Ur‐Energy Releases 2019 Year End Results
News Release
10758 W. Centennial Rd. Suite 200
Littleton, CO 80127
Phone: 720.981.4588
Fax: 720.981.5643
www.ur-energy.com
Ur‐Energy Releases 2019 Year End Results
Littleton, Colorado (PR Newswire – February 28, 2020) Ur‐Energy Inc. (NYSE American:URG)(TSX:URE) (“Ur‐
Energy” or the “Company”) has f iled 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 co nsolidated financial
statements, free of charge, upon request to the Company.
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 U 3O8 inventory at the conversion facility. This provides a solid fo undation 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 quarter ly 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 G roup 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 Administr ation and appears to be part of the
recommendations of the Working Group. Secretary of Energy Broui llette 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 pr ice 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 U 3O8 were captured within the Lost Creek plant. A total of 50,794 p ounds were
packaged in drums and 58,353 pounds of the drummed inventory we re 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 Productio n 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
- 2 -
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 U nit 2019 Q4 2019 Q 3 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 $ 20.0 8 $ 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 lin es, 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 th e 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 expens es 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 ch arged 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 pr imarily 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.
- 3 -
U3O8 Sales and Cost of Sales
Sales and cost of sales Unit 2019 Q4 2019 Q3 20 19 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 $ 2 7.80 $ 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 inventor y 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.
- 4 -
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 p rice 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 purchase d inventory at an average price of $49.56 per
pound.
For the year, our uranium cost of sales totaled $20.0 million e xcluding $10.3 million net realizable value (NRV)
adjustments and was comprised of $11.9 million of purchase cost s 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 a n 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 $ 1 2.38
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 t he 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.
- 5 -
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 $ 3,32 8
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 $ 3,1 81 $ 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 97,50 0 665,000
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.
- 6 -
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 compa red 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 delivere d from our produced inventory at an average
total cost of $38 per pound, which included cash costs of $24 per pound.
- 7 -
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 cos t 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 prod uction 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 strate gy, implemented further cost reductions, and
supplemented existing mine production with cost‐effective price d 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 16 5,000 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 an d 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, inve ntory, 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 foll owing a go decision simply by developing additional
h e a d e r h o u s e s w i t h i n t h e f u l l y p e r m i t t e d M U 2 . D e v e l o p m e n t e x p e nses during this time are estimated to be
approximately $14 million and are almost entirely related to MU 2 drilling and header house construction costs.
Lost Creek does not require any significant capital expenditure s in order to increase production. The Lost Creek
plant has been routinely maintained to be fully ready to receiv e 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 uran ium market. To that end, we initiated in 2018,
- 8 -
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 Sect ion 232 Trade Action. Instead, the President did
establish a Working Group to develop recommendations for revivi ng 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 Work ing 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 condit ion. 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 cyc le 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 “addr ess 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 m illion 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. S hares 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
o f f i c e i s i n L i t t l e t o n , C o l o r a d o ; i t s r e g i s t e r e d o f f i c e i s i n 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 o perations 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, inheren tly 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