10-Q 1 urg_10q.htm FORM 10-Q urg_10q.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED March 31, 2024

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD OF _________ TO _________.

 

Commission File Number: 001-33905

 

UR-ENERGY INC.

(Exact name of registrant as specified in its charter)

 

Canada

 

Not Applicable

State or other jurisdiction of incorporation or organization

 

(I.R.S. Employer Identification No.)

 

10758 West Centennial Road, Suite 200

Littleton, Colorado 80127

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: 720-981-4588

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol

 

Name of each exchange on which registered:

Common stock

 

URG (NYSE American); URE (TSX)

 

NYSE American; TSX

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No ☒

 

As of May 2, 2024, there were 281,626,324 shares of the registrant’s no par value Common Shares (“Common Shares”), the registrant’s only outstanding class of voting securities, outstanding.

 

 

 

 

UR-ENERGY INC.

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

37

Item 4.

Controls and Procedures

38

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

39

Item 3.

Defaults Upon Senior Securities

39

Item 4.

Mine Safety Disclosure

39

Item 5.

Other Information

39

Item 6.

Exhibits

40

 

 

 

SIGNATURES

41

 

 
2

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When we use the terms “Ur-Energy,” “we,” “us,” or “our,” or the “Company” we are referring to Ur-Energy Inc. and its subsidiaries, unless the context otherwise requires. Throughout this document we make statements that are classified as “forward-looking.” Please refer to the “Cautionary Statement Regarding Forward-Looking Statements” section below for an explanation of these types of assertions.

 

Cautionary Statement Regarding Forward-Looking Information

 

This report on Form 10-Q contains "forward-looking statements" within the meaning of applicable United States (“U.S.”) and Canadian securities laws, and these forward-looking statements can be identified by the use of words such as "expect," "anticipate," "estimate," "believe," "may," "potential," "intends," "plans" and other similar expressions or statements that an action, event or result "may," "could" or "should" be taken, occur or be achieved, or the negative thereof or other similar statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Such statements include, but are not limited to: (i) the ability to maintain safe and compliant operations at Lost Creek; (ii) the timing for ongoing construction and development work at Lost Creek, including the schedule for bringing additional header houses online; (iii) our ability to reach steady state higher production levels at Lost Creek in a timely and cost-effective manner including timely delivery into our contracts; (iv) development and construction priorities and timelines for Shirley Basin, and whether our current projections for buildout can to be met; (v) the ability to complete additional favorable uranium sales agreements; (vi) the timing and outcome of final regulatory approvals of the amendments for uranium recovery at the LC East Project; (vii) continuing effects of supply-chain disruption, and challenges in the labor market, and whether the Company will continue to anticipate and overcome such delays; (viii) the effects of the current evolving uranium market, including supply and demand, and whether increases in spot and term pricing will continue and be sustained; (ix) the impacts of global geopolitical events on the nuclear fuel industry and specifically U.S. uranium producers; (x) whether new or continuing sanctions on Russia will affect imports of nuclear fuel to the U.S., including whether the ban on Russian uranium will be signed into law and what effects it will have on the uranium market; and (xi) whether we will be able to expand our production portfolio business with organic or inorganic growth. Additional factors include, among others, the following: future estimates for production; capital expenditures; operating costs; mineral resources, grade estimates and recovery rates; market prices; business strategies and measures to implement such strategies; competitive strengths; estimates of goals for expansion and growth of the business and operations; plans and references to our future successes; our history of operating losses and uncertainty of future profitability; status as an exploration stage company; the lack of mineral reserves; risks associated with obtaining permits and other authorizations in the U.S.; risks associated with current variable economic conditions; the possible impact of future debt or equity financings; the hazards associated with mining production operations; compliance with environmental laws and regulations; wastewater management; the possibility for adverse results in potential litigation; uncertainties associated with changes in law, government policy and regulation; uncertainties associated with a Canada Revenue Agency or U.S. Internal Revenue Service audit of any of our cross border transactions; changes in size and structure; the effectiveness of management and our strategic relationships; ability to attract and retain key personnel and management; uncertainties regarding the need for additional capital; sufficiency of insurance coverages, bonding surety arrangements, and indemnifications for our inventory; uncertainty regarding the fluctuations of quarterly results; foreign currency exchange risks; ability to enforce civil liabilities under U.S. securities laws outside the U.S.; ability to maintain our listing on the NYSE American and Toronto Stock Exchange (“TSX”); risks associated with the expected classification as a "passive foreign investment company" under the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended; risks associated with our investments and other risks and uncertainties described under the heading “Risk Factors” in our Annual Report on Form 10-K, dated March 6, 2024.

 

 
3

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Cautionary Note to Investors Concerning Disclosure of Mineral Resources

 

Unless otherwise indicated, all mineral resource estimates included in this report on Form 10-Q have been prepared in accordance with U.S. securities laws pursuant to Regulation S-K, Subpart 1300 (“S-K 1300”). Prior to these estimates, we prepared our estimates of mineral resources in accord with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for public disclosure an issuer makes of scientific and technical information concerning mineral projects. We are required by applicable Canadian Securities Administrators to file in Canada an NI 43‑101 compliant report at the same time we file an S-K 1300 technical report summary. The NI 43‑101 and S-K 1300 reports (for each of the Lost Creek Property (March 4, 2024) and Shirley Basin Project, as amended (March 11, 2024)), are substantively identical to one another except for internal references to the regulations under which the report is made, and certain organizational differences.

 

Investors should note that the term “mineral resource” does not equate to the term “mineral reserve.” Mineralization may not be classified as a “mineral reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under S-K 1300, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies. Additionally, as required under S-K 1300, our report on the Lost Creek Property includes two economic analyses to account for the chance that the inferred resources are not upgraded as production recovery progresses and the Company collects additional drilling data; the second economic analysis was prepared which excluded the inferred resources. The estimated recovery excluding the inferred resources also establishes the potential viability at the property, as detailed in the S-K 1300 report. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable.

 

 
4

Table of Contents

 

PART I

 

Item 1. FINANCIAL STATEMENTS

 

Ur-Energy Inc.

Interim Consolidated Balance Sheets

(expressed in thousands of U.S. dollars)

(the accompanying notes are an integral part of these consolidated financial statements)

 

 

 

Note

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

3

 

 

 

53,896

 

 

 

59,700

 

Current portion of lease receivable (net)

 

 

 

 

 

 

78

 

 

 

77

 

Inventory

 

 

4

 

 

 

4,698

 

 

 

2,571

 

Prepaid expenses

 

 

 

 

 

 

1,347

 

 

 

1,321

 

Total current assets

 

 

 

 

 

 

60,019

 

 

 

63,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

 

Lease receivable (net)

 

 

 

 

 

 

194

 

 

 

208

 

Restricted cash

 

 

5

 

 

 

8,641

 

 

 

8,549

 

Mineral properties

 

 

6

 

 

 

34,938

 

 

 

34,906

 

Capital assets

 

 

7

 

 

 

21,148

 

 

 

21,044

 

Total non-current assets

 

 

 

 

 

 

64,921

 

 

 

64,707

 

Total assets

 

 

 

 

 

 

124,940

 

 

 

128,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

8

 

 

 

4,842

 

 

 

2,366

 

Current portion of notes payable

 

 

9

 

 

 

-

 

 

 

5,694

 

Current portion of warrant liability

 

 

10

 

 

 

-

 

 

 

1,743

 

Current portion of lease liability

 

 

 

 

 

 

169

 

 

 

162

 

Environmental remediation accrual

 

 

 

 

 

 

63

 

 

 

69

 

Total current liabilities

 

 

 

 

 

 

5,074

 

 

 

10,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

 

10

 

 

 

10,913

 

 

 

11,549

 

Asset retirement obligations

 

 

11

 

 

 

31,367

 

 

 

31,236

 

Lease liability

 

 

 

 

 

 

640

 

 

 

687

 

Total non-current liabilities

 

 

 

 

 

 

42,920

 

 

 

43,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

12

 

 

 

322,213

 

 

 

302,182

 

Contributed surplus

 

 

 

 

 

 

20,184

 

 

 

19,881

 

Accumulated other comprehensive income

 

 

 

 

 

 

4,001

 

 

 

3,718

 

Accumulated deficit

 

 

 

 

 

 

(269,452)

 

 

(250,911)

Total shareholders' equity

 

 

 

 

 

 

76,946

 

 

 

74,870

 

Total liabilities and shareholders' equity

 

 

 

 

 

 

124,940

 

 

 

128,376

 

 

 

 
5

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Ur-Energy Inc.

Interim Consolidated Statements of Operations and Comprehensive Loss

(expressed in thousands of U.S. dollars, except share data)

(the accompanying notes are an integral part of these consolidated financial statements)

  

 

 

 

 

Three Months Ended

March 31,

 

 

 

Note

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

13

 

 

 

-

 

 

 

6,447

 

Cost of sales

 

 

14

 

 

 

(1,139)

 

 

(6,504)

Gross loss

 

 

 

 

 

 

(1,139)

 

 

(57)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

 

15

 

 

 

(15,145)

 

 

(3,065)

Operating loss

 

 

 

 

 

 

(16,284)

 

 

(3,122)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

 

488

 

 

 

213

 

Warrant liability revaluation gain (loss)

 

 

10

 

 

 

(2,756)

 

 

1,867

 

Foreign exchange gain

 

 

 

 

 

 

12

 

 

 

336

 

Other loss

 

 

 

 

 

 

(1)

 

 

(7)

Net loss

 

 

 

 

 

 

(18,541)

 

 

(713)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

283

 

 

 

(317)

Comprehensive loss

 

 

 

 

 

 

(18,258)

 

 

(1,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

(0.07)

 

 

-

 

Diluted

 

 

 

 

 

 

(0.07)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

278,030,162

 

 

 

241,893,816

 

Diluted

 

 

 

 

 

 

278,030,162

 

 

 

241,893,816

 

 

 
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Ur-Energy Inc.

Interim Consolidated Statements of Changes in Shareholders' Equity

(expressed in thousands of U.S. dollars, except share data)

(the accompanying notes are an integral part of these consolidated financial statements)

 

Three Months Ended

March 31,

 

Note 

 

 

Shares

 

 

Share

Capital

 

 

Contributed

Surplus

 

 

Accumulated

Other

Comprehensive

Income

 

 

Accumulated

Deficit

 

 

Shareholders’

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

 

 

224,699,621

 

 

 

258,646

 

 

 

19,843

 

 

 

4,265

 

 

 

(220,255)

 

 

62,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

12

 

 

 

536,183

 

 

 

429

 

 

 

(131)

 

 

-

 

 

 

-

 

 

 

298

 

Shares issued for cash

 

 

12 

 

 

 

39,491,000

 

 

 

37,528

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

37,528

 

Share issue costs

 

 

12 

 

 

 

-

 

 

 

(2,992)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,992)

Stock compensation

 

 

 

 

 

 

-

 

 

 

-

 

 

 

253

 

 

 

-

 

 

 

-

 

 

 

253

 

Comprehensive loss

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(317)

 

 

(713)

 

 

(1,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2023

 

 

 

 

 

 

264,726,804

 

 

 

293,611

 

 

 

19,965

 

 

 

3,948

 

 

 

(220,968)

 

 

96,556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

 

 

 

 

270,898,900

 

 

 

302,182

 

 

 

19,881

 

 

 

3,718

 

 

 

(250,911)

 

 

74,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

12 

 

 

 

74,674

 

 

 

61

 

 

 

(21)

 

 

-

 

 

 

-

 

 

 

40

 

Exercise of warrants

 

 

10 

 

 

 

8,188,250

 

 

 

15,849

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,849

 

Shares issued for cash

 

 

12

 

 

 

2,464,500

 

 

 

4,227

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,227

 

Share issue costs

 

 

12 

 

 

 

-

 

 

 

(106)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(106)

Stock compensation

 

 

 

 

 

 

-

 

 

 

-

 

 

 

324

 

 

 

-

 

 

 

-

 

 

 

324

 

Comprehensive loss

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

283

 

 

 

(18,541)

 

 

(18,258)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

 

 

 

 

281,626,324

 

 

 

322,213

 

 

 

20,184

 

 

 

4,001

 

 

 

(269,452)

 

 

76,946

 

 

 
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Ur-Energy Inc.

Interim Consolidated Statements of Cash Flow

(expressed in thousands of U.S. dollars)

(the accompanying notes are an integral part of these consolidated financial statements)

  

 

 

 

 

 

Three Months Ended

March 31,

 

 

 

Note

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

Cash provided by (used for):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

 

 

 

(18,541)

 

 

(713)

 

 

 

 

 

 

 

 

 

 

 

 

Items not affecting cash:

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

324

 

 

 

253

 

Net realizable value adjustments

 

 

 

 

 

1,139

 

 

 

2,875

 

Amortization of mineral properties

 

 

 

 

 

(22)

 

 

313

 

Depreciation of capital assets

 

 

 

 

 

603

 

 

 

473

 

Accretion expense

 

 

 

 

 

121

 

 

 

122

 

Amortization of deferred loan costs

 

 

 

 

 

33

 

 

 

11

 

Provision for reclamation

 

 

 

 

 

(6)

 

 

-

 

Mark to market loss (gain)

 

 

 

 

 

2,756

 

 

 

(1,867)

Unrealized foreign exchange gain

 

 

 

 

 

(12)

 

 

(336)

Changes in non-cash working capital:

 

 

 

 

 

 

 

 

 

 

 

Lease receivable

 

 

 

 

 

13

 

 

 

-

 

Inventory

 

 

 

 

 

(3,266)

 

 

753

 

Prepaid expenses

 

 

 

 

 

(131)

 

 

(170)

Accounts payable and accrued liabilities

 

 

 

 

 

2,612

 

 

 

613

 

 

 

 

 

 

 

(14,377)

 

 

2,327

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

Purchase of capital assets

 

 

 

 

 

(843)

 

 

(665)

 

 

 

 

 

 

(843)

 

 

(665)

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

 

 

Issuance of common shares for cash

 

 

12

 

 

 

4,227

 

 

 

46,637

 

Share issue costs

 

 

12

 

 

 

(106)

 

 

(2,914)

Proceeds from exercise of warrants and stock options

 

 

12

 

 

 

11,202

 

 

 

298

 

Repayment of debt

 

 

 

 

 

 

(5,767)

 

 

(1,324)

 

 

 

 

 

 

 

9,556

 

 

 

42,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effects of foreign exchange rate changes on cash

 

 

 

 

 

 

(48)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash, cash equivalents, and restricted cash

 

 

 

 

 

 

(5,712)

 

 

44,359

 

Beginning cash, cash equivalents, and restricted cash

 

 

 

 

 

 

68,249

 

 

 

41,140

 

Ending cash, cash equivalents, and restricted cash

 

 

16

 

 

 

62,537

 

 

 

85,499

 

 

 
8

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Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

1. Nature of Operations

 

Ur-Energy Inc. (the “Company”) was incorporated on March 22, 2004, under the laws of the Province of Ontario. The Company continued under the Canada Business Corporations Act on August 8, 2006. The Company is an exploration stage issuer, as defined by United States Securities and Exchange Commission (“SEC”). The Company is engaged in uranium mining and recovery operations, with activities including the acquisition, exploration, development, and production of uranium mineral resources located primarily in Wyoming. The Company commenced uranium production at its Lost Creek Project in Wyoming in 2013.

 

Due to the nature of the uranium recovery methods used by the Company on the Lost Creek Property, and the definition of “mineral reserves” under Subpart 1300 to Regulation S-K (“S-K 1300”), the Company has not determined whether the property contains mineral reserves. The recoverability of amounts recorded for mineral properties is dependent upon the discovery of economic resources, the ability of the Company to obtain the necessary financing to develop the properties and upon attaining future profitable production from the properties or sufficient proceeds from disposition of the properties.

 

2. Summary of Significant Accounting Policies

 

Basis of presentation

 

These interim consolidated financial statements do not conform in all respects to the requirements of U.S. generally accepted accounting principles (“US GAAP”) for annual financial statements. These interim consolidated financial statements reflect all normal adjustments which in the opinion of management are necessary for a fair presentation of the results for the periods presented. These interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2023. We applied the same accounting policies as in the prior year. Certain information and footnote disclosures required by US GAAP have been condensed or omitted in these interim consolidated financial statements.

 

3. Cash and Cash Equivalents

 

The Company’s cash and cash equivalents consist of the following:

 

 Cash and cash equivalents

 

March 31,

2024

 

 

December 31,

2023

 

 

 

 

 

 

 

 

Cash on deposit

 

 

11,046

 

 

 

11,515

 

Money market accounts

 

 

42,850

 

 

 

48,185

 

 

 

 

53,896

 

 

 

59,700

 

 

4. Inventory

 

The Company’s inventory consists of the following:

 

 Inventory by Type

 

March 31,

2024

 

 

December 31,

2023

 

 

 

 

 

 

 

 

Plant inventory

 

 

1,593

 

 

 

1,343

 

Conversion facility inventory

 

 

3,105

 

 

 

1,228

 

 

 

 

4,698

 

 

 

2,571

 

 

Using lower of cost or net realizable value (“NRV”) calculations, the Company reduced the inventory valuation by $1,139 and $2,875 for the three months ended March 31, 2024 and 2023, respectively.

 

 
9

Table of Contents

 

Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

5. Restricted Cash

 

The Company’s restricted cash consists of the following:

 

Restricted Cash

 

March 31,

2024

 

 

December 31,

2023

 

 

 

 

 

 

 

 

Cash pledged for reclamation

 

 

8,629

 

 

 

8,518

 

Other restricted cash

 

 

12

 

 

 

31

 

 

 

 

8,641

 

 

 

8,549

 

 

The Company’s restricted cash consists of money market and short-term government bond investment accounts.

 

The bonding requirements for reclamation obligations on various properties have been reviewed and approved by the Wyoming Department of Environmental Quality (“WDEQ”), including the Wyoming Uranium Recovery Program (“URP”), and the Bureau of Land Management (“BLM”) as applicable. The restricted accounts are pledged as collateral against performance surety bonds, which secure the estimated costs of reclamation related to the properties. Surety bonds totaled $28.4 million and $28.4 million as of March 31, 2024, and December 31, 2023, respectively.

 

6. Mineral Properties

 

The Company’s mineral properties consist of the following:

 

Mineral Properties

 

Lost Creek Property

 

 

Shirley Basin Property

 

 

Other U.S. Properties

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

2,466

 

 

 

17,726

 

 

 

14,714

 

 

 

34,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in estimated reclamation costs

 

 

-

 

 

 

10

 

 

 

-

 

 

 

10

 

Depletion and amortization

 

 

22

 

 

 

-

 

 

 

-

 

 

 

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

2,488

 

 

 

17,736

 

 

 

14,714

 

 

 

34,938

 

 

Lost Creek Property

 

The Company acquired certain Wyoming properties in 2005 when Ur-Energy USA Inc. purchased 100% of NFU Wyoming, LLC. Assets acquired in this transaction include the Lost Creek Project, other Wyoming properties, and development databases. NFU Wyoming, LLC was acquired for aggregate consideration of $20 million plus interest. Since 2005, the Company has increased its holdings adjacent to the initial Lost Creek acquisition through staking additional claims and making additional property purchases and leases.

 

There is a royalty on each of the State of Wyoming sections under lease at the Lost Creek, LC West and EN Projects, as required by law. We are not recovering U3O8 within the State section under lease at Lost Creek and are therefore not subject to royalty payments currently. Other royalties exist on certain mining claims at the LC South, LC East and EN Projects. There are no royalties on the mining claims in the Lost Creek, LC North, or LC West Projects.

 

 
10

Table of Contents

 

Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

Shirley Basin Property

 

The Company acquired additional Wyoming properties in 2013 when Ur-Energy USA Inc. purchased 100% of Pathfinder Mines Corporation (“Pathfinder”). Assets acquired in this transaction include the Shirley Basin property, other Wyoming properties, and development databases. Pathfinder was acquired for aggregate consideration of $6.7 million, the assumption of $5.7 million in estimated asset reclamation obligations, and other consideration.

 

Other U.S. Properties

 

Other U.S. properties include the acquisition costs of several prospective mineralized properties, which the Company continues to maintain through claim payments, lease payments, insurance, and other holding costs in anticipation of future exploration efforts.

 

7. Capital Assets

 

The Company’s capital assets consist of the following:

  

 

 

March 31, 2024

 

 

December 31, 2023

 

Capital Assets

 

Cost

 

 

Accumulated

Depreciation

 

 

Net Book

Value

 

 

Cost

 

 

Accumulated

Depreciation

 

 

Net Book

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rolling stock

 

 

5,765

 

 

 

(3,819)

 

 

1,946

 

 

 

5,226

 

 

 

(3,701)

 

 

1,525

 

Enclosures

 

 

35,227

 

 

 

(17,278)

 

 

17,949

 

 

 

35,190

 

 

 

(16,850)

 

 

18,340

 

Machinery and equipment

 

 

2,127

 

 

 

(1,113)

 

 

1,014

 

 

 

2,016

 

 

 

(1,081)

 

 

935

 

Furniture and fixtures

 

 

265

 

 

 

(168)

 

 

97

 

 

 

265

 

 

 

(163)

 

 

102

 

Information technology

 

 

1,205

 

 

 

(1,073)

 

 

132

 

 

 

1,198

 

 

 

(1,067)

 

 

131

 

Right of use assets

 

 

14

 

 

 

(4)

 

 

10

 

 

 

14

 

 

 

(3)

 

 

11

 

 

 

 

44,603

 

 

 

(23,455)

 

 

21,148

 

 

 

43,909

 

 

 

(22,865)

 

 

21,044

 

 

8. Accounts Payable and Accrued Liabilities

 

Accounts payable and accrued liabilities consist of the following:

 

Accounts Payable and Accrued Liabilities

 

March 31,

2024

 

 

December 31,

2023

 

 

 

 

 

 

 

 

Accounts payable

 

 

3,663

 

 

 

1,680

 

Accrued payroll liabilities

 

 

831

 

 

 

578

 

Accrued severance, ad valorem, and other taxes payable

 

 

348

 

 

 

108

 

 

 

 

4,842

 

 

 

2,366

 

 

 
11

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Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

9. Notes Payable

 

On October 15, 2013, the Sweetwater County Commissioners approved the issuance of a $34.0 million Sweetwater County, State of Wyoming, Taxable Industrial Development Revenue Bond (Lost Creek Project), Series 2013 (the “Sweetwater IDR Bond”) to the State of Wyoming, acting by and through the Wyoming State Treasurer, as purchaser. On October 23, 2013, the Sweetwater IDR Bond was issued, and the proceeds were in turn loaned by Sweetwater County to Lost Creek ISR, LLC pursuant to a financing agreement dated October 23, 2013 (the “State Bond Loan”). The State Bond Loan called for payments of interest at a fixed rate of 5.75% per annum on a quarterly basis commencing January 1, 2014. The principal was scheduled to be paid in 28 quarterly installments commencing January 1, 2015.

 

On October 1, 2019, the Sweetwater County Commissioners and the State of Wyoming approved an eighteen-month deferral of principal payments beginning October 1, 2019. On October 6, 2020, the State Bond Loan was again modified to defer principal payments for an additional eighteen months. Quarterly principal payments resumed on October 1, 2022, and were to continue until October 1, 2024.

 

On March 27, 2024, we pre-paid the remaining $4.4 million due on the bond loan. The State Bond Loan was secured by all the assets of the Lost Creek Project. All releases of collateral have been obtained following the final repayment of the facility.

 

The following table summarizes the Company’s current debt. The Company has no long-term debt.

 

Current Debt

 

March 31,

2024

 

 

December 31,

2023

 

 

 

 

 

 

 

 

State Bond Loan

 

 

-

 

 

 

5,727

 

Deferred financing costs

 

 

-

 

 

 

(33)

 

 

 

-

 

 

 

5,694

 

 

10. Warrant Liability

 

In February 2021, the Company issued 16,930,530 warrants to purchase 8,465,265 common shares at $1.35 per whole common share for a term of three years.

 

In February 2023, the Company issued 39,100,000 warrants to purchase 19,550,000 common shares at $1.50 per whole common share for a term of three years.

 

Because the warrants are priced in U.S. dollars and the functional currency of Ur-Energy Inc., the parent company entity, is Canadian dollars, a derivative financial liability was created. Using Level 2 inputs of the fair value hierarchy under US GAAP, the liability created is measured and recorded at fair value, and adjusted monthly, using the Black-Scholes model described below as there is no active market for the warrants. Any gain or loss from the adjustment of the liability is reflected in net income for the period.

 

 
12

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Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

The Company’s warrant liabilities consist of the following.  The Company has no current warrant liability.

 

 Warrant Liability Activity

 

 Feb-2021

Warrants

 

 

 Feb-2023

Warrants

 

 

 Total

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

1,743

 

 

 

11,549

 

 

 

13,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants exercised

 

 

(4,770)

 

 

(20)

 

 

(4,790)

Mark to market revaluation loss (gain)

 

 

3,072

 

 

 

(316)

 

 

2,756

 

Effects for foreign exchange rate changes

 

 

(45)

 

 

(300)

 

 

(345)

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

-

 

 

 

10,913

 

 

 

10,913

 

 

The fair value of the warrant liabilities on March 31, 2024, was determined using the Black-Scholes model with the following assumptions:

 

 

 

Feb-2023

 

Black-Scholes Assumptions as of March 31, 2024

 

Warrants

 

 

 

 

 

Expected forfeiture rate

 

 

0.0%

Expected life (years)

 

 

1.9

 

Expected volatility rate

 

 

55.7%

Risk free rate

 

 

4.1%

Expected dividend rate

 

 

0.0%

Exercise price

 

$1.50

 

Market price

 

$1.60

 

 

11. Asset Retirement Obligations

 

Asset retirement obligations relate to the Lost Creek mine and Shirley Basin project and are equal to the current estimated reclamation cost escalated at inflation rates ranging from 0.74% to 2.52% and then discounted at credit adjusted risk-free rates ranging from 0.33% to 9.24%. Current estimated reclamation costs include costs of closure, reclamation, demolition and stabilization of the wellfields, processing plants, infrastructure, aquifer restoration, waste dumps, and ongoing post-closure environmental monitoring and maintenance costs. The schedule of payments required to settle the future reclamation extends through 2033.

 

The present value of the estimated future closure estimate is presented in the following table.

 

Asset Retirement Obligations

 

Total

 

 

 

 

 

December 31, 2023

 

 

31,236

 

 

 

 

 

 

Change in estimated reclamation costs

 

 

10

 

Accretion expense

 

 

121

 

 

 

 

 

 

March 31, 2024

 

 

31,367

 

 

The restricted cash discussed in note 5 relates to the surety bonds provided to the governmental agencies for these and other reclamation obligations.

 

 
13

Table of Contents

 

Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

12.  Shareholders’ Equity and Capital Stock

 

Common shares

 

The Company’s share capital consists of an unlimited amount of Class A preferred shares authorized, without par value, of which no shares are issued and outstanding; and an unlimited amount of common shares authorized, without par value, of which 281,626,324 shares and 270,898,900 shares were issued and outstanding as of March 31, 2024, and December 31, 2023, respectively.

 

On February 21, 2023, the Company closed an underwritten public offering of 34,000,000 common shares and accompanying warrants to purchase up to 17,000,000 common shares, at a combined public offering price of $1.18 per common share and accompanying warrant. The warrants have an exercise price of $1.50 per whole common share and will expire three years from the date of issuance. Ur-Energy also granted the underwriters a 30-day option to purchase up to an additional 5,100,000 common shares and warrants to purchase up to 2,550,000 common shares on the same terms. The option was exercised in full. Including the exercised option, Ur-Energy issued a total of 39,100,000 common shares and accompanying warrants to purchase up to 19,550,000 common shares. The gross proceeds to Ur-Energy from this offering were approximately $46.1 million. After fees and expenses of $3.0 million, net proceeds to the Company were approximately $43.1 million.

 

During the three months ended March 31, 2024, the Company sold 2,464,500 common shares through its At Market facility for $4.2 million. After issue costs of $0.1 million, net proceeds to the Company were $4.1 million. The Company also received $11.1 million from the exercise of 16,376,500 warrants for 8,188,250 underlying common shares, and less than $0.1 million from the exercise of 74,674 stock options.

 

Stock options

 

In 2005, the Company’s Board of Directors approved the adoption of the Company's stock option plan (the “Option Plan”). The Option Plan was most recently approved by the shareholders on June 2, 2023. Eligible participants under the Option Plan include directors, officers, employees, and consultants of the Company. Under the terms of the Option Plan, grants of options will vest over a three-year period: one-third on the first anniversary, one-third on the second anniversary, and one-third on the third anniversary of the grant. The term of the options is five years.

 

Activity with respect to stock options is summarized as follows:

 

Stock Option Activity

 

Outstanding

Options

 

 

Weighted-average

Exercise Price

 

December 31, 2023

 

 

8,900,335

 

 

 

0.87

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(74,674)

 

 

0.55

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

8,825,661

 

 

 

0.86

 

 

 
14

Table of Contents

 

Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

The exercise price of a new grant is set at the closing price for the shares on the Toronto Stock Exchange (TSX) on the trading day immediately preceding the grant date and there is no intrinsic value as of the date of grant.

 

We received less than $0.1 million from options exercised in the three months ended March 31, 2024.

 

Stock-based compensation expense from stock options was $0.2 million for the three months ended March 31, 2024, and $0.2 million for the three months ended March 31, 2023.

 

As of March 31, 2024, there was approximately $1.5 million of unamortized stock-based compensation expense related to the Option Plan. The expenses are expected to be recognized over the remaining weighted-average vesting period of 2.2 years under the Option Plan.

 

As of March 31, 2024, outstanding stock options are as follows:

  

 

 

 

 Options Outstanding

 

 

 Options Exercisable

 

 

Exercise

Price

 

 

Number

of Options

 

 

Weighted-average

Remaining Contractual

Life

 

 

 Aggregate

Intrinsic

Value

 

 

Number

of

 Options

 

 

 Weighted-average

Remaining Contractual

Life

 

 

 Aggregate

Intrinsic

Value

 

 

 Expiry

$

 

 

#

 

 

years

 

 

$

 

 

#

 

 

years

 

 

$

 

 

 

 

0.58

 

 

 

2,220,584

 

 

 

0.6

 

 

 

2,257,237

 

 

 

2,220,584

 

 

 

0.6

 

 

 

2,257,237

 

 

2024-11-05

 

0.47

 

 

 

2,568,652

 

 

 

1.6

 

 

 

2,914,603

 

 

 

2,568,652

 

 

 

1.6

 

 

 

2,914,603

 

 

2025-11-13

 

1.06

 

 

 

1,302,672

 

 

 

2.4

 

 

 

698,774

 

 

 

925,045

 

 

 

2.4

 

 

 

496,209

 

 

2026-08-27

 

1.65

 

 

 

175,000

 

 

 

3.0

 

 

 

-

 

 

 

116,666

 

 

 

3.0

 

 

 

-

 

 

2027-03-14

 

1.14

 

 

 

1,322,528

 

 

 

3.8

 

 

 

601,975

 

 

 

434,906

 

 

 

3.8

 

 

 

197,956

 

 

2028-01-04

 

1.52

 

 

 

1,236,225

 

 

 

4.7

 

 

 

97,024

 

 

 

-

 

 

 

-

 

 

 

-

 

 

2028-12-07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.86

 

 

 

8,825,661

 

 

 

2.3

 

 

 

6,569,613

 

 

 

6,265,853

 

 

 

1.5

 

 

 

5,866,005

 

 

 

 

The aggregate intrinsic value of the options in the preceding table represents the total pre-tax intrinsic value for stock options, with an exercise price less than the Company’s TSX closing stock price as of the last trading day in the three months ended March 31, 2024 (approximately US$1.60), that would have been received by the option holders had they exercised their options on that date. There were 8,650,661 in-the-money stock options outstanding and 6,149,187 in-the-money stock options exercisable as of March 31, 2024.

 

No stock options were granted in the three months ended March 31, 2024. 

 

Restricted share units

 

On June 24, 2010, the Company’s shareholders approved the adoption of the Company’s restricted share unit plan (the “RSU Plan”), as subsequently amended and now known as the Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”). The RSU&EI Plan was approved by our shareholders most recently on June 2, 2022.

 

 
15

Table of Contents

 

Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

Eligible participants under the RSU&EI Plan include directors and employees of the Company. Granted RSUs are redeemed on the second anniversary of the grant. Upon an RSU redemption, the holder of the RSU will receive one common share, for no additional consideration, for each RSU held.

 

Activity with respect to RSUs is summarized as follows:

 

Restricted Share Unit Activity

 

Outstanding

RSUs

 

 

Weighted-average

Grant Date

Fair Value

 

 

 

#

 

 

$

 

December 31, 2023

 

 

641,910

 

 

 

1.33

 

 

 

 

 

 

 

 

 

 

Exercises

 

Nil

 

 

Nil

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

641,910

 

 

 

1.33

 

 

Stock-based compensation expense from RSUs was $0.1 million for the three months ended March 31, 2024, and $0.1 million for the three months ended March 31, 2023.

 

As of March 31, 2024, there was approximately $0.5 million of unamortized stock-based compensation expense related to the RSU&EI Plan. The expenses are expected to be recognized over the remaining weighted-average vesting periods of 1.4 years under the RSU&EI Plan.

 

As of March 31, 2024, outstanding RSUs were as follows:

 

Number

of RSUs

 

 

Weighted-average

Remaining

Contractual

Life

 

 

Aggregate

Intrinsic

Value

 

 

Redemption

Date

 

#

 

 

years

 

 

$

 

 

 

 

 

332,850

 

 

 

0.8

 

 

 

532,560

 

 

2025-01-04

 

 

309,060

 

 

 

1.7

 

 

 

494,496

 

 

2025-12-07

 

 

641,910

 

 

 

1.2

 

 

 

1,027,056

 

 

 

 

 

No restricted share units were granted in the three months ended March 31, 2024.

 

Warrants

 

In February 2021, the Company issued 16,930,530 warrants to purchase 8,465,265 of our common shares at $1.35 per full share. 

 

In February 2023, the Company issued 39,100,000 warrants to purchase 19,550,000 of our common shares at $1.50 per full share.

 

 
16

Table of Contents

  

Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

Activity with respect to warrants is summarized as follows:

 

 Warrant Activity

 

 Outstanding

Warrants

 

 

 Number of

Shares to be

Issued

Upon Exercise

 

 

 Per Share

Exercise Price

 

 

 

#

 

 

#

 

 

$

 

December 31, 2023

 

 

55,417,500

 

 

 

27,708,750

 

 

 

1.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Exercised

 

 

(16,376,500)

 

 

(8,188,250)

 

 

1.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

39,041,000

 

 

 

19,520,500

 

 

 

1.50

 

 

We received $11.1 million from warrants exercised in the three months ended March 31, 2024.

 

As of March 31, 2024, outstanding warrants were as follows:

 

Exercise

Price

 

 

Number

of Warrants

 

 

Weighted-average

Remaining

Contractual

Life

 

 

Aggregate

Intrinsic

Value

 

 

Expiry

 

$

 

 

#

 

 

years

 

 

$

 

 

 

 

 

1.50

 

 

 

39,041,000

 

 

 

1.9

 

 

 

1,952,050

 

 

2026-02-21

 

 

1.50

 

 

 

39,041,000

 

 

 

1.9

 

 

 

1,952,050

 

 

 

 

 

Fair value calculation assumptions for stock options, restricted share units, and warrants

 

The fair value of stock options are determined using the Black-Scholes model on their respective grant dates.  The fair value of restricted share units are determined using the Intrinsic Value Method on their respective grant dates. 

 

The Company estimates expected future volatility based on daily historical trading data of the Company’s common shares. The risk-free interest rates are determined by reference to Canadian Benchmark Bond Yield rates with maturities that approximate the expected life. The Company has never paid dividends and currently has no plans to do so. Forfeitures and expected lives were estimated based on actual historical experience.

 

Share-based compensation expense related to stock options and restricted share units is recognized net of estimated pre-vesting forfeitures, which results in expensing the awards that are ultimately expected to vest over the expected life.

 

13. Sales and Other Income

 

Revenue is primarily derived from the sale of U3O8 under multi-year agreements or spot sales agreements. The Company also receives disposal fee revenues, which are not related to the sale of U3O8.

 

 
17

Table of Contents

 

Revenues for the three months ended March 31, 2024 and 2023 were as follows:

 

 

 

Three Months Ended

March 31,

 

 

2024

 

 

2023

Revenue Summary

 

 $

 

 

 %

 

 

$

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer A

 

 

-

 

 

 

0.0%

 

 

6,447

 

 

 

100.0%

U3O8 sales

 

 

-

 

 

 

0.0%

 

 

6,447

 

 

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disposal fees

 

 

-

 

 

 

0.0%

 

 

-

 

 

 

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

0.0%

 

 

6,447

 

 

 

100.0%

 

14. Cost of Sales

 

Cost of sales 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 the 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.

 

Cost of sales consists of the following:

 

 

 

Three Months Ended

March 31,

 

Cost of Sales

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Cost of U3O8 sales

 

 

-

 

 

 

3,629

 

Lower of cost or NRV adjustments

 

 

1,139

 

 

 

2,875

 

 

 

 

1,139

 

 

 

6,504

 

 

15. Operating Costs

 

Operating expenses include exploration and evaluation expense, development expense, general and administration (“G&A”) expense, and mineral property write-offs. Exploration and evaluation expenses consist of labor and the associated costs of the exploration and evaluation departments as well as land holding and exploration costs including drilling and analysis on properties which have not reached the permitting or operations stage. Development expense relates to properties that have reached the permitting or operations stage and include costs associated with exploring, delineating, and permitting a property. Once permitted, development expenses also include the costs associated with the construction and development of the permitted property that are otherwise not eligible to be capitalized. G&A expense relates to the administration, finance, investor relations, land, and legal functions, and consists principally of personnel, facility, and support costs.

 

 
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Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

Operating costs consist of the following:

 

 

 

Three Months Ended

March 31,

 

Operating Costs

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Exploration and evaluation

 

 

903

 

 

 

371

 

Development

 

 

11,552

 

 

 

1,149

 

General and administration

 

 

2,569

 

 

 

1,422

 

Accretion

 

 

121

 

 

 

123

 

 

 

 

15,145

 

 

 

3,065

 

 

16. Supplemental Information for Statement of Cash Flows

 

Cash, cash equivalents, and restricted cash per the Statement of Cash Flows consists of the following:

 

 

 

Three Months Ended

 

 

 

March 31,

 

Cash and Cash Equivalents, and Restricted Cash

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

53,896

 

 

 

77,276

 

Restricted cash

 

 

8,641

 

 

 

8,223

 

 

 

 

62,537

 

 

 

85,499

 

 

Interest expense paid was $0.1 million and $0.1 million for the three months ended March 31, 2024, and 2023, respectively.

 

17.  Financial Instruments

 

The Company’s financial instruments consist of cash and cash equivalents, trade receivables, lease receivable, restricted cash, accounts payable and accrued liabilities, notes payable, and warrant liabilities. The Company is exposed to risks related to changes in interest rates and management of cash and cash equivalents and short-term investments.

 

Credit risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, and restricted cash. These assets include Canadian dollar and U.S. dollar denominated certificates of deposit, money market accounts, and demand deposits. These instruments are maintained at financial institutions in Canada and the U.S. Of the amount held on deposit, approximately $0.6 million is covered by the Canada Deposit Insurance Corporation, the Securities Investor Protection Corporation, or the U.S. Federal Deposit Insurance Corporation, leaving approximately $62.3 million at risk on March 31, 2024, should the financial institutions with which these amounts are invested be rendered insolvent. The Company does not consider any of its financial assets to be impaired as of March 31, 2024.

 

 
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Ur-Energy Inc.

Condensed Notes to Consolidated Financial Statements

March 31, 2024

(expressed in thousands of U.S. dollars unless otherwise indicated)

 

Currency risk

 

As of March 31, 2024, we maintained a balance of approximately $2.6 million Canadian dollars.  The funds will be used to pay Canadian dollar expenses and are considered to be a low currency risk to the Company.  A hypothetical 10% weakening in the exchange rate of the Canadian dollar to the U.S. dollar as of March 31, 2024 would not have a material effect on our results of operations, financial position, or cash flows.

 

Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. As of March 31, 2024, the Company’s financial liabilities consisted of accounts payable and accrued liabilities of $4.8 million, and the current portion of lease liability of $0.2 million. As of March 31, 2024, the Company had $53.9 million of cash and cash equivalents.

 

Interest rate risk

 

The Company has completed a sensitivity analysis to estimate the impact that a change in interest rates would have on the net loss of the Company. This sensitivity analysis shows that a change of +/- 100 basis points in interest rate would have a negligible effect on the three months ended March 31, 2024. The financial position of the Company may vary at the time that a change in interest rates occurs, causing the impact on the Company’s results to vary.

 

 
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Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

Business Overview

 

The following discussion and analysis by management is designed to provide information that we believe is necessary for an understanding of our financial condition, changes in financial condition, and results of our operations and should be read in conjunction with the audited financial statements and MD&A contained in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Incorporated on March 22, 2004, Ur-Energy is an exploration stage issuer, as that term is defined by the SEC. We are engaged in uranium recovery and processing activities, including the acquisition, exploration, development, and operation of uranium mineral properties in the U.S. We are operating our first in situ recovery uranium facility at our Lost Creek Project in Wyoming. Ur-Energy is a corporation continued under the Canada Business Corporations Act on August 8, 2006. Our common shares are listed on the TSX under the symbol “URE” and on the NYSE American under the symbol “URG.”

 

Ur-Energy has one wholly owned subsidiary, Ur-Energy USA Inc., incorporated under the laws of the State of Colorado. Ur-Energy USA Inc. has three wholly-owned subsidiaries: NFU Wyoming, LLC, a limited liability company formed under the laws of the State of Wyoming which acts as our land holding and exploration entity; Lost Creek ISR, LLC, a limited liability company formed under the laws of the State of Wyoming to operate our Lost Creek Project and hold our Lost Creek properties and assets; and Pathfinder Mines Corporation, incorporated under the laws of the State of Delaware, which holds, among other assets, the Shirley Basin Project in Wyoming. Our material U.S. subsidiaries remain unchanged since the filing of our Annual Report on Form 10-K, dated March 6, 2024.

 

We utilize in situ recovery (“ISR”) of the uranium at our flagship project, Lost Creek, and will do so at other projects where possible. The ISR technique is employed in uranium extraction because it allows for an effective recovery of roll front uranium mineralization at a lower cost. At Lost Creek, we extract and process uranium oxide (“U3O8”) for shipping to a third-party conversion facility to be weighed, assayed and stored until sold. After sale, when further processed, the uranium we have produced fuels carbon-free, emissions-free nuclear power which is a cost-effective, safe, and reliable form of electrical power. Nuclear power provides an estimated 50% of the carbon-free electricity in the U.S.

 

Our Lost Creek wellfield is permitted and licensed for annual recovery of up to 1.2 million pounds U3O8. The processing facility at Lost Creek, which includes all circuits for the production, drying and packaging of U3O8 for delivery into sales transactions, is designed and approved under current licensing to process up to 2.2 million pounds of U3O8 annually, which provides additional capacity of up to one million pounds U3O8 to process material from other sources. We expect that the Lost Creek processing facility will be utilized to process captured U3O8 from our Shirley Basin Project for which we anticipate only a satellite plant will be built. However, the Shirley Basin permit and license allow for the construction of a full processing facility, providing greater construction and operating flexibility as may be dictated by market conditions.

 

Currently, our sales deliveries in 2024 are projected to be 570,000 pounds U3O8 into two of our sales agreements secured in 2022. We now have six multi-year sales agreements which together anticipate sales of 5.7 million pounds U3O8 between 2024 and 2030.

 

 
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Industry and Market Update

 

Global factors continue to positively influence the uranium recovery market and the nuclear energy industries. Continued growth in the acceptance of nuclear energy, geopolitics, and production reductions, shortfalls and delays, have each contributed to a stronger uranium market with a more optimistic future. As each of these influences continues to gain momentum and strength, the market has experienced significant impacts.  

 

Recognition of the critical role nuclear energy plays in providing baseload power for decarbonization has been complemented more recently as energy security has become a nearly universal priority. Beyond the war in Ukraine, continuing Russian misconduct has only strengthened the resolve of fuel purchasers to reduce dependence on Russian nuclear products. U.S. and global utilities have increasingly been seeking non-Russian supplies when negotiating uranium term sales agreements. This change of supply priority has reflected growing concern over current and possible future sanctions.

 

On April 30, 2024, by unanimous consent, the U.S. Senate passed a ban on Russian imports to the U.S., which serves as the companion bill to H.R. Bill 1042, previously passed by the U.S. House of Representatives. The legislation awaits action by President Biden, who has expressed support for a ban on Russian uranium and is expected to sign the bill. While the legislation has certain waivers available until January 1, 2028, the prohibitions on imports continue until 2040. If signed into law, the ban will help to secure the U.S. nuclear fuel supply chain and advance domestic uranium recovery operations. Also on April 30, members of the G7 committed to reducing dependency on Russian nuclear fuel supplies to create a diversified fuel supply chain free from Russian influence, and to offer support to countries which are working to diversify their nuclear fuel sources.

 

Also affecting the balance of supply and demand are the challenges that nearly all uranium producers have faced as they have returned to production operations amid stronger market indicators through 2023. Even for experienced and well financed operators, ramp-up and return to commercial level operations has been impeded by labor, equipment, technical, supply chain and other challenges and delays. Kazakh production continues to be hindered by significant supply chain disruptions related to sufficient supply of sulfuric acid for its recovery processes. The announcements by Kazatomprom, beginning in December 2023, of substantially reduced production targets (~20% below state-concession required levels) due to this supply shortage as well as continuing construction delays for the Kazakhs, have sent shockwaves through the uranium markets.

 

The foregoing as well as many other factors continued to move and sustain the market early in 2024. Year-end spot pricing of $91 per pound was a milestone not experienced in more than 16 years. Early 2024 has seen pricing increases continue, with spot prices passing $100 per pound and reaching as much as $107 per pound during January. Even after retracting to levels between closer to $90 per pound, the 2024 spot market prices have remained, on average, more than 40% above the average price in 2023.

 

Additionally, term market prices increased 50% between year-end 2022 pricing and the March 31, 2024 average term price of $78 per pound. The determination of utilities in the U.S. and abroad to fill mid-term supply requirements continues to support higher term prices. These new contracts are projected to have a distinct focus on secure future deliveries of North American production by proven producers, which would be advantageous to our Company.

 

Mineral Rights and Properties

 

We have 12 U.S. uranium properties. Ten of our uranium properties are in the Great Divide Basin, Wyoming, including Lost Creek. Currently, we control nearly 1,800 unpatented mining claims and three State of Wyoming mineral leases for a total of more than 35,000 acres in the area of the Lost Creek Property, including the Lost Creek permit area (the “Lost Creek Project”), and certain adjoining properties referred to as LC East, LC West, LC North, LC South and EN Project areas (collectively, with the Lost Creek Project, the “Lost Creek Property”). Our Shirley Basin Project permit area, also in Wyoming, comprises nearly 1,800 acres of Company-controlled mineral acres.

 

Lost Creek Property

 

Ramp-up continues at Lost Creek, with two additional header houses (HHs 2-6 and 2-7) coming online thus far in 2024. During Q1, we captured 38,221 pounds, dried and packaged 39,229 pounds, and shipped 35,445 pounds U3O8. At quarter end, our in-process inventory was approximately 80,465 pounds, our drummed inventory was 26,062 pounds, and our finished inventory at the conversion facility was 79,235 pounds U3O8.

 

While we have experienced some additional equipment and operational challenges at Lost Creek, we are seeing more consistent drying and packaging, with 29,497 pounds U3O8 packaged since quarter end and dryer operations keeping pace with wellfield production. We have 12 drill rigs onsite, with an additional rig scheduled to commence work in early May. Drilling has advanced into HH 2-11 with completion work nearly finished in recovery areas of HH 2-8. Fabrication of HHs 2-8 and 2-9 is complete, and work on HHs 2-10 and 2-11 is advancing in our Casper construction shop. HH 2-8 is expected to come online in May.

 

All remaining planned production areas of Mine Unit 2 (MU2) are scheduled to be constructed during 2024. Additionally, we are planning delineation drilling and initial well installation in Phase 2 of Mine Unit 1 (MU1) when drilling is complete in MU2.

 

Surface construction of injection and production systems for upcoming recovery areas continues to advance including the installation of pipelines, powerlines, downhole equipment and the header house building including its primary motor control, piping and controls.

 

As disclosed, we drilled an additional deep disposal well at Lost Creek in mid-2023, with the drilling phase completed in 2023 Q3. Preliminary completion and testing continued in 2023 Q4 and, following receipt of regulatory approvals, final completion work was finished in Q1. We will now obtain remaining regulatory approvals followed by specification of surface injection equipment. In advance of operation of the deep well, procurement and installation of a powerline was completed enabling anticipated operation in 2024. Initial injection systems are onsite allowing for operation of the deep well soon after injection permits are received.

 

We filed an updated Technical Report Summary on our Lost Creek Property, Sweetwater County, Wyoming, USA (the “Lost Creek Report,” March 4, 2024), which was prepared by Western Water Consultants, Inc., d/b/a WWC Engineering (“WWC”). The resources identified and evaluated have been included in the Lost Creek production plan and continue to support the potential viability of the Lost Creek Property.

 

The mineral resource estimate for the Property is 12.682 million pounds eU3O8 in the Measured and Indicated categories, and 6.119 million pounds eU3O8 in the Inferred category. The mineral resource has been reduced to account for production at Lost Creek of 2.838 million pounds U3O8 at December 31, 2023.

 

 
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Shirley Basin

 

During the quarter, the decision was made to build out our wholly owned, fully permitted and licensed Shirley Basin Project in Carbon County, Wyoming. The satellite plant will be designed with a flow rate of up to 6,000 gallons per minute and capacity to produce up to 1.0 million pounds of U3O8 per year. Our permits and license allow for the construction of the elution, precipitation and drying circuits should it become economically advantageous. No amendments to the existing permits or licenses would be required.

 

The satellite plant will be a relatively low-cost facility consisting of ion exchange (IX), wastewater and groundwater restoration circuits. The IX resin at Shirley Basin will be loaded with uranium from the mine and shipped to the Company’s operating Lost Creek ISR Facility for processing before being recycled back into operations at Shirley Basin. This satellite approach will help minimize initial facility capital costs to approximately $24.4 million and pre-operational wellfield development costs to approximately $16.3 million.

 

The estimated time to finalize designs, order materials and construct the satellite plant and initial wellfield recovery area is approximately 24 months. Work has already been initiated on long-lead items, including detailed engineering and additional geologic pattern planning for the wellfield. Planning has been completed and fieldwork initiated for the monitor well ring for the first mine unit, with plans to install approximately 120 wells in 2024 Q2 and Q3. This installation will enable hydrologic testing and baseline water quality analyses to proceed prior to the start of installation of production patterns in mid-2025. Significantly, the bid process and award for fabrication of IX columns has been completed. This procurement represents one of the longest lead items in the facility.

 

We filed an updated Technical Report Summary on Shirley Basin ISR Uranium Project, Carbon County, Wyoming, USA, as amended (the “Shirley Basin Report,” March 11, 2024), which was prepared by WWC. The report reaffirms the mineral resources as well as the economic analysis on the Shirley Basin Project from a prior report prepared under S-K 1300.

 

Based upon data from the historical and confirmation drilling at the site, the Shirley Basin Report confirms the project’s mineral resource estimate of 8.8 million pounds eU3O8 in the Measured and Indicated categories. Due to the very high level of density in drilling at the project, all resources within the three proposed mine units are classified as Measured or Indicated. There are no resources in the Inferred category.

 

Sales of U3O8 and Sales Agreements

 

Beginning in 2022 and continuing into 2024, we have secured six multi-year sales agreements with global nuclear purchasers. These multi-year agreements are in addition to our contract under the DOE uranium reserve which was completed with delivery in early 2023.

 

In 2022, we completed two sales agreements which call for deliveries from 2023 through 2028 totaling 3.2 million pounds U3O8 with the possibility of additional sales of up to 300,000 pounds U3O8 in 2029.

 

In 2023, we completed one agreement calling for deliveries from 2025 through 2027 totaling 0.3 million pounds U3O8.

 

In 2024, we have completed three additional sales agreements. In February, the first of three agreements calls for annual deliveries of between 100,000 and 350,000 pounds U3O8 over a five-year period beginning in 2026. The agreement includes the opportunity for the purchaser to add up to three additional annual deliveries of 300,000 pounds U3O8 beginning in 2031. The pricing for the sales under this agreement is a combination of an escalated fixed price, which is well above the anticipated all-in costs of production, and market related pricing component that is subject to an escalated floor and ceiling.

 

 
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Table of Contents

 

Also in February 2024, the second of three agreements was signed with delivery commitments for five years with an initial delivery of 50,000 pounds U3O8 in 2026 and deliveries of 200,000 pounds U3O8 annually in 2027 through 2030. All sales will be made at fixed prices, escalated from the base agreed price.

 

In April 2024, the third of the three new agreements was signed with annual delivery commitments of up to 100,000 pounds U3O8 in 2026 through 2029, a portion of which is based upon production milestones. The pricing for the sales under this agreement is a combination of an escalated fixed price, which is well above the anticipated all-in costs of production, and a market-related pricing component that is subject to an escalated floor and ceiling.

 

Certain of the sales agreements permit the purchaser the customary election to flex the delivery quantity up or down by as much as ten percent. All sales prices are anticipated to be profitable on an all-in production cost basis and escalate annually from initial pricing, including some market-based pricing features.

 

Our six sales agreements with various global nuclear purchasers provide for deliveries as follows:

  

Year

Base Quantity

(U3O8 Pounds)

 

 

 

 

2024

 

 

570,000

 

2025

 

 

700,000

 

2026

 

 

950,000

 

2027

 

 

1,150,000

 

2028

 

 

1,200,000

 

2029

 

 

600,000

 

2030

 

 

550,000

 

 

 

 

5,720,000

 

 

Corporate Developments

 

As previously disclosed, we completed the pre-payment of the remaining $4.4 million on our State Bond Loan. We are now debt free. (See also discussion below under “Wyoming State Bond Loan.”)

 

In March 2024, we expanded our executive team with the addition of Ryan Schierman as our Vice President Regulatory Affairs. Prior to joining Ur-Energy, Mr. Schierman held numerous positions in management, most recently at Fluor/Idaho Environmental Coalition, contractors to the U.S. Department of Energy, at the Idaho Cleanup Project. Mr. Schierman has also held several positions in the uranium recovery industry, gaining expertise in regulatory relations and compliance, licensing, and environmental health and safety. As the Wyoming Uranium Recovery Program Manager (2015-2020), Mr. Schierman was critical in assisting Wyoming to become the 38th US Nuclear Regulatory Commission Agreement State. Mr. Schierman earned a B.S. in Environmental Science from Brigham Young University, a M.Sc. in Health Physics from Idaho State University, and is a Certified Health Physicist. 

 

Subsequent to quarter end, we announced the appointment of John Paul Pressey and Elmer W. Dyke as new members of the Ur-Energy Board of Directors. We also announced the anticipated retirement of founding Director James M. Franklin and Director, and former President and CEO, W. William Boberg. Both will continue to serve the Board until the Company’s Annual Meeting of Shareholders, June 6, 2024, though neither will stand for re-election at the Meeting.

 

John Paul Pressey had a nearly three-decade long career in the assurance practice at PricewaterhouseCoopers LLP, with 16 years as a partner. With a Bachelor of Commerce degree from the University of Alberta, Mr. Pressey is a Chartered Professional Accountant with extensive experience working with U.S. and Canadian publicly traded companies in the mining industry, and other industries including manufacturing, utilities, and alternative energy. His experience includes acquisitions and capital markets transactions, working with clients to identify and implement practical business solutions to accounting, audit and financial issues. Mr. Pressey spent six years at PricewaterhouseCoopers as its Assurance Leader for British Columbia, overseeing all aspects of PricewaterhouseCoopers’s assurance results and operations for that Province.

 

Elmer Dyke has over 35 years’ experience in the commercial and government nuclear industry. Mr. Dyke has a Bachelor of Arts Degree in International Political Economy from Davidson College and served as a U.S. Army Officer for thirteen years. Mr. Dyke’s professional career includes a tenure with the U.S. Department of State during which he directed international security programs, including nuclear nonproliferation and high technology projects and was detailed to the Departments of Defense and Commerce. Mr. Dyke has worked within global firms NAC International and Booz Allen Hamilton where he served as an expert on nuclear nonproliferation, strategy and nuclear fuel cycle. More recently, Mr. Dyke filled senior executive roles at Centrus Energy Corporation, a global nuclear fuel supplier and technical services provider. At Centrus Energy and in prior executive roles, Mr. Dyke led strategic planning and business development, financial performance, and risk management for the businesses. Currently, Mr. Dyke leads New Horizons Nuclear Associates, LLC, a global nuclear consulting firm he formed in 2022.

 

 
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Table of Contents

 

Results of Operations

 

Reconciliation of Non-GAAP measures with US GAAP financial statement presentation

 

The following tables include measures specific to U3O8 sales, cost of sales, gross profit, pounds sold, price per pound sold, cost per pound sold, and gross profit per pound sold. These measures do not have standardized meanings 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. The following two tables provide a reconciliation of U3O8 price per pound sold and U3O8 cost per pound sold to the consolidated financial statements.

 

U3O8 Price per Pound Sold Reconciliation

 

 

 

Unit

 

 

2023 Q2

 

 

2023 Q3

 

 

2023 Q4

 

 

2024 Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales per financial statements

 

$ 000

 

 

 

39

 

 

 

5,752

 

 

 

5,441

 

 

 

-

 

Disposal fees

 

$ 000

 

 

 

(39)

 

 

(312)

 

 

-

 

 

 

-

 

U3O8 sales

 

$ 000

 

 

 

-

 

 

 

5,440

 

 

 

5,441

 

 

 

-

 

U3O8 pounds sold

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

U3O8 price per pound sold

 

$/lb

 

 

 

-

 

 

 

60.44

 

 

 

60.46

 

 

 

-

 

 

Sales per the financial statements includes U3O8 sales and disposal fees.  Disposal fees received at Pathfinder’s Shirley Basin property do not relate to the sale of U3O8 and are excluded from the U3O8 sales and U3O8 price per pound measures.

 

U3O8 Cost per Pound Sold Reconciliation

 

 

 

Unit

 

 

2023 Q2

 

 

2023 Q3

 

 

2023 Q4

 

 

2024 Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales per financial statements

 

$ 000

 

 

 

2,951

 

 

 

4,855

 

 

 

5,055

 

 

 

1,139

 

Lower of cost or NRV adjustment

 

$ 000

 

 

 

(2,951)

 

 

(2,332)

 

 

(2,531)

 

 

(1,139)

U3O8 cost of sales

 

$ 000

 

 

 

-

 

 

 

2,523

 

 

 

2,524

 

 

 

-

 

U3O8 pounds sold

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

U3O8 cost per pound sold

 

$/lb

 

 

 

-

 

 

 

28.03

 

 

 

28.04

 

 

 

-

 

 

Cost of sales per the financial statements includes U3O8 costs of sales and lower of cost or NRV adjustments. U3O8 cost of sales 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 the 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 in the financial statements. NRV adjustments, if any, relate to U3O8 inventories and do not relate to the sale of U3O8, and are excluded from the U3O8 cost of sales and U3O8 cost per pound sold measures.

 

 
25

Table of Contents

 

U3O8 Sales

 

The following table provides information on our U3O8 sales.

 

 

 

Unit

 

 

2023 Q2

 

 

2023 Q3

 

 

2023 Q4

 

 

2024 Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Sales by Product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

$ 000

 

 

 

-

 

 

 

5,440

 

 

 

5,441

 

 

 

-

 

Purchased

 

$ 000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$ 000

 

 

 

-

 

 

 

5,440

 

 

 

5,441

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Pounds Sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

Purchased

 

lb

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Price per Pounds Sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

$/lb

 

 

 

-

 

 

 

60.44

 

 

 

60.46

 

 

 

-

 

Purchased

 

$/lb

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$/lb

 

 

 

-

 

 

 

60.44

 

 

 

60.46

 

 

 

-

 

 

There were no U3O8 sales in 2024 Q1.

 

As previously announced, the Company made the decision to ramp up operations after securing new term contracts in 2022 with initial deliveries beginning in 2023 Q3. 

 

In 2023 Q3 and 2023 Q4, we delivered a total of 180,000 produced pounds U3O8 into term contracts at a combined average price of $60.45.

 

Our sales in 2024 are projected at 570,000 pounds U3O8 and we expect to realize revenues of $33.1 million. The deliveries are under contracts negotiated in 2022, when the long-term price was between $43 and $52 per pound.

 

 
26

Table of Contents

 

U3O8 Cost of Sales

 

The following table provides information on our U3O8 cost of sales.  

 

 

 

Unit

 

 

2023 Q2

 

 

2023 Q3

 

 

2023 Q4

 

 

2024 Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Cost of Sales by Product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem and severance taxes

 

$ 000

 

 

 

-

 

 

 

53

 

 

 

53

 

 

 

-

 

Cash costs

 

$ 000

 

 

 

-

 

 

 

1,674

 

 

 

1,674

 

 

 

-

 

Non-cash costs

 

$ 000

 

 

 

-

 

 

 

796

 

 

 

797

 

 

 

-

 

Produced

 

$ 000

 

 

 

-

 

 

 

2,523

 

 

 

2,524

 

 

 

-

 

Purchased

 

$ 000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$ 000

 

 

 

-

 

 

 

2,523

 

 

 

2,524

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Pounds Sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

Purchased

 

lb

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Cost per Pound Sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad valorem and severance taxes

 

$/lb

 

 

 

-

 

 

 

0.59

 

 

 

0.59

 

 

 

-

 

Cash costs

 

$/lb

 

 

 

-

 

 

 

18.60

 

 

 

18.60

 

 

 

-

 

Non-cash costs

 

$/lb

 

 

 

-

 

 

 

8.84

 

 

 

8.85

 

 

 

-

 

Produced

 

$/lb

 

 

 

-

 

 

 

28.03

 

 

 

28.04

 

 

 

-

 

Purchased

 

$/lb

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$/lb

 

 

 

-

 

 

 

28.03

 

 

 

28.04

 

 

 

-

 

 

There were no U3O8 sales in 2024 Q1.

 

In 2023 Q3 and 2023 Q4, a total of 180,000 produced pounds U3O8 were sold into term contracts.  The average cost per produced pound sold was $28.04.

 

 
27

Table of Contents

 

U3O8 Gross Profit

 

The following table provides information on our U3O8 gross profit.

 

 

 

Unit

 

 

2023 Q2

 

 

2023 Q3

 

 

2023 Q4

 

 

2024 Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Gross Profit by Product

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

$ 000

 

 

 

-

 

 

 

5,440

 

 

 

5,441

 

 

 

-

 

Purchased

 

$ 000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$ 000

 

 

 

-

 

 

 

5,440

 

 

 

5,441

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

$ 000

 

 

 

-

 

 

 

2,523

 

 

 

2,524

 

 

 

-

 

Purchased

 

$ 000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$ 000

 

 

 

-

 

 

 

2,523

 

 

 

2,524

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

$ 000

 

 

 

-

 

 

 

2,917

 

 

 

2,917

 

 

 

-

 

Purchased

 

 $ 000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$ 000

 

 

 

-

 

 

 

2,917

 

 

 

2,917

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Pounds Sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

Purchased

 

lb

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

lb

 

 

 

-

 

 

 

90,000

 

 

 

90,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Gross Profit per Pound Sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

$/lb

 

 

 

-

 

 

 

32.41

 

 

 

32.42

 

 

 

-

 

Purchased

 

$/lb

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$/lb

 

 

 

-

 

 

 

32.41

 

 

 

32.42

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Gross Profit Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Produced

 

%

 

 

 

0.0%

 

 

53.6%

 

 

53.6%

 

 

0.0%

Purchased

 

%

 

 

 

0.0

 

 

0.0

 

 

0.0

%

 

 

0.0

 

 

%

 

 

 

0.0%

 

 

53.6%

 

 

53.6%

 

 

0.0%

 

There were no U3O8 sales in 2024 Q1.

 

In 2023 Q3 and 2023 Q4, the average price per pound sold into term contracts was $60.45 and the average cost per pound sold was $28.04, which resulted in an average gross profit per pound sold of $32.41 and an average gross profit margin of nearly 54%.

 

 
28

Table of Contents

 

U3O8 Production and Ending Inventory

 

The following table provides information on our production and ending inventory of U3O8 pounds. 

 

 

 

Unit

 

 

2023 Q2

 

 

2023 Q3

 

 

2023 Q4

 

 

2024 Q1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U3O8 Production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pounds captured

 

lb

 

 

 

4,392

 

 

 

30,491

 

 

 

68,448

 

 

 

38,221

 

Pounds drummed

 

lb