Mark Roberts, Interviewer and Senior Editor at Traders News Source
Interviewed, John W. Cash
Chief Executive Officer at UR-Energy Inc.
Mr. Cash was named Ur-Energy’s Chief Executive Officer and appointed as a Director on March 1, 2022. Mr. Cash joined Ur-Energy in 2007 and was appointed as Vice President Regulatory Affairs in 2011. He has led the permitting and licensure of both the Lost Creek and Shirley Basin uranium mines, while managing the environmental, health and safety (“EHS”) and geology departments and contributing to the development and growth the Company. During his tenure with Ur-Energy, Mr. Cash has gained a well-deserved reputation for developing impactful solutions for industry related to water management, EPA aquifer exemptions, technical design, and environmental matters.
Mr. Cash has nearly 30 years of diverse experience in the uranium industry, from which he has acquired broad-reaching expertise in exploration, EHS including radiation safety, regulatory and legislative affairs, and uranium recovery operations, as well as extensive management experience. He is a respected industry leader and has served as a past president of the Uranium Producers of America.
Prior to joining Ur-Energy, Mr. Cash worked for established uranium mining companies, including BHP, Rio Algom Mining, and Crow Butte Resources, a subsidiary of Cameco, in various roles in mineral exploration, as Operations Superintendent and EHS Manager. As Operations Superintendent, Mr. Cash managed all aspects of wellfield production and plant processing at the 800,000 lbs. U3O8 per year Crow Butte ISR facility. Mr. Cash is a Fellow of the inaugural World Nuclear Summer Institute. Mr. Cash received B.Sc. and M.Sc. degrees in Geology and Geophysics from the University of Missouri-Rolla.
Thank you giving us your time to answer some questions. Can you give us a brief overview of your company’s business model as well as current and potential revenue streams?
“Ur-Energy Inc. is a publicly traded pure play uranium explorer and developer with two flagship projects in the mining friendly jurisdiction of Wyoming. Our first project, Lost Creek, utilizes the in situ mining technique and has been in operation for over eight years with total production of 2.7 million pounds of yellowcake. Production has been consistently low cost with high mineral recovery rates. Lost Creek is completely permitted and we are entering the final stages of permitting a large expansion.”
“Our second project is called Shirley Basin and it has already received all three major permits required for construction and operations. Shirley Basin is a brownfield project with significant infrastructure already in place and the resource is relatively shallow. These factors will assist in keeping production costs low.”
“With regard to revenue, the combined annual licensed capacity of both facilities, once Shirley Basin is constructed, is 2.2 million pounds. The spot price of uranium has ranged from the upper $40s to $65 per pound over the last several weeks. The long-term price has been around $50 per pound which puts us in the money. Our objective over the coming months is to sign long-term off-take agreements with U.S. utilities for the sale of product from our two flagship properties. Additionally, the DOE has announced that there will be an opportunity for government purchasing of domestic uranium in June of this year as part of the Uranium Reserve Program passed by congress. We stand ready to respond to the government RFP with 284,000 pounds of domestically produced inventory and the capacity to ramp up full scale production within six to eight months at Lost Creek and in 15-18 months at Shirley Basin.”
What is your perspective on the uranium market for the rest of 2022 and beyond as regards pricing and supply?
“In the short term, we expect continued market volatility in response to purchasing by the Sprott Physical Uranium Trust that was established in July of 2021 and geopolitics driven by Russia’s invasion of Ukraine.”
“Since its inception, the Sprott Physical Uranium Trust has acquired over 55 million pounds of yellowcake from the spot market which has placed considerable pressure on limited mobile inventories. Sprott’s impact is relatively limited to the spot price which only makes up a small, but important, portion of the overall market.”
“With regard to geopolitics, Russia supplies about thirty percent of conversion and forty percent of enrichment services globally. Many nations are attempting to move away from Russian energy supplies, including nuclear materials. However, in the case of nuclear fuel, the options to replace Russian supplies are limited; especially in the short term. As western utilities attempt to replace Russian supply, we expect pressure in the term market which constitutes the majority of the overall uranium market.”
“Predicting the impact of these pressures on pricing is extremely difficult given the number of complex factors affecting supply and demand; especially in the short term. In the long-term, I believe the nuclear industry will experience tremendous growth as nations recognize nuclear’s rightful place in the green economy. We are already seeing tremendous growth in serious plans to construct conventional reactors; especially in China and in response to Russia’s invasion of Ukraine. Small modular reactors, SMRs, are also becoming popular with several companies in the design and licensing stages. Of course, the growth in conventional and SMR build outs will ultimately have an impact on the demand for uranium and processing services globally. Given the limited number of existing and planned tier 1 uranium mines, it is clear the price of uranium will need to increase substantially to incentivize new production.”
Other mining companies with properties in Wyoming say it’s a great state to operate in. What has your experience been?
“Wyoming is a great place to be a miner. The state is a natural resources state and the people and the government agencies understand what mining is about and how it should be properly regulated. Wyoming took over jurisdiction of health and environmental safety of uranium mines from the U.S. Nuclear Regulatory Commission a few years ago to reduce costs to mining companies and to provide for better regulatory oversight. This has been a tremendous boon to the Wyoming uranium mining industry since the cost of licensing has been dramatically reduced while oversight has improved.”
Can you estimate the total uranium production at Lost Creek for full year 2022 and 2023?
“The timing and quantity of production will depend on our ability to sign long-term contracts with utilities. Our objective is to sign sufficient contracts to justify the capital outlay to ramp up production at Lost Creek to one million pounds per year and to build out our Shirley Basin Project and ramp it up to at least 800,000 pounds per year.”
Is there a timeline for anticipated uranium production at Shirley Basin?
“Once market signals and/or contracting allow, we will start construction of the Shirley Basin facility. Construction of the satellite plant and the initial ramp up to a rate of one million pounds per year will take 15 to 18 months at a cost of about $30M US.”
Can you briefly describe the advancements in your new, developing water treatment system?
“Minimization of wastewater generation is a high priority in the arid Mountain West where whiskey is for drinking and water is for fighting. Ur-Energy has made great strides over the past several years at reducing the amount of wastewater generated. The first generation of technology we developed involved standard reverse osmosis and radium removal technologies to produce essentially potable water. At the same time we permitted a series of shallow wells that we inject the clean water into so it can be used by ranchers in the future. Currently, we are working on an advanced water treatment and filtration system that we believe will ultimately result in our ability to recycle about 99.8% of the water we utilize. On-site engineering and testing of the system is progressing and we hope to be able to report more on the system late this year. The technologies developed at Lost Creek may also be used at Shirley Basin and other future Ur-Energy operations.”
Would you describe your vision of growth for your company both in the near term and long term?
“In the near term, our vision for growth revolves around the ramp up of production at Lost Creek and the buildout and operation of our Shirley Basin Project. We would like to be producing at a rate of two million pounds per year two years from now. In the mid-term, we will be turning to our other exploration and development projects, such as Lost Soldier, to bring on additional production that will feed into the Lost Creek Plant. In the long-term, we believe it is important to grow the companies’ revenue potential by bringing additional uranium properties into our portfolio and into production. Any uranium properties or companies we acquire must be of such quality that we can permit and operate them within a reasonable time frame and cost profile. We won’t pursue opportunities in jurisdictions that are unsafe for our employees or that don’t have strong, well established ownership rights for mining companies. In essence, any acquisition must be accretive to our revenue stream within the foreseeable future.”
“Finally, although Lost Creek and Shirley Basin are both low-cost projects, we intend to capitalize on our R&D by driving production costs down even further and reducing our environmental footprint. R&D projects are, by their nature, technically challenging and the outcomes can never be certain, but we have an exceptional team that has already demonstrated our ability to innovate in meaningful ways. As we lower production costs, we will be able to enter the market sooner and at higher profit margins.”
Thank you John, we appreciate you taking the time to answer our questions.
The Traders News Group
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