LITTLETON, Colo., May 4, 2015 /CNW/ -- Ur-Energy Inc.
(TSX:URE, NYSE MKT:URG) ("Ur-Energy" or the "Company") has
filed the Company's Form 10-Q for the quarter ended March 31, 2015, with the U.S. Securities and
Exchange Commission at www.sec.gov/edgar.shtml and with Canadian
securities authorities on SEDAR at www.sedar.com. Our filing
may also be accessed on the Company's website at
www.ur-energy.com.
![Ur-Energy. Ur-Energy.](http://photos.prnewswire.com/prnvar/20110913/LA67628LOGO)
Lost Creek Uranium Production and Sales
The quarter
included contractual product sales of 146,000 pounds
U3O8. The product was sold at an average
price of $50.55 per pound for sales
revenues totaling $7.4 million. For
the quarter, 192,280 pounds of U3O8 were
captured within the Lost Creek plant. Of that, 177,057 pounds
U3O8 were packaged in drums and 171,505
pounds U3O8 of the drummed inventory were
shipped to the conversion facility. The average price per pound
sold, $50.55, represents a 28%
premium to the average spot market price during the quarter. The
Company recorded production cash costs of $18.86 per pound sold this quarter compared with
$20.32 during the previous quarter.
The total cost per pound sold including ad valorem and severance
taxes, cash and non-cash costs was $36.91 (see table below).
Jeff Klenda, Board Chair and
Acting CEO of the Company, noted that "Q1 represents a solid
quarter for us and, while the quarterly production totals came in
slightly below our targeted production rates, they represent a very
favorable increase quarter-over-quarter. Production rates also
trended up during the quarter and continued to trend up in
April. Our preliminary April production estimate demonstrates
that the continuing efficiencies and increased production levels
that we have targeted are attainable. We are quite optimistic that
the trend toward steady state operations, including an anticipated
lower overall cost per pound, will continue throughout 2015."
Production levels and costs along with sales figures for the
Lost Creek Project are presented in the following table:
Inventory,
Production and Sales Analysis
|
|
Unit
|
|
|
2015
Q1
|
|
|
2014
Q4
|
|
|
2014
Q3
|
|
|
2014
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
captured
|
|
lb
|
|
|
192,280
|
|
|
149,564
|
|
|
131,331
|
|
|
116,708
|
|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
150
|
|
$
|
1,163
|
|
$
|
313
|
|
$
|
212
|
|
Wellfield cash cost
(1)
|
|
$000
|
|
$
|
1,080
|
|
$
|
881
|
|
$
|
1,012
|
|
$
|
912
|
|
Wellfield non-cash
cost (1)(2)
|
|
$000
|
|
$
|
1,335
|
|
$
|
1,350
|
|
$
|
1,349
|
|
$
|
1,350
|
|
Ad valorem and
severance tax per pound captured
|
|
$/lb
|
|
$
|
0.78
|
|
$
|
7.78
|
|
$
|
2.38
|
|
$
|
1.82
|
|
Cash cost per pound
captured
|
|
$/lb
|
|
$
|
5.62
|
|
$
|
5.89
|
|
$
|
7.71
|
|
$
|
7.81
|
|
Non-cash cost per
pound captured
|
|
$/lb
|
|
$
|
6.94
|
|
$
|
9.02
|
|
$
|
10.28
|
|
$
|
11.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
drummed
|
|
lb
|
|
|
177,057
|
|
|
117,160
|
|
|
125,915
|
|
|
133,684
|
|
Plant cash cost
(3)
|
|
$000
|
|
$
|
1,718
|
|
$
|
1,553
|
|
$
|
1,703
|
|
$
|
1,625
|
|
Plant non-cash cost
(2)(3)
|
|
$000
|
|
$
|
497
|
|
$
|
507
|
|
$
|
504
|
|
$
|
502
|
|
Cash cost per pound
drummed
|
|
$/lb
|
|
$
|
9.70
|
|
$
|
13.26
|
|
$
|
13.53
|
|
$
|
12.15
|
|
Non-cash cost per
pound drummed
|
|
$/lb
|
|
$
|
2.81
|
|
$
|
4.33
|
|
$
|
4.00
|
|
$
|
3.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
shipped
|
|
lb
|
|
|
171,505
|
|
|
102,071
|
|
|
126,499
|
|
|
163,747
|
|
Distribution cash cost
(4)
|
|
$000
|
|
$
|
145
|
|
$
|
113
|
|
$
|
(31)
|
|
$
|
117
|
|
Cash cost per pound
shipped
|
|
$/lb
|
|
$
|
0.85
|
|
$
|
1.10
|
|
$
|
(0.24)
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
sold
|
|
lb
|
|
|
146,000
|
|
|
100,000
|
|
|
100,000
|
|
|
207,760
|
|
U3O8 sales
|
|
$000
|
|
$
|
7,380
|
|
$
|
6,603
|
|
$
|
5,996
|
|
$
|
7,197
|
|
Average long-term
contract price
|
|
$/lb
|
|
$
|
50.55
|
|
$
|
66.03
|
|
$
|
59.96
|
|
$
|
34.64
|
|
Average spot price
(5)
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
50.55
|
|
$
|
66.03
|
|
$
|
59.96
|
|
$
|
34.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 Cost of sales
(6)
|
|
$000
|
|
$
|
5,390
|
|
$
|
3,697
|
|
$
|
3,752
|
|
$
|
6,761
|
|
Ad valorem and
severance tax cost per pound sold
|
|
$/lb
|
|
$
|
4.73
|
|
$
|
3.18
|
|
$
|
2.52
|
|
$
|
3.11
|
|
Cash cost per pound
sold
|
|
$/lb
|
|
$
|
18.86
|
|
$
|
20.32
|
|
$
|
20.77
|
|
$
|
17.45
|
|
Non-cash cost per
pound sold (2)
|
|
$/lb
|
|
$
|
13.32
|
|
$
|
13.47
|
|
$
|
14.23
|
|
$
|
11.98
|
|
Total cost per pound
sold
|
|
$/lb
|
|
$
|
36.91
|
|
$
|
36.97
|
|
$
|
37.52
|
|
$
|
32.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross profit
|
|
$000
|
|
$
|
1,990
|
|
$
|
2,906
|
|
$
|
2,244
|
|
$
|
436
|
|
Gross profit per pound
sold
|
|
$/lb
|
|
$
|
13.64
|
|
$
|
29.06
|
|
$
|
22.44
|
|
$
|
2.10
|
|
Gross profit
margin
|
|
%
|
|
|
27.0
|
|
|
44.0
|
|
|
37.4
|
|
|
6.1
|
|
Notes:
|
1
|
Wellfield costs
include all wellfield operating costs plus amortization of the
related mineral property acquisition costs and depreciation of the
related asset retirement obligation costs. Wellfield
construction and development costs, which include wellfield
drilling, header houses, pipelines, power lines, roads, fences and
disposal wells, are treated as development expense and are not
included in wellfield operating costs.
|
2
|
Non-cash costs
include depreciation of plant equipment, capitalized ARO costs and
amortization of the investment in the mineral property acquisition
costs. The expenses are calculated on a straight line basis
so the expense is constant for each quarter. The cost per
pound from these costs will therefore vary based on production
levels only.
|
3
|
Plant costs include
all plant operating costs, site overhead costs and depreciation of
the related plant construction and asset retirement obligation
costs.
|
4
|
Distribution costs
include all shipping costs and costs charged by the conversion
facility for weighing, sampling, assaying and storing the
U3O8 prior to sale.
|
5
|
There were no spot
sales in either 2015 or 2014.
|
6
|
Cost of sales include
all production costs (notes 1, 2, 3 and 4) adjusted for changes in
inventory values.
|
|
|
Cash cost per pound and non-cash cost per pound for produced and
sold uranium presented in the table above are non-US GAAP measures.
These measures do not have a standardized meaning or a consistent
basis of calculation under US GAAP. These measures are used to
assess business performance and may be used by certain investors to
evaluate performance. To facilitate a better understanding of these
measures, the tables below present a reconciliation of these
measures to the financial results as presented in our financial
statements.
Average Price Per Pound Sold
Reconciliation
|
|
Unit
|
|
|
2015
Q1
|
|
|
2014
Q4
|
|
|
2014
Q3
|
|
|
2014
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 Sales (a)
1
|
|
$000
|
|
$
|
7,380
|
|
$
|
6,603
|
|
$
|
5,996
|
|
$
|
7,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
(b)
|
|
lb
|
|
|
146,000
|
|
|
100,000
|
|
|
100,000
|
|
|
207,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average price per
pound sold (a ÷ b)
|
|
$/lb.
|
|
$
|
50.55
|
|
$
|
66.03
|
|
$
|
59.96
|
|
$
|
34.64
|
|
|
Notes:
|
1
|
2014 Q2 and 2014 Q3
does not include $1.3 million and $1.2 million, respectively,
recognized from the gain on assignment of deliveries under
long-term contracts because the additional revenue would distort
the average price per pound sold (see the Sales footnotes to the
respective financial statements for the periods ended June 30 and
September 30, 2014).
|
|
|
U3O8 sales of $7.4
million for the three months were based on selling 146,000
pounds at an average price of $50.55,
which resulted from meeting all of our contractual delivery
requirements with no additional spot sales. We also
recognized a small amount in disposal fees at the Shirley Basin
Project. This resulted in total sales of $7.4 million as reported in the financial
statements.
Total
Cost Per Pound Sold Reconciliation
|
|
Unit
|
|
|
2015
Q1
|
|
|
2014
Q4
|
|
|
2014
Q3
|
|
|
2014
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem and
severance taxes
|
|
$000
|
|
$
|
150
|
|
$
|
1,163
|
|
$
|
314
|
|
$
|
212
|
|
Wellfield
costs
|
|
$000
|
|
$
|
2,415
|
|
$
|
2,230
|
|
$
|
2,361
|
|
$
|
2,262
|
|
Plant
costs
|
|
$000
|
|
$
|
2,215
|
|
$
|
2,060
|
|
$
|
2,207
|
|
$
|
2,127
|
|
Distribution
costs
|
|
$000
|
|
$
|
145
|
|
$
|
112
|
|
$
|
(31)
|
|
$
|
117
|
|
Inventory
change
|
|
$000
|
|
$
|
465
|
|
$
|
(1,868)
|
|
$
|
(1,099)
|
|
$
|
2,043
|
|
Cost of sales
(a)
|
|
$000
|
|
$
|
5,390
|
|
$
|
3,697
|
|
$
|
3,752
|
|
$
|
6,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
(b)
|
|
lb
|
|
|
146,000
|
|
|
100,000
|
|
|
100,000
|
|
|
207,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per pound sold (a
÷ b) 1
|
|
$/lb.
|
|
$
|
36.91
|
|
$
|
36.97
|
|
$
|
37.52
|
|
$
|
32.54
|
|
1
|
The cost per pound
sold reflects both cash and non-cash costs, which are combined as
cost of sales in the statement of operations included in this
filing. The cash and non-cash cost components are identified
in the above inventory, production and sales table.
|
|
|
The cost of sales includes ad valorem and severance taxes
related to the extraction of uranium, all costs of wellfield, plant
and site operations including the related depreciation and
amortization of capitalized assets, reclamation and mineral
property costs, plus product distribution costs. These costs are
also used to value inventory and the resulting inventoried cost per
pound is compared to the estimated sales prices based on the
contracts or spot sales anticipated for the distribution of the
product. Any costs in excess of the calculated market value are
charged to cost of sales.
Production costs per pound have generally declined throughout
the past twelve months. In November
2014, the State of Wyoming
retroactively increased the ad valorem and severance tax industry
factor used in calculating the taxable value of the extracted
uranium by 31%. The one-time retroactive adjustment to the tax
expense was reflected in Q4 2014 resulting in significantly higher
extraction costs per pound in that quarter. In March 2015, the State revised the industry factor
increase down to a six percent increase, as compared to the
previously announced 31% increase, after further review of
operational data submitted by the affected companies. We recognized
the reduction of $0.4 million to the
2014 liability in January 2015 which
resulted in a substantially lower cost per pound than what had been
reflected the previous quarter.
The gross profit for the three months was $2.0 million, which represents a gross profit
margin of approximately 27%. This was lower than the previous two
quarters primarily due to a lower average sales price per pound. At
March 31, the Company's cash position
was $2.2 million. Our current
cash position, at April 29, 2015, is
$3.8 million.
Shirley Basin Project Development
Having completed an
independent NI 43-101 Technical Report on resources for our
wholly-owned Shirley Basin Project in August
2014, we subsequently commissioned and issued a second NI
43-101 report, including a Preliminary Economic Assessment for the
project, in January 2015. Baseline
studies necessary for the permitting and licensing of the project
also commenced in 2014 and are anticipated to be completed this
summer.
Continuing Guidance for 2015
We accelerated the timing
of one delivery of 200,000 pounds from September to April 2015. To fulfill the delivery, we purchased
200,000 pounds from a trader at the then-current spot price. This
generated net cash proceeds of approximately $4.0 million and lowered our production
requirements for the year by 200,000 pounds. Nevertheless,
our current production plan for 2015 is still to maintain an
average production rate of approximately 70,000 pounds per month
and produce between 750,000 and 850,000 pounds of U3O8. Excess
production will be used to build inventory, which may be utilized
to complete discretionary spot sales transactions on an as needed
basis if market conditions warrant. The production rate may
be adjusted based on continuing operational refinements, and
indicators in the market, including uranium spot market pricing and
other factors.
The Q2 2015 production target for Lost Creek is 210,000 pounds
U3O8 dried and drummed. April 2015 production results are currently being
finalized. Our initial production estimates indicate that we
captured 84,000 pounds, drummed 77,000 pounds, and shipped 73,000
pounds.
As production levels increased during 2015 Q1, our production
cost per pound generally decreased as compared to previous
quarters. Many of our costs are primarily process based and
do not necessarily fluctuate in proportion to the pounds being
produced. As production levels increase, the cost per pound
produced will tend to decrease so long as production costs remain
on target. As a result of higher production rates and relatively
consistent costs, our ending conversion facility inventory of
82 thousand pounds at March 31,
2015 was carried at a total cost per pound of $31.47, which consisted of ad valorem and
severance taxes ($3.43), cash costs
($16.73) and non-cash costs
($11.21). Our expectation is
that those costs per pound figures will continue to decrease in
2015 Q2 so long as our production and production costs remain on
target.
About Ur-Energy
Ur-Energy is a uranium mining company
operating the Lost Creek in-situ recovery uranium facility
in south-central Wyoming. The Lost
Creek processing facility has a two million pounds per year
nameplate design capacity. Shirley
Basin, our newest project, is one of the Pathfinder Mines
assets we acquired in 2013. Baseline studies necessary for
permitting and licensing of the project are currently being
advanced. Ur-Energy is engaged in uranium mining, recovery and
processing activities, including the acquisition, exploration,
development and operation of uranium mineral properties in
the United States. Shares of
Ur-Energy trade on the NYSE MKT under the symbol "URG" and on the
Toronto Stock Exchange under the symbol "URE." Ur-Energy's
corporate office is located in Littleton,
Colorado; its registered office is in Ottawa, Ontario. Ur-Energy's website is
www.ur-energy.com.
FOR FURTHER
INFORMATION, PLEASE CONTACT
|
Rich Boberg, Senior
Director IR/PR
|
|
Jeff Klenda, Chair
and Acting CEO
|
866-981-4588
|
|
866-981-4588
|
rich.boberg@ur-energy.com
|
|
jeff.klenda@ur-energy.com
|
Cautionary Note Regarding Forward-Looking
Information
This release may contain "forward-looking
statements" within the meaning of applicable securities laws
regarding events or conditions that may occur in the future
(e.g., results of production and continued efforts to ramp
up production at the Lost Creek facility; ability to meet
production targets and to timely deliver into existing contractual
obligations; ability to deliver into spot sales if the market
conditions warrant; the ability to realize the technical and
economic viability of the Shirley
Basin project as set forth in the PEA; ability to advance
Shirley Basin into and through
permitting process as projected) and are based on current
expectations that, while considered reasonable by management at
this time, inherently involve a number of significant business,
economic and competitive risks, uncertainties and contingencies.
Factors that could cause actual results to differ materially from
any forward-looking statements include, but are not limited to,
capital and other costs varying significantly from estimates;
failure to establish estimated resources and reserves; the grade
and recovery of ore which is mined varying from estimates;
production rates, methods and amounts varying from estimates;
delays in obtaining or failures to obtain required governmental,
environmental or other project approvals; inflation; changes in
exchange rates; fluctuations in commodity prices; delays in
development and other factors described in the public filings made
by the Company at www.sedar.com and www.sec.gov. Readers should not
place undue reliance on forward-looking statements. The
forward-looking statements contained herein are based on the
beliefs, expectations and opinions of management as of the date
hereof and Ur-Energy disclaims any intent or obligation to update
them or revise them to reflect any change in circumstances or in
management's beliefs, expectations or opinions that occur in the
future.
Logo -
http://photos.prnewswire.com/prnh/20110913/LA67628LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ur-energy-releases-2015-q1-results-300077046.html
SOURCE Ur-Energy Inc.