Ur-Energy Finds Next Potential Production Center

(Wyoming Business Report, July 22) – The company operating the young Lost Creek uranium facility, which was commissioned less than a year ago, said Tuesday it may have already found its next production focus.

Littleton, Colo.-based Ur-Energy, which has offices in Casper and the Lost Creek project outside Jeffrey City, said part of a $6.6 million acquisition from December 2013 has more than 8.8 million pounds of uranium in place, making it an ideal candidate to follow on the heels of Lost Creek.

“Our efforts have demonstrated the presence of a well-defined, high-grade uranium roll front deposit, at very favorable production depths on our Shirley Basin Project,” CEO Wayne Heili said in a statement. “Based on the strength of this maiden resource we feel that the project has the potential to be Ur-Energy’s next production center in Wyoming.”

He added that Ur-Energy is already working toward amendments to existing mining permits and licenses that would allow collection of the resource. Having historic permits in place speeds up the process, but officials have estimated the process will still take two or three years. But when the mine is ready, its resources will likely be processed at the Lost Creek facility, which has the capacity to handle it according to The Ranger.

The historic Shirley Basin Uranium Mining District, which is the second-largest uranium producing district in Wyoming, produced more than 51 million pounds of uranium from 1959 to 1992. The December deal brought both the Lucky Mc and Shirley Basin conventional mines under the Ur-Energy umbrella. Operations at the mines were suspended in the 1990s due to low uranium pricing of less than $10 per pound.

That problem continues today – though to a lesser extent – after a pre-Fukushima disaster peak of more than $72 per pound that has steadily decreased until resting below $30 today. In June 2007, the commodity stood at $136. According to Donna Wichers, Senior Vice President, Americas for competing mining company Uranium One, costs to produce a pound of uranium stand at about $34 per pound, even in Wyoming where costs are lower than elsewhere. That means uranium sold at current spot prices is likely going at a loss.

Ur-Energy isn’t immune to the problem, though it, along with other producers, prefer to sell at long-term contract pricing. According to a recent earnings report, Ur-Energy sold at contract prices of about $34.64 during the second quarter, a sharp decline from its first contracted sales of about $63 per pound. 

A Ur-Energy representative didn’t return requests for comment prior to press time.

Original article here.