Ur-Energy Targets 2M-Pound Uranium Output as Wyoming Expansion Gains Momentum

Key Points

• Ur-Energy is targeting roughly 2 million pounds of annual uranium production by late 2028 as Lost Creek production increases and the Shirley Basin operation ramps up. Together, the sites have constructed capacity of 2.2 million pounds annually.
• The company’s in-situ recovery model requires comparatively low capital investment, with estimated startup costs of $60 million–$80 million and operating costs of about $50–$55 per pound. Labor and electricity are its main inflation pressures.
• Ur-Energy is evaluating further growth through the nearby Lost Soldier project, which could potentially add 750,000 pounds of annual output, as well as regional acquisitions and possible government-backed opportunities to support U.S. uranium supply.

Ur Energy NYSEAMERICAN: URG President and CEO Matt Gili outlined the uranium producer’s expansion plans in Wyoming, emphasizing the company’s in-situ recovery, or ISR, operations at Lost Creek and Shirley Basin and its longer-term goal of building a larger regional production platform.

Gili described Ur-Energy as the fastest-growing ISR uranium producer in the United States and said the company has increased its operational capacity by 60% through the addition of its Shirley Basin operation. Lost Creek and Shirley Basin together provide constructed production capacity of 2.2 million pounds annually, while the company’s licensed capacity totals 4.2 million pounds per year.

Lost Creek Hub and Shirley Basin Ramp-Up

Lost Creek is the company’s operating hub, with a mine licensed for 1.2 million pounds annually and a processing facility capable of drumming 2.2 million pounds per year. Shirley Basin has capacity of 1 million pounds annually. Under the company’s model, uranium-loaded resin from Shirley Basin is transported to Lost Creek for precipitation, drying and drumming.

Gili said the company produced 225,000 pounds during the first half of the year and is increasing production at Lost Creek while bringing Shirley Basin into operation. He said both mines reaching full production would provide the initial path to 2.2 million pounds of annual capacity.

Asked about the timing of that ramp-up, Gili said the company does not provide forward guidance but sees a path toward full operational production at its two properties near the end of 2028. He said he would expect output at that point to be “right around 2 million pounds a year,” while stressing that the statement was not formal guidance.

“Mining can be hard,” Gili said, but added that the company has not identified issues in its ramp-up that it does not believe can be solved.

ISR Operations and Cost Considerations

Ur-Energy uses ISR technology, which involves pumping groundwater through well fields and recovering uranium at processing plants. Gili said the approach requires lower capital investment than conventional mining and can be scaled more rapidly. He said a typical ISR operation for the company costs roughly $60 million to $80 million to bring online.

The company’s technical reports indicate operating costs of approximately $50 to $55 per pound, according to Gili. He said inflation exposure is concentrated largely in labor and electricity because the company uses limited chemical reagents. Oxygen and carbon dioxide are the principal additives in its recovery process, he said, while diesel usage is largely associated with drilling rigs.

Labor costs remain an area of pressure, Gili said, citing competition for workers from Wyoming’s oil and gas industry. Still, he said the company believes its cost structure is sustainable. He contrasted its reported cost levels with a uranium term price that he said had risen from the high-$70-per-pound range when he joined the company in July of the prior year to the high-$90-per-pound range.

Growth Pipeline and Consolidation

Beyond Lost Creek and Shirley Basin, Gili identified the Lost Soldier project as a potential third spoke feeding the Lost Creek hub. The property is about eight miles from Lost Creek, and the company expects to release a technical report by the end of the year. A previous 2006 resource estimate identified 14 million pounds of resources, and Ur-Energy is updating the assessment for ISR development with associated economics.

Gili said Lost Soldier could potentially add about 750,000 pounds of annual production, though he characterized the estimate cautiously. He said further growth toward the company’s 4.2 million-pound licensed capacity would likely depend on regional consolidation.

The company also holds the Lost Creek South, North Hadsell and Lucky Mc properties at various exploration or development stages. At North Hadsell, Gili said 13 of 33 drill holes completed during the year encountered ore-grade uranium mineralization.

Gili said Ur-Energy is positioned to pursue acquisitions or other forms of consolidation because it is currently the only operating entity in Wyoming’s Great Divide Basin and Shirley Basin. The company views its Lost Creek processing hub and regional footprint as potential advantages in combining nearby stranded or undeveloped assets.

U.S. Supply and Government Opportunities

Gili linked the company’s strategy to growing demand for nuclear power and U.S. efforts to strengthen domestic uranium supply chains. He cited 438 operating nuclear reactors globally, 79 under construction and 435 in planning or proposal stages.

He also said Ur-Energy responded to a recent information request from the National Nuclear Security Administration regarding uranium supply capabilities. Gili said the company is already producing uranium and would like to supply U.S. defense-related nuclear fuel needs, clarifying that he was referring to power for the nuclear fleet rather than weapons production.

While Gili said Department of Energy-related funding opportunities are available to the nuclear sector, Ur-Energy has not yet needed to raise money to construct new operations. He said the company could begin evaluating funding sources, potentially including the U.S. government, if it makes a positive construction decision for Lost Soldier.

About Ur Energy (NYSEAMERICAN:URG)

Ur-Energy Inc is a uranium exploration, development and production company focused on supplying uranium for the nuclear energy industry. The company's activities include acquiring and advancing uranium properties, permitting and constructing recovery facilities, and producing uranium concentrate, commonly known as yellowcake.

Ur-Energy's primary operating asset is the Lost Creek in-situ recovery uranium project in Wyoming's Great Divide Basin. The project uses in-situ recovery methods, which circulate a solution through underground uranium deposits to bring the uranium-bearing solution to the surface for processing.

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