re: Ann: Company Presentation - Mines and Mon......

re: Ann: Company Presentation - Mines and Mon... http://www.wyomingbusinessreport.com/article/20140320/NEWS/140329996

Uranium mine reports on first partial production year

By Mark Wilcox March 20, 2014


"Luckily for Casper-based Ur-Energy, which operates the Lost Creek mine near Jeffrey City, it hasn't had to resort to spot-price sales yet, instead selling at long-term contract prices about 177 percent higher than current spot prices. But contracts can't always swallow all production. The company said it expects to produce about one million pounds of U3O8 in 2014, of which at least a third should sell at contract prices.

"The remainder of the sales will be at existing spot prices unless additional contract sales are put in place," the company wrote in an SEC filing.

If subject to the spot market as expected under current contracts, much of the profit could be stripped out of the commodity for the young company. The company's price to produce a pound of U308 stood at $34.40 for the year, with spot prices sitting only slightly higher at around $35.25 recently. However, CEO Wayne Heili said in an email to the Business Report that without factoring in non-cash components like depreciation and amortization of capital assets – neither of which directly affect profitability – production costs were only $21.98. That still leaves room for a healthy margin even at currently depressed spot prices."