| Long-Term Price Case | $65/lb. U308 | $65/lb. U308 |
| Project | Lost Creek | Shirley Basin |
| Mineral Resources | 13,252,000 lbs. | 8,816,000 lbs. |
| Shares Outstanding | 143,400,000 | 143,400,000 |
| Market Cap | $131,928,000 | $131,928,000 |
| Average Annual Production | 1M lbs. | 500,000 lbs. |
| Recovery | 92% | 80% |
| LoM | 12 Years | 14 Years |
| Payable Product | 12,191,840 lbs. | 7,052,800 lbs. |
| True All-in Cost (TAIC) | $35.61/lb. | $38.29/lb. |
| Gross Revenue | $792,469,600 | $458,432,000 |
| Royalties | ($31,698,784) | ($18,337,280) |
| Gross Income | $760,770,816 | $440,094,720 |
| Total Operating Cost | ($177,757,027) | ($102,547,712) |
| Operating Profit | $583,013,789 | $337,547,008 |
| Wellfield Development | ($118,504,685) | ($55,152,896) |
| Sweetwater Property Tax | ($1,584,939) | — |
| Wyoming Severance Tax | — | ($10,226,560) |
| Carbon County Ad Valorem Tax | — | ($16,362,496) |
| County Property Tax | — | ($1,128,448) |
| Income Taxes | ($89,244,269) | ($40,130,432) |
| Total Capital Costs | ($15,400,000) | ($26,200,000) |
| Net Income | $358,279,896 | $204,708,672 |
| Net Profit Margin | 45% | 45% |
| Absolute Cost Structure (ACS) | 55% | 59% |
| True Value | $3.92/sh. | |
| Cash Flow Multiple | 10x | |
| Annual Cash Flow | $29,390,000 | $13,355,000 |
| Future Market Cap | $427,450,000 | |
| Future Market Cap Growth | 224% | |
| Target | $2.98/sh. |
Notes: All Values in U.S. Dollars
There is a great deal of value in Ur-Energy that hasn’t been baked into price. Were shares to trade between 30-40% lower in a general market decline, we would be buyers.
Rationale
At $65/lb., Ur-Energy will achieve excellent Net Profit Margins and enjoy an Absolute Cost Structure that will elude peers (On its worst day, the company’s TAIC won’t rise much above $36/lb.).
Update, 13 July ’19
We do not presently have exposure to the uranium sector in the U.S., and in light of recent developments, the likelihood of our future participation has dropped. Any consideration of a U.S. issue will necessitate a substantial discount to our estimate of True Value. In the case of Ur-Energy, an additional 20% discount to the 12 July close will be essential before a small initial stake is considered.
More likely, future exposure to the U.S. uranium sector will be gained via exposure to Cameco’s Crow Butte and Smith Ranch-Highland Projects, though at that time, we believe Cameco shares will be available to us up to 30% cheaper following a general market decline.
