uncertainty in any mineral resource
estimate and actual deposits encountered and the economic viability of a deposit may differ materially from our estimates.
As well, because we are
now in operation and are depleting our known resource at Lost Creek, we must continue to conduct exploration and develop additional
mineral resources. While there remain large areas of our Lost Creek property which require additional exploration, and we have
identified mineral resources at our Shirley Basin project, we will need to continue to explore other areas of the Lost Creek property
and our other mineral properties in Wyoming, or acquire additional, known mineral resource properties to replenish our mineral
resources and sustain continued operations. We estimate life of mine when we prepare our mineral resource estimates, but such estimates
may not be correct.
Restrictive covenants in agreements governing
our indebtedness may restrict our ability to pursue our business strategies. If we are unable to service our indebtedness, we could
lose the assets securing our indebtedness.
Our State Bond Loan, under
which we originally received approximately $34 million in debt financing, includes restrictive covenants that, among other things,
limit our ability to sell the assets securing our indebtedness (which include our Lost Creek project and other related assets).
Our ability to make scheduled payments and satisfy other covenants in the State Bond Loan depends on our financial condition and
operating performance, which are subject to prevailing economic, competitive, legislative and regulatory conditions beyond our
control. We may be unable to generate a level of cash flow from operating activities sufficient to permit us to pay the principal,
interest and other fees on our indebtedness.
If we cannot make scheduled
payments on our debt, we will be in default which, if not addressed or waived, could require accelerated repayment of our indebtedness
and the enforcement by the lender against the assets securing our indebtedness. The secured collateral for the State Bond Loan
includes the Lost Creek project and other related assets. These are key assets on which our business is substantially dependent
and as such, the enforcement against any one or all of these assets would have a material adverse effect on our operations and
financial condition.
Our mining operations are subject to
numerous environmental laws, regulations and permitting requirements and bonding requirements that can delay production and adversely
affect operating and development costs.
Our business is subject
to extensive federal, state, provincial and local laws governing prospecting and development, taxes, labor standards and occupational
health, mine and radiation safety, toxic substances, environmental protection, endangered species protections, and other matters.
Exploration, development and production operations are also subject to various federal, state and local laws and regulations relating
to the protection of the environment. These laws impose high standards on the mining industry, and particularly standards with
respect to uranium recovery, to monitor the discharge of waste water and report the results of such monitoring to regulatory authorities,
to reduce or eliminate certain effects on or into land, water or air, to progressively restore mine properties, to manage hazardous
wastes and materials and to reduce the risk of worker accidents. A violation of these laws may result in the imposition of substantial
fines and other penalties and potentially expose us to operational restrictions, suspension, administrative proceedings or litigation. Many
of these laws and regulations have tended to become more stringent over time. Any change in such laws could have a material adverse
effect on our financial condition, cash flow or results of operations. There can be no assurance that we will be able to
meet all the regulatory requirements in a timely manner or without significant expense or that the regulatory requirements will
not change to delay or prohibit us from proceeding with certain exploration, development or operations. Further, there is no assurance
that we will not face new challenges by third parties to regulatory decisions when made, which may cause additional delay and substantial
expense, or may cause a project to be permanently halted.
Many of our operations
require licenses and permits from various governmental authorities. We believe we hold all necessary licenses and permits to carry
on the activities which we are currently conducting or propose to conduct under applicable laws and regulations. Such licenses
and permits are subject to changes in regulations and changes in various operating circumstances. There can be no guarantee that
we will be able to obtain all necessary licenses and permits that may be required to maintain our exploration and mining activities
including constructing mines or milling facilities and commencing or continuing exploration or mining activities or operations
at any of our properties. In addition, if we proceed to production on any other exploration property, we must obtain and comply
with permits and licenses which will contain specific operating conditions. There can be no assurance that we will be able to obtain
such permits and licenses or that we will be able to comply with any such conditions.
Lack of acceptance of nuclear energy
and deregulation of the electrical utility industry could impede our business.
Our future prospects are
tied directly to the electrical utility industry worldwide. Deregulation of the utility industry, particularly in the United States
and Europe, is expected to affect the market for nuclear and other fuels for years to come, and may result in a wide range of outcomes
including the expansion or the premature shutdown of nuclear reactors. Maintaining the demand for uranium at current levels and
future growth in demand will depend upon the continued acceptance of the nuclear technology as a means of generating electricity. Lack
of continued public acceptance of nuclear technology would adversely affect the demand for nuclear power and potentially increase
the regulation of the nuclear power industry. Following the events of March 2011 in Fukushima Japan, a reaction worldwide
called into question the public’s confidence in nuclear energy and technology, the effects of which are still apparent in
many countries around the world.
We have entered into term sales contracts
for a portion of our production, and there can be no guarantee that we will be able to enter into new term sales contracts in the
future on suitable terms and conditions.
Those contracts, which
have historically resulted in uranium sales at prices in excess of spot prices, have fixed delivery terms. Certain of our contracts
have delivery terms that have expired with no future deliveries planned. The failure to enter into new term sales contracts on
suitable terms, could adversely impact our operations and mining activity decisions, and resulting cash flows and income.
The results of exploration and ultimate
production are highly uncertain.
The exploration for, and
development of, mineral deposits involves significant risks which a combination of careful evaluation, experience and knowledge
may not eliminate. Few properties which are explored are ultimately developed into producing mines. Major expenses may be required
to establish mineral resources or reserves, to develop metallurgical processes and to construct mining and processing facilities
at a particular site. It is impossible to ensure that our current exploration and development programs will result in profitable
commercial operations.
Whether a mineral deposit
will be commercially viable depends on a number of factors, some of which are the particular attributes of the deposit, such as
size, grade and proximity to infrastructure, as well as uranium prices, which are highly cyclical, and government regulations,
including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of uranium and environmental
protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in
us not receiving an adequate return on invested capital.
The uranium industry is highly competitive
and is competitive with other energy sources.
The international uranium
industry is highly competitive. Our activities are directed toward the search for, evaluation, acquisition and development of uranium
deposits into production operations. There is no certainty that the expenditures to be made by us will result in discoveries of
commercial quantities of uranium deposits. There is aggressive competition within the mining industry for the discovery and acquisition
of properties considered to have commercial potential. We will compete with other interests, many of which have greater financial
resources than we have, for the opportunity to participate in promising projects. Significant capital investment is required to
achieve commercial production from successful exploration and development efforts.
Nuclear energy competes
with other sources of energy, including oil, natural gas, coal, hydro-electricity and renewable energy sources. These other energy
sources are to some extent interchangeable with nuclear energy, particularly over the longer term. Lower prices of oil, natural
gas, coal and hydro-electricity may result in lower demand for uranium concentrate and uranium conversion services. Furthermore,
the growth of the uranium and nuclear power industry beyond its current level will depend upon continued and increased acceptance
of nuclear technology as a means of generating electricity. Because of unique political, technological and environmental factors
that affect the nuclear industry, the industry is subject to public opinion risks which could have an adverse impact on the demand
for nuclear power and increase the regulation of the nuclear power industry.
Our property title may be uncertain and
could be challenged.
Although we have obtained
title opinions with respect to certain of our properties, there is no guarantee that title to any of our properties will not be
challenged or impugned. Third parties may have valid claims underlying portions of our interests. Our mineral
properties in the United States consist of leases to private mineral rights, leases covering state lands, unpatented mining claims
and patented mining claims. Many of our mining properties in the United States are unpatented mining claims to which we have only
possessory title. Because title to unpatented mining claims is subject to inherent uncertainties, it is difficult to determine
conclusively ownership of such claims. These uncertainties relate to such things as sufficiency of mineral discovery, proper posting
and marking of boundaries and possible conflicts with other claims not determinable from descriptions of record. The present status
of our unpatented mining claims located on public lands allows us the exclusive right to mine and remove valuable minerals. We
are allowed to use the surface of the public lands solely for purposes related to mining and processing the mineral-bearing ores.
However, legal ownership of the land remains with the United States. We remain at risk that the mining claims may be forfeited
either to the United States or to rival private claimants due to failure to comply with statutory requirements. We have taken or
will take appropriate curative measures to ensure proper title to our properties where necessary and where possible.
Possible amendments to the General Mining
Law could make it more difficult or impossible for us to execute our business plan.
Members of the United States
Congress have repeatedly introduced bills which would supplant or alter the provisions of the United States Mining Law of 1872,
as amended. Such bills have proposed, among other things, to (i) either eliminate or greatly limit the right to a mineral patent;
(ii) significantly alter the laws and regulations relating to uranium mineral development and recovery from unpatented and patented
mining claims; (iii) impose a federal royalty on production from unpatented mining claims; (iv) impose time limits on the effectiveness
of plans of operation that may not coincide with mine life, (v) impose more stringent environmental compliance and reclamation
requirements on activities on unpatented mining claims, (vi) establish a mechanism that would allow states, localities and Native
American tribes to petition for the withdrawal of identified tracts of federal land from the operation of the U.S. general mining
laws, and (vii) allow for administrative determinations that mining would not be allowed in situations where undue degradation
of the federal lands in question could not be prevented.
If enacted, such legislation
could, among other effects, change the cost of holding unpatented mining claims and could significantly impact our ability to develop
locatable mineral resources on our patented and unpatented mining claims. Although it is impossible to predict at this point what
any legislated royalties might be, enactment could adversely affect the potential for development and the economics of existing
operating mines. Passage of such legislation could adversely affect our financial performance.
Additionally, as noted
in other risk factors, there are ongoing withdrawals of federal lands for the purposes of mineral location and development. While
such proposals are not yet final and, as yet, do not directly affect the area of Wyoming in which we currently have land holdings,
they could have an adverse effect on our financial performance if they are broadened in scope to directly affect the areas in which
we have properties.
We do not have an established earnings
record, and we have never paid dividends.
We do not have an established
earnings record. We have not paid dividends on our Common Shares since incorporation and do not anticipate doing so in the foreseeable
future. Payments of any dividends will be at the discretion of our Board after taking into account many factors, including our
financial condition and current and anticipated cash needs.
We depend on the services of our management,
key personnel, contractors and service providers.
Shareholders will be relying
on the good faith, experience and judgment of our management and advisors in supervising and providing for the effective management
of the business and our operations and in selecting and developing new investment and expansion opportunities. We may need to recruit
additional qualified employees, contractors and service providers to supplement existing management and personnel, the timely availability
of which cannot be assured, particularly in the current labor markets in which we recruit our employees and the somewhat remote
locations for which employees are needed. As well, the skilled professionals with expertise in engineering and process aspects
of in situ recovery, radiation safety and other facets of our business are currently in high demand, as there are relatively few
such professionals with both expertise and experience. We will need to hire additional employees as we develop the Shirley Basin
project. We will continue to be dependent on a relatively small number of key persons, including key contractors, the loss of any
one or several of whom could have an adverse effect on our business and operations. We do not hold key man insurance in respect
of any of our executive officers.
Our insurance coverage could be insufficient.
We currently carry insurance
coverage for general liability, directors’ and officers’ liability and other matters. We intend to carry
insurance to protect against certain risks in such amounts as we consider adequate. Certain insurances may be cost prohibitive
to maintain, and even if we carried all such insurances, the nature of the risks we face in our exploration and uranium production
operations is such that liabilities could exceed policy limits in any insurance policy or could be excluded from coverage under
an insurance policy. The potential costs that could be associated with any liabilities not covered by insurance or in excess of
insurance coverage or compliance with applicable laws and regulations may cause substantial delays and require significant capital
outlays, adversely affecting our business and financial position. Additionally, we utilize a bonding surety program for our regulatory,
reclamation and restoration obligations at Lost Creek project and the Pathfinder sites. Availability of and terms for such surety
arrangements may change in the future, resulting in adverse effects to our financial condition.
We are subject to risks associated with
regulatory investigations or challenges, litigation and other legal proceedings.
Defense and settlement
costs of legal claims can be substantial, even with respect to claims that have no merit. From time to time, we may be involved
in disputes with other parties which may result in litigation or other proceedings. Additionally, it is not unlikely that we may
find ourselves involved directly or indirectly in legal proceedings, in the form of regulatory investigations, administrative proceedings
or litigation, arising from challenges to regulatory actions as described elsewhere in this prospectus. Such investigations, administrative
proceedings and litigation related to regulatory matters may delay or halt exploration or development of our projects. The results
of litigation or any other proceedings cannot be predicted with certainty. If we are unable to resolve any such disputes favorably,
it could have a material adverse effect on our financial position, ability to operate, results of operations or our property development.
Acquisitions and integration may disrupt
our business.
From time to time, we examine
opportunities to acquire additional mining assets and businesses. Any acquisition that we may choose to complete may be of significant
size, may change the scale of our business and operations, and/or may expose us to new geographic, political, operating, financial
and geological risks. Any acquisitions would be accompanied by risks. For example, there may be a significant change in commodity
prices after we have committed to complete the transaction and established the purchase price or share exchange ratio; a material
ore body may prove to be below expectations; we may have difficulty integrating and assimilating the operations and personnel of
any acquired company, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise,
and maintaining uniform standards, policies and controls across the organization; the integration of the acquired business or assets
may disrupt our ongoing business and relationships with employees, customers, suppliers and contractors; and the acquired business
or assets may have unknown liabilities which may be significant. There can be no assurance that we would be successful in overcoming
these risks or any other problems encountered in connection with such acquisitions.
We are dependent on information technology
systems, which are subject to certain risks.
We depend upon information
technology systems in a variety of ways throughout our operations. Any significant breakdown of those systems, whether
through virus, cyber-attack, security breach, theft, or other destruction, invasion or interruption, or unauthorized access to
our systems, could negatively impact our business and operations. To the extent that such invasion, cyber-attack or similar security
breach results in disruption to our operations, loss or disclosure of, or damage to, our data and particularly our confidential
or proprietary information, our reputation, business, results of operations and financial condition could be materially adversely
affected. Our systems, internal controls and insurance for protecting against such cyber security risks may be insufficient. Although
to date we have experienced no such attack resulting in material losses, we may suffer such losses at any time in the future. We
may be required to expend significant additional resources to continue to modify and enhance our protective measures or to investigate,
restore or remediate any information technology security vulnerabilities.
There may be adverse U.S. federal income
tax consequences to U.S. shareholders under the passive foreign investment company rules.
Investors in the Securities
of Ur-Energy that are U.S. taxpayers (referred to as a U.S. shareholder) should be aware that we may be a “passive foreign
investment company” (a “PFIC”) for the period ended December 31, 2016, and may be a PFIC in subsequent years.
If we are a PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholders generally will be subject
to a special, highly adverse tax regime with respect to so-called “excess distributions” received on our Common Shares.
Gain realized upon a disposition of our Common Shares or Warrants (including upon certain dispositions that would otherwise be
tax-free) also will be treated as an excess distribution. Excess distributions are punitively taxed and are subject to additional
interest charges. Additional special adverse rules also apply to U.S. shareholders who own Common Shares or Warrants of Ur-Energy
if we are a PFIC and have a non-U.S. subsidiary that is also a PFIC (a “lower-tier PFIC”).
A U.S. shareholder of our
Common Shares may make a timely “qualified electing fund” election (“QEF election”) or a “mark-to-market”
election with respect to our Common Shares to mitigate the adverse tax rules that apply to PFICs, but these elections may accelerate
the recognition of taxable income and may result in the recognition of ordinary income. To be timely, a QEF election generally
must be made for the first year in the U.S. shareholder’s holding period in its Common Shares in which Ur-Energy is a PFIC. A
U.S. shareholder may make a QEF election only if the U.S. shareholder receives certain information (known as a “PFIC annual
information statement”) from us annually. A U.S. shareholder may make a QEF election with respect to a lower-tier PFIC only
if it receives a PFIC annual information statement with respect to the lower-tier PFIC. The mark-to-market election is available
only if our Common Shares are considered regularly traded on a qualifying exchange, which we cannot assure will be the case for
years in which we may be a PFIC. The mark-to-market election is not available for a lower-tier PFIC.
We will use commercially
reasonable efforts to make available to U.S. shareholders, upon their written request: (a) timely and accurate information
as to our status as a PFIC and the PFIC status of any subsidiary in which Ur-Energy owns more than 50% of such subsidiary’s
total aggregate voting power, and (b) for each year in which Ur-Energy determines that it is a PFIC, upon written request, a PFIC
annual information statement with respect to Ur-Energy and with respect to each such subsidiary that we determine is a PFIC.
A U.S. shareholder may
not make a QEF election with respect to Warrants. As a result, if we are a PFIC at any time when a U.S. shareholder owns Warrants,
the U.S. shareholder generally will not be able to make a normal QEF election with respect to the Common Shares acquired upon exercise
of such Warrants. Such a U.S. shareholder could, however, make a special “deemed sale” election with respect to the
Common Shares under which the U.S. shareholder would recognize inherent gain in the Common Shares acquired on exercise of such
Warrants as an excess distribution at the time of the deemed sale election. Such a deemed sale election generally can be made only
if the U.S. shareholder owns Common Shares on the first day of our taxable year in which the election is to be effective.
A U.S. shareholder also
may not make a mark-to-market election with respect to Warrants. A U.S. shareholder may be able to make a mark-to-market election
with respect to Common Shares acquired upon exercise of such Warrants; however, this election would require the U.S. shareholder
to recognize inherent gain in the Common Shares acquired on exercise of the Warrants as an excess distribution at the time of the
election.
Special adverse rules that
impact certain estate planning goals could apply to our Common Shares and Warrants if we are a PFIC. Each U.S. shareholder should
consult its own tax advisor regarding the U.S. federal, state and local consequences of the PFIC rules, and regarding the QEF and
mark-to-market elections.
RATIO OF EARNINGS TO FIXED CHARGES
We did not have earnings
for the five most recent fiscal years ended December 31, 2016. Accordingly, we have no ratio of earnings to fixed charges to illustrate
for such periods. We have had earnings in the three months ended March 31, 2017 and therefore have included the ratio of earnings
to fixed charges for that period.
(Dollar amounts in thousands)
|
|
THREE
MONTHS
ENDED
|
|
|
FISCAL YEAR ENDED DECEMBER 31
|
|
|
|
MARCH
31, 2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Adjusted Earnings/Deficiency
|
|
|
5,706
|
|
|
|
(514
|
)
|
|
|
(1,033
|
)
|
|
|
(5,538
|
)
|
|
|
(24,164
|
)
|
|
|
(17,554
|
)
|
Fixed Charges
|
|
|
517
|
|
|
|
2,513
|
|
|
|
3,077
|
|
|
|
3,156
|
|
|
|
7,534
|
|
|
|
4
|
|
Earnings/Deficiency
|
|
|
5,189
|
|
|
|
(3,027
|
)
|
|
|
(4,110
|
)
|
|
|
(8,694
|
)
|
|
|
(31,698
|
)
|
|
|
(17,558
|
)
|
Ratio of Earnings to Fixed Charges
|
|
|
11.04
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
* Ratio was less than 1.0.
USE OF PROCEEDS
Unless otherwise specified
in a prospectus supplement, the net proceeds from the sale of the Securities will be used for general corporate purposes and working
capital. Each prospectus supplement will contain specific information concerning the use of proceeds from that sale of the Securities.
We will bear all of the
expenses of the offering of the Securities, and such expenses will be paid out of our general funds, unless otherwise stated in
the applicable prospectus supplement.
PLAN OF DISTRIBUTION
We are registering the
Securities with an aggregate offering price not to exceed $100,000,000, to be sold by the Company under a “shelf” registration
process. If we offer any of the Securities under this prospectus we will amend or supplement this prospectus by means of an accompanying
prospectus supplement setting forth the specific terms and conditions and other information about that offering as is required
or necessary.
We may offer and sell all
or a portion of the Securities covered by this prospectus from time to time, in one or more or any combination of the following
transactions:
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent, but may position
and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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short sales effected after the date the registration statement of which this prospectus is a part
is declared effective by the SEC;
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through the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise;
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broker-dealers may agree to sell a specified number of such shares at a stipulated price per share;
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sales “at the market” to or through a market maker or into an existing trading market,
on an exchange or otherwise;
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a combination of any such methods of sale; and
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any other method permitted by applicable law.
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We may sell the Securities
at prices then prevailing or related to the then current market price or at negotiated prices. The offering price of the Securities
from time to time will be determined by us, and, at the time of the determination, may be higher or lower than the market price
of our Common Shares on TSX, NYSE American, or any other exchange or market.
In connection with the
sale of the Securities or interests therein, we may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the Securities in the course of hedging the positions they assume. We may also sell
the Securities short and deliver these Securities to close out their short positions, or loan or pledge the Securities to broker-dealers
that in turn may sell these Securities. We may also enter into option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant
to this prospectus (as supplemented or amended to reflect such transaction).
In connection with an underwritten
offering, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from us or from
purchasers of the offered shares for whom they may act as agents. In addition, underwriters may sell the shares to or through dealers,
and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Any underwriters, broker-dealers or agents that participate in the sale of
the Common Shares or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities
Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and
commissions under the Securities Act. We will bear all of the expenses of the offering of Securities.
We may agree to indemnify
an underwriter, broker-dealer or agent against certain liabilities related to the selling of the Securities, including liabilities
arising under the Securities Act.
Except for the At Market
Issuance Sales Agreement entered into in connection with Ur-Energy’s ATM program, we have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding the sale of the Securities. Upon entering into
any material arrangement with an underwriter or broker-dealer for the sale of the Securities through a block trade, special offering,
exchange distribution, secondary distribution or a purchase by an underwriter or broker-dealer, we will file a prospectus supplement,
if required, pursuant to Rule 424(b) under the Securities Act, disclosing certain material information, including:
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the name of the applicable seller;
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the Securities being offered;
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the terms of the offering;
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the names of the participating underwriters, broker-dealers or agents;
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any discounts, commissions or other compensation paid to underwriters or broker-dealers and any
discounts, commissions or concessions allowed or reallowed or paid by any underwriters to dealers;
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the purchase price of the Securities and the proceeds to be received from the sale; and
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other material terms of the offering.
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We are subject to the applicable
provisions of the Exchange Act and the rules and regulations under the Exchange Act, including Regulation M. This regulation may
limit the timing of purchases and sales of any of the Securities offered in this prospectus. The anti-manipulation rules under
the Exchange Act may apply to sales of Securities in the market and to our activities.
To the extent required,
this prospectus may be amended and/or supplemented from time to time to describe a specific plan of distribution. Instead of selling
the Securities under this prospectus, we may sell the Common Shares in compliance with the provisions of Rule 144 under the Securities
Act, if available, or pursuant to other available exemptions from the registration requirements of the Securities Act.
With respect to the sale
of any Securities under this prospectus, the maximum commission or discount to be received by any member of the Financial Industry
Regulatory Authority, Inc. or any independent broker or dealer will not be greater than eight percent (8%).
DESCRIPTION OF SENIOR AND SUBORDINATED DEBT
SECURITIES
The following description,
together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and
provisions of the debt securities that we may offer under this prospectus. While the terms we have summarized below will apply
generally to any future debt securities we may offer, we will describe the particular terms of any debt securities that we may
offer in more detail in the applicable prospectus supplement. Because the terms of a specific series of debt securities may vary
from the general information that we have provided below, you should rely on information in the applicable prospectus supplement
that varies from any information below.
We may issue senior notes
under a senior indenture to be entered into among us and a trustee to be named in the senior indenture. We may issue subordinated
notes under a subordinated indenture to be entered into among us and a trustee to be named in the subordinated indenture. We have
filed forms of these documents as exhibits to the registration statement which includes this prospectus. We use the term “indentures”
to refer to both the senior indenture and the subordinated indenture. Unless otherwise specified in the applicable prospectus supplement,
the indentures will be qualified under the Trust Indenture Act of 1939 (the “Trust Indenture Act”). We use the term
“trustee” to refer to either the senior trustee or the subordinated trustee, as applicable. We urge you to read the
indenture applicable to your investment, because the indenture, and not this section, defines your rights as a holder of debt securities.
The following summaries
of material provisions of senior notes, subordinated notes and the indentures are subject to, and qualified in their entirety by
reference to, the provisions of the indenture applicable to a particular series of debt securities. Except as we may otherwise
indicate, the terms of the senior indenture and the subordinated indenture are identical in all material respects.
General
The senior debt securities
will have the same ranking as all of our other unsecured and unsubordinated debt. The subordinated debt securities will be unsecured
and will be subordinated and junior to all senior indebtedness.
The debt securities may
be issued in one or more separate series of senior debt securities and/or subordinated debt securities. The prospectus supplement
relating to the particular series of debt securities being offered will specify the particular amounts, prices and terms of those
debt securities. These terms may include:
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the title of the debt securities;
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any limit upon the aggregate principal amount of the debt
securities;
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the date or dates, or the method of determining the dates,
on which the debt securities will mature;
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the interest rate or rates of the debt securities, or the
method of determining those rates, the interest payment dates and, for registered debt securities, the regular record dates;
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if a debt security is issued with original issue discount,
the yield to maturity;
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the places where payments may be made on the debt securities;
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any mandatory or optional redemption provisions applicable
to the debt securities;
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any sinking fund or analogous provisions applicable to
the debt securities;
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whether and on what terms we will pay additional amounts
to holders of the debt securities that are not U.S. persons in respect of any tax, assessment or governmental charge withheld
or deducted and, if so, whether and on what terms we will have the option to redeem the debt securities rather than pay the additional
amounts;
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whether the notes will be senior or subordinated;
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any terms for the attachment to the debt securities of
warrants, options or other rights to purchase or sell our securities;
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the portion of the principal amount of the debt security
payable upon the acceleration of maturity if other than the entire principal amount of the debt securities;
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any deletions
of,
or changes or additions to, the events of default or covenants applicable to the
debt securities;
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if other than U.S. dollars, the currency or currencies
in which payments of principal, premium and/or interest on the debt securities will be payable and whether the holder may elect
payment to be made in a different currency;
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the method of determining the amount of any payments on
the debt securities which are linked to an index;
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whether the debt securities will be issued in fully registered
form without coupons;
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or any combination of these, and whether they will be issued
in the form of one or more global securities in temporary or definitive form;
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whether the debt securities will be convertible into or
exchangeable for Common Shares or other debt securities and the conversion price or exchange ratio, the conversion or exchange
period and any other conversion or exchange provisions;
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any terms relating to the delivery of the debt securities
if they are to be issued upon the exercise of warrants; and
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any other specific terms of the debt securities.
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Unless otherwise specified
in the applicable prospectus supplement, (1) the debt securities will be registered debt securities, and (2) debt securities denominated
in U.S. dollars will be issued, in the case of registered debt securities, in denominations of $1,000 or an integral multiple of
$1,000. Debt securities may bear legends required by applicable United States and Canadian federal tax law and regulations.
If any of the debt securities
are sold for any foreign currency or currency unit or if any payments on the debt securities are payable in any foreign currency
or currency unit, the prospectus supplement will contain any restrictions, elections, tax consequences, specific terms and other
information with respect to the debt securities and the foreign currency or currency unit.
Some of the debt securities
may be issued as original issue discount debt securities. Original issue discount securities bear no interest during all or a part
of the time that these debt securities are outstanding or bear interest at below-market rates and will be sold at a discount below
their stated principal amount at maturity. The prospectus supplement will also contain special tax, accounting or other information
relating to original issue discount securities or relating to other kinds of debt securities that may be offered, including debt
securities linked to an index or payable in currencies other than U.S. dollars.
Exchange, Registration and Transfer
Debt securities may be
transferred or exchanged at the corporate trust office of the security registrar or at any other office or agency maintained by
us or on our behalf for these purposes, without the payment of any service charge, except for any tax or governmental charges.
The senior trustee initially will be the designated security registrar in the United States or Canada for the senior debt securities.
The subordinated trustee initially will be the designated security registrar in the United States or Canada for the subordinated
debt securities.
In the event of any redemption
in part of any class or series of debt securities, we will not be required to:
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issue, register the transfer of, or exchange, debt securities
of any series between the opening of business 15 days before any selection of debt securities of that series to be redeemed and
the close of business on the day of mailing of the relevant notice of redemption; or
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register the transfer of, or exchange, any registered debt
security selected for redemption, in whole or in part, except the unredeemed portion of any registered debt security being redeemed
in part.
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Payment and Paying Agent
We will pay principal,
interest and any premium on fully registered securities in the designated currency or currency unit at the office of a designated
paying agent.
Global Securities
A global security represents
one or any other number of individual debt securities. Generally, all debt securities represented by the same global securities
will have the same terms. Each debt security issued in book-entry form will be represented by a global security that we deposit
with and register in the name of a financial institution or its nominee that we select. The financial institution that we select
for this purpose is called the depositary. Unless we specify otherwise in the applicable prospectus supplement, The Depository
Trust Company, New York, New York, known as DTC, will be the depositary for all debt securities that are issued in book-entry form.
A global security may not
be transferred to or registered in the name of anyone other than the depositary or its nominee, unless special termination situations
arise. As a result of these arrangements, the depositary, or its nominee, will be the sole registered holder of all debt securities
represented by a global security, and investors will be permitted to own only beneficial interests in a global security. Beneficial
interests must be held by means of an account with a broker, bank or other financial institution that in turn has an account either
with the depositary or with another institution that has an account with the depositary. Thus, an investor whose security is represented
by a global security will not be registered holder of the debt security, but an indirect holder of a beneficial interest in the
global security.
Definitive Global Securities
Book-Entry Securities
.
Debt securities of a series represented by a definitive global registered debt security and deposited with or on behalf of a depositary
in the United States will be represented by a definitive global debt security registered in the name of the depositary or its nominee.
Upon the issuance of a global debt security and the deposit of the global debt security with the depositary, the depositary will
credit, on its book-entry registration and transfer system, the respective principal amounts represented by that global debt security
to the accounts of participating institutions that have accounts with the depositary or its nominee. The accounts to be credited
shall be designated by the underwriters or agents for the sale of book-entry debt securities or by us, if these debt securities
are offered and sold directly by us.
Ownership of book-entry
debt securities will be limited to participants or persons that may hold interests through participants. In addition, ownership
of book-entry debt securities will be evidenced only by, and the transfer of that ownership will be effected only through, records
maintained by the depositary or its nominee for the definitive global debt security or by participants or persons that hold through
participants.
So long as the depositary
or its nominee is the registered owner of a global debt security, that depositary or nominee, as the case may be, will be considered
the sole owner or holder of the book-entry debt securities represented by that global debt security for all purposes under the
indenture. Payment of principal of, and premium and interest, if any, on, book-entry debt securities will be made to the depositary
or its nominee as the registered owner or the holder of the global debt security representing the book-entry debt securities. Owners
of book-entry debt securities:
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will not be entitled to have the debt securities registered
in their names;
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will not be entitled to receive physical delivery of the
debt securities in definitive form; and
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will not be considered the owners or holders of the debt
securities under the indenture.
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The laws of some jurisdictions
require that purchasers of securities take physical delivery of securities in definitive form. These laws impair the ability to
purchase or transfer book-entry debt securities.
We expect that the depositary
for book-entry debt securities of a series, upon receipt of any payment of principal of, or premium or interest, if any, on, the
related definitive global debt security, will immediately credit participants’ accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the global debt security as shown on the records of the depositary.
We also expect that payments by participants to owners of beneficial interests in a global debt security held through those participants
will be governed by standing instructions and customary practices, and will be the responsibility of those participants.
Consolidation, Merger, Sale or Conveyance
We may, without the consent
of the holders of the debt securities, merge into, amalgamate or consolidate with any other person, or convey or transfer all or
substantially all of our properties and assets to another person provided that the successor assumes on the same terms and conditions
all the obligations under the debt securities and the indentures.
The remaining or acquiring
person will be substituted for us in the indentures with the same effect as if it had been an original party to the indenture.
A prospectus supplement will describe any other limitations on our ability to merge into, amalgamate, consolidate with, or convey
or transfer all or substantially all of our properties and assets to, another person.
Satisfaction and Discharge; Defeasance
We may be discharged from
our obligations on the debt securities of any class or series that have matured or will mature or be redeemed within one year if
we deposit with the trustee enough cash and/or U.S. or Canadian government obligations to pay all the principal, interest and any
premium due to the stated maturity or redemption date of the debt securities and comply with the other conditions set forth in
the applicable indenture, which will described in the applicable prospectus supplement. The principal conditions that we must satisfy
to discharge our obligations on any debt securities are (1) pay all other sums payable with respect to the applicable series of
debt securities and (2) deliver to the trustee an officers’ certificate and an opinion of counsel that state that the required
conditions have been satisfied.
Each indenture contains
a provision that permits us to elect to be discharged from all of our obligations with respect to any class or series of debt securities
then outstanding. However, even if we affect a legal defeasance, some of our obligations will continue, including obligations to:
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maintain and apply money in the defeasance trust,
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register the transfer or exchange of the debt securities,
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replace mutilated, destroyed, lost or stolen debt securities,
and
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maintain a registrar and paying agent in respect of the
debt securities.
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The indentures specify
the types of U.S. or Canadian government obligations that we may deposit, which will be described in the applicable prospectus
supplement.
Events of Default, Notice and Waiver
Except as may be set forth
in the applicable prospectus supplement, each indenture defines an event of default with respect to any class or series of debt
securities as one or more of the following events:
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failure to pay interest on any debt security of the class
or series for 90 days when due;
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failure to pay the principal or any premium on any debt
securities of the class or series when due;
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failure to make any sinking fund payment when due;
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failure to perform any other covenant in the debt securities
of the series or in the applicable indenture with respect to debt securities of the series for 90 days after being given notice;
and
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occurrence of an event of bankruptcy, insolvency or reorganization
set forth in the indenture.
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An event of default for
a particular class or series of debt securities does not necessarily constitute an event of default for any other class or series
of debt securities issued under an indenture.
If any event of default
as to a series of debt securities occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the
then outstanding debt securities of that series may declare all the debt securities to be due and payable immediately.
The holders of a majority
in aggregate principal amount of the debt securities of that series then outstanding by notice to the trustee may on behalf of
the holders of all of the debt securities of that series waive any existing default or event of default and its consequences under
the applicable indenture except a continuing default or event of default in the payment of interest on, or the principal of, the
debt securities of that series.
Each indenture requires
the trustee to, within 90 days after the occurrence of a default known to it with respect to any outstanding series of debt securities,
give the holders of that class or series notice of the default if uncured or not waived. However, the trustee may withhold this
notice if it determines in good faith that the withholding of this notice is in the interest of those holders, except that the
trustee may not withhold this notice in the case of a payment default. The term “default” for the purpose of this provision
means any event that is, or after notice or lapse of time or both would become, an event of default with respect to debt securities
of that series.
Other than the duty to
act with the required standard of care during an event of default, a trustee is not obligated to exercise any of its rights or
powers under the applicable indenture at the request or direction of any of the holders of debt securities, unless the holders
have offered to the trustee reasonable security and indemnity. Each indenture provides that the holders of a majority in principal
amount of outstanding debt securities of any series may direct the time, method and place of conducting any proceeding for any
remedy available to the trustee, or exercising any trust or other power conferred on the trustee if the direction would not conflict
with any rule of law or with the indenture. However, the trustee may take any other action that it deems proper which is not inconsistent
with any direction and may decline to follow any direction if it in good faith determines that the directed action would involve
it in personal liability.
Each indenture includes
a covenant that we will file annually with the trustee a certificate of no default, or specifying any default that exists.
Modification of the Indentures
We and the applicable trustee
may modify an indenture without the consent of the holders for limited purposes, including adding to our covenants or events of
default, establishing forms or terms of debt securities, curing ambiguities and other purposes which do not adversely affect the
holders in any material respect.
We and the applicable trustee
may make modifications and amendments to an indenture with the consent of the holders of a majority in principal amount of the
outstanding debt securities of all affected series. However, without the consent of each affected holder, no modification may:
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change the stated maturity of any debt security;
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reduce the principal, premium, if any, or rate of interest
on any debt security; or
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reduce the percentage of holders of outstanding debt securities
of any series required to consent to any modification, amendment or waiver under the indenture.
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Notices
Notice to holders of registered
debt securities will be given by mail to the addresses of those holders as they appear in the security register.
Replacement of Securities Coupons
Debt securities or coupons
that have been mutilated will be replaced by us at the expense of the holder upon surrender of the mutilated debt security or coupon
to the security registrar. Debt securities or coupons that become destroyed, stolen, or lost will be replaced by us at the expense
of the holder upon delivery to the security registrar of evidence of its destruction, loss, or theft satisfactory to us and the
security registrar. In the case of a destroyed, lost, or stolen debt security or coupon, the holder of the debt security or coupon
may be required to provide reasonable security or indemnity to the trustee and us before a replacement debt security will be issued.
Concerning the Trustees
We may from time to time
maintain lines of credit, and have other customary banking relationships, with any of the trustees.
Senior Debt Securities
The senior debt securities
will rank equally with all of our other unsecured and non-subordinated debt.
Certain Covenants in the Senior Indenture
The prospectus supplement
relating to a series of senior debt securities will describe any material covenants in respect of that series of senior debt securities.
Subordinated Debt Securities
The subordinated debt
securities will be unsecured. The subordinated debt securities will be subordinate in right of payment to all senior indebtedness.
In addition, claims of creditors generally will have priority with respect to the assets and earnings of our subsidiaries over
the claims of our creditors, including holders of the subordinated debt securities, even though those obligations may not constitute
senior indebtedness. The subordinated debt securities, therefore, will be effectively subordinated to creditors, including trade
creditors with regard to the assets of our subsidiaries. Creditors of our subsidiaries include trade creditors, secured creditors
and creditors holding guarantees issued by our subsidiaries.
Unless otherwise specified
in a prospectus supplement, senior indebtedness shall mean the principal of, premium, if any, and interest on, all indebtedness
for money borrowed by us and any deferrals, renewals, or extensions of any senior indebtedness. Indebtedness for money borrowed
by us includes all indebtedness of another person for money borrowed that we guarantee, other than the subordinated debt securities,
whether outstanding on the date of execution of the subordinated indenture or created, assumed or incurred after the date of the
subordinated indenture. However, senior indebtedness will not include any indebtedness that expressly states to have the same rank
as the subordinated debt securities or to rank junior to the subordinated debt securities. Senior indebtedness will also not include
any of our obligations to our subsidiaries.
The senior debt securities
constitute senior indebtedness under the subordinated indenture. A prospectus supplement will describe the relative ranking among
different series of subordinated debt securities.
Unless otherwise specified
in a prospectus supplement, we may not make any payment on the subordinated debt securities and may not purchase, redeem, or retire
any subordinated debt securities if any senior indebtedness is not paid when due or the maturity of any senior indebtedness is
accelerated as a result of a default, unless the default has been cured or waived and the acceleration has been rescinded or the
senior indebtedness has been paid in full. We may, however, pay the subordinated debt securities without regard to these limitations
if we or the subordinated trustee receive written notice approving the payment from the representatives of the holders of senior
indebtedness with respect to which either of the events set forth above has occurred and is continuing. Unless otherwise specified
in a prospectus supplement, during the continuance of any default with respect to any designated senior indebtedness under which
its maturity may be accelerated immediately without further notice or the expiration of any applicable grace periods, we may not
pay the subordinated debt securities for 90 days after the receipt by the subordinated trustee of written notice of a default from
the representatives of the holders of designated senior indebtedness. If the holders of designated senior indebtedness or the representatives
of those holders have not accelerated the maturity of the designated senior indebtedness at the end of the 90 day period, we may
resume payments on the subordinated debt securities. Only one notice may be given in any consecutive 360-day period, irrespective
of the number of defaults with respect to designated senior indebtedness during that period.
In the event that we
pay or distribute our assets to creditors upon a total or partial liquidation, dissolution or reorganization of our company or
our property, the holders of senior indebtedness will be entitled to receive payment in full of the senior indebtedness before
the holders of subordinated debt securities are entitled to receive any payment. Until the senior indebtedness is paid in full,
any payment or distribution to which holders of subordinated debt securities would be entitled but for the subordination provisions
of the subordinated indenture will be made to holders of the senior indebtedness as their interests may appear. However, holders
of subordinated debt securities will be permitted to receive distributions of shares and debt securities subordinated to the senior
indebtedness. If a distribution is made to holders of subordinated debt securities that, due to the subordination provisions, should
not have been made to them, the holders of subordinated debt securities are required to hold it in trust for the holders of senior
indebtedness, and pay it over to them as their interests may appear.
If payment of the subordinated
debt securities is accelerated because of an event of default, either we or the subordinated trustee will promptly notify the holders
of senior indebtedness or the representatives of the holders of the acceleration. We may not pay the subordinated debt securities
until five business days after the holders or the representatives of the senior indebtedness receive notice of the acceleration.
Afterwards, we may pay the subordinated debt securities only if the subordination provisions of the subordinated indenture otherwise
permit payment at that time.
As a result of the
subordination provisions contained in the subordinated indenture, in the event of insolvency, our creditors who are holders of
senior indebtedness may recover more, ratably, than the holders of subordinated debt securities. In addition, our creditors who
are not holders of senior indebtedness may recover less, ratably, than holders of senior indebtedness and may recover more, ratably,
than the holders of subordinated indebtedness.
The prospectus supplement
relating to a series of subordinated debt securities will describe any material covenants in respect of any series of subordinated
debt securities.
Conversion or Exchange
We may issue debt securities
that we may convert or exchange into Common Shares or other securities, property or assets. If so, we will describe the specific
terms on which the debt securities may be converted or exchanged in the applicable prospectus supplement. The conversion or exchange
may be mandatory, at your option, or at our option. The applicable prospectus supplement will describe the manner in which the
Common Shares or other securities, property or assets you would receive would be issued or delivered.
DESCRIPTION OF COMMON SHARES
Our authorized share
capital consists of an unlimited number of Common Shares without par value. As at July 21, 2017, we had 145,873,898 Common Shares
outstanding.
Dividend Rights
Holders of Common Shares
are entitled to receive such dividends as may be declared from time to time by our board of directors, in its discretion, out of
funds legally available therefore.
Voting Rights
Holders of Common Shares
are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.
Election of Directors
The Company has adopted
a majority voting policy for the election of directors at uncontested meetings which can be viewed on our website
www.ur-energy/corporategovernance
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The policy provides that, in an uncontested election, each director will be elected by a majority of the votes cast with respect
to that director’s election. Votes will not be deemed cast if no authority or discretion is given (for example, a broker
non-vote, failure to vote). If a director does not receive a majority (50% + 1) of the votes cast as to his election, he will forthwith
submit to the Board his resignation and shall not participate in any meeting of the Board or any of its committees while the resignation
is considered. The Corporate Governance and Nominating Committee (the “Committee”) will expeditiously consider the
candidate’s resignation and make recommendation to the Board whether to accept it. In considering the candidate’s resignation,
the Committee and the Board shall only refuse to accept such resignation if there are exceptional circumstances.
Liquidation
Upon liquidation, dissolution
or winding up of the Company, holders of Common Shares are entitled to receive pro rata the assets of the Company, if any, remaining
after payments of all debts and liabilities. All of the Common Shares rank equally as to participation in a distribution of our
assets on a liquidation, dissolution or winding-up of the Company and the entitlement to dividends.
Redemption
No shares have been
issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase
for cancellation, surrender, or sinking or purchase funds.
Shareholder Rights Plan
Ur-Energy maintains
a shareholder rights plan (the “Rights Plan”) designed to encourage the fair and equal treatment of shareholders in
connection with any take-over bid for the Company's outstanding securities. The Rights Plan is intended to provide the Board
with adequate time to assess a take-over bid, to consider alternatives to a take-over bid as a means of maximizing shareholder
value, to allow competing bids to emerge, and to provide our shareholders with adequate time to properly assess a take-over bid
without undue pressure. The Rights Plan was reconfirmed by shareholders at Ur-Energy’s annual and special meeting of shareholders
on May 28, 2015.
The Rights issued under
the Rights Plan become exercisable only if a person acquires 20% or more of our Common Shares without complying with the “permitted
bid” provisions of the Rights Plan or without the approval of our Board. Should such an acquisition occur, holders of Rights
(other than the acquiring person and related persons) can purchase Common Shares at a 50% discount to the prevailing market price
(as defined in the Rights Plan) at the time such Rights become exercisable pursuant to the terms of the Rights Plan.
Advance Notice By-Law
By-Law No. 2 (Advance
Notice) was approved by our Board on February 25, 2016 and later approved by our shareholders at Ur-Energy’s annual and special
meeting of shareholders on May 5, 2016. The Advance Notice By-Law requires shareholders to provide the Company with advanced
notice of persons the shareholder intends to nominate for election to the Board. The Advance Notice By-Law fixes a deadline
by which director nominations must be submitted to the Company prior to any annual or special meeting of shareholders and sets
forth the information that a shareholder must include in the notice to the Company for it to be in proper written form.
In the case of an annual
meeting of shareholders, notice to the Company must be made not less than thirty (30) days prior to the date of the annual meeting;
provided
,
however
,
that if the first public announcement of the date of the annual meeting is less than fifty (50) days prior to the meeting, notice
must be made not later than the tenth (10th) day following such public announcement.
In the case of a special
meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors, notice to the Company
must be made not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement
of the date of the special meeting was made.
Other Provisions
Provisions as to the
modification, amendment or variation of the rights attached to the Common Shares are contained in our articles and the
Canada
Business Corporations Act
. Generally speaking, substantive changes to the share capital require the approval of the shareholders
by special resolution (at least two-thirds of the votes cast).
General
All outstanding Common
Shares are, and the Common Shares offered by this prospectus or obtainable upon exercise or conversion of other securities offered
hereby, if issued in the manner described in this prospectus and the applicable prospectus supplement, will be, fully paid and
non-assessable.
You should read the
prospectus supplement relating to any offering of Common Shares, or of securities convertible, exchangeable or exercisable for
Common Shares, for the terms of the offering, including the number of Common Shares offered, any initial offering price and market
prices relating to the Common Shares.
This section is a summary
and may not describe every aspect of our Common Shares that may be important to you. We urge you to read applicable provisions
of the
Canada Business Corporations Act
and our Articles of Continuance and Articles of Amendment, because they, and not
this description, define your rights as a holder of our Common Shares. See “Wh
ere You Can Find More Information
”
for information on how to obtain copies of these documents.
DESCRIPTION OF WARRANTS
We may issue Warrants
for the purchase of debt securities, Common Shares or other securities. Warrants may be issued independently or together with debt
securities, Common Shares or other securities offered by any prospectus supplement and may be attached to or separate from any
such offered Securities. Series of Warrants may be issued under a separate warrant agreement entered into between us and a bank
or trust company, as warrant agent, as will be set forth in the prospectus supplement relating to the particular issue of Warrants.
The warrant agent would act solely as our agent in connection with the Warrants and would not assume any obligation or relationship
of agency or trust for or with any holders of Warrants or beneficial owners of Warrants.
You should refer to
the provisions of the warrant agreement that will be filed with the SEC and any other applicable securities commissions or similar
regulatory authorities in connection with the offering of Warrants for the complete terms of the warrant agreement.
Prior to the exercise
of any Warrants, holders of such Warrants will not have any rights of holders of the securities purchasable upon such exercise,
including the right to receive payments of dividends or the right to vote such underlying securities.
DESCRIPTION OF UNITS
As specified in the
applicable prospectus supplement, we may issue units consisting of one or more debt securities, Common Shares, Warrants or any
combination of such securities. In addition, the prospectus supplement relating to units will describe the terms of any units we
issue, including as applicable:
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the designation and terms of the units and the securities included in the units;
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any provision for the issuance, payment, settlement, transfer or exchange of the units;
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the date, if any, on and after which the units may be transferable separately;
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whether we will apply to have the units traded on a securities exchange or securities quotation
system;
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any material Canadian and/or United States federal income tax consequences; and
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how, for Canadian and/or United States federal income tax purposes, the purchase price paid for
the units is to be allocated among the component securities.
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DESCRIPTION OF RIGHTS
We may issue rights
to purchase debt securities or common shares. These rights may be issued independently or together with any other security offered
hereby and may or may not be transferable by the shareholder receiving the rights in such offering. In connection with any offering
of such rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the
underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
Each series of rights
will be issued under a separate rights agreement which we will enter into with a bank or trust company, as rights agent, all as
set forth in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the certificates
relating to the rights and will not assume any obligation or relationship of agency or trust with any holders of rights certificates
or beneficial owners of rights. We will file the rights agreement and the rights certificates relating to each series of rights
with the SEC, and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part
on or before the time we issue a series of rights.
The applicable prospectus
supplement will describe the specific terms of any offering of rights for which this prospectus is being delivered, including the
following:
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the date of determining the shareholders entitled to the rights distribution;
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the number of rights issued or to be issued to each shareholder;
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the exercise price payable for each share of debt securities, common shares, or other securities
upon the exercise of the rights;
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the number and terms of the shares of debt securities, common shares, or other securities which
may be purchased per each right;
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the extent to which the rights are transferable;
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the date on which the holder’s ability to exercise the rights shall commence, and the date
on which the rights shall expire;
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the extent to which the rights may include an over-subscription privilege with respect to unsubscribed
securities;
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if applicable, the material terms of any standby underwriting or purchase arrangement entered into
by us in connection with the offering of such rights; and
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any other terms of the rights, including the terms, procedures, conditions and limitations relating
to the exchange and exercise of the rights.
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The description in
the applicable prospectus supplement of any rights that we may offer will not necessarily be complete and will be qualified in
its entirety by reference to the applicable rights certificate, which will be filed with the SEC.
DENOMINATIONS, REGISTRATION AND TRANSFER
Other than in the case
of book-entry-only Securities, Securities may be presented for registration of transfer (with the form of transfer endorsed thereon
duly executed) in the city specified for such purpose at the office of the registrar or transfer agent designated by us for such
purpose with respect to any issue of Securities referred to in a prospectus supplement. No service charge will be made for any
transfer, conversion or exchange of the Securities but we may require payment of a sum to cover any transfer tax or other governmental
charge payable in connection therewith. Such transfer, conversion or exchange will be effected upon such registrar or transfer
agent being satisfied with the documents of title and the identity of the person making the request. If a prospectus supplement
refers to any registrar or transfer agent designated by us with respect to any issue of Securities, we may at any time rescind
the designation of any such registrar or transfer agent and appoint another in its place or approve any change in the location
through which such registrar or transfer agent acts.
In the case of book-entry-only
Securities, a global certificate or certificates representing the Securities will be held by a designated depository for its participants.
The Securities must be purchased or transferred through such participants, which includes securities brokers and dealers, banks
and trust companies. The depository will establish and maintain book-entry accounts for its participants acting on behalf of holders
of the Securities. The interests of such holders of Securities will be represented by entries in the records maintained by the
participants. Holders of Securities issued in book-entry-only form will not be entitled to receive a certificate or other instrument
evidencing their ownership thereof, except in limited circumstances. Each holder will receive a customer confirmation of purchase
from the participants from which the Securities are purchased in accordance with the practices and procedures of that participant.
CERTAIN CANADIAN FEDERAL INCOME TAX
CONSIDERATIONS
Non-Residents of Canada
The following is a
general summary of the principal Canadian federal income tax considerations generally applicable under
Income Tax Act
(Canada)
(the “Tax Act”) to a holder who acquires Common Shares or Warrants as beneficial owner pursuant to the prospectus and
who, at all relevant times, for the purposes of the Tax Act, holds such Common Shares or Warrants as capital property, deals at
arm’s length with the Company, is not affiliated with the Company and, for purposes of the Tax Act, is not, and is not deemed
to be, a resident of Canada and has not and will not use or hold or be deemed to use or hold the Common Shares or Warrants in or
in the course of carrying on business in Canada (a “Non-Resident Holder”). Special rules, which are not discussed below,
may apply to a non-resident of Canada that is an insurer which carries on business in Canada and elsewhere. Such Non-Residents
Holders should consult their own tax advisors.
The Common Shares and
Warrants will generally be considered capital property to a Non-Resident Holder unless either (i) the Non-Resident Holder holds
the Common Shares or Warrants in the course of carrying on a business of buying and selling securities or (ii) the Non-Resident
Holder has acquired the Common Shares or Warrants in a transaction or transactions considered to be an adventure in the nature
of trade.
The term “US
Holder,” for the purposes of this section, means a Non-Resident Holder who, for purposes of the
Canada-United States Tax
Convention
(1980) as amended, (the “Convention”), is at all relevant times a resident of the United States and
is a “qualifying person” within the meaning of the Convention. In some circumstances, income or gains earned by fiscally
transparent entities (including limited liability companies) will be eligible for benefits under the Convention. US Holders are
urged to consult with their own tax advisors to determine their entitlement to benefits under the Convention based on their particular
circumstances.
This summary is
based on the current provisions of the Tax Act, the regulations thereunder (the “Regulations”), the current
provisions of the Convention, and counsel’s understanding of the current administrative policies and assessing
practices of the Canada Revenue Agency (the “CRA”) publicly available prior to the date hereof.
This summary also takes
into account all specific proposals to amend the Tax Act and Regulations publicly announced by or on behalf of the Minister of
Finance (Canada) prior to the date hereof (collectively, the “Proposed Tax Amendments”). No assurances can be given
that the Proposed Tax Amendments will be enacted or will be enacted as proposed. Other than the Proposed Tax Amendments, this summary
does not take into account or anticipate any changes in law or the administration policies or assessing practice of CRA, whether
by judicial, legislative, governmental or administrative decision or action, nor does it take into account provincial, territorial
or foreign income tax legislation or considerations, which may differ significantly from those discussed herein.
This summary is
of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder
and no representations with respect to the income tax consequences to any particular holder are made. This summary is not exhaustive
of all Canadian federal income tax considerations. Accordingly, prospective investors in Common Shares or Warrants should consult
their own tax advisors with respect to their own particular circumstances.
Currency Conversion
For purposes of the
Tax Act, all amounts relating to the acquisition, holding or disposition of the Common Shares and Warrants, including dividends,
adjusted cost base and proceeds of disposition must be converted into Canadian dollars using the rate of exchange quoted by the
Bank of Canada at noon on the date on which the amount first arose or such other rate of exchange as is acceptable to the CRA.
Exercise of Warrants
Upon the exercise of
a Warrant, there will be no income tax consequences for a Non-Resident Holder. When a Warrant is exercised, the Non-Resident Holder’s
cost of the Common Share acquired thereby will be the aggregate of the Non-Resident Holder’s adjusted cost base of such Warrant
and the exercise price paid for the Common Share. The Non-Resident Holder’s adjusted cost base of the Common Share so acquired
will be determined by averaging such cost with the adjusted cost base to the Non-Resident Holder of all Common Shares held by the
Non-Resident Holder as capital property immediately prior to such acquisition.
Disposition of Common Shares and Warrants
Generally, a Non-Resident
Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder on a disposition
of the Common Shares or Warrants, nor will capital losses arising from the disposition be recognized under the Tax Act, unless
the Common Shares or Warrants constitute “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident
Holder at the time of disposition and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty or
convention. Provided the shares are listed on a designated stock exchange (which currently includes the TSX and the NYSE American) at
the time of disposition, the Common Shares and the Warrants generally will not constitute taxable Canadian property of a Non-Resident
Holder, unless at any time during the 60-month period immediately preceding the disposition the following two conditions have been
met concurrently: (i) the Non-Resident Holder, persons with whom the Non-Resident Holder did not deal at arm’s length, or
the Non-Resident Holder together with all such persons, owned or was considered to own 25% or more of the issued shares of any
class or series of shares of the capital stock of the Company; and (ii) more than 50% of the fair market value of the Common Shares
was determined directly or indirectly from one or any combination of real or immovable property situated in Canada, “Canadian
resource properties” (as determined in the Tax Act), “timber resource properties” (as defined in the Tax Act)
or a options in respect of, or interests in, or civil law rights in, such properties, whether or not such property exists.
If the Common Shares
or Warrants are taxable Canadian property to a Non-Resident Holder, any capital gain realized on the disposition or deemed disposition
of such shares, may not be subject to Canadian federal income tax pursuant to the terms of an applicable income tax treaty or convention
between Canada and the country of residence of a Non-Resident Holder.
A Non-Resident Holder whose shares are
taxable Canadian property should consult their own advisors.
Dividends on Common Shares
Under the Tax Act,
dividends on shares paid or credited to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of 25% of
the gross amount of the dividends. This withholding tax may be reduced pursuant to the terms of an applicable income tax treaty
or convention between Canada and the country of residence of a Non-Resident Holder. Under the Convention, a US Holder will generally
be subject to Canadian withholding tax at a rate of 15% of the amount of such dividends. In addition, under the Convention, dividends
may be exempt from Canadian non-resident withholding tax if paid to certain US Holders that are qualifying religious, scientific,
literary, educational or charitable tax-exempt organizations and qualifying trusts, companies, organizations or arrangements operated
exclusively to administer or provide pension, retirement or employee benefits that are exempt from tax in the United States and
that have complied with specific administrative procedures.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a
general summary of the anticipated U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising
from and relating to (i) the acquisition, ownership and disposition of Common Shares or Warrants which the Company may offer, either
separately or in combination as a unit, from time to time pursuant to terms described in an applicable prospectus supplement, including
Common Shares acquired upon exercise of a Warrant; and (ii) the exercise, disposition, and lapse of Warrants acquired in such an
offering.
This summary is for
general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income
tax considerations that may apply to a U.S. Holder as a result of acquisition of Common Shares or Warrants pursuant to a prospectus
supplement. Additionally, this summary does not address the U.S. federal tax consequences of acquiring, owning and disposing of
the other types of securities (including debt securities) that the Company has the ability to offer based on this prospectus, and
the relevant prospectus supplement will contain additional or modified disclosure concerning the anticipated U.S. federal income
tax consequences relevant to such other securities. Furthermore, this summary does not take into account the individual facts and
circumstances of any particular U.S. Holder that may affect the U.S. federal income tax considerations applicable to such U.S.
Holder at the time of a particular offering of Common Shares or Warrants. Accordingly, this summary is not intended to be, and
should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. U.S. Holders should consult
their own tax advisors regarding the U.S. federal, U.S. state and local, and foreign tax consequences relating to the acquisition,
ownership and disposition of Common Shares and/or Warrants in connection with any offering pursuant to a prospectus supplement.
No ruling from the
U.S. Internal Revenue Service (the “IRS”) or legal opinion has been requested, or will be obtained, regarding the potential
U.S. federal income tax considerations applicable to U.S. Holders as discussed in this summary. This summary is not binding on
the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this
summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and
the U.S. courts could disagree with one or more of the positions taken in this summary.
Scope of this Summary
Authorities
This summary is based
on the Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated by the Department of the Treasury
(whether final, temporary or proposed) (“Treasury Regulations”), U.S. court decisions, published rulings and administrative
positions of the IRS, and the Convention, in each case, in effect as of the date of this prospectus. Any of the authorities on
which this summary is based could be changed in a material and adverse manner, possibly with retroactive effect, at any time, including
between the date of this prospectus and the date of any prospectus supplement pursuant to which a U.S. Holder acquires Common Shares
and/or Warrants. Additionally, any such change could be applied on a retroactive basis after a U.S. Holder has acquired Common
Shares and/or Warrants and could change the U.S. federal income tax considerations described in this summary as applied to such
U.S. Holder in connection with a purchase of Common Shares and/or Warrants pursuant to the applicable prospectus supplement. This
summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could
be applied on a retroactive basis.
U.S. Holder
For purposes of this
section, a “U.S. Holder” is a beneficial owner of Common Shares or Warrants acquired pursuant to a prospectus supplement
that is (a) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; (b) a corporation,
or other entity classified as a corporation for U.S. federal income tax purposes, that is created or organized in or under the
laws of the United States or any state in the United States or the District of Columbia; (c) an estate if the income of such estate
is subject to U.S. federal income tax regardless of the source of such income; or (d) a trust if (i) such trust has validly elected
to be treated as a U.S. person for U.S. federal income tax purposes, or (ii) a U.S. court is able to exercise primary supervision
over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of such
trust.
Non-U.S. Holder
For purposes of this
summary, a “Non-U.S. Holder” is a beneficial owner of Common Shares or Warrants that is neither a U.S. Holder nor a
partnership (or other “pass-through” entity). This summary does not address the U.S. federal income tax considerations
applicable to Non-U.S. Holders relating to the acquisition, ownership and disposition of Common Shares or Warrants. Accordingly,
Non-U.S. Holders should consult their own tax advisors regarding the U.S. federal, U.S. state and local, and foreign tax consequences
(including the potential application of and operation of the Convention or any other tax treaties) relating to the acquisition,
ownership, and disposition of Common Shares and Warrants.
U.S. Holders Subject to Special U.S.
Federal Income Tax Rules Not Addressed
This summary does not
address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the
Code, including (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts
or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate
investment trusts or regulated investment companies or that are broker-dealers, dealers, or traders in securities or currencies
that elect to apply a mark-to-market accounting method; (c) U.S. Holders that have a “functional currency” other than
the U.S. dollar; (d) U.S. Holders that own Common Shares or Warrants as part of a straddle, hedging transaction, conversion transaction,
constructive sale or other arrangement involving more than one position; (e) U.S. Holders that acquired Common Shares or Warrants
in connection with the exercise of employee stock options or otherwise as compensation for services; (f) U.S. Holders that hold
Common Shares or Warrants other than as a capital asset (generally property held for investment purposes) within the meaning of
Section 1221 of the Code; or (g) U.S. Holders that own, directly, indirectly or by attribution, 10% or more, by voting power or
value, of the outstanding shares of the Company. The summary below also does not address the impact of an offering on persons who
are U.S. expatriates or former long-term residents of the United States subject to Section 877 or 877A of the Code. U.S. Holders
and others that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult
their own tax advisors regarding the U.S. federal income tax consequences relating to the acquisition, ownership and disposition
of Common Shares and/or Warrants.
If an entity that is
classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares
or Warrants, the U.S. federal income tax consequences applicable to such partnership (or “pass-through” entity) and
the partners of such partnership (or owners of such “pass-through” entity) generally will depend on the activities
of the partnership (or “pass-through” entity) and the status of such partners (or owners). Partners of entities that
are classified as partnerships (and owners of other “pass-through” entities) for U.S. federal income tax purposes should
consult their own tax advisors regarding the U.S. federal income tax consequences relating to the acquisition, ownership and disposition
of Common Shares and/or Warrants.
Tax Consequences Other than U.S.
Federal Income Tax Consequences Not Addressed
This summary does not
address the U.S. state and local tax, U.S. estate, gift, and generation-skipping tax, U.S. federal alternative minimum tax, or
foreign tax consequences to U.S. Holders relating to the acquisition, ownership, and disposition of Common Shares and/or Warrants.
Each U.S. Holder should consult its own tax advisor regarding the U.S. state and local tax, U.S. estate, gift, and generation-skipping
tax, U.S. federal alternative minimum tax and foreign tax consequences relating to the acquisition, ownership, and disposition
of Common Shares and/or Warrants.
U.S. Federal Income Tax Consequences
of Common Shares and Warrants Offered as Part of a Unit
It is possible that
the Company will offer Common Shares and Warrants in combination to be purchased as a unit. For U.S. federal income tax purposes,
the acquisition by a U.S. Holder of such a unit will be treated as the acquisition of two separate instruments: an instrument consisting
of a Common Share or portion of such a Common Share and an instrument consisting of a Warrant or portion of such a Warrant. The
purchase price for the unit will be allocated between these two instruments in proportion to their relative fair market values
at the time the unit is purchased by the U.S. Holder. This allocation of the purchase price for a unit will establish a U.S. Holder’s
initial tax basis for U.S. federal income tax purposes in the Common Share and Warrant components that comprise such unit.
If the Company issues
Common Shares and Warrants as part of a unit, it will inform the U.S. Holder of the portion of the unit purchase price it intends
to allocate to each instrument in the applicable prospectus supplement. However, the IRS will not be bound by the Company’s
allocation of the purchase price for units offered, and therefore, the IRS or a U.S. court might not respect the allocation provided
by the Company. U.S. Holders should consult their own tax advisors regarding the allocation of the purchase price for any units
purchased. A U.S. Holder’s holding period for each instrument acquired in a unit will begin on the day after the date of
acquisition.
U.S. Federal Income Tax Consequences
of the Exercise and Disposition of Warrants
Exercise of Warrants
A U.S. Holder should
not recognize gain or loss on the exercise of a Warrant and related receipt of a Common Share (unless cash is received in lieu
of the issuance of a fractional Common Share). A U.S. Holder’s initial tax basis in the Common Share received on the exercise
of a Warrant should be equal to the sum of (a) such U.S. Holder’s tax basis in such Warrant plus (b) the exercise price paid
by such U.S. Holder on the exercise of such Warrant. Subject to the PFIC rules discussed below, a U.S. Holder’s holding period
for the Common Share acquired on exercise of a Warrant generally should begin on the day after the date on which such U.S. Holder
exercised the corresponding Warrant.
It is possible that
under the terms of the applicable prospectus supplement, a U.S. Holder may be permitted to undertake a cashless exercise of a Warrant
into Common Shares. The U.S. federal income tax treatment of a cashless exercise of Warrants into Common Shares is unclear, and
the tax consequences of a cashless exercise could differ from the consequences upon the exercise of a Warrant described in the
preceding paragraph. U.S. Holders should consult their own tax advisors regarding the U.S. federal income tax consequences of a
cashless exercise of Warrants, including whether taxable gain or loss is recognized in connection with such a cashless exercise,
if a cashless exercise is permitted under the applicable prospectus Supplement.
Disposition of Warrants
A U.S. Holder will
recognize gain or loss on the sale or other taxable disposition of a Warrant in an amount equal to the difference, if any, between
(a) the amount of cash plus the fair market value of any property received and (b) such U.S. Holder’s tax basis in the Warrant
sold or otherwise disposed of. As noted below under “Sale or Other Taxable Disposition of Common Shares,” such gain
or loss generally will be treated as “U.S. source” gain or loss for purposes of U.S. foreign tax credit calculations.
Subject to the PFIC rules discussed below, any such gain or loss generally should be a capital gain or loss (provided that the
Common Shares to be issued on the exercise of such Warrant would have been a capital asset if acquired by the U.S. Holder). Any
such gain or loss will be long-term gain or loss if the Warrant disposed of was held for more than one year.
Expiration of Warrants without Exercise
Upon the lapse or expiration
of a Warrant a U.S. Holder will recognize a loss in an amount equal to such U.S. Holder’s tax basis in the Warrant. Any such
loss generally will be a capital loss (provided that the Common Shares to be issued on the exercise of such Warrant would have
been a capital asset if acquired by the U.S. Holder) and will be long-term capital loss if the Warrant was held for more than one
year. Deductions for capital losses are subject to limitations under the Code.
Certain Adjustments to the Warrants
Under Section 305 of
the Code, an adjustment to the number of Common Shares that are to be issued on the exercise of Warrants purchased, or an adjustment
to the exercise price of such Warrants, may be treated as a constructive distribution to a U.S. Holder of the Warrants if, and
to the extent that, such adjustment has the effect of increasing such U.S. Holder’s proportionate interest in the “earnings
and profits” or assets of the Company, depending on the circumstances of such adjustment (for example, if such adjustment
is to compensate for a distribution of cash or other property to shareholders of the Company). Any constructive distributions will
generally be taxable (see a more detailed discussion of the rules applicable to distributions made by the Company at “
Distributions
on Common Shares
” below).
However, adjustments
to the exercise price of the Warrants made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing
the dilution of the interest of the holders of Warrants will generally not be considered to result in a constructive distribution
to a U.S. Holder of Warrants. U.S. Holders should carefully review the conversion rate adjustment provisions and consult their
own tax advisors with respect to the tax consequences of any such adjustment.
U.S. Federal Income Tax Consequences
of the Acquisition, Ownership and Disposition of Common Shares
Distributions on Common Shares
Subject to the PFIC
rules discussed below, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common
Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian
income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the
Company, as computed for U.S. federal income tax purposes. To the extent that a distribution exceeds the current and accumulated
“earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the
extent of a U.S. Holder’s tax basis in the Common Shares and thereafter as a gain from the sale or exchange of such Common
Shares (see “
Sale or Other Taxable Disposition of Common Shares
” below). However, the Company might not determine
its current and accumulated earnings and profits in accordance with U.S. federal income tax principles, and U.S. Holders might
therefore assume that any distribution by the Company with respect to its Common Shares will constitute dividend income. Dividends
received on Common Shares will not be eligible for the “dividends received deduction”.
If we are not a PFIC
in the taxable year in which we pay a dividend or the immediately preceding taxable year, dividends paid to a non-corporate U.S.
Holder in a taxable year will be taxed to such U.S. Holder at the rates applicable to long-term capital gains as “qualified
dividend income” so long as our common shares are readily tradable on an established securities exchange within the United
States or we are eligible for benefits under the Convention. We will be eligible for benefits under the Convention if the principal
class of our shares is primarily and regularly traded on one or more recognized stock exchanges. However, dividend income will
not be qualified dividend income (and will be taxed at ordinary income rates) if (i) the U.S. Holder has not held its common shares
for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date; (ii) our common shares are not readily
tradable on an established securities market; (iii) the company is a PFIC for the taxable year in which the dividend is paid or
in the preceding taxable year; or, (iv) we are not eligible for benefits under the Convention and our stock is not readily tradable
on an established securities exchange within the United States. If the Company is not a PFIC, dividends paid to a U.S. Holder that
do not result in qualified dividend income generally will be taxed at ordinary income tax rates.
Sale or Other Taxable Disposition
of Common Shares
Subject to the PFIC
rules discussed below, upon the sale or other taxable disposition of Common Shares, a U.S. Holder generally will recognize capital
gain or loss in an amount equal to the difference between (a) the amount of cash plus the fair market value of any property received
and (b) its tax basis in such Common Shares sold or otherwise disposed of. Such gain generally will be treated as “U.S. source”
for purposes of applying the U.S. foreign tax credit rules unless the gain is subject to tax in Canada and is re-sourced as “foreign
source” under the Convention and such U.S. Holder elects to treat such gain or loss as “foreign source” (see
a more detailed discussion at “
Foreign Tax Credit
” below).
Foreign Tax Credit
A U.S. Holder who pays
(whether directly or through withholding) Canadian income tax with respect to dividends paid on Common Shares generally may elect
to deduct or credit such tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly
or through withholding) by a U.S. Holder during a year.
Complex limitations
apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S.
Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears
to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income
and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” In
addition, this limitation is calculated separately with respect to specific categories of income. Dividends paid by the Company
generally will constitute “foreign source” income and generally will be categorized as “passive category income”.
However, and subject to certain exceptions, a portion of the dividends paid with respect to Common Shares will be treated as U.S.
source income for U.S. foreign tax credit purposes, in proportion to its U.S. source earnings and profits, if United States persons
own, directly or indirectly, 50 percent or more of the voting power or value of the foreign corporation’s shares. A portion
of any dividends paid with respect to Common Shares may be treated as U.S. source income under these rules, which may limit the
ability of a U.S. Holder to claim a foreign tax credit for any Canadian withholding taxes paid in respect of such amount. Because
the foreign tax credit rules are complex, U.S. Holders should consult their own tax advisors regarding the foreign tax credit rules,
including the source of any dividends paid to U.S. Holders.
Subject to certain
specific rules, foreign income and withholding taxes paid with respect to any distribution in respect of stock in a PFIC should
qualify for the foreign tax credit. The rules relating to distributions by a PFIC are complex, and a U.S. Holder should consult
with its own tax advisor with respect to any distribution received from a PFIC.
Receipt of Foreign Currency
The amount of any distribution
paid in foreign currency to a U.S. Holder in connection with the ownership of Common Shares, or on the sale, exchange or other
taxable disposition of Common Shares or Warrants, generally will be equal to the U.S. dollar value of such foreign currency based
on the exchange rate applicable on the date of actual or constructive receipt (regardless of whether such foreign currency is converted
into U.S. dollars at that time). If the foreign currency received is not converted into U.S. dollars on the date of receipt, a
U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. A U.S. Holder that
receives foreign currency and converts such foreign currency into U.S. dollars at a conversion rate other than the rate in effect
on the date of receipt may have a foreign currency exchange gain or loss, which generally would be treated as U.S. source ordinary
income or loss for foreign tax credit purposes. U.S. Holders should consult their own U.S. tax advisors regarding the U.S. federal
income tax consequences of receiving, owning and disposing of foreign currency.
Surtax on Unearned Income
A surtax at the rate
of 3.8% (the “unearned income Medicare contribution tax”) is imposed on the “net investment income” of
certain U.S. citizens and resident aliens, and on the undistributed ‘‘net investment income’’ of certain
estates and trusts, in each case in excess of a certain threshold amount. Net investment income generally includes interest, dividends,
royalties, rents, gross income from a trade or business involving “passive” activities, and net gains from the disposition
of property (other than property held in a “non-passive” trade or business). Net investment income is reduced by deductions
that are properly allocable to such income.
Passive Foreign Investment Company
Rules
If the Company is a
PFIC within the meaning of Section 1297 of the Code at any time during a U.S. Holder’s holding period, then certain different
and potentially adverse tax consequences would apply to such U.S. Holder’s acquisition, ownership and disposition of Common
Shares and Warrants.
PFIC Status of the Company
The Company generally
will be a PFIC if, for a given tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income
or (b) 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income,
based on the fair market value of such assets. “Gross income” generally includes all income less the cost of goods
sold, and “passive income” includes, for example, dividends, interest, certain rents and royalties, certain gains from
the sale of stock and securities, and certain gains from commodities transactions. Active business gains arising from the sale
of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation’s commodities
are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in a
trade or business.
For purposes of the
PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of
the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets
of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition,
for purposes of the PFIC income test and asset test described above, “passive income” does not include any interest,
dividends, rents or royalties that are received or accrued by the Company from a “related person” (as defined in Section
954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive
income.
Under certain attribution
rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of the Company
which is also a PFIC (a “lower-tier PFIC”), and will be subject to U.S. federal income tax on (a) a distribution on
the shares of a lower-tier PFIC and (b) a disposition of shares of a lower-tier PFIC, both as if the U.S. Holder directly held
the shares of such lower-tier PFIC.
The Company may (or
may not) be a PFIC for the tax year ended December 31, 2016, and may (or may not) be a PFIC in subsequent years. The determination
of whether the Company (or a subsidiary of the Company) was, or will be, a PFIC for a tax year depends, in part, on the application
of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether the Company (or
subsidiary) will be a PFIC for any tax year depends on the assets and income of the Company (and each such subsidiary) over the
course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly,
there can be no assurance that the IRS will not challenge any determination made by the Company (or subsidiary) concerning its
PFIC status or that the Company (and any subsidiary) was not, or will not be, a PFIC for any tax year. U.S. Holders should consult
their own tax advisors regarding the PFIC status of the Company and any subsidiary of the Company.
Default PFIC Rules under Section
1291 of the Code
If the Company is a
PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership and disposition of Common Shares
and Warrants will depend on whether such U.S. Holder makes a QEF Election or makes a mark-to-market election under Section 1296
of the Code (a “Mark-to-Market Election”) with respect to Common Shares. A U.S. Holder that does not make either a
QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”
A Non-Electing U.S.
Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable
disposition of Common Shares or Warrants and (b) any excess distribution paid on the Common Shares. A distribution generally will
be an “excess distribution” to the extent that such distribution (together with all other distributions received in
the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S.
Holder’s holding period for the Common Shares, if shorter).
If the Company is a
PFIC, under Section 1291 of the Code any gain recognized on the sale or other taxable disposition of Common Shares or Warrants
(including an indirect disposition of shares of a lower-tier PFIC), and any excess distribution paid on Common Shares (or a distribution
by a lower-tier PFIC to its shareholder that is deemed to be received by a U.S. Holder) must be ratably allocated to each day of
a Non-Electing U.S. Holder’s holding period for the Common Shares or Warrants, as applicable. The amount of any such gain
or excess distribution allocated to the tax year of disposition or excess distribution and to years before the Company became a
PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax year would be subject to U.S. federal income
tax at the highest tax rate applicable to ordinary income in each such year without regard to the U.S. Holder’s other tax
attributes, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability
had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal
interest,” which is not deductible.
If the Company is a
PFIC for any tax year during which a Non-Electing U.S. Holder holds Common Shares or Warrants, the Company will continue to be
treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or
more subsequent years. If the Company ceases to be a PFIC, a Non-Electing U.S. Holder may terminate this deemed PFIC status with
respect to Common Shares by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed
above) as if such Common Shares were sold on the last day of the last tax year for which the Company was a PFIC. No such election,
however, may be made with respect to Warrants.
Under proposed Treasury
Regulations, if a U.S. Holder has an option, warrant or other right to acquire stock of a PFIC (such as Warrants), such option,
warrant or right is considered to be PFIC stock subject to the default rules of Section 1291 of the Code. Under rules described
below, if the Company were a PFIC, the holding period for Common Shares acquired on exercise of Warrants would begin on the day
after the date a U.S. Holder acquired the Warrants. This would adversely affect the availability of the QEF Election and Mark-to-Market
Election with respect to such Common Shares. (See discussion below under “
QEF Election
” and “
Market-to-Market
Election
”.)
QEF Election
If the Company is
a PFIC and a U.S. Holder makes a QEF Election for the first tax year in which its holding period of its Common Shares begins,
such U.S. Holder generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its Common
Shares. However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s
pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder,
and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, “net
capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital gain, and “ordinary
earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a
QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless
of whether such amounts are actually distributed to such U.S. Holder by the Company. However, a U.S. Holder that makes a QEF Election
may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an
interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as “personal interest,”
which is not deductible.
A U.S. Holder that
makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents
“earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF
Election and (b) will adjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in income or
allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally
will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.
The procedure for making
a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election
is timely. A QEF Election will be treated as timely if it is made for the first year in the U.S. Holder’s holding period
for the Common Shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF
Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year.
A QEF Election will
apply to the tax year for which such QEF Election is made and to all subsequent tax years, unless such QEF Election is invalidated
or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent
tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those
tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in a subsequent tax year, the QEF Election
will be effective, and the U.S. Holder will be subject to the QEF rules described above during a subsequent tax year in which the
Company qualifies as a PFIC.
As discussed above,
under proposed Treasury Regulations, if a U.S. Holder has an option, warrant or other right to acquire stock of a PFIC (such as
Warrants), such option, warrant or right is considered to be PFIC stock subject to the default rules of Section 1291 of the Code
on its disposition. However, a holder of an option, warrant or other right to acquire stock of a PFIC may not make a QEF Election
that will apply to the option, warrant or other right to acquire PFIC stock. In addition, under proposed Treasury Regulations,
if a U.S. Holder holds an option, warrant or other right to acquire stock of a PFIC, the holding period with respect to shares
of stock of the PFIC acquired upon exercise of such option, warrant or other right will include the period that the option, warrant
or other right was held.
Consequently, if a
U.S. Holder of Common Shares makes a QEF Election, such election generally will not be treated as a timely QEF Election with respect
to Common Shares subsequently acquired on the exercise of Warrants, and the rules of Section 1291 of the Code discussed above will
continue to apply with respect to such U.S. Holder’s previously owned Common Shares. However, a U.S. Holder of Common Shares
acquired on exercise of Warrants should be eligible to make a timely QEF Election if such U.S. Holder elects in a tax year throughout
which such U.S. Holder owns such Common Shares to recognize gain (which will be taxed under the rules of Section 1291 of the Code
discussed above) as if such Common Shares were sold on the first day of such year at fair market value. In addition, gain recognized
on the sale or other taxable disposition (other than by exercise) of the Warrants by a U.S. Holder will be subject to the rules
of Section 1291 of the Code discussed above. U.S. Holders should consult their own tax advisors regarding the application of the
PFIC rules to Warrants and Common Shares acquired upon exercise of Warrants.
The Company will use
commercially reasonable efforts to make available to U.S. Holders, upon their written request, timely and accurate information
as to its status as a PFIC and to provide to a U.S. Holder all information and documentation that a U.S. Holder making a QEF Election
with respect to the Company, and any lower-tier PFIC in which the Company owns, directly or indirectly, more than 50% of such lower-tier
PFIC’s total aggregate voting power, is required to obtain for U.S. federal income tax purposes in the event it is a PFIC.
However, U.S. Holders should be aware that the Company provides no assurances that it will attempt to provide any such information
relating to any lower-tier PFIC in which the Company owns, directly or indirectly, 50% or less of such lower-tier PFIC’s
aggregate voting power. Because the Company may own shares in one or more lower-tier PFICs, and may acquire shares in one or more
lower-tier PFICs in the future, they will continue to be subject to the rules discussed above with respect to the taxation of gains
and excess distributions with respect to any lower-tier PFIC for which the U.S. Holders do not obtain the required information.
U.S. Holders should consult their tax advisors regarding the availability of, and procedure for making, a QEF Election with respect
to the Company and any lower-tier PFIC.
Mark-to-Market Election
A U.S. Holder may make
a Mark-to-Market Election only if the Common Shares are marketable stock. The Common Shares generally will be “marketable
stock” if they are regularly traded on (a) a national securities exchange that is registered with the SEC; (b) the national
market system established pursuant to section 11A of the Securities and Exchange Act of 1934; or (c) a foreign securities exchange
that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such
foreign exchange has trading volume, listing, financial disclosure and other requirements and the laws of the country in which
such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually
enforced; and (ii) the rules of such foreign exchange ensure active trading of listed stocks. If such stock is traded on such a
qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which
such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Each U.S. Holder should
consult its own tax advisor regarding whether the Common Shares constitute marketable stock.
A U.S. Holder that
makes a Mark-to-Market Election with respect to its Common Shares generally will not be subject to the rules of Section 1291 of
the Code discussed above. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of
such U.S. Holder’s holding period for Common Shares or such U.S. Holder has not made a timely QEF Election, the rules of
Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the Common Shares.
Any Mark-to-Market
Election made by a U.S. Holder for Common Shares will also apply to such U.S. Holder’s Common Shares acquired upon exercise
of Warrants. As a result, if a Market-to-Market Election has been made by a U.S. Holder with respect to Common Shares, any Common
Shares received on exercise of Warrants will automatically be marked-to-market in the year of exercise. If the Company is a PFIC
at the time a U.S. Holder acquires Warrants, a U.S. Holder’s holding period for Warrant Shares received on exercise will
include the period during which such U.S. Holder has held the Warrants. In these circumstances, a U.S. Holder will be treated as
making a Mark-to-Market Election with respect to its Common Shares acquired on exercise of the Warrants after the beginning of
such U.S. Holder’s holding period for such Common Shares, unless the Common Shares are acquired in the same tax year as the
year in which the U.S. Holder acquired the corresponding Warrants, and the tax regime and interest charge of Section 1291 described
above generally will apply to the mark-to-market gain realized in the tax year in which the Common Shares are received. However,
the general mark-to-market rules will apply to subsequent tax years.
A U.S. Holder that
makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal
to the excess, if any, of (a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder’s
tax basis in such Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal
to the excess, if any, of (i) such U.S. Holder’s adjusted tax basis in the Common Shares over (ii) the fair market value
of such Common Shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market
Election for prior tax years).
U.S. Holders that make
a Mark-to-Market Election generally also will adjust their tax basis in the Common Shares to reflect the amount included in gross
income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition
of Common Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or loss (not to exceed the
excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over
(b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years).
A Mark-to-Market Election
applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the Common Shares
cease to be “marketable stock” or the IRS consents to revocation of such election. U.S. Holders should consult their
own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Election.
Although a U.S. Holder
may be eligible to make a Mark-to-Market Election with respect to Common Shares, no such election may be made with respect to the
stock of any lower-tier PFIC that a U.S. Holder is treated as owning because such stock is not marketable. Hence, the Mark-to-Market
Election will not be effective to eliminate the interest charge described above with respect to deemed dispositions of lower-tier
PFIC stock or distributions from a lower-tier PFIC.
Other PFIC Rules
Under Section 1291(f)
of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that
had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise
be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations) in the event the Company is a PFIC during such
U.S. Holder’s holding period for the relevant shares. However, the specific U.S. federal income tax consequences to a U.S.
Holder may vary based on the manner in which Common Shares are transferred.
Certain additional
adverse rules will apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a
QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares or Warrants as security
for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such Common
Shares or Warrants.
If the Company were
a PFIC, a U.S. Holder would be required to attach a completed IRS Form 8621 to its tax return every year in which it recognized
gain on a disposition of the Common Shares or Warrants or received an excess distribution. In addition, subject to certain rules
intended to avoid duplicative filings, U.S. Holders may also be required to file an annual information return on IRS Form 8621
with respect to each PFIC in which the U.S. Holder holds a direct or indirect interest. U.S. Holders should consult their own tax
advisors regarding their filing obligations with respect to such information returns.
In addition, a U.S.
Holder who acquires Common Shares or Warrants from a decedent will not receive a “step up” in tax basis of such Common
Shares or Warrants to fair market value unless such decedent had a timely and effective QEF Election in place.
Special rules also
apply to foreign tax credits that a U.S. Holder may claim on a distribution from a PFIC.
The PFIC rules are
complex, and U.S. Holders should consult their own tax advisors regarding the PFIC rules and how they may affect the U.S. federal
income tax consequences of the acquisition, ownership, and disposition of Common Shares and Warrants in the event the Company is
a PFIC at any time during the holding period for such Common Shares or Warrants.
Information Reporting and Backup Withholding
Certain U.S. Holders
are required to report information relating to an interest in Common Shares or Warrants, subject to certain exceptions (including
an exception for Common Shares and Warrants held in accounts maintained by certain financial institutions), by attaching a completed
IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest
in Common Shares or Warrants. U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements
relating to their ownership of the Common Shares and Warrants.
Payments made within
the United States, or by a U.S. payor or U.S. middleman, of dividends on Common Shares, and proceeds arising from certain sales
or other taxable dispositions of Common Shares or Warrants, may be subject to information reporting and backup withholding tax,
at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. social security or other taxpayer
identification number (generally on Form W-9); (b) furnishes an incorrect U.S. taxpayer identification number; (c) is notified
by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax; or (d) fails
under certain circumstances to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer
identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However,
U.S. Holders that are corporations generally are excluded from these information reporting and backup withholding rules. Any amounts
withheld under the U.S. backup withholding rules will be allowed as a credit against a U.S. Holder’s U.S. federal income
tax liability, if any, or will be refunded, if such U.S. Holder timely furnishes the required information to the IRS. U.S. Holders
should consult their own tax advisors regarding the information reporting and backup withholding tax rules.
LEGAL MATTERS
Fasken Martineau DuMoulin
LLP of Ottawa, Ontario, has provided its opinion on the validity of the Securities offered by this prospectus.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company’s
auditors, for the Audited Financial Statements incorporated by reference in this prospectus, PricewaterhouseCoopers LLP, Chartered
Professional Accountants, of Vancouver, British Columbia, report that they are independent from the Company within the meaning
of the Code of Professional Conduct of Chartered Professional Accountants of British Columbia, Canada, and within the meaning
of the U.S. Securities Act and the applicable rules and regulations thereunder adopted by the SEC. PricewaterhouseCoopers
LLP is registered with the Public Company Accounting Oversight Board.
EXPERTS
The mineral resource
estimate and related information of the Company’s Lost Creek property incorporated by reference herein
are based upon analyses performed or overseen by TREC, Inc. Such estimates and related information have been incorporated
by reference herein in reliance upon the authority of such firm as experts in such matters.
The mineral resource
estimate and related information of the Company’s Shirley Basin property incorporated by reference herein are based upon
analyses performed by Western Water Consultants, Inc., d/b/a WWC Engineers. Such estimates and related information have been
incorporated by reference herein in reliance upon the authority of such firm as experts in such matters.
UR-ENERGY INC.
Common Shares
Warrants to
Purchase Common Shares
PROSPECTUS SUPPLEMENT
Sole
Book-Running Manager
Cantor
September ,
2018
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