Uranium

Ur-energy (TSX:URE) has released its operational results for the first quarter of 2016. Rob Chang of Cantor Fitzgerald noted that “[g]rades remain high as an intentionally low flow rate is used.” As quoted in the press release: Lost Creek Uranium Production and Sales For the quarter, 159,330 pounds of U3O8 were captured within the Lost …

Ur-energy (TSX:URE) has released its operational results for the first quarter of 2016. Rob Chang of Cantor Fitzgerald noted that “[g]rades remain high as an intentionally low flow rate is used.”
As quoted in the press release:

Lost Creek Uranium Production and Sales
For the quarter, 159,330 pounds of U3O8 were captured within the Lost Creek plant. 173,844 pounds U3O8 were packaged in drums and 182,150 pounds U3O8 of drummed inventory were shipped out of the Lost Creek processing plant.  At March 31, 2016, inventory at the conversion facility was approximately 173,178 pounds U3O8.  During the quarter, sales totaled $2.7 million with one contract sale of 25,000 pounds at a price of $39.35 per pound, and one spot sale of 50,000 pounds at a price of $34.50 per pound.
Production rates at Lost Creek during the quarter were largely as projected. These rates were achieved despite winter weather conditions, which prevented routine operations for several days during the period. While production rates were intentionally slowed, construction for the Class V wells to enhance waste water capacities and routine plant and wellfield maintenance continued as scheduled. Construction of the thirteenth and final originally-planned header house in Lost Creek’s first mine unit is underway.  It is anticipated that it will be brought online during Q2. Plant head grades from the first 12 header houses continue to be significantly higher than originally projected.
Lost Creek Preliminary Economic Assessment Extends Life of Mine
Also in the quarter, Ur-Energy issued its updated Preliminary Economic Assessment of the Lost Creek Property (“PEA”), as amended, to confirm the updated mineral resource estimate prompted by 2015 drilling within Lost Creek’s Mine Unit 2 and exploratory drilling at the Lost Creek and LC East Projects. Also included in this estimate is an increase to the overall property resource total through a re-estimation of all previously-identified resources at a revised 0.20 grade-thickness (GT) cut-off. The current mineral resource estimate for the Lost Creek Property, after subtracting 1.358 million pounds of uranium produced from Mine Unit 1 through September 30, 2015, is 13.251 million pounds in the Measured and Indicated categories, and 6.439 million pounds in the Inferred category.
The economic analyses were revised to evaluate the impact of additional identified resources with information and data acquired through two years of ISR operations at Lost Creek. These analyses continue to demonstrate the potential economic viability of the project. Most notably, the PEA forecasts a nine year extension of the anticipated Lost Creek life of mine: total future life of mine production is modeled to be 13.8 million pounds, with production operations ending in 2031. See also Ur-Energy News Releases dated January 19, 2016 and February 9, 2016.
Cautionary statement: The Amended 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. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is increased risk and uncertainty to commencing and conducting production without established mineral reserves that may result in economic and technical failure which may adversely impact future profitability. The estimated mineral recovery used in the Amended Preliminary Economic Assessment is based on recovery data from wellfield operations to date, as well as Ur-Energy personnel and industry experience at similar facilities. There can be no assurance that recovery at this level will be achieved.
Financing Activities
Due to the timing of payment commitments and changes in timing of contracted deliveries in 2016, we completed two financial transactions in Q1 2016.  In February, we completed a bought deal financing for aggregate gross proceeds to the Company in the amount of $6.46 million. See also Ur-Energy News Release dated February 17, 2016. Then, in March, we assigned certain late 2016 contractual deliveries of U3O8, similar to the transaction made in April 2013, for cash proceeds of $5.1 million.
Continuing Guidance for 2016
The Q2 2016 production target for Lost Creek is 160,000 – 190,000 pounds U3O8 dried and drummed. Our production rate may be adjusted based on continuing operational refinements, and indicators in the market, including uranium spot market pricing and other factors. The assignments made in March permit us greater flexibility to make such operational decisions and/or to continue to build inventory.
Mr. James Bonner, Vice President Geology with Ur-Energy, C.P.G., American Institute of Professional Geologists and a Qualified Person as defined by NI 43-101, has reviewed and approved the technical disclosure contained in this news release.

Click here for the full press release.

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