Ur-Energy(URG) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements Presents the unaudited interim condensed consolidated financial statements for the quarter ended March 31, 2025, including balance sheets, statements of operations, and cash flows Interim Condensed Consolidated Balance Sheet Highlights (Unaudited) | (in thousands of U.S. dollars) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | 99,958 | 115,261 | | Total assets | 182,873 | 194,128 | | Total current liabilities | 20,681 | 19,254 | | Total liabilities | 59,774 | 61,329 | | Total shareholders' equity | 123,099 | 132,799 | Interim Condensed Consolidated Statements of Operations Highlights (Unaudited) | (in thousands of U.S. dollars) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Sales | — | — | | Gross profit (loss) | (2,598) | (1,139) | | Operating profit (loss) | (15,835) | (16,284) | | Net income (loss) | (10,898) | (18,541) | | Basic and Diluted loss per share | (0.03) | (0.07) | Interim Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (in thousands of U.S. dollars) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | 2,806 | (14,377) | | Net cash used in investing activities | (3,828) | (843) | | Net cash provided by financing activities | (11) | 9,556 | | Decrease in cash and cash equivalents | (1,091) | (5,712) | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's Q1 2025 financial condition and operational results, highlighting project advancements, improved net loss, and strong liquidity Business Overview Ur-Energy is a US-based uranium mining company operating the Lost Creek Project with significant processing capacity and multi-year sales agreements - The company operates its first in-situ recovery (ISR) uranium facility at the Lost Creek Project in Wyoming[85] - The Lost Creek processing facility is licensed for up to 1.2 million pounds U3O8 annual recovery and can process up to 2.2 million pounds annually, providing capacity for material from other sources like the Shirley Basin Project[86] - The company holds seven multi-year sales agreements anticipating sales of approximately 5.84 million pounds of U3O8 between 2025 and 2033[86] Industry and Market Update The uranium market benefits from strong US government support, high public approval for nuclear power, and global sector expansion with numerous reactors under construction and planned - The U.S. Department of Commerce has initiated a Section 232 national security investigation into the impact of uranium imports, which could positively impact domestic producers like Ur-Energy[87] - Support for nuclear power in the U.S. has reached a multi-decade high of 77%, with significant developments like Vogel Unit 4 coming online and plans for small modular reactors (SMRs)[90] - Globally, the nuclear sector is expanding, with 66 conventional reactors under construction, 101 planned, and 440 operable as of May 2, 2025. The number of countries committing to triple nuclear power by 2050 has risen to 31[93] Mineral Rights and Properties The company is advancing its Lost Creek and Shirley Basin projects in Wyoming, with Lost Creek ramping up production and Shirley Basin on track for an early 2026 startup - The company controls nearly 1,800 unpatented mining claims and three State of Wyoming mineral leases, totaling over 35,000 acres in the Lost Creek Property area[95] - The Shirley Basin Project permit area comprises nearly 1,800 acres of Company-controlled mineral acres[95] Lost Creek Property Lost Creek operations in Q1 2025 saw increased wellfield flow rates, significant U3O8 packaging, and receipt of key permit amendments for expansion - During Q1 2025, 83,066 pounds of U3O8 were dried and packaged, and 106,301 pounds were shipped to the conversion facility[96] - Wellfield flow rate increased by 44% since the beginning of March 2025, now routinely exceeding 2,800 gallons per minute[97] - Received final state and federal approvals for the expansion of recovery operations into six additional mine units at the LC East and Lost Creek projects[99] Shirley Basin Project Construction at the Shirley Basin Project is on schedule for an early 2026 startup, with significant infrastructure and drilling progress underway - Construction is on target for an early 2026 mine startup[101] - Key construction activities completed include road upgrades, installation of 125 monitor wells, power and communication systems, and refurbishment of existing buildings[102] - Subsequent to quarter end, drilling has begun in mine unit one, and materials for pipelines and the satellite plant enclosure have been procured or received[103] Results of Operations Q1 2025 results show no sales revenue, a gross loss of $2.6 million, reduced operating costs, and a significant mark-to-market gain leading to an improved net loss of $10.9 million U3O8 Production and Ending Inventory Q1 2025 saw increased U3O8 production and ending inventory, with improved production efficiency reflected in a decreased cost per produced pound U3O8 Production (in pounds) | Production Metric | 2024 Q4 | 2025 Q1 | | :--- | :--- | :--- | | Pounds captured | 81,771 | 74,479 | | Pounds drummed | 74,006 | 83,066 | | Pounds shipped | 66,526 | 106,301 | U3O8 Ending Inventory | Inventory Metric | 2024 Q4 | 2025 Q1 | | :--- | :--- | :--- | | Total Pounds | 335,327 | 409,012 | | In-process (lbs) | 39,169 | 29,700 | | Plant (lbs) | 33,919 | 10,772 | | Conversion - produced (lbs) | 12,239 | 118,540 | | Conversion - non-produced (lbs) | 250,000 | 250,000 | | Total Value ($000) | 20,744 | 23,485 | - The cost per produced pound at the conversion facility decreased from $57.52 in Q4 2024 to $54.53 per pound in Q1 2025, reflecting lower costs of drummed inventory shipped[120] Q1 2025 vs. Q1 2024 Comparison Net loss improved in Q1 2025 to $10.9 million from $18.5 million in Q1 2024, driven by mark-to-market gains and lower operating costs, despite a wider gross loss Q1 2025 vs Q1 2024 Results Summary | (in thousands of U.S. dollars) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross profit (loss) | (2,598) | (1,139) | (1,459) | | Operating profit (loss) | (15,835) | (16,284) | 449 | | Mark to market gain (loss) | 4,310 | (2,756) | 7,066 | | Net income (loss) | (10,898) | (18,541) | 7,643 | - Operating costs decreased by $1.9 million in Q1 2025 compared to Q1 2024, mainly due to lower development costs at Lost Creek[128] - A mark-to-market gain of $4.3 million was recorded in Q1 2025, compared to a $2.8 million loss in Q1 2024. The gain was due to a decrease in the company's share price (affecting warrant liability) and a decrease in the U3O8 spot price (affecting the uranium inventory loan)[135] Liquidity and Capital Resources The company maintains strong liquidity with $86.0 million in cash as of March 31, 2025, generated $2.8 million from operations, and projects $27.1 million in 2025 U3O8 sales - Cash, cash equivalents, and restricted cash decreased slightly to $86.0 million as of March 31, 2025, from $87.1 million at year-end 2024[137] - In Q1 2025, the company generated $2.8 million from operating activities, largely due to the collection of a $16.5 million trade receivable from a December 2024 sale[137][138] - Investing activities used $3.8 million in Q1 2025, with $3.0 million spent on construction and equipment at Shirley Basin[139] - The company projects 2025 sales of 440,000 pounds of U3O8 at an average price of $61.56/lb, expecting revenues of $27.1 million[149] Looking Ahead The company aims to become a two-mine operator in 2025, advancing Shirley Basin and ramping up Lost Creek production, supported by long-term sales agreements and a strong cash position - The company is actively growing into a two-mine site company in 2025, with development drilling beginning at Shirley Basin[151] - The wellfield flow rate at Lost Creek increased by 44% since the beginning of March 2025 and is now routinely over 2,800 gallons per minute, leading to increased production in April 2025 (38,646 lbs captured, 43,226 lbs drummed)[153][154] - The company has seven sales agreements with deliveries scheduled from 2025 through 2033, with prices anticipated to be profitable on an all-in production cost basis[160] - The company's cash position was $66.0 million as of May 2, 2025[161] Quantitative and Qualitative Disclosures about Market Risk The company identifies key market risks including credit, liquidity, and commodity price volatility, while currency and interest rate risks are considered low - Credit risk: Approximately $85.3 million held in financial institutions is at risk, exceeding federal deposit insurance coverage as of March 31, 2025[168] - Liquidity risk: As of March 31, 2025, current financial liabilities total approximately $24.4 million ($7.9 million accounts payable, $0.4 million lease payable, $16.1 million inventory loan), which is covered by $74.8 million of cash and cash equivalents[170] - Commodity Price Risk: The company is exposed to fluctuations in uranium prices, which are affected by numerous factors beyond its control. The average spot market price was $69.55 per pound U3O8 as of May 2, 2025[172] Controls and Procedures Management concluded that disclosure controls and procedures are effective as of March 31, 2025, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures are effective as of the end of the period covered by the report[173] - No changes in internal control over financial reporting occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[175] PART II – OTHER INFORMATION Legal Proceedings The company reports no new legal proceedings or material developments in pending proceedings during the quarter - There were no new legal proceedings or material developments in pending proceedings[177] Risk Factors No material changes to previously disclosed risk factors were reported as of March 31, 2025 - As of March 31, 2025, there have been no material changes from the risk factors set forth in the Annual Report on Form 10-K[178] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None[179] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[180] Mine Safety Disclosure The company's Lost Creek operations are not subject to federal Mine Safety and Health Administration regulation - The company's operations at Lost Creek are not subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977[181] Other Information No directors or officers adopted or terminated trading arrangements during Q1 2025 - During the quarter ended March 31, 2025, none of the company's directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[182] Exhibits This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes certifications from the CEO and CFO as required by the Sarbanes-Oxley Act of 2002[183] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Labels, Presentation) are filed as exhibits[183]