Ur-Energy Releases 2018 Q2 Results
LITTLETON, Colo., July 27, 2018 /PRNewswire/ -- Ur-Energy Inc. (NYSE American:URG TSX:URE) ("Ur-Energy" or the "Company") has filed the Company's Form 10-Q for the quarter ended June 30, 2018, with the U.S. Securities and Exchange Commission at www.sec.gov/edgar.shtml and Canadian securities authorities on SEDAR at www.sedar.com.
Ur-Energy Chair and CEO, Jeffrey Klenda said, "In May, our third header house in mine unit two came on line. Initial production results are encouraging and indicate that the new mine unit appears to have similar performance characteristics to our prolific first mine unit. Additionally, we are pleased that the trade action investigation was initiated following the end of the quarter. We look forward to a prompt resolution."
Lost Creek Uranium Production and Sales
Inventory, production and sales figures for the Lost Creek Project are presented in the following tables:
Production and Production Costs Unit 2018 Q2 2018 Q1 2017 Q4 2017 Q3 2018 YTD
------- ------- ------- ------- --------
Pounds captured lb 89,209 84,047 67,982 52,812 173,256
Ad valorem and severance tax $000 $133 $179 $160 $119 $312
Wellfield cash cost (1) $000 $516 $671 $686 $743 $1,187
Wellfield non-cash cost (2) $000 $400 $403 $575 $730 $803
Ad valorem and severance tax per pound captured $/lb $1.49 $2.13 $2.35 $2.25 $1.80
Cash cost per pound captured $/lb $5.78 $7.98 $10.09 $14.07 $6.85
Non-cash cost per pound captured $/lb $4.48 $4.79 $8.44 $13.82 $4.63
Pounds drummed lb 74,302 79,961 60,461 48,336 154,263
Plant cash cost (3) $000 $1,230 $1,226 $1,210 $1,120 $2,456
Plant non-cash cost (2) $000 $493 $492 $493 $494 $985
Cash cost per pound drummed $/lb $16.57 $15.33 $20.01 $23.17 $15.92
Non-cash cost per pound drummed $/lb $6.64 $6.15 $8.15 $10.20 $6.39
Pounds shipped to conversion facility lb 74,416 73,515 73,367 36,797 147,931
Distribution cash cost (4) $000 $34 $19 $48 $24 $53
Cash cost per pound shipped $/lb $0.46 $0.26 $0.65 $0.65 $0.36
Pounds purchased lb 100,000 370,000 - 109,000 470,000
Purchase costs $000 $2,225 $9,251 $ - $2,196 $11,476
Cash cost per pound purchased $/lb $22.25 $25.00 $ - $20.15 $24.42
Notes:
1 Wellfield cash costs include all
wellfield operating costs.
Wellfield construction and
development costs, which
include wellfield drilling,
header houses, pipelines, power
lines, roads, fences and
disposal wells, are treated as
development expense and are not
included in wellfield operating
costs.
2 Non-cash costs include the
amortization of the investment
in the mineral property
acquisition costs and the
depreciation of plant
equipment, and the depreciation
of their related asset
retirement obligation costs.
The expenses are calculated on
a straight line basis so the
expenses are typically constant
for each quarter. The cost per
pound from these costs will
therefore typically vary based
on production levels only.
3 Plant cash costs include all
plant operating costs and site
overhead costs.
4 Distribution cash costs include
all shipping costs and costs
charged by the conversion
facility for weighing,
sampling, assaying and storing
the U3O8 prior to sale.
During the three months ended June 30, 2018, a total of 89,209 pounds of U(3)O(8) were captured within the Lost Creek plant. 74,302 pounds were packaged in drums and 74,416 pounds of the drummed inventory were shipped to the conversion facility. We sold 100,000 pounds of purchased U(3)O(8) during the period.
Sales and cost of sales Unit 2018 Q2 2018 Q1 2017 Q4 2017 Q3 2018 YTD
----------------------- ------- ------- ------- ------- --------
Pounds sold lb 100,000 380,000 - 289,000 480,000
U3O8 sales $000 $3,790 $19,663 $ - $11,674 $23,453
Average contract price $/lb $37.90 $52.50 $ - $40.39 $49.39
Average spot price $/lb $ - $23.75 $ - $ - $23.75
Average price per pound sold $/lb $37.90 $51.74 $ - $40.39 $48.86
U3O8 cost of sales (1) $000 $2,225 $9,758 $376 $11,157 $11,983
Ad valorem and severance tax cost per pound sold $/lb $ - $2.30 $ - $3.15 $2.30
Cash cost per pound sold $/lb $ - $31.20 $ - $29.11 $31.20
Non-cash cost per pound sold $/lb $ - $17.20 $ - $17.52 $17.20
--- --- ------ --- --- ------ ------
Cost per pound sold - produced $/lb $ - $50.70 $ - $49.78 $50.70
Cost per pound sold - purchased $/lb $22.25 $25.00 $ - $20.15 $24.42
------ ------ --- --- ------ ------
Average cost per pound sold $/lb $22.25 $25.68 $ - $38.61 $24.96
U3O8 gross profit $000 $1,565 $9,905 $(376) $517 $11,470
Gross profit per pound sold $/lb $15.65 $26.06 $ - $1.78 $23.90
Gross profit margin % 41.3% 50.4% 0.0% 4.4% 48.9%
Ending Inventory Balances
Pounds
In-process inventory lb 43,733 28,937 26,796 22,306
Plant inventory lb 15,391 15,504 9,043 21,948
Conversion facility inventory lb 233,712 159,296 94,077 17,813
------- ------- ------ ------
Total inventory lb 292,836 203,737 129,916 62,067
------- ------- ------- ------
Total cost
In-process inventory $000 $518 $416 $315 $221
Plant inventory $000 $548 $538 $369 $824
Conversion facility inventory $000 $8,738 $6,044 $3,831 $675
------ ------ ------ ----
Total inventory $000 $9,804 $6,998 $4,515 $1,720
------ ------ ------ ------
Cost per pound
In-process inventory $/lb $11.84 $14.38 $11.76 $9.92
Plant inventory $/lb $35.61 $34.70 $40.81 $37.53
Conversion facility inventory $/lb $37.39 $37.94 $40.72 $37.89
Note:
1 Cost of sales include all
production costs (notes 1,
2, 3 and 4 in the previous
Production and Production
Cost table) adjusted for
changes in inventory
values.
U(3)O(8) sales of $3.8 million for 2018 Q2 were based on selling 100,000 pounds at an average price of $37.90. The pounds were sold under term contracts and were purchased for an average price of $22.25 per pound for a total cost of sales of $2.2 million.
Total Cost Per Pound Sold Unit 2018 Q2 2018 Q1 2017 Q4 2017 Q3 2018 YTD
Reconciliation
Ad valorem & severance taxes $000 $133 $179 $160 $119 $312
Wellfield costs $000 $916 $1,074 $1,260 $1,473 $1,990
Plant and site costs $000 $1,723 $1,718 $1,703 $1,614 $3,441
Distribution costs $000 $34 $19 $48 $24 $53
Inventory change $000 $(2,806) $(2,483) $(2,795) $5,731 $(5,289)
------- ------- ------- ------ -------
Cost of sales - produced $000 $ - $507 $376 $8,961 $507
Cost of sales - purchased $000 $2,225 $9,251 $ - $2,196 $11,476
------ ------ --- --- ------ -------
Total cost of sales $000 $2,225 $9,758 $376 $11,157 $11,983
Pounds sold produced lb - 10,000.00 - 180,000 10,000
Pounds sold purchased lb 100,000 370,000.00 - 109,000 470,000
------- ---------- --- ------- -------
Total pounds sold lb 100,000 380,000.00 - 289,000 480,000
Average cost per pound sold -
produced (1) $/lb $ - $50.70 $ - $49.78 $50.70
Average cost per pound sold -
purchased $/lb $22.25 $25.00 $ - $20.15 $24.42
------ ------ --- --- ------ ------
Total average cost per pound sold $/lb $22.25 $25.68 $ - $38.61 $24.96
------ ------ --- --- ------ ------
Note:
1 The cost per pound sold
reflects both cash and non-
cash costs, which are combined
as cost of sales in the
statement of operations
included in this filing. The
cash and non-cash cost
components are identified in
the above inventory,
production and sales table.
The cost of sales includes ad valorem and severance taxes related to the extraction of uranium, all costs of wellfield, plant and site operations including the related depreciation and amortization of capitalized assets, reclamation and mineral property costs, plus product distribution costs. These costs are also used to value inventory and the resulting inventoried cost per pound is compared to the estimated sales prices based on the contracts or spot sales anticipated for the distribution of the product. Any costs in excess of the calculated market value are charged to cost of sales.
Continuing Guidance for 2018
At the end of the second quarter of 2018, the average spot price of U(3)O(8), as reported by Ux Consulting Company, LLC and TradeTech, LLC, was approximately $22.65 per pound. Market fundamentals have not changed sufficiently to warrant the accelerated development of MU2. We anticipate meeting our projected production level of 250,000 to 300,000 pounds drummed for the year.
Through June 30, 2018, we sold 470,000 pounds of U(3)O(8) under term contracts at an average price of approximately $49.39 per pound and 10,000 pounds of U(3)O(8 )under a spot sale for $23.75 per pound. We purchased 470,000 pounds at an average cost of $24.42 per pound. The remaining 10,000 pounds were delivered from our produced inventory. We have no more contract sales scheduled in 2018.
The third of three planned MU2 header houses was brought into production in Q2. No additional new production areas are currently planned for the remainder of the year. Production guidance for Q3 is between 70,000 and 80,000 pounds U(3)O(8) dried and drummed. Full year 2018 guidance, similar to 2017, estimates production of between 250,000 and 300,000 pounds, but our production rate may be adjusted based on operational matters and other indicators in the market.
As at July 26, 2018, our unrestricted cash position was $6.3 million.
About Ur-Energy
Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged and shipped more than 2.4 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 we have begun to submit applications for permits and licenses to construct and operate at our Shirley Basin Project. Ur-Energy is engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the United States. Shares of Ur-Energy trade on the NYSE American under the symbol "URG" and on the Toronto Stock Exchange under the symbol "URE." Ur-Energy's corporate office is located in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy's website is www.ur-energy.com.
FOR FURTHER INFORMATION, PLEASE CONTACT
Jeffrey Klenda, Chair and CEO
866-981-4588
Jeff.Klenda@ur-energy.com
Cautionary Note Regarding Forward-Looking Information
This release may contain "forward-looking statements" within the meaning of applicable securities laws regarding events or conditions that may occur in the future (e.g., results of production, including whether mine unit two continues to perform and realize production results similar to mine unit one; timing and results of our efforts to permit future operations at LC East and Shirley Basin) and are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to, capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of ore which is mined varying from estimates; production rates, methods and amounts varying from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; inflation; changes in exchange rates; fluctuations in commodity prices; delays in development and other factors described in the public filings made by the Company at www.sedar.com and www.sec.gov. Readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are based on the beliefs, expectations and opinions of management as of the date hereof and Ur-Energy disclaims any intent or obligation to update them or revise them to reflect any change in circumstances or in management's beliefs, expectations or opinions that occur in the future.
View original content with multimedia:http://www.prnewswire.com/news-releases/ur-energy-releases-2018-q2-results-300688040.html
SOURCE Ur-Energy Inc.
