UR-ENERGY INC.
TSX: URE
Contact: Bill Boberg
President and CEO
Investor Relations: Dani Wright
10758 W. Centennial Rd., Ste. 200
Littleton, CO 80127
Toll Free: 866-981-4588
Phone: 720-981-4588
Fax: 720-981-5643
E-Mail: info@ur-energyusa.com
Web Site: www.ur-energy.com
Shares Outstanding:
93.2 million
as of March 31, 2008)
52 Week Trading Range:
Hi: C$5.03 • Low: C$1.46
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Ur-Energy Inc. (TSX: TSX: URE) -- www.ur-energy.com -- is a production visible company currently exploring and developing uranium properties in the US and Canada. With the commencement of production expected in late 2009 at the Lost Creek Wyoming project, the company has assembled one of the finest teams in the junior mining space. Ur-Energy has successfully executed an integrated business plan to advance its flagship project toward production and expand its resource base to assure resource availability for future development.
Why Wyoming? Uranium was first discovered in Wyoming in 1918 and historically has produced over 200 million pounds of uranium. Today, the state hosts the largest uranium resource in the US and is the nation’s leading producer of uranium ore. Only 8% of US requirements are met by domestic production while 104 US nuclear power plants supply 20% of the national electricity demand, requiring 50 million pounds of uranium each year.
Uranium was discovered at Lost Creek in Wyoming’s Great Divide Basin in the 1970s and further defined by 540 drill holes. Detailed evaluation of the extensive historic database led to NI 43-101 compliant measured and indicated resources of 9.8 million pounds of U3O8 and inferred resources of 1.1 million pounds of U3O8.
The company has raised more than C$100 million to bring Lost Creek to production and build out a processing facility. With the receipt permits in Q1 2009, Lost Creek will produce uranium in Q4 2009 ramping up to 1 million pounds annually is expected by 2010.
A NI 43-101 Preliminary Assessment shows “the project will produce results that are quite robust” and confirms it to be economically viable. Projected start-up capital costs for build-out of the 2 million pound per year ISR plant are $30 million with additional costs for drilling, environmental and engineering work on the first mine unit anticipated at $32.5 million for a total of $62.5 million – of which $5.5 million was spent in 2007 and $17 million is planned for 2008. With a base case scenario of $80 per pound, operating costs come in at $23.36 per pound and total sales at $516.2 million for the life of the mine. The base case includes a 20% contingency on both the operating and capital costs and utilizes only 6.5 million of the 9.8 million measured and indicated resources.
Permit applications were submitted to the Nuclear Regulatory Commission and Wyoming Department of Environmental Quality in Q3 2007. The review process can take up to 18 months. In the interim, preliminary design of the first production wellfield will be initiated. Parts will also be ordered for the build-out of the processing plant.
Once the permit is received from the NRC, the wellfield installation will proceed with the drilling of 12 to 15 5-spot patterns each month. A total of 150 to 180 5-spot patterns will be in each individual mine unit. The processing plant will be built in tandem with the wellfield installation.
Environmentally Friendly Mining Process
Uranium, held in suspension in naturally flowing groundwater, is deposited in the sandstone when oxygen is depleted through natural chemical reactions with surrounding minerals and organic materials. ISR simply reverses this natural process and, after mining is completed, returns the aquifer to its pre-mining state, if not better.
Wyoming, one of the most pro-mining jurisdictions in the US, is a leader in the use of in-situ recovery (ISR) mining techniques. ISR is considered the safest and most environmentally friendly method to extract uranium from sandstone rock. The technique, also widely used in Australia and Kazakhstan, involves injection of oxygenated and carbonated water into the ground to dissolve the uranium into a solution that can then be pumped back to the surface for processing.
ISR production wellfields are installed within an ore deposit in a series of patterns comprised of a central production well surrounded by injection wells. The production wells pump at a flow rate greater than the injection wells to control fluid flow. Groundwater contained originally in the orebody is produced from the deposit and is oxygenated prior to being re-injected into the deposit. The continuously re-injected oxygenated groundwater dissolves the uranium in the deposit and the production wells pump the uranium-bearing solution out of the ground and to a processing facility where the uranium is removed from the solution in an ion exchange column. When the resin beads in the ion exchange column are loaded with uranium they are stripped putting the uranium back into solution which is then treated to precipitate the uranium as yellowcake slurry which is then dried to become uranium “yellowcake” suitable for sale.
“The sandstone deposits in the Wyoming region are very suitable for alkaline-type in-situ mining, and it is a lot easier to clean up and restore the aquifer afterwards. ISR mining is basically a water plant. You are dealing with pipes, water, oxygen, bicarbonate of soda and reverse osmosis,” states President and Chief Executive Officer Bill Boberg.
A REAL Company with a World Class Team
Ur-Energy has assembled one of the finest mining teams in the junior mining space. With 635 years of total mineral industry experience; 298 years of direct uranium industry experience; and, 72 years of uranium production experience, personnel is not an issue for Ur-Energy like it is for so many other juniors. Ur-Energy is staffed to see its mining projects through to production while at the same time aggressively exploring for new projects and additional resources.
The experienced management team and work-force, along with sufficient funding, place Ur-Energy in a position to identify, acquire and cultivate strategic opportunities. Given the current market conditions, a trend towards consolidation in the uranium industry is likely. Ur-Energy is well-positioned to take advantage of strategic opportunities as they arise. Additional value will also come from the finalization of Ur-Energy’s listing application with the American Stock Exchange. The listing should strengthen the Company’s market value and enhance the Company’s shareholder base, especially in the US.
Aggressive Long-Term Production Strategy
 Ur-Energy has an impressive historical resource base of more than 88 million pounds of uranium (U3O8) which the Company plans to utilize for developing additional resources from existing properties through advanced exploration and to explore for new projects. The objective is to continually have projects entering the development pipeline so that new projects are continuously being brought into production.
The Company’s current US land portfolio consists of 18 projects covering more than 100,000 mineral acres. In addition, Ur-Energy has two ventures for its Bootheel, Buck Point, and Hauber, WY projects. These ventures allow the exploration of these projects to move forward while the Company centers its attention on production and development of its other projects.
Ur-Energy’s focus in Canada has been unconformity deposits in Proterozoic Basins. Unconformity uranium deposits are the most attractive exploration targets on the planet. The Company has over 300,000 acres in the Hornby Bay, Thelon & Baker Lake Basins. In the Thelon Basin land withdrawals were settled between the Federal Government and the Akaitcho First Nations, opening the way for exploration agreements. The objective in the Thelon Basin will be to develop a partnership with Akaitcho First Nations and re-apply for a Land Use Permit in anticipation of exploration drilling in 2009. The Company’s Bugs Project in the Baker Lake Basin revealed very positive geophysics and prospecting results in 2007 which will assist in targeting the additional geologic field work, sampling, geochemistry and 2,500 m drill testing of uranium targets in 2008.
Investment Considerations
The reasons behind Ur-Energy’s evident success are not hard to understand. Yes, the company is swiftly approaching the ranks of uranium producers. It also has an impressive portfolio of exploration properties such that it has developed a long-term production strategy and intends to bring new properties into production every 2-3 years.
But even more importantly, Ur-Energy is led by a team of highly experienced managers. This is truly a world-class team that has quickly established Ur-Energy as a junior mining company with virtually unmatched technical depth, exploration potential and near-term production revenues. As a low-cost uranium producer, Ur-Energy’s downside exposure to spot uranium prices will be minimal. Uranium market fundamentals offer Ur-Energy investors a bright outlook. Worldwide, there are 439 operable nuclear plants in 30 countries, with 34 more under construction and an additional 315 planned or proposed. Global annual uranium production is less than 110 million pounds while annual requirements are now more than 170 million pounds. Reactor demand for uranium is expected to grow by 46% by 2030. All of this bodes well for Ur-Energy, as it nears production in Wyoming and is poised to begin aggressive exploration on its promising properties in Canada.
“Market fundamentals have improved for the nuclear power industry,” says President and CEO Bill Boberg. “We believe Ur-Energy is well positioned to benefit from these market conditions.”
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