UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

 

 

FOR THE TRANSITION PERIOD OF _________ TO _________.

 

Commission File Number: 001-33905

 

UR-ENERGY INC.

(Exact name of registrant as specified in its charter)

  

Canada

 

Not Applicable

State or other jurisdiction of incorporation or organization

 

(I.R.S. Employer Identification No.)

 

10758 West Centennial Road, Suite 200
Littleton, Colorado 80127
(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: 720-981-4588

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol

 

Name of each exchange on which registered:

Common stock

 

URG (NYSE American); URE (TSX)

 

NYSE American; TSX

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

Non-accelerated filer

Accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes      No ☒

 

As of October 27, 2021, there were 210,820,732 shares of the registrant’s no par value Common Shares (“Common Shares”), the registrant’s only outstanding class of voting securities, outstanding.

 

 

 

  

UR-ENERGY INC.

 

TABLE OF CONTENTS

  

 

 

 

Page

 

 

 

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

Financial Statements

 

5

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

24

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

36

 

Item 4.

Controls and Procedures

 

37

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

 

Item 1.

Legal Proceedings

 

38

 

Item 1A.

Risk Factors

 

38

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

38

 

Item 3.

Defaults Upon Senior Securities

 

38

 

Item 4.

Mine Safety Disclosure

 

38

 

Item 5.

Other Information

 

38

 

Item 6.

Exhibits

 

39

 

 

 

 

 

 

SIGNATURES

 

40

 

 
2

Table of Contents

 

When we use the terms “Ur-Energy,” “we,” “us,” or “our,” or the “Company” we are referring to Ur-Energy Inc. and its subsidiaries, unless the context otherwise requires. Throughout this document we make statements that are classified as “forward-looking.” Please refer to the “Cautionary Statement Regarding Forward-Looking Statements” section below for an explanation of these types of assertions.

 

Cautionary Statement Regarding Forward-Looking Information

 

This report on Form 10-Q contains “forward-looking statements” within the meaning of applicable United States (“U.S.”) and Canadian securities laws, and these forward-looking statements can be identified by the use of words such as “expect,” “anticipate,” “estimate,” “believe,” “may,” “potential,” “intends,” “plans” and other similar expressions or statements that an action, event or result “may,” “could” or “should” be taken, occur or be achieved, or the negative thereof or other similar statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Such statements include, but are not limited to: (i) the ability to maintain safe and compliant reduced-level production operations at Lost Creek; (ii) the timing for completion of ongoing development and to determine future development and construction priorities at Lost Creek and Shirley Basin; (iii) the ability to ramp-up and transition to full or other warranted production levels in a timely and cost-effective manner when market and other conditions warrant; (iv) life of mine, costs and production results for each project; (v) the timing and outcome of final regulatory approvals of the amendments for uranium recovery at the LC East Project; (vi) the ability to complete additional favorable uranium sales agreements including spot sales if the market warrants and as may be advantageous to the Company; (vii) the impacts of COVID‑19 on our business, operations, and financial liquidity, and the impacts of the pandemic directly and indirectly on the uranium market; (viii) resolution of the continuing challenges within the uranium market, including supply and demand projections; (ix) the size and sustainability of impacts on the uranium market of recent physical funds and other depositories for purchases of uranium inventories; (x) the timing and impact of implementation of the national uranium reserve program and the Company’s role in the program; (xi) timing for implementation of other recommendations made by the United States Nuclear Fuel Working Group for the revival and expansion of domestic nuclear fuel production, and whether the Biden Administration will incorporate nuclear energy and domestic production of uranium into its climate change initiatives; (xii) impacts on the global markets of climate change initiatives of nations and multi-national companies; (xiii) whether the proposed transaction of certain non-core assets will be completed, on what terms and timing; and (xiv) whether our financing activities and cost-savings measures which we have implemented will be sufficient to support our operations and for what period of time. Additional factors include, among others, the following: challenges presented by current inventories and largely unrestricted imports of uranium products into the U.S.; future estimates for production; capital expenditures; operating costs; mineral resources, grade estimates and recovery rates; market prices; business strategies and measures to implement such strategies; competitive strengths; estimates of goals for expansion and growth of the business and operations; plans and references to our future successes; our history of operating losses and uncertainty of future profitability; status as an exploration stage company; the lack of mineral reserves; risks associated with obtaining permits and other authorizations in the U.S.; risks associated with current variable economic conditions; our ability to service our debt and maintain compliance with all restrictive covenants related to the debt facility and security documents; the possible impact of future debt or equity financings; the hazards associated with mining production operations; compliance with environmental laws and regulations; wastewater management; the possibility for adverse results in potential litigation; uncertainties associated with changes in law, government policy and regulation; uncertainties associated with a Canada Revenue Agency or U.S. Internal Revenue Service audit of any of our cross border transactions; changes in size and structure; the effectiveness of management and our strategic relationships; ability to attract and retain key personnel and management; uncertainties regarding the need for additional capital; sufficiency of insurance coverages; uncertainty regarding the fluctuations of quarterly results; foreign currency exchange risks; ability to enforce civil liabilities under U.S. securities laws outside the U.S.; ability to maintain our listing on the NYSE American and Toronto Stock Exchange (“TSX”); risks associated with the expected classification as a “passive foreign investment company” under the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended; risks associated with our investments and other risks and uncertainties described under the heading “Risk Factors” in our Annual Report on Form 10-K, dated February 26, 2021.

 

 
3

Table of Contents

 

Cautionary Note to U.S. Investors Concerning Disclosure of Mineral Resources

 

Unless otherwise indicated, all resource estimates included in this Form 10-Q have been prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.

 

Canadian standards, including NI 43-101, differ significantly from the requirements of the U.S. Securities and Exchange Commission (“SEC”), and resource information contained in this Form 10-Q may not be comparable to similar information disclosed by U.S. companies. In particular, the term “resources” does not equate to the term “reserves.” Under SEC Industry Guide 7, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. SEC Industry Guide 7 does not define and the SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources,” “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with U.S. standards.

 

NI 43-101 Review of Technical Information: Michael Mellin, Ur-Energy / Lost Creek Mine Geologist, Certified P.Geo., and Qualified Person as defined by NI 43-101, reviewed and approved the technical information contained in this Form 10-Q.

 

 
4

Table of Contents

 

PART I

Item 1. FINANCIAL STATEMENTS

 

Ur-Energy Inc.

Unaudited Consolidated Balance Sheets

(expressed in thousands of U.S. dollars)

(the accompanying notes are an integral part of these consolidated financial statements)

 

 

 

Note

 

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

3

 

 

 

33,413

 

 

 

4,268

 

Accounts receivable

 

 

 

 

 

 

15

 

 

 

-

 

Prepaid expenses

 

 

 

 

 

 

1,195

 

 

 

814

 

Assets held for sale

 

 

4

 

 

 

1,536

 

 

 

-

 

Total current assets

 

 

 

 

 

 

36,159

 

 

 

5,082

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

 

Non-current portion of inventory

 

 

5

 

 

 

7,921

 

 

 

7,814

 

Restricted cash

 

 

6

 

 

 

7,861

 

 

 

7,859

 

Mineral properties

 

 

7

 

 

 

35,193

 

 

 

39,184

 

Capital assets

 

 

8

 

 

 

20,590

 

 

 

21,891

 

Total non-current assets

 

 

 

 

 

 

71,565

 

 

 

76,748

 

Total assets

 

 

 

 

 

 

107,724

 

 

 

81,830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

9

 

 

 

2,178

 

 

 

2,320

 

Current portion of notes payable

 

 

10

 

 

 

-

 

 

 

459

 

Current portion of warrant liability

 

 

12

 

 

 

4,175

 

 

 

729

 

Environmental remediation accrual

 

 

 

 

 

 

76

 

 

 

76

 

Total current liabilities

 

 

 

 

 

 

6,429

 

 

 

3,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable

 

 

10

 

 

 

12,311

 

 

 

12,720

 

Lease liability

 

 

 

 

 

 

22

 

 

 

50

 

Asset retirement obligations

 

 

11

 

 

 

29,400

 

 

 

29,965

 

Warrant liability

 

 

12

 

 

 

7,677

 

 

 

1,415

 

Total non-current liabilities

 

 

 

 

 

 

49,410

 

 

 

44,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

13

 

 

 

230,024

 

 

 

189,620

 

Contributed surplus

 

 

 

 

 

 

21,218

 

 

 

20,946

 

Accumulated other comprehensive income

 

 

 

 

 

 

4,179

 

 

 

3,707

 

Accumulated deficit

 

 

 

 

 

 

(203,536)

 

 

(180,177)

Total shareholders’ equity

 

 

 

 

 

 

51,885

 

 

 

34,096

 

Total liabilities and shareholders’ equity

 

 

 

 

 

 

107,724

 

 

 

81,830

 

 

 
5

Table of Contents

 

Ur-Energy Inc.

Unaudited Consolidated Statements of Operations and Comprehensive Loss

(expressed in thousands of U.S. dollars, except per share data)

(the accompanying notes are an integral part of these consolidated financial statements)

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

Note

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

14

 

 

 

9

 

 

 

-

 

 

 

16

 

 

 

8,304

 

Cost of sales

 

 

15

 

 

 

(1,703)

 

 

(1,840)

 

 

(5,211)

 

 

(11,462)

Gross profit (loss)

 

 

 

 

 

 

(1,694)

 

 

(1,840)

 

 

(5,195)

 

 

(3,158)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

 

16

 

 

 

(2,189)

 

 

(2,157)

 

 

(6,778)

 

 

(6,446)

Profit (loss) from operations

 

 

 

 

 

 

(3,883)

 

 

(3,997)

 

 

(11,973)

 

 

(9,604)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest expense

 

 

 

 

 

 

(182)

 

 

(195)

 

 

(558)

 

 

(522)

Warrant liability mark to market gain (loss)

 

 

12

 

 

 

(5,060)

 

 

550

 

 

 

(11,384)

 

 

592

 

Foreign exchange gain (loss)

 

 

 

 

 

 

15

 

 

 

(53)

 

 

(352)

 

 

(46)

Other income (expense)

 

 

10

 

 

 

2

 

 

 

(1)

 

 

908

 

 

 

16

 

Net income (loss)

 

 

 

 

 

 

(9,108)

 

 

(3,696)

 

 

(23,359)

 

 

(9,564)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

219

 

 

 

36

 

 

 

472

 

 

 

67

 

Comprehensive income (loss)

 

 

 

 

 

 

(8,889)

 

 

(3,660)

 

 

(22,887)

 

 

(9,497)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

(0.04)

 

 

(0.02)

 

 

(0.12)

 

 

(0.06)

Diluted

 

 

 

 

 

 

(0.04)

 

 

(0.02)

 

 

(0.12)

 

 

(0.06)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

197,205,734

 

 

 

166,130,403

 

 

 

189,835,800

 

 

 

162,375,926

 

Diluted

 

 

 

 

 

 

197,205,734

 

 

 

166,130,403

 

 

 

189,835,800

 

 

 

162,375,926

 

 

 
6

Table of Contents

 

Ur-Energy Inc.

Unaudited Consolidated Statements of Changes in Shareholders’ Equity

 

(expressed in thousands of U.S. dollars, except share data)

(the accompanying notes are an integral part of these consolidated financial statements)

 

Nine months ended

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

September 30,

 

 

 

 Share Capital

 

 

 

 

 Contributed

 

 

 Comprehensive

 

 

 Accumulated

 

 

 Shareholders’

 

 2020

 

Note

 

 

 Shares

 

 

 Amount

 

 

 Warrants

 

 

 Surplus

 

 

 Income

 

 

 Deficit

 

 

 Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

160,478,059

 

 

 

185,754

 

 

 

-

 

 

 

20,317

 

 

 

3,654

 

 

 

(165,392)

 

 

44,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

234

 

 

 

-

 

 

 

-

 

 

 

234

 

Comprehensive income (loss)

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

27

 

 

 

(3,641)

 

 

(3,614)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2020

 

 

 

 

 

160,478,059

 

 

 

185,754

 

 

 

-

 

 

 

20,551

 

 

 

3,681

 

 

 

(169,033)

 

 

40,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

230

 

 

 

-

 

 

 

-

 

 

 

230

 

Comprehensive income (loss)

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4

 

 

 

(2,227)

 

 

(2,223)

June 30, 2020

 

 

 

 

 

160,478,059

 

 

 

185,754

 

 

 

-

 

 

 

20,781

 

 

 

3,685

 

 

 

(171,260)

 

 

38,960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for cash

 

 

13

 

 

 

9,000,000

 

 

 

4,680

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,680

 

Less amount assigned to warrant liablity

 

 

 

 

 

 

 

 

 

 

(860)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(860)

Less share issue costs

 

 

 

 

 

 

 

 

 

 

(428)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(428)

Redemption of RSUs

 

 

 

 

 

 

189,613

 

 

 

104

 

 

 

-

 

 

 

(149)

 

 

-

 

 

 

-

 

 

 

(45)

Stock compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

229

 

 

 

-

 

 

 

-

 

 

 

229

 

Comprehensive income (loss)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

36

 

 

 

(3,696)

 

 

(3,660)

September 30, 2020

 

 

 

 

 

 

169,667,672

 

 

 

189,250

 

 

 

-

 

 

 

20,861

 

 

 

3,721

 

 

 

(174,956)

 

 

38,876

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 Accumulated

 

 

 

 

 

 Nine months ended

 

 

 

 

 

 

 

 

 

 

 

 Other

 

 

 

 

 

September 30,

 

 

 

 Share Capital

 

 

 

 

 Contributed

 

 

 Comprehensive

 

 

 Accumulated

 

 

 Shareholders’

 

 2021

 

Note

 

 

 Shares

 

 

 Amount

 

 

 Warrants

 

 

 Surplus

 

 

 Income

 

 

 Deficit

 

 

 Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

170,253,752

 

 

 

189,620

 

 

 

-

 

 

 

20,946

 

 

 

3,707

 

 

 

(180,177)

 

 

34,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

13

 

 

 

1,723,818

 

 

 

1,540

 

 

 

-

 

 

 

(462)

 

 

-

 

 

 

-

 

 

 

1,078

 

Exercise of warrants

 

 

13

 

 

 

481,000

 

 

 

551

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

551

 

Shares issued for cash

 

 

13

 

 

 

16,930,530

 

 

 

15,068

 

 

 

169

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,237

 

Less amount assigned to warrant liablity

 

12 & 13

 

 

 

-

 

 

 

(2,435)

 

 

(169)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,604)

Less share issue costs

 

 

13

 

 

 

-

 

 

 

(1,307)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,307)

Stock compensation

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

231

 

 

 

-

 

 

 

-

 

 

 

231

 

Comprehensive income (loss)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

219

 

 

 

(7,372)

 

 

(7,153)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2021

 

 

 

 

 

 

189,389,100

 

 

 

203,037

 

 

 

-

 

 

 

20,715

 

 

 

3,926

 

 

 

(187,549)

 

 

40,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

13

 

 

 

160,000

 

 

 

134

 

 

 

-

 

 

 

(40)

 

 

-

 

 

 

-

 

 

 

94

 

Exercise of warrants

 

 

13

 

 

 

825,637

 

 

 

1,245

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,245

 

Shares issued for cash

 

 

13

 

 

 

4,423,368

 

 

 

6,930

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,930

 

Less amount assigned to warrant liablity

 

11 & 12

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Less share issue costs

 

 

13

 

 

 

-

 

 

 

(218)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(218)

Stock compensation

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

259

 

 

 

-

 

 

 

-

 

 

 

259

 

Comprehensive income (loss)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

34

 

 

 

(6,879)

 

 

(6,845)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2021

 

 

 

 

 

 

194,798,105

 

 

 

211,128

 

 

 

-

 

 

 

20,934

 

 

 

3,960

 

 

 

(194,428)

 

 

41,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

13

 

 

 

17,548

 

 

 

16

 

 

 

-

 

 

 

(5)

 

 

-

 

 

 

-

 

 

 

11

 

Shares issued for cash

 

 

13

 

 

 

6,026,499

 

 

 

10,112

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,112

 

Less amount assigned to warrant liablity

 

11 & 12

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Less share issue costs

 

 

13

 

 

 

-

 

 

 

(253)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(253)

Stock compensation

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

289

 

 

 

-

 

 

 

-

 

 

 

289

 

Comprehensive income (loss)

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

219

 

 

 

(9,108)

 

 

(8,889)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

 

 

 

 

206,285,975

 

 

 

230,024

 

 

 

-

 

 

 

21,218

 

 

 

4,179

 

 

 

(203,536)

 

 

51,885

 

 

 
7

Table of Contents

 

Ur-Energy Inc.

Unaudited Consolidated Statements of Cash Flow

(expressed in thousands of U.S. dollars)

(the accompanying notes are an integral part of these consolidated financial statements)

 

 

 

 

 

 

Nine months ended

 

 

 

 

 

 

September 30,

 

 

 

Note

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

Cash provided by (used for):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

 

 

Net income (loss) for the year

 

 

 

 

 

(23,754)

 

 

(9,564)

 

 

 

 

 

 

 

 

 

 

 

 

Items not affecting cash:

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

779

 

 

 

693

 

Net realizable value adjustments

 

 

 

 

 

5,211

 

 

 

6,296

 

Amortization of mineral properties

 

 

 

 

 

1,525

 

 

 

1,850

 

Depreciation of capital assets

 

 

 

 

 

1,336

 

 

 

1,365

 

Accretion expense

 

 

 

 

 

365

 

 

 

433

 

Amortization of deferred loan costs

 

 

 

 

 

32

 

 

 

58

 

Gain on loan forgiveness

 

 

 

 

 

(900)

 

 

-

 

Provision for reclamation

 

 

 

 

 

-

 

 

 

18

 

Mark to market loss (gain)

 

 

 

 

 

11,384

 

 

 

(592)

Gain on sale of assets

 

 

 

 

 

-

 

 

 

(16)

Unrealized foreign exchange loss (gain)

 

 

 

 

 

350

 

 

 

-

 

Accounts receivable

 

 

 

 

 

(15)

 

 

8

 

Inventory

 

 

 

 

 

(5,318)

 

 

(6,489)

Prepaid expenses

 

 

 

 

 

(381)

 

 

(58)

Accounts payable and accrued liabilities

 

 

 

 

 

253

 

 

154

 

 

 

 

 

 

 

(9,133)

 

 

(5,844)

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of capital assets

 

 

 

 

 

-

 

 

 

18

 

Purchase of capital assets

 

 

 

 

 

(63)

 

 

(38)

 

 

 

 

 

 

(63)

 

 

(20)

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

 

 

 Issuance of common shares and warrants for cash

 

 

13

 

 

 

32,280

 

 

 

4,680

 

 Share issue costs

 

 

13

 

 

 

(1,778)

 

 

(429)

 Proceeds from exercise of warrants and stock options

 

 

 

 

 

 

7,822

 

 

 

-

 

RSU redeemed for cash

 

 

 

 

 

 

 -

 

 

 

 (45

)

 Proceeds from debt financing

 

 

10

 

 

 

-

 

 

 

893

 

 

 

 

 

 

 

 

38,324

 

 

 

5,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effects of foreign exchange rate changes on cash

 

 

 

 

 

 

19

 

 

 

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash, cash equivalents, and restricted cash

 

 

 

 

 

 

29,147

 

 

 

(715)

Beginning cash, cash equivalents, and restricted cash

 

 

 

 

 

 

12,127

 

 

 

15,215

 

Ending cash, cash equivalents, and restricted cash

 

 

17

 

 

 

41,274

 

 

 

14,500

 

 

 
8

Table of Contents

 

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

    

1.

Nature of Operations

 

 

 

Ur-Energy Inc. (the “Company”) was incorporated on March 22, 2004, under the laws of the Province of Ontario. The Company continued under the Canada Business Corporations Act on August 8, 2006. The Company is an Exploration Stage mining company, as defined by United States Securities and Exchange Commission (“SEC”). The Company is engaged in uranium mining and recovery operations, with activities including the acquisition, exploration, development, and production of uranium mineral resources located primarily in Wyoming. The Company commenced uranium production at its Lost Creek Project in Wyoming in 2013.

 

 

 

Due to the nature of the uranium mining methods used by the Company on the Lost Creek Property, and the definition of “mineral reserves” under National Instrument 43-101 (“NI 43-101”), which uses the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards, the Company has not determined whether the properties contain mineral reserves. However, the Company’s “Amended Preliminary Economic Assessment of the Lost Creek Property, Sweetwater County, Wyoming,” February 8, 2016 (“Lost Creek PEA”) outlines the potential viability of the Lost Creek Property. The recoverability of amounts recorded for mineral properties is dependent upon the discovery of economic resources, the ability of the Company to obtain the necessary financing to develop the properties and upon attaining future profitable production from the properties or sufficient proceeds from disposition of the properties.

 

2.

Summary of Significant Accounting Policies

 

 

 

Basis of presentation

 

 

 

These unaudited consolidated financial statements do not conform in all respects to the requirements of U.S. generally accepted accounting principles (“US GAAP”) for annual financial statements. These unaudited consolidated financial statements reflect all normal adjustments which in the opinion of management are necessary for a fair presentation of the results for the periods presented. These unaudited consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2020. We applied the same accounting policies as in the prior year. Certain information and footnote disclosures required by US GAAP have been condensed or omitted in these unaudited consolidated financial statements.

 

3.

Cash and Cash Equivalents

 

 

 

The Company’s cash and cash equivalents consist of the following:

 

 Cash and cash equivalent

 

September 30, 2021

 

 

December 31, 2020

 

 

 

 

 

 

 

 

Cash on deposit

 

 

22,127

 

 

 

852

 

Money market funds

 

 

11,286

 

 

 

3,416

 

 

 

 

33,413

 

 

 

4,268

 

    

 
9

Table of Contents

    

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

   

4.

Assets Held for Sale

 

 

 

A non-core, unpermitted, non-operating property held by Pathfinder Mines Corporation is presently considered to be an asset held for sale. The Company has a plan to sell the asset and is considering an offer consisting of cash and mineral properties. The asset’s mineral property cost as shown in the table below has been reclassified as assets held for sale as of September 30, 2021. There were no liabilities associated with the asset held for sale as of September 30, 2021.

  

Net assets held for sale

 

September 30, 2021

 

 

December 31, 2020

 

 

 

 

 

 

 

 

Assets held for sale

 

 

 

 

 

 

Mineral properties

 

 

1,536

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

1,536

 

 

 

-

 

           

5.

Inventory

 

 

 

The Company’s inventory consists of the following:

 

Inventory by Type

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

Plant inventory

 

 

-

 

 

 

463

 

Conversion facility inventory

 

 

7,921

 

 

 

7,351

 

 

 

 

7,921

 

 

 

7,814

 

 

 

 

 

 

 

 

 

 

Inventory by Duration

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

Non-current portion of inventory

 

 

7,921

 

 

 

7,814

 

 

 

 

7,921

 

 

 

7,814

 

 

 

Using lower of cost or net realizable value (“NRV”) calculations, the Company reduced the inventory valuation by $5,211 and $7,802 for the nine months ended September 30, 2021, and the year ended December 31, 2020, respectively.

 

6.

Restricted Cash

 

 

 

The Company’s restricted cash consists of the following:

Restricted Cash

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

Cash pledged for reclamation

 

 

7,861

 

 

 

7,859

 

 

 

 

7,861

 

 

 

7,859

 

 

 

The Company’s restricted cash consists of money market accounts and short-term government bonds.

 

 

 

The bonding requirements for reclamation obligations on various properties have been reviewed and approved by the Wyoming Department of Environmental Quality (“WDEQ”), including the Wyoming Uranium Recovery Program (“URP”), and the Bureau of Land Management (“BLM”) as applicable. The restricted money market accounts are pledged as collateral against performance surety bonds, which secure the estimated costs of reclamation related to the properties. Surety bonds providing $27.1 million of coverage towards reclamation obligations are collateralized by the restricted cash.

 

 

 
10

Table of Contents

   

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

       

7.

Mineral Properties

 

 

 

The Company’s mineral properties consist of the following:

 

 

 

Lost Creek

 

 

Pathfinder

 

 

Other U.S.

 

 

 

Mineral Properties

 

Property

 

 

Mines

 

 

Properties

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

6,276

 

 

 

19,730

 

 

 

13,178

 

 

 

39,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassify assets held for sale (note 4)

 

 

-

 

 

 

(1,536)

 

 

-

 

 

 

(1,536)

Change in estimated reclamation costs

 

 

-

 

 

 

(930)

 

 

-

 

 

 

(930)

Depletion and amortization

 

 

(1,525)

 

 

-

 

 

 

-

 

 

 

(1,525)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

4,751

 

 

 

17,264

 

 

 

13,178

 

 

 

35,193

 

 

 

Lost Creek Property

 

The Company acquired certain Wyoming properties in 2005 when Ur-Energy USA Inc. purchased 100% of NFU Wyoming, LLC. Assets acquired in this transaction include the Lost Creek Project, other Wyoming properties and development databases. NFU Wyoming, LLC was acquired for aggregate consideration of $20 million plus interest. Since 2005, the Company has increased its holdings adjacent to the initial Lost Creek acquisition through staking additional claims and making additional property purchases and leases.

 

There is a royalty on each of the State of Wyoming sections under lease at the Lost Creek, LC West and EN Projects, as required by law. We are not recovering U3O8 within the State section under lease at Lost Creek and are therefore not subject to royalty payments currently. Other royalties exist on certain mining claims at the LC South, LC East and EN Projects. There are no royalties on the mining claims in the Lost Creek, LC North or LC West Projects.

 

Pathfinder Mines

 

The Company acquired additional Wyoming properties when Ur-Energy USA Inc. closed a Share Purchase Agreement (“SPA”) with an AREVA Mining affiliate in 2013. Under the terms of the SPA, the Company purchased Pathfinder Mines Corporation (“Pathfinder”). Assets acquired in this transaction include the Shirley Basin mine, portions of the Lucky Mc mine, machinery and equipment, vehicles, office equipment, and development databases. Pathfinder was acquired for aggregate consideration of $6.7 million, the assumption of $5.7 million in estimated asset reclamation obligations, and other consideration. A non-core, unpermitted, non-operating property held by Pathfinder is presently considered to be an asset held for sale (see note 4).

 

 
11

Table of Contents

   

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

          

 

Other U.S. properties

 

Other U.S. properties include the acquisition costs of several prospective mineralized properties, which the Company continues to maintain through claim payments, lease payments, insurance, and other holding costs in anticipation of future exploration efforts.

  

8.

Capital Assets

 

 

 

The Company’s capital assets consist of the following:

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

 

 

 

 Accumulated

 

 

 Net Book

 

 

 

 

 

 Accumulated

 

 

 Net Book

 

Capital Assets

 

Cost

 

 

Depreciation

 

 

Value

 

 

Cost

 

 

Depreciation

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rolling stock

 

 

3,450

 

 

 

(3,403)

 

 

47

 

 

 

3,450

 

 

 

(3,369)

 

 

81

 

Enclosures

 

 

33,008

 

 

 

(13,074)

 

 

19,934

 

 

 

33,008

 

 

 

(11,834)

 

 

21,174

 

Machinery and equipment

 

 

1,469

 

 

 

(930)

 

 

539

 

 

 

1,446

 

 

 

(885)

 

 

561

 

Furniture and fixtures

 

 

119

 

 

 

(119)

 

 

-

 

 

 

119

 

 

 

(119)

 

 

-

 

Information technology

 

 

1,160

 

 

 

(1,113)

 

 

47

 

 

 

1,123

 

 

 

(1,098)

 

 

25

 

Right of use assets

 

 

36

 

 

 

(13)

 

 

23

 

 

 

165

 

 

 

(115)

 

 

50

 

 

 

 

39,242

 

 

 

(18,652)

 

 

20,590

 

 

 

39,311

 

 

 

(17,420)

 

 

21,891

 

 

9.

Accounts Payable and Accrued Liabilities

 

 

 

Accounts payable and accrued liabilities consist of the following:

 

Accounts Payable and Accrued Liabilities

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

Accounts payable

 

 

195

 

 

 

396

 

Accrued payroll liabilities

 

 

1,818

 

 

 

1,767

 

Accrued severance, ad valorem, and other taxes payable

 

 

165

 

 

 

157

 

 

 

 

2,178

 

 

 

2,320

 

 

10.

Notes Payable

 

 

 

On October 15, 2013, the Sweetwater County Commissioners approved the issuance of a $34.0 million Sweetwater County, State of Wyoming, Taxable Industrial Development Revenue Bond (Lost Creek Project), Series 2013 (the “Sweetwater IDR Bond”) to the State of Wyoming, acting by and through the Wyoming State Treasurer, as purchaser. On October 23, 2013, the Sweetwater IDR Bond was issued, and the proceeds were in turn loaned by Sweetwater County to Lost Creek ISR, LLC pursuant to a financing agreement dated October 23, 2013 (the “State Bond Loan”). The State Bond Loan calls for payments of interest at a fixed rate of 5.75% per annum on a quarterly basis commencing January 1, 2014. The principal was to be paid in 28 quarterly installments commencing January 1, 2015.

 

 
12

Table of Contents

    

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

  

 

On October 1, 2019, the Sweetwater County Commissioners and the State of Wyoming approved an eighteen-month deferral of principal payments beginning October 1, 2019. On October 6, 2020, the State Bond Loan was again modified to defer principal payments for an additional eighteen months. Quarterly principal payments are scheduled to resume on October 1, 2022, and the last payment will be due on October 1, 2024.

 

On April 16, 2020, we obtained two Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans (one for each of our subsidiaries with U.S. payroll obligations) through the Bank of Oklahoma Financial (“BOKF”). The program was a part of the CARES Act enacted by Congress March 27, 2020, in response to the COVID-19 (Coronavirus) pandemic. The combined loan amount was $0.9 million.

 

On June 5, 2020, the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”) became law. The Flexibility Act changes key provisions of the PPP, including maturity of the loans, deferral of loan payments, and the forgiveness of the PPP loans, with revisions being retroactive to the date of the CARES Act.

 

Under the program, as modified by the Flexibility Act and SBA and Treasury rulemakings, the repayment of our loans, including interest, would be forgiven based on eligible payroll, payroll-related, and other allowable costs incurred in a twenty-four-week period following the funding of the loans. For any portion of the loans not forgiven, the program provided for an initial deferral of payments based upon the timing of a borrower’s application for forgiveness and SBA’s action on the application up to a maximum of ten months after the use and forgiveness covered period ends (July 30, 2021).

 

In December 2020, we applied for loan forgiveness with the BOKF. The BOKF, after reviewing the loan forgiveness applications, submitted them to the SBA for approval. The Company received notifications in Q2 that the principal amount of $893 thousand and accrued interest of approximately $10 thousand were forgiven under the terms of the PPP. This was treated as a forgiveness of debt on the Consolidated Statements of Operations for the nine-months ended September 30, 2021, and a $903 thousand gain on debt forgiveness was recognized in other income.

 

 
13

Table of Contents

     

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

  

 

The following table summarizes the Company’s current and long-term debts.

 

Current and Long-term Debt

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

Small Business Administration PPP Loans

 

 

-

 

 

 

502

 

Deferred financing costs

 

 

-

 

 

 

(43)

 

 

 

-

 

 

 

459

 

 

 

 

 

 

 

 

 

 

Long-term

 

 

 

 

 

 

 

 

Small Business Administration PPP Loans

 

 

-

 

 

 

398

 

State Bond Loan

 

 

12,441

 

 

 

12,441

 

Deferred financing costs

 

 

(130)

 

 

(119)

 

 

 

12,311

 

 

 

12,720

 

 

 

The schedule of remaining payments on outstanding debt as of September 30, 2021, is presented below.

 

Remaining Payments

 

Total

 

 

2021

 

 

2022

 

 

2023

 

 

2024

 

 

Final payment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State Bond Loan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal

 

 

12,441

 

 

 

-

 

 

 

2,628

 

 

 

5,487

 

 

 

4,326

 

 

Oct-2024

 

Interest

 

 

1,448

 

 

 

179

 

 

 

697

 

 

 

447

 

 

 

125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

13,889

 

 

 

179

 

 

 

3,325

 

 

 

5,934

 

 

 

4,451

 

 

 

 

 

11.

Asset Retirement Obligations

 

 

 

Asset retirement obligations (“ARO”) relate to the Lost Creek mine and Shirley Basin project and are equal to the current estimated reclamation cost escalated at inflation rates ranging from 0.74% to 2.44% and then discounted at credit adjusted risk-free rates ranging from 0.33% to 7.25%. Current estimated reclamation costs include costs of closure, reclamation, demolition and stabilization of the well fields, processing plants, infrastructure, aquifer restoration, waste dumps, and ongoing post-closure environmental monitoring and maintenance costs. The schedule of payments required to settle the future reclamation extends through 2033.

 

 
14

Table of Contents

     

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

  

 

The present value of the estimated future closure estimate is presented in the following table.

 

Asset Retirement Obligations

 

Total

 

December 31, 2020

 

 

29,965

 

 

 

 

 

 

Change in estimated reclamation costs

 

 

(930)

Accretion expense

 

 

365

 

 

 

 

 

 

September 30, 2021

 

 

29,400

 

 

 

The restricted cash discussed in note 6 relates to the surety bonds provided to the governmental agencies for these and other reclamation obligations.

 

12.

Warrant Liability

 

 

 

In September 2018, we issued 13,062,878 warrants as part of an underwritten public offering with two warrants redeemable for one Common Share of the Company’s stock at a price of $1.00 per full share. The remaining, unexercised warrants expired in September 2021.

 

In August 2020, we issued 9,000,000 warrants as part of a registered direct offering with two warrants redeemable for one Common Share of the Company’s stock at a price of $0.75 per full share. Any remaining, unexercised warrants will expire in August 2022.

 

In February 2021, we issued 16,930,530 warrants as part of an underwritten public offering with two warrants redeemable for one Common Share of the Company’s stock at a price of $1.35 per full share. Any remaining, unexercised warrants will expire in February 2024.

 

Because the warrants are priced in U.S. dollars and the functional currency of Ur-Energy Inc. is Canadian dollars, a derivative financial liability was created. The liability created, and adjusted monthly, is calculated using the Black-Scholes model described below as there is no active market for the warrants. Any gain or loss from the adjustment of the liability is reflected in net income for the period.

 

The Company’s warrant liabilities consist of the following:

 

 

 

Sep-2018

 

 

Aug-2020

 

 

Feb-2021

 

 

 

 Warrant Liability Activity

 

 Warrants

 

 

 Warrants

 

 

 Warrants

 

 

 Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

729

 

 

 

1,415

 

 

 

-

 

 

 

2,144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants issued

 

 

-

 

 

 

-

 

 

 

2,604

 

 

 

2,604

 

Warrants exercised

 

 

(3,961)

 

 

(190)

 

 

(26)

 

 

(4,177)

Mark to market revaluation loss (gain)

 

 

3,227

 

 

 

2,992

 

 

 

5,165

 

 

 

11,384

 

Effects for foreign exchange rate changes

 

 

5

 

 

 

(42)

 

 

(66)

 

 

(103)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

-

 

 

 

4,175

 

 

 

7,677

 

 

 

11,852

 

 

 
15

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Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

  

 

 

Aug-2020

 

 

Feb-2021

 

 

 

 

 Warrant Liability Duration

 

 Warrants

 

 

 Warrants

 

 

 Total

 

 

 

 

 

 

 

 

 

 

 

Current portion of warrant liability

 

 

4,175

 

 

 

-

 

 

 

4,175

 

Warrant liability

 

 

 

 

 

 

7,677

 

 

 

7,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

4,175

 

 

 

7,677

 

 

 

11,852

 

 

 

The fair value of the warrant liabilities on September 30, 2021, was determined using the Black-Scholes model with the following assumptions:

 

 

 

Aug-2020

 

 

Feb-2021

 

Black-Scholes Assumptions at September 30, 2021

 

Warrants

 

 

Warrants

 

 

 

 

 

 

 

 

Expected forfeiture rate

 

 

0.0%

 

 

0.0%

Expected life (years)

 

 

0.8

 

 

 

2.3

 

Expected volatility

 

 

86.8%

 

 

80.0%

Risk free rate

 

 

0.5%

 

 

0.6%

Expected dividend rate

 

 

0.0%

 

 

0.0%

Exercise price

 

$0.75

 

 

$1.35

 

Market price

 

$1.72

 

 

$1.72

 

 

13.

Shareholders’ Equity and Capital Stock

 

 

 

Common shares

 

 

 

The Company’s share capital consists of an unlimited amount of Class A preferred shares authorized, without par value, of which no shares are issued and outstanding; and an unlimited amount of common shares authorized, without par value, of which 206,285,975 shares and 170,253,752 shares were issued and outstanding as of September 30, 2021, and December 31, 2020, respectively.

 

On February 4, 2021, the Company closed an underwritten public offering of 14,722,200 common shares and accompanying warrants to purchase up to 7,361,100common shares, at a combined public offering price of $0.90 per common share and accompanying warrant. The warrants will have an exercise price of $1.35 per whole common share and will expire three years from the date of issuance. Ur-Energy also granted the underwriters a 30-day option to purchase up to an additional 2,208,330 common shares and warrants to purchase up to 1,104,165 common shares on the same terms. The option was exercised in full. Including the exercised option, Ur-Energy issued a total of 16,930,530 common shares and 16,930,530 warrants to purchase up to 8,465,265 common shares. The gross proceeds to Ur‑Energy from this offering were approximately $15.2 million. After fees and expenses of $1.3 million, net proceeds to the Company were approximately $13.9 million.

 

 
16

Table of Contents

     

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

   

 

Stock options

 

In 2005, the Company’s Board of Directors approved the adoption of the Company’s stock option plan (the “Option Plan”). The Option Plan was most recently approved by the shareholders on May 7, 2020. Eligible participants under the Option Plan include directors, officers, employees, and consultants of the Company. Under the terms of the Option Plan, grants of options will vest over a three-year period: 33.3% on the first anniversary, 33.3% on the second anniversary, and 33.4% on the third anniversary of the grant. The term of the options is five years.

 

Activity with respect to stock options is summarized as follows:

 

 

 

 Outstanding

 

 

 Weighted-average

 

 Stock Option Activity

 

 Options

 

 

 exercise price

 

 

 

#

 

 

$

 

 

 

 

 

 

 

 

December 31, 2020

 

 

11,910,424

 

 

$0.61

 

 

 

 

 

 

 

 

 

 

Granted

 

 

1,322,164

 

 

 

1.14

 

Exercised

 

 

(1,901,366)

 

 

0.63

 

Forfeited

 

 

(219,055)

 

 

0.56

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

11,112,167

 

 

$0.67

 

 

 

The exercise price of a new grant is set at the closing price for the shares on the Toronto Stock Exchange (TSX) on the trading day immediately preceding the grant date and there is no intrinsic value as of the date of grant.

 

We received $1.2 million from options exercised in the nine months ended September 30, 2021. No options were exercised in the nine months ended September 30, 2020.

 

Stock-based compensation expense from stock options was $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively. Stock-based compensation expense from stock options was $0.1 million and $0.4 million for the three and nine months ended September 30, 2020, respectively.

  

As of September 30, 2021, there was approximately $1.3 million unamortized stock-based compensation expense related to the Option Plan. The expenses are expected to be recognized over the remaining weighted-average vesting period of 2.3 years under the Option Plan.

 

 
17

Table of Contents

     

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

   

 

As of September 30, 2021, outstanding stock options are as follows:

   

 

 

 

 Options outstanding

 

 

 Options exercisable

 

 

 

 

 

 

 

 

 

 Weighted-

 

 

 

 

 

 

 

 

 Weighted-

 

 

 

 

 

 

 

 

 

 

 

 

 average

 

 

 

 

 

 

 

 

 average

 

 

 

 

 

 

 

 

 

 

 

 

 remaining

 

 

 Aggregate

 

 

 

 

 

 remaining

 

 

 Aggregate

 

 

 

 Exercise

 

 

 Number

 

 

 contractual

 

 

 intrinsic

 

 

 Number

 

 

 contractual

 

 

 intrinsic

 

 

 

 price

 

 

 of options

 

 

 life (years)

 

 

 value

 

 

 of options

 

 

 life (years)

 

 

 value

 

 

 Expiry

$

 

 

#

 

 

 

 

 

$

 

 

#

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.58

 

 

 

924,470

 

 

 

0.2

 

 

 

1,057,891

 

 

 

924,470

 

 

 

0.2

 

 

 

1,057,891

 

 

2021-12-16

 

0.58

 

 

 

200,000

 

 

 

0.9

 

 

 

228,864

 

 

 

200,000

 

 

 

0.9

 

 

 

228,864

 

 

2022-09-07

 

0.71

 

 

 

1,541,751

 

 

 

1.2

 

 

 

1,557,569

 

 

 

1,541,751

 

 

 

1.2

 

 

 

1,557,569

 

 

2022-12-15

 

0.61

 

 

 

200,000

 

 

 

1.5

 

 

 

222,556

 

 

 

200,000

 

 

 

1.5

 

 

 

222,556

 

 

2023-03-30

 

0.73

 

 

 

830,366

 

 

 

1.9

 

 

 

819,241

 

 

 

830,366

 

 

 

1.9

 

 

 

819,241

 

 

2023-08-20

 

0.72

 

 

 

726,674

 

 

 

2.2

 

 

 

728,399

 

 

 

477,562

 

 

 

2.2

 

 

 

478,696

 

 

2023-12-14

 

0.62

 

 

 

2,542,252

 

 

 

3.1

 

 

 

2,788,866

 

 

 

838,304

 

 

 

3.1

 

 

 

919,625

 

 

2024-11-05

 

0.50

 

 

 

2,824,490

 

 

 

4.1

 

 

 

3,454,865

 

 

 

-

 

 

 

-

 

 

 

-

 

 

2025-11-13

 

1.14

 

 

 

1,322,164

 

 

 

4.9

 

 

 

772,694

 

 

 

-

 

 

 

-

 

 

 

-

 

 

2026-08-27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.67

 

 

 

11,112,167

 

 

 

2.9

 

 

 

11,630,945

 

 

 

5,012,453

 

 

 

1.5

 

 

 

5,284,442

 

 

 

 

The aggregate intrinsic value of the options in the preceding table represents the total pre-tax intrinsic value for stock options, with an exercise price less than the Company’s TSX closing stock price as of the last trading day in the nine months ended September 30, 2021 (approximately US$1.72), that would have been received by the option holders had they exercised their options on that date. There were 11,112,167 in-the-money stock options outstanding and 5,012,453 in-the-money stock options exercisable as of September 30, 2021.

 

The fair value of the stock options on their respective grant dates was determined using the Black-Scholes model with the following assumptions:

 

Stock Option Fair Value Assumptions

 

2021

 

 

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected forfeiture rate

 

 

6.1%

 

 

6.1%

 

 

6.2%

 

5.8% - 6.0

%

 

5.3% - 6.0

%

 

 

5.6%

Expected life (years)

 

 

3.9

 

 

 

3.9

 

 

 

3.7

 

 

3.7 - 3.8

 

 

 

3.7

 

 

 

3.7

 

Expected volatility

 

 

69.5%

 

 

63.2%

 

 

58.6%

 

53.8% - 55.0

%

 

56.0% - 57.5

%

 

 

56.8%

Risk free rate

 

 

0.7%

 

 

0.4%

 

 

1.6%

 

1.9% - 2.1

%

 

1.0% - 1.6

%

 

 

1.0%

Expected dividend rate

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

 

 

0.0%

Black-Scholes value (CAD$)

 

$0.74

 

 

$0.30

 

 

$0.35

 

 

$

0.33 - $0.39

 

 

$

0.32 - $0.44

 

 

$0.31

 

 

Restricted share units

 

On June 24, 2010, the Company’s shareholders approved the adoption of the Company’s restricted share unit plan (the “RSU Plan”), as subsequently amended. The RSU Plan was approved by our shareholders most recently on May 2, 2019. Amendments to the RSU Plan were approved by our shareholders on June 3, 2021, and the plan is now known as the Restricted Share Unit and Equity Incentive Plan (the “RSU&EI Plan”).

 

 
18

Table of Contents

     

Ur-Energy Inc.

Condensed Notes to Unaudited Consolidated Financial Statements

September 30, 2021

(expressed in thousands of U.S. dollars unless otherwise indicated)

   

 

Eligible participants under the RSU&EI Plan include directors and employees of the Company. Granted RSUs are redeemed on the second anniversary of the grant. Upon an RSU vesting, the holder of the RSU will receive one Common Share, for no additional consideration, for each RSU held.

 

Activity with respect to RSUs is summarized as follows: 

 

 

 

 

 

 

 Weighted average

 

 

 

 Outstanding

 

 

 grant date

 

 Restricted Share Unit Activity

 

 RSUs

 

 

 fair value

 

&