March 23,
2009
Dear
Shareholder:
Enclosed
are the documents relating to the 2008 Annual and Special Meeting of
Shareholders for Ur-Energy Inc. This is our fourth annual meeting
since becoming a public company. Although 2008 brought turmoil to the credit,
housing and stock markets, Ur-Energy ended the year in a strong
position. At year’s end the Company had a cash position of
approximately C$65 million with which to advance our robust uranium project at
Lost Creek, Wyoming. Our cash on hand is sufficient to get Lost Creek
into production in late 2010. We are proud to continue to say that we
have one of the finest technical teams among the uranium juniors. We are excited
to highlight some of our 2008 activities and to share our plans for 2009 with
you.
During
2008, Ur-Energy achieved a number of important milestones. Most
importantly, the Company made significant advances towards the commencement of
production on the Lost Creek Project in Wyoming by: having its Nuclear
Regulatory Commission (NRC) Source Material License application and Wyoming
Department of Environmental Quality (WDEQ) Permit to Mine application both
deemed complete and moved into the technical review phase; starting the
production area Underground Injection Control (UIC) Permit and the Deep Disposal
Well UIC Permit processes; completing delineation of Mine Unit #1 and a portion
of Mine Unit #2; continuing exploration efforts towards identifying potential
extensions of mineral trends; completing the detailed engineering design with
specifications and construction plans for the processing plant facility; and
adding to the engineering and geology development and production
staff. The Company began trading on NYSE Amex; re-aligned its budget
in accord with current market conditions and our amended timeline to production;
discovered several new targets that may potentially increase resources; and,
adopted a Shareholder Rights Plan.
We also
completed an in-house economic analysis on the Lost Creek Project and
subsequently obtained an NI 43-101 Preliminary Assessment from Lyntek
Inc. This Preliminary Assessment showed the project to be “robust”
and economically viable at uranium prices above US$40 per
pound. According to uranium spot price forecasts, an average of
approximately US$50/lb is expected in 2009 and may rise to US$70/lb by the end
of 2010. The financial crisis forced speculators to sell their
uranium inventory and by the end of 2008, utilities with available funds had
taken advantage of troubled sellers to increase their
inventories. This resulted in significantly lower spot market volumes
and fewer buyers for uranium at the spot price, dropping the uranium spot price
to US$43/lb and the long term contract price to US$70/lb by March
2009.
In
September 2008, Ur-Energy adjusted its production timeline for Lost Creek
because of NRC’s six month delay in completing its new guidance, known as the
Generic Environmental Impact Statement (GEIS). The GEIS will be
utilized for processing all in-situ leaching/recovery project
applications. The GEIS was originally scheduled for completion in
January 2009; but, in July 2008, the estimated completion date was changed to
June 2009. As a result, the Company’s
TSX: URE
– NYSE Amex: URG
www.ur-energy.com
production
timeline moved from late-2009 to late-2010. The Company recently
determined that the new timeline is expected to result in reduced capital
development costs.
For 2009,
delineation drilling will continue for the completion of Lost Creek Mine Unit
#2, as well as testing the extent and economic potential of the underlying KM
horizon but within the areas of Mine Units #1 and #2. The 2009
planned installation of regional baseline wells for the KM Horizon has already
been completed, and will enable the gathering of baseline data to add the KM
Horizon to the Lost Creek licenses.
This
January, with the completion of the state-of-the-art design and specifications
for all components of the Lost Creek ISR Plant and Mine Unit #1, Ur-Energy began
the preparation of the necessary bid documents for soliciting firm bids for the
components to complete the construction of the plant and Mine Unit
#1. The processing plant will have a two-million-pound-per-year
capacity. Plant and mine construction will begin upon receipt of the
necessary permits and licenses, weather permitting. The Company does
not anticipate any further delays in the permitting and licensing process and
currently expects the WDEQ Permit to Mine will be granted in late
2009. Unless site specific issues are raised, the NRC expects to
complete the licensing, with the aid of the GEIS, and issue the Source Material
License for the Lost Creek Project in late 2009. A late 2010 start-up
of production is planned with a ramp up to full production in 2011 to 1 million
pounds per year from the Lost Creek Project.
We have
elected to submit the NRC and WDEQ license applications for the Lost Soldier
Project after Lost Creek’s NRC Source Material License is
granted. This will allow the Lost Soldier Project to be included as
an amendment to the Lost Creek license(s), making for a more efficient
application process which should result in a more rapid
completion. Further geologic studies focusing on detailed mapping of
Lost Soldier’s roll-front geology began in 2008. These studies will
be followed by detailed engineering and mine design planning and a preliminary
assessment in 2009.
The year
2009 opens a new window of opportunity for Ur-Energy. Unfunded
capital expenditure requirements among the juniors, the global recession and
ever-increasing world nuclear demand places Ur-Energy in a position to
capitalize on the opportunities that 2009 will bring as we continue to move
toward production. Our financial strength, outstanding technical and support
team and executable business plan enables us to grow during difficult
times. We appreciate the support of our existing shareholders and
invite new investors to take a look at this truly special company.
Yours
truly,
 |
 |
| W. William
Boberg |
Jeffrey T.
Klenda |
| President
& CEO |
Chairman of
the Board |
TSX: URE
– NYSE Amex: URG
www.ur-energy.com
