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What changed in UR-ENERGY INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of UR-ENERGY INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+264 added−232 removedSource: 10-K (2024-03-06) vs 10-K (2023-03-06)

Top changes in UR-ENERGY INC's 2023 10-K

264 paragraphs added · 232 removed · 146 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

78 edited+11 added−17 removed97 unchanged
Biggest changeWe depend on services of our management, and key personnel, contractors and service providers, and the timely availability of such individuals and providers cannot be assured during ramp-up or into the future. Successful implementation of our business plan and operations is dependent upon our management team and experienced staff, some of whom are approaching retirement age.
Biggest changeSuccessful implementation of our business plan and operations is dependent upon our management team and experienced staff, some of whom are approaching retirement age. From time to time, we may need to recruit additional qualified employees, contractors and service providers to supplement existing management and personnel.
We believe we hold all necessary licenses and permits to carry on the activities which we are currently conducting or propose to conduct under applicable laws and regulations. Such licenses and permits are subject to changes in regulations and changes in various operating circumstances.
We believe we hold all necessary licenses and permits to carry on the activities which we are currently conducting or currently propose to conduct under applicable laws and regulations. Such licenses and permits are subject to changes in regulations and changes in various operating circumstances.
These laws impose high standards on the mining industry, particularly with respect to uranium recovery, to monitor the discharge of wastewater and report the results of such monitoring to regulatory authorities, to reduce or eliminate certain effects on or into land, water or air, to progressively restore mine properties, to manage hazardous wastes and materials and to reduce the risk of worker accidents.
These laws impose high standards on the mining industry, particularly with respect to uranium recovery, to monitor the discharge of wastewater and report the results of such monitoring to regulatory authorities, to reduce or eliminate certain effects on or into land, groundwater, water or air, to progressively restore mine properties, to manage hazardous wastes and materials and to reduce the risk of worker accidents.
A violation of these laws may result in the imposition of substantial fines and other penalties and potentially expose us to operational restrictions, suspension, administrative proceedings or litigation. Many of these laws and regulations have tended to become more stringent over time, which appears will continue to be the trend in coming years.
A violation of any of these laws may result in the imposition of substantial fines and other penalties and potentially expose us to operational restrictions, suspension, administrative proceedings or litigation. Many of these laws and regulations have tended to become more stringent over time, which appears will continue to be the trend in coming years.
As a result, and despite the fact that we have produced U 3 O 8 at the Lost Creek Project since 2013, there is an increased uncertainty and risk that may result in economic and technical failure which may adversely impact our future profitability.
As a result, and despite the fact that we have produced U 3 O 8 at the Lost Creek Project since 2013, there is increased uncertainty and risk that may result in economic and technical failure which may adversely impact our future profitability.
U.S., Canadian, and other international legislative and regulatory action intended to ensure the protection of the environment are continually changing and evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability, and potentially increased capital expenditures and operating costs.
U.S., Canadian, and other international legislative and regulatory action intended to ensure the protection of the environment are continually changing and evolving in a manner expected to result in stricter standards, restrictions and enforcement, larger fines and liability, and potentially increased capital expenditures and operating costs.
Potential sources of future funds available to us, in addition to the proceeds from sales of current inventory and future production, include the sale of additional equity capital, proceeds from the exercise of outstanding convertible equity instruments, borrowing of funds or other debt structure, project financing, or the sale of our interests in assets.
Potential sources of future funds available to us, in addition to the proceeds from sales of inventory and future production, include the sale of additional equity capital, proceeds from the exercise of outstanding convertible equity instruments, borrowing of funds or other debt structure, project financing, or the sale of our interests in assets.
Passage of such legislation could adversely affect our financial performance, including that proposals imposing a royalty or otherwise impacting holding and operational costs of mining claims, if passed, could render mineral projects or existing mines uneconomic.
Passage of such legislation could adversely affect our financial performance, including proposals imposing a royalty or otherwise impacting holding and operational costs of mining claims, if passed, could render mineral projects or existing mines uneconomic.
Further, the growth of the uranium and nuclear power industry beyond its current level will depend upon continued and increased acceptance of nuclear technology as a means of generating electricity.
Further, the sustained growth of the uranium and nuclear power industry beyond its current level will depend upon continued and increased acceptance of nuclear technology as a means of generating electricity.
Maintaining the demand for uranium at current levels and future growth in demand will depend upon the continued acceptance of nuclear technology as a means of generating electricity. Unique political and public perception factors impact the nuclear fuel cycle industries, including uranium miners. Some government entities and non-governmental organizations continue to aggressively oppose certain mining activities including specifically uranium recovery.
Maintaining the demand for uranium at current levels and future growth in demand will depend upon the continued acceptance of nuclear technology as a means of generating electricity. Unique political and public perception factors impact the nuclear fuel cycle industries, including uranium producers. Some government entities and non-governmental organizations continue to aggressively oppose certain mining activities including specifically uranium recovery.
Operational cost estimates are affected by changes in production levels and may be affected by current inflation and cost-of-goods due to supply chain issues as well as the possible need to utilize a greater level of contractor services if required staffing is unavailable or cannot timely be hired and trained.
Operational cost estimates are affected by changes in production levels and may be affected by continuing inflation and cost-of-goods due to supply chain issues as well as the possible need to utilize a greater level of contractor services if required staffing is unavailable or cannot timely be hired and trained.
While we do not currently purchase goods and materials directly from China for our Lost Creek operations and ramp up, our suppliers of electronics and instrumentation components may purchase necessary materials from China, and/or our suppliers and we may be indirectly affected if the market for Chinese products is further disrupted by sanctions, countersanctions or other events.
While we do not currently purchase goods and materials directly from China for our Lost Creek operations, our suppliers of electronics and instrumentation components may purchase necessary materials from China, and we may be indirectly affected if the market for Chinese products is further disrupted by sanctions, countersanctions or other events.
Additionally, these operations are subject to perceived risks, as well as all the hazards and risks, normally encountered in the production of uranium by in situ methods of recovery, such as water management and treatment, including wastewater disposal capacity (deep wells, Class V wells, ponds or other methods; each of which requires regulatory authorizations and varying levels of expense to install and operate), unusual and unexpected geological formations, unanticipated metallurgical difficulties, equipment malfunctions and availability of parts, interruptions of electrical power and communications, other conditions involved in the drilling and removal of material through pressurized injection and production wells, radiation safety, transportation and industrial accidents, and natural disaster ( e.g., fire, tornado), any of which could result in damage to, or destruction of, production facilities, damage to life or property, environmental damage and possible legal liability.
Additionally, these operations are subject to perceived risks, and the hazards and risks normally encountered in the production of uranium by in situ methods of recovery, such as water management and treatment, including wastewater disposal capacity (deep wells, Class V wells, ponds or other methods; each of which requires regulatory authorizations and varying levels of expense to install and operate), unusual and unexpected geological formations, unanticipated metallurgical difficulties, equipment malfunctions and availability of materials and parts for operations and construction, interruptions of electrical power and communications, other conditions involved in the drilling and removal of material through pressurized injection and production wells, radiation safety, transportation and industrial accidents, and natural disaster ( e.g., fire, tornado), any of which could result in damage to, or destruction of, production facilities, damage to life or property, environmental damage and possible legal liability.
Investors in our common shares that are U.S. taxpayers (referred to as a U.S. shareholder) should be aware that we may be a “passive foreign investment company” (a “PFIC”) for the period ended December 31, 2022, and may be a PFIC in subsequent years.
Investors in our common shares that are U.S. taxpayers (referred to as a U.S. shareholder) should be aware that we may be a “passive foreign investment company” (a “PFIC”) for the period ended December 31, 2023, and may be a PFIC in subsequent years.
Should any impacts of climate change be material in nature or occur for lengthy periods of time, our financial condition or results of operations would be adversely affected. As an ISR uranium producer, we maintain a comparatively light environmental footprint. Nonetheless, certain environmental impacts are inevitable from all mineral exploration and development.
Should any impacts of climate change be material in nature or occur for lengthy periods of time, our financial condition or results of operations would be adversely affected. 40 Table of Contents As an ISR uranium producer, we maintain a comparatively light environmental footprint. Nonetheless, certain environmental impacts are inevitable from all mineral exploration and development.
We have entered into term sales contracts for a portion of our Lost Creek production but may be unable to enter into additional term sales contracts in the future on suitable terms and conditions.
We have entered into term sales contracts for a portion of our Lost Creek production, however, we may be unable to enter into additional term sales contracts in the future on suitable terms and conditions.
As a result, our competitors may adopt technological advancements that provide them an advantage over our operational and production costs. Lack of acceptance of or outright opposition to nuclear energy could impede our business. Our future business prospects are tied to the electrical utility industry in the U.S. and worldwide.
As a result, our competitors may adopt technological advancements that provide them an advantage over our operational and production costs. 35 Table of Contents Lack of acceptance of or outright opposition to nuclear energy could impede our business. Our future business prospects are tied to the electrical utility industry in the U.S. and worldwide.
We compete with other companies for the opportunity to participate in promising projects, many of which competing entities have greater financial resources than we have and/or are state-sponsored entities.
We compete with other companies for the opportunity to participate in promising projects, and many of those competing entities have greater financial resources than we have and/or are state-sponsored entities.
Additionally, it is possible that the Company may become involved directly or indirectly in legal proceedings, in the form of governmental or regulatory investigations, administrative proceedings or litigation, arising from challenges to regulatory actions. Such investigations, administrative proceedings and litigation related to regulatory matters may delay or halt exploration or development of our projects.
Additionally, it is possible that the Company may become involved directly or indirectly in legal proceedings, in the form of governmental or regulatory investigations, administrative proceedings or litigation, arising from challenges to regulatory actions. Such investigations, administrative proceedings and litigation related to regulatory matters may delay or halt exploration, development or even operations at our projects.
We do not hold key man insurance in respect of any of our executive officers. 39 Table of Contents The SEC’s adoption of S-K 1300 results in changes to our technical reports and will continue to result in increased compliance costs and uncertainty of interpretation.
We do not hold key man insurance in respect of any of our executive officers. The SEC’s adoption of S-K 1300 results in changes to our technical reports and will continue to result in increased compliance costs and uncertainty of interpretation.
The failure to complete additional term sales contracts on suitable terms may further delay decisions to maximize production at Lost Creek and to construct and begin operations at our Shirley Basin Project and could otherwise adversely impact our operations and resulting cash flows and income. The uranium market is volatile and has limited customers.
The failure to complete additional term sales contracts on suitable terms may further delay decisions to maximize production at Lost Creek and to construct and begin operations at our Shirley Basin Project and could otherwise adversely impact our operations and resulting cash flows and income. 34 Table of Contents The uranium market is volatile and has limited customers.
Further, there is no assurance that we will not face new challenges by third parties to regulatory decisions when made, which may cause additional delay and substantial expense, or may cause a project to be permanently halted. Our operations require licenses and permits from various governmental authorities.
Further, there is no assurance that we will not face new challenges by third parties to regulatory decisions when made, which may cause additional delay and substantial expense, or may cause a project to be permanently halted. 38 Table of Contents Our operations require licenses and permits from various governmental authorities.
Our operations at Lost Creek, which is a remote site in south-central Wyoming, and at other projects as they continue in development, will be subject to all the hazards and risks normally encountered at remote sites in Wyoming, including safety in commuting and severe weather which can affect such commutes and may slow operations, particularly during adverse winter weather and road conditions.
Lost Creek and our other projects as they continue in development, will be subject to all the hazards and risks normally encountered at remote sites in Wyoming, including safety in commuting and severe weather which can affect such commutes and may slow operations, particularly during adverse winter weather and road conditions.
We estimate life of mine when we prepare our mineral resource estimates, but such estimates may not be correct. Our property title and rights may be uncertain and could be challenged.
We estimate life of mine when we prepare our mineral resource estimates, but such estimates may not be correct. 37 Table of Contents Our property title and rights may be uncertain and could be challenged.
The effect of these and other factors on the market price of the common shares is expected to make the price of the common shares volatile in the future, which may result in losses to investors. You may experience future dilution as a result of additional equity offerings.
The effect of these and other factors on the market price of the common shares is expected to make the price of the common shares volatile in the future, which may result in losses to investors. 42 Table of Contents Investors may experience future dilution as a result of additional equity offerings.
We have established the existence of uranium resources for certain uranium projects, including at the Lost Creek Property. We have not established proven or probable reserves, as defined under S-K 1300 or NI 43-101, through the completion of a feasibility study, for any of our uranium projects, including the Lost Creek Property.
We have not established proven or probable reserves, as defined under S-K 1300 or NI 43-101, through the completion of a feasibility study, for any of our uranium projects, including the operating Lost Creek Property.
We have been in production operations since 2013 and are depleting the estimated mineral resource at Lost Creek, which remains our only uranium recovery operation. As a result, we must be able to continue to conduct exploration and develop additional mineral resources.
We have been in production operations for more than a decade and are depleting the estimated mineral resource at Lost Creek, which remains our only uranium recovery operation. As a result, we must be able to continue to conduct exploration and develop additional mineral resources.
To the extent the war in Ukraine may adversely affect our business as discussed, it may also have the effect of heightening many of the other risks described in this Item 1A such as those relating to cyber-security, supply chain, inflationary and other volatility in prices of goods and materials, and the condition of the markets including as related to our ability to access additional capital, any of which could negatively affect our business.
To the extent these conflicts and geopolitical situations may adversely affect our business as discussed, they may also have the effect of heightening many of the other risks described in this Item 1A such as those relating to cyber-security, supply chain, inflationary and other volatility in prices of goods and materials, and the condition of the markets including as related to our ability to access additional capital, any of which could negatively affect our business.
Adverse weather may result in physical damage to our operations, instability of our infrastructure and equipment, or alter the supply of electricity to our Lost Creek Property. Impacts of such events may affect worker productivity at our projects.
Adverse weather may result in physical damage to our operations, instability of our infrastructure and equipment, or alter the supply of electricity to our Lost Creek Property or Shirley Basin when it is constructed. Impacts of such events may affect worker productivity at our projects.
A U.S. shareholder may make a timely “qualified electing fund” election (“QEF election”) or a “mark-to-market” election with respect to our common shares to mitigate the adverse tax rules that apply to PFICs, but these elections may accelerate the recognition of taxable income and may result in the recognition of ordinary income.
A U.S. shareholder may make a timely "qualified electing fund" election (“QEF election”) or a "mark-to-market" election with respect to our common shares to mitigate the adverse tax rules that apply to PFICs, but these elections may accelerate the recognition of taxable income and may result in the recognition of ordinary income.
If we cannot make scheduled payments on our debt, we will be in default which, if not addressed or waived, could require accelerated repayment of our indebtedness and enforcement by the lender against the assets securing our indebtedness.
If we do not make the remaining payments on our debt, we will be in default which, if not addressed or waived, could require accelerated repayment and enforcement by the lender against the assets securing the loan.
Major expenses may be required to establish mineral resources or reserves, to develop metallurgical processes and to construct mining and processing facilities at a site. It is impossible to ensure that our current exploration and development programs will result in profitable commercial operations; this is true for our Excel gold project as well as our uranium properties.
Major expenses may be required to establish mineral resources or reserves, to develop metallurgical processes and to construct mining and processing facilities at a site. It is impossible to ensure that our current exploration and development programs will result in profitable commercial operations.
Any change in such laws could have a material adverse effect on our financial condition, cash flow or results of operations.
Any change in such laws or imposition of fines or restrictions in operations as a result of violations could have a material adverse effect on our financial condition, cash flow or results of operations.
Our activities are directed toward the exploration for, evaluation, acquisition and development of uranium deposits into production operations. There is no certainty that any expenditures we made will result in discoveries of commercial quantities of uranium production. There is aggressive competition within the uranium mining industry for the discovery, acquisition and development of properties considered to have commercial potential.
There is no certainty that any expenditures we made will result in discoveries of commercial quantities of uranium production. There is aggressive competition within the uranium mining industry for the discovery, acquisition and development of properties considered to have commercial potential.
From time to time, we examine opportunities to acquire additional mining assets and businesses. Any acquisition that we may choose to complete may be of significant size, may change the scale of our business and operations, and/or may expose us to new geographic, political, operating, financial and geological risks.
Any acquisition that we may choose to complete may be of significant size, may change the scale of our business and operations, and/or may expose us to new geographic, political, operating, financial and geological risks.
Continued volatility in the equity markets, particularly the commodities and energy markets, as well as current interest rates, may increase the costs attendant to either equity or debt financing. There is no assurance that such funding will be available to us to renew full production operations or to fund continued development or future exploration.
Continued volatility in the equity markets, particularly the commodities and energy markets, as well as current interest rates, may increase the costs attendant to either equity or debt financing. There is no assurance that such funding will be available to us to fund continued development or future exploration at Lost Creek or the construction and ramp up of Shirley Basin.
Additionally, there continue to be proposals for withdrawal of federal lands for the purposes of mineral location and development.
Additionally, there continue to be proposals for withdrawal of federal lands for the purposes of mineral location and development, and the reasons for withdrawals have been increasingly broad.
Our properties do not contain mineral reserves as defined under SEC Subpart 1300 of Regulation S-K (“S‑K 1300”) or Canadian National Instrument 43-101 (“NI 43-101”). See “Cautionary Note Concerning Disclosure of Mineral Resources,” above. Until mineral reserves or mineral resources are mined and processed, the quantity of mineral resources and grades must be considered as estimates only.
Our properties do not contain mineral reserves as defined under SEC Subpart 1300 of Regulation S-K (“S‑K 1300”) or Canadian National Instrument 43-101 (“NI 43-101”). See “Cautionary Note Concerning Disclosure of Mineral Resources,” above.
As well, the skilled professionals with expertise in geologic, engineering and process aspects of uranium in situ recovery, radiation safety and other facets of our business are currently in high demand, as there are relatively few professionals with both expertise and experience.
As well, the skilled professionals with expertise in geologic, engineering and process aspects of uranium in situ recovery, radiation safety and other facets of our business are currently in high demand, as there are relatively few professionals with both expertise and experience. The sustained downturn of the uranium production industry in recent years makes these challenges even more pronounced.
Timely availability of staffing and retention of contractors cannot be assured in our industry, many aspects of which are highly specialized. This is particularly true in the current labor markets in which we recruit our employees and contractors, including where we compete with higher paying energy jobs, and because of the remote locations for which employees and contractors are needed.
This is particularly true in the current labor markets in which we recruit our employees and contractors, including where we compete with higher paying energy jobs, and because of the remote locations for which employees and contractors are needed.
The market price of the Company’s securities is affected by many other variables which may be unrelated to our success and are, therefore, not within our control.
The trading price of our common shares may also be significantly affected by short-term changes in the price of uranium. The market price of the Company's securities is affected by many other variables which may be unrelated to our success and are, therefore, not within our control.
The ability to timely obtain all required authorizations may become more of an issue with regulatory agencies facing staffing challenges similar to those our industry is encountering, as experienced staff retire or leave government, including those with highly specialized knowledge specific to uranium recovery and radiation safety. 38 Table of Contents Possible amendments to the General Mining Law could make it more difficult or impossible for us to execute our business plan.
The ability to timely obtain all required authorizations may become more of an issue with regulatory agencies facing staffing challenges similar to those our industry is encountering, as experienced staff retire or leave government, including those with highly specialized knowledge specific to uranium recovery and radiation safety.
Similarly, we market our product to a limited number of purchasers in competition with supplies from a very limited number of competitors, most of whom currently are state-sponsored operations producing at lower, subsidized costs. Nuclear energy competes with other sources of energy, including natural gas, oil, coal, hydroelectricity and renewable energy sources.
Similarly, we market our product to a limited number of purchasers in competition with supplies from a very limited number of competitors, most of whom currently are state-sponsored operations producing at lower, subsidized costs.
While we continue to monitor and assess all new policies, legislation and regulations regarding such matters, we currently believe that the impact of any such legislation on our business is unlikely to be material.
While we continue to monitor and assess all new policies, legislation and regulations regarding such matters, we currently believe that the impact of any such legislation on our business is unlikely to be material. We cannot, however, assure that our efforts to mitigate the impact of such laws or regulations will be successful and/or without significant attendant costs.
Further, even if such financing is successfully completed, there can be no assurance that it will be obtained on terms favorable to us or will provide us with sufficient funds to meet our objectives, which may adversely affect our business and financial position. Restrictive covenants in the agreements governing our indebtedness may restrict our ability to pursue our business strategies.
Further, even if such financing is successfully completed, there can be no assurance that it will be obtained on terms favorable to us or will provide us with sufficient funds to meet our objectives, which may adversely affect our business and financial position. If we are unable to service our debt, we could lose the assets securing our indebtedness.
Because of the highly uncertain and dynamic nature of the war and related geopolitics, it remains difficult to estimate the impact of the Ukraine war on our business.
Because of the highly uncertain and dynamic nature of the war, global conflicts and related geopolitics, it remains difficult to estimate the impact on our business. Item 1B. UNRESOLVED STAFF COMMENTS None.
S-K 1300 requires us to disclose specific information related to our material mining operations, including concerning our reported mineral resources at Lost Creek and Shirley Basin in existing NI 43-101 technical reports.
S-K 1300 requires us to disclose specific information related to our material mining operations, including concerning our reported mineral resources at Lost Creek and Shirley Basin. We conformed our technical reports to comply with both S-K 1300 and NI 43-101. Disclosures under S-K 1300 continue to be subject to largely unknown interpretations.
These are key assets on which our business is substantially dependent and, as such, the enforcement against any one or all these assets would have a material adverse effect on our operations and financial condition. Production, capital and operating cost estimates may be inaccurate.
The secured collateral includes the Lost Creek Project and other projects and assets of the Lost Creek Property, which are key assets on which our business is substantially dependent. Enforcement against these assets would have a material adverse effect on our operations and financial condition. Production, capital and operating cost estimates may be inaccurate.
Any future accidents, or threats of or incidents of war, civil unrest or terrorism, at nuclear facilities are likely to also impact the conditions of uranium mining and the use and acceptance of nuclear energy.
Any future accidents, or threats of or incidents of war, civil unrest or terrorism, at nuclear facilities are likely to also impact the conditions of uranium mining and the use and acceptance of nuclear energy. The effect of these factors on the price of uranium, and therefore on the economic viability of our properties, cannot accurately be predicted.
Our Code of Conduct provides guidance on conflicts of interest and our directors are required to act in good faith, to make certain disclosures and to abstain from voting on decisions in which they may have a conflict of interest. 45 Table of Contents Acquisitions and integration may disrupt our business, and we may not obtain full anticipated value of certain acquisitions due to the condition of the markets.
Our Code of Conduct provides guidance on conflicts of interest and our directors are required to act in good faith, to make certain disclosures and to abstain from voting on decisions in which they may have a conflict of interest.
The mining industry is subject to extensive environmental and other laws and regulations, which may change at any time.
Our business is subject to extensive environmental and other regulations that may make exploring, mining or related activities increasingly expensive, and may change at any time. The mining industry is subject to extensive environmental and other laws and regulations, which may change at any time.
Additionally, our state leases have fixed terms and, while renewals have historically been granted upon timely application, there is no certainty there will not be changes to rights granted and/or the state lands procedures, either of which could negatively affect our mineral projects. 37 Table of Contents Our mining operations are subject to numerous environmental laws, regulations and permitting requirements and bonding requirements that can delay production and adversely affect operating and development costs.
Additionally, our state leases have fixed terms and, while renewals have historically been granted upon timely application, there is no certainty there will not be changes to rights granted and/or the state lands procedures, either of which could negatively affect our mineral projects.
These factors could also significantly negatively affect the market price of our common shares and our ability to raise capital. 42 Table of Contents The trading price of our common shares may experience substantial volatility.
These factors could also significantly negatively affect the market price of our common shares and our ability to raise capital. The trading price of our common shares may experience substantial volatility. The market price of our common shares has experienced and may continue to experience substantial volatility that is unrelated to the Company's financial condition or operations.
Although certain of the proposed amendments have included provisions to ‘grandfather’ permitted projects, there is no assurance that any new legislation will necessarily contain such provisions or that such legislation will not otherwise have a significant financial impact on our operations and business.
Although certain of the proposed amendments have included provisions to ‘grandfather’ permitted projects, there is no assurance that any new legislation will necessarily contain such provisions or that such legislation will not otherwise have a significant financial impact on our operations and business. 39 Table of Contents We depend on services of our management, and key personnel, contractors and service providers, and the timely availability of such individuals and providers cannot be assured during ramp-up or into the future.
Additionally, if a decision is made to construct and develop Shirley Basin, the direct or indirect exposure to these market uncertainties may be greater or more direct. 46 Table of Contents Item 1B. UNRESOLVED STAFF COMMENTS None. Item 3. LEGAL PROCEEDINGS None.
If/as a decision is made to construct and develop Shirley Basin, the direct or indirect exposure to these market uncertainties may be greater or more direct.
Overall, the global uranium market continues to be characterized by production levels and sales priced in and for countries such as Russia, Kazakhstan and Uzbekistan which continue to adversely affect the U.S. uranium production industry. China continues to expand its role in the global uranium mining markets and in the rest of the nuclear fuel cycle.
Notwithstanding other recent favorable market events and pricing, the global uranium market continues to be characterized by production levels and sales priced in and for countries such as Russia, Kazakhstan and Uzbekistan which adversely affect the U.S. uranium production industry.
Adverse effects on operations and/or further development of our projects could also adversely affect our business, financial condition, results of operations and cash flow. 36 Table of Contents Our mineral resource estimates may not be reliable and are inherently more uncertain than estimates of proven and probable reserves; there is risk and increased uncertainty to commencing and conducting production without established mineral reserves .
Our mineral resource estimates may not be reliable and are inherently more uncertain than estimates of proven and probable reserves; there is risk and increased uncertainty to commencing and conducting production without established mineral reserves .
Members of the U.S. Congress have repeatedly introduced bills which would materially amend or replace the provisions of the General Mining Law.
Possible amendments to the General Mining Law could make it more difficult or impossible for us to execute our business plan. Members of the U.S. Congress have repeatedly introduced bills which would materially amend or replace the provisions of the General Mining Law.
We prepare estimates of annual and future production, the attendant production and operational costs and required working capital for such levels of production, but there is no assurance that we will achieve those estimates. These types of estimates are inherently uncertain and may change materially over time.
We prepare estimates of annual and future production, the attendant production and operational costs and required working capital for such levels of production, but there is no assurance that we will achieve those estimates. Additionally, we have and continue to estimate the costs of construction for Shirley Basin, in the current market.
While we have secured term sales contracts for the sale of 600,000 pounds U 3 O 8 annually beginning in 2024 and continuing through 2028, there is no certainty that we will be able enter additional term sales agreements at suitable pricing and other terms to support longer-term production at Lost Creek and/or the construction of Shirley Basin.
While we continue to respond to requests for proposals from nuclear fuel purchasers, there is no certainty that we will be able enter additional term sales agreements at suitable pricing and other terms to support longer-term production at Lost Creek and/or the construction and operation of Shirley Basin.
Additionally, the extent of foreign inventories in some instances is uncertain. If U.S. imports from government-subsidized production sites continue unchecked, without other relief, there could be a significant continuing negative impact to the uranium market which could adversely impact the Company’s future profitability. Although the U.S.
If U.S. imports from government-subsidized production sites resume beyond demand capacity, there could be a significant negative impact to the uranium market which could adversely impact the Company’s future profitability.
China In light of continuing and increased tension in the relations between U.S. and China, it is difficult to assess and predict the impact that further developments may have, including sanctions, further supply disruption and increased prices of materials, and cyber-security threats.
The conflicts in the Middle East, and other geopolitical tensions, including between the U.S. and China, also make it difficult to assess and predict the impact to the economy, supply disruption and increased prices of materials, and cyber-security threats.
The price of uranium is volatile, has experienced and may continue to experience significant price movements over short periods of time.
The price of uranium is volatile, has experienced and may continue to experience significant price movements over short periods of time. Spot pricing reached lows at or below $20 per pound U 3 O 8 in recent years.
Additional funds will be required for working capital and exploration and development activities at our properties including Lost Creek and the adjoining projects at the Lost Creek Property, as well as the development of our Shirley Basin Project.
Risks Factors Related to our Financial Circumstances The uranium mining industry is capital intensive, and we may be unable to raise necessary funding. Additional funds will be required for working capital and exploration and development activities at our properties including Lost Creek Property and for the construction and development of our Shirley Basin Project.
We intend to carry insurance to protect against certain risks in amounts we consider adequate.
We currently carry insurance coverage for general liability, property and casualty, directors’ and officers’ liability and other matters. We intend to carry insurance to protect against certain risks in amounts we consider adequate.
Risk Factors Related to our Mining Operations Our mining operations involve significant hazards, a high degree of risk and the possibility of uninsured losses. Mining operations generally involve a high degree of risk. We continue operations at our first and, currently, only, uranium in situ recovery facility at Lost Creek, where production activities commenced in 2013.
Risk Factors Related to our Mining Operations Our mining operations involve significant hazards and risks and the possibility of uninsured losses. Mining operations generally involve a high degree of risk.
There can be no assurance that we would be able to conclude any acquisition successfully, or that we would be successful in overcoming these risks or other problems encountered in connection with such an acquisition.
There can be no assurance that we would be able to conclude any acquisition successfully, or that we would be successful in overcoming these risks or other problems encountered in connection with such an acquisition. 45 Table of Contents The war in Ukraine and other global conflicts and tensions continue to have implications to the global economy and energy supplies; as a result, the impact to the nuclear fuel market remains uncertain.
Because of the vast reliance by the U.S. and other nations on uranium exported from Russia and Russian-controlled or influenced sources including Kazakhstan and Uzbekistan, an even greater impact related to global supply and pricing of uranium may result.
The war is likely to continue to have an adverse effect on energy and economic markets, including the nuclear fuel industries because of the vast reliance by the U.S. and other nations on uranium products exported from Russia and Russian-controlled or influenced sources.
Spot pricing has reached lows at or below $20 per pound U 3 O 8 in recent years; while some improvement in pricing has been seen, spot pricing in the past two years continues to demonstrate this volatility: at December 31, 2020, the price of U 3 O 8 was $30.20 per pound and at December 31, 2022, the price was $47.68 per pound U 3 O 8 .
Although current spot pricing is vastly improved from those recent lows, pricing continues to demonstrate volatility: at December 31, 2022, the price of U 3 O 8 was $47.68 per pound and at December 31, 2023, the price was $91.00 per pound U 3 O 8 .
Our ability to make scheduled payments and satisfy other covenants in the State Bond Loan depends on our financial condition and operating performance, which are subject to prevailing economic, competitive, legislative and regulatory conditions beyond our control.
At the date of this report, we continue to owe approximately $4.3 million in principal under our State Bond Loan. Our ability to make scheduled payments under the State Bond Loan depends on our financial condition and operating performance, which may be subject to conditions beyond our control.
Special adverse rules that impact certain estate planning goals could apply to our common shares if we are a PFIC.
Special adverse rules that impact certain estate planning goals could apply to our common shares if we are a PFIC. Each U.S. shareholder should consult its own tax advisor regarding the U.S. federal, state and local consequences of the PFIC rules, and regarding the QEF and mark-to-market elections.
Following the events of March 2011 in Fukushima Japan, worldwide reaction called into question the public’s confidence in nuclear energy and technology, the impacts of which continue in many countries a decade later.
Following the events of March 2011 in Fukushima Japan, worldwide reaction called into question the public’s confidence in nuclear energy and technology, and the impact continues in many countries. Additionally, media coverage about uranium production and nuclear energy may be inaccurate or non-objective and further negatively impact public perception of our industry.
While many of the direct impacts to our business arising from our employees, regulators and suppliers being unable to conduct routine operations due to illness or exposure to COVID have decreased, direct and indirect effects of the pandemic may continue to be experienced.
While many of the direct impacts to our business arising during the pandemic have decreased substantially, direct and indirect effects continue to be experienced particularly in supply chain and available labor and contractors.
The war may result in impacts to the nuclear fuel industries and uranium producers, through the imposition of additional sanctions and counter sanctions. The war is likely to continue to have an adverse effect on energy and economic markets generally.
The global implications of the war in Ukraine remain difficult to predict. The war has resulted in impacts to the nuclear fuel industries and uranium producers, through the imposition of sanctions and counter sanctions, and more may follow.
The effect of these factors on the price of uranium, and therefore on the economic viability of our properties, cannot accurately be predicted. 34 Table of Contents The uranium industry is highly competitive and nuclear energy competes with other energy sources. The national and international uranium industry is small and highly competitive.
The uranium industry is highly competitive and nuclear energy competes with other energy sources. The national and international uranium industry is small and highly competitive. Our activities are directed toward the exploration for, evaluation, acquisition and development of uranium deposits into production operations.
The COVID pandemic has had a significant negative impact generally on the global economy and commodity and equity markets, and the outlook remains uncertain with variants of the virus evolving and continuing to affect many parts of the world.
General Risk Factors Certain impacts to the economy and supply chain disruption resulting initially from the COVID pandemic are likely to continue for the foreseeable future. The COVID pandemic has had a significant negative impact generally on the global economy and commodity and equity markets.
Risk Factors Related to the Uranium Markets and Nuclear Fuel Cycle Industries Largely unrestricted imports from state-owned enterprises challenge the U.S. uranium industry. While spot market pricing has been affected positively by various developments since 2020, term contracting by domestic and Western purchasers remains at prices which do not incentivize a return to full production by many uranium recovery facilities.
Risk Factors Related to the Uranium Markets and Nuclear Fuel Cycle Industries Imports from state-owned enterprises may continue to challenge the U.S. uranium industry.
The ongoing impacts to supply chain and available labor and contractors may continue to pose risk to our operations, particularly as we ramp up production operations at Lost Creek and if a decision is made to construct and operate Shirley Basin.
These impacts are likely to continue to pose risk to our operations, particularly at our renewed production operations at Lost Creek and if/as we proceed to construct and operate Shirley Basin. 43 Table of Contents Our insurance coverage, bonding surety arrangements and indemnifications for our inventory could be insufficient or change in adverse ways in the future.
Removed
Department of Energy (“DOE”) established the national uranium reserve program, it appears that DOE’s 2022 purchase awards completed a one-time purchase program. Although envisioned by U.S. Nuclear Fuel Working Group and Congress as a multi-year program, there remains great uncertainty whether DOE will continue with additional contract awards and/or whether there will be appropriations to sustain the program.
Added
China continues to expand its role in the global uranium mining markets and in the rest of the nuclear fuel cycle, including with effects felt in the U.S. Additionally, the extent of foreign inventories in some instances remains uncertain.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings 47 Item 4. Mine Safety Disclosure 47 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6. Reserved 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 63 Item 8.
Biggest changeItem 3. Legal Proceedings 47 Item 4. Mine Safety Disclosure 47 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6. Reserved 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 68 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of March 1, 2023, we had 264,726,804 Common Shares issued and outstanding; no preferred shares are issued and outstanding. We estimate that we have approximately 7,825 beneficial holders of our Common Shares. The holders of the Common Shares are entitled to one vote per share at all meetings of our shareholders.
Biggest changeAs of February 29, 2024, we had 281,626,324 Common Shares issued and outstanding; no preferred shares are issued and outstanding. We estimate that we have approximately 30,000 beneficial holders of our Common Shares. The holders of the Common Shares are entitled to one vote per share at all meetings of our shareholders.
Recent Sales of Unregistered Securities During the fiscal years ended December 31, 2022 and 2021, we did not have any sales of securities in transactions that were not registered under the Securities Act. Issuer Purchases of Equity Securities The Company did not purchase its own equity securities during the fiscal year ended December 31, 2022.
Recent Sales of Unregistered Securities During the fiscal years ended December 31, 2023 and 2022, we did not have any sales of securities in transactions that were not registered under the Securities Act. Issuer Purchases of Equity Securities The Company did not purchase its own equity securities during the fiscal year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2022, Compared to Year Ended December 31, 2021 The following table summarizes the results of operations for the years ended December 31, 2022, and 2021: Year Ended December 31, 2022 2021 Change Sales 19 16 3 Cost of sales (6,861 ) (7,000 ) 139 Gross loss (6,842 ) (6,984 ) 142 Operating costs (12,952 ) (9,773 ) (3,179 ) Loss from operations (19,794 ) (16,757 ) (3,037 ) Net interest expense (463 ) (733 ) 270 Warrant mark to market gain (loss) 1,835 (5,998 ) 7,833 Foreign exchange gain (loss) 27 (355 ) 382 Other income 1,255 905 350 Net loss (17,140 ) (22,938 ) 5,798 Foreign currency translation adjustment 123 435 (312 ) Comprehensive loss (17,017 ) (22,503 ) 5,486 Loss per common share: Basic (0.08 ) (0.12 ) 0.04 Diluted (0.08 ) (0.12 ) 0.04 56 Table of Contents Sales We had no U 3 O 8 sales in 2022 or 2021.
Biggest changeAs discussed above, we resumed operations in 2023, which resulted in increases to our in-process and plant inventories during the year. 60 Table of Contents Year Ended December 31, 2023, Compared to Year Ended December 31, 2022 The following table summarizes the results of operations for the years ended December 31, 2023, and 2022: Year Ended December 31, 2023 2022 Change Sales 17,679 19 17,660 Cost of sales (19,365 ) (6,861 ) (12,504 ) Gross loss (1,686 ) (6,842 ) 5,156 Operating costs (29,156 ) (12,952 ) (16,204 ) Loss from operations (30,842 ) (19,794 ) (11,048 ) Net interest expense 1,471 (463 ) 1,934 Warrant mark to market gain (loss) (1,586 ) 1,835 (3,421 ) Foreign exchange gain 325 27 298 Other income (loss) (24 ) 1,255 (1,279 ) Net loss (30,656 ) (17,140 ) (13,516 ) Foreign currency translation adjustment (547 ) 123 (670 ) Comprehensive loss (31,203 ) (17,017 ) (14,186 ) Loss per common share: Basic (0.12 ) (0.08 ) (0.04 ) Diluted (0.12 ) (0.08 ) (0.04 ) U 3 O 8 pounds sold 280,000 - 280,000 U 3 O 8 price per pound sold 61.89 - 61.89 U 3 O 8 cost per pound sold 30.99 - 30.99 U 3 O 8 gross profit per pound sold 30.90 - 30.90 Sales We had no U 3 O 8 sales in 2022.
We completed an additional sales agreement in 2022 Q4 which calls for annual deliveries of 300,000 pounds U 3 O 8 over a five-year period, beginning in 2024, together with the possibility of additional deliveries of up to 300,000 pounds U 3 O 8 in 2029.
We completed an additional sales agreement in 2022 Q4 which calls for annual deliveries of 300,000 pounds U 3 O 8 over a five-year period, beginning in 2024, together with the possibility of additional sales of up to 300,000 pounds U 3 O 8 in 2029.
The approval also increased the license limit for annual plant production to 2.2 million pounds U 3 O 8 which includes wellfield production of up to 1.2 million pounds U 3 O 8 and toll processing up to one million pounds U 3 O 8 .
The approval also increased the license limit for annual plant production to 2.2 million pounds U 3 O 8 which includes wellfield production of up to 1.2 million pounds U 3 O 8 and confirmed toll processing up to one million pounds U 3 O 8 .
Our R&D projects are at varying stages of development and include a new material for injection wells and related well installation process, for which we recently converted our provisional patent application with the U.S. Patent Office to a non-provisional patent application.
Our R&D projects are at varying stages of development and include a new material for injection wells and related well installation process, for which we converted our provisional patent application with the U.S. Patent Office to a non-provisional patent application in 2023.
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 December 31, 2022, the Company’s current financial liabilities consisted of accounts payable and accrued liabilities of $1.2 million, and the current portion of notes payable of $5.4 million.
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 December 31, 2023, the Company’s current financial liabilities consisted of accounts payable and accrued liabilities of $2.4 million, and the current portion of notes payable of $5.7 million.
(“Cantor,” and together with B. Riley Securities, the “Agents”) 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.
Riley Securities, the “Agents”) 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.
Federal Deposit Insurance Corporation, leaving approximately $40.6 million at risk on December 31, 2022, should the financial institutions with which these amounts are invested be rendered insolvent. The Company does not consider any of its financial assets to be impaired as of December 31, 2022.
Federal Deposit Insurance Corporation, leaving approximately $68.0 million at risk on December 31, 2023, should the financial institutions with which these amounts are invested be rendered insolvent. The Company does not consider any of its financial assets to be impaired as of December 31, 2023.
The warrant liability revaluation resulted in a gain of $1.8 million in 2022 as compared to a loss of $6.0 million in 2021. As a result of the February 2021 underwritten public offering, Ur-Energy Inc. received approximately $13.9 million in net proceeds.
The warrant liability revaluation resulted in a loss of $1.6 million as compared to a gain of $1.8 million in 2022. As a result of the February 2023 underwritten public offering, Ur-Energy Inc. received approximately $43.1 million in net proceeds.
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 through which 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.
On June 28, 2023, we filed a new universal shelf registration statement on Form S-3 with the SEC through which we may offer and sell, from time to time, in one or more offerings, at prices and terms to be determined, up to $175 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.
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.
As of December 31, 2023, the balance of the State Bond Loan was $5.7 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.
During 2022, we were able to put in place new, multi-year, sales contracts and expect to realize revenues of $17.3 million from the sale of 280,000 pounds of uranium in 2023. We had 323,790 pounds of conversion facility inventory on December 31, 2022. Deliveries into the new contracts in 2023 are expected to be made from existing conversion facility inventory.
During 2022, we put in place new, multi-year, sales contracts and realized revenues of $17.3 million from the sale of 280,000 pounds of uranium in 2023. We had 43,790 pounds of conversion facility inventory on December 31, 2023. Deliveries into term contracts in 2024 are expected to be made from existing conversion facility inventory and new production from Lost Creek.
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. The warrants expire in February 2024. Liquidity Outlook As of March 1, 2023, our unrestricted cash position was $79.0 million.
The gross proceeds to Ur‑Energy from this offering were approximately $46.1 million. After fees and expenses of $3.0 million, net proceeds to the Company were approximately $43.1 million. The warrants expire in February 2026. Liquidity Outlook As of February 29, 2024, our unrestricted cash position was $66.2 million.
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. (“B. Riley Securities”), relating to our Common Shares. On June 7, 2021, we amended and restated the Sales Agreement to include Cantor Fitzgerald & Co.
Universal Shelf Registration and At Market Facility On May 29, 2020, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley Securities”), relating to our common shares. On June 7, 2021, we amended and restated the Sales Agreement to include Cantor Fitzgerald & Co. (“Cantor,” and together with B.
Equity Financing Subsequent to year-end, on February 21, 2023, we announced the closing of an underwritten public offering of 39,100,000 common shares and accompanying warrants to purchase up to 19,550,000 common shares, which includes the full exercise of the underwriters’ option to purchase up to 5,100,000 additional common shares and accompanying warrants to purchase up to 2,550,000 common shares, at a combined public offering price of $1.18 per common share and accompanying warrant.
Field construction will occur as appropriate based on engineering and delivery of materials. 53 Table of Contents Corporate Developments Equity Financing On February 21, 2023, we announced the closing of an underwritten public offering of 39,100,000 common shares and accompanying warrants to purchase up to 19,550,000 common shares, which includes the full exercise of the underwriters’ option to purchase up to 5,100,000 additional common shares and accompanying warrants to purchase up to 2,550,000 common shares, at a combined public offering price of $1.18 per common share and accompanying warrant.
Research and Development Throughout 2022, we continued to pursue several research and development (“R&D”) projects with an objective to introduce new methods of cost-effective technology to our Lost Creek Project, and to Shirley Basin when it is constructed.
Research and Development As priorities at Lost Creek allow, we will continue to pursue several research and development projects with an objective to introduce new methods of cost-effective technology to our Lost Creek Project, and to Shirley Basin when it is constructed.
That delivery was made in January 2023 and sales proceeds of $6.4 million were received shortly thereafter. Including the DOE NNSA sale, we anticipate selling 280,000 pounds at an average price of $61.89 for revenues of $17.3 million in 2023.
That delivery was made in January 2023 and sales proceeds of $6.4 million were received shortly thereafter. Including the DOE NNSA sale, we sold 280,000 pounds at an average price of $61.89 for revenues of $17.3 million in 2023. Beginning in 2022, we have secured several multi-year sales agreements with global nuclear purchasers.
Based on testing to date, it is anticipated that as much as a 49% savings on well installation costs may be realized on injection wells. Phase Two testing will be initiated in 2023 Q2. We continue to progress work on engineering of an advanced water treatment system.
Based on testing to date, it is anticipated that as much as a 49% savings on well installation costs may be realized for injection wells. We also continue with work on an advanced water treatment system.
Financial Instruments and Other Instruments As of December 31, 2022, and December 31, 2021, the Company’s cash, cash equivalents, and restricted cash are composed of: (expressed in thousands of U.S. dollars) Cash, Cash Equivalents, and Restricted Cash December 31, 2022 December 31, 2021 Cash and cash equivalents 33,003 46,189 Restricted cash 8,137 7,966 41,140 54,155 Quarterly financial data (unaudited and expressed in thousands except per share data) Quarter Ended 2022 2021 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 Sales - - 19 - - 9 7 - Net income (loss) (4,897 ) (4,962 ) (353 ) (6,928 ) 421 (9,108 ) (6,879 ) (7,372 ) Income (loss) per common share: Basic (0.02 ) (0.03 ) - (0.03 ) - (0.04 ) (0.04 ) (0.04 ) Diluted (0.02 ) (0.03 ) - (0.03 ) - (0.04 ) (0.04 ) (0.04 ) 62 Table of Contents Credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and restricted cash.
Financial Instruments and Other Instruments As of December 31, 2023, and 2022, the Company’s cash, cash equivalents, and restricted cash are composed of: (expressed in thousands of U.S. dollars) Cash, Cash Equivalents, and Restricted Cash December 31, 2023 December 31, 2022 Cash and cash equivalents 59,700 33,003 Restricted cash 8,549 8,137 68,249 41,140 Quarterly financial data (unaudited and expressed in thousands except per share data) Quarter Ended 2023 2022 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 Sales 5,441 5,752 39 6,447 - - 19 - Net income (loss) (5,472 ) (17,187 ) (7,284 ) (713 ) (4,897 ) (4,962 ) (353 ) (6,928 ) Income (loss) per common share: Basic (0.02 ) (0.07 ) (0.03 ) - (0.02 ) (0.03 ) - (0.03 ) Diluted (0.02 ) (0.07 ) (0.03 ) - (0.02 ) (0.03 ) - (0.03 ) 67 Table of Contents Credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, and restricted cash.
Investing activities used $0.7 million of cash in 2022. We spent $0.4 million on the Casper, Wyoming shop and lab building currently under construction, $0.2 million on plant related equipment at Lost Creek, and $0.1 million on IT equipment. Financing activities provided $5.9 million of cash in 2022.
Investing activities used $2.0 million of cash in 2023. We spent $0.8 million to complete the construction of our new Casper, Wyoming shop and lab building, $0.8 million on plant related equipment at Lost Creek, and $0.4 million on IT and other equipment. Financing activities provided $46.1 million in cash in 2023.
The registration statement became effective December 17, 2021, for a three-year period. 59 Table of Contents On December 17, 2021, we entered into an amendment to the Sales Agreement (“Amendment No. 1” and together with the Sales Agreement, the “Amended Sales Agreement”) with the Agents to, among other things, reflect the new registration statement under which we may sell up to $50 million from time to time through or to the Agents under the Amended Sales Agreement, in addition to amounts previously sold under the Sales Agreement.
On December 17, 2021, we entered into an amendment to the Sales Agreement with the Agents to, among other things, reflect the new registration statement under which we may sell up to $50 million from time to time through or to the Agents under the amended Sales Agreement, in addition to amounts previously sold under the Sales Agreement.
Lost Creek Property – Great Divide Basin, Wyoming Lost Creek Operations Since commencement of operations in 2013, we have captured approximately 2.735 million pounds of U 3 O 8 at Lost Creek through December 31, 2022. Following our reduction in production operations in 2020 Q3, we maintained controlled, reduced level production operations throughout 2022.
Lost Creek Operations Since commencement of operations in 2013, we have captured approximately 2.838 million pounds of U 3 O 8 at Lost Creek through December 31, 2023. Following our reduction in production operations in 2020 Q3, we maintained controlled, reduced level production operations until the restart of commercial wellfield production in 2023 Q2.
As previously announced, we put in place new, multi-year, sales contracts in 2022. We expect to realize revenues of $17.3 million from the sale of 280,000 pounds of U 3 O 8 in 2023 through sales to the DOE and into the new term agreements. Deliveries in 2023 are expected to be made from existing conversion facility inventory.
As previously disclosed, we put in place new, multi-year, sales contracts in 2022 and we realized U 3 O 8 revenues of $17.3 million from the sale of 280,000 pounds of U 3 O 8 in 2023 through sales to the DOE and into the new term agreements. We also realized revenues of $0.4 million from disposal fees in 2023.
Currently, we await only approval by the Wyoming Department of Environmental Quality, Land Quality Division (“LQD”) of the amendment to the Lost Creek permit to mine adding HJ and KM horizons at LC East and HJ mine units at Lost Creek. We anticipate the LQD review will be complete in 2023 H1.
We await approval by the Wyoming Department of Environmental Quality (“WDEQ”), Land Quality Division (“LQD”) of the amendment to the Lost Creek permit to mine adding HJ and KM horizons at LC East and HJ mine units at Lost Creek. LQD has confirmed that the public comment period has concluded, and the technical review is complete.
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 increase was primarily due to development costs, which increased $15.7 million due to ramp up activities at Lost Creek. 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.
Following receipt of WDEQ authorization to proceed with field testing the materials and engineering, Phase One field testing was successfully completed in 2022 Q3-Q4.
Following receipt of WDEQ authorization to proceed with field testing the materials and engineering, Phase One field testing was successfully completed in 2022. Phase Two testing of our new injection well material and well installation technology will continue in 2024.
The following discussion and analysis should be read in conjunction with the accompanying audited consolidated financial statements and related notes. The financial statements have been prepared in accordance with US GAAP.
The following discussion and analysis should be read in conjunction with the accompanying audited consolidated financial statements and related notes. The financial statements have been prepared in accordance with US GAAP. Industry and Market Update Several global factors continue to positively influence the uranium recovery market and the nuclear energy industries.
As always, we will focus on maintaining safe and compliant operations while continuing to enhance and leverage our production operations. 61 Table of Contents Outstanding Share Data As of December 31, 2022, and December 31, 2021, the Company’s capital consisted of the following: Share Data December 31, 2022 December 31, 2021 Common shares 224,699,621 216,782,694 Shares issuable upon the exercise or redemption of: Stock options 8,574,904 10,064,024 Restricted share units 305,530 1,011,660 Warrants 8,365,265 12,184,265 241,945,320 240,042,643 Off Balance Sheet Arrangements We have not entered 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 December 31, 2023, and 2022, the Company’s capital consisted of the following: Share Data December 31, 2023 December 31, 2022 Common shares 270,898,900 224,699,621 Shares issuable upon the exercise or redemption of: Stock options 8,900,335 8,574,904 Restricted share units 641,910 305,530 Warrants 27,708,750 8,365,265 308,149,895 241,945,320 Off Balance Sheet Arrangements We have not entered 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.
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.
These measures do not have standardized meanings 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.
Operating Costs The following table summarizes the operating costs for the years ended December 31, 2022, and 2021: (expressed in thousands of U.S. dollars) Year Ended December 31, Operating Costs 2022 2021 Change Exploration and evaluation 1,769 2,037 (268 ) Development 4,686 1,922 2,764 General and administration 6,037 5,328 709 Accretion 460 486 (26 ) 12,952 9,773 3,179 Total operating costs increased $3.2 million in 2022.
Operating Costs The following table summarizes the operating costs for the years ended December 31, 2023, and 2022: (expressed in thousands of U.S. dollars) Year Ended December 31, Operating Costs 2023 2022 Change Exploration and evaluation 2,109 1,769 340 Development 20,396 4,686 15,710 General and administration 6,154 6,037 117 Accretion 497 460 37 29,156 12,952 16,204 Total operating costs increased $16.2 million in 2023.
Gross Loss Including NRV cost of sales adjustments, the gross loss was $6.8 million and $7.0 million for the years ended December 31, 2022, and 2021, respectively. The Company anticipates returning to positive gross profits from uranium sales in 2023.
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.
In 2022, we utilized the Amended Sales Agreement for gross proceeds of $3.8 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.
As of the date of this annual report, we have issued and sold a total of 6,499,309 common shares having aggregate gross proceeds of approximately $10.7 million since July 19, 2023, under the Amended Sales Agreement. 64 Table of Contents 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.
Because the functional currency of Ur‑Energy Inc., the parent company, is Canadian dollars, the U.S. dollar funds were revalued into Canadian dollars, which resulted in a $0.4 million foreign exchange loss in 2021. The U.S. dollar funds were moved into the Company’s U.S. subsidiary company shortly after the underwritten public offering, which greatly reduced the magnitude of any subsequent revaluations.
Because the functional currency of Ur‑Energy Inc., the parent company entity, is Canadian dollars, the U.S. dollar funds were revalued into Canadian dollars, which resulted in a $0.3 million foreign exchange gain in 2023.
General and administration expenses relate to the administration, finance, investor relations, land, and legal functions, and consist principally of personnel, facility, and support costs. The $0.7 million increase in 2022 was primarily related to higher labor costs ($0.4 million), higher professional service costs ($0.2 million), and increases in stock compensation expenses ($0.1 million).
The remainder of the increase was primarily related to equipment rental and infrastructure costs. General and administration expenses relate to the administration, finance, investor relations, land, and legal functions, and consist principally of personnel, facility, and support costs.
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 of the Lost Creek Project. As of December 31, 2022, the balance of the State Bond Loan was $11.1 million.
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 of the Lost Creek Project.
As of December 31, 2022, we had $33.0 million of cash and cash equivalents.
As of December 31, 2023, we had $59.7 million of cash and cash equivalents, and $0.1 million in accounts receivable.
U 3 O 8 Production and Ending Inventory Unit 2020 2021 2022 U 3 O 8 Production Pounds captured lb 10,789 251 325 Pounds drummed lb 15,873 - - Pounds shipped lb - 15,873 - Pounds purchased lb 200,000 - 40,000 U 3 O 8 Ending Inventory Pounds In-process inventory lb 303 1,069 1,357 Plant inventory lb 15,873 - - Conversion inventory - produced lb 219,735 267,049 267,049 Conversion inventory - purchased lb 48,750 16,741 56,741 lb 284,661 284,859 325,147 Value In-process inventory $ 000 - - - Plant inventory $ 000 463 - - Conversion inventory - produced $ 000 6,083 7,488 7,488 Conversion inventory - purchased $ 000 1,268 435 2,415 $ 000 7,814 7,923 9,903 Cost per Pound In-process inventory $/lb - - - Plant inventory $/lb 29.17 - - Conversion inventory - produced $/lb 27.68 28.04 28.04 Conversion inventory - purchased $/lb 26.01 25.98 42.56 $/lb 27.45 27.81 30.46 Produced conversion inventory detail: Ad valorem and severance tax $/lb 0.75 0.59 0.59 Cash cost $/lb 17.50 18.60 18.60 Non-cash cost $/lb 9.43 8.85 8.85 $/lb 27.68 28.04 28.04 55 Table of Contents During 2022 and 2021, we continued to operate Lost Creek at reduced production rates in response to the depressed state of the uranium markets.
Unit 2021 2022 2023 U 3 O 8 Production Pounds captured lb 251 325 103,487 Pounds drummed lb - - 22,278 Pounds shipped lb 15,873 - - Pounds purchased lb - 40,000 - U 3 O 8 Ending Inventory Pounds In-process inventory lb 1,069 1,357 82,033 Plant inventory lb - - 22,278 Conversion inventory - produced lb 267,049 267,049 43,790 Conversion inventory - purchased lb 16,741 56,741 - lb 284,859 325,147 148,101 Value In-process inventory $ 000 - - - Plant inventory $ 000 - - 1,343 Conversion inventory - produced $ 000 7,488 7,488 1,228 Conversion inventory - purchased $ 000 435 2,415 - $ 000 7,923 9,903 2,571 Cost per Pound In-process inventory $/lb - - - Plant inventory $/lb - - 60.28 Conversion inventory - produced $/lb 28.04 28.04 28.04 Conversion inventory - purchased $/lb 25.98 42.56 - Conversion inventory weighted average $/lb 27.92 30.58 28.04 Produced conversion inventory detail Ad valorem and severance tax $/lb 0.59 0.59 0.59 Cash cost $/lb 18.60 18.60 18.60 Non-cash cost $/lb 8.85 8.85 8.85 $/lb 28.04 28.04 28.04 At the end of the 2021, we had 283,790 pounds of U 3 O 8 at the conversion facility including 267,049 produced pounds at an average cost per pound of $28.04, and 16,741 purchased pounds at an average cost of $25.98 per pound.
We will continue to closely monitor the uranium market, the impact and possible expansion of the uranium reserve program, and other developments in the markets or from Congress, which may positively affect the uranium production industry and provide the opportunity to put in place additional off-take contracts at pricing sufficient to justify expanded production.
We look forward to delivering existing and future Lost Creek production inventory into our sales contracts. 66 Table of Contents We will continue to closely monitor the uranium markets, and other developments, which may positively affect the uranium production industry and provide the opportunity to put in place additional off-take sales contracts at pricing sufficient to justify further expansion of production at Lost Creek and to support a decision to construct Shirley Basin.
We spent $3.9 million on production related cash costs and $2.0 million to purchase uranium. Operating cash costs consumed $11.3 million of cash, and we paid $0.7 million in interest payments on our state bond loan. Working capital and other items, including a severance payment to the former Chief Executive Officer, used $1.7 million of cash.
We received $17.3 million from the sale of uranium, $0.4 million from disposal fees, and $2.0 million of interest income. We spent $9.2 million on production related cash costs and $27.6 million on cash operating costs, and we paid $0.5 million in interest payments on our state bond loan. Working capital and other items generated $0.6 million in cash.
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.
We spent $5.4 million on principal payments for our state bond loan and $0.1 million RSU redemption related costs. 63 Table of Contents 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”).
Lost Creek Regulatory Proceedings The first two mine units at Lost Creek (MU1 and MU2) have all permits necessary for our return to operations, including production resulting from the ongoing MU2 advance development program.
Lost Creek Regulatory Proceedings The first two mine units at Lost Creek have all permits necessary for commercial level operations.
Higher labor and stock compensation costs were largely due to overlapping costs related to the transition of the Chief Executive Officer position. Other Income and Expenses Net interest expense decreased $0.3 million in 2022 reflecting higher interest income received on our bank accounts and lower interest expense following the resumption of principal payments on the Company’s long-term loan.
The $0.1 million increase in 2023 was primarily related to higher labor costs that were partially offset by lower non-cash costs. 62 Table of Contents Other Income and Expenses Net interest increased from interest expense of $0.5 million in 2022 to interest income of $1.5 million in 2023, reflecting higher interest income received on our bank accounts and lower interest expense following the resumption of principal payments on the Company’s state bond loan.
Earnings (loss) per Common Share The basic and diluted loss per common share was $0.08 and $0.12 for the years ended December 31, 2022, and 2021, 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.
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 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.
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. Currently, we are planning a satellite plant.
The Company plans three relatively shallow mining units at the project, where we plan to construct a satellite plant, from which loaded resin will be sent to Lost Creek for processing.
In December 2022, we were notified by the DOE that our bid was accepted, and 100,000 pounds U 3 O 8 were delivered to the DOE on January 31, 2023.
During 2022, we submitted a bid to the U.S. DOE uranium reserve program. In December 2022, we were notified by the DOE that our bid was accepted, and 100,000 pounds U 3 O 8 were delivered to the DOE in 2023 Q1 at an average price per pound sold of $64.47. The delivery included both produced and previously purchased pounds.
Sale prices under this agreement are also anticipated to be profitable on a Company-wide, all-in cost basis and are escalated annually from initial pricing in 2024. In December 2022, we were awarded a contract to sell to the DOE NNSA uranium reserve 100,000 pounds of domestically produced U 3 O 8 at a sales price of $64.47 per pound .
The license renewal is in timely review and is proceeding through the technical review with URP. 51 Table of Contents Sales of U 3 O 8 and Sales Agreements In December 2022, we were awarded a contract to sell to the DOE NNSA uranium reserve 100,000 pounds of domestically produced U 3 O 8 at a sales price of $64.47 per pound .
For the year ended December 31, 2022, the warrant liability decreased significantly due to all 2020 warrants being exercised before their expiry in August 2022 and changes in the factors associated with the related Black-Scholes calculations used to determine the warrant liability.
The higher interest income was driven by a combination of higher interest rates and higher cash balances. For the year ended December 31, 2023, the warrant liability increased significantly due to new warrants issued in February 2023 and changes in the factors associated with the related Black-Scholes calculations used to determine the warrant liability.
This initial agreement calls for the annual delivery of a base amount of 200,000 pounds of uranium concentrates over a six-year period beginning in the second half of 2023. Sale prices are anticipated to be profitable on a Company-wide, all-in cost basis and are escalated annually from the initial pricing in 2023.
The initial agreement calls for the annual delivery of a base amount of 200,000 pounds of uranium concentrates over a six-year period beginning in the second half of 2023. Subsequently, we announced the amendment of this agreement to increase the annual delivery, starting in 2024, by 100,000 pounds U 3 O 8 at the same pricing levels.
We received net proceeds of $3.7 million through our At Market facility, $2.9 million from the exercise of warrants, and $0.9 million from the exercise of stock options. We spent $1.3 million on principal payments for our state bond loan and $0.2 million RSU redemption related costs.
We received net proceeds of $43.1 million from the February 2023 underwritten public offering, $6.8 million through our At Market facility, $1.4 million from the exercise of stock options, and $0.3 million from the exercise of warrants.
Subsequently, in Q4, we announced the amendment of this agreement to increase the annual delivery, starting in 2024, by 100,000 pounds U 3 O 8 at the same pricing levels. The sales agreement permits the purchaser the customary election to flex the delivery quantity up or down by as much as ten percent.
We signed a third agreement in 2023, under which we will deliver 100,000 pounds U 3 O 8 in each of 2025, 2026 and 2027, also subject to an election by the purchaser to flex the annual delivery quantity up or down by as much as ten percent.
During 2022, we purchased 40,000 pounds U 3 O 8 at $49.50 per pound, which increased the average cost per pound purchased as compared to 2021. The pounds were purchased with the intention of selling them to the U.S. DOE uranium reserve purchase program.
During 2022, we purchased 40,000 pounds U 3 O 8 at $49.50 per pound, which increased the average cost per pound purchased to $42.56. The average cost per produced pound sold in Q1 was $28.06, and together with the purchased pounds, the average cost per pound sold was $36.29.
Cost of Sales Cost of sales included $6.9 million and $7.0 million of NRV adjustments for the years ended December 31, 2022, and 2021, respectively. Because of intentionally low production rates, inventory valuations, which include on-going production costs, were reduced by the NRV adjustments, effectively expensing the production costs to cost of sales during those years.
In 2022, cost of sales included only NRV adjustments as we had no U 3 O 8 sales in 2022. Because of low production rates, inventory valuations, which include production costs, exceeded the inventory’s NRV. As a result, the inventory valuations were reduced to the inventory’s NRV, effectively expensing the production costs to cost of sales during those years.
There was no similar foreign exchange loss in 2022. During March 2022, we sold a royalty interest related to Strata Energy’s Lance Uranium ISR Project for $1.3 million. There were no assets related to the royalty on our balance sheet, therefore the entire amount was recognized as other income.
The U.S. dollar funds were moved into the Company’s U.S. subsidiary company shortly after the underwritten public offering, which greatly reduced the magnitude of any subsequent revaluations. There was no similar foreign exchange gain in 2022. During March 2022, we sold a royalty interest related to Strata Energy’s Lance Uranium ISR Project for $1.3 million.
The increase was primarily related to expanded development activities intended to accelerate future ramp up activities at Lost Creek. Drilling and related supply costs accounted for $2.8 million of the increase. The remainder of the increase was primarily related to increased labor costs.
Ramp up activities in 2023 focused on the development of Mine Unit 2 and the resumption of uranium production at Lost Creek. Drilling and related supply costs accounted for $11.0 million of the increase and labor and outside services accounted for another $1.9 million of the increase.
Fewer miles traveled by our staff and fewer vehicles on the road equates to a significantly lower risk of accident or injury, a smaller carbon footprint for Lost Creek, and considerably lower vehicle and labor costs. COVID Pandemic COVID-19 (Coronavirus) (“COVID”) was declared a pandemic in March 2020.
Fewer miles traveled by our staff and fewer vehicles on the road equates to a significantly lower risk of accident or injury, a smaller carbon footprint for Lost Creek, and considerably lower vehicle and labor costs. 54 Table of Contents Results of Operations Reconciliation of Non-GAAP measures with US GAAP financial statement presentation The following tables include measures specific to U 3 O 8 sales, cost of sales, gross profit, pounds sold, price per pound sold, cost per pound sold, and gross profit per pound sold.
It also includes costs associated with the Shirley Basin and Lucky Mc Projects, which are at a more advanced stage. The $2.8 million increase in 2022 was primarily related to drilling and supply costs for the development of Mine Unit 2 at Lost Creek and additional labor costs as we added more employees at the mine site.
The $0.3 million increase in 2023 was primarily due to higher labor costs. Development expenses include costs 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 at a more advanced stage.
During 2022, we generated $5.9 million from financing activities and used $18.1 million for operating activities, $0.7 million for investing activities, and increased restricted cash by $0.2 million. 58 Table of Contents Operating activities used $18.1 million of cash in 2022. We received $1.3 million from the sale of a royalty interest and $0.2 million of interest income.
Cash resources consist of Canadian and U.S. dollar denominated deposit and money market fund accounts. 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. Operating activities used $17.0 million of cash in 2023.
Quarterly principal payments were resumed on October 1, 2022, and the last payment will be due on October 1, 2024.
Quarterly principal payments were resumed on October 1, 2022, with the last payment due on October 1, 2024. On February 29, 2024, we provided notice to Sweetwater County, the State Treasurer and the Trustee of our intention to prepay all remaining amounts on the State Bond Loan on April 1, 2024.
At the end of the 2022, we had 323,790 pounds of U 3 O 8 at the conversion facility including 267,049 produced pounds at an average cost per pound of $28.04, and 56,741 purchased pounds at an average cost of $42.56 per pound.
We sold 223,259 produced pounds U 3 O 8 with a cost per pound sold of $28.04 and 56,741 purchased pounds at a cost per pound sold of $42.56, which resulted in a total U 3 O 8 cost of sales of $8.7 million in 2023. 61 Table of Contents Cost of sales in 2023 included $10.7 million of NRV adjustments.
Beyond water recycling gains already achieved with our industry-leading Class V circuit, the new system may allow an additional 90% reduction of disposed water. This project is in advanced-stage analyses and planning. The value of increasing the water recycling rate is an increased reduction in required wastewater disposal, and thus the need for multiple additional (and costly) deep disposal wells.
Beyond water recycling gains already achieved with our industry-leading Class V circuit, the new system may allow an additional 90% reduction of disposed water as well as providing filtration of incoming production solutions to optimize uranium capture. Detailed engineering design and construction plans are anticipated to be completed in 2024 along with ordering/procurement of all components.
Removed
Industry and Market Update The increased support for nuclear energy experienced over the past several years has been sustained as more governments understand it is a critical energy source to successfully address climate change. Growing numbers of countries are making commitments to net-zero emissions, including on more accelerated schedules than previously targeted.
Added
Over the past several years, continued growth in the acceptance of nuclear energy, geopolitics, and production reductions, shortfalls and delays, have each contributed to a stronger uranium market with a more optimistic future. As each of these categories of influence continues to gain momentum and strength, the market has experienced significant impacts.
Removed
In the process, many nations, environmental groups and large companies are endorsing nuclear energy to meet such objectives, recognizing the safety, reliability, and economic advantages nuclear power presents.
Added
For several years, we and others in our industry have noted the growing acceptance of the necessity of nuclear energy as it relates to concerns over climate change and the determination of nations and multi-national companies to reach decarbonization goals on increasingly aggressive timelines.
Removed
Supply-demand fundamentals also continue to strengthen with the supply gap widening as secondary inventories decline while projections are for sustained growth of nuclear power through traditional uses and the construction of advanced reactors of various types.
Added
Most recently, in December, 22 countries including the U.S., pledged at the UN climate summit, COP 28, to triple nuclear energy capacity by 2050. Even prior to this commitment, numerous announcements in 2023 of extended nuclear plant licenses and lifespans, and deferred retirements of reactors, supplemented planned future numbers of reactors with ongoing construction in many countries.
Removed
Additionally, projections for sustained growth of nuclear power globally in coming years has incentivized investment in the fuel cycle industries, through legislative programs and private and industrial capital.
Added
Recognition of the critical role nuclear energy plays in providing baseload power for decarbonization has been complemented more recently as energy security has become a universal priority. Energy security includes not only the heightened concern over Russian supply, but other areas of geopolitical unrest.
Removed
In the U.S., in late 2020, Congress approved the appropriation of $75 million for the establishment of a new national uranium reserve through which the Department of Energy (“DOE”), National Nuclear Security Administration (“NNSA”) was directed to purchase domestically produced uranium.
Added
The coup d’état in Niger in mid-2023, for example, threatens the security and stability of 25% of European uranium supply. The true scope and possible long-standing impact of China in the nuclear market remains undefined.
Removed
In June 2022, NNSA issued a solicitation for proposals to purchase from uranium producers qualified under the solicitation up to one million pounds U 3 O 8 . We were awarded a contract to supply 100,000 pounds of U 3 O 8 at a price of $64.47 per pound.
Added
While the initial invasion of Ukraine in early 2022 focused nuclear and other energy buyers on the risk attendant to dependence on Russian supplies, continuing Russian conduct has only strengthened the resolve of fuel purchasers to reduce that dependence.
Removed
Several other U.S. uranium companies and the sole U.S. uranium convertor were also awarded contracts. Although the initial funding authorization and bid process were for one-time purchases, Congress is actively considering additional legislation and funding to support the domestic nuclear fuel cycle.
Added
It has been reported that, throughout 2023, both U.S. and non-U.S. utilities increasingly sought non-Russian supplies when negotiating uranium term sales agreements. This change of supply priority reflects the concern over current and possible future sanctions but also the prospect that Russia of its own volition will refuse to export committed nuclear fuels to the U.S.
Removed
The Biden Administration continues to prioritize climate change initiatives and its senior leaders, including DOE Secretary Granholm, have 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 will support nuclear energy and the nuclear fuel cycle industries.
Added
In either circumstance, the utilities are at significant risk as the West has limited capacity to backfill such supply disruption, regardless of cause.
Removed
We continue to see signs of increased bipartisan support for nuclear energy in Washington, including the passage of the Infrastructure Investment and Jobs Act (November 2021) which is designed to prevent the premature closure of nuclear power plants and extend the life of others.
Added
Moreover, many nations, including the US, are considering increasing sanctions against Russia in 2024, related to what the Biden Administration most recently labeled Russia’s “aggression abroad and repression at home.” With this public condemnation of Russia’s conduct and the specter of additional sanctions, speculation is strong that the nuclear fuel buyers’ preference to non-Russian contracting will continue, including even a more broadly defined concept of what is considered Russian inventory.
Removed
In addition, under the Inflation Reduction Act, a number of tax credits were authorized that further subsidize nuclear generated power and hydrogen production to put it on a level playing field with renewables.
Added
As uranium production operations have returned following the pandemic, and with the stronger market indicators in 2022 and 2023, the path forward has not been without challenges. Even for experienced and well financed operators, ramp-up and return to commercial level operations has been impeded by labor, equipment, technical, supply chain and other challenges and delays.
Removed
In response to the Inflation Reduction Act, several nuclear utilities are advancing efforts to renew licenses for extended periods, uprate power output, and adjust refueling cycles to minimize down time. Each of these activities will increase the demand for uranium over time.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe average spot market price was $50.85 per pound as of March 1, 2023. 63 Table of Contents Transactions with Related Parties During the fiscal year ended December 31, 2022, we did not participate in any reportable transactions with related parties.
Biggest changeThe average spot market price was $95.00 per pound as of February 29, 2024. 68 Table of Contents Transactions with Related Parties During the fiscal year ended December 31, 2023, we did not participate in any reportable transactions with related parties.
Development expenses include all costs associated with exploring, delineating, and permitting new or expanded mine units, the costs associated with the construction and development of permitted mine units including wells, pumps, piping, header houses, roads and other infrastructure related to the preparation of a mine unit to begin extraction operations as well as the cost of drilling and completing disposal wells. 64 Table of Contents Capital Assets Property, plant, and equipment assets, including machinery, processing equipment, enclosures, vehicles, and expenditures that extend the life of such assets, are recorded at cost including acquisition and installation costs.
Development expenses include all costs associated with exploring, delineating, and permitting new or expanded mine units, the costs associated with the construction and development of permitted mine units including wells, pumps, piping, header houses, roads and other infrastructure related to the preparation of a mine unit to begin extraction operations as well as the cost of drilling and completing disposal wells. 69 Table of Contents Capital Assets Property, plant, and equipment assets, including machinery, processing equipment, enclosures, vehicles, and expenditures that extend the life of such assets, are recorded at cost including acquisition and installation costs.
The liability accretes until it reaches the estimated future reclamation cost and remains until the Company settles the obligation. 65 Table of Contents Share-Based Compensation We are required to initially record all equity instruments including warrants, restricted share units and stock options at fair value in the financial statements.
The liability accretes until it reaches the estimated future reclamation cost and remains until the Company settles the obligation. 70 Table of Contents Share-Based Compensation We are required to initially record all equity instruments including warrants, restricted share units and stock options at fair value in the financial statements.
A hypothetical 10% weakening in the exchange rate of the Canadian dollar to the U.S. dollar as of December 31, 2022 would not have a material effect on our results of operations, financial position, or cash flows. Commodity Price Risk The Company is subject to market risk related to the market price of uranium.
A hypothetical 10% weakening in the exchange rate of the Canadian dollar to the U.S. dollar as of December 31, 2023 would not have a material effect on our results of operations, financial position, or cash flows. Commodity Price Risk The Company is subject to market risk related to the market price of uranium.
Depreciation on the plant enclosure and related equipment is calculated on a straight-line basis. Estimated lives for depreciation purposes range from three years for computer equipment and software to 20 years for the plant enclosure and the name plate life of the related equipment.
Depreciation on the plant enclosure and related equipment is calculated on a straight-line basis. Estimated lives for depreciation purposes range from three years for computer equipment and software to 20 years for the plant enclosure and the nameplate life of the related equipment.
Currency risk As of December 31, 2022, we maintained a balance of approximately $2.0 million Canadian dollars. The funds will be used to pay Canadian dollar expenses and are considered to be a low currency risk to the Company.
Currency risk As of December 31, 2023, we maintained a balance of approximately $2.8 million Canadian dollars. The funds will be used to pay Canadian dollar expenses and are considered to be a low currency risk to the Company.

Other URG 10-K year-over-year comparisons