ur-energy december 2012 presentation
TRANSCRIPT
Ur-Energy is an Advanced Pre-Production Junior Mining Company
Focused on development of low-cost uranium production properties in the
United States
Corporate Objectives: •Lost Creek Development •Resource Growth •Strategic Opportunities
NYSE MKT: URG TSX: URE
Corporate Presentation December 2012
NYSE MKT: URG TSX: URE
Disclaimer This presentation contains “forward-looking statements,” within the meaning of applicable securities laws, regarding events or conditions that may occur in the future. Such statements include without limitation the Company’s timeframe for events leading to and culminating in the commencement of production at Lost Creek (including procurement, construction and commissioning); the timing and outcome of the challenge to the BLM Record of Decision, including petitioner’s motion for preliminary injunction, the technical and economic viability of Lost Creek (including the projections contained in the preliminary analysis of economics of the Lost Creek Property); ability and timing of the Company to secure project financing including the state bond process; timing and completion of closing of the Pathfinder transaction; the ability to complete additional favorable uranium sales agreements and ability to reduce exposure to volatile market; the potential of exploration targets throughout the Lost Creek Property; the further exploration, development and permitting of exploration projects including Lost Soldier, the Nebraska properties, Screech Lake and, following a closing, at PMC projects; the long term effects on the uranium market of events in Japan in 2011 including supply and demand projections; and whether a re-rating of the Company will occur as production nears. These statements are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Numerous factors could cause actual events to differ materially from those in the forward-looking statements. Factors that could cause such differences, without limiting the generality of the following, include: risks inherent in exploration activities; volatility and sensitivity to market prices for uranium; volatility and sensitivity to capital market fluctuations; the impact of exploration competition; the ability to raise funds through private or public equity financings; imprecision in resource and reserve estimates; environmental and safety risks including increased regulatory burdens; unexpected geological or hydrological conditions; a possible deterioration in political support for nuclear energy; changes in government regulations and policies, including trade laws and policies; demand for nuclear power; weather and other natural phenomena; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; and other exploration, development, operating, financial market and regulatory risks. Although Ur-Energy Inc. believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this presentation. Ur-Energy Inc. disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Cautionary Note Regarding Projections: Similarly, this presentation also may contain projections relating to an extended future period and, accordingly, the estimates and assumptions underlying the projections are inherently highly uncertain, based on events that have not taken place, and are subject to significant economic, financial, regulatory, competitive and other uncertainties and contingencies beyond the control of Ur-Energy Inc. Further, given the nature of the Company's business and industry that is subject to a number of significant risk factors, there can be no assurance that the projections can be or will be realized. It is probable that the actual results and outcomes will differ, possibly materially, from those projected. The attention of investors is drawn to the Risk Factors set out in the Company's Annual Information Form and Annual Report on Form 40-F, dated March 2, 2012, which are filed, respectively, with the regulatory authorities in Canada on SEDAR and with the U.S. Securities and Exchange Commission on EDGAR. (www.sedar.com and http://www.sec.gov/edgar.shtml) Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources: the information presented uses the terms "measured", "indicated" and "inferred" mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally minable. John Cooper, Ur-Energy Project Geologist, P.Geo. and SME Registered Member, and Qualified Person as defined by National Instrument 43-101, and Catherine Bull, Ur-Energy Project Engineer, Wyoming P.E., and Qualified Person as defined by the NI 43-101, reviewed and approved the technical information contained in this presentation.
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NYSE MKT: URG TSX: URE
Ur-Energy At A Glance Re-Rating is Likely as URG Nears Production
Advanced Pre-Production Project at Lost Creek, Wyoming Construction began in October 2012 First production forecast for mid-2013
Expanding Resources Through Acquisition and Exploration Definitive agreement to acquire Pathfinder Mines Corporation Continued expansion of the Lost Creek Property
Secure Future Revenue Stream Through Sales Agreements
Maintaining a Strong Balance Sheet
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Ur-Energy’s Achievements
1. Completed Licensing the Lost Creek Project Construction began October 2012
2. Addition of Strategic Lost Creek Property Positions 45% Expansion of Measured and Indicated Resources 42% Increase in Inferred Resources
3. Agreement to Acquire Pathfinder Mines
4. Long Term Sales Agreements with Three US Utilities Exclusive marketing agreement with NuCore
5. Maintaining Strong Balance Sheet $17 million top-up financing in February 2012 Advancing application for $34 million Bond Finance with Wyoming Business Council
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Ur-Energy’s Market Position Share Capital & Cash Position As of 09/30/12 Shares Outstanding 121.1M Stock Options & RSUs 7.3M Fully Diluted 128.4M
Market Cap (12/04/12) C$90.8M
Cash (09/30/12) C$29.2M
Cash per share (09/30/12) ~C$0.241 Share price (12/04/12) C$0.75 52 Week Range C$.64 - $1.49 Avg. Daily Volume ~350,000 (3-mo URG & URE 12/04/12)
Member of S&P/TSX SmallCap Index
Geographical Distribution as of 6/30/12
United States ~46% Canada ~40% Other ~14%
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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TSX: URE
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Analyst Coverage
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United States Roth Capital Partners Michael Legg (New York, NY) 1 646 358 1917
Canada Dundee Securities David A. Talbot (Toronto, ON) 1 416-350-3082
Haywood Securities Colin Healey (Vancouver, BC) 1 604-697-7400
Raymond James David Sadowski (Vancouver, BC) 1 604-659-8255
RBC Capital Adam Schatzker (Toronto, ON) 1 416-842-7850
Ur-Energy Inc. is followed by the analysts listed above. This list, including the firms and individual analysts at these firms, is subject to change at any time without notice. Please note that any opinions, estimates, forecasts, conclusions or recommendations regarding Ur-Energy Inc. performance made by these analysts are theirs alone and do not represent opinions, estimates, forecasts, conclusions, recommendations or predictions of Ur-Energy Inc. or its management. Ur-Energy Inc. does not by its reference above or in any other manner imply its endorsement of or concurrence with such information, conclusions or recommendations.
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Experienced Management Team Board of Directors
Executive Directors
Wayne W. Heili, President & Chief Executive Officer (Metallurgical Engineer) Jeffrey T. Klenda*, Board Chairman, Executive Director (Mining Finance)
Non-Executive Directors
W. William Boberg*, Former President & CEO (Professional Geologist) James M. Franklin*, Chair-Technical Committee (Professional Geologist) Paul Macdonell*, Chair-Compensation and Corp. Governance & Nominating Committees
(Senior Federal Mediator) Thomas H. Parker, Chair-Audit Committee (Professional Engineer)
Officers Roger L. Smith, Chief Financial Officer & Chief Administrative Officer(CPA & MBA) Steven M. Hatten, VP Operations (Mining Engineer) John W. Cash, VP Regulatory Affairs, Exploration & Geology (Geologist & Geophysicist) Penne A. Goplerud, Corporate Secretary & General Counsel (JD)
* Founding Directors
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Industry Leading Professionals Highly Experienced Technical and Management Team
144 Years of Direct Uranium Production Experience ISR operations experience – Nebraska, Texas ,Wyoming & Kazakhstan
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Nuclear Fuel Demand is Growing
US NRC approved four new construction & operation licenses this year (2012)
First nuclear power plant licenses in 30+ years
HEU Agreement to expire next year Provides 13% of world and 45% of US annual supply
63 new reactors under construction
Russia, China and India represent 50% of new builds and have reaffirmed support for nuclear power
Saudi Arabia & the United Kingdom combined have announced plans to build 24 new reactors
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Global Supply Picture is Dynamic Today’s capital markets present a significant obstacle to development of new large scale mining centers
Current prices do not incentivize new supply development or sustain high cost conventional producers
Large scale production growth is being curtailed for the foreseeable future
Olympic Dam expansion delayed Kintyre shelved No new growth for Paladin under $85/pound
New production likely to come only from a limited number of low cost, scalable projects
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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The US Uranium Market US Demand is not met by US Production
The US mines produce ~ 4M lbs of uranium/ yr1
The US utilities consume 55M lbs of uranium/ yr1
Ur-Energy is well positioned to capitalize on this opportunity
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See Disclaimer re Forward-looking Statements and Projections (slide 2) 1 – U.S. Energy Information Administration
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Sound Marketing Strategy
Balancing strategic and economic benefits of the spot/term price ratio
De-risking by securing future revenue stream in an uncertain market
Securing pricing that supports development plans for the Lost Creek Project
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Four term contracts secured with North American utilities
Exclusive representation by NuCore Energy, LLC in off-take purchase agreement negotiations
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Ur-Energy’s US Projects
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Lost Creek ISR Project
Ur-Energy’s Flagship Property
Under Construction
Fully Licensed for Production
Growing Resources
Low Projected Operating Costs
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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The Lost Creek Property
Updated technical report includes new claims and upgraded resources
Exploration targets within the Lost Creek Project and adjoining projects provide potential of additional resources U3O8
Lost Creek Project – 4,254 permit acres Adjoining Projects – ~38,000 acres
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Many of these exploration targets remain conceptual in nature. There has been insufficient exploration to define mineral resource estimates at all such exploration targets. It is uncertain if further exploration will result in the additional target areas being delineated as further mineral resource.
Measured: 4.20 Mlbs eU3O8 (in 3.85 Mt @ 0.055%) Indicated: 4.15 Mlbs eU3O8 (in 3.96 Mt @ 0.053%) Inferred: 2.87 Mlbs eU3O8 (in 2.99 Mt @ 0.049%) * Based on grade cutoff of 0.02% eU3O8 and a GT cutoff of 0.3
Upgrade to the NI 43-101 Mineral Resource Estimate on the Lost Creek Property (as of April 30, 2012 PEA)
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Lost Creek Path to Production
Received Record of Decision from BLM on October 5, 2012 Final permit under review
Approval of First Mine Unit Complete
Construction: 6-9 months for build out and commissioning
First Production Anticipated in second quarter of next year Ramp-up to 1 million pound per year production rate in 2014
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
Lost Creek
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Adjacent to Rio Tinto Sweetwater Mine Complex (NRC licensed conventional uranium mill)
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Lost Creek Plant Capacity 1M lbs expandable to 2M lbs
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2012 Property Acquisition
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Asset Exchange with Uranium One Added ~5,250 acres No Cash Cost
Additional ~250 new mining claims staked
Resource gain (as of April 30, 2012 PEA)
Measured: 1.26 Mlbs eU3O8 (in 1.16 Mt @ 0.054%) Indicated: 1.33 Mlbs eU3O8 (in 1.55 Mt @ 0.043%) Inferred: 0.85 Mlbs eU3O8 (in 0.93 Mt @ 0.048%) * Based on grade cutoff of 0.02% eU3O8 and a GT cutoff of 0.3
Ur-Energy possesses ~1,100 holes of historic drill data on new lands
Completed 200 hole exploration program at LC East
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Preliminary Economic Assessment
April 30, 2012 PEA* Updates Resources and Economics
Extended Life of Mine to 8-10 years
Mineral Resource Increase from February 2012 PEA 45% Increase in Measured and Indicated Resources 42% Increase in Inferred Resources
Estimates Operating Costs at US$16.12/ lb
Lowest quartile of all uranium producers
Project Internal Rate of Return (IRR) at 87%
Pre-Production Capital Costs of Only US$31.6M Remaining Lowest quartile of all developing uranium production facilities
* Preliminary Economic Assessment of the Lost Creek Property, Sweetwater County, Wyoming Prepared by Ur-Energy Inc. – April 30, 2012 (posted on SEDAR and EDGAR)
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Cautionary Statement: This PEA is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. The estimated mineral recovery used in this PEA is based on both site-specific laboratory recovery data as well as URE personnel and industry experience at similar facilities. There can be no assurance that recovery at this level will be achieved.
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Under Construction
Groundbreaking Oct. 2012 Wyoming based contractor hired Nine month estimated build-out
Construction Initiated Processing Plant First Mine Unit Auxiliary Facilities
Pre-Production Capital of $31.6M Processing Plant: $18.8M Initial Production Area: $4.7M Disposal Well Installation: $6.4M Infrastructure: $1.7M
Staffed for Construction Management Personnel Field Support Crew
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
IX Columns
Interior of Ur-Energy’s Prototype Header House
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Lost Creek Construction Highlights
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Pipe Fusion – Plant to Mine Unit 1
Concrete piers being poured at Plant Site
Drilling activities at First Mine Unit
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Pathfinder Mines Corporation
Definitive Purchase Agreement with AREVA signed in July 2012
Three Major Assets 1. Projects: Shirley Basin & Lucky Mc 2. PMC’s extensive uranium
exploration database 3. Licensed ISR by-product disposal
facility
PMC holds Ur-Energy’s Next Production Center
Purchase Price: US$13.25 million, 10% down payment, balance due on closing, no other monetary obligations prior to closing
Transaction expected to close in first half of 2013
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
PATHFINDER
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Pathfinder Projects
Brownfield properties, existing infrastructure, permits & licenses
Low holding costs Resources located on patented mining claims and state leases
Shirley Basin Historic estimate of resources: >10 million lbs U3O8* High grade roll front deposit: average 0.21% U3O8 Uranium resources can be converted to NI 43-101 compliant Shallow, ISR amenable mineralization
Lucky Mc – Gas Hills Historic estimate of resources: 4.7 million lbs U3O8* Uranium resources can be converted to NI 43-101 compliant Strategic opportunities with nearby developers
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*Ur-Energy is not treating the historic reports as current mineral resources or mineral reserves, because a Qualified Person has not yet conducted sufficient work to classify the estimates as such.
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Pathfinder Assets
Historic US Uranium Exploration Database Hundreds of project descriptions located in twenty-three states Exploration reports dating back as far back as the 1960s More than 15,000 drill logs Technical and economic evaluations
ISR By-Product Disposal Facility Fully licensed for operation Multiple contracts in-place Cash generating – Money Saving Scarce Asset - 1 of 4 commercial facilities in the US
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Lost Soldier – 12.2M M&I lbs U3O8
M & I Resource average GT of 1.1 (17.2 ft @ 0.065% U3O8)
Shallow: 240 feet deep
Over 3,700 drill holes define deposit
NI 43-101 Resource | July 2006
Measured & Indicated: 12.2 Mlbs eU3O8 (in 9.4 Mt @ 0.065%) Inferred: 1.8 Mlbs eU3O8 (in1.6 Mt @ 0.055%)
(Technical Report on the Lost Soldier Project, Wyoming, C. Stewart Wallis, Roscoe Postle Associates Inc., July 10, 2006 - Posted on SEDAR)
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
Can be Licensed with NRC as Amendment to Lost Creek License
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Screech Lake, Thelon Basin, NWT Completed Audio-Magnetotelluric Geophysical Survey, and Soil Gas Hydrocarbon and Enzyme Leach Soil Geochemistry Analyses to Better Define Drill Targets
MegaTEM Survey
0 4 Kilometers
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Screech Lake
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Ur-Energy – Right Now! Growth Oriented Technical & Management Team
Strong Balance Sheet C$29.2 Million (09/30/12)
Advanced Pre-Production Project at Lost Creek Low-cost uranium production center Project construction began in October 2012
Signed Multiple Long-Term Uranium Sales Agreements Reducing Company exposure to volatile marketplace
Re-rating Likely as Ur-Energy Nears Production
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Re-Rating Potential
Stage EV/Lb Producers $3.80
URG $1.31
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URG Upside vs. Producers 3X (+$2.49/Lb)
Source: Dundee (Dec 5, 2012)
As Ur-Energy Nears Production, Re-rating is Likely
See Disclaimer re Forward-looking Statements and Projections (slide 2)
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2013 Growth Objectives 1. Advance Lost Creek
Initiate production Permit area growth Expand NI 43-101 compliant resources
2. Pathfinder Mines Close transaction Transition to operating and regulatory activities Bring resources to NI 43-101 compliance
3. Growth in Production Profile Identify project priorities Act on priorities
4. Corporate Finance – Positive Cash Position Methods, timing, pricing Forecasting additional needs
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Ur-Energy’s News Flow
Construction Updates at Lost Creek Project Started in October 2012
Project Finance Wyoming Industrial Revenue Bond Issuance
Expanding Resources Closing of Pathfinder Mines Acquisition Exploration Results
Uranium Production!
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See Disclaimer re Forward-looking Statements and Projections (slide 2)
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Ur-Energy - The Right People. The Right Projects. Right Now.
For more information, please contact:
Wayne Heili, President, Chief Executive Officer & Director Jeff Klenda, Board Chairman & Director Rich Boberg, Director of Public Relations
By Mail: Ur-Energy Corporate Office 10758 W. Centennial Rd., Ste. 200 Littleton, CO 80127 USA
By Phone: Office (720) 981-4588 Toll-Free (866) 981-4588 Fax (720) 981-5643
By E-mail: [email protected] [email protected] [email protected]
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