Exhibit 99.1
 




Ur-Energy Inc.
(a Development Stage Company)
Headquartered in Littleton, Colorado

Unaudited Interim Consolidated Financial Statements

September 30, 2010

(expressed in Canadian dollars)
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Unaudited Interim Consolidated Balance Sheets

(expressed in Canadian dollars)


 
   
September 30, 2010
    
December 31, 2009
  
      $       $  
                 
 Assets
                
                 
 Current assets
                
 Cash and cash equivalents (note 3)
     27,471,163       32,457,323  
 Short-term investments (note 3)
     7,209,416       10,932,101  
 Marketable securities
     33,000       29,250  
 Amounts receivable
     31,854       19,509  
 Prepaid expenses
     160,298       101,653  
                 
 
     34,905,731       43,539,836  
 
                
 Bonding and other deposits (note 4)
     3,956,879       2,920,835  
 Mineral properties (note 5)
     29,974,272       29,733,296  
 Capital assets (note 6)
     3,327,378       2,739,121  
 Equity investments (note 7)
     2,769,117       2,769,117  
                 
      40,027,646       38,162,369  
 
                
 
     74,933,377       81,702,205  
                 
 Liabilities and shareholders' equity
                
                 
 Current liabilities
                
 Accounts payable and accrued liabilities
     1,388,483       1,046,963  
 Asset retirement obligation (note 8)
     620,728       503,712  
                 
      2,009,211       1,550,675  
                 
 Shareholders' equity (note 9)
                
 Capital stock
     148,763,479       144,053,337  
Warrants
     37,013       -  
 Contributed surplus
     14,196,853       13,671,699  
 Deficit
     (90,073,179 )     (77,573,506 )
                 
      72,924,166       80,151,530  
                 
 
     74,933,377       81,702,205  

The accompanying notes are an integral part of these consolidated financial statements
 
Approved by the Board of Directors
 
 (signed)  /s/ Jeffery T. Klenda, Director  (signed)   /s/ Thomas Parker, Director
 

Page 1 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Unaudited Interim Consolidated Statements of Operations, Comprehensive Loss and Deficit

(expressed in Canadian dollars)

                           
Cumulative
  
                           
from
  
   
Three Months
    
Three Months
    
Nine Months
    
Nine Months
    
March 22, 2004
  
   
Ended
    
Ended
    
Ended
    
Ended
    
Through
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2010
    
2009
    
2010
    
2009
    
2010
  
      $       $       $       $       $  
                                         
Expenses
                                        
General and administrative
     1,146,958       1,248,210       3,735,545       4,008,718       31,089,074  
Exploration and evaluation
     1,779,132       2,214,050       3,622,878       4,724,946       48,349,658  
Development
     1,918,003       1,878,899       4,271,423       5,152,967       20,057,262  
Write-off of mineral properties
     381,252       (4,623 )     381,252       102,439       803,336  
                                         
      (5,225,345 )     (5,336,536 )     (12,011,098 )     (13,989,070 )     (100,299,330 )
                                         
Interest income
     83,516       130,519       281,693       749,899       7,251,047  
Loss on equity investments (note 7)
     (13,635 )     (13,490 )     (27,031 )     (13,490 )     (44,886 )
Foreign exchange gain (loss)
     (588,286 )     (814,255 )     (739,073 )     (2,112,975 )     1,323,055  
Other income (loss)
     8,586       1,085,947       (4,164 )     975,115       899,435  
                                         
Loss before income taxes
     (5,735,164 )     (4,947,815 )     (12,499,673 )     (14,390,521 )     (90,870,679 )
                                         
Recovery of future income taxes
     -       797,500       -       797,500       797,500  
                                         
Net loss and comprehensive loss for the period
     (5,735,164 )     (4,150,315 )     (12,499,673 )     (13,593,021 )     (90,073,179 )
                                         
Deficit - Beginning of period
     (84,338,015 )     (68,283,394 )     (77,573,506 )     (58,840,688 )     -  
                                         
Deficit - End of period
     (90,073,179 )     (72,433,709 )     (90,073,179 )     (72,433,709 )     (90,073,179 )
                                         
Weighted average number of common shares outstanding:
                                        
Basic and diluted
     98,949,781       93,907,324       96,234,164       93,829,182          
                                         
Loss per common share:
                                        
Basic and diluted
     (0.06 )     (0.04 )     (0.13 )     (0.14 )        

The accompanying notes are an integral part of these consolidated financial statements
Page 2 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Unaudited Interim Consolidated Statements of Cash Flow

(expressed in Canadian dollars)


                           
Cumulative
  
                           
from
  
   
Three Months
    
Three Months
    
Nine Months
    
Nine Months
    
March 22, 2004
  
   
Ended
    
Ended
    
Ended
    
Ended
    
Through
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2010
    
2009
    
2010
    
2009
    
2010
  
      $       $       $       $       $  
Cash provided by (used in)
                                        
Operating activities
                                        
Net loss for the period
     (5,735,164 )     (4,150,315 )     (12,499,673 )     (13,593,021 )     (90,073,179 )
Items not affecting cash:
                                        
Stock based compensation
     187,777       282,314       565,619       757,288       16,278,690  
Amortization of capital assets
     194,154       125,820       392,316       414,874       1,544,931  
Provision for reclamation
     120,672       14,430       127,967       91,396       646,089  
Write-off of mineral properties
     381,252       (4,623 )     381,252       102,439       803,336  
Foreign exchange loss (gain)
     592,606       814,255       739,073       2,112,975       (1,322,986 )
Gain on sale of assets
     7,915       (1,062,056 )     7,915       (1,062,056 )     (1,071,081 )
Non-cash exploration costs (credits)
     -       -       -       -       1,819,225  
Other loss (income)
     (16,500 )     (5,250 )     (3,750 )     (22,250 )     (2,002 )
Future income taxes
     -       (797,500 )     -       (797,500 )     (797,500 )
Change in non-cash working capital items:
                                        
Amounts receivable
     (3,290 )     10,109       (12,697 )     69,956       (21,032 )
Prepaid expenses
     8,864       (57,438 )     (60,321 )     (172,605 )     (167,986 )
Accounts payable and accrued liabilities
     673,709       542,642       304,437       (972,822 )     1,182,389  
      (3,588,005 )     (4,287,612 )     (10,057,862 )     (13,071,326 )     (71,181,106 )
                                         
Investing activities
                                        
Mineral property costs
     (145,842 )     (12,666 )     (617,527 )     (177,864 )     (11,576,100 )
Purchase of short-term investments
     (3,664,642 )     (300,753 )     (17,652,069 )     (26,412,446 )     (182,539,005 )
Sale of short-term investments
     6,393,313       25,854,963       21,293,849       64,816,227       176,887,009  
Decrease (increase) in bonding and other deposits
     (1,120,435 )     352,706       (1,103,211 )     (878,982 )     (4,094,323 )
Payments from venture partner
     -       -       -       -       146,806  
Proceeds from sale of data base and capital assets
     17,769       1,086,980       17,769       1,086,980       1,127,069  
Purchase of capital assets
     (287,120 )     (769,401 )     (1,017,386 )     (1,295,611 )     (4,893,459 )
      1,193,043       26,211,829       921,425       37,138,304       (24,942,003 )
                                         
Financing activities
                                        
Issuance of common shares and warrants for cash
     -       -       5,000,000       -       127,668,053  
Share issue costs
     (13,074 )     -       (234,850 )     -       (2,803,875 )
Proceeds from exercise of warrants and stock options
     -       1,392       6,541       1,392       18,575,865  
Payment of New Frontiers obligation
     -       -       -       -       (17,565,125 )
      (13,074 )     1,392       4,771,691       1,392       125,874,918  
                                         
Effects of foreign exchange rate changes on cash
     (453,140 )     (677,174 )     (621,414 )     (1,414,546 )     (2,280,646 )
                                         
Net change in cash and cash equivalents
     (2,861,176 )     21,248,435       (4,986,160 )     22,653,824       27,471,163  
Beginning cash and cash equivalents
     30,332,339       27,205,124       32,457,323       25,799,735       -  
    Ending cash and cash equivalents
     27,471,163       48,453,559       27,471,163       48,453,559       27,471,163  
Non-cash financing and investing activities:
                                        
    Common shares issued for properties
     -       42,750       -       452,250       1,164,750  

The accompanying notes are an integral part of these consolidated financial statements
Page 3 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2010

(expressed in Canadian dollars)
1.
Nature of operations

Ur-Energy Inc. (the "Company") is a development stage junior mining company headquartered in Littleton, Colorado, engaged in the identification, acquisition, evaluation, exploration and development of uranium mineral properties primarily in the United States with additional exploration interests in 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 properties contain 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 and upon attaining future profitable production from the properties or sufficient proceeds from disposition of the properties.

2.
Significant accounting policies

Basis of presentation

Ur-Energy Inc. 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.  These financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles and 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 the “Company”.

The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. The accounting policies used in the preparation of the unaudited interim consolidated financial statements conform to those used in the Company’s annual financial statements for the year ended December 31, 2009 and reflect all normal and recurring adjustments considered necessary to fairly state the results for the periods presented.

These unaudited interim consolidated financial statements do not conform in all respects to the requirements of generally accepted accounting principles for annual financial statements.  These unaudited interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2009.

Certain comparative figures have been reclassified to conform to the presentation adopted for the current period.

3.
Cash and cash equivalents and short-term investments

The Company’s cash and cash equivalents are composed of:

   
As at
    
As at
  
   
September 30,
    
December 31,
  
   
2010
    
2009
  
      $       $  
                 
Cash on deposit at banks
     129,993       308,918  
Guaranteed investment certificates
     287,500       287,500  
Money market funds
     27,053,670       25,564,505  
Certificates of deposit
     -       6,296,400  
                 
      27,471,163       32,457,323  


Page 4 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2010

(expressed in Canadian dollars)



The Company’s short term investments are composed of:

   
As at
    
As at
  
   
September 30,
    
December 31,
  
   
2010
    
2009
  
      $       $  
                 
Guaranteed investment certificates
     3,862,109       2,342,637  
Certificates of deposit
     3,347,307       8,589,464  
                 
      7,209,416       10,932,101  


The Company’s cash and cash equivalents of $27.5 million and short-term investments of $7.2 million consist of Canadian dollar and U.S. dollar denominated deposit accounts, guaranteed investment certificates, money market funds and certificates of deposits.  They bear interest at annual rates ranging from 0.40% to 1.15% and mature at various dates up to September 28, 2011.  The instruments with initial maturity over ninety days have been classified as short-term investments.

These instruments are maintained at financial institutions in Canada and the United States.  Of the amount held on deposit, approximately $6.8 million is covered by either the Canada Deposit Insurance Corporation or the Federal Deposit Insurance Corporation.  Another $3.5 million is guaranteed by a Canadian provincial government leaving approximately $24.4 million at risk should the financial institutions with which these amounts are invested be rendered insolvent.  As at September 30, 2010, the Company does not consider any of its financial assets to be impaired.

4.
Bonding and other deposits

Bonding and other deposits include $3,956,879 (December 31, 2009 – $2,920,835) of reclamation bonds deposited with United States financial institutions as collateral to cover potential costs of reclamation related to properties. Bonding deposits are refundable, once the reclamation is complete.

5.
Mineral properties

   
USA
    
Canada
    
Total
  
                         
   
Lost Creek/
    
Other US
    
Canadian
        
   
Lost Soldier
    
Properties
    
Properties
        
      $       $       $       $  
                                 
Balance, December 31, 2009
     24,324,656       4,884,973       523,667       29,733,296  
                                 
Acquisition costs
     -       211,576       -       211,576  
Labor, outside services and other costs
     -       410,652       -       410,652  
Property write-offs
     -       (381,252 )     -       (381,252 )
                                 
Balance, September 30, 2010
     24,324,656       5,125,949       523,667       29,974,272  


United States

Lost Creek and Lost Soldier

The Company acquired certain Wyoming properties when Ur-Energy USA Inc. entered into the Membership Interest Purchase Agreement (“MIPA”) with New Frontiers Uranium, LLC effective June 30, 2005.  Under the terms of the MIPA, the Company purchased 100% of the issued and outstanding membership interests in NFU Wyoming, LLC.  Assets acquired in this transaction
Page 5 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2010

(expressed in Canadian dollars)
include the Lost Creek and Lost Soldier projects and a development database.  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.

Other U.S. Properties

The Company holds other mineral properties in the U.S. including EN, LC North and LC South as well as other exploration properties.

During the three and nine months ended September 30, 2010, the Company wrote off mineral property costs associated with the Kaycee claims.  During the year ended December 31, 2009, the Company wrote off mineral property costs associated with the Muggins Mountain claims in Arizona.

Canada

The Company's Canadian properties include Screech Lake and Gravel Hill, which are located in the Thelon Basin, Northwest Territories and Bugs, which is located in the Kivalliq region of the Baker Lake Basin, Nunavut.  During the year ended December 31, 2009, the Company wrote off mineral property costs associated with the Eyeberry claims.


6.
Capital assets
   
September 30, 2010
    
December 31, 2009
  
         
Accumulated
    
Net Book
          
Accumulated
    
Net Book
  
   
Cost
    
Amortization
    
Value
    
Cost
    
Amortization
    
Value
  
      $       $       $       $       $       $  
                                                 
Rolling stock
     1,922,483       1,035,281       887,202       1,646,607       792,538       854,069  
Machinery and equipment
     293,911       198,454       95,457       277,552       160,212       117,340  
Furniture, fixtures and leasehold improvements
     74,992       35,758       39,234       72,687       29,167       43,520  
IT
     557,998       335,662       222,336       523,997       246,211       277,786  
Pre-construction costs
     2,083,149       -       2,083,149       1,446,406       -       1,446,406  
                                                 
      4,932,533       1,605,155       3,327,378       3,967,249       1,228,128       2,739,121  


7.
Equity investments

In the third quarter of 2009, the other member of The Bootheel Project, LLC (the “Project”) completed its earn-in requirement by spending US$3.0 million and now has a 75% interest in the Project with the Company retaining the other 25%.  From the date of the earn-in, the other member is now required to fund 75% of the Project’s expenditures and the Company the remaining 25%. As the Company is no longer the controlling member of the Project, the Project is now accounted for using the equity accounting method with the Company’s proportionate share of the Project’s loss included in the Statement of Operations from the date of earn-in and the Company’s net investment reflected on the Balance Sheet.

8.
Asset retirement obligation

The Company has recorded $620,728 for asset retirement obligations (December 31, 2009 – $503,712) which represents an estimate of costs that would be incurred to remediate the exploration and development properties.  The retirement obligations recorded relate entirely to exploration and development drill holes, related monitor wells and site disturbance on the Company's U.S. properties.
Page 6 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2010

(expressed in Canadian dollars)

9.
Shareholders’ equity and capital stock

Authorized

The Company is authorized to issue an unlimited number of no-par common shares and an unlimited number of Class A preference shares with the rights, privileges and restrictions as determined by the Board of Directors at the time of issuance.

No class A preference shares have been issued

   
Capital Stock
                
Contributed
    
Accumulated
  
   
Shares
    
Amount
    
Warrants
    
Surplus
    
Deficit
    
Equity
  
      #       $       $       $       $       $  
                                                 
Balance, December 31, 2009
     93,940,568       144,053,337       -       13,671,699       (77,573,506 )     80,151,530  
                                                 
Exercise of stock options
     9,213       9,991       -       (3,450 )     -       6,541  
Common shares issued for cash, net of issue costs
     5,000,000       4,700,151       -       -       -       4,700,151  
Non-cash warrant costs
                     37,013       -               37,013  
Non-cash stock compensation
     -       -       -       528,604       -       528,604  
Net loss and comprehensive loss
     -       -       -       -       (12,499,673 )     (12,499,673 )
                                                 
 Balance, September 30, 2010
     98,949,781       148,763,479       37,013       14,196,853       (90,073,179 )     72,924,166  


Issuances

On May 31, 2010, the Company completed a private placement of 5,000,000 common shares at $1.00 per share raising gross proceeds of $5,000,000.  Total direct share issue costs, including the placement agent’s commission, were $299,849.

In May 2010, 9,213 common shares were issued pursuant to the exercise of stock options.

Restricted Share Units (“RSU”)

On May 7, 2010, the Company’s Board of Directors approved the adoption of the Company’s restricted share unit plan (the “RSU Plan”).  Eligible participants under the RSU Plan include directors, officers and employees of the Company.  Under the terms of the RSU Plan, RSUs vest with participants as follows: 50% on the first anniversary of the date of the grant and 50% on the second anniversary of the date of the grant.

As of September 30, 2010, no restricted shares have been awarded under the RSU Plan.

Warrants

The Company is committed to issue 100,000 warrants to purchase stock at $1.20 per share to its consultant GVC Advisors, LLC on November 1, 2010.  During the three and nine months ended September 30, 2010, the Company recorded $37,013 in non-cash warrant costs related to the commitment.

 Stock options

On November 17, 2005, the Company’s Board of Directors approved the adoption of the Company's stock option plan (the “Option Plan”).  Eligible participants under the Option Plan include directors, officers and employees of the Company and consultants to the Company.  Under the terms of the Option Plan, options generally vest with Option Plan participants as follows: 10% at the date of grant; 22% four and one-half months after grant; 22% nine months after grant; 22% thirteen and one-half months after grant; and, the balance of 24% eighteen months after the date of grant.
Page 7 
 
 
 
Ur-Energy Inc.
(a Development Stage Company)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2010

(expressed in Canadian dollars)

Activity with respect to stock options is summarized as follows:

         
Weighted-
  
         
average
  
   
Options
    
exercise price
  
      #       $  
                 
Outstanding, December 31, 2009
     8,361,452       1.65  
Granted
     798,537       0.81  
Exercised
     (9,213 )     0.71  
Forfeited
     (75,470 )     0.84  
Expired
     (202,307 )     1.83  
                 
Outstanding, September 30, 2010
     8,872,999       1.58  

As at September 30, 2010, outstanding stock options are as follows:
 
 
Options outstanding
  
Options exercisable
    
   
Weighted-
    
Weighted-
    
   
average
    
average
    
Exercise
  
remaining
    
remaining
    
price
Number
contractual
  
Number
contractual
    
$
of options
life (years)
  
of options
life (years)
Expiry
  
               
1.25
2,400,800
0.1
  
2,400,800
0.1
November 17, 2010
  
2.01
75,000
0.5
  
75,000
0.5
March 25, 2011
  
2.35
1,450,000
0.6
  
1,450,000
0.6
April 21, 2011
  
2.75
329,200
1.0
  
329,200
1.0
September 26, 2011
  
1.65
74,714
1.6
  
74,714
1.6
May 4, 2012
  
4.75
30,000
1.6
  
30,000
1.6
May 15, 2012
  
3.67
200,000
1.8
  
200,000
1.8
July 15, 2012
  
3.00
437,500
1.9
  
437,500
1.9
August 9, 2012
  
3.16
50,000
2.0
  
50,000
2.0
September 17, 2012
  
2.98
50,000
2.0
  
50,000
2.0
October 5, 2012
  
4.07
30,000
2.1
  
30,000
2.1
November 7, 2012
  
2.11
25,000
2.5
  
25,000
2.5
March 19, 2013
  
1.65
865,000
2.6
  
865,000
2.6
May 8, 2013
  
1.72
25,000
2.9
  
25,000
2.9
August 6, 2013
  
0.71
949,994
3.4
  
949,994
3.4
February 9, 2014
  
0.64
75,000
3.4
  
75,000
3.4
March 11, 2014
  
0.90
1,086,064
3.9
  
586,472
3.9
September 2, 2014
  
0.81
719,727
4.4
  
230,310
4.4
March 5, 2015
  
               
1.58
8,872,999
1.8
  
7,883,990
1.6
  

During the nine months ended September 30, 2010, the Company recorded a total of $528,604 related to stock based compensation (2009 – $757,288).  This amount is included in shareholders’ equity as contributed surplus and is recorded as an expense.
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Ur-Energy Inc.
(a Development Stage Company)
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2010

(expressed in Canadian dollars)

Fair Value Calculations

The fair value of options granted and warrants authorized during the nine months ended September 30, 2010 and 2009 was determined using the Black-Scholes option pricing model with the following assumptions:

 
2010
2009
     
Expected warrant life (years)
             2.75
                     -
Expected option life (years)
3.12 - 3.14
2.85 - 3.01
Expected volatility
81-82%
82 - 83%
Risk-free interest rate
1.7-1.9%
1.4 - 1.9%
Forfeiture rate
4.3%
4.4 - 4.6%
Expected dividend rate
0%
0%


10.
Segmented information

The Company’s operations comprise one reportable segment being the exploration and development of uranium resource properties.  The Company operates in the United States and Canada.  Capital assets segmented by geographic area are as follows:

   
September 30, 2010
  
   
United States
    
Canada
    
Total
  
      $       $       $  
                         
Bonding and other deposits
     3,956,879       -       3,956,879  
Mineral properties
     29,450,605       523,667       29,974,272  
Capital assets
     3,327,378       -       3,327,378  
Investments
     2,769,117       -       2,769,117  

   
December 31, 2009
  
   
United States
    
Canada
    
Total
  
      $       $       $  
                         
Bonding and other deposits
     2,920,835       -       2,920,835  
Mineral properties
     29,209,629       523,667       29,733,296  
Capital assets
     2,736,940       2,181       2,739,121  
Investments
     2,769,117       -       2,769,117  


11.
Commitments

Although construction of the Lost Creek plant will not begin until receipt of the necessary authorizations, request for quotations for all major process equipment at the Lost Creek project have been prepared and solicited from vendors and contractors.  Bids are currently being evaluated and procurement will be ongoing through the commencement of construction.

Purchase orders totaling US$2.0 million have been issued for ion exchange columns and other process equipment.  Payments of US$1.1 million have been made to date on these purchase orders.
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