LITTLETON, Colo., April 13, 2017 /CNW/ -- Ur-Energy Inc. (NYSE MKT:URG, TSX:URE)(the "Company" or "Ur-Energy") is pleased to provide the following operational results for first quarter 2017.
Highlights
| Lost Creek Operations | ||||
| Units | 2017 Q1 | 2016 Q4 | ||
| U3O8 Captured | ('000 lbs) | 79.3 | 103.6 | |
| U3O8 Dried & Drummed | ('000 lbs) | 74.4 | 111.1 | |
| U3O8 Sold (from production) | ('000 lbs) | 50.0 | 100.0 | |
| Average Flow Rate | (gpm) | 2,403 | 2,559 | |
| U3O8 Head Grade | (mg/l) | 32 | 39 | |
Lost Creek Uranium Production and Sales
For the quarter, 79,340 pounds of U3O8 were captured within the Lost Creek plant. 74,382 pounds of U3O8 were packaged in drums and 72,643 pounds of U3O8 drummed inventory were shipped out of the Lost Creek processing plant. At March 31, 2017, inventory at the conversion facility was approximately 113,528 pounds U3O8. During the quarter, sales totaled $14.8 million on contract sales of 250,000 pounds at an average price of $59.28 per pound, or 145% above the average spot price for the same period of $24.17 per pound. In addition to the 50,000 pounds of Lost Creek production, we purchased 200,000 pounds at an average cost of $20.08 per pound, and delivered a total of 250,000 pounds into our contractual commitments.
Production rates at Lost Creek during the quarter were in line with guidance. These rates were achieved despite extreme winter conditions in Wyoming, which prevented routine operations for many days during the period. Notwithstanding the weather and site conditions, we achieved average flow rates during the first quarter of 2017 that exceeded the average for all of 2016, which was 2,274 gpm. We also successfully commenced operations of our Class V water disposal and recycling circuit.
Vice President Operations, Steve Hatten, noted that "Lost Creek continues to outperform our expectations. We recognize that we have a unique and very special deposit here – with production remaining at approximately 25,000 pounds per month, even after being in production for three and a half years and providing more than two million pounds of shipped material. We look forward to completion of the current development work, which will enable us to begin production from the first three header houses of Mine Unit 2."
Following the end of the quarter, we recognized a safety milestone, as 12 months have passed with no lost-time accidents. This achievement speaks highly of the commitment and diligence of our Lost Creek team.
As previously disclosed, we implemented a further reduction in force during the quarter, with a total of eight lay-offs occurring from our three locations (Lost Creek, Casper and Littleton offices). The reduction was primarily focused on those departments not directly related to production. The estimated reduction in labor costs attributable to this action will be approximately $0.8 million per year.
Continuing Guidance for 2017
We expect to have contract sales of 241,000 pounds U3O8 in 2017 Q2 at an average price of $49 per pound. We plan to purchase 210,000 of those pounds at an average cost of $23 per pound. The balance will be delivered from Lost Creek production. The 2017 Q2 production target for Lost Creek is between 60,000 and 75,000 pounds dried and drummed. Our production rate may be adjusted based on continuing operational matters and other indicators in the market.
Following advance purchasing and planning activities in March, drilling and other construction work to develop the first three header houses in Mine Unit 2 ("MU2") commenced in early April. We expect to bring the first MU2 header house on line in 2017 Q3.
We will provide further guidance for the upcoming quarter and year in our Form 10-Q, which is currently anticipated to be filed on Friday, May 5, 2017.
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 two 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 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 MKT 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.
