Ur-Energy Releases 2020 Q3 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 2020 Q3 Results
Littleton, Colorado (ACCESSWIRE – October 30, 2020) 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 September 30, 2020,
with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and with Canadian securities
authorities at www.sedar.com.
Ur-Energy CEO, Jeff Klenda said, “We are pleased that the U.S. Nuclear Fuel Working Group, as well as bipartisan
Congressional support, remains focused on securing the future of our industry and our nation. As we await
additional positive developments, like the recent amendment and 20- year extension of the Russian Suspension
Agreement, we continue our efforts to support the uranium production industry and to safeguard America’s national
and energy security through the reinvigoration of the front end of our nuclear fuel cycle.
“After making further, market -appropriate adjustments to our Lost Creek operations, we anticipate substantial
savings in 2021 and 2022, which are greatly enhanced by the recent agreement to defer principal payments on our
State Bond Loan until October 2022. We remain grateful to the State of Wyoming and Sweetwater County for their
continuing support. With $5.9 million of cash and approximately 270,000 pounds of finished, ready-to-sell product
at the conversion facility, we now have ample runway to support operations into 2022.”
Results of Operations
For the three months ended September 30, 2020, 2,503 pounds of U3O8 were captured within the Lost Creek plant
and 4,926 pounds of U3O8 were packaged in drums. Our inventory at the converter totaled approximately 268,485
pounds of U3O8 at September 30, 2020.
During the quarter, we took steps to further reduce production operations at Lost Creek and adjust to the continued
depressed state of the uranium markets while we await the recommended relief from the Working Group and further
positive developments in the uranium markets. The reduced production levels allowed us to make further operating
cost reductions at Lost Creek and related support cost reductions at the corporate office in Littleton. The cost
reductions include savings from additional reductions in f orce at both locations as well as other cost containment
measures. Together with the further deferral of principal payments on the State Bond Loan, these measures
will result in substantial savings to the Company, estimated to exceed $7 million and $4 mill ion in calendar
years 2021 and 2022, respectively.
The following tables provide detailed financial information on our sales and cost of sales as they relate to U 3O8
pounds. The U3O8 and cost per pound measures included in the following tables 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 performanc e. Where applicable, reconciliation of these measures to US GAAP financial statement
presentation are included within the respective table.
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Sales
Uni t 2020 Q3 2020 Q2 2020 Q1 2019 Q4 2020 Y TD
U3O8 Sales Reconciliation (1)
Sales per financial statements $000 -$ 6,934$ 1,370$ 10,849$ 8,304$
Disposal fees $000 -$ (4)$ -$ (1)$ (4)$
U3O8 sales $000 -$ 6,930$ 1,370$ 10,848$ 8,300$
U3O8 pounds sold lb - 167,000 33,000 180,000 200,000
U3O8 price per pound sold $/lb -$ 41.50$ 41.52$ 60.26$ 41.50$
U3O8 Sales by Product
U3O8 Sales
Produced $000 -$ -$ -$ -$ -$
Purchased $000 -$ 6,930$ 1,370$ 10,848$ 8,300$
$000 -$ 6,930$ 1,370$ 10,848$ 8,300$
U3O8 Pounds Sold
Produced lb - - - - -
Purchased lb - 167,000 33,000 180,000 200,000
lb - 167,000 33,000 180,000 200,000
U3O8 Price per Pounds Sold
Produced $/lb -$ -$ -$ -$ -$
Purchased $/lb -$ 41.50$ 41.52$ 60.26$ 41.50$
$/lb -$ 41.50$ 41.52$ 60.26$ 41.50$
Note:
1. Sales per the financial statements include revenues from disposal fees received at Shirley Basin.
The disposal fees do not relate to U3O8 pounds sold and are excluded from the U3O8 sales and U3O8
price per pound sold figures.
There were no sales in the third quarter, and we do not anticipate making any sales in the fourth quarter.
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Cost of Sales
U3O8 Cost of Sales Reconciliation (1)
Cost of sales per financial statements $000 1,840$ 6,517$ 3,105$ 6,451$ 11,462$
Lower of cost or NRV adjustm ent $000 (1,840)$ (2,174)$ (2,282)$ (2,074)$ (6,296)$
U3O8 cost of sales $000 -$ 4,343$ 823$ 4,377$ 5,166$
U3O8 pounds sold lb - 167,000 33,000 180,000 200,000
U3O8 cost per pound sold $/lb -$ 26.01$ 24.94$ 24.31$ 25.83$
U3O8 Cost of Sales by Product
U3O8 Cost of Sales
Ad valorem and severance tax es $000 9$ 6$ 3$ 22$ 18$
Wellfield cash costs $000 107$ 154$ 128$ 158$ 389$
Wellfield non-cash costs $000 557$ 557$ 618$ 611$ 1,732$
Plant cash costs $000 807$ 1,064$ 910$ 898$ 2,781$
Plant non-cash costs $000 490$ 490$ 490$ 494$ 1,470$
Distribution costs $000 4$ (3)$ -$ 26$ 1$
Inventory change $000 (1,974)$ (2,268)$ (2,149)$ (2,209)$ (6,391)$
Produced $000 -$ -$ -$ -$ -$
Purchased $000 -$ 4,343$ 823$ 4,377$ 5,166$
$000 -$ 4,343$ 823$ 4,377$ 5,166$
U3O8 Pounds Sold
Produced lb - - - - -
Purchased lb - 167,000 33,000 180,000 200,000
lb - 167,000 33,000 180,000 200,000
U3O8 Cost per Pound Sold
Produced $/lb -$ -$ -$ -$ -$
Purchased $/lb -$ 26.01$ 24.94$ 24.31$ 25.83$
$/lb -$ 26.01$ 24.94$ 24.31$ 25.83$
Note:
1. Cost of sales per the financial statements include lower of cost or net realizable value (“NRV”)
adjustments. The NRV adjustments do not relate to U 3O8 pounds sold and are excluded from the
U3O8 cost of sales and U3O8 cost per pound sold figures.
Cost of sales per the financial statements includes ad valorem and severance taxes related to the extraction of
uranium, all costs of wellfield and plant 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. The resulting inventoried cost per pound is compared to the NRV of the product, which is based on t he
estimated sales price of the product, net of any necessary costs to finish the product. Any inventory value in excess
of the NRV is charged to cost of sales per the financial statements. These NRV adjustments are excluded from the
U3O8 cost of sales and U3O8 cost per pound sold figures because they relate to the pounds of U 3O8 in ending
inventory and do not relate to the pounds of U3O8 sold during the period.
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Continuing Guidance for 2020
Following multiple announcements of industry production suspensions and reductions earlier this year, U 3O8 spot
prices increased to $33 per pound in June. U3O8 spot prices have decreased to just under $30 per pound since then.
While the production cuts may amount to as much as 46 million pounds of pr imary production on an annualized
basis, positive impacts on long-term U3O8 prices have not materialized.
The Working Group report makes several strong recommendations to revitalize domestic uranium mining, most
relevant among which is that the U.S. government should make direct purchases of 17 to 19 million total pounds of
U3O8 to replenish the American Assured Fuel Supply uranium reserve. Additionally, the report recommends the
establishment of a national uranium reserve, which is included in the President’s Fiscal Year 2021 Budget Request;
during the first year, it is expected that the reserve would directly support the operation of at least two U.S. uranium
mines. The budget item is for $150 million per year from FY2021 to FY2030. However, in July the U .S. House
Committee on Appropriations decided not to fund the budget item without further information from DOE, for which
they directed DOE to submit a plan for the proposed establishment of a uranium reserve within six months of the
appropriation bill’s enactment.
The amendment and extension of the RSA, completed in early October, continues caps on Russian imports of
nuclear fuel to the U.S. for an additional 20 years, through 2040. The amendment reduces the current cap of 20%
of demand to an average of 17% of demand over the 20-year period, with reductions starting in 2028 and continuing
through 2040. These provisions in the RSA are positive developments in the long term. Notably, Senator Barrasso
has introduced legislation to codify the recent extension of the RSA.
Still, no specific action or remedies have resulted from the Working Group’s plan at this time and, while the report
is strong in its recommendations, there can be no certainty of the final outcome of the Working Group’s findings
and recommen dations, or the timing and impact of any actions taken in response to those findings and
recommendations. This includes both the Congressional budget appropriations process and proposed legislation
related to the national uranium reserves. The outcome of t hese continuing processes and its effects on the U.S.
uranium market, therefore, remains uncertain.
In addition to the restructuring of the State Bond Loan, we have continued to implement other Company-wide cost-
saving measures as we await the recommended relief from the Working Group report and further positive
developments in the uranium markets. Recently, we further reduced production operations at Lost Creek to market-
appropriate levels. The reduced production levels allowed us to make further operating cost reductions at Lost Creek
and related support cost reductions at the corporate office. The cost reductions include savings from additional
reductions in force at both locations as well as other cost containment measures. Together with the further deferral
of principal payments on the State Bond Loan, these measures will result in substantial savings to the Company,
estimated to exceed $7 million and $4 million in calendar years 2021 and 2022, respectively.
With our remaining highly experie nced technical and operation staff, we will continue to maintain operational
readiness at our fully permitted Lost Creek mine and plant. Ur-Energy is prepared to expand uranium production at
Lost Creek to an annualized run rate of one million pounds.
The Lost Creek facility has the constructed and licensed capacity to process up to two million pounds of U3O8 per
year and previously reported mineral resources to feed the processing plant for many years to come. A ramp-up of
production at Lost Creek will advance further development in the first two mine units, followed by the ten additional
mining areas as defi ned in the Lost Creek Property Preliminary Economic Assessment, as amended. With future
development and construction in mind, our current staff members were retained as having the greatest level of
experience and adaptability allowing for an easier transit ion back to full operations. Lost Creek operations can
increase to full 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 six- month ramp up period are
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estimated to be approximately $14 million and are almost entirely related to MU2 drilling and header house
construction costs.
We will continue to closely monitor the uranium market and any actions or remedies resulting from the W orking
Group’s report, DOE’s and DOC’s efforts, or legislative actions, which may positively impact the uranium
production industry. Until such time, we will continue to minimize costs and maximize ‘runway’ to maintain current
operations and avoid unnecess ary dilution while maintaining the operational readiness needed to ramp- up
production when called upon.
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 prod uced, 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 Shirle y 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 America n 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
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., our ability to maintain safe and compliant, reduced-level
production operations at Lost Creek; the ability to readily and cost-effectively ramp-up production operations when
market and other conditions warrant; the viability of the additional mining areas at Lost Creek; the impact of
ongoing changes in global uranium production and other im pacts related to COVID -19; timing and results of
implementation of the r ecommendations from the U.S. Nuclear Fuel Working Group and pending legislation,
including the budget appropriations process related to the establishment of the national uranium reserve; the effects
on the uranium markets of the extension and amendment of the Russian Suspension Agreement and whether the
pending legislation to codify the amendment is enacted; whether cost-savings measures which have been and will
be implemented will be sufficient to support our operations and avoid unnecessary dilution to our shareholders) and
are based on current expectations that, while considered reasonable by management at this time, inherently involve
a number of significant busi ness, 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 esti mates; 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.seda r.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 dat e 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.