Ur-Energy
Inc.
(a
Development Stage Company)
Headquartered
in Littleton, Colorado
Management’s
Discussion and Analysis
June 30,
2010
(expressed
in Canadian dollars)
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Introduction
The
Company was incorporated on March 22, 2004 and completed its first year-end on
December 31, 2004. The Company is headquartered in Littleton, CO with
assets predominantly located in the United States. The consolidated
financial statements include all of the assets, liabilities and expenses of the
Company and its wholly-owned subsidiaries Ur-Energy USA Inc.; NFU Wyoming, LLC;
Lost Creek ISR, LLC; NFUR Bootheel, LLC; Hauber Project LLC; NFUR Hauber, LLC;
ISL Resources Corporation; ISL Wyoming, Inc.; and CBM-Energy Inc. All
inter-company balances and transactions have been eliminated upon consolidation.
Ur-Energy Inc. and its wholly-owned subsidiaries are collectively referred to
herein as “Ur-Energy” or the “Company”.
The
following provides management’s discussion and analysis of results of operations
and financial condition for the three and six months ended June 30,
2010. Management’s Discussion and Analysis (“MD&A”) was prepared
by Company management and approved by the board of directors on July 28,
2010. This discussion and analysis should be read in conjunction with
the Company’s unaudited financial statements for the three and six months ended
June 30 2010 and its audited consolidated financial statements for the years
ended December 31, 2009 and 2008. All figures are presented in
Canadian dollars, unless otherwise noted, and are in accordance with Canadian
generally accepted accounting principles.
Forward-Looking
Information
This
MD&A contains "forward-looking statements" within the meaning of applicable
United States and Canadian securities laws. Shareholders can identify these
forward-looking statements 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 the Company’s
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) whether the Company has sufficient cash to
fund its capital requirements; (ii) receipt of (and related
timing of) a United States Nuclear
Regulatory Commission Source and Byproduct Material License; Wyoming Department of
Environmental Quality Permit and License to Mine; record of decision on the
United States Bureau of Land Management Plan of Operations; and all other
necessary permits related to Lost Creek; (iii) Lost Creek will
advance to production and the production timeline at Lost Creek; (iv) production rates,
timetables and methods at Lost Creek; (v) the Company’s procurement and
construction plans at Lost Creek; (vi) the completion and timing of various
exploration programs, including without limitation, those at LC South; (vii) the
potential of new exploration targets in the area of Lost Creek, including those
at LC North and LC South, to contain 24 to 28 million pounds of U3O8 (not NI
43-101 compliant); and (viii) timing, completion, and funding for and results of
further exploration programs at the Bootheel Project and Hauber
Project. These other factors include, among others, the following:
future estimates for production, production start-up and operations (including
any difficulties with start-up), capital expenditures, operating
costs, mineral resources, recovery rates, grades and prices; business strategies
and measures to implement such strategies; competitive strengths; estimated
goals; expansion and growth of the business and operations; plans and references
to the Company’s future successes; the Company’s history of operating losses and
uncertainty of future profitability; the Company’s status as a development stage
company; the Company’s lack of mineral reserves; the hazards associated with
mining construction and production; compliance with environmental laws and
regulations; risks associated with obtaining permits in Canada and the United
States; risks associated with current variable economic conditions; the possible
impact of future financings; the possibility for adverse results in potential
litigation; fluctuations in foreign exchange rates; uncertainties associated
with changes in government policy and regulation; uncertainties associated with
the Canadian Revenue Agency’s audit of any of the Company’s cross border
transactions; adverse changes in general business conditions in any of the
countries in which the Company does business; changes in the Company’s size and
structure; the effectiveness of the Company’s management and its strategic
relationships; risks associated with the Company’s ability to attract and retain
key personnel; uncertainties regarding the Company’s need for additional
capital; uncertainty regarding the fluctuations of the Company’s quarterly
results; uncertainties relating to the Company’s status as a non-U.S.
corporation; uncertainties related to the volatility of the Company’s share
price and trading volumes; foreign currency exchange risks; ability to enforce
civil liabilities under U.S. securities laws outside the United States; ability
to maintain the Company’s listing on the NYSE Amex (the “NYSE Amex”) and Toronto
Stock Exchange (the “TSX”); risks associated with the Company’s possible status
as a "passive foreign investment corporation" or a "controlled foreign
corporation" under the applicable provisions of the U.S. Internal Revenue Code
of 1986, as amended; risks associated with the Company’s investments and other
risks and uncertainties described under the heading “Risk Factors” of the
Company’s Annual Report on Form 20-F (“Annual Information Form”) dated March 5,
2010 which is filed on SEDAR at www.sedar.com (March
11, 2010) and with the U.S. Securities and Exchange Commission at www.sec.gov (March
12, 2010).
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
The
potential quantity and grade ranges set forth in regards to exploration targets
at Lost Creek, LC North and LC South are conceptual in nature only. There has
been insufficient exploration to define a mineral resource at the new
exploration targets at Lost Creek and the targets at LC North and LC
South. It is uncertain if further exploration will result in the target(s)
being delineated as a mineral resource.
Cautionary
Note to U.S. Investors - Resource and Reserve Estimates
The terms
“mineral reserve,” “proven mineral reserve” and “probable mineral reserve” used
in the Company’s disclosure are Canadian mining terms that are defined in
accordance with National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”) under the guidelines set out in the Canadian Institute of
Mining, Metallurgy and Petroleum (the “CIM”) Best Practice Guidelines for the
Estimation of Mineral Resource and Mineral Reserves (the “CIM Standards”),
adopted by the CIM Council on November 23, 2003. These definitions differ from
the definitions in the United States Securities and Exchange Commission (the
“SEC”) Industry Guide 7 under the Securities Act of 1933, as amended (the
“Securities Act”). Under Industry Guide 7 standards, 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. Under Industry Guide 7
standards, a “final” or “bankable” feasibility study is required to report
reserves, the three-year historical average price is used in any reserve or cash
flow analysis to designate reserves and the primary environmental analysis or
report must be filed with the appropriate governmental authority.
The terms
“mineral resource,” “measured mineral resource,” “indicated mineral resource”
and “inferred mineral resource” used in the Company’s disclosure are Canadian
mining terms that are defined in accordance with NI 43-101 under the guidelines
set out in the CIM Standards; however, these terms are not defined terms under
Industry Guide 7 and are normally not permitted to be used in reports and
registration statements filed with the SEC. Investors are cautioned
not to assume that any part or all of mineral deposits in these categories will
ever be converted into reserves. “Inferred mineral resources” have a
great amount of uncertainty as to their existence, and great uncertainty as to
their economic 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, estimates of 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
mineable.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Accordingly,
information contained in this report containing descriptions of the Company’s
mineral deposits may not be comparable to similar information made public by
U.S. companies subject to the reporting and disclosure requirements under the
United States federal securities laws and the rules and regulations
thereunder.
Nature
of Operations and Description of Business
The
Company is a development stage junior mining company engaged in the
identification, acquisition, evaluation, exploration and development of uranium
mineral properties in the United States and Canada. The Company is
primarily focused on exploration within the geological uranium province centered
on Wyoming, USA. Two of the Company’s Wyoming properties, Lost Creek
and Lost Soldier, contain defined resources that the Company expects to advance
to production. Lost Creek is progressing through the regulatory
process and is expected to have all necessary licenses and permits in coming
months. Among its other properties in North America, the Company
continues to hold its Screech Lake property in the Thelon Basin, Northwest
Territories, Canada.
Due to
the nature of the uranium mining methods to be 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
(“CIM”) Definition Standards, the Company has not determined whether the
property contains mineral reserves. However, the Company’s April 2008
NI 43-101 “Preliminary Assessment for the Lost Creek Project Sweetwater County,
Wyoming” outlines the economic viability of the Lost Creek project, which is
currently in the permitting process with state and federal
regulators. The recoverability of amounts recorded for mineral
properties is dependent upon the discovery of economically recoverable
resources, the ability of the Company to obtain the necessary financing to
develop the properties, the ability of the Company to obtain the necessary
permits to operate the properties and upon attaining future profitable
production from the properties or sufficient proceeds from disposition of the
properties.
Selected
Information
The
following table contains selected financial information as at June 30, 2010 and
December 31, 2009.
| |
As at
June
30,
2010
$
|
As at
December
31,
2009
$
|
| |
(unaudited) |
|
| |
|
|
| Total
assets |
79,848,090 |
81,702,205 |
| Liabilities |
(1,376,563) |
(1,550,675) |
| |
|
|
| Net
assets |
78,471,527 |
80,151,530 |
| |
|
|
| Capital stock
and contributed surplus |
162,809,542 |
157,725,036 |
| Deficit |
(84,338,015) |
(77,573,506) |
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
The
following table contains selected financial information for the three and six
months ended June 30, 2010 and 2009 and cumulative information from inception of
the Company on March 22, 2004 to June 30, 2010.
|
|
Three
Months
Ended
June
30,
2010
$
|
Three
Months
Ended
June
30,
2009
$
|
Six
Months
Ended
June
30,
2010
$
|
Six
Months
Ended
June
30,
2009
$
|
Cumulative
from
March
22,
2004
through
June
30, 2010
$
|
|
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Revenue
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
|
Total
expenses
(1)
|
(2,981,561)
|
(3,616,032)
|
(6,785,753)
|
(8,652,534)
|
(95,073,985)
|
|
Interest
income
|
92,912
|
218,637
|
198,177
|
619,380
|
7,167,531
|
|
Loss
from equity investment
|
(10,770)
|
Nil
|
(13,396)
|
Nil
|
(31,251)
|
|
Foreign
exchange gain (loss)
|
837,178
|
(1,933,051)
|
(150,787)
|
(1,298,720)
|
1,911,341
|
|
Other
income (loss)
|
(12,000)
|
(117,332)
|
(12,750)
|
(110,832)
|
890,849
|
|
Loss
before income taxes
|
(2,074,241)
|
(5,447,778)
|
(6,764,509)
|
(9,442,706)
|
(85,135,515)
|
|
Recovery
of future income taxes
|
Nil
|
Nil
|
Nil
|
Nil
|
797,500
|
|
Net
loss for the period
|
(2,074,241)
|
(5,447,778)
|
(6,764,509)
|
(9,442,706)
|
(84,338,015)
|
|
|
|
|
|
|
|
|
Loss
per common share:
Basic
and diluted
|
(0.02)
|
(0.06)
|
(0.07)
|
(0.10)
|
|
|
|
|
|
|
|
|
|
Cash
dividends per common share
|
Nil
|
Nil
|
Nil
|
Nil
|
|
|
|
|
|
|
|
|
|
(1) Stock based compensation included in total
expenses
|
191,620
|
194,485
|
377,842
|
474,974
|
16,090,913
|
The
Company has not generated any revenue from its operating activities to
date. The Company’s expenses include general and administrative
(“G&A”) expense, exploration and evaluation expense, development expense and
write-off of mineral property costs. Acquisition costs of mineral
properties are capitalized.
No cash
dividends have been paid by the Company. The Company has no present
intention of paying cash dividends on its common shares as it anticipates that
all presently available funds will be invested to finance new and existing
exploration and development activities.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Summary of Quarterly
Financial Information
The
following table contains summary quarterly financial information for each of the
eight most recently completed quarters.
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun.
30
|
Mar.
31
|
Dec.
31
|
Sep.
30
|
Jun.
30
|
Mar.
31
|
Dec.
31
|
Sep.
30
|
|
|
2010
|
2010
|
2009
|
2009
|
2009
|
2009
|
2008
|
2008
|
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
|
Total
expenses
|
(2,981,561)
|
(3,804,192)
|
(3,419,379)
|
(5,336,536)
|
(3,616,032)
|
(5,036,502)
|
(7,947,470)
|
(9,186,720)
|
|
Interest
income
|
92,912
|
105,265
|
141,016
|
130,519
|
218,637
|
400,743
|
531,148
|
573,608
|
|
Loss
from equity investment
|
(10,770)
|
(2,626)
|
(4,365)
|
(13,490)
|
Nil
|
Nil
|
Nil
|
Nil
|
|
Foreign
exchange gain (loss)
|
837,178
|
(987,965)
|
(1,393,136)
|
(814,255)
|
(1,933,051)
|
634,331
|
5,585,970
|
(425,801)
|
|
Other
income (loss)
|
(12,000)
|
(750)
|
(34,878)
|
1,085,947
|
(117,332)
|
6,500
|
Nil
|
(18,203)
|
|
Loss
before income taxes
|
(2,074,241)
|
(4,690,268)
|
(4,710,742)
|
(4,947,815)
|
(5,447,778)
|
(3,994,928)
|
(1,830,352)
|
(9,057,116)
|
|
Recovery
of future income taxes
|
Nil
|
Nil
|
(429,055)
|
797,500
|
Nil
|
Nil
|
Nil
|
Nil
|
|
Net
loss for the period
|
(2,074,241)
|
(4,690,268)
|
(5,139,797)
|
(4,150,315)
|
(5,447,778)
|
(3,994,928)
|
(1,830,352)
|
(9,057,116)
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per share – basic and diluted
|
(0.02)
|
(0.05)
|
(0.06)
|
(0.04)
|
(0.06)
|
(0.04)
|
(0.02)
|
(0.09)
|
Overall Performance and
Results of Operations
From
inception to June 30, 2010, the Company has raised net cash proceeds from the
issuance of common shares and warrants and from the exercise of warrants and
stock options of $143.4 million. As at June 30, 2010, the Company
held cash and cash equivalents, and short-term investments of $40.4
million. The Company's cash resources are invested with banks in
Canada and the United States in deposit accounts, guaranteed investment
certificates, certificates of deposit, and money market accounts.
Mineral
Properties
The
Company holds mineral properties in the United States and Canada totaling more
than 230,000 acres (more than 93,000 hectares).
Lost Creek Project – Great
Divide Basin, Wyoming
The Lost
Creek uranium deposit is located in the Great Divide Basin, Wyoming. The deposit
is approximately three miles (4.8 kilometers) long and the mineralization occurs
in four main sandstone horizons between 315 feet (96 meters) and 700 feet (213
meters) in depth. As identified in the June 2006 Technical Report on Lost Creek,
NI 43-101 compliant resources are 9.8 million pounds of U3O8 at
0.058 % as an indicated resource and an additional 1.1 million pounds of
U3O8 at
0.076 % as an inferred resource.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Lost
Creek was acquired in 2005 as part of the purchase of all of the membership
interests in NFU Wyoming, LLC (“NFU Wyoming”). In addition to Lost Creek,
other assets acquired include the Lost Soldier project, other properties, and a
development database including more than 10,000 electric well logs, over 100
geologic reports and over 1,000 geologic and uranium maps covering large areas
of Wyoming, Montana and South Dakota. The 100% interest in NFU Wyoming was
purchased for an aggregate consideration of $24,515,832 (US$20,000,000), plus
interest.
A royalty
on future production of 1.67% is in place with respect to 20 claims comprising a
small portion of the Lost Creek Project claims.
Lost Creek
Regulatory
Ur-Energy
continues to focus its efforts on the regulatory processes necessary to obtain
all required authorizations to mine uranium by in situ recovery methods at the
Lost Creek project. The required authorizations include permits
and/or licenses from the U.S. Nuclear Regulatory Commission (“NRC”), the U.S.
Bureau of Land Management (“BLM”), and the Wyoming Department of Environmental
Quality (“WDEQ”).
The NRC
is required to complete two reports, the Safety Evaluation Report (“SER”) and
the Supplemental Environmental Impact Statement (“SEIS”), prior to issuing an
NRC Source Material and Byproduct License (“NRC License”). The
Company has responded to all NRC staff requests related to the
SER. The NRC is continuing its effort to finalize the
SER. The Draft SEIS was issued for the Lost Creek Project in December
2009. The NRC is currently processing the comments received to the
Draft SEIS and has stated that it expects to issue the SEIS in the second half
of 2010
The BLM
is preparing the environmental review required before approving the Lost Creek
Plan of Operations that was submitted to the BLM in November 2009. A
third party contractor has been assigned to draft the environmental review
documents. The BLM may choose to coordinate its environmental review
with the issuance of the NRC SEIS or it may complete an independent review that
may incorporate part or all of the NRC SEIS for Lost Creek.
The
permitting process with the WDEQ Land Quality Division (“WDEQ-LQD”) for the
Permit to Mine is also proceeding through the final aspects of technical
review. Current expectations are that the Permit to Mine will not be
finalized until the BLM completes its environmental review process and issues
its approval as the Landowner.
The
WDEQ-Air Quality Division issued the Lost Creek Air Quality Permit in January
2010. In May 2010, WDEQ-Water Quality Division (“WDEQ-WQD”) issued
the final Class I Underground Injection Control Permit to drill, complete and
operate up to five Class I injection wells at Lost Creek to meet the anticipated
disposal requirements for the life of the Lost Creek project. Also in
May, the Company received from the Wyoming State Engineer’s Office its approval
for the construction and operation of two waste water retention ponds at the
Lost Creek site.
As a part
of its WDEQ-LQD Permit to Mine application, the Company submitted a Wildlife
Management Plan that addresses, among other concerns, the Greater Sage Grouse.
The Wyoming Game and Fish Department (“WGFD”) recently determined that the
Wildlife Management Plan meets all of the current and proposed protection
measures for the Greater Sage Grouse species. WGFD has forwarded its
required approval to the WDEQ-LQD for incorporation into the Permit to
Mine.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
The Lost
Creek Project Development Plan was approved by Sweetwater County in December
2009.
Lost Creek Development
Program – Drilling, Planning and Procurement
The
Company established a framework to demonstrate the economic viability of the
Lost Creek project. In April 2008, the Company released an
independent technical report under NI 43-101 prepared by Lyntek Inc. (“Lyntek”),
entitled Preliminary Assessment for the Lost Creek Project Sweetwater County,
Wyoming (“Preliminary Assessment”). The Preliminary Assessment
provides an analysis of the economic viability of the mineral resource of the
Lost Creek project. The base case in the Preliminary Assessment
demonstrates that the project will be economic at prices above US$40 per pound
U3O8. Lyntek
also concluded that the uranium is leachable with a reasonable solution of
bicarbonate and peroxide (and by extension, oxygen), and that an overall
recovery of uranium in the range of 85% appears reasonable. The
Preliminary Assessment is available for review on the Company’s profile on www.sedar.com.
To date,
Ur-Energy has completed 1,048 drill holes totaling approximately 690,000 feet
(approximately 210,000 meters) on the Lost Creek property. Of that,
298 holes of delineation and monitor well drilling (213,040 feet (64,935
meters)) were drilled in 2009 and early 2010 to obtain geologic data
necessary for mine planning within the HJ horizon in Mine Unit #2. A secondary
objective of the program was to continue to collect data from the underlying
mineralized horizons (KM and N) for future production planning. The
Company anticipates submitting an application for amendment to its licenses and
permits, when received, to allow for mineral recovery from the underlying KM
horizon at Lost Creek. Recent leaching tests done on samples from the
KM region yielded favorable results consistent with those of the HJ
horizon.
During
2009, the Company completed detailed designs and specifications for the Lost
Creek plant and selected Fagen, Inc. as its general contractor of the Lost Creek
plant construction project. Procurement of equipment for the plant
has continued. Design work continues on pipelines, power lines,
header house internals, instrumentation and wellheads for Lost
Creek. Refinement of the automation and programming systems for the
plant and well fields is ongoing. The prototype header house was
completed in the second quarter of 2010.
Company Projects Adjacent to
Lost Creek
Having
expanded its land position around Lost Creek in 2009, the Company currently
controls 1,753 unpatented mining claims and two State of Wyoming uranium leases
for a total of almost 34,000 mineral acres including the Lost Creek permit area,
LC North, LC South, EN and Toby project areas.
In August
2009, the Company announced the results of in-house geologic evaluations of the
Lost Creek permit area and adjacent properties held by the Company which contain
multiple exploration targets demonstrating the potential to contain 24 to 28
million pounds U3O8 (not NI
43-101 compliant). These potential quantity ranges are conceptual in
nature, only, as there has been insufficient exploration to define a mineral
resource as to all of these exploration targets. It is uncertain if
further exploration will result in the target(s) being delineated as a mineral
resource. Company geologists, using Ur-Energy drilling and historic data, have
identified a minimum of an additional 120 compiled linear miles (193 kilometers)
of new redox fronts with potential for resource development on these properties.
This is in addition to the approximately 36 miles (58 kilometers) of redox
fronts contained in the current Lost Creek deposit. The new exploration
targets on LC North and LC South properties (adjacent to the Lost Creek permit
area) consist of at least 10 individual sinuous redox fronts within four major
stratigraphic horizons. The newly identified fronts occur within the same
stratigraphic horizons that are present in the area of the Lost Creek
deposit. Estimation of the potential of the new fronts is based on the
observed similarity of alteration characteristics, grade and thickness of
mineralization to that currently identified in the Lost Creek
deposit.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
The
Company plans a 200-hole drill program in 2010 to further explore certain of
these new exploration targets located on the LC South
property. Planning for the program continued in the second quarter,
including completion of baseline studies and other work leading to necessary
regulatory approvals to proceed. It is estimated that as many as
2,000 to 3,000 drill holes will be required over the course of several years to
fully evaluate the various new exploration targets in LC South, as well as LC
North and certain areas within the Lost Creek Permit Area. Ur-Energy
also announced it will commission an independent NI 43-101 study to further
evaluate a portion of the roll fronts and exploration targets identified within
the LC South property with the objective to report on inferred
resources. The NI 43-101 report will be based upon existing data from
approximately 60 mineralized drill holes on the LC South property.
Company Ventures: Hauber
Project LLC and The Bootheel Project, LLC
As a part
of its 2010 obligations under the Hauber Project venture agreement, NCA Nuclear
Inc. (subsidiary of Bayswater Uranium Corporation) plans to drill at least two
drill holes for the purpose of testing in situ recovery amenability of the
uranium mineralization. Hauber Project maintains properties within the
Black Hills Uplift in Crook County, Wyoming, comprising 205 unpatented lode
mining claims and one state uranium lease totaling approximately 4,570 mineral
acres. In January 2010, NCA Nuclear completed an independent NI 43-101
mineral resource estimate of the properties at the Hauber Project. The resource
estimate concludes the Hauber Project properties hold approximately 1.45 million
pounds of equivalent U3O8 (eU3O8) (Indicated
Resources) in 423,000 tons at an average grade of 0.17% eU3O8.
Bayswater has filed the NI 43-101 report on www.sedar.com.
NCA Nuclear Inc. can earn a 75% interest in the Hauber Project by completing its
US$1 million earn-in commitment.
Crosshair
Exploration & Mining (“Crosshair”) continues to advance The Bootheel Project
working with a contractor, AATA International, completing wildlife surveys and
other baseline monitoring. Crosshair plans to obtain an NRC docket number
for the Bootheel property. The Project’s properties within the Shirley
Basin, Wyoming cover total defined areas of approximately 8,524, and 7,895 net,
mineral acres. In 2009, Crosshair released an independent NI 43-101
resource estimate on the Bootheel property, which reports the Bootheel property
contains an indicated resource of 1.09 million pounds U3O8 (indicated
resource) in 1.4 million short tons, at a grade of 0.038% U3O8, and an
inferred resource of 3.25 million pounds U3O8 (in 4.4
million short tons) at an average grade of 0.037% U3O8.
This NI 43-101 report was filed by Crosshair on www.sedar.com.
Ur-Energy has a 25% interest in this property.
Additional Exploration
Activities and Company Databases
In 2010,
the Company continues to acquire rights in additional lands, including
grassroots regional exploration projects. The Company continues to
actively explore within the multi-state geological uranium province centered on
Wyoming. The Company continues to plan for 2010 exploration programs,
including drilling, to further an understanding of regional geologic
trends. Ongoing evaluation also continues of the various historic
exploration databases owned by the Company which include data acquired
throughout the geologic province.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Three
Months and Six Months Ended June 30, 2010 Compared to Three Months and Six
Months Ended June 30, 2009
The
following tables summarize the results of operations for the three and six
months ended June 30, 2010 and 2009.
|
|
Three
Months Ended June 30,
|
|
|
2010
|
2009
|
Change
|
Change
|
|
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
Revenue
|
Nil
|
Nil
|
Nil
|
NA
|
|
General
and administrative
|
(1,269,047)
|
(1,400,320)
|
131,273
|
-9%
|
|
Exploration
and evaluation expense
|
(921,487)
|
(1,274,631)
|
353,144
|
-28%
|
|
Development
expense
|
(791,027)
|
(897,580)
|
106,553
|
-12%
|
|
Write-off
of mineral properties
|
Nil
|
(43,501)
|
43,501
|
NA
|
|
Total
expenses
|
(2,981,561)
|
(3,616,032)
|
634,471
|
-18%
|
|
Interest
income
|
92,912
|
218,637
|
(125,725)
|
-58%
|
|
Loss
from equity investment
|
(10,770)
|
Nil
|
(10,770)
|
NA
|
|
Foreign
exchange gain (loss)
|
837,178
|
(1,933,051)
|
2,770,229
|
-143%
|
|
Other
income (loss)
|
(12,000)
|
(117,332)
|
105,332
|
-90%
|
|
Loss
before income taxes
|
(2,074,241)
|
(5,447,778)
|
3,373,537
|
-62%
|
|
Recovery
of future income taxes
|
Nil
|
Nil
|
Nil
|
NA
|
|
Net
loss for the period
|
(2,074,241)
|
(5,447,778)
|
3,373,537
|
-62%
|
|
|
|
|
|
|
|
Loss
per share – basic and diluted
|
(0.02)
|
(0.06)
|
0.04
|
-67%
|
|
|
Six
Months Ended June 30,
|
|
|
|
2010
|
2009
|
Change
|
Change
|
|
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
Revenue
|
Nil
|
Nil
|
Nil
|
NA
|
|
General
and administrative
|
(2,588,587)
|
(2,760,508)
|
171,921
|
-6%
|
|
Exploration
and evaluation expense
|
(1,843,746)
|
(2,510,896)
|
667,150
|
-27%
|
|
Development
expense
|
(2,353,420)
|
(3,274,068)
|
920,648
|
-28%
|
|
Write-off
of mineral properties
|
-
|
(107,062)
|
107,062
|
NA
|
|
Total
expenses
|
(6,785,753)
|
(8,652,534)
|
1,866,781
|
-22%
|
|
Interest
income
|
198,177
|
619,380
|
(421,203)
|
-68%
|
|
Loss
from equity investment
|
(13,396)
|
-
|
(13,396)
|
NA
|
|
Foreign
exchange gain (loss)
|
(150,787)
|
(1,298,720)
|
1,147,933
|
-88%
|
|
Other
income (loss)
|
(12,750)
|
(110,832)
|
98,082
|
-88%
|
|
Loss
before income taxes
|
(6,764,509)
|
(9,442,706)
|
2,678,197
|
-28%
|
|
Recovery
of future income taxes
|
Nil
|
Nil
|
Nil
|
NA
|
|
Net
loss for the period
|
(6,764,509)
|
(9,442,706)
|
2,678,197
|
-28%
|
|
|
|
|
|
|
|
Loss
per share – basic and diluted
|
(0.07)
|
(0.10)
|
0.03
|
-30%
|
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Expenses
Total
expenses for the three and six months ended June 30, 2010 were $3.0 million and
$6.8 million, respectively, which include G&A expense, exploration and
evaluation expense and development expenses. These expenses decreased
by $0.6 million and $1.9 million from a total of $3.6 million and $8.7 million
for the respective periods in 2009. This decrease was driven in large
part by the cost of a deep test well which was completed in 2009.
G&A
expense relates to the Company’s administration, finance, investor relations,
land and legal functions and consists principally of personnel and facility
costs. Expenses declined $0.1 million and $0.2 million for the three
and six month periods respectively. External legal costs in Canada
declined $0.1 million for each period and salary costs declined by $0.1 million
for the six months ended June 30, 2010 compared to the comparable period in
2009.
Exploration
and evaluation expenses declined $0.4 million and $0.7 million for the three and
six month periods ended June 30, 2010 compared to the respective periods in
2009. Much of this decline relates to an overall reduction in these
expenses as the focus continues to shift to the development of the Lost Creek
facility for production. The most significant declines were in labor
costs which declined $0.2 million and $0.3 million for the three and six month
periods respectively and depreciation expense with declined $0.1 million for the
six month period.
Development
expense relates entirely to the Company’s Lost Creek
property. Overall expenses declined by $0.1 and $0.9 million from
2009 to 2010 for the three and six month periods. The main reason for
the six month decline was that 2009 costs included drilling and piping costs in
excess of $1.2 million related to the completion of a deep test well. This was
partially offset by additional delineation drilling costs in 2010 of $0.2
million. There was a decrease in consulting costs of $0.1 million for
the three months ended June 30, 2010 compared to 2009 as the majority of the
consulting work related to permitting was done in the initial development and
application stage of the permitting process, which is now nearly
complete.
During
the six months ended June 30, 2009, the Company wrote off the Eyeberry and
Muggins Mountain mineral properties reflecting a $0.1 million
expense. There are no mineral property write offs to date in
2010.
Other income and
expenses
The
Company's cash resources are invested with banks in deposit accounts, guaranteed
investment certificates, certificates of deposit, and money market
accounts. The decrease in interest income was driven by lower average
cash resources and lower average interest rates in 2010 as compared to those in
2009.
The net
foreign exchange gain and loss for the three and six months ended June 30, 2010
was primarily due to cash resources held in U.S. dollar accounts, which
fluctuate relative to the Canadian dollar. In 2009, the Canadian
dollar strengthened during both the three and six month periods ended June
30. In 2010, the Canadian dollar weakened during the three months
ended June 30, but strengthened slightly for the six month period then
ended.
Loss per Common
Share
Both
basic and diluted loss per common share for the three and six months ended March
31, 2010 were $0.02 and $0.07, respectively (2009 – $0.06 and - $0.10,
respectively). The diluted loss per common share is equal to the
basic loss per common share due to the anti-dilutive effect of all convertible
securities outstanding given that net losses were experienced. The
decreased loss is due to a general reduction in expenses and more favorable
changes in the US$ to C$ exchange rate.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Liquidity
and Capital Resources
As at
June 30, 2010, the Company had cash resources, consisting of cash and cash
equivalents and short-term investments, of $40.4 million, a decrease of $3.0
million from the December 31, 2009 balance of $43.4 million. The
Company's cash resources consist of Canadian and U.S. dollar denominated deposit
accounts, guaranteed investment certificates, money market funds and
certificates of deposit. During the three and six months ended June
30, 2010, the Company used $2.9 million and $6.5 million, respectively, of
its cash resources to fund operating activities and $0.9 million and $1.2
million, respectively, for investing activities (excluding short term investment
transactions). During both the three and six months ended June 30,
2010, the Company generated $4.8 million through financing
activities. The remaining $0.6 million increase and $0.2 million
decrease, respectively, related to the effects of foreign exchange rate changes
on cash resources including short term investments.
The
Company has financed its operations from its inception primarily through the
issuance of equity securities and has no source of cash flow from
operations. The Company does not expect to generate any cash
resources from operations until it is successful in commencing production from
its properties. Operating activities used $2.9 million and $6.5
million of cash resources during the three and six months ended June 30, 2010,
respectively, as compared to $3.8 million and $8.8 million for the same periods
in 2009. This is the result of an overall reduction in cash expenses
for the period as discussed above combined with less cash being required to pay
liabilities recorded at December 31, 2009 compared to the amount accrued at
December 31, 2008 ($0.8 million difference). The Company received
less interest income in 2010 due to lower average cash resource balances and
lower interest rates.
During
the three and six months ended June 30, 2010, the Company invested cash
resources of $0.9 million and $1.2 million, respectively, in mineral properties,
bonding deposits, capital assets and pre-construction activities related to
plant design and equipment purchases at Lost Creek. The majority of
these expenditures went toward pre-construction costs on the Lost Creek facility
($0.6 and $0.5 million, respectively).
During
the three and six months ended June 30, 2010, the Company raised $5.0 million
through a private placement of capital stock. The Company incurred
$0.3 million in costs related to the placement for registration fees, legal
expenses and placement agent commissions.
Financing
Transactions
The
Company maintains a shareholder rights plan (the “Rights Plan”) designed to
encourage the fair and equal treatment of shareholders in connection with any
take-over bid for the Company's outstanding securities. The Rights
Plan is intended to provide the Company’s board of directors with adequate time
to assess a take-over bid, to consider alternatives to a take-over bid as a
means of maximizing shareholder value, to allow competing bids to emerge, and to
provide the Company’s shareholders with adequate time to properly assess a
take-over bid without undue pressure.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
The
Company has a corporate credit card facility with a U.S. bank. This facility has
an aggregate borrowing limit of US$250,000 and is used for corporate travel and
incidental expenses. The Company has provided a letter of credit
secured by a guaranteed investment certificate in the amount of $287,500 as
collateral for this facility.
Outstanding
Share Data
As of
July 28, 2010, the Company had 98,949,781 common shares and 8,946,422 stock
options outstanding.
Off-Balance
Sheet Arrangements
The
Company has not entered into any material off-balance sheet arrangements such as
guarantee contracts, contingent interests in assets transferred to
unconsolidated entities, derivative instrument obligations, or with respect to
any obligations under a variable interest entity arrangement.
Financial
Instruments and Other Instruments
The
Company’s cash and cash equivalents are composed of:
|
|
As
at
|
As
at
|
|
|
June
30,
|
December
31,
|
|
|
2010
|
2009
|
|
|
$
|
$
|
|
|
(unaudited)
|
|
|
|
|
|
|
Cash
on deposit at banks
|
302,167
|
308,918
|
|
Guaranteed
investment certificates
|
287,500
|
287,500
|
|
Money
market funds
|
29,742,672
|
25,564,505
|
|
Certificates
of deposit
|
-
|
6,296,400
|
|
|
|
|
|
|
30,332,339
|
32,457,323
|
The
Company’s short term investments are composed of:
|
|
As
at
|
As
at
|
|
|
June
30,
|
December
31,
|
|
|
2010
|
2009
|
|
|
$
|
$
|
|
|
(unaudited)
|
|
|
|
|
|
|
Guaranteed
investment certificates
|
1,458,836
|
2,342,637
|
|
Certificates
of deposit
|
8,581,090
|
8,589,464
|
|
|
|
|
|
|
10,039,926
|
10,932,101
|
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Credit
risk
Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash and cash equivalents, short term investments and bonding
deposits. The Company’s cash equivalents and short-term investments
consist of Canadian dollar and U.S. dollar denominated guaranteed investment
certificates and certificates of deposits. They bear interest at
annual rates ranging from 0.3% to 2.25% and mature at various dates up to June
29, 2011. These instruments are maintained at financial institutions
in Canada and the United States. Of the amount held on deposit,
approximately $7.3 million is covered by either the Canada Deposit Insurance
Corporation or the Federal Deposit Insurance Corporation. Another
$1.2 million is guaranteed by a Canadian provincial government; leaving
approximately $34.7 million at risk should the financial institutions with which
these amounts are invested be rendered insolvent. The Company does
not consider any of its financial assets as of June 30, 2010 to be
impaired.
Liquidity
risk
Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they come due.
The
Company manages liquidity risk through regular cash flow forecasting of cash
requirements to fund its exploration and development projects and operating
costs.
As at
June 30, 2010 the Company’s liabilities consisted of accounts payable and
accrued liabilities of $865,992, all of which are due within normal trade
terms. Trade accounts payable are generally due within 30
days.
Market
risk
Market
risk is the risk to the Company of adverse financial impact due to changes in
the fair value or future cash flows of financial instruments as a result of
fluctuations in interest rates and foreign currency exchange
rates. Market risk arises as a result of the Company incurring a
significant portion of its expenditures and a significant portion of its cash
equivalents and short-term investments in U.S. dollars, and holding cash
equivalents and short term investments which earn interest.
Interest
rate risk
Financial
instruments that expose the Company to interest rate risk are its cash
equivalents and short term investments. The Company’s objectives for managing
its cash and cash equivalents are to ensure sufficient funds are maintained on
hand at all times to meet day to day requirements and to place any amounts which
are considered in excess of day to day requirements on short-term deposit with
the Company's banks so that they earn interest. When placing amounts of cash and
cash equivalents on short-term deposit, the Company only uses high quality
commercial banks and ensures that access to the amounts placed can generally be
obtained on short notice.
Currency
risk
The
Company makes expenditures in both the United States and Canada and is therefore
exposed to risk from changes in these currency rates. In addition, the Company
holds financial assets and liabilities in Canadian and U.S. dollars. The Company
does not utilize any financial instruments or cash management policies to
mitigate the risks arising from changes in foreign currency
rates.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
At June
30, 2010, the Company had cash and cash equivalents, short term investments and
bonding deposits of approximately US$34.5 million and had accounts payable of
US$0.7 million which were denominated in U.S. dollars.
Sensitivity
analysis
The
Company has completed a sensitivity analysis to estimate the impact that a
change in foreign exchange rates would have on the net loss of the Company,
based on the Company’s net U.S. dollar denominated assets and liabilities at
June 30, 2010. This sensitivity analysis assumes that changes in market interest
rates do not cause a change in foreign exchange rates. This
sensitivity analysis shows that a change of +/- 10% in U.S. dollar foreign
exchange rate would have a +/- $3.5 million impact on net loss for the six
months ended June 30, 2010. This impact is primarily as a result of
the Company having cash and investment balances denominated in U.S. dollars and
U.S. dollar denominated trade accounts payables. The financial
position of the Company may vary at the time that a change in exchange rates
occurs causing the impact on the Company’s results to differ from that shown
above.
The
Company has also completed a sensitivity analysis to estimate the impact that a
change in interest rates would have on the net loss of the Company. This
sensitivity analysis assumes that changes in market foreign exchange rates do
not cause a change in interest rates. This sensitivity analysis shows
that a change of +/- 100 basis points in interest rate would have a +/- $0.2
million impact on net loss for the six months ended June 30,
2010. This impact is primarily as a result of the Company having cash
and short-term investments invested in interest bearing accounts. The
financial position of the Company may vary at the time that a change in interest
rates occurs causing the impact on the Company’s results to differ materially
from that shown above.
Transactions
with Related Parties
During
the six months ended June 30, 2010 and 2009, the Company did not participate in
any material transactions with related parties.
Proposed
Transactions
As is
typical of the mineral exploration and development industry, the Company is
continually reviewing potential merger, acquisition, investment and venture
transactions and opportunities that could enhance shareholder
value. Timely disclosure of such transactions is made as soon as
reportable events arise.
Critical
Accounting Policies and Estimates
Mineral
Properties
Acquisition
costs of mineral properties are capitalized. When production commences, these
costs will be amortized on the unit-of-production method based upon the
estimated recoverable resource of the mineral property.
As of
June 30, 2010, the current and long term price of uranium was approximately $42
and $59, respectively. This is a decline from $45 and $61 as of
December 31, 2009. This decline was not significant enough to be
considered an impairment indicator in the quarter. Management did not
identify any other impairment indicators for any of the Company’s mineral
properties during the six months ended June 30, 2010.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Stock Based
Compensation
The
Company is required to record all equity instruments including warrants,
restricted share units, compensation options and stock options at fair value in
the financial statements. Management utilizes the Black-Scholes model to
calculate the fair value of these equity instruments at the time they are
issued. Use of the Black-Scholes model requires management to make
estimates regarding the expected volatility of the Company’s stock over the
future life of the equity instrument, the estimate of the expected life of the
equity instrument, the expected volatility of the Company’s common shares, and
the number of options that are expected to be
forfeited. Determination of these estimates requires significant
judgment and requires management to formulate estimates of future events based
on a limited history of actual results.
Changes
in Accounting Policies Including Initial Adoption
International Financial
Reporting Standards / US GAAP
In
addition to the rules of the Ontario Securities Commission, the Company is
subject to the reporting requirements of the United States Securities and
Exchange Commission (“SEC”). Under those rules, companies are allowed
to submit their financial statements using a foreign GAAP (Canadian GAAP for
Ur-Energy) or International Financial Reporting Standards (“IFRS”) as long as
they are considered a foreign private issuer (“FPI”). For Ur-Energy,
the primary criterion to maintain its FPI status is the ownership of the
majority of the Company’s stock by non-United States investors. This
is verified with the transfer agency during the second quarter of each
year. If the Company loses its FPI status, it will have to file its
statements with the SEC using US GAAP.
Management
believes that it is likely that the Company will lose its FPI status at some
point in the next few years, potentially as soon as 2011. Since the
loss of FPI status would necessitate a change to US GAAP, management has
concluded that it will adopt US GAAP rather than IFRS effective January 1,
2011. Instead of Canadian GAAP or IFRS, Canadian public companies
that are listed in the United States are also permitted to prepare their
financial statements in accordance with US GAAP. Consequently, the
Company has discontinued its IFRS conversion project. The Company
will therefore no longer report on the status of changing our accounting to IFRS
as required under Canadian securities guidance.
Material
differences between Canadian GAAP and US GAAP to date are reported in note 15 to
our annual audited financial statements as filed on www.sedar.com. To
date, the only material differences between the Company’s Canadian GAAP
financial statements and US GAAP have been:
a) The
interest savings from the early extinguishment of our debt obligation on
acquiring the Lost Creek and Lost Soldier properties. Under Canadian GAAP, the
interest saving was recorded as a reduction in the carrying value of the mineral
properties. Under US GAAP, the accrued but unpaid interest was recorded as a
gain and included in income.
b) Under
Canadian income tax legislation, a company is permitted to issue shares whereby
the company agrees to incur qualifying expenditures and renounce the related
income tax deductions to the investors. Under Canadian GAAP, we recorded the
full amount of the proceeds received on issuance as capital stock in the balance
sheet. Upon renouncing the income tax deductions, capital stock
balance was reduced by the amount of the future income tax benefits recognized.
For US GAAP, the proceeds on issuance of these shares were allocated between the
offering of the shares and the sale of the tax benefit. The premium paid by the
investor in excess of the fair value of non flow-through shares (determined by
the exchange price at the close of day on the day before the issuance) was
recognized as a liability at the time the shares were issued and the fair value
of non flow-through shares (shares issued at the exchange price) recorded as
capital stock. Upon renouncing the income tax deductions, the premium liability
was re-characterized as deferred income taxes and the difference between the
full deferred income tax liability related to the renounced tax deductions and
the premium previously recognized was recorded as an income tax expense or
benefit.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Evaluation
of Disclosure Controls and Procedures
As of the
end of the period covered by this MD&A, under the supervision of the Chief
Executive Officer and the Chief Financial Officer, the Company evaluated the
effectiveness of its disclosure controls and procedures, as such term is defined
in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act
of 1934 (the “Exchange Act”). Based on this evaluation, the Chief Executive
Officer and the Chief Financial Officer have concluded that the Company’s
disclosure controls and procedures are effective to ensure that information the
Company is required to disclose in reports that are filed or submitted under the
Exchange Act: (1) is recorded, processed and summarized effectively and
reported within the time periods specified in SEC rules and forms, and
(2) is accumulated and communicated to Company management, including the
Chief Executive Officer and the Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. The Company’s disclosure
controls and procedures include components of internal control over financial
reporting. No matter how well designed and operated, internal controls over
financial reporting can provide only reasonable, but not absolute, assurance
that the control system's objectives will be met.
Management’s
Report on Internal Control over Financial Reporting
Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, the Company’s management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act
Rules 13a-15(f) and 15d-15(f). The Company’s internal control
over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.
All
internal control systems, no matter how well designed, have inherent
limitations. Therefore even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and
presentation. Because of the inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
Under the
supervision and with the participation of the Company’s management, including
the Chief Executive Officer and the Chief Financial Officer, an evaluation was
conducted of the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2009 based on the framework set forth in Internal
Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on that evaluation,
Company management concluded that, as of December 31, 2009, the Company’s
internal control over financial reporting was effective.
Ur-Energy
Inc.
(a
Development Stage Company)
Management’s
Discussion and Analysis
For
the Three and Six Months Ended June 30, 2010
(Information
as at July 28, 2010 unless otherwise noted)
Changes
in Internal Control over Financial Reporting
There has
been no change in the Company’s internal control over financial reporting during
the six months ended June 30, 2010 that has materially affected, or is
reasonably likely to materially affect, its internal control over financial
reporting.
Risks
and Uncertainties
The
Company is subject to a number of risks and uncertainties due to the nature of
its business and the present stage of development of its
business. Investment in the natural resource industry in general, and
the exploration and development sector in particular, involves a great deal of
risk and uncertainty. Current and potential investors should give
special consideration to the risk factors involved. These factors are
discussed more fully in our Annual Report on Form 20-F (Annual Information Form)
dated March 5, 2010 which is filed on SEDAR at www.sedar.com (March
11, 2010) and on the U.S. Securities and Exchange Commission’s website at www.sec.gov. (March
12, 2010).
Other
Information
Other
information relating to the Company may be found on the SEDAR website at www.sedar.com or on
the U.S. Securities and Exchange Commission’s website at www.sec.gov.
Directors and
Officers
Jeffrey
T. Klenda, B.A. – Chairman and Executive Director
W.
William Boberg, M. Sc., P. Geo. – President, Chief Executive Officer and
Director
James M.
Franklin, PhD, FRSC, P. Geo. –Director and Technical Committee
Chair
Paul
Macdonell, Diploma Public Admin. – Director and Compensation Committee
Chair
Thomas
Parker, M. Sc., P.E. – Director and Audit Committee Chair
Harold A.
Backer, B. Sc. – Executive Vice President Geology and Exploration
Wayne W.
Heili, B. Sc. – Vice President, Mining and Engineering
Paul W.
Pitman, B. Sc. Hon. Geo., P. Geo. – Vice President, Canadian
Exploration
Roger L.
Smith, CPA, MBA – Chief Financial Officer and Vice President Finance, IT &
Administration
Paul G.
Goss, J.D., MBA – General Counsel and Corporate Secretary
Corporate
Offices
|
Corporate
Headquarters:
10758
West Centennial Road, Suite 200
Littleton
(Denver), Colorado 80127
Phone:
(720) 981-4588
|
Canadian
Exploration Office:
341
Main Street North, Suite 206
Brampton,
Ontario L6X 3C7
Phone:
(905) 456-5436
|
|
Wyoming
Operations Office:
5880
Enterprise Drive, Suite 200
Casper,
Wyoming 82609
Phone:
(307) 265-2373
|
Registered
Canadian Office:
55
Metcalfe Street, Suite 1300
Attn:
Virginia K. Schweitzer
Ottawa,
Ontario K1P 6L5
Phone:
(613) 236-3882
|
Website
www.ur-energy.com
Trading
Symbols
NYSE
Amex: URG
TSX:
URE
Independent
Auditors
PricewaterhouseCoopers
LLP, Vancouver
Corporate Legal
Counsel
Fasken
Martineau DuMoulin LLP, Ottawa
Corporate
Banker
Royal
Bank of Canada, Ottawa
Transfer
Agent
Computershare
Investor Services Inc., Toronto
Computershare
Trust Company N.A. (U.S. Co-Transfer Agent and Co-Registrar), Golden,
CO