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Message: UR-Energy - A Recent Uranium Explorer Turned Producer With More Than 35% Upside

Aug 11 2013, 22:16 by: Joshua Chin | about: URG (Ur-Energy Inc. (USA)), includes: CCJ
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Disclosure: I am long URG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

"Throw the pass into the space ahead of your teammate. Hit him in stride!"

- High school Rugby Coach

There is much to say about such a statement, along with numerous parallels that can be drawn to various aspects of life. Investors and traders strive to be ahead of the crowd to ultimately generate greater risk-adjusted returns. Whether it is forecasting entity specific sales and earnings, or anticipating systematic shifts in supply and demand economics both are done with the intention to capture future value.

From the macroeconomic standpoint, the fall from the glory days of uranium has been well documented, analyzed and discussed among investors and news outlets alike. Investing idioms like "Catching a Falling Knife" and "Be Greedy When Others are Fearful" have been heavily used throughout post-Fukushima in the investment community.

This article is written for investors who believe that U308 prices, both spot and long-term contract prices, are poised for a material increase within a 1-2 year time frame. There is a plethora of analysis and articles alike discussing both the bull and bear case for the uranium industry. This article will not go into heavy detail the macroeconomic conditions dictating future U308 prices.

For the purpose of this article, a bullish stance on U308 prices is a presupposition.

Ur-Energy Business Overview

Overview Obtained from Ur-Energy Website

Ur-Energy is a dynamic junior mining company focusing on exploration and development of uranium properties in the United States and in Canada. Ur-Energy was incorporated in 2004 and trades on the Toronto Stock Exchange under the symbol URE and on the NYSE MKT under the symbol URG.

In the United States, the Company's current Wyoming properties contain NI 43-101 compliant resources of 20.55 million pounds of uranium in the measured and indicated category plus 4.67 million pounds in the inferred category. In Nebraska, the Company has leased approximately 35,000 acres (14,164 hectares) (not contiguous) for initial exploration. The Company's land position, based upon an extensive in-house geologic study, was secured in areas which may contain geology similar in nature to Cameco Corporation's nearby Crow Butte deposit which is currently being mined by the in-situ recovery method.

In Canada, the Company's Screech Lake project is in the Thelon Basin. The Company acquired this project based upon the presence of key geological vectors and encouraging supporting data from 1970s-era exploration work. The property is located in the eastern part of the Northwest Territories. While the Athabasca Basin in Saskatchewan is better known and contains 65% of the known future capacity of global uranium production, the Thelon Basin is highly prospective for unconformity-type uranium deposits, the highest grade known uranium deposits.

Asset Portfolio

Lost Creek

The Lost Creek project is located in South-Central Wyoming. It has measured and indicated resources of 8.348 Million Lbs as shown from the NI 43-101 compliant report.

Lost Creek is Ur-Energy's flagship asset as it recently began U308 production on August 2nd, 2013. It is the first revenue stream for Ur- Energy.

(click to enlarge)

Wyoming has shown not only to be abundant in U308, but the political landscape has proven to be very accommodating for uranium development. This ideal combination of assets and supportive environment is ever more evident by the presence of numerous projects from an ever greater number of companies in the Wyoming area. In particular, the Lost Creek project is located in the Great Divide Basin. Examining the map below, potential investors can see the additional scope of the Lost Creek asset.

(click to enlarge)

This project is of great strategic importance as the existing infrastructure developed at the current site can be leveraged by future project developments in the surrounding area to which UR-Energy already lays claim too.

Lost Soldier

Lost Soldier is another project that is situated closely to the flagship Lost Creek project. Specifically, it is located 14 miles North East of the Lost Creek Project. Again, the geographical proximity is of strategic importance in managing future cost through leveraging existing infrastructure.

Lost Soldier has not undergone development at this time because UR- Energy has specifically stated it is focusing current efforts on the flagship, Lost Creek, project.

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