LITTLETON, Colo., March 28, 2013 /CNW/ - Ur-Energy Inc. (TSX:URE, NYSE
MKT:URG) ("Ur-Energy" or the "Company") issued the following letter to
shareholders from President and CEO, Wayne W. Heili.
Dear Fellow Shareholder,
I am pleased to present to you this 2012 year-end report for Ur-Energy. The
Board of Directors and our management team truly appreciate our shareholders'
continued support and confidence in the Company.
In 2012, the Company achieved significant growth in identified resources
available for recovery at our flagship Lost Creek Property. We also realized
the completion of the permitting and regulatory approval process which allowed
us to initiate construction of the project facilities. Along the way, we
entered into several product sales agreements which should secure a strong
rate of return for our investment in the Lost Creek Property. All the while,
we maintained a watchful eye on spending and exercised concerted budgetary
constraints. Nevertheless, the success and strengthening fundamentals of the
Corporation went largely overlooked by the equity market as macro-economic
concerns kept investors on the sidelines.
This year, Ur-Energy management will continue to focus on advancing our core
business objectives. Growth is planned through the commencement of production
operations at Lost Creek and through acquisition. At this time, facility
construction is moving at a rapid pace with the expectation that we will be
able to achieve first production at Lost Creek this summer. We also expect to
close the announced acquisition of the Pathfinder Mines assets during the
second quarter of 2013. Following our strategic planning, we will move
quickly to demonstrate the inherent value of these substantial assets.
Ur-Energy concluded 2012 as a strong company with an exciting future, well
positioned to capitalize on the strengthening nuclear fuel markets. I am
excited to share with you the highlights of our corporate accomplishments from
2012 and those ongoing in the first quarter of 2013. On the strength of those
accomplishments, I am looking forward to continued success and the completion
of several major milestones in 2013.
Accomplishments in 2012 and Early 2013
The year 2012 was filled with significant growth developments for Ur-Energy.
The Company acquired substantial property interests and mineral rights
adjacent to our Lost Creek Property. Our talented technical team produced
significant expansions of the compliant resource estimate for our flagship
property. The Company took measures to fortify our balance sheet during a
period of strength in a generally soft market, and we implemented a marketing
strategy that secures a meaningful future revenue stream in an uncertain
market. Finally, we realized a long anticipated objective with the completion
of the final regulatory approval necessary to commence construction at Lost
Lost Creek Property
Regulatory Achievements: The principal focus of the Company continues to be
the advancement of the Lost Creek Project to production. We were pleased to
announce the receipt of the US Bureau of Land Management (BLM) Final
Environmental Impact Statement in August and the Record of Decision early in
October, 2012. The BLM approval was the final major regulatory authorization
necessary to allow construction and production at the site.
Uranium Resource Base Increases: Lost Creek Property expansion efforts
resulted in a 58% aggregate growth of the Lost Creek Property Measured and
Indicated resources from 5.3 Mlbs U(3)O(8) to 8.35 Mlbs U(3)O(8). We also
added over 2.0 Mlbs U(3)O(8) to our Inferred resource inventory in 2012. Our
ongoing work leads us to project that there is significant potential for the
definition of additional resources through exploration and expansion of the
Lost Creek Property. Resource growth in 2012 was realized through our
-- Resource Drilling: In February 2012, we completed an update to
the NI 43-101 Preliminary Economic Assessment (PEA) of the Lost
Creek Property, primarily based upon the 2011 drill program.
The PEA expanded the Lost Creek Property Measured and Indicated
Resource by 11%. For the first time, we reported resources
within our Lost Creek Property holdings but outside of the Lost
Creek Project area. The Inferred Resource at the Lost Creek
Property was increased significantly with the inclusion of
Inferred Resources on our LC North and LC South Projects.
-- Property Expansion: In February 2012, the Company acquired
property interests adjacent to the Lost Creek Project in an
asset exchange with Uranium One Americas. The acquired property
and other newly staked federal mining claims were incorporated
into the Lost Creek Property, primarily as our new LC East and
LC West Projects. The Company's historic database contained
over 1,100 drill holes located on these new project areas. The
database was utilized to estimate the mineral resources for LC
East and LC West. In April 2012, the Company reported a 45%
increase (from the February 2012 PEA) in Measured and Indicated
Resources along with a 42% increase in Inferred Resources for
the Lost Creek Property. A limited drill program was conducted
on the LC East project area in 2012, resulting in an
approximate nine percent increase in the Inferred Mineral
resource for the project. Reported mineral resources in the
Measured and Indicated categories did not change from the April
2012 PEA figures for LC East.
Economic Assessment: Our April 2012 update to the PEA for the Lost Creek
Property continues to demonstrate the technical viability and possible
economics of Lost Creek. The PEA estimates direct operating costs which place
Lost Creek in the lowest quartile of all uranium production facilities
worldwide at under $16.50 per pound.(1)
Project Construction: Project construction commenced in early October 2012.
Our technical team and selected contractors have demonstrated their
proficiency by moving the project forward as scheduled. Many aspects of
construction are now completed with the major efforts advancing as expected
for an on-time completion in June of this year.
In February 2012 we closed a private placement financing in which we raised
C$17 million. At year's end the Company had a cash position of approximately
C$18 million to continue to advance our Company growth objectives. Our
internal finance team has created exceptional opportunity for funding future
growth in the Company by initiating an application to the State of Wyoming for
state funded industrial development bonds. Our application for US$34 million
of funding out of this seldom-utilized program is a demonstration of the
creativity that characterizes the Company in all of our business dealings.
Ur-Energy has enjoyed the strong support of the State of Wyoming as we work
through the application process and we look forward to finalization of the
bond terms and approvals, followed by the availability of this funding, in the
The Company's approach to growth through acquisition can be defined by the
expectation that any investment will only be committed to target projects that
have technical and economic viability for production in the near term. Simply
put, we hold numerous high quality exploration projects in our portfolio today
and we will invest our treasury "at home" unless a valid opportunity for
near-term production growth is available. One such opportunity was identified
and, in mid-2012, the Company entered into an agreement with AREVA to acquire
AREVA's wholly-owned Pathfinder Mines Corporation. This transaction represents
an exceptional opportunity for Ur-Energy. Pathfinder's Wyoming based uranium
projects and extensive historical exploration databases are expected to
provide near term and long term growth opportunities for the Company. Today,
both parties await approval and license transfer by the US Nuclear Regulatory
Commission before the final steps to closing the transaction can be completed.
Uranium Markets and Contract Sales
In two years following the events at Fukushima in Japan, the global uranium
market has endured the impact of the temporary suspension of nuclear reactor
operations in that country and other reactionary responses around the world.
While a greater understanding of the root causes of the event were gained, the
nuclear energy industry demonstrated its resiliency, and growth in the usage
of nuclear energy worldwide has resumed. New reactor development continues to
outpace the retirement of the oldest reactors in the global fleet and the best
estimates indicate a growth in demand for Ur-Energy's product now and in the
decades to come.
The market price of uranium has remained soft during this period with a
resulting significant negative impact on the supply side of the uranium
market. I believe that new growth by the small universe of uranium producing
companies will be limited in the near term to the few projects which are
expected to generate low production costs from the outset. Our Lost Creek
project is counted among the few in this elite group.
In the latter part of 2011, Ur-Energy developed a strategic marketing
initiative designed to reduce the Company's exposure to future negative turns
in uranium pricing due to unforeseen events like Fukushima. By January 2012,
Ur-Energy had secured several multi-year sales agreements with major North
American nuclear utilities. These contracts feature fixed pricing that will
readily support ongoing production at the Company's Lost Creek Property. The
very nature of these contracts has made them a substantial asset for the
Company moving forward in a low spot market price environment. The Company
expects to continue to expand its portfolio of supply contracts when the
proper opportunities are presented.
A Look Ahead: 2013
We expect that this year will hold several major milestones for the Company.
The completion of construction and the advancement of our flagship project to
production will take center stage. It is rare when a junior exploration
company successfully emerges as a producer, even more so when the commodity is
one as challenging as uranium. The employees and management team at Ur?Energy
appreciate the long and challenging path we have travelled together in
arriving at this point and we fully respect the opportunities that lay ahead.
I personally believe that the true strength of this Company will be
demonstrated in the months ahead as our production team is handed the torch
and is allowed to advance the Company objectives.
Our objectives for 2013 are similar to those we set out and accomplished in
2012. As we transition to first production, the Company looks to continue its
efforts to systematically expand the minable resources that will be accessible
to the Lost Creek processing plant. This objective will be achieved through
implementation of our continued exploration drilling and property acquisition
strategies. Ur?Energy will also continue to target growth in our production
profile through strategic acquisitions and exploration on the significant land
and resource positions held outside of the Lost Creek Property.
Ur-Energy has all of the fundamental building blocks of growth in place. I
believe that the Company will be producing a steady stream of positive news in
2013. The robust Lost Creek Property combined with fundamentally sound
product marketing strategies, superb technical and support staff, our solid
financial base and funding opportunities, and the ability to expand our
mineral resources will enable us to continue moving steadily ahead with the
growth of the Company.
Finally, I would like to thank all of Ur-Energy's employees for their
continued dedication in building this thriving uranium company. It is their
abilities and hard work that have sustained our pace of activities in 2012.
It will only be with their constant effort that we will reach the goal of
generating revenues from uranium production in 2013.
Enclosed are our Management Proxy Circular and other documents relating to the
Ur-Energy Inc. Annual and Special Meeting of Shareholders scheduled for April
25, 2013. These documents are also available on our website,
As always, we appreciate the support of our existing shareholders and invite
new investors to take a look at Ur-Energy. Building shareholder value is our
highest priority. Stay informed, and view the latest photos of our Lost Creek
construction activities by visiting our website at www.ur-energy.com. Contact
us by emailing email@example.com or calling +1-866-981-4588.
On Behalf of the Board,
/s/ Wayne W. Heili
Wayne W. Heili
President and Chief Executive Officer, Director
About Ur-Energy Ur-Energy is a junior uranium mining company currently
constructing its first in-situ recovery (ISR) uranium mine in south- central
Wyoming at its fully licensed and permitted Lost Creek project. The Lost
Creek processing facility will have two million pounds per year capacity and
is anticipated to be in production mid-year 2013. Ur-Energy engages in the
identification, acquisition, exploration and development of uranium projects
in the United States and Canada. Shares of Ur-Energy trade on the Toronto
Stock Exchange under the symbol "URE" and on the NYSE MKT under the symbol
"URG". Ur-Energy's corporate office is located in Littleton, Colorado; its
registered office is in Ottawa, Ontario. Ur-Energy's website is
|FOR FURTHER INFORMATION, PLEASE CONTACT |
|Rich Boberg, Director, IR/PR |Wayne
Heili, President and CEO |
|303-269-7707 |307-265-2373 |
|866-981-4588 |866-981-4588 |
Cautionary Note to U.S. Investors Concerning Resource Estimates This document
uses the terms "measured mineral resource," "indicated mineral resource" and
"inferred mineral resource." The Company advises US investors that while
these terms are recognized and required by Canadian regulations, the United
States Securities and Exchange Commission (SEC) does not recognize them. US
investors are cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted into mineral reserves.
"Inferred mineral resources" have a great amount of uncertainty as to their
existence, and great uncertainty as to their legal and economic feasibility.
It cannot be assumed that all or any part of an inferred mineral resource will
ever be upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. US Investors are cautioned not
to assume that all or any part of an inferred mineral resource exists or is
Cautionary Note Regarding Forward-Looking Information This document contains
"forward-looking statements" within the meaning of applicable securities laws
regarding events or conditions that may occur in the future (e.g., timeframe
culminating in the commencement of production at Lost Creek (including
procurement, construction and commissioning); ability and timing of the
Company to secure project financing including the state bond process;
technical and economic viability of Lost Creek (including the projections
contained in the preliminary analysis of economics of the property); ability
to complete the acquisition of Pathfinder Mines Corporation, timing for
closing the transaction and whether the projects will become near term
producers; ability to complete additional favorable uranium sales agreements
and the ability to reduce exposure to volatile market conditions; the ability
to expand resources throughout the Lost Creek Property), 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. 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.
(1 )Cautionary statement pursuant to NI 43-101: the Preliminary Economic
Assessment is preliminary in nature, and includes inferred mineral resources
that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as
mineral reserves. The estimated mineral recovery used in this PEA is based on
site-specific laboratory recovery data as well as Company personnel and
industry experience at similar facilities. There can be no assurance that
recovery at this level will be achieved.
PRN Photo Desk, firstname.lastname@example.org
SOURCE: Ur-Energy Inc.
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