An anonymous director reports

UR-ENERGY AND ENERGY FUELS: UTILITY-SPONSORED PAPER MISSES THE MARK ON ECONOMIC IMPACT OF REMEDIES PROPOSED IN SECTION 232 PETITION

A utility-sponsored paper released yesterday misses the mark in its analysis of the remedies that Energy Fuels Inc. and Ur-Energy Inc. proposed in their Section 232 petition to the U.S. Department of Commerce (DOC). For decades, the U.S. has increased its dependence on uranium from state-sponsored enterprises subject to neither environmental nor worker safety standards.

Energy Fuels and Ur-Energy welcome all interested parties, including utilities, to carefully analyze the economic impacts of the proposed remedies. They believe the remedies are sound and will result in minimal impacts to the U.S. nuclear utility industry and consumers of electricity, while also bolstering U.S. national security. However, the utilities' analysis misses the mark on several fronts.

Most critically, the paper ignores evidence that Energy Fuels and Ur-Energy included in their petition for relief under Section 232 of the Trade Expansion Act of 1962 demonstrating that the industry has sufficient licensed capacity and resources -- and all at a cost consistent with the unsubsidized global standard -- to meet U.S. production requirements if the quotas recommended in the petition are imposed. The U.S. uranium industry has produced at well over those levels in the past, and the proposed remedies would allow the industry to get back to those production levels at minimal cost to the nuclear utility industry.

The paper also fails to address the serious threat to U.S. national security caused by its dependence on Russia and its allies for a significant portion of its uranium supply. Russia's actions in Eastern Europe prove its willingness to use energy exports as a geopolitical weapon.

Finally, the authors at The NorthBridge Group did not consider or fully understand a number of exhibits the companies included in their petition for relief. The most relevant include:

• Exhibit 17 of the petition shows that during a period of uranium price increases between 2007 and 2012, domestic uranium mining companies endeavoured to bring considerable new production capacity on line. Unfortunately, state and federal permitting delays forced U.S. companies to miss the price hike. Since that period, the industry has increased its licensed capacity by 74 per cent, with additional capacity expected in the near term.
• Exhibit 23 of the petition shows that the mining operations necessary to reach the required production rate are already in place and ready to resume production. In addition, the number of required facilities is relatively small and spread over several states -- meaning that the industry can meet labour and other capacity needs.

In addition, the authors vastly overstate the costs to expand production to the level needed to support the quota, while ignoring the effect of direct and indirect subsidies received by state-sponsored enterprises in Russia, Kazakhstan, China and elsewhere. Domestic industry costs for current operating and near-term production are consistent with the worldwide, all-in production costs cited in Exhibit 3 of the petition.

Above all, the U.S. cannot and should not put a price on its national security. The U.S. must not surrender the entire front end of its nuclear fuel supply chain because of an addiction to government-subsidized uranium from Russia and its allies.

Energy Fuels' and Ur-Energy's January press releases provide further details on the background and legal basis for the petition. Additional information regarding the trade action, including the petition and its exhibits, can also be readily found on the companies' websites (Energy Fuels and Ur-Energy).

In any governmental investigation, there can be no certainty of the outcome. The purpose of this investigation is to shine a light on the facts and discover the truth about the national security impact of uranium imports from state-sponsored enterprises in adversarial nations.

About Energy Fuels Inc.

Energy Fuels is a leading integrated U.S. uranium mining company, supplying triuranium octoxide to major nuclear utilities. Its corporate offices are in Denver, Colo., and all of its assets and employees are in the Western United States. Energy Fuels holds three of America's key uranium production centres, the White Mesa mill in Utah, the Nichols Ranch processing facility in Wyoming and the Alta Mesa project in Texas. The White Mesa mill is the only conventional uranium mill operating in the U.S. today and has a licensed capacity of over eight million pounds of U3O8 per year.

About Ur-Energy Inc.

Ur-Energy is a U.S. uranium mining company with corporate and operations offices in Denver, Colo., and Casper, Wyo., respectively. Ur-Energy operates the Lost Creek in situ recovery uranium facility in south-central Wyoming. Ur-Energy has produced, packaged and shipped more than two million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate Ur-Energy's LC East project area into the Lost Creek permits, and the company has begun to submit applications for permits and licences to construct and operate its Shirley basin project.

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