LITTLETON, Colo., May 3, 2019 /CNW/ -- Ur-Energy Inc.
(NYSE American:URG)(TSX:URE) (the
"Company" or "Ur-Energy") has filed the Company's
Form 10-Q for the quarter ended March 31,
2019, with the U.S. Securities and Exchange Commission at
www.sec.gov/edgar.html and Canadian securities authorities on SEDAR
at www.sedar.com.
Ur-Energy CEO, Jeff Klenda said,
"Despite the complexities of the current uranium market, we are
pleased to report our Q1 results, as we have again met our
production guidance, continued to obtain great value from our term
sales agreements, and maintained the operational leverage necessary
to begin the ramp-up activities we hope to take place not long
after the President's decision on the Section 232 Trade Action, due
on or before July 15, 2019. We have
the necessary working capital to sustain operations as we await the
outcome of the Section 232 Trade Action, and hope to return to
increased production through the further development of our
fully-permitted second mine unit at Lost Creek, as well as
to initiate development activities at Shirley Basin. We
are in the enviable position of being able to ramp up faster and
with lower costs than most, if not all, others in our
industry."
Inventory, production and sales figures for the Lost Creek
Project are presented in the following tables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and
Production Costs
|
|
Unit
|
|
2019
Q1
|
|
2018
Q4
|
|
2018
Q3
|
|
2018
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
captured
|
|
lb
|
|
|
22,551
|
|
|
48,304
|
|
|
80,604
|
|
|
89,209
|
|
|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
57
|
|
$
|
30
|
|
$
|
81
|
|
$
|
133
|
|
|
Wellfield cash cost
(1)
|
|
$000
|
|
$
|
250
|
|
$
|
459
|
|
$
|
422
|
|
$
|
516
|
|
|
Wellfield non-cash
cost (2)
|
|
$000
|
|
$
|
612
|
|
$
|
400
|
|
$
|
400
|
|
$
|
400
|
|
|
Ad valorem and
severance tax per pound captured
|
|
$/lb
|
|
$
|
2.53
|
|
$
|
0.62
|
|
$
|
1.00
|
|
$
|
1.49
|
|
|
Cash cost per pound
captured
|
|
$/lb
|
|
$
|
11.09
|
|
$
|
9.50
|
|
$
|
5.24
|
|
$
|
5.78
|
|
|
Non-cash cost per
pound captured
|
|
$/lb
|
|
$
|
27.14
|
|
$
|
8.28
|
|
$
|
4.96
|
|
$
|
4.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
drummed
|
|
lb
|
|
|
21,015
|
|
|
53,654
|
|
|
78,441
|
|
|
74,302
|
|
|
Plant cash cost
(3)
|
|
$000
|
|
$
|
1,318
|
|
$
|
1,154
|
|
$
|
1,109
|
|
$
|
1,230
|
|
|
Plant non-cash cost
(2)
|
|
$000
|
|
$
|
480
|
|
$
|
484
|
|
$
|
485
|
|
$
|
493
|
|
|
Cash cost per pound
drummed
|
|
$/lb
|
|
$
|
62.72
|
|
$
|
21.51
|
|
$
|
14.14
|
|
$
|
16.57
|
|
|
Non-cash cost per
pound drummed
|
|
$/lb
|
|
$
|
22.84
|
|
$
|
9.02
|
|
$
|
6.18
|
|
$
|
6.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds shipped to
conversion facility
|
|
lb
|
|
|
-
|
|
|
67,040
|
|
|
72,902
|
|
|
74,416
|
|
|
Distribution cash cost
(4)
|
|
$000
|
|
$
|
6
|
|
$
|
47
|
|
$
|
36
|
|
$
|
34
|
|
|
Cash cost per pound
shipped
|
|
$/lb
|
|
$
|
-
|
|
$
|
0.70
|
|
$
|
0.49
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
purchased
|
|
lb
|
|
|
97,500
|
|
|
-
|
|
|
-
|
|
|
100,000
|
|
|
Purchase
costs
|
|
$000
|
|
$
|
2,681
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,225
|
|
|
Cash cost per pound
purchased
|
|
$/lb
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
-
|
|
$
|
22.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 expenses and are not included in wellfield
operating costs.
|
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.
|
3
|
Plant cash costs
include all plant operating costs and site overhead
costs.
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and cost of
sales
|
|
Unit
|
|
2019
Q1
|
|
2018
Q4
|
|
2018
Q3
|
|
2018
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
sold
|
|
lb
|
|
|
97,500
|
|
|
-
|
|
|
-
|
|
|
100,000
|
|
U3O8 sales
|
|
$000
|
|
$
|
4,812
|
|
$
|
-
|
|
$
|
-
|
|
$
|
3,790
|
|
Average contract
price
|
|
$/lb
|
|
$
|
49.35
|
|
$
|
-
|
|
$
|
-
|
|
$
|
37.90
|
|
Average spot
price
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
49.35
|
|
$
|
-
|
|
$
|
-
|
|
$
|
37.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost of sales
(1)
|
|
$000
|
|
$
|
3,181
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,225
|
|
Ad valorem and
severance tax cost per pound sold
|
|
$/lb
|
|
$
|
1.52
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Cash cost per pound
sold
|
|
$/lb
|
|
$
|
23.86
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Non-cash cost per
pound sold
|
|
$/lb
|
|
$
|
12.36
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Cost per pound sold -
produced
|
|
$/lb
|
|
$
|
37.74
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Cost per pound sold -
purchased
|
|
$/lb
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
-
|
|
$
|
22.25
|
|
Total average cost per pound sold
|
|
$/lb
|
|
$
|
32.63
|
|
$
|
-
|
|
$
|
-
|
|
$
|
22.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross profit
|
|
$000
|
|
$
|
1,631
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,565
|
|
Gross profit per pound
sold
|
|
$/lb
|
|
$
|
16.72
|
|
$
|
-
|
|
$
|
-
|
|
$
|
15.65
|
|
Gross profit
margin
|
|
%
|
|
|
33.9%
|
|
|
0.0%
|
|
|
0.0%
|
|
|
41.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Inventory
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
lb
|
|
|
10,595
|
|
|
9,134
|
|
|
14,588
|
|
|
43,733
|
|
Plant
inventory
|
|
lb
|
|
|
28,574
|
|
|
7,559
|
|
|
20,944
|
|
|
15,391
|
|
Conversion facility
inventory produced
|
|
lb
|
|
|
327,053
|
|
|
375,803
|
|
|
308,762
|
|
|
233,712
|
|
Conversion facility
inventory purchased
|
|
lb
|
|
|
48,750
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
inventory
|
|
lb
|
|
|
414,972
|
|
|
392,496
|
|
|
344,294
|
|
|
292,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$000
|
|
$
|
-
|
|
$
|
160
|
|
$
|
359
|
|
$
|
518
|
|
Plant
inventory
|
|
$000
|
|
$
|
1,259
|
|
$
|
345
|
|
$
|
665
|
|
$
|
548
|
|
Conversion facility
inventory produced
|
|
$000
|
|
$
|
12,352
|
|
$
|
14,187
|
|
$
|
11,143
|
|
$
|
8,738
|
|
Conversion facility
inventory purchased
|
|
$000
|
|
$
|
1,341
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Total
inventory
|
|
$000
|
|
$
|
14,952
|
|
$
|
14,692
|
|
$
|
12,167
|
|
$
|
9,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$/lb
|
|
$
|
-
|
|
$
|
17.52
|
|
$
|
24.61
|
|
$
|
11.84
|
|
Plant
inventory
|
|
$/lb
|
|
$
|
44.06
|
|
$
|
45.64
|
|
$
|
31.75
|
|
$
|
35.61
|
|
Conversion facility
inventory produced
|
|
$/lb
|
|
$
|
37.77
|
|
$
|
37.75
|
|
$
|
36.09
|
|
$
|
37.39
|
|
Conversion facility
inventory purchased
|
|
$/lb
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
Note:
|
1
|
U3O8 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
and excludes NRV.
|
During the quarter we sold 97,500 pounds under term contracts at
a price per pound of $49.35 per
pound, of which 48,750 pounds were from production and the balance
was purchased.
For the quarter, our uranium cost of sales totaled $3.2 million which included $1.3 million of purchase costs and $1.9 million of production costs. In 2019 Q1, we
purchased 97,500 pounds at an average price of $27.50 per pound, of which half remains in our
inventory. The average cost per pound sold from production
was $37.74.
Excluding the NRV adjustment of $2.0
million, the gross profit from uranium sales for 2019
Q1 was $1.6 million, which
represents a gross profit margin of approximately 34%.
Total
Cost Per Pound Sold
Reconciliation
|
|
Unit
|
|
2019
Q1
|
|
2018
Q4
|
|
2018
Q3
|
|
2018
Q2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales per
financial statements
|
|
|
|
$
|
5,146
|
|
$
|
50
|
|
$
|
170
|
|
$
|
2,225
|
Less adjustments
reflecting the lower of cost or NRV
|
|
|
|
$
|
(1,965)
|
|
$
|
(50)
|
|
$
|
(170)
|
|
$
|
-
|
U3O8 cost of sales
|
|
|
|
$
|
3,181
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
57
|
|
$
|
30
|
|
$
|
81
|
|
$
|
133
|
Wellfield
costs
|
|
$000
|
|
$
|
862
|
|
$
|
859
|
|
$
|
823
|
|
$
|
916
|
Plant and site
costs
|
|
$000
|
|
$
|
1,798
|
|
$
|
1,638
|
|
$
|
1,594
|
|
$
|
1,723
|
Distribution
costs
|
|
$000
|
|
$
|
6
|
|
$
|
47
|
|
$
|
36
|
|
$
|
34
|
Inventory
change
|
|
$000
|
|
$
|
(883)
|
|
$
|
(2,574)
|
|
$
|
(2,534)
|
|
$
|
(2,806)
|
Cost of sales -
produced
|
|
$000
|
|
$
|
1,840
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
Cost of sales -
purchased
|
|
$000
|
|
$
|
1,341
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,225
|
Total cost of
sales
|
|
$000
|
|
$
|
3,181
|
|
$
|
-
|
|
$
|
-
|
|
$
|
2,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
produced
|
|
lb
|
|
|
48,750
|
|
|
-
|
|
|
-
|
|
|
-
|
Pounds sold
purchased
|
|
lb
|
|
|
48,750
|
|
|
-
|
|
|
-
|
|
|
100,000
|
Total pounds
sold
|
|
lb
|
|
|
97,500
|
|
|
-
|
|
|
-
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per pound
sold - produced
|
|
$/lb
|
|
$
|
37.74
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
Average cost per pound
sold - purchased
|
|
$/lb
|
|
$
|
27.50
|
|
$
|
-
|
|
$
|
-
|
|
$
|
22.25
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
32.63
|
|
$
|
-
|
|
$
|
-
|
|
$
|
22.25
|
The cost of sales per the financial statements 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 realizable value are charged to the cost of
sales per the financial statements as adjustments reflecting the
lower of cost or NRV. These adjustments are excluded from
U3O8costs of sales because they relate to the
pounds of U3O8 in ending inventories and do
not relate to the pounds of U3O8 sold during
the period.
Continuing Guidance for 2019
At the end of the first
quarter of 2019, the average spot price of
U3O8, as reported by UxC, LLC and TradeTech,
LLC, declined to approximately $25.33
per pound because of low volumes and uncertainty over the Section
232 Trade Action. Market fundamentals have not changed sufficiently
to warrant further development of MU2 and we currently expect to
produce between 75,000 and 100,000 pounds at Lost Creek.
In 2019, we expect to deliver 665,000 pounds related to term
contracts at an average price of approximately $48 per pound. In 2019 Q1, we sold 97,500 pounds
of U3O8. Early in 2019 Q2, we delivered
100,000 pounds into a scheduled term contract commitment and sold
165,000 pounds related to 2020 obligations under existing term
agreements. We do not expect to make additional sales during
Q2. By quarter, our remaining 2019 contractual sales
commitments thereafter are as follows: 122,500 pounds in Q3; and
180,000 pounds in Q4.
We have purchase contracts in place for 500,000 pounds at an
average cost of $26 per pound in
2019.
Gross profits from uranium sales are expected to be
approximately $12.3 million, which
represents a gross profit margin of approximately 38%. On a cash
basis (excluding non-cash costs and extraction taxes), gross
profits from uranium sales are expected to generate $15.3 million in cash, which represents a
cash-basis gross profit margin of approximately 47%.
Should uranium pricing improve, or following a successful
outcome of the ongoing Section 232 Trade Action, we stand ready to
ramp up production to full capacity at Lost Creek and initiate
development activities at Shirley
Basin. We remain operationally ready to increase production
through the further development of our fully-permitted MU2 at Lost
Creek. Lost Creek operations could begin to increase production
rates in as little as six months following a "go" decision simply
by developing additional header houses within MU2. Development
expenses during this time are estimated to be less than
$14 million and are almost entirely
related to MU2 drilling and header house construction costs. Lost
Creek also does not require any significant capital expenditures in
order to increase production, but we will continue to optimize site
operations through engineering design enhancements and
modifications. The Lost Creek plant has been well maintained and is
ready to receive additional flows for increased production when
warranted.
As at May 2, 2019, our
unrestricted cash position was $3.0
million. In addition, we will receive proceeds of
$7.5 million in May 2019 from the April
2019 sale of 165,000 pounds U3O8.
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 approximately 2.5 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 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
+1 720.981.4588
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., continuing results of Lost Creek operations and the
timing and ability to ramp up operations, including time and cost
compared with others in our industry; timing and outcome for
resolution of the Section 232 trade action or other changes to the
uranium market; timing and outcome for all permitting and licensure
of the Shirley Basin project and
for the subsequent buildout of the project; projected sales and
costs of
sales 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,
fluctuations in commodity prices; capital and other costs varying
significantly from estimates; failure to
establish estimated resources and reserves; the grade and recovery of uranium 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; 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.
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SOURCE Ur-Energy Inc.