from Ur-Energy Inc. (NASDAQ:URG)
Ur-Energy Releases 2023 Year End Results and Announces Two New Uranium Sales Agreements
LITTLETON, CO / ACCESSWIRE / March 6, 2024 / Ur-Energy Inc. (NYSE American:URG)(TSX:URE) ("Ur-Energy" or the "Company") has filed the Company's Annual Report on Form 10-K, Consolidated Financial Statements, and Management's Discussion & Analysis, all for the year ended December 31, 2023, with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov/edgar.shtml and with Canadian securities authorities on SEDAR at www.sedarplus.ca. These filings also may be accessed on the Company's website at www.ur-energy.com. Shareholders of the Company may receive a hard copy of the consolidated financial statements, free of charge, upon request to the Company.
Ur-Energy CEO, John Cash said: "We are pleased to have met our sales guidance during 2023, with $17.3 million in revenues received during the year. Our ramp-up and recommissioning activities at Lost Creek are advancing well now. In February, we made our first shipment of U3O8 to the conversion facility since returning to commercial production. It was our 75th shipment from Lost Creek. We have recently completed two additional sales agreements, strengthening our sales contract book through 2030.
"As the uranium market evolves toward supply from secure jurisdictions, we continue to see a significant number of requests for proposals from global fuel buyers. Our objective with the ramp up of production from Lost Creek, and ultimately from Shirley Basin, is to continue signing well-priced, long-term contracts that provide strong profit margins for many years to come. We also plan to leave some of our production capacity uncontracted, so we can participate in a strong spot market. We remain one of the few North American producers, as our mine staff continues to successfully progress production toward these objectives."
Lost Creek Operations
Ramp-up activities at Lost Creek in 2023 led to operation of the first two new header houses in Mine Unit 2 (MU2). Our Q4 production figures reflect the progress made in wellfield operations: in 2023, we captured approximately 103,487 pounds U3O8, of which 68,448 pounds U3O8 were captured in Q4. The average production grade in Q4 was 93.9 mg/l U3O8.
Wellfield construction and development continues in all areas of MU2. Subsequent to year-end, we completed all delineation drilling throughout the remaining eight planned production areas in MU2. We have 12 drill rigs onsite with plans to mobilize additional rigs in the coming weeks. Production in HH 2-6 came online after year-end, with HH 2-7 anticipated to come online in early March 2024. All remaining planned production areas of MU2 are scheduled to be drilled and constructed during 2024. Additionally, we are planning delineation drilling and initial well installation in Phase 2 of Mine Unit 1 (MU1) when drilling is complete in MU2.
Financial Results
As of December 31, 2023, we had cash resources of $59.7 million, which was an increase of $26.7 million from the $33.0 million balance on December 31, 2022. During 2023, we generated $46.1 million from financing activities and used $17.0 million for operating activities, $2.0 million for investing activities, and increased restricted cash by $0.4 million.
U3O8 Sales, Cost of Sales, and Gross Profit 1
The following table provides information on our U3O8 sales, cost of sales, and gross profit.
| Unit | 2023 Q1 | 2023 Q2 | 2023 Q3 | 2023 Q4 | 2023 | |||||||||||||
U3O8 Pounds Sold | ||||||||||||||||||
Produced | lb | 43,259 | - | 90,000 | 90,000 | 223,259 | ||||||||||||
Purchased | lb | 56,741 | - | - | - | 56,741 | ||||||||||||
| lb | 100,000 | - | 90,000 | 90,000 | 280,000 | |||||||||||||
U3O8 Sales | ||||||||||||||||||
Produced | $000 | 2,789 | - | 5,440 | 5,441 | 13,670 | ||||||||||||
Purchased | $000 | 3,658 | - | - | - | 3,658 | ||||||||||||
| $000 | 6,447 | - | 5,440 | 5,441 | 17,328 | |||||||||||||
U3O8 Price per Pounds Sold | ||||||||||||||||||
Produced | $/lb | 64.47 | - | 60.44 | 60.46 | 61.23 | ||||||||||||
Purchased | $/lb | 64.47 | - | - | - | 64.47 | ||||||||||||
| $/lb | 64.47 | - | 60.44 | 60.46 | 61.89 | |||||||||||||
U3O8 Cost of Sales | ||||||||||||||||||
Ad valorem and severance taxes | $000 | 26 | - | 53 | 53 | 132 | ||||||||||||
Cash costs | $000 | 805 | - | 1,674 | 1,674 | 4,153 | ||||||||||||
Non-cash costs | $000 | 383 | - | 796 | 797 | 1,976 | ||||||||||||
Produced | $000 | 1,214 | - | 2,523 | 2,524 | 6,261 | ||||||||||||
Purchased | $000 | 2,415 | - | - | - | 2,415 | ||||||||||||
| $000 | 3,629 | - | 2,523 | 2,524 | 8,676 | |||||||||||||
U3O8 Cost per Pound Sold | ||||||||||||||||||
Ad valorem and severance taxes | $/lb | 0.60 | - | 0.59 | 0.59 | 0.59 | ||||||||||||
Cash costs | $/lb | 18.61 | - | 18.60 | 18.60 | 18.60 | ||||||||||||
Non-cash costs | $/lb | 8.85 | - | 8.84 | 8.85 | 8.85 | ||||||||||||
Produced | $/lb | 28.06 | - | 28.03 | 28.04 | 28.04 | ||||||||||||
Purchased | $/lb | 42.56 | - | - | - | 42.56 | ||||||||||||
| $/lb | 36.29 | - | 28.03 | 28.04 | 30.99 | |||||||||||||
U3O8 Gross Profit | ||||||||||||||||||
Produced | $000 | 1,575 | - | 2,917 | 2,917 | 7,409 | ||||||||||||
Purchased | $000 | 1,243 | - | - | - | 1,243 | ||||||||||||
| $000 | 2,818 | - | 2,917 | 2,917 | 8,652 | |||||||||||||
U3O8 Gross Profit per Pound Sold | ||||||||||||||||||
Produced | $/lb | 36.41 | - | 32.41 | 32.42 | 33.19 | ||||||||||||
Purchased | $/lb | 21.91 | - | - | - | 21.91 | ||||||||||||
| $/lb | 28.18 | - | 32.41 | 32.42 | 30.90 | |||||||||||||
U3O8 Gross Profit Margin | ||||||||||||||||||
Produced | % | 56.5 | % | 0.0 | % | 53.6 | % | 53.6 | % | 54.2 | % | |||||||
Purchased | % | 34.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 34.0 | % | |||||||
| % | 43.7 | % | 0.0 | % | 53.6 | % | 53.6 | % | 49.9 | % | ||||||||
1 The U3O8 and cost per pound measures included the above 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.
We sold a total of 280,000 pounds U3O8 in 2023 at an average price per pound sold of $61.89 and the average cost per pound sold was $30.99, which resulted in an average gross profit per pound sold of $30.90 with an average gross profit margin of nearly 50%. Including NRV adjustments, the gross loss was $1.7 million and $6.8 million for the years ended December 31, 2023, and 2022, respectively. Excluding the NRV adjustments, we realized gross profits of $8.7 million and nil for the years ended December 31, 2023, and 2022, respectively. We were pleased to generate positive gross profits from uranium sales in 2023.
U3O8 Production and Ending Inventory
The following table provides information on our pro