Ur-Energy(US:URG)2022-08-02 21:06Production Capacity and Facilities - Ur-Energy's Lost Creek processing facility is designed to process up to 1.2 million pounds of U3O8 annually, with a licensed capacity of 2.2 million pounds, allowing for additional processing from other sources [99]. - The Shirley Basin Project is construction-ready, having received all major permits required to begin construction, including a source material license and permit to mine [113]. - The company is prepared to ramp up production at the Lost Creek facility to an annualized run rate of up to 1.2 million pounds, with the capacity to process up to 2.2 million pounds of U3O8 per year [163]. - The company is advancing preparations in the fully permitted MU2 through a drilling and construction program to enhance operational readiness at Lost Creek [161]. Financial Performance - U3O8 production for Q2 2022 was 83 pounds, consistent with Q1 2022, and total production year-to-date reached 166 pounds [121]. - Sales for Q2 2022 were $19 thousand, compared to $7 thousand in Q2 2021, reflecting a $12 thousand increase [125]. - Cost of sales for Q2 2022 was $1.66 million, a decrease of $173 thousand from Q2 2021, while total cost of sales for the first half of 2022 was $3.38 million, down $124 thousand year-over-year [125]. - Gross loss for Q2 2022 was $1.64 million, slightly improved from a gross loss of $1.83 million in Q2 2021 [131]. - Operating costs for Q2 2022 totaled $3.46 million, an increase of $683 thousand compared to Q2 2021, primarily due to the MU2 advance development program [134]. - Net loss for Q2 2022 was $353 thousand, significantly improved from a net loss of $6.88 million in Q2 2021 [126]. - The company reported a warrant mark to market gain of $4.89 million for Q2 2022, compared to a loss of $2.92 million in Q2 2021 [139]. - Cash, cash equivalents, and restricted cash decreased from $54.2 million at the end of 2021 to $51.3 million as of June 30, 2022 [143]. - The average cost per pound of produced U3O8 was $28.04, while the average cost per pound of purchased U3O8 was $25.98 [124]. - The company generated $3.7 million from financing activities during the first half of 2022 [143]. - For the six months ended June 30, 2022, the company utilized $6.4 million in cash from operating activities, with $1.9 million spent on production-related cash costs and $5.8 million on operating costs [144]. - As of August 1, 2022, the company had $42.2 million in cash and cash equivalents, along with approximately $15.7 million worth of finished U3O8 inventory at recent spot prices [156][160]. Market Conditions and Pricing - Uranium pricing has increased significantly, with spot market prices in the upper $40s and $50s per pound during Q2 2022, reflecting a strengthening supply-demand dynamic [106]. - The average spot market price of uranium was $48.63 per pound as of August 1, 2022, reflecting ongoing fluctuations in the uranium market [181]. - Uranium prices are influenced by demand for nuclear power and various political and economic conditions [181]. - Governmental legislation in uranium producing and consuming countries affects uranium pricing [181]. - Production levels and costs of production from other companies also impact uranium prices [181]. - The company is subject to market risk related to uranium price fluctuations, impacting future sales [181]. Research and Development - Research and development efforts include a new injection well technology expected to reduce drill rig time by about 70% and lower environmental impacts, with field testing already underway [114]. - An advanced water treatment system is in development, which may achieve a 90% reduction in disposed water, enhancing recycling capabilities at Lost Creek [115]. Corporate Developments - The company is constructing a new operations headquarters in Casper, Wyoming, expected to be completed in approximately seven to nine months, facilitating centralized construction activities [116]. - Changes in senior leadership occurred with the retirement of Chairman and President Jeffrey T. Klenda, and John W. Cash was appointed as the new CEO and Chairman of the Board [117]. - The company has submitted a bid proposal to the NNSA to purchase up to one million pounds of U3O8 as part of the establishment of a new national uranium reserve [101]. - The company has submitted a bid proposal for the DOE uranium reserve program, indicating its intention to participate in the bidding process [158]. - The company has a plan to sell a non-core, unpermitted, non-operating property, considering an offer consisting of cash and mineral properties [166]. - The company has not identified any impairment indicators that would require a formal impairment test for its long-lived assets [175]. - The company continues to monitor the uranium market and related developments that may positively impact the uranium production industry [164].