LITTLETON, Colo., Feb. 28, 2020 /CNW/ -- Ur-Energy Inc.
(NYSE American:URG)(TSX:URE) ("Ur-Energy" or the "Company")
has filed the Company's Annual Report on Form 10-K, Consolidated
Financial Statements, and Management's Discussion & Analysis,
all for the year ended December 31,
2019, with the U.S. Securities and Exchange Commission on
EDGAR at www.sec.gov/edgar.shtml and with Canadian securities
authorities on SEDAR at www.sedar.com. These filings also may be
accessed on the Company's website at www.ur-energy.com.
Shareholders of the Company may receive a hard copy of the
consolidated financial statements, free of charge, upon request to
the Company.
![Ur-Energy. (PRNewsFoto/Ur-Energy Inc.) (PRNewsfoto/Ur-Energy Inc.) Ur-Energy. (PRNewsFoto/Ur-Energy Inc.) (PRNewsfoto/Ur-Energy Inc.)](https://mma.prnewswire.com/media/552320/Ur_Energy_Logo.jpg)
Ur-Energy CEO, Jeff Klenda said:
"At February 26, we had $6.4 million in cash, and nearly 270,000
pounds of finished, ready-to-sell U3O8 inventory at the conversion
facility. This provides a solid foundation for us to begin 2020,
and complements our distinct advantage over our peers in being able
to ramp up our operating low-cost Lost Creek facility quickly and
cost-effectively when warranted. In the period of uncertainty
following the President's decision not to take immediate action
with regard to the Section 232 Trade Action, we took aggressive,
but positive, measures, to sustain operations and maximize our
runway. With the cooperation and support of the State of Wyoming and Sweetwater County, we deferred six quarterly
principal payments, totaling $7.8
million, and implemented many other cost-saving
measures.
"Beyond extending our runway, these actions enabled us to avoid any
further dilution to our shareholders while we await the
recommendations of the U.S. Nuclear Fuel Working Group formed by
the President in response to our trade action. The recently
announced ten-year, $150 million
annual budget item for the creation of a national uranium reserve
is a solid signal of support from the Administration and appears to
be part of the recommendations of the Working Group. Secretary of
Energy Brouillette has commented publicly he anticipates the
Working Group report being published at any time. We await the
release of the recommendations and hope to be able to ramp-up
production at Lost Creek soon."
Financial Results
The Company ended the year with a cash and cash equivalents
balance of $7.8 million. Excluding
NRV adjustments, we recognized a gross profit of $12.2 million on sales of $32.3 million during 2019, which represents a
gross profit margin of approximately 38%. The Company realized an
average price per pound sold of $48.50, as compared to $48.86 in 2018. As at February 26, 2020, our unrestricted cash position
was $6.4 million.
Lost Creek Operations
During 2019, 47,957 pounds of U3O8 were
captured within the Lost Creek plant. A total of 50,794 pounds were
packaged in drums and 58,353 pounds of the drummed inventory were
shipped to the conversion facility where our year-end inventory was
approximately 268,803 pounds U3O8. The cash
cost per pound and non-cash cost per pound for produced uranium
presented in the following Production and Production Costs, and
Sales and Cost of Sales tables are non-US GAAP measures. These
measures do not have a standardized meaning within US GAAP or a
defined basis of calculation. These measures are used by management
to assess business performance and determine production and pricing
strategies. They may also be used by certain investors to evaluate
performance. Please see the tables below for reconciliations of
these measures to the US GAAP compliant financial measures.
Production and sales figures for the Lost Creek Project are as
follows:
Production and
Production Costs
|
|
Unit
|
|
2019
Q4
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
captured
|
|
lb
|
|
|
5,004
|
|
|
7,256
|
|
|
13,146
|
|
|
22,551
|
|
|
47,957
|
Ad valorem and
severance tax
|
|
$000
|
|
$
|
22
|
|
$
|
(14)
|
|
$
|
17
|
|
$
|
57
|
|
$
|
82
|
Wellfield cash cost
(1)
|
|
$000
|
|
$
|
158
|
|
$
|
210
|
|
$
|
264
|
|
$
|
250
|
|
$
|
882
|
Wellfield non-cash
cost (2)
|
|
$000
|
|
$
|
611
|
|
$
|
611
|
|
$
|
612
|
|
$
|
612
|
|
$
|
2,446
|
Ad valorem and
severance tax per pound captured
|
|
$/lb
|
|
$
|
4.40
|
|
$
|
(1.93)
|
|
$
|
1.29
|
|
$
|
2.53
|
|
$
|
1.71
|
Cash cost per pound
captured
|
|
$/lb
|
|
$
|
31.57
|
|
$
|
28.94
|
|
$
|
20.08
|
|
$
|
11.09
|
|
$
|
18.39
|
Non-cash cost per
pound captured
|
|
$/lb
|
|
$
|
122.10
|
|
$
|
84.21
|
|
$
|
46.55
|
|
$
|
27.14
|
|
$
|
51.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
drummed
|
|
lb
|
|
|
7,116
|
|
|
9,367
|
|
|
13,296
|
|
|
21,015
|
|
|
50,794
|
Plant cash cost
(3)
|
|
$000
|
|
$
|
898
|
|
$
|
1,045
|
|
$
|
1,134
|
|
$
|
1,318
|
|
$
|
4,395
|
Plant non-cash cost
(2)
|
|
$000
|
|
$
|
494
|
|
$
|
490
|
|
$
|
490
|
|
$
|
480
|
|
$
|
1,954
|
Cash cost per pound
drummed
|
|
$/lb
|
|
$
|
126.19
|
|
$
|
111.56
|
|
$
|
85.29
|
|
$
|
62.72
|
|
$
|
86.53
|
Non-cash cost per
pound drummed
|
|
$/lb
|
|
$
|
69.42
|
|
$
|
52.31
|
|
$
|
36.85
|
|
$
|
22.84
|
|
$
|
38.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds shipped to
conversion facility
|
|
lb
|
|
|
20,643
|
|
|
37,710
|
|
|
—
|
|
|
—
|
|
|
58,353
|
Distribution cash cost
(4)
|
|
$000
|
|
$
|
26
|
|
$
|
12
|
|
$
|
27
|
|
$
|
6
|
|
$
|
71
|
Cash cost per pound
shipped
|
|
$/lb
|
|
$
|
1.26
|
|
$
|
0.32
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
purchased
|
|
lb
|
|
|
180,000
|
|
|
122,500
|
|
|
100,000
|
|
|
97,500
|
|
|
500,000
|
Purchase
costs
|
|
$000
|
|
$
|
4,311
|
|
$
|
3,391
|
|
$
|
2,795
|
|
$
|
2,681
|
|
$
|
13,178
|
Cash cost per pound
purchased
|
|
$/lb
|
|
$
|
23.95
|
|
$
|
27.68
|
|
$
|
27.95
|
|
$
|
27.50
|
|
$
|
26.36
|
|
|
Notes:
|
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.
|
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 pounds prior to sale.
|
In total, wellfield, plant and distribution cash costs were very
consistent quarter on quarter during 2019. The respective costs per
pound increased overall during the year primarily driven by
decreasing levels of production, which is a typical result as a
mine and its wellfields mature and older operating patterns remain
in the flow regime.
U3O8 Sales and Cost of Sales
Sales and cost of
sales
|
|
Unit
|
|
2019
Q4
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2019
|
Pounds
sold
|
|
lb
|
|
|
180,000
|
|
|
122,500
|
|
|
265,000
|
|
|
97,500
|
|
|
665,000
|
U3O8 sales
|
|
$000
|
|
$
|
10,848
|
|
$
|
5,115
|
|
$
|
11,477
|
|
$
|
4,812
|
|
$
|
32,252
|
Average contract
price
|
|
$/lb
|
|
$
|
60.26
|
|
$
|
41.76
|
|
$
|
43.31
|
|
$
|
49.35
|
|
$
|
48.50
|
Average spot
price
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
60.26
|
|
$
|
41.76
|
|
$
|
43.31
|
|
$
|
49.35
|
|
$
|
48.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost of
sales(1)
|
|
|
|
$
|
4,377
|
|
$
|
3,428
|
|
$
|
9,026
|
|
$
|
3,181
|
|
$
|
20,012
|
Ad valorem and
severance tax cost per pound sold
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1.52
|
|
$
|
1.52
|
|
$
|
1.52
|
Cash cost per pound
sold
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
23.95
|
|
$
|
23.86
|
|
$
|
23.93
|
Non-cash cost per
pound sold
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
12.38
|
|
$
|
12.36
|
|
$
|
12.38
|
Cost per pound sold -
produced
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
37.85
|
|
$
|
37.74
|
|
$
|
37.83
|
Cost per pound sold -
purchased
|
|
$/lb
|
|
$
|
24.31
|
|
$
|
27.98
|
|
$
|
27.80
|
|
$
|
27.50
|
|
$
|
26.43
|
Total average cost
per pound sold
|
|
$/lb
|
|
$
|
24.31
|
|
$
|
27.98
|
|
$
|
34.06
|
|
$
|
32.63
|
|
$
|
30.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross
profit
|
|
$000
|
|
$
|
6,471
|
|
$
|
1,687
|
|
$
|
2,451
|
|
$
|
1,631
|
|
$
|
12,240
|
Gross profit per
pound sold
|
|
$/lb
|
|
$
|
35.95
|
|
$
|
13.78
|
|
$
|
9.25
|
|
$
|
16.72
|
|
$
|
18.41
|
Gross profit
margin
|
|
%
|
|
|
59.7%
|
|
|
33.0%
|
|
|
21.4%
|
|
|
33.9%
|
|
|
38.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Inventory
Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
lb
|
|
|
5,396
|
|
|
8,074
|
|
|
10,221
|
|
|
10,595
|
|
|
|
Plant
inventory
|
|
lb
|
|
|
-
|
|
|
13,526
|
|
|
41,871
|
|
|
28,574
|
|
|
|
Conversion facility
inventory produced
|
|
lb
|
|
|
220,053
|
|
|
199,411
|
|
|
161,700
|
|
|
327,053
|
|
|
|
Conversion facility
inventory purchased
|
|
lb
|
|
|
48,750
|
|
|
48,750
|
|
|
48,750
|
|
|
48,750
|
|
|
|
Total
inventory
|
|
lb
|
|
|
274,199
|
|
|
269,761
|
|
|
262,542
|
|
|
414,972
|
|
|
|
Total
cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$000
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
Plant
inventory
|
|
$000
|
|
$
|
-
|
|
$
|
384
|
|
$
|
1,638
|
|
$
|
1,259
|
|
|
|
Conversion facility
inventory produced
|
|
$000
|
|
$
|
6,250
|
|
$
|
5,721
|
|
$
|
6,134
|
|
$
|
12,352
|
|
|
|
Conversion facility
inventory purchased
|
|
$000
|
|
$
|
1,176
|
|
$
|
1,252
|
|
$
|
1,355
|
|
$
|
1,341
|
|
|
|
Total
inventory
|
|
$000
|
|
$
|
7,426
|
|
$
|
7,357
|
|
$
|
9,127
|
|
$
|
14,952
|
|
|
|
Cost per
pound
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process
inventory
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
Plant
inventory
|
|
$/lb
|
|
$
|
-
|
|
$
|
28.39
|
|
$
|
39.12
|
|
$
|
44.06
|
|
|
|
Conversion facility
inventory produced
|
|
$/lb
|
|
$
|
28.40
|
|
$
|
28.69
|
|
$
|
37.93
|
|
$
|
37.77
|
|
|
|
Conversion facility
inventory purchased
|
|
$/lb
|
|
$
|
24.12
|
|
$
|
25.68
|
|
$
|
27.80
|
|
$
|
27.50
|
|
|
|
|
|
Note:
|
1.
|
U3O8 costs of sales include all
production costs (notes 1, 2, 3 and 4 in the previous Production
and Production Costs table) adjusted for changes in inventory
values but excludes the lower of cost or NRV adjustments as the
adjustments do not correspond with the timing of the sales of
produced inventory.
|
We sold 180,000 pounds under contract in Q4 2019 at an average
price of $60.26. For the year, we
sold 665,000 pounds which were all sold under term contracts at an
average price per pound of $48.50.
Total uranium sales were $32.3
million. Of the 665,000 pounds, 213,750 pounds were sold
from produced inventory at an average price of $46.26 per pound while 451,250 were sold from
purchased inventory at an average price of $49.56 per pound.
For the year, our uranium cost of sales totaled $20.0 million excluding $10.3 million net realizable value (NRV)
adjustments and was comprised of $11.9
million of purchase costs and $8.1
million of production costs. In 2019, we purchased 500,000
pounds at an average price of $26.36
per pound. In 2019, the average cost per pound sold from production
was $37.83, as compared to
$40.80 in 2018.
The gross profit from uranium sales for 2019 was $12.2 million, which represents a gross profit
margin of approximately 38%. This compares to a gross profit margin
of $11.6 million or 49% in 2018.
At the end of the year, we had approximately 268,803 pounds of
U3O8 at the conversion facility, which was
comprised of 220,053 produced and 48,750 purchased pounds, at an
average cost per pound of $28.40 for
the produced inventory and $24.12 for
the purchased inventory. The following table shows the average cost
per pound of the conversion facility inventory. The costs per pound
for uranium inventory presented in the following inventory table
are non-US GAAP measures. These measures do not have a standardized
meaning within US GAAP or a defined basis of calculation. These
measures are used by management to assess business performance.
Ending Conversion
Facility Inventory
|
|
Unit
|
31-Dec-19
|
|
30-Sep-19
|
|
30-Jun-19
|
31-Mar-19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost Per Pound Summary
(Produced)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem and
severance tax cost per pound
|
|
$/lb
|
|
$
|
0.77
|
|
$
|
0.91
|
|
$
|
1.52
|
|
$
|
1.52
|
Cash cost per
pound
|
|
$/lb
|
|
$
|
17.95
|
|
$
|
18.28
|
|
$
|
24.00
|
|
$
|
23.87
|
Non-cash cost per
pound
|
|
$/lb
|
|
$
|
9.68
|
|
$
|
9.50
|
|
$
|
12.41
|
|
$
|
12.38
|
Total cost per
pound
|
|
$/lb
|
|
$
|
28.40
|
|
$
|
28.69
|
|
$
|
37.77
|
|
$
|
37.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost Per Pound Summary
(Purchased)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost per
pound
|
|
$/lb
|
|
$
|
24.12
|
|
$
|
25.68
|
|
$
|
27.80
|
|
$
|
27.50
|
Generally, the cost per produced pound in ending inventory at
the conversion facility decreased during the year as compared to
the ending cost per pound in 2018. The decrease was directly
related to the use of lower projected sales prices in the NRV
computations which reduces the realizable value of the inventory
and the carrying cost per pound.
Reconciliation of Non-GAAP sales and inventory presentation
with US GAAP statement presentation
As discussed above, the cash costs, non-cash costs and per pound
calculations are non-US GAAP measures we use to assess business
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
|
|
2019
Q4
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales per financial
statements
|
|
$000
|
|
$
|
10,849
|
|
$
|
5,115
|
|
$
|
11,479
|
|
$
|
4,812
|
|
$
|
32,255
|
Less disposal
fees
|
|
$000
|
|
$
|
1
|
|
$
|
-
|
|
$
|
2
|
|
$
|
-
|
|
$
|
3
|
U3O8 sales
|
|
$000
|
|
$
|
10,848
|
|
$
|
5,115
|
|
$
|
11,477
|
|
$
|
4,812
|
|
$
|
32,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold -
produced
|
|
lb
|
|
|
-
|
|
|
-
|
|
|
165,000
|
|
|
48,750
|
|
|
213,750
|
Pounds sold -
purchased
|
|
lb
|
|
|
180,000
|
|
|
122,500
|
|
|
100,000
|
|
|
48,750
|
|
|
451,250
|
Total pounds
sold
|
|
lb
|
|
|
180,000
|
|
|
122,500
|
|
|
265,000
|
|
|
97,500
|
|
|
665,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average price per
pound sold
|
|
$/lb
|
|
$
|
60.26
|
|
$
|
41.76
|
|
$
|
43.31
|
|
$
|
49.35
|
|
$
|
48.50
|
|
Total
Cost Per Pound Sold Reconciliation
(1)
|
|
Unit
|
|
2019
Q4
|
|
2019
Q3
|
|
2019
Q2
|
|
2019
Q1
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales per
financial statements
|
|
|
|
$
|
6,451
|
|
$
|
7,515
|
|
$
|
11,163
|
|
$
|
5,146
|
|
$
|
30,275
|
Less adjustments
reflecting the lower of cost or NRV
|
|
|
|
$
|
(2,074)
|
|
$
|
(4,087)
|
|
$
|
(2,137)
|
|
$
|
(1,965)
|
|
$
|
(10,263)
|
U3O8 cost of sales
|
|
|
|
$
|
4,377
|
|
$
|
3,428
|
|
$
|
9,026
|
|
$
|
3,181
|
|
$
|
20,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem &
severance taxes
|
|
$000
|
|
$
|
22
|
|
$
|
(14)
|
|
$
|
17
|
|
$
|
57
|
|
$
|
82
|
Wellfield
costs
|
|
$000
|
|
$
|
769
|
|
$
|
821
|
|
$
|
876
|
|
$
|
862
|
|
$
|
3,328
|
Plant and site
costs
|
|
$000
|
|
$
|
1,393
|
|
$
|
1,535
|
|
$
|
1,624
|
|
$
|
1,798
|
|
$
|
6,350
|
Distribution
costs
|
|
$000
|
|
$
|
26
|
|
$
|
12
|
|
$
|
27
|
|
$
|
6
|
|
$
|
71
|
Inventory
change
|
|
$000
|
|
$
|
(2,209)
|
|
$
|
(2,354)
|
|
$
|
3,702
|
|
$
|
(883)
|
|
$
|
(1,744)
|
Cost of sales -
produced
|
|
$000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,246
|
|
$
|
1,841
|
|
$
|
8,087
|
Cost of sales -
purchased
|
|
$000
|
|
$
|
4,377
|
|
$
|
3,428
|
|
$
|
2,780
|
|
$
|
1,340
|
|
$
|
11,925
|
Total cost of
sales
|
|
$000
|
|
$
|
4,377
|
|
$
|
3,428
|
|
$
|
9,026
|
|
$
|
3,181
|
|
$
|
20,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds sold
produced
|
|
lb
|
|
|
—
|
|
|
—
|
|
|
165,000
|
|
|
48,750
|
|
|
213,750
|
Pounds sold
purchased
|
|
lb
|
|
|
180,000
|
|
|
122,500
|
|
|
100,000
|
|
|
48,750
|
|
|
451,250
|
Total pounds
sold
|
|
lb
|
|
|
180,000
|
|
|
122,500
|
|
|
265,000
|
|
|
97,500
|
|
|
665,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per pound
sold - produced
|
|
$/lb
|
|
$
|
-
|
|
$
|
-
|
|
$
|
37.85
|
|
$
|
37.74
|
|
$
|
37.83
|
Average cost per pound
sold - purchased
|
|
$/lb
|
|
$
|
24.31
|
|
$
|
27.98
|
|
$
|
27.80
|
|
$
|
27.50
|
|
$
|
26.43
|
Total average cost per
pound sold
|
|
$/lb
|
|
$
|
24.31
|
|
$
|
27.98
|
|
$
|
34.06
|
|
$
|
32.63
|
|
$
|
30.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
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 production cost table. It excludes the lower of cost or NRV
adjustments as the adjustments do not correspond with the timing of
the sales of produced inventory.
|
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.
Year Ended December 31, 2019
Compared to Year Ended December 31,
2018
The following table summarizes the results of operations for the
years ended December 31, 2019 and
2018 (in thousands of U.S. dollars):
|
Year ended
December 31,
|
|
2019
|
|
2018
|
|
$
|
|
$
|
|
|
|
|
Sales
|
32,255
|
|
23,496
|
Cost of
sales
|
(30,275)
|
|
(12,203)
|
Gross profit
(loss)
|
1,980
|
|
11,293
|
Exploration and
evaluation expense
|
(2,476)
|
|
(2,431)
|
Development
expense
|
(1,404)
|
|
(1,654)
|
General and
administrative expense
|
(5,801)
|
|
(5,393)
|
Accretion
expense
|
(577)
|
|
(508)
|
Write-off of mineral
properties
|
(11)
|
|
-
|
Net profit from
operations
|
(8,289)
|
|
1,307
|
Net interest
expense
|
(668)
|
|
(1,002)
|
Warrant mark to
market gain
|
524
|
|
581
|
Loss from equity
investment
|
-
|
|
(5)
|
Foreign exchange gain
(loss)
|
(28)
|
|
43
|
Other
income
|
43
|
|
3,610
|
Net income
|
(8,418)
|
|
4,534
|
|
|
|
|
Income per share –
basic
|
(0.05)
|
|
0.03
|
|
|
|
|
Income per share
– diluted
|
(0.05)
|
|
0.03
|
|
|
|
|
Revenue per pound
sold
|
48.50
|
|
48.86
|
|
|
|
|
Total cost per pound
sold
|
30.09
|
|
24.76
|
|
|
|
|
Gross profit per
pound sold
|
18.41
|
|
24.10
|
Outlook for 2020
In 2019, we delivered 665,000 pounds into term contracts at an
average price of $49 per pound.
During the year, we purchased 500,000 pounds at an average cost of
$26 per pound and delivered 451,250
purchased pounds into the term contracts. The remaining
213,750 pounds were delivered from our produced inventory at an
average total cost of $38 per pound,
which included cash costs of $24 per
pound.
In 2020, we expect to deliver 200,000 pounds into term contracts
at an average price of $42 per
pound. We have contracts in place to purchase 200,000 pounds
at an average cost of $26 per pound,
which we intend to deliver into the term contracts. Given what will
be very limited production in 2020 (not expected to exceed 5,000
pounds U3O8), we are not planning to sell any
pounds from this year's production or existing inventories at
current spot prices.
The ending spot price decreased from $28 per pound in 2018 to $25 per pound in 2019 and has continued to trade
at or below $25 per pound thus far in
2020. As a reminder, the ending spot price has been below
$25 per pound three of the last four
years.
In response to the persistently weak uranium market, we have
taken multiple, aggressive measures over the years to control
costs, including reductions in force in each of the last four
years.
In 2016, we deliberately slowed development activities at MU2,
reduced costs, and focused on enhancing production efficiencies
from our operating MU1 header houses
In 2017, we continued to employ this limited-development
strategy, implemented further cost reductions, and supplemented
existing mine production with cost-effective priced uranium
purchases to meet our contractual sales commitments.
In 2018, we implemented further cost reductions, suspended all
MU2 development activities, purchased 100% of the uranium necessary
to meet our 2018 contractual commitments, and increased our ending
inventory position from 130,000 pounds to 392,000 pounds.
In 2019, we again chose to conduct no further MU2 development
activities, secured purchase contracts for 500,000 pounds of
uranium at cost-effective prices, and sold 165,000 pounds related
to 2020 obligations under existing term agreements. We again took
aggressive cost cutting measures, including additional staffing
cuts, and renegotiated the Wyoming State Bond Loan deferring six
quarterly principal payments.
As at February 26, 2020, our
unrestricted cash position was $6.4
million, and we had nearly 270,000 pounds of finished
inventory readily available for sale at our discretion. Given our
current cash and inventory position, and our remaining sales and
purchase contracts, we do not anticipate the need for additional
funding for current operations in the near term unless it is
advantageous to do so.
The actions we have taken, together with our current cash,
inventory, and contract positions, give the Company the flexibility
it needs to react to changing market conditions and quickly
re-start development activities in MU2 when warranted. With future
development and construction in mind, the staff who were retained
had the greatest level of experience and adaptability allowing for
an easier transition back to full operations. Lost Creek operations
could increase production rates in as little as six months
following a go decision simply by developing additional header
houses within the fully permitted MU2. Development expenses during
this time are estimated to be approximately $14 million and are almost entirely related to
MU2 drilling and header house construction costs. Lost Creek does
not require any significant capital expenditures in order to
increase production. The Lost Creek plant has been routinely
maintained to be fully ready to receive additional flows for
increased production when warranted. This operating strategy will
allow us to control production costs, minimize development
expenditures, maximize cash flows and maintain the operational
flexibility to respond to market conditions.
We have consistently focused on innovative approaches to enhance
production, control costs, and exercise financial restraint in what
has become a moribund domestic uranium market. To that end, we
initiated in 2018, and subsequently awaited the outcome of, the
Section 232 Trade Action. To our great disappointment, however, the
President chose to take no direct action regarding the Section 232
Trade Action. Instead, the President did establish a Working Group
to develop recommendations for reviving and expanding domestic
uranium production, which was slated to report back to the White
House in early Q4 2019. At this time, the report has not been made
public.
More recently, the President's proposed FY2021 budget included a
line item of $150 million per year
from 2021 to 2030 to support the creation and fulfillment of a new
national uranium reserve to be supplied by domestically mined
uranium. While this news is encouraging, there can be no certainty
of the approval and implementation of the President's proposed
budget, nor of the outcome of the Working Group's long overdue
findings and recommendations, and therefore, the outcome of this
continuing process and its effects on the U.S. uranium market is
uncertain.
The domestic uranium market has been and remains in poor
condition. U.S. uranium production in 2020 will be substantially
less than 2019 production, which was dismal – 90% less than the
record-setting low production of 2018. Imports continue to besiege
the domestic uranium fuel cycle and have "undermined U.S. energy
security and impacted U.S. fuel supply capabilities." We implore
the President, the Working Group, and Congress, to take innovative
approaches to "secure energy independence" and "address challenges
to the production of domestic uranium."
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 2.6 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 operate at our Shirley
Basin Project. Ur-Energy is engaged in uranium mining, recovery and
processing activities, including the acquisition, exploration,
development and operation of uranium mineral properties in
the United States. Shares of
Ur‑Energy trade on the NYSE 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 &
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.,
controlling production operations at lower levels at Lost Creek;
the timing to determine future development and construction
priorities, and the ability to readily and cost-effectively ramp-up
production operations when market and other conditions warrant; our
continuing ability to avoid dilution of shareholders; the
outcome of the report and recommendations from the U.S. Nuclear
Fuel Working Group, including the timeline and scope of proposed
remedies, including the budget appropriations process related to
the establishment of the national uranium reserve) 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.
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SOURCE Ur-Energy Inc.