LITTLETON, Colo., Jan. 27, 2015 /CNW/ --Ur-Energy Inc. (TSX:URE, NYSE MKT:URG) ("Ur-Energy" or the "Company") announces the completion of a Preliminary Economic Assessment ("PEA") for its Shirley Basin Project ("Project") in Carbon County, Wyoming. This PEA analyzes the planned development of a commercial satellite uranium in situ recovery (ISR) operation at the Project, combined with existing processing operations at the Company's Lost Creek Mine in Sweetwater County, Wyoming.
Western Water Consultants, Inc., d/b/a WWC Engineering, was retained by the Company and its subsidiary, Pathfinder Mines Corporation (PMC), to oversee and supervise preparation of this PEA, in accordance with Canadian National Instrument 43-101 "Standards of Disclosure for Mineral Projects" (NI 43-101). Mr. Benjamin J. Schiffer, P.G. and Mr. Ray Moores, P.E. of WWC Engineering, are the independent Qualified Persons for the PEA.
The PEA demonstrates the potential viability of satellite ISR operations at the Project. The Project currently has a Source and Byproduct Material License from the U.S. Nuclear Regulatory Commission and a Permit to Mine from the Wyoming Department of Environmental Quality – Land Quality Division. The Company has begun the process of amending this license and permit for ISR operations. The PEA is based on an assumption of construction activities starting in January 2017, with production commencing October 2017. It is estimated that a total of 6.3 million pounds of U3O8 will be produced from the Project.
The economic analysis estimates the Project will generate net cash flow over its life, before income tax, of US$215.9 million. It is estimated that the Project has a calculated before-tax Internal Rate of Return (IRR) of 117.0% and a before-tax Net Present Value (NPV) of US$146.0 million applying an eight percent discount rate starting in year 2017. The estimated operating cost for the project is US$14.54 per pound of uranium produced, while the total cost of uranium production including severance taxes and operational and capital spending is estimated at US$31.26 per pound.
Steve Hatten, Vice President Operations of the Company commented "We are very pleased to confirm the solid prospects for the Shirley Basin Project through the PEA. Production from our latest project will not only enable Ur-Energy to produce from a second low cost resource base, but will allow us to fully utilize the Lost Creek processing facility at its designed capacity."
This Preliminary Economic Assessment is preliminary in nature and includes mineral resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimated mineral recovery used in this Preliminary Economic Assessment is based on site-specific laboratory recovery data as well as URE personnel and industry experience at similar facilities. There can be no assurance that recovery of mineral resources at this level will be achieved. There is no certainty that the preliminary economic assessment will be realized.
The full report, titled "Preliminary Economic Assessment, Shirley Basin Uranium Project, Carbon County, Wyoming, USA," January 27, 2015 is available on the Company's profile on SEDAR (www.sedar.com). The PEA is also available on the Company's website at www.ur-energy.com. Benjamin J. Schiffer, P.G. and Ray Moores, P.E. of WWC Engineering, have reviewed and approved the technical disclosure contained in this news release.
Ur-Energy is a junior uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. The Lost Creek processing facility has a two million pounds per year nameplate design capacity. Ur-Energy engages in the identification, acquisition, exploration, development, and operation of uranium projects in the United States and Canada. Shares of Ur-Energy trade on the Toronto Stock Exchange under the symbol "URE" and on the NYSE MKT under the symbol "URG". All currency figures in this announcement are in US dollars unless otherwise stated. Ur-Energy's corporate office is located in Littleton, Colorado; its registered office is in Ottawa, Ontario. Ur-Energy's website is www.ur-energy.com.
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Cautionary Note Regarding Forward-Looking Information
This release may contain "forward-looking statements" within the meaning of applicable securities laws regarding events or conditions that may occur in the future (e.g., the technical and economic viability of the Shirley Basin project, and the other projections and mineral resource estimates contained in the PEA; timing and ability to advance all regulatory authorizations for Shirley Basin project, and subsequent time of construction, development and commissioning) and are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to, capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of ore which is mined varying from estimates; production rates, methods and amounts varying from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; inflation; fluctuations in commodity prices; delays in development and other factors described in the public filings made by the Company at www.sedar.com and www.sec.gov. Readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are based on the beliefs, expectations and opinions of management as of the date hereof and Ur-Energy disclaims any intent or obligation to update them or revise them to reflect any change in circumstances or in management's beliefs, expectations or opinions that occur in the future.
Cautionary Note to U.S. Investors: The terms "mineral resource," "measured mineral resource," and "indicated mineral resource," as used in this news release are Canadian mining terms that are defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). These Canadian terms are not defined terms under United States Securities and Exchange Commission ("SEC") Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC by U.S. registered companies. The SEC permits U.S. companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. Accordingly, note that information contained in this news release describing the Company's "mineral resources" is not directly comparable to information made public by U.S. companies subject to reporting requirements under U.S. securities laws. U.S. investors are cautioned not to assume that any part or all of the mineral resources in these categories will ever be converted into Mineral Reserves. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or online at http://www.sec.gov/edgar.shtml.
SOURCE Ur-Energy Inc.