LITTLETON, Colo., Oct.
27, 2017 /PRNewswire/ -- Ur-Energy Inc. (NYSE
American:URG, TSX:URE) ("Ur-Energy" or the "Company") has
filed the Company's Form 10-Q for the quarter ended September 30, 2017, with the U.S. Securities and
Exchange Commission at www.sec.gov/edgar.shtml and with Canadian
securities authorities on SEDAR at www.sedar.com.
Ur-Energy Chairman Jeff Klenda
said, "During a quarter when uranium spot prices continued to face
downward pressure, we were pleased to realize a $40 per pound average sales price and generate
$3.9 million in cash from operating
activities, including the sale 180,000 pounds of produced product
for $7.8 million in cash late in the
quarter."
Lost Creek Production and Sales
During the three
months ended September 30, 2017, a
total of 52,812 pounds of U3O8 were captured
within the Lost Creek plant. 48,336 pounds were packaged in drums
and 36,797 pounds of the drummed inventory were shipped to the
conversion facility. We sold 289,000 pounds of
U3O8 during the period of which 109,000
pounds were purchased. Inventory, production and sales figures for
the Lost Creek Project are presented in the following tables.
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Production and
Production Costs
|
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Unit
|
|
2017
Q3
|
|
2017
Q2
|
|
2017
Q1
|
|
2016
Q4
|
|
2017
YTD
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|
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|
|
|
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|
|
|
|
|
|
|
|
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|
|
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Pounds
captured
|
|
lb
|
|
|
52,812
|
|
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65,257
|
|
|
79,340
|
|
|
103,558
|
|
|
197,409
|
|
|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
119
|
|
$
|
227
|
|
$
|
241
|
|
$
|
247
|
|
$
|
587
|
|
|
Wellfield cash cost
(1)
|
|
$000
|
|
$
|
743
|
|
$
|
599
|
|
$
|
889
|
|
$
|
864
|
|
$
|
2,231
|
|
|
Wellfield non-cash
cost (2)
|
|
$000
|
|
$
|
730
|
|
$
|
780
|
|
$
|
776
|
|
$
|
777
|
|
$
|
2,286
|
|
|
Ad valorem and
severance tax per pound captured
|
|
$/lb
|
|
$
|
2.25
|
|
$
|
3.48
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|
$
|
3.04
|
|
$
|
2.39
|
|
$
|
2.97
|
|
|
Cash cost per pound
captured
|
|
$/lb
|
|
$
|
14.07
|
|
$
|
9.18
|
|
$
|
11.20
|
|
$
|
8.34
|
|
$
|
11.31
|
|
|
Non-cash cost per
pound captured
|
|
$/lb
|
|
$
|
13.82
|
|
$
|
11.95
|
|
$
|
9.78
|
|
$
|
7.50
|
|
$
|
11.55
|
|
|
|
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|
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|
|
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|
|
|
|
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Pounds
drummed
|
|
lb
|
|
|
48,336
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|
|
70,833
|
|
|
74,382
|
|
|
111,049
|
|
|
193,551
|
|
|
Plant cash cost
(3)
|
|
$000
|
|
$
|
1,120
|
|
$
|
1,270
|
|
$
|
1,488
|
|
$
|
1,336
|
|
$
|
3,878
|
|
|
Plant non-cash cost
(2)
|
|
$000
|
|
$
|
493
|
|
$
|
491
|
|
$
|
491
|
|
$
|
493
|
|
$
|
1,475
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Cash cost per pound
drummed
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$/lb
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|
$
|
23.17
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$
|
17.93
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|
$
|
20.00
|
|
$
|
12.03
|
|
$
|
20.04
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|
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Non-cash cost per
pound drummed
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$/lb
|
|
$
|
10.20
|
|
$
|
6.93
|
|
$
|
6.61
|
|
$
|
4.44
|
|
$
|
7.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Pounds shipped to
conversion facility
|
|
lb
|
|
|
36,797
|
|
|
74,406
|
|
|
72,643
|
|
|
98,775
|
|
|
183,846
|
|
|
Distribution cash cost
(4)
|
|
$000
|
|
$
|
24
|
|
$
|
26
|
|
$
|
47
|
|
$
|
68
|
|
$
|
97
|
|
|
Cash cost per pound
shipped
|
|
$/lb
|
|
$
|
0.65
|
|
$
|
0.35
|
|
$
|
0.65
|
|
$
|
0.69
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
purchased
|
|
lb
|
|
|
109,000
|
|
|
210,000
|
|
|
200,000
|
|
|
-
|
|
|
519,000
|
|
|
Purchase
costs
|
|
$000
|
|
$
|
2,196
|
|
$
|
4,870
|
|
$
|
4,015
|
|
$
|
-
|
|
$
|
11,081
|
|
|
Cash cost per pound
purchased
|
|
$/lb
|
|
$
|
20.15
|
|
$
|
23.19
|
|
$
|
20.08
|
|
$
|
-
|
|
$
|
21.35
|
|
|
|
|
|
|
|
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|
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Notes:
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1
|
Wellfield cash costs
include all wellfield operating costs. Wellfield construction and
development costs, which include wellfield drilling, header houses,
pipelines, power lines, roads, fences and disposal wells, are
treated as development expense and are not included in wellfield
operating costs.
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2
|
Non-cash costs
include the amortization of the investment in the mineral property
acquisition costs and the depreciation of plant equipment, and the
depreciation of their related asset retirement obligation costs.
The expenses are calculated on a straight line basis so the
expenses are typically constant for each quarter. The cost per
pound from these costs will therefore typically vary based on
production levels only.
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3
|
Plant cash costs
include all plant operating costs and site overhead
costs.
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4
|
Distribution cash
costs include all shipping costs and costs charged by the
conversion facility for weighing, sampling, assaying and storing
the U3O8 prior to sale.
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Sales and cost of
sales
|
|
Unit
|
|
2017
Q3
|
|
2017
Q2
|
|
2017
Q1
|
|
2016
Q4
|
|
2017
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
sold
|
|
lb
|
|
|
289,000
|
|
|
241,000
|
|
|
250,000
|
|
|
100,000
|
|
|
780,000
|
|
|
U3O8 sales
|
|
$000
|
|
$
|
11,674
|
|
$
|
11,797
|
|
$
|
14,819
|
|
$
|
3,270
|
|
$
|
38,290
|
|
|
Average contract
price
|
|
$/lb
|
|
$
|
40.39
|
|
$
|
48.95
|
|
$
|
59.28
|
|
$
|
32.70
|
|
$
|
49.09
|
|
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
40.39
|
|
$
|
48.95
|
|
$
|
59.28
|
|
$
|
32.70
|
|
$
|
49.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost of sales
(1)
|
|
$000
|
|
$
|
11,157
|
|
$
|
6,573
|
|
$
|
6,295
|
|
$
|
3,082
|
|
$
|
24,025
|
|
|
Ad valorem and
severance tax cost per pound sold
|
|
$/lb
|
|
$
|
3.15
|
|
$
|
4.26
|
|
$
|
4.00
|
|
$
|
2.98
|
|
$
|
3.44
|
|
|
Cash cost per pound
sold
|
|
$/lb
|
|
$
|
29.11
|
|
$
|
31.54
|
|
$
|
26.12
|
|
$
|
18.27
|
|
$
|
28.82
|
|
|
Non-cash cost per
pound sold
|
|
$/lb
|
|
$
|
17.52
|
|
$
|
19.13
|
|
$
|
15.48
|
|
$
|
9.57
|
|
$
|
17.33
|
|
|
Cost per pound sold -
produced
|
|
$/lb
|
|
$
|
49.78
|
|
$
|
54.93
|
|
$
|
45.60
|
|
$
|
30.82
|
|
|
49.59
|
|
|
Cost per pound sold -
purchased
|
|
$/lb
|
|
$
|
20.15
|
|
$
|
23.19
|
|
$
|
20.08
|
|
$
|
-
|
|
|
21.35
|
|
|
Average cost per
pound sold
|
|
$/lb
|
|
$
|
38.61
|
|
$
|
27.26
|
|
$
|
25.18
|
|
$
|
30.82
|
|
$
|
30.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross
profit
|
|
$000
|
|
$
|
517
|
|
$
|
5,224
|
|
$
|
8,524
|
|
$
|
188
|
|
|
14,265
|
|
|
Gross profit per pound
sold
|
|
$/lb
|
|
$
|
1.78
|
|
$
|
21.68
|
|
$
|
34.10
|
|
$
|
1.88
|
|
|
18.29
|
|
|
Gross profit
margin
|
|
%
|
|
|
4.4%
|
|
|
44.3%
|
|
|
57.5%
|
|
|
5.7%
|
|
|
37.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Inventory
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
lb
|
|
|
22,306
|
|
|
19,010
|
|
|
28,164
|
|
|
29,891
|
|
|
|
|
|
Plant
inventory
|
|
lb
|
|
|
21,948
|
|
|
10,446
|
|
|
14,019
|
|
|
12,274
|
|
|
|
|
|
Conversion facility
inventory
|
|
lb
|
|
|
17,813
|
|
|
160,094
|
|
|
113,528
|
|
|
84,689
|
|
|
|
|
|
Total
inventory
|
|
lb
|
|
|
62,067
|
|
|
189,550
|
|
|
155,711
|
|
|
126,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$000
|
|
$
|
221
|
|
$
|
352
|
|
$
|
712
|
|
$
|
897
|
|
|
|
|
|
Plant
inventory
|
|
$000
|
|
$
|
824
|
|
$
|
479
|
|
$
|
670
|
|
$
|
461
|
|
|
|
|
|
Conversion facility
inventory
|
|
$000
|
|
$
|
675
|
|
$
|
6,620
|
|
$
|
4,379
|
|
$
|
2,751
|
|
|
|
|
|
Total
inventory
|
|
$000
|
|
$
|
1,720
|
|
$
|
7,451
|
|
$
|
5,761
|
|
$
|
4,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$/lb
|
|
$
|
9.92
|
|
$
|
18.46
|
|
$
|
25.28
|
|
$
|
30.01
|
|
|
|
|
|
Plant
inventory
|
|
$/lb
|
|
$
|
37.53
|
|
$
|
45.85
|
|
$
|
47.79
|
|
$
|
37.56
|
|
|
|
|
|
Conversion facility
inventory
|
|
$/lb
|
|
$
|
37.89
|
|
$
|
41.35
|
|
$
|
38.57
|
|
$
|
32.48
|
|
|
|
|
|
|
|
Notes:
|
|
|
1
|
Cost of sales include
all production costs (notes 1, 2, 3 and 4 in the previous
Production and Production Cost table) adjusted for changes in
inventory values.
|
U3O8 sales of $11.7
million for 2017 Q3 were based on selling 289,000 pounds at
an average price of $40.39. We
did not make any spot sales during the quarter. Of the 289,000
pounds sold, 180,000 were from produced inventory and 109,000 were
from purchased U3O8. For the quarter, our
cost of sales totaled $11.1 million
at an average cost of $38.61 per
pound.
On a cash basis, the average cost per pound sold was
$27.69, which yielded average cash
margins of $12.70 per pound and
generated cash gross profits of $3.7
million during the quarter. The average cash cost per
pound sold was composed of produced and purchased pounds. The
cash cost per produced pound sold was $32.26, including ad valorem and severance taxes,
and the cash cost per purchased pound sold was $20.15.
Due to our low production volumes, we have been experiencing
lower of cost or net realizable value adjustments, which totaled
$1.3 million for the quarter.
These costs are included in our cost of sales for the period and
reduced the reported gross profit for the period. Total gross
profit was $0.5 million, or
approximately 4%.
At the end of the quarter, we had approximately 17,813 pounds of
U3O8 at the conversion facility at an average cost per pound of
$37.89, which reflects the net
realizable value of the product at that location. We intend
to sell this product into our lowest priced, 2018 term contract in
January. While this assumption did increase the non-cash, net
realizable value adjustment for the quarter, it will also lower the
actual cash paid out for 2018 severance and ad valorem taxes, which
are based on the sales value of the product.
|
Total
Cost Per Pound Sold
Reconciliation
1
|
|
Unit
|
|
2017
Q3
|
|
2017
Q2
|
|
2017
Q1
|
|
2016
Q4
|
|
2017
YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
119
|
|
$
|
227
|
|
$
|
241
|
|
$
|
247
|
|
$
|
587
|
|
Wellfield
costs
|
|
$000
|
|
$
|
1,473
|
|
$
|
1,379
|
|
$
|
1,665
|
|
$
|
1,641
|
|
$
|
4,517
|
|
Plant and site
costs
|
|
$000
|
|
$
|
1,614
|
|
$
|
1,761
|
|
$
|
1,979
|
|
$
|
1,829
|
|
$
|
5,354
|
|
Distribution
costs
|
|
$000
|
|
$
|
24
|
|
$
|
26
|
|
$
|
47
|
|
$
|
68
|
|
|
97
|
|
Inventory
change
|
|
$000
|
|
$
|
5,731
|
|
$
|
(1,690)
|
|
$
|
(1,652)
|
|
$
|
(703)
|
|
$
|
2,389
|
|
Cost of sales -
produced
|
|
$000
|
|
$
|
8,961
|
|
$
|
1,703
|
|
$
|
2,280
|
|
$
|
3,082
|
|
$
|
12,944
|
|
Cost of sales -
purchased
|
|
$000
|
|
$
|
2,196
|
|
$
|
4,870
|
|
$
|
4,015
|
|
$
|
—
|
|
|
11,081
|
|
Total cost of
sales
|
|
$000
|
|
$
|
11,157
|
|
$
|
6,573
|
|
$
|
6,295
|
|
$
|
3,082
|
|
|
24,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
produced
|
|
lb
|
|
|
180,000
|
|
|
31,000
|
|
|
50,000
|
|
|
100,000
|
|
|
261,000
|
|
Pounds sold
purchased
|
|
lb
|
|
|
109,000
|
|
|
210,000
|
|
|
200,000
|
|
|
—
|
|
|
519,000
|
|
Total pounds
sold
|
|
lb
|
|
|
289,000
|
|
|
241,000
|
|
|
250,000
|
|
|
100,000
|
|
|
780,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per pound
sold - produced (1)
|
|
$/lb
|
|
$
|
49.78
|
|
$
|
54.93
|
|
$
|
45.60
|
|
$
|
30.82
|
|
$
|
49.59
|
|
Average cost per pound
sold - purchased
|
|
$/lb
|
|
$
|
20.15
|
|
$
|
23.19
|
|
$
|
20.08
|
|
$
|
-
|
|
$
|
21.35
|
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
38.61
|
|
$
|
27.27
|
|
$
|
25.18
|
|
$
|
30.82
|
|
$
|
30.80
|
|
|
|
1
|
The cost per pound
sold reflects both cash and non-cash costs, which are combined as
cost of sales in the statement of operations included in this
filing. The cash and non-cash cost components are identified
in the above inventory, production and sales table.
|
The cost of sales includes ad valorem and severance taxes
related to the extraction of uranium, all costs of wellfield, plant
and site operations including the related depreciation and
amortization of capitalized assets, reclamation and mineral
property costs, plus product distribution costs. These costs are
also used to value inventory and the resulting inventoried cost per
pound is compared to the estimated sales prices based on the
contracts or spot sales anticipated for the distribution of the
product. Any costs in excess of the calculated market value are
charged to cost of sales.
Continuing Guidance
At the end of the third quarter
of 2017, the average spot price of U3O8, as
reported by Ux Consulting Company, LLC and TradeTech, LLC, was
approximately $20.33 per pound.
Market fundamentals have not changed sufficiently to warrant the
accelerated development of MU2. We are developing MU2 at a
controlled rate as approved by our Board of Directors in the first
quarter, which will allow us to produce at a level that will
satisfy a portion of our term contracts.
Through September 30, 2017, we
sold 780,000 pounds of U3O8 under contract at
an average price of approximately $49
per pound. We purchased 519,000 pounds at an average cost of
$21 per pound. The remaining 261,000
pounds were delivered from our produced inventory. We do not
anticipate any further sales this year.
We expect to bring the second MU2 header house on line in 2017
Q4, and the 2017 Q4 production target for Lost Creek is between
65,000 and 75,000 pounds U3O8 dried and
drummed. Full year 2017 production guidance is unchanged at between
250,000 and 300,000 pounds, but our production rate may be adjusted
based on operational matters and other indicators in the
market.
As at October 25, 2017, our
unrestricted cash position was $9.1
million.
About Ur-Energy
Ur-Energy is a uranium mining company
operating the Lost Creek in-situ recovery uranium facility
in south-central Wyoming. We have
produced, packaged and shipped more than two million pounds from
Lost Creek since the commencement of operations. Applications are
under review by various agencies to incorporate our LC East project
area into the Lost Creek permits, and we have begun to submit
applications for permits and licenses to construct and operate at
our Shirley Basin Project. Ur-Energy is engaged in uranium mining,
recovery and processing activities, including the acquisition,
exploration, development and operation of uranium mineral
properties in the United States.
Shares of Ur-Energy trade on NYSE American under the symbol "URG"
and on the Toronto Stock Exchange under the symbol "URE."
Ur-Energy's corporate office is in Littleton, Colorado; its registered office is
in Ottawa, Ontario. Ur-Energy's
website is www.ur-energy.com.
|
FOR FURTHER
INFORMATION, PLEASE CONTACT
|
|
|
|
|
Jeffrey Klenda, Chair
and CEO
|
|
|
866-981-4588
|
|
|
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
Lost Creek production, including meeting production projections;
ability to maintain production levels and development at
Lost Creek; ability to deliver into existing contractual
obligations through a balance of production and purchased pounds)
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.
View original content with
multimedia:http://www.prnewswire.com/news-releases/ur-energy-releases-2017-q3-results-300545051.html
SOURCE Ur-Energy Inc.