Ur-Energy Inc 10-Q for FY2021 Q3
Ur-Energy Inc (URG)
About this 10-Q
Ur-Energy Inc filed this 10-Q on November 1, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).
Headline figures
Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $9000
- compared with $0 a year earlier
- Net loss
- $9.11M
- compared with a net loss of $3.7M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| FOR THE QUARTERLY PERIOD ENDED |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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| FOR THE TRANSITION PERIOD OF _________ TO _________. |
Commission File Number:
(Exact name of registrant as specified in its charter) |
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State or other jurisdiction of incorporation or organization |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
| Trading Symbol |
| Name of each exchange on which registered: |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer | ☐ | ☒ | |
Accelerated filer | ☐ | Smaller reporting company | |
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| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes
As of October 27, 2021, there were
UR-ENERGY INC.
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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| Table of Contents |
When we use the terms “Ur-Energy,” “we,” “us,” or “our,” or the “Company” we are referring to Ur-Energy Inc. and its subsidiaries, unless the context otherwise requires. Throughout this document we make statements that are classified as “forward-looking.” Please refer to the “Cautionary Statement Regarding Forward-Looking Statements” section below for an explanation of these types of assertions.
Cautionary Statement Regarding Forward-Looking Information
This report on Form 10-Q contains “forward-looking statements” within the meaning of applicable United States (“U.S.”) and Canadian securities laws, and these forward-looking statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” “may,” “potential,” “intends,” “plans” and other similar expressions or statements that an action, event or result “may,” “could” or “should” be taken, occur or be achieved, or the negative thereof or other similar statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Such statements include, but are not limited to: (i) the ability to maintain safe and compliant reduced-level production operations at Lost Creek; (ii) the timing for completion of ongoing development and to determine future development and construction priorities at Lost Creek and Shirley Basin; (iii) the ability to ramp-up and transition to full or other warranted production levels in a timely and cost-effective manner when market and other conditions warrant; (iv) life of mine, costs and production results for each project; (v) the timing and outcome of final regulatory approvals of the amendments for uranium recovery at the LC East Project; (vi) the ability to complete additional favorable uranium sales agreements including spot sales if the market warrants and as may be advantageous to the Company; (vii) the impacts of COVID‑19 on our business, operations, and financial liquidity, and the impacts of the pandemic directly and indirectly on the uranium market; (viii) resolution of the continuing challenges within the uranium market, including supply and demand projections; (ix) the size and sustainability of impacts on the uranium market of recent physical funds and other depositories for purchases of uranium inventories; (x) the timing and impact of implementation of the national uranium reserve program and the Company’s role in the program; (xi) timing for implementation of other recommendations made by the United States Nuclear Fuel Working Group for the revival and expansion of domestic nuclear fuel production, and whether the Biden Administration will incorporate nuclear energy and domestic production of uranium into its climate change initiatives; (xii) impacts on the global markets of climate change initiatives of nations and multi-national companies; (xiii) whether the proposed transaction of certain non-core assets will be completed, on what terms and timing; and (xiv) whether our financing activities and cost-savings measures which we have implemented will be sufficient to support our operations and for what period of time. Additional factors include, among others, the following: challenges presented by current inventories and largely unrestricted imports of uranium products into the U.S.; future estimates for production; capital expenditures; operating costs; mineral resources, grade estimates and recovery rates; market prices; business strategies and measures to implement such strategies; competitive strengths; estimates of goals for expansion and growth of the business and operations; plans and references to our future successes; our history of operating losses and uncertainty of future profitability; status as an exploration stage company; the lack of mineral reserves; risks associated with obtaining permits and other authorizations in the U.S.; risks associated with current variable economic conditions; our ability to service our debt and maintain compliance with all restrictive covenants related to the debt facility and security documents; the possible impact of future debt or equity financings; the hazards associated with mining production operations; compliance with environmental laws and regulations; wastewater management; the possibility for adverse results in potential litigation; uncertainties associated with changes in law, government policy and regulation; uncertainties associated with a Canada Revenue Agency or U.S. Internal Revenue Service audit of any of our cross border transactions; changes in size and structure; the effectiveness of management and our strategic relationships; ability to attract and retain key personnel and management; uncertainties regarding the need for additional capital; sufficiency of insurance coverages; uncertainty regarding the fluctuations of quarterly results; foreign currency exchange risks; ability to enforce civil liabilities under U.S. securities laws outside the U.S.; ability to maintain our listing on the NYSE American and Toronto Stock Exchange (“TSX”); risks associated with the expected classification as a “passive foreign investment company” under the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended; risks associated with our investments and other risks and uncertainties described under the heading “Risk Factors” in our Annual Report on Form 10-K, dated February 26, 2021.
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Cautionary Note to U.S. Investors Concerning Disclosure of Mineral Resources
Unless otherwise indicated, all resource estimates included in this Form 10-Q have been prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.
Canadian standards, including NI 43-101, differ significantly from the requirements of the U.S. Securities and Exchange Commission (“SEC”), and resource information contained in this Form 10-Q may not be comparable to similar information disclosed by U.S. companies. In particular, the term “resources” does not equate to the term “reserves.” Under SEC Industry Guide 7, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. SEC Industry Guide 7 does not define and the SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources,” “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal 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, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with U.S. standards.
NI 43-101 Review of Technical Information: Michael Mellin, Ur-Energy / Lost Creek Mine Geologist, Certified P.Geo., and Qualified Person as defined by NI 43-101, reviewed and approved the technical information contained in this Form 10-Q.
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PART I
Item 1. FINANCIAL STATEMENTS
Ur-Energy Inc. |
Unaudited Consolidated Balance Sheets |
(expressed in thousands of U.S. dollars) |
(the accompanying notes are an integral part of these consolidated financial statements) |
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Assets |
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Current assets |
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Cash and cash equivalents |
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Accounts receivable |
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Prepaid expenses |
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Assets held for sale |
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Total current assets |
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Non-current assets |
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Non-current portion of inventory |
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Restricted cash |
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Mineral properties |
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Capital assets |
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Total non-current assets |
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Total assets |
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Liabilities and shareholders’ equity |
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Current liabilities |
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Accounts payable and accrued liabilities |
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Current portion of notes payable |
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Current portion of warrant liability |
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Environmental remediation accrual |
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Total current liabilities |
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Non-current liabilities |
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Notes payable |
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Lease liability |
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Asset retirement obligations |
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Warrant liability |
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Total non-current liabilities |
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Shareholders’ equity |
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Share capital |
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Contributed surplus |
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Accumulated other comprehensive income |
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Accumulated deficit |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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| Table of Contents |
Ur-Energy Inc. |
Unaudited Consolidated Statements of Operations and Comprehensive Loss |
(expressed in thousands of U.S. dollars, except per share data) |
(the accompanying notes are an integral part of these consolidated financial statements) |
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Sales |
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Cost of sales |
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Gross profit (loss) |
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Operating costs |
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Profit (loss) from operations |
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Net interest expense |
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Warrant liability mark to market gain (loss) |
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Foreign exchange gain (loss) |
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Other income (expense) |
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Net income (loss) |
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Foreign currency translation adjustment |
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Comprehensive income (loss) |
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Income (loss) per common share: |
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Basic |
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Diluted |
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Weighted average common shares: |
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Basic |
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Diluted |
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| Table of Contents |
Ur-Energy Inc. | |
Unaudited Consolidated Statements of Changes in Shareholders’ Equity |
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(expressed in thousands of U.S. dollars, except share data) | |
(the accompanying notes are an integral part of these consolidated financial statements) |
Nine months ended |
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September 30, |
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2020 |
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December 31, 2019 |
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Stock compensation |
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Comprehensive income (loss) |
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March 31, 2020 |
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Stock compensation |
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Comprehensive income (loss) |
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June 30, 2020 |
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Shares issued for cash |
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Less amount assigned to warrant liablity |
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Comprehensive income (loss) |
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September 30, 2020 |
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September 30, |
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2021 |
| Note |
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| Shares |
|
| Amount |
|
| Warrants |
|
| Surplus |
|
| Income |
|
| Deficit |
|
| Equity |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exercise of stock options |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||
Exercise of warrants |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shares issued for cash |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Less amount assigned to warrant liablity |
| 12 & 13 |
|
|
| - |
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
Less share issue costs |
|
| 13 |
|
|
| - |
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
Stock compensation |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Comprehensive income (loss) |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
March 31, 2021 |
|
|
|
|
|
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|
|
|
|
|
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|
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|
|
|
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| ( | ) |
|
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| ||||||
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||
Exercise of warrants |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Shares issued for cash |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Less amount assigned to warrant liablity |
| 11 & 12 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Less share issue costs |
|
| 13 |
|
|
| - |
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
Stock compensation |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Comprehensive income (loss) |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
|
|
|
|
|
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|
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|
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|
|
June 30, 2021 |
|
|
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|
|
|
|
|
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|
|
|
|
|
|
| ( | ) |
|
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| ||||||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of stock options |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
| ||||||
Shares issued for cash |
|
| 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Less amount assigned to warrant liablity |
| 11 & 12 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Less share issue costs |
|
| 13 |
|
|
| - |
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | ||||
Stock compensation |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Comprehensive income (loss) |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||||
| 7 |
| Table of Contents |
Ur-Energy Inc. | |||
Unaudited Consolidated Statements of Cash Flow | |||
(expressed in thousands of U.S. dollars) | |||
(the accompanying notes are an integral part of these consolidated financial statements) |
|
|
|
|
| Nine months ended |
| ||||||
|
|
|
|
| September 30, |
| ||||||
|
| Note |
|
| 2021 |
|
| 2020 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Cash provided by (used for): |
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| |||
Operating activities |
|
|
|
|
|
|
|
|
| |||
Net income (loss) for the year |
|
|
|
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Items not affecting cash: |
|
|
|
|
|
|
|
|
|
|
| |
Stock based compensation |
|
|
|
|
|
|
|
|
| |||
Net realizable value adjustments |
|
|
|
|
|
|
|
|
| |||
Amortization of mineral properties |
|
|
|
|
|
|
|
|
| |||
Depreciation of capital assets |
|
|
|
|
|
|
|
|
| |||
Accretion expense |
|
|
|
|
|
|
|
|
| |||
Amortization of deferred loan costs |
|
|
|
|
|
|
|
|
| |||
Gain on loan forgiveness |
|
|
|
|
| ( | ) |
|
|
| ||
Provision for reclamation |
|
|
|
|
|
|
|
|
| |||
Mark to market loss (gain) |
|
|
|
|
|
|
|
| ( | ) | ||
Gain on sale of assets |
|
|
|
|
|
|
|
| ( | ) | ||
Unrealized foreign exchange loss (gain) |
|
|
|
|
|
|
|
|
| |||
Accounts receivable |
|
|
|
|
| ( | ) |
|
|
| ||
Inventory |
|
|
|
|
| ( | ) |
|
| ( | ) | |
Prepaid expenses |
|
|
|
|
| ( | ) |
|
| ( | ) | |
Accounts payable and accrued liabilities |
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Investing activities |
|
|
|
|
|
|
|
|
|
|
| |
Proceeds from sale of capital assets |
|
|
|
|
|
|
|
|
| |||
Purchase of capital assets |
|
|
|
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Financing activities |
|
|
|
|
|
|
|
|
|
|
| |
Issuance of common shares and warrants for cash |
|
| 13 |
|
|
|
|
|
|
| ||
Share issue costs |
|
| 13 |
|
|
| ( | ) |
|
| ( | ) |
Proceeds from exercise of warrants and stock options |
|
|
|
|
|
|
|
|
|
| ||
RSU redeemed for cash |
|
|
|
|
|
| |
|
|
| ( | ) |
Proceeds from debt financing |
|
| 10 |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
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|
|
|
|
|
|
|
|
Effects of foreign exchange rate changes on cash |
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
|
|
|
|
|
|
| ( | ) | |
Beginning cash, cash equivalents, and restricted cash |
|
|
|
|
|
|
|
|
|
| ||
Ending cash, cash equivalents, and restricted cash |
|
| 17 |
|
|
|
|
|
|
| ||
| 8 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
1. | Nature of Operations |
|
|
| Ur-Energy Inc. (the “Company”) was incorporated on March 22, 2004, under the laws of the Province of Ontario. The Company continued under the Canada Business Corporations Act on August 8, 2006. The Company is an Exploration Stage mining company, as defined by United States Securities and Exchange Commission (“SEC”). The Company is engaged in uranium mining and recovery operations, with activities including the acquisition, exploration, development, and production of uranium mineral resources located primarily in Wyoming. The Company commenced uranium production at its Lost Creek Project in Wyoming in 2013. |
|
|
| Due to the nature of the uranium mining methods used by the Company on the Lost Creek Property, and the definition of “mineral reserves” under National Instrument 43-101 (“NI 43-101”), which uses the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards, the Company has not determined whether the properties contain mineral reserves. However, the Company’s “Amended Preliminary Economic Assessment of the Lost Creek Property, Sweetwater County, Wyoming,” February 8, 2016 (“Lost Creek PEA”) outlines the potential viability of the Lost Creek Property. The recoverability of amounts recorded for mineral properties is dependent upon the discovery of economic resources, the ability of the Company to obtain the necessary financing to develop the properties and upon attaining future profitable production from the properties or sufficient proceeds from disposition of the properties. |
2. | Summary of Significant Accounting Policies |
|
|
| Basis of presentation |
|
|
| These unaudited consolidated financial statements do not conform in all respects to the requirements of U.S. generally accepted accounting principles (“US GAAP”) for annual financial statements. These unaudited consolidated financial statements reflect all normal adjustments which in the opinion of management are necessary for a fair presentation of the results for the periods presented. These unaudited consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2020. We applied the same accounting policies as in the prior year. Certain information and footnote disclosures required by US GAAP have been condensed or omitted in these unaudited consolidated financial statements.
|
3. | Cash and Cash Equivalents |
|
|
| The Company’s cash and cash equivalents consist of the following: |
Cash and cash equivalent |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Cash on deposit |
|
|
|
|
|
| ||
Money market funds |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
| 9 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
4. | Assets Held for Sale |
|
|
| A non-core, unpermitted, non-operating property held by Pathfinder Mines Corporation is presently considered to be an asset held for sale. The Company has a plan to sell the asset and is considering an offer consisting of cash and mineral properties. The asset’s mineral property cost as shown in the table below has been reclassified as assets held for sale as of September 30, 2021. There were no liabilities associated with the asset held for sale as of September 30, 2021. |
Net assets held for sale |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Assets held for sale |
|
|
|
|
|
| ||
Mineral properties |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
5. | Inventory |
|
|
| The Company’s inventory consists of the following: |
Inventory by Type |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Plant inventory |
|
|
|
|
|
| ||
Conversion facility inventory |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Inventory by Duration |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
|
|
|
Non-current portion of inventory |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
| Using lower of cost or net realizable value (“NRV”) calculations, the Company reduced the inventory valuation by $
|
6. | Restricted Cash |
|
|
| The Company’s restricted cash consists of the following: |
Restricted Cash |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Cash pledged for reclamation |
|
|
|
|
| |||
|
|
|
|
|
|
| ||
| The Company’s restricted cash consists of money market accounts and short-term government bonds. |
|
|
| The bonding requirements for reclamation obligations on various properties have been reviewed and approved by the Wyoming Department of Environmental Quality (“WDEQ”), including the Wyoming Uranium Recovery Program (“URP”), and the Bureau of Land Management (“BLM”) as applicable. The restricted money market accounts are pledged as collateral against performance surety bonds, which secure the estimated costs of reclamation related to the properties. Surety bonds providing $ |
| 10 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
7. | Mineral Properties |
|
|
| The Company’s mineral properties consist of the following: |
|
| Lost Creek |
|
| Pathfinder |
|
| Other U.S. |
|
|
| |||||
Mineral Properties |
| Property |
|
| Mines |
|
| Properties |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassify assets held for sale (note 4) |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Change in estimated reclamation costs |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Depletion and amortization |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Lost Creek Property
The Company acquired certain Wyoming properties in 2005 when Ur-Energy USA Inc. purchased
There is a royalty on each of the State of Wyoming sections under lease at the Lost Creek, LC West and EN Projects, as required by law. We are not recovering U3O8 within the State section under lease at Lost Creek and are therefore not subject to royalty payments currently. Other royalties exist on certain mining claims at the LC South, LC East and EN Projects. There are no royalties on the mining claims in the Lost Creek, LC North or LC West Projects.
Pathfinder Mines
The Company acquired additional Wyoming properties when Ur-Energy USA Inc. closed a Share Purchase Agreement (“SPA”) with an AREVA Mining affiliate in 2013. Under the terms of the SPA, the Company purchased Pathfinder Mines Corporation (“Pathfinder”). Assets acquired in this transaction include the Shirley Basin mine, portions of the Lucky Mc mine, machinery and equipment, vehicles, office equipment, and development databases. Pathfinder was acquired for aggregate consideration of $ |
| 11 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| Other U.S. properties
Other U.S. properties include the acquisition costs of several prospective mineralized properties, which the Company continues to maintain through claim payments, lease payments, insurance, and other holding costs in anticipation of future exploration efforts. |
8. | Capital Assets |
|
|
| The Company’s capital assets consist of the following: |
|
| September 30, 2021 |
|
| December 31, 2020 |
| ||||||||||||||||||
|
|
|
|
| Accumulated |
|
| Net Book |
|
|
|
|
| Accumulated |
|
| Net Book |
| ||||||
Capital Assets |
| Cost |
|
| Depreciation |
|
| Value |
|
| Cost |
|
| Depreciation |
|
| Value |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Rolling stock |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
Enclosures |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
Machinery and equipment |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
Furniture and fixtures |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
Information technology |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
Right of use assets |
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| ||||
9. | Accounts Payable and Accrued Liabilities |
|
|
| Accounts payable and accrued liabilities consist of the following: |
Accounts Payable and Accrued Liabilities |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Accounts payable |
|
|
|
|
|
| ||
Accrued payroll liabilities |
|
|
|
|
|
| ||
Accrued severance, ad valorem, and other taxes payable |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
10. | Notes Payable |
|
|
| On October 15, 2013, the Sweetwater County Commissioners approved the issuance of a $ |
| 12 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| On October 1, 2019, the Sweetwater County Commissioners and the State of Wyoming approved an eighteen-month deferral of principal payments beginning October 1, 2019. On October 6, 2020, the State Bond Loan was again modified to defer principal payments for an additional eighteen months. Quarterly principal payments are scheduled to resume on October 1, 2022, and the last payment will be due on October 1, 2024.
On April 16, 2020, we obtained two Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans (one for each of our subsidiaries with U.S. payroll obligations) through the Bank of Oklahoma Financial (“BOKF”). The program was a part of the CARES Act enacted by Congress March 27, 2020, in response to the COVID-19 (Coronavirus) pandemic. The combined loan amount was $
On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”) became law. The Flexibility Act changes key provisions of the PPP, including maturity of the loans, deferral of loan payments, and the forgiveness of the PPP loans, with revisions being retroactive to the date of the CARES Act.
Under the program, as modified by the Flexibility Act and SBA and Treasury rulemakings, the repayment of our loans, including interest, would be forgiven based on eligible payroll, payroll-related, and other allowable costs incurred in a twenty-four-week period following the funding of the loans. For any portion of the loans not forgiven, the program provided for an initial deferral of payments based upon the timing of a borrower’s application for forgiveness and SBA’s action on the application up to a maximum of ten months after the use and forgiveness covered period ends (July 30, 2021).
In December 2020, we applied for loan forgiveness with the BOKF. The BOKF, after reviewing the loan forgiveness applications, submitted them to the SBA for approval. The Company received notifications in Q2 that the principal amount of $ |
| 13 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| The following table summarizes the Company’s current and long-term debts. |
Current and Long-term Debt |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Current |
|
|
|
|
|
| ||
Small Business Administration PPP Loans |
|
|
|
|
|
| ||
Deferred financing costs |
|
|
|
|
| ( | ) | |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Long-term |
|
|
|
|
|
|
|
|
Small Business Administration PPP Loans |
|
|
|
|
|
| ||
State Bond Loan |
|
|
|
|
|
| ||
Deferred financing costs |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
| ||
| The schedule of remaining payments on outstanding debt as of September 30, 2021, is presented below. |
Remaining Payments |
| Total |
|
| 2021 |
|
| 2022 |
|
| 2023 |
|
| 2024 |
|
| Final payment | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
State Bond Loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
11. | Asset Retirement Obligations |
|
|
| Asset retirement obligations (“ARO”) relate to the Lost Creek mine and Shirley Basin project and are equal to the current estimated reclamation cost escalated at inflation rates ranging from |
| 14 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| The present value of the estimated future closure estimate is presented in the following table. |
Asset Retirement Obligations |
| Total |
| |
December 31, 2020 |
|
|
| |
|
|
|
|
|
Change in estimated reclamation costs |
|
| ( | ) |
Accretion expense |
|
|
| |
|
|
|
|
|
September 30, 2021 |
|
|
| |
| The restricted cash discussed in note 6 relates to the surety bonds provided to the governmental agencies for these and other reclamation obligations.
|
12. | Warrant Liability |
|
|
| In September 2018, we issued
In August 2020, we issued
In February 2021, we issued
Because the warrants are priced in U.S. dollars and the functional currency of Ur-Energy Inc. is Canadian dollars, a derivative financial liability was created. The liability created, and adjusted monthly, is calculated using the Black-Scholes model described below as there is no active market for the warrants. Any gain or loss from the adjustment of the liability is reflected in net income for the period.
The Company’s warrant liabilities consist of the following: |
|
| Sep-2018 |
|
| Aug-2020 |
|
| Feb-2021 |
|
|
| |||||
Warrant Liability Activity |
| Warrants |
|
| Warrants |
|
| Warrants |
|
| Total |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants issued |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Warrants exercised |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Mark to market revaluation loss (gain) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effects for foreign exchange rate changes |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| 15 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
|
| Aug-2020 |
|
| Feb-2021 |
|
|
|
| |||
Warrant Liability Duration |
| Warrants |
|
| Warrants |
|
| Total |
| |||
|
|
|
|
|
|
|
|
|
| |||
Current portion of warrant liability |
|
|
|
|
|
|
|
|
| |||
Warrant liability |
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
| |||
| The fair value of the warrant liabilities on September 30, 2021, was determined using the Black-Scholes model with the following assumptions: |
|
| Aug-2020 |
|
| Feb-2021 |
| ||
Black-Scholes Assumptions at September 30, 2021 |
| Warrants |
|
| Warrants |
| ||
|
|
|
|
|
|
| ||
Expected forfeiture rate |
|
| % |
|
| % | ||
Expected life (years) |
|
|
|
|
|
| ||
Expected volatility |
|
| % |
|
| % | ||
Risk free rate |
|
| % |
|
| % | ||
Expected dividend rate |
|
| % |
|
| % | ||
Exercise price |
| $ |
|
| $ |
| ||
Market price |
| $ |
|
| $ |
| ||
13. | Shareholders’ Equity and Capital Stock |
|
|
| Common shares |
|
|
| The Company’s share capital consists of an unlimited amount of Class A preferred shares authorized, without par value, of which no shares are issued and outstanding; and an unlimited amount of common shares authorized, without par value, of which
On February 4, 2021, the Company closed an underwritten public offering of |
| 16 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| Stock options
In 2005, the Company’s Board of Directors approved the adoption of the Company’s stock option plan (the “Option Plan”). The Option Plan was most recently approved by the shareholders on May 7, 2020. Eligible participants under the Option Plan include directors, officers, employees, and consultants of the Company. Under the terms of the Option Plan, grants of options will vest over a three-year period:
Activity with respect to stock options is summarized as follows: |
|
| Outstanding |
|
| Weighted-average |
| ||
Stock Option Activity |
| Options |
|
| exercise price |
| ||
|
| # |
|
| $ |
| ||
|
|
|
|
|
|
| ||
December 31, 2020 |
|
|
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
| ||
Exercised |
|
| ( | ) |
|
|
| |
Forfeited |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
| $ |
| ||
| The exercise price of a new grant is set at the closing price for the shares on the Toronto Stock Exchange (TSX) on the trading day immediately preceding the grant date and there is no intrinsic value as of the date of grant.
We received $
Stock-based compensation expense from stock options was $0.2 million and $
As of September 30, 2021, there was approximately $1.3 million unamortized stock-based compensation expense related to the Option Plan. The expenses are expected to be recognized over the remaining weighted-average vesting period of |
| 17 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| As of September 30, 2021, outstanding stock options are as follows: |
|
|
| Options outstanding |
|
| Options exercisable |
|
|
| |||||||||||||||||||
|
|
|
|
|
| Weighted- |
|
|
|
|
|
|
|
| Weighted- |
|
|
|
|
|
| |||||||
|
|
|
|
|
| average |
|
|
|
|
|
|
|
| average |
|
|
|
|
|
| |||||||
|
|
|
|
|
| remaining |
|
| Aggregate |
|
|
|
|
| remaining |
|
| Aggregate |
|
|
| |||||||
Exercise |
|
| Number |
|
| contractual |
|
| intrinsic |
|
| Number |
|
| contractual |
|
| intrinsic |
|
|
| |||||||
price |
|
| of options |
|
| life (years) |
|
| value |
|
| of options |
|
| life (years) |
|
| value |
|
| Expiry | |||||||
$ |
|
| # |
|
|
|
|
| $ |
|
| # |
|
|
|
|
| $ |
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3.1 |
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
| - |
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
| 772,694 |
|
|
| - |
|
|
| - |
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
| |||||||
The aggregate intrinsic value of the options in the preceding table represents the total pre-tax intrinsic value for stock options, with an exercise price less than the Company’s TSX closing stock price as of the last trading day in the nine months ended September 30, 2021 (approximately US$1.72), that would have been received by the option holders had they exercised their options on that date. There were
The fair value of the stock options on their respective grant dates was determined using the Black-Scholes model with the following assumptions: |
Stock Option Fair Value Assumptions |
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| 2016 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Expected forfeiture rate |
|
| % |
|
| % |
|
| % |
| % |
| % |
|
| % | ||||||||
Expected life (years) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Expected volatility |
|
| % |
|
| % |
|
| % |
| % |
| % |
|
| % | ||||||||
Risk free rate |
|
| % |
|
| % |
|
| % |
| % |
| % |
|
| % | ||||||||
Expected dividend rate |
|
| % |
|
| % |
|
| % |
|
| % |
|
| % |
|
| % | ||||||
Black-Scholes value (CAD$) |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
Restricted share units
On June 24, 2010, the Company’s shareholders approved the adoption of the Company’s restricted share unit plan (the “RSU Plan”), as subsequently amended. The RSU Plan was approved by our shareholders most recently on May 2, 2019. Amendments to the RSU Plan were approved by our shareholders on June 3, 2021, and the plan is now known as the Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”). |
| 18 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| Eligible participants under the RSU&EI Plan include directors and employees of the Company. Granted RSUs are redeemed on the second anniversary of the grant. Upon an RSU vesting, the holder of the RSU will receive one Common Share, for no additional consideration, for each RSU held.
Activity with respect to RSUs is summarized as follows: |
|
|
|
|
| Weighted average |
| ||
|
| Outstanding |
|
| grant date |
| ||
Restricted Share Unit Activity |
| RSUs |
|
| fair value |
| ||
|
| # |
|
| $ |
| ||
|
|
|
|
|
|
| ||
December 31, 2020 |
|
|
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
| $ |
| ||
Forfeited |
|
| ( | ) |
| $ |
| |
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
| $ |
| ||
| Stock-based compensation expense from RSUs was $0.1 million and $
As of September 30, 2021, there was approximately $
As of September 30, 2021, outstanding RSUs are as follows: |
RSUs outstanding | |||||||||||||
|
|
| Weighted- |
|
|
|
|
|
| ||||
|
|
| average |
|
|
|
|
|
| ||||
|
|
| remaining |
|
| Aggregate |
|
|
| ||||
Number |
|
| contractual |
|
| intrinsic |
|
| Redemption | ||||
of RSUs |
|
| life (years) |
|
| value |
|
| Date | ||||
# |
|
|
|
|
| $ |
|
|
|
| |||
|
|
|
|
|
|
|
|
|
| ||||
|
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| |||||
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| |||||
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| |||||
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| |
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| ||||
| 19 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| The fair value of restricted share units on their respective grant dates was determined using the Intrinsic Value Method with the following assumptions: |
Restricted Share Unit Fair Value Assumptions |
| 2021 |
|
| 2020 |
|
| 2019 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Expected forfeiture rate |
|
| % |
|
| % |
|
| % | |||
Grant date fair value (CAD$) |
| $ |
|
| $ |
|
| $ |
| |||
Warrants
In September 2018, the Company issued
The following represents warrant activity during the period ended September 30, 2021: |
|
|
|
| Number of |
|
|
| |||||
|
| Outstanding |
|
| shares to be issued |
|
| Per share |
| |||
Warrant Activity |
| warrants |
|
| upon exercise |
|
| exercise price |
| |||
|
| # |
|
| # |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
| |||
December 31, 2020 |
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
|
|
|
|
|
|
|
| |||
Exercised |
|
| ( | ) |
|
| ( | ) |
|
|
| |
Expired |
|
| ( | ) |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
|
|
|
|
|
|
|
| |||
| We received $ |
| 20 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| As of September 30, 2021, outstanding warrants are as follows: |
|
|
|
|
|
| Weighted- |
|
|
|
|
|
| |||||
|
|
|
|
|
| average |
|
|
|
|
|
| |||||
|
|
|
|
|
| remaining |
|
| Aggregate |
|
|
| |||||
Exercise |
|
| Number |
|
| contractual |
|
| Intrinsic |
|
|
| |||||
price |
|
| of warrants |
|
| life (years) |
|
| Value |
|
| Expiry | |||||
$ |
|
| # |
|
|
|
|
| $ |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
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|
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|
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|
| ||||||
|
|
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|
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|
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|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| The fair value of the warrants on their respective grant dates was determined using the Black-Scholes model with the following assumptions: |
Warrant Fair Value Assumptions |
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Expected forfeiture rate |
|
| % |
|
| % | ||
Expected life (years) |
|
|
|
|
|
| ||
Expected volatility |
|
| % |
|
| % | ||
Risk free rate |
|
| % |
|
| % | ||
Expected dividend rate |
|
| % |
|
| % | ||
Black-Scholes value (CAD$) |
| $ |
|
| $ |
| ||
| Fair value calculations
The Company estimates expected future volatility based on daily historical trading data of the Company’s common shares. The risk-free interest rates are determined by reference to Canadian Treasury Note constant maturities that approximate the expected life. The Company has never paid dividends and currently has no plans to do so.
Share-based compensation expense is recognized net of estimated pre-vesting forfeitures, which results in expensing the awards that are ultimately expected to vest over the expected life. Forfeitures and expected lives were estimated based on actual historical experience. |
14. | Sales |
|
|
| Revenue is primarily derived from the sale of U3O8 to domestic utilities under contracts or spot sales. |
| 21 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| Revenue consists of: |
|
| Nine months ended |
| |||||||||||||
|
| September 30, |
| |||||||||||||
|
| 2021 |
|
| 2020 |
| ||||||||||
Revenue Summary |
| $ |
|
| % |
|
| $ |
|
| % |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales of purchased inventory |
|
|
|
|
|
|
|
|
|
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|
| ||||
Company A |
|
|
|
|
| % |
|
|
|
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| % | ||||
Total product sales |
|
|
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|
| % |
|
|
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| % | ||||
|
|
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Disposal fee income |
|
|
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| % |
|
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|
| % | ||||
|
|
|
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|
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| % |
|
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| % | ||||
15. | Cost of Sales
Cost of sales includes ad valorem and severance taxes related to the extraction of uranium, all costs of wellfield and plant 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. The resulting inventoried cost per pound is compared to the NRV of the product, which is based on the estimated sales price of the product, net of any necessary costs to finish the product. Any inventory value in excess of the NRV is charged to cost of sales.
Cost of sales consists of the following: |
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
Cost of Sales |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
|
|
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|
|
|
|
|
|
|
|
| ||||
Cost of product sales |
|
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|
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|
| ||||
Lower of cost or NRV adjustments |
|
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| ||||
|
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|
| ||||
16. | Operating Costs |
| Operating expenses include exploration and evaluation expense, development expense, General and Administration (“G&A”) expense, and mineral property write-offs. Exploration and evaluation expense consists of labor and the associated costs of the exploration and evaluation departments as well as land holding and exploration costs including drilling and analysis on properties which have not reached the permitting or operations stage. Development expense relates to properties that have reached the permitting or operations stage and include costs associated with exploring, delineating, and permitting a property. Once permitted, development expense also includes the costs associated with the construction and development of the permitted property that are otherwise not eligible to be capitalized. G&A expense relates to the administration, finance, investor relations, land, and legal functions, and consists principally of personnel, facility, and support costs. |
| 22 |
| Table of Contents |
Ur-Energy Inc. Condensed Notes to Unaudited Consolidated Financial Statements September 30, 2021 |
(expressed in thousands of U.S. dollars unless otherwise indicated) |
| Operating costs consist of the following: |
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
Operating Costs |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exploration and evaluation |
|
|
|
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|
|
|
|
|
|
|
| ||||
Development |
|
|
|
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|
|
|
|
|
|
|
| ||||
General and administration |
|
|
|
|
|
|
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|
| ||||
Accretion |
|
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| ||||
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|
| ||||
17. | Supplemental Information for Statement of Cash Flows
Cash and cash equivalents, and restricted cash per the Statement of Cash Flows consists of the following: |
Cash and Cash Equivalents, and Restricted Cash |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
|
|
|
|
|
| ||
Cash and cash equivalents |
|
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| ||
Restricted cash |
|
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| ||
|
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| ||
| Interest expense paid was $ |
18. | Financial Instruments |
|
|
| The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, and notes payable. The Company is exposed to risks related to changes in interest rates and management of cash and cash equivalents and short-term investments.
Credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, and restricted cash. These assets include Canadian dollar and U.S. dollar denominated certificates of deposit, money market accounts, and demand deposits. These instruments are maintained at financial institutions in Canada and the U.S. Of the amount held on deposit, approximately $
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due.
As of September 30, 2021, the current Company’s financial liabilities consisted of accounts payable and accrued liabilities of $
As of September 30, 2021, we had $
Sensitivity analysis
The Company has completed a sensitivity analysis to estimate the impact that a change in interest rates would have on the net loss of the Company. This sensitivity analysis shows that a change of +/- 100 basis points in interest rate would have a negligible effect on the three months ended September 30, 2021. The financial position of the Company may vary at the time that a change in interest rates occurs causing the impact on the Company’s results to vary. |
19. | Subsequent Event |
|
|
| Subsequent to September 30, 2021, the Company issued 4.4 million common shares for sales through our At Market facility and |
| 23 |
| Table of Contents |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Business Overview
The following discussion is designed to provide information that we believe is necessary for an understanding of our financial condition, changes in financial condition, and results of our operations. The following discussion and analysis should be read in conjunction with the MD&A contained in our Annual Report on Form 10-K for the year ended December 31, 2020.
Incorporated on March 22, 2004, Ur-Energy is an exploration stage mining company, as that term is defined by the SEC. We are engaged in uranium mining, recovery and processing activities, including the acquisition, exploration, development and operation of uranium mineral properties in the U.S. We are operating our first in situ recovery uranium mine at our Lost Creek Project in Wyoming. Ur-Energy is a corporation continued under the Canada Business Corporations Act on August 8, 2006. Our Common Shares are listed on the TSX under the symbol “URE” and on the NYSE American under the symbol “URG.”
Ur-Energy has one wholly owned subsidiary, Ur-Energy USA Inc., incorporated under the laws of the State of Colorado. Ur-Energy USA Inc. has three wholly-owned subsidiaries: NFU Wyoming, LLC, a limited liability company formed under the laws of the State of Wyoming which acts as our land holding and exploration entity; Lost Creek ISR, LLC, a limited liability company formed under the laws of the State of Wyoming to operate our Lost Creek Project and hold our Lost Creek properties and assets; and Pathfinder Mines Corporation (“Pathfinder”), incorporated under the laws of the State of Delaware, which holds, among other assets, the Shirley Basin and Lucky Mc properties in Wyoming. Our material U.S. subsidiaries remain unchanged since the filing of our Annual Report on Form 10-K, dated February 26, 2021.
We utilize in situ recovery (“ISR”) of the uranium at our flagship project, Lost Creek, and will do so at other projects where possible. The ISR technique is employed in uranium extraction because it allows for an effective recovery of roll front uranium mineralization at a lower cost. At Lost Creek, we extract and process uranium oxide (“U3O8”) for shipping to a third-party conversion facility to be weighed, assayed and stored until sold.
Our Lost Creek processing facility, which includes all circuits for the production, drying and packaging of U3O8 for delivery into sales transactions, is designed and anticipated under current licensing to process up to 1.2 million pounds of U3O8 annually from the Lost Creek mine. The processing facility has the physical design capacity and is licensed to process 2.2 million pounds of U3O8 annually, which provides additional capacity, of up to one million pounds U3O8, to process material from other sources. We expect that the Lost Creek processing facility may be utilized to process captured U3O8 from our Shirley Basin Project. However, the Shirley Basin permit and license allow for the construction of a full processing facility, providing greater construction and operating flexibility as may be dictated by market conditions.
COVID-19
During the quarter, we continued to monitor updated State, Federal and public health guidance related to COVID-19 and have adapted to continuing changes in the guidance and restrictions. We have experienced no cases of COVID-19 among our staff which have had a material impact on our operations.
| 24 |
| Table of Contents |
Uranium Market Update
With global climate initiatives being advanced by numerous countries, there has been a great deal of support for nuclear energy in the news during Q3 and subsequent to quarter-end. Growing numbers of countries are making commitments to net-zero emissions, including on more accelerated schedules than previously announced. In the process, many nations are endorsing nuclear energy to meet such objectives. This support, and projections for sustained growth of nuclear power globally in coming years, has incentivized much investment in the fuel cycle industries, through legislative programs and private and industrial capital. These and other market influences have been accompanied by significant developments among purchasers of uranium. In addition to the financial firms, ETFs and uranium producers and developers who have purchased substantial uranium inventories in 2021, the newly formed Sprott Physical Uranium Trust began making significant purchases of uranium during Q3, as well as establishing the means in the equity markets to raise more than $1 billion for such purchases. Subsequent to quarter-end, the most recent participant in the long-term investment in uranium is the physical uranium fund formed by the Kazakhs, including Kazatomprom, the national uranium operator of Kazakhstan.
The U.S. Department of Energy (“DOE”) continues its work to implement the new national uranium reserve which was established in December 2020. DOE published requests for information for stakeholders to respond with data and input to support and define the establishment of the uranium reserve. Following an extension, all such responses were due to DOE in mid-October. DOE has not yet publicly provided a timeline of the remaining process to launch the reserve.
In addition to the DOE uranium reserve, the Biden Administration continues to prioritize climate change initiatives and, like many other governments, has expressed an understanding that clean, carbon-free nuclear energy must be an integral part of those initiatives. Several pieces of federal legislation have been proposed which would support nuclear energy and the nuclear fuel cycle industries.
Mineral Rights and Properties
We have 12 U.S. uranium properties. Ten of our uranium properties are located in the Great Divide Basin, Wyoming, including Lost Creek. Currently, we control nearly 1,800 unpatented mining claims and three State of Wyoming mineral leases for a total of approximately 36,000 acres in the area of the Lost Creek Property, including the Lost Creek permit area (the “Lost Creek Project” or “Project”), and certain adjoining properties referred to as LC East, LC West, LC North, LC South and EN Project areas (collectively, with the Lost Creek Project, the “Lost Creek Property”). Our Shirley Basin Project, also in Wyoming, comprises more than 3,700 Company-controlled acres. Our Lucky Mc Project holds 1,800 acres in the Gas Hills Mine District, Wyoming. As set forth elsewhere in this report, we received final approvals of reclamation at the Lucky Mc project in Q3 and confirmation of the termination of the permit to mine and associated bond requirements. Our Excel gold project holds approximately 2,400 acres of mining claims in the Excelsior Mountains of Mineral County, Nevada.
Lost Creek Property
Lost Creek continues to operate at reduced production levels while we await additional positive developments in the uranium markets. The reduced production operations have allowed us to sustain operating cost reductions at Lost Creek, while continuing to conduct preventative maintenance and optimize processes in preparation for ramp up to full production rates.
Previously, we disclosed that such preparations included advanced planning for further development of our fully permitted Mine Unit 2 (“MU2”). Subsequent to quarter-end, we commenced a drilling and construction program for the development of the fourth header house in MU2 (HH2-4). HH 2-4, and its associated drilling and wellfield development, is expected to be complete early in 2022, at which time HH 2-4 will be ready for production. A delineation drill program to support geologic design in the following four header houses is planned for 2022 H1. Together, the two programs will significantly advance our readiness when production ramp-up occurs.
| 25 |
| Table of Contents |
Applications for amendment to the Lost Creek licenses and permits were submitted in 2014 in order to include recovery from the uranium resource in the LC East Project (HJ and KM horizons) immediately adjacent to the Lost Creek Project. In 2021 Q1, the Wyoming Uranium Recovery Program (“URP”) approved the amendment to the Lost Creek source material license to include recovery from these areas. This license approval grants the Company access to six planned mine units in addition to the already licensed three mine units at Lost Creek. The approval also increases the license limit for annual plant production to 2.2 million pounds U3O8 which includes wellfield production of up to 1.2 million pounds U3O8 and toll processing up to one million pounds U3O8. The BLM previously completed its review and granted approval for this expansion at Lost Creek.
The Wyoming Department of Environmental Quality, Land Quality Division, continues its review of the application for amendment to the Lost Creek permit to mine which will add the LC East and KM mine units. We anticipate that the Land Quality Division review will be complete in 2021.
Shirley Basin Project
During 2021 Q2 the State of Wyoming and the EPA completed their respective reviews of our Shirley Basin Project and issued the source material license, permit to mine, and aquifer exemption for the project. These three approvals represent the final major permits required to begin construction of the Shirley Basin Project. We received BLM final approval of the project, following its NEPA review process, in 2020.
The Company plans three relatively shallow mining units at the project, where we have the option to build out a complete processing plant with drying facilities or a satellite plant with the ability to send loaded ion exchange resin to Lost Creek for processing. As approved, the Shirley Basin processing facility is allowed to recover up to one million pounds U3O8 annually from the wellfield. The annual production of U3O8 from wellfield production and toll processing of loaded resin or yellowcake slurry will not exceed two million pounds equivalent of dried U3O8 product.
Situated in an historic mining district, the project has existing access roads, power, waste disposal facility and shop buildings onsite. Because delineation and exploration drilling were completed historically, the project is construction ready. All wellfield, pipeline and header house layouts are finalized and additional, minor on-the-ground preparations were initiated in 2021 Q3. We anticipate up to nine years of production at the site.
Results of Operations
The following table provides information on our production and ending inventory of U3O8 pounds.
Reconciliation of Non-GAAP measures with US GAAP financial statement presentation
The U3O8 and cost per pound measures included in the following table do not have a standardized meaning within US GAAP or a defined basis of calculation. These measures are used by management to assess business performance and determine production and pricing strategies. They may also be used by certain investors to evaluate performance.
| 26 |
| Table of Contents |
U3O8 Production and Ending Inventory
|
| Unit |
|
| 2020 Q4 |
|
| 2021 Q1 |
|
| 2021 Q2 |
|
| 2021 Q3 |
|
| 2021-09 YTD |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
U3O8 Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Pounds captured |
| lb |
|
|
| 54 |
|
|
| 49 |
|
|
| 58 |
|
|
| 70 |
|
|
| 177 |
| |
Pounds drummed |
| lb |
|
|
| 6,622 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |
Pounds shipped |
| lb |
|
|
| - |
|
|
| 15,873 |
|
|
| - |
|
|
| - |
|
|
| 15,873 |
| |
Pounds purchased |
| lb |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
U3O8 Ending Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Pounds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
In-process inventory |
| lb |
|
|
| 303 |
|
|
| 318 |
|
|
| 365 |
|
|
| 999 |
|
|
|
|
| |
Plant inventory |
| lb |
|
|
| 15,873 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
| |
Conversion inventory - produced |
| lb |
|
|
| 219,735 |
|
|
| 235,608 |
|
|
| 267,617 |
|
|
| 267,049 |
|
|
|
|
| |
Conversion inventory - purchased |
| lb |
|
|
| 48,750 |
|
|
| 48,750 |
|
|
| 16,741 |
|
|
| 16,741 |
|
|
|
|
| |
|
| lb |
|
|
| 284,661 |
|
|
| 284,676 |
|
|
| 284,723 |
|
|
| 284,789 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
In-process inventory |
| $ | 000 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
Plant inventory |
| $ | 000 |
|
| $ | 463 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
Conversion inventory - produced |
| $ | 000 |
|
| $ | 6,083 |
|
| $ | 6,592 |
|
| $ | 7,487 |
|
| $ | 7,486 |
|
|
|
|
|
Conversion inventory - purchased |
| $ | 000 |
|
| $ | 1,268 |
|
| $ | 1,268 |
|
| $ | 435 |
|
| $ | 435 |
|
|
|
|
|
|
| $ | 000 |
|
| $ | 7,814 |
|
| $ | 7,860 |
|
| $ | 7,922 |
|
| $ | 7,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost per Pound |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In-process inventory |
| $/lb |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
| |
Plant inventory |
| $/lb |
|
| $ | 29.17 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
| |
Conversion inventory - produced |
| $/lb |
|
| $ | 27.68 |
|
| $ | 27.98 |
|
| $ | 27.98 |
|
| $ | 28.03 |
|
|
|
|
| |
Conversion inventory - purchased |
| $/lb |
|
| $ | 26.01 |
|
| $ | 26.01 |
|
| $ | 25.98 |
|
| $ | 25.98 |
|
|
|
|
| |
|
| $/lb |
|
| $ | 27.45 |
|
| $ | 27.61 |
|
| $ | 27.82 |
|
| $ | 27.81 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced conversion inventory detail: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ad valorem and severance tax |
| $/lb |
|
| $ | 0.75 |
|
| $ | 0.67 |
|
| $ | 0.59 |
|
| $ | 0.59 |
|
|
|
|
| |
Cash cost |
| $/lb |
|
| $ | 17.50 |
|
| $ | 17.28 |
|
| $ | 18.56 |
|
| $ | 18.59 |
|
|
|
|
| |
Non-cash cost |
| $/lb |
|
| $ | 9.43 |
|
| $ | 10.03 |
|
| $ | 8.83 |
|
| $ | 8.85 |
|
|
|
|
| |
|
| $/lb |
|
| $ | 27.68 |
|
| $ | 27.98 |
|
| $ | 27.98 |
|
| $ | 28.03 |
|
|
|
|
| |
During 2020, we took steps to reduce production operations at Lost Creek and adjust to the continued depressed state of the uranium markets while we awaited the recommended relief from the Working Group and further positive developments in the uranium markets. As a result, production rates at Lost Creek declined significantly since that decision was made. Pounds captured decreased nearly 80 percent during that year and will remain low until a decision to ramp up is made.
As of September 30, we had approximately 283,790 pounds of U3O8 at the conversion facility including 267,049 produced pounds at an average cost per pound of $28.03, and 16,741 purchased pounds at an average cost of $25.98 per pound. In April 2021, we exchanged purchased U3O8 in our inventory for an equal number of pounds of U3O8 with a trader who held Lost Creek origin pounds pursuant to an earlier agreement.
| 27 |
| Table of Contents |
Three and nine months ended September 30, 2021, compared to the three and nine months ended September 30, 2020
The following table summarizes the results of operations for the three months ended September 30, 2021, and 2020:
(expressed in thousands of U.S. dollars, except per share and pound data) |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
| ||||||
|
| Three months ended |
| |||||||||
|
| September 30, |
| |||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
| |||
|
|
|
|
|
|
|
|
|
| |||
Sales |
|
| 9 |
|
|
| - |
|
|
| 9 |
|
Cost of sales |
|
| (1,703 | ) |
|
| (1,840 | ) |
|
| 137 |
|
Gross profit (loss) |
|
| (1,694 | ) |
|
| (1,840 | ) |
|
| 146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
| (2,585 | ) |
|
| (2,157 | ) |
|
| (428 | ) |
Loss from operations |
|
| (4,279 | ) |
|
| (3,997 | ) |
|
| (282 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense |
|
| (182 | ) |
|
| (195 | ) |
|
| 13 |
|
Warrant mark to market gain |
|
| (5,060 | ) |
|
| 550 |
|
|
| (5,610 | ) |
Foreign exchange gain (loss) |
|
| 15 |
|
|
| (53 | ) |
|
| 68 |
|
Other income (expense) |
|
| 3 |
|
|
| (1 | ) |
|
| 4 |
|
Net loss |
|
| (9,503 | ) |
|
| (3,696 | ) |
|
| (5,807 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
| 219 |
|
|
| 36 |
|
|
| 183 |
|
Comprehensive loss |
|
| (9,284 | ) |
|
| (3,660 | ) |
|
| (5,624 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| (0.05 | ) |
|
| (0.02 | ) |
|
| (0.03 | ) |
Diluted |
|
| (0.05 | ) |
|
| (0.02 | ) |
|
| (0.03 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 pounds sold |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 price per pounds sold |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost per pounds sold |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross profit per pounds sold |
|
| - |
|
|
| - |
|
|
| - |
|
| 28 |
| Table of Contents |
The following table summarizes the results of operations for the nine months ended September 30, 2021, and 2020:
(expressed in thousands of U.S. dollars, except per share and pound data) |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
| ||||||
|
| Nine months ended |
| |||||||||
|
| September 30, |
| |||||||||
|
| 2021 |
|
| 2020 |
|
| Change |
| |||
|
|
|
|
|
|
|
|
|
| |||
Sales |
|
| 16 |
|
|
| 8,304 |
|
|
| (8,288 | ) |
Cost of sales |
|
| (5,211 | ) |
|
| (11,462 | ) |
|
| 6,251 |
|
Gross profit (loss) |
|
| (5,195 | ) |
|
| (3,158 | ) |
|
| (2,037 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
| (7,174 | ) |
|
| (6,446 | ) |
|
| (728 | ) |
Loss from operations |
|
| (12,369 | ) |
|
| (9,604 | ) |
|
| (2,765 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense |
|
| (558 | ) |
|
| (522 | ) |
|
| (36 | ) |
Warrant mark to market gain |
|
| (11,384 | ) |
|
| 592 |
|
|
| (11,976 | ) |
Foreign exchange gain (loss) |
|
| (352 | ) |
|
| (46 | ) |
|
| (306 | ) |
Other income (expense) |
|
| 909 |
|
|
| 16 |
|
|
| 893 |
|
Net loss |
|
| (23,754 | ) |
|
| (9,564 | ) |
|
| (14,190 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
| 472 |
|
|
| 67 |
|
|
| 405 |
|
Comprehensive loss |
|
| (23,282 | ) |
|
| (9,497 | ) |
|
| (13,785 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| (0.13 | ) |
|
| (0.06 | ) |
|
| (0.07 | ) |
Diluted |
|
| (0.13 | ) |
|
| (0.06 | ) |
|
| (0.07 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 pounds sold |
|
| - |
|
|
| 200,000 |
|
|
| (200,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 price per pounds sold |
|
| - |
|
|
| 41.50 |
|
|
| (41.50 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 cost per pounds sold |
|
| - |
|
|
| 25.83 |
|
|
| (25.83 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
U3O8 gross profit per pounds sold |
|
| - |
|
|
| 15.67 |
|
|
| (15.67 | ) |
Sales
There were no sales of U3O8 in the first nine months of 2021, and we do not anticipate making any U3O8 sales in 2021. We sold 200,000 pounds of U3O8 during the nine months ended September 30, 2020, for an average price of $41.50 per pound. There were no sales in 2020 Q3. The sales were all into term contracts using purchased pounds.
Cost of Sales
Cost of sales per the financial statements includes ad valorem and severance taxes related to the extraction of uranium, all costs of wellfield and plant 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. The resulting inventoried cost per pound is compared to the NRV of the product, which is based on the estimated sales price of the product, net of any necessary costs to finish the product. Any inventory value in excess of the NRV is charged to cost of sales per the financial statements. These NRV adjustments are excluded from the U3O8 cost of sales and U3O8 cost per pound sold figures because they relate to the pounds of U3O8 in ending inventory and do not relate to the pounds of U3O8 sold during the period.
| 29 |
| Table of Contents |
In the three and nine months ended September 30, 2021, cost of sales per the financial statements included $1.7 million and $5.2 million, respectively, in lower of cost or NRV adjustments. With production rates held to these intentionally lower levels, virtually all production costs during 2021 will be charged to cost of sales as NRV adjustments. In the three and nine months ended September 30, 2020, cost of sales per the financial statements included $1.8 million and $6.3 million, respectively, in lower of cost or NRV adjustments.
All sales in 2020 were from purchased product. The weighted average purchase price was $25.83 per pound.
Gross Profit
The gross loss per the financial statements for the three and nine months ended September 30, 2021, was $1.7 million and $5.2 million, respectively. As there were no U3O8 sales during the nine months ended September 30, 2021, the losses were composed of NRV adjustments. The gross loss per the financial statements for the three and nine months ended September 30, 2020, was $1.8 million and $6.3 million, respectively. Excluding the lower of cost or NRV adjustments, the U3O8 gross profit was $3.1 million for the nine months ended September 30, 2020, which represents a gross profit margin of approximately 38 percent.
Operating Costs
Operating costs include exploration and evaluation expense, development expense, general and administration expense, and accretion expense.
The following table summarizes the operating costs for the three and nine months ended September 30, 2021, and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
Operating Costs |
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Exploration and evaluation |
|
| 515 |
|
|
| 474 |
|
|
| 1,671 |
|
|
| 1,419 |
|
| Development |
|
| 583 |
|
|
| 284 |
|
|
| 1,048 |
|
|
| 900 |
|
| General and administration |
|
| 1,368 |
|
|
| 1,254 |
|
|
| 4,090 |
|
|
| 3,694 |
|
| Accretion |
|
| 119 |
|
|
| 145 |
|
|
| 365 |
|
|
| 433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,585 |
|
|
| 2,157 |
|
|
| 7,174 |
|
|
| 6,446 |
|
Total operating costs for the three and nine months ended September 30, 2021, were $2.6 million and $7.2 million, respectively. Total operating expenses for the three and nine months ended September 30, 2020, were $2.2 million and $6.4 million, respectively. The increase in 2021 was primarily related to the payment of bonuses in 2021. There were no bonuses paid in 2020.
Exploration and evaluation expense consists of labor and the associated costs of the exploration, evaluation, and regulatory departments, as well as land holding and exploration costs on properties that have not reached the development or operations stage. The total expense for the three months ended September 30, 2021, and 2020 were similar. The $0.3 million increase in the nine months ended September 30, 2021, was primarily due to bonus payments in 2021, which were partially offset by savings realized from labor reductions and relocating the Casper operations office to a smaller, less expensive, office building.
| 30 |
| Table of Contents |
Development expense includes costs incurred at the Lost Creek Project not directly attributable to production activities, including wellfield construction, drilling, and development costs. It also includes costs associated with the Shirley Basin Project, which is in a more advanced stage. Lucky Mc, which is an historic mine site, has also been classified as a development project. During 2021 Q3, all remaining reclamation obligations on the Lucky Mc property were satisfied and the permit to mine and related bond requirements were terminated. The $0.3 million and $0.1 million increases in development expense during the three and nine months ended September 30, 2021, respectively, related to repair costs of drainage channels at Shirley Basin that were damaged by a heavy rainstorm.
General and administration expense relates to the administration, finance, investor relations, land, and legal functions, and consists principally of personnel, facility, and support costs. The $0.1 million and $0.4 million increases in the three and nine months ended September 30, 2021, were primarily related to the 2021 bonus payments, which were partially offset by savings realized from labor reductions in 2020.
Other Income and Expenses
Net interest expense increased slightly in 2021 because of lower interest income received from restricted cash deposit accounts as compared to 2020.
For the three months ended September 30, 2021, the warrant liability mark to market adjustment changed from a gain of $0.6 million in the comparable period in 2020 to a loss of $5.1 million in 2021. For the nine months ended September 30, 2021, the warrant liability mark to market adjustment changed from a gain of $0.6 million in the comparable period in 2020 to a loss of $11.4 million in 2021. As a part of the September 2018 underwritten public offering, the August 2020 registered direct offering, and the February 2021 underwritten public offering, we sold warrants that were priced in U.S. dollars. Because the functional currency of the Ur-Energy Inc. entity is Canadian dollars, a derivative financial liability was created. The liability was originally calculated, and is revalued monthly, using the Black-Scholes model as there is no active market for the warrants. Any gain or loss resulting from the revaluation of the liability is reflected in other income and expenses for the period. During 2021, the Company’s stock price, volatility, and other factors used in the Black-Scholes model rose significantly, leading to a significant increase in the warrant liability and corresponding mark to market losses.
As a result of the February 2021 underwritten public offering, the Company received approximately $13.9 million in net proceeds from the offering. Because the functional currency of the Ur‑Energy Inc. entity is Canadian dollars, the entity’s USD bank account is revalued into Canadian dollars and any gain or loss resulting from changes in the currency rates is reflected in other income and expenses for the period. For the nine months ended September 30, 2021, the foreign exchange loss was primarily due to the revaluation of the Canadian entity’s USD bank account.
On April 16, 2020, we obtained two SBA PPP loans (one for each of our subsidiaries with U.S. payroll obligations) through the BOKF. Under the program, as modified by the Flexibility Act and SBA and Treasury rulemakings, the repayment of our loans, including interest, would be forgiven based on eligible payroll, payroll-related, and other allowable costs incurred in a twenty-four-week period following the funding of the loans. In December 2020, we applied for loan forgiveness with the BOKF. The BOKF, after reviewing the loan forgiveness applications, submitted them to the SBA for approval. The Company received notifications in 2021 Q2 that the principal amount of $893 thousand and accrued interest of approximately $10 thousand were forgiven under the terms of the PPP. This was treated as a forgiveness of debt on the Consolidated Statements of Operations for the nine-months ended September 30, 2021, and a $903 thousand gain on debt forgiveness was recognized in other income.
| 31 |
| Table of Contents |
Earnings (loss) per Common Share
The basic and diluted loss per common share for the three and nine months ended September 30, 2021, was $0.05 and $0.13, respectively. For 2020, the losses per share were $0.02 and $0.06, respectively. The diluted loss per common share is equal to the basic loss per common share due to the anti-dilutive effect of all convertible securities in periods of loss.
Liquidity and Capital Resources
Cash and cash equivalents increased $29.1 million from the December 31, 2020, balance of $4.3 million to $33.4 million as of September 30, 2021. Cash resources consist of Canadian and U.S. dollar denominated deposit accounts and money market funds. During the nine months ended September 30, 2021, we used $9.1 million for operating activities, had minimal investing activities, and generated $38.3 million from financing activities.
Operating activities used $9.1 million of cash for the nine months ended September 30, 2021. We spent $2.5 million on production related cash costs, operating costs consumed $5.6 million of cash, and we paid $0.6 million for interest payments on our state bond loan and $0.4 million for insurance premiums.
Investing activities used less than $0.1 million during the period.
Financing activities provided $38.3 million of cash in 2021. As described below, on February 4, 2021, we closed a $15.2 million underwritten public offering. After share issue costs, we received net proceeds of $13.9 million. During 2021, we have received net proceeds of $16.6 million through our At Market facility. We also received $7.8 million from the exercise of warrants and stock options.
Wyoming State Bond Loan
On October 23, 2013, we closed a $34.0 million Sweetwater County, State of Wyoming, Taxable Industrial Development Revenue Bond financing program loan (“State Bond Loan”). The State Bond Loan calls for payments of interest at a fixed rate of 5.75% per annum on a quarterly basis, which commenced January 1, 2014. The principal was to be payable in 28 quarterly installments, which commenced January 1, 2015. The State Bond Loan is secured by all the assets at the Lost Creek Project. As of September 30, 2021, the balance of the State Bond Loan was $12.4 million.
On October 1, 2019, the Sweetwater County Commissioners and the State of Wyoming approved an eighteen-month deferral of principal payments beginning October 1, 2019. On October 6, 2020, the State Bond Loan was again modified to defer principal payments for an additional eighteen months. Quarterly principal payments are scheduled to resume on October 1, 2022, and the last payment will be due on October 1, 2024.
Small Business Administration Loans
On April 16, 2020, we obtained two SBA PPP loans (one for each of our subsidiaries with U.S. payroll obligations) through the Bank of Oklahoma Financial (“BOKF”). The program was a part of the CARES Act enacted by Congress on March 27, 2020, in response to the COVID-19 (Coronavirus) pandemic. The combined loan amount was $0.9 million.
On June 5, 2020, the Flexibility Act became law. The Flexibility Act changes key provisions of the PPP, including maturity of the loans, deferral of loan payments, and the forgiveness of the PPP loans, with revisions being retroactive to the date of the CARES Act.
| 32 |
| Table of Contents |
Under the PPP, as modified by the Flexibility Act, the repayment of our loans, including interest, may be forgiven based on eligible payroll, payroll-related, and other allowable costs incurred in a twenty-four-week period following the funding of the loans. In December 2020, we applied for loan forgiveness with the BOKF. After reviewing the loan forgiveness applications, BOKF submitted them to the SBA for approval. The Company received notifications in 2021 Q2 that the principal amount of $893 thousand and accrued interest of approximately $10 thousand were forgiven under the terms of the PPP. This was treated as a forgiveness of debt on the Consolidated Statements of Operations for the nine-months ended September 30, 2021, and a $903 thousand gain on debt forgiveness was recognized in other income.
Universal Shelf Registration and At Market Facility
On May 15, 2020, we filed a universal shelf registration statement on Form S-3 with the SEC in order that we may offer and sell, from time to time, in one or more offerings, at prices and terms to be determined, up to $100 million of our Common Shares, warrants to purchase our Common Shares, our senior and subordinated debt securities, and rights to purchase our Common Shares and/or senior and subordinated debt securities. The registration statement became effective May 27, 2020, for a three-year period.
On May 29, 2020, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (formerly, B. Riley FBR, Inc.). On June 7, 2021, we amended and restated the Sales Agreement to include Cantor Fitzgerald & Co. as a co-agent. Under the Sales Agreement, as amended, we may, from time to time, issue and sell Common Shares at market prices on the NYSE American or other U.S. market through the agents for aggregate sales proceeds of up to $50 million.
In 2021 through September 30, we utilized the Sales Agreement for gross proceeds of $16.6 million. In 2020 Q4, we utilized the Sales Agreement and received gross proceeds of $0.1 million.
2020 Registered Direct Offering
On August 4, 2020, the Company closed a $4.68 million registered direct offering of 9,000,000 common shares and accompanying one-half common share warrants to purchase up to 4,500,000 common shares, at a combined public offering price of $0.52 per common share and accompanying warrant, with gross proceeds to the Company of $4.68 million. After fees and expenses of $0.4 million, net proceeds to the Company were $4.3 million.
2021 Underwritten Public Offering
The Company closed on February 4, 2021, a $15.2 million underwritten public offering of 16,930,530 common shares and accompanying one-half common share warrants to purchase up to 8,465,265 common shares, at a combined public offering price of $0.90 per common share and accompanying one-half common share warrant. The gross proceeds to Ur‑Energy from this offering were approximately $15.2 million. After fees and expenses of $1.3 million, net proceeds to the Company were approximately $13.9 million.
Liquidity Outlook
As of October 27, 2021, we had $40.9 million of cash and cash equivalents including an additional $8.2 million received from ATM sales and warrant exercises which took place after September 30, 2021. In addition to our cash position, our finished, ready-to-sell, conversion facility inventory, worth $13.4 million at recent spot prices, is immediately realizable, if necessary. We do not anticipate selling our existing finished-product inventory in the next 12 months unless it is advantageous to do so.
| 33 |
| Table of Contents |
Looking Ahead
Global recognition of nuclear energy’s role in achieving net-zero carbon emissions continues to foster renewed interest in the uranium sector in 2021. The Paris Climate Agreement calls for net-zero carbon emissions by 2050, and certain nations are now targeting earlier realization of net-zero. The U.S. rejoined the agreement this year, and the Biden Administration continues to voice support for the nuclear industry. Japan, several member nations of the European Union, and the United Kingdom have all recently made announcements of action plans placing nuclear energy as an integral part of the climate change solution.
The support for nuclear energy this year has prompted financial funds and uranium ETFs, as well as uranium developers and producers, to purchase uranium inventories further supporting the uranium spot price. In July 2021, the newly formed Sprott Physical Uranium Trust began its purchases of uranium and has established the means in the equity markets to raise more than $1 billion for such purchases. Subsequent to quarter-end, the most recent participant in the long-term investment in uranium is the physical uranium fund formed by the Kazakhs. That physical fund announced plans to raise as much as $500 million for purchasing uranium. These events during Q3 and early Q4 have moved the spot price more than 70 percent over 2021 lows and uranium equities have benefited. Uranium spot prices marked a daily high of $50.50 in mid-September, before holding in the mid- and upper-$40s more recently.
To date in 2021, the Company has raised $46.5 million. Our cash position as of October 27, 2021, is $40.9 million. In addition to our strong cash position, we have nearly 285,000 pounds of finished, U.S. produced U3O8 inventory, worth approximately $13.4 million at recent spot prices. Our financial position provides us with adequate funds to maintain and enhance operational readiness at Lost Creek, as well as allowing us to preserve our existing inventory to sell into higher prices. To further heighten our readiness to return to production operations at Lost Creek, we commenced a drill and development program in October. Initially, we are drilling, developing and constructing an additional header house (HH2-4) in our fully permitted MU2. We anticipate that when this work is complete, we will advance a delineation drill program in MU2 in preparation of operations beyond the fourth MU2 header house. The estimated cost of these development programs is $2.2 million.
We continue to diligently work to optimize processes and refine production plans to strengthen our operational readiness at Lost Creek. Our experienced Lost Creek operational staff is prepared to expand uranium production to an annualized run rate of up to 1.2 million pounds upon a “go” decision for ramp up. Our current and planned development initiatives will further enhance our operational readiness for a production ramp up, which will then include further development work in both of the first two mine units, followed by the ten additional mining areas as defined in the Lost Creek Property Preliminary Economic Assessment, as amended. Following receipt of an approved license amendment in 2021 Q2, the Lost Creek facility now has the constructed and licensed capacity to process up to 2.2 million pounds of U3O8 per year and sufficient mineral resources to feed the processing plant for many years to come.
Lost Creek operations can increase to full production rates in as little as nine months following a “go” decision, simply by developing additional header houses within the fully permitted MU2. The ongoing development and construction will shorten the time to production in HH2-4. Development expenses during the full period of ramp up are estimated to be approximately $14 million. These planned costs are nearly all related to MU2 drilling and header house construction of HH2-4 and beyond. Our long-tenured operational and professional staff have significant levels of experience and adaptability which will allow for an easier transition back to full operations. Among our recent hires, we have been fortunate to return three former employees to work. Having knowledgeable and experienced staff return further enhances our preparations for production. We are prepared to ramp up and to deliver future Lost Creek production inventory into new sales contracts and the national uranium reserve when markets and the implementation of the reserve permit.
| 34 |
| Table of Contents |
With all major permits and authorizations for our Shirley Basin Project now in hand, we also stand ready to construct at the mine site when market conditions warrant. We estimate up to nine years production at the project based upon the mineral resources reported in the Shirley Basin Preliminary Economic Assessment.
We will continue to closely monitor the uranium market, the implementation of the uranium reserve program, and other developments in the markets or from Congress, which may positively impact the uranium production industry. Until market conditions signal a decision for the return to production operations, we will focus on maintaining safe and compliant operations while continuing to enhance and leverage our operational readiness.
Transactions with Related Parties
There were no transactions with related parties during the quarter.
Proposed Transactions
A non-core, unpermitted, non-operating property held by Pathfinder is presently considered to be an asset held for sale. The Company has a plan to sell the asset and is considering an offer consisting of cash and mineral properties. The asset’s mineral property cost is shown in note 4 to the accompanying Unaudited Consolidated Financial Statements.
Other than the proposed transaction, as is typical of the mineral exploration, development, and mining industry, we will consider and review potential merger, acquisition, investment and venture transactions and opportunities that could enhance shareholder value. Timely disclosure of such transactions is made as soon as reportable events arise.
Critical Accounting Policies and Estimates
We have established the existence of uranium resources at the Lost Creek Property, but because of the unique nature of in situ recovery mines, we have not established, and have no plans to establish, the existence of proven and probable reserves at this project. Accordingly, we have adopted an accounting policy with respect to the nature of items that qualify for capitalization for in situ U3O8 mining operations to align our policy to the accounting treatment that has been established as best practice for these types of mining operations.
The development of the wellfield includes injection, production and monitor well drilling and completion, piping within the wellfield and to the processing facility and header houses used to monitor production and disposal wells associated with the operation of the mine. These costs are expensed when incurred.
Mineral Properties
Acquisition costs of mineral properties are capitalized. When production is attained at a property, these costs will be amortized over a period of estimated benefit.
Development costs including, but not limited to, production wells, header houses, piping and power will be expensed as incurred as we have no proven and probable reserves.
| 35 |
| Table of Contents |
Inventory and Cost of Sales
Our inventories are valued at the lower of cost and net realizable value based on projected revenues from the sale of that product. We are allocating all costs of operations of the Lost Creek facility to the inventory valuation at various stages of production with the exception of wellfield and disposal well costs which are treated as development expenses when incurred. Depreciation of facility enclosures, equipment and asset retirement obligations as well as amortization of the acquisition cost of the related property is also included in the inventory valuation. We do not allocate any administrative or other overhead to the cost of the product.
Share-Based Expense
We are required to initially record all equity instruments including warrants, restricted share units and stock options at fair value in the financial statements.
Management utilizes the Black-Scholes model to calculate the fair value of the warrants and stock options at the time they are issued. In addition, the fair value of derivative warrant liability is recalculated monthly using the Black-Scholes model with any gain or loss being reflected in the net income for the period. Use of the Black-Scholes model requires management to make estimates regarding the expected volatility of the Company’s stock over the future life of the equity instrument, the estimate of the expected life of the equity instrument and the number of options that are expected to be forfeited. Determination of these estimates requires significant judgment and requires management to formulate estimates of future events based on a limited history of actual results.
Off Balance Sheet Arrangements
We have not entered into any material off balance sheet arrangements such as guaranteed contracts, contingent interests in assets transferred to unconsolidated entities, derivative instrument obligations, or with respect to any obligations under a variable interest entity arrangement.
Outstanding Share Data
As of October 27, 2021, we had outstanding 210,820,732 Common Shares and 11,102,167 options to acquire Common Shares.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk
Market risk is the risk to the Company of adverse financial impact due to changes in the fair value or future cash flows of financial instruments as a result of fluctuations in interest rates and foreign currency exchange rates.
Interest rate risk
Financial instruments that expose the Company to interest rate risk are its cash equivalents, deposits, restricted cash and debt financing. Our objectives for managing our cash and cash equivalents are to maintain sufficient funds on hand at all times to meet day-to-day requirements and to place any amounts which are considered in excess of day-to-day requirements on short-term deposit with the Company’s financial institutions so that they earn interest.
| 36 |
| Table of Contents |
Currency risk
As of September 30, 2021, we maintained a balance of approximately C$1.1 million in Canadian dollars. The funds will be used to pay Canadian dollar expenses and are considered to be a low currency risk to the Company.
Commodity Price Risk
The Company is subject to market risk related to the market price of uranium. Future sales would be impacted by both spot and long-term uranium price fluctuations. Historically, uranium prices have been subject to fluctuation, and the price of uranium has been and will continue to be affected by numerous factors beyond our control, including the demand for nuclear power, political and economic conditions, governmental legislation in uranium producing and consuming countries, and production levels and costs of production of other producing companies. The average spot market price was $47.13 per pound as of October 27, 2021.
Item 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this MD&A, under the supervision of the Chief Executive Officer and the Chief Financial Officer, the Company evaluated the effectiveness of its disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information the Company is required to disclose in reports that are filed or submitted under the Exchange Act: (1) is recorded, processed and summarized effectively and reported within the time periods specified in SEC rules and forms, and (2) is accumulated and communicated to Company management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures include components of internal control over financial reporting. No matter how well designed and operated, internal controls over financial reporting can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met.
(b) Changes in Internal Controls over Financial Reporting
No changes in our internal control over financial reporting occurred during the nine months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 37 |
| Table of Contents |
PART II
Item 1. LEGAL PROCEEDINGS
No new legal proceedings or material developments in pending proceedings.
Item 1A. RISK FACTORS
There have been no material changes for the three months ended September 30, 2021 from those risk factors set forth in our Annual Report on Form 10-K.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURE
Our operations and exploration activities at Lost Creek are not subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.
Item 5. OTHER INFORMATION
None.
| 38 |
| Table of Contents |
Item 6. EXHIBITS
|
|
|
| Incorporated by Reference | ||||||
Exhibit |
| Exhibit Description |
| Form |
| Date of |
| Exhibit |
| Filed |
|
|
|
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101.INS |
| Inline XBRL Instance Document |
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| x |
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101.SCH |
| Inline XBRL Schema Document |
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| x |
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101.CAL |
| Inline XBRL Calculation Linkbase Document |
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| x |
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101.DEF |
| Inline XBRL Definition Linkbase Document |
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| x |
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101.LAB |
| Inline XBRL Labels Linkbase Document |
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| x |
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101.PRE |
| Inline XBRL Presentation Linkbase Document |
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| x |
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104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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| x |
| 39 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| UR -ENERGY INC. |
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Date: November 1, 2021 | By: | /s/ Jeffrey T. Klenda |
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| Jeffrey T. Klenda |
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| Chief Executive Officer |
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| (Principal Executive Officer) |
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Date: November 1, 2021 | By: | /s/ Roger L. Smith |
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| Roger L. Smith |
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| Chief Financial Officer |
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| (Principal Financial Officer and |
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| Principal Accounting Officer) |
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| 40 |
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jeffrey T. Klenda, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Ur-Energy Inc.; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared; |
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| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 1, 2021 | By: | /s/ Jeffrey T. Klenda |
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| Jeffrey T. Klenda |
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| Chief Executive Officer |
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EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Roger Smith certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Ur-Energy Inc.; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared; |
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| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 1, 2021 | By: | /s/ Roger Smith |
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| Roger Smith |
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| Chief Financial Officer |
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EXHIBIT 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this quarterly report of Ur-Energy Inc. (the “Registrant”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, the undersigned, in the capacity and on the date indicated below, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| (a) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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| (b) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
| Date: November 1, 2021 | By: | /s/ Jeffrey T. Klenda |
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| Jeffrey T. Klenda |
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| Chief Executive Officer |
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EXHIBIT 32.2
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this quarterly report of Ur-Energy Inc. (the “Registrant”) on Form 10-Q for the period ended September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, the undersigned, in the capacity and on the date indicated below, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| (a) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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| (b) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
| Date: November 1, 2021 | By: | /s/ Roger Smith |
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| Roger Smith |
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| Chief Financial Officer |
|