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With Uranium Supply Being Far Exceeded By
Demand, Ur-Energy Is In The Right Place At The Right Time As They Bring
Their Lost Creek Project In Wyoming Into Production
Mining
Uranium
(URE-TSX)
Ur-Energy Inc.
Headquarters Office:
10758 West Centennial Road, Suite 200
Littleton, Colorado 80127
Phone: 866-981-4588
Registered Office:
1128 Clapp Lane, P.O. Box 279
Manotick, Ontario K4M 1A3
Phone: 877-692-7704
William Boberg, M.Sc., P.Geo.
President, CEO and Director
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – November 23, 2007
BIO:
W. William Boberg,
M.Sc., P.Geo.
President, C.E.O and Director
Bill
has his Masters degree in Geology from the University of Colorado. He is a
registered Wyoming Professional Geologist and has over 40 years in mining
and petroleum geology, mostly in minerals exploration and management in the
United States and Africa. He has worked for Continental Oil Company, Wold
Nuclear, Kennecott Exploration Inc., Western Mining Corporation, Canyon
Resources Corporation and Patrician Gold. He has held management positions
in all of these companies and has been the president of the consulting
companies Boberg GeoTech International and Africa Mineral Resource
Specialists. He has extensive experience in the exploration for and
development of uranium deposits and has authored a number of papers on
uranium geology and uranium exploration in Wyoming.
Company Profile:
Ur-Energy is a junior mining company completing mine planning and permitting
activities to bring its Lost Creek Wyoming uranium deposit into production
in 2009. The company is also engaged in the identification, acquisition and
exploration of uranium properties in both Canada and the United States.
Shares of the corporation trade on the Toronto Stock Exchange under the
symbol URE. Ur-Energy has a registered corporate office in Ottawa, Canada
and bases its headquarters in Littleton, Colorado.
CEOCFO: Mr. Boberg, what is your vision for
the company?
Mr. Boberg:
“Our vision at this time is to get our company into production at our Lost
Creek uranium mine in Wyoming and then to grow the company with operations
in the future.”
CEOCFO:
What are the steps going forward in Wyoming now?
Mr. Boberg:
“We have a number of projects in Wyoming; a large number of them are in what
is called the Great Divide Basin in the south central portion of Wyoming. It
is a very remote area that has seen uranium exploration and mining starting
back in the 1960’s and continuing up to the 1980’s. However, there has been
nothing going on since that period of time. We acquired these properties two
years ago, that were originally explored and discovered back in the 1960’s
and 1970’s. The deposits were already discovered and some additional
development was done on them so that we knew what was there when we acquired
the properties and the data that went with them. We have been working to
develop the deposits since that time to increase our knowledge of them so
that we can obtain our permits and to mine them properly.
The continuing process as you might acknowledge is a fairly extensive and
lengthy one. We have to get a permit from the Nuclear Regulatory Commission
to build our plant and to mine the project. We have to get a permit from the
Wyoming Department of Environmental Quality and US Bureau of Land
Management, and there are quite a number of other agencies that have to sign
off on our permits through the Wyoming Department of Environmental Quality.
We have been working for about two years to complete those permits. We
completed our permit for the Nuclear Regulatory Commission early in
September. We are in the editing process to have it complete so that we can
submit it later this month to the Nuclear Regulatory Commission. We will be
submitting our permits to the Wyoming Department of Environmental Quality by
December of this year (2007). The Nuclear Regulatory Commission has an
18-month review process. The WDEQ has a 12 month permitting process so we
are staging these so that we can get our permits completed and approved by
early 2009, start construction of our plant and get our production operation
going by later in 2009. That is the process.
We are completely funded; we have in the past year raised over $100 million
Canadian, to enable us to grow our project. Our capital cost to build our
mine and our plant for the operation, we have completely in our bank account
now so we are well funded and fixed to move our projects forward.”
CEOCFO:
Are the regulatory agencies favorable?
Mr. Boberg:
“They are. The nuclear industry in the US is relatively sizeable even though
it has been relatively quiet for years; we have not heard much of it. It has
been something that has been working along. We have 104 nuclear reactors
that are producing electricity in the United States today, producing around
20% of all the electricity that is used in the United States. The nuclear
industry is a significant contributor to the energy that is required in the
United States at this time. In addition, there are indications that there
may be an additional 28 to 30 plants being considered by operators of
nuclear utilities to add to the system over the next decade or so. This
would allow us to have additional power coming through nuclear reactors in
that period of time. The Nuclear Regulatory Commission is very careful with
their approach but they follow the regulations very carefully and make sure
that all the operations are being done in the most safe and proper manner
that they can be. However, they also see that there is and has been a supply
shortage of mined uranium since 1988. The amount of uranium mined has been
exceeded by demand by a very significant amount for almost the past twenty
years. The gap has been filled by secondary supplies and inventory that had
been built up previously and those are dwindling and the supply gap is
becoming serious enough that it would cause the price of uranium to
increase. The powers that be are recognizing that the supply gap has to be
filled and they are prepared to do what is necessary to permit under their
regulations those operations that would enable it to happen. In the US
probably 5% or less of the requirements of the US utilities are filled by US
deposits. Our ability to produce in the US and produce uranium for our
reactors in the US, we view as a very strategic requirement of the United
States.”
CEOCFO:
You mentioned that you are in a remote area; do you need to do much
infrastructure?
Mr. Boberg:
“We are in a remote area, but it is an area that has had uranium mining in
the past and there is a former uranium mine that is just about three miles
south of our current operation and it has been maintained on standbys since
1982. In addition, a power line runs right across our property, so from a
power standpoint and electricity standpoint we will be able to tap into the
grid fairly simply with what we have there. There is a paved road that is
about five miles south of the property and there are gravel county roads
that come essentially right up to the property. Therefore, there will not be
a lot of infrastructure work that we will have to do and although there is
some, we won’t have to bring things in for tens of miles.”
CEOCFO:
While you are waiting for the permitting, what is going on at Ur-Energy?
Mr. Boberg:
“We are working on additional properties that we have. We do not want to
have ourselves in a position of being a one-project company. We would like
to be in a position of bringing additional properties into production every
two to three years. We are working to make sure that we have properties
developed in advance to enable that sort of thing to happen. We are
continuing to do the engineering on our project that we will be bringing
into production. We will need to be ordering quite a number of supplies.
Some of the things that will be required in the plant may take twelve months
or more to fabricate and we do not want to be in a position of waiting for
the permit to order those. We will be ordering those within the next few
months so that we have those sitting on the shelf waiting for our permit so
that we have all of the pieces available for us once the permit comes in, we
will be constructing it. Just to make sure that the construction process
will go as quickly and smoothly as possible.”
CEOCFO:
Please tell us about your team.
Mr. Boberg:
“I have uranium experience myself going back to the late 1960’s, 1970’s and
through the 1980’s. I started out hiring people that I knew had experience,
I wanted people who knew what uranium was and what the things were that I
needed to work with to make things work out there. As a result when you are
looking at people who have experience from that period of time that were
obviously a bit older than some of the average staff, but we have put
together a strong staff. It had a bit of age on it to start with, but we are
bringing the age down by hiring younger people to be mentored by our older
staff. We actually have two staff members who are in excess of eighty years
at this time; they are like kids in a candy shop, they are enjoying
themselves, having the opportunity to be back, and contributing. We have a
number that are in their seventies, quite a few in their fifties and sixties
and we managed to get several on that are in their forties, and now we have
some in their twenties and thirties who are learning from some of the more
experienced people. We managed to develop a staff of engineers, geologists
and technical professionals to do the work that we need to have done. We
have twelve support management professionals and twelve professionals with
our operating company in Wyoming that will actually be involved in building
the mine. We have significant uranium production experience; we have hired
some of our younger staff in their forties who have worked through the
downtime in the uranium industry in operations management and production
management. We have managed to develop an operating team that we feel is a
world-class team that can build and operate our plants. We are very pleased
with our technical and professional staff.”
CEOCFO:
Is the investment community paying attention?
Mr. Boberg:
“To a degree they are. We probably got about 60% ownership by institutions;
a number of funds own us. Our ownership we feel is split probably about ⅓
between Canada, US, and Europe, and a significant amount of that are
institutions. There seems to be a fair bit of a lack of understanding of how
real our company is as far as our ability to get ourselves into production
in the timeframe that we say that we will. We are anxious to get our
application for permit to mine, get our pre-feasibility study published
within the next 45 days or so, and get some of these key milestones
completed within the next two to three months. This will demonstrate to the
investment community how real the company is.”
CEOCFO:
What should potential investors remember most about Ur-Energy when they read
this interview?
Mr. Boberg:
“Here are some of our key take-away points. One of the things that
some people have been concerned about is that uranium price has fallen off
in the last few months after a spectacular rise earlier this year. Within a
period of eight months it has gone up from about $80.00 to $138.00 and
dropped back down to $75.00 and some people are thinking that might be the
end of it. One of the key things they need to keep in mind is this major gap
between mine production and demand still exists. There are still problems
with a lot of the existing production and the ability to be able to close
that gap and as a result, price will remain strong for a while.
We will be producing our first project in 2009. We have our application
complete after final review and editing, it will be submitted at the end of
this month, our feasibility study is complete and under final review, and it
should be published some time in November (2007). We have sufficient cash on
hand to take the project into production and our cash, given the current
environment, is secure in safe investments. Our production costs will be
low, our pre-feasibility study is defining our operating costs to be less
than twenty-five dollars a pound so we can still suffer even more reduction
in the uranium price and we will still be doing well with our project. We
have the engineering team that has extensive experience in mining these
deposits. We are actively exploring projects to strengthen our pipeline to
production and to have additional projects moving up. The key thing is that
we have the experienced technical management team to develop producing mines
and to find future mines.”
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