Business Overview


The following discussion is designed to provide information that we believe is
necessary for an understanding of our financial condition, changes in financial
condition, and results of our operations. The following discussion and analysis
should be read in conjunction with the audited financial statements and MD&A
contained in our Annual Report on Form 10-K for the year ended December 31,
2021.



Incorporated on March 22, 2004, Ur-Energy is an exploration stage issuer, as
that term is defined by the SEC. We are engaged in uranium recovery and
processing activities, including the acquisition, exploration, development and
operation of uranium mineral properties in the U.S. We are operating our first
in situ recovery uranium facility at our Lost Creek Project in Wyoming.
Ur-Energy is a corporation continued under the Canada Business Corporations Act
on August 8, 2006. Our Common Shares are listed on the TSX under the symbol
"URE" and on the NYSE American under the symbol "URG."



Ur-Energy has one wholly owned subsidiary, Ur-Energy USA Inc., incorporated
under the laws of the State of Colorado. Ur-Energy USA Inc. has three
wholly-owned subsidiaries: NFU Wyoming, LLC, a limited liability company formed
under the laws of the State of Wyoming which acts as our land holding and
exploration entity; Lost Creek ISR, LLC, a limited liability company formed
under the laws of the State of Wyoming to operate our Lost Creek Project and
hold our Lost Creek properties and assets; and Pathfinder Mines Corporation
("Pathfinder"), incorporated under the laws of the State of Delaware, which
holds, among other assets, the Shirley Basin and Lucky Mc properties in Wyoming.
Our material U.S. subsidiaries remain unchanged since the filing of our Annual
Report on Form 10-K, dated March 9, 2022.



We utilize in situ recovery ("ISR") of the uranium at our flagship project, Lost
Creek, and will do so at other projects where possible. The ISR technique is
employed in uranium extraction because it allows for an effective recovery of
roll front uranium mineralization at a lower cost. At Lost Creek, we extract and
process uranium oxide ("U3O8") for shipping to a third-party conversion facility
to be weighed, assayed and stored until sold. After sale, when further
processed, the uranium we have produced fuels carbon-free, emissions-free
nuclear power which is a cost-effective and reliable form of electrical power.
Nuclear power is estimated to provide more than 50% of the carbon-free
electricity in the U.S.



Our Lost Creek processing facility, which includes all circuits for the
production, drying and packaging of U3O8 for delivery into sales transactions,
is designed and approved under current licensing to process up to 1.2 million
pounds of U3O8 annually from the Lost Creek wellfield. The processing facility
has the physical design capacity and is licensed to process 2.2 million pounds
of U3O8 annually, which provides additional capacity of up to one million pounds
U3O8, to process material from other sources. We expect that the Lost Creek
processing facility will be utilized to process captured U3O8 from our Shirley
Basin Project for which we anticipate the need only for a satellite plant.
However, the Shirley Basin permit and license allow for the construction of a
full processing facility, providing greater construction and operating
flexibility as may be dictated by market conditions.



Uranium Market Update



Increasing support for nuclear energy has been sustained as more governments
understand it is a critical element to successfully address climate change.
Growing numbers of countries are making commitments to net-zero emissions,
including on more accelerated schedules than previously targeted. In the
process, many nations and large companies are endorsing nuclear energy to meet
such objectives, recognizing the safety, reliability, and economic advantages
nuclear power presents. Supply-demand fundamentals continue to strengthen with
the supply gap widening as secondary inventories decline while projections are
for sustained growth of nuclear power through traditional uses and the
construction of advanced reactors of various types. Additionally, projections
for sustained growth of nuclear power globally in coming years has incentivized
investment in the fuel cycle industries, through legislative programs and
private and industrial capital.




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In the U.S., in late 2020, Congress approved the appropriation of $75 million
for the establishment of a new national uranium reserve through which the
Department of Energy ("DOE"), National Nuclear Security Administration ("NNSA")
is to purchase domestically produced uranium. A 2021 DOE request for information
was issued for stakeholders to respond with data and input to support and define
the establishment of the uranium reserve. Subsequently, in June 2022, NNSA
issued a solicitation for proposals to purchase from uranium producers qualified
under the solicitation up to one million pounds U3O8. Bid proposals are due to
DOE NNSA on or before August 1, 2022. We have submitted a bid proposal to the
NNSA. There can be no assurance that the Company will be a successful bidder.



The Biden Administration continues to prioritize climate change initiatives and
its leaders have expressed an understanding that clean, carbon-free nuclear
energy must be an integral part of those initiatives. Several pieces of federal
legislation have been proposed which will support nuclear energy and the nuclear
fuel cycle industries. We continue to see signs of increased bipartisan support
for nuclear energy in Washington. Also, it appears that the U.S. utilities are
beginning to understand the need for supply diversity in light of supply
disruptions, general market conditions and geopolitical realities.



The Infrastructure Investment and Jobs Act ("Act"), signed into law in November
2021, contains several provisions supporting nuclear energy including, most
importantly, a $6 billion Civil Nuclear Credit Program designed to prevent the
premature closure of nuclear power plants. Nuclear power plants utilizing
domestically sourced uranium products will be given priority funding under this
program. The DOE issued guidance for submission of certifications and bids for
the Program with submissions due in September 2022.



The Act also supports the Advanced Reactor Demonstration Program, the
demonstration of clean hydrogen hubs including hubs powered by nuclear, advanced
reactor siting feasibility studies for isolated communities and other nuclear
based programs. When successfully implemented, the Act will extend the life of
existing reactors and potentially expand uses for nuclear technology, both of
which will result in stronger demand for uranium-based fuel.



In April 2022, Senator Manchin (D-W.Va.), introduced a bipartisan bill titled
The International Nuclear Energy Act of 2022 with the stated goal of
establishing an Executive Office for Nuclear Energy Policy to promote engagement
with ally and partner nations to develop a civil nuclear export strategy and
offset China and Russia's growing influence on international nuclear energy
development. Also, numerous states in the U.S. have passed legislation
supporting nuclear power.



Globally, several countries including China, Japan, France and England are
ramping up power plant construction, reactor life extensions and/or research
activities. As a result of these and other developments in the U.S. and abroad,
uranium pricing has increased significantly over the past year. Spot market
prices continue to experience volatility, but through Q2 per-pound prices
continued in the upper $40s and $50s. While generally lagging behind spot price
increases, term pricing has also continued to strengthen.



Although it is likely that all uranium producers returning to production may
face challenges in today's inflationary and supply-chain driven world, we
believe that the steps we have taken throughout the past several years to
optimize our processes in both the Lost Creek wellfield and plant, conduct
routine maintenance and further cross train our experienced staff will
facilitate an orderly return to production when market conditions warrant. As
described below, our advanced wellfield preparations and research and
development work should assist to streamline the path to full production.




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The short- and long-term worldwide implications of the Russian invasion of
Ukraine are difficult to predict. In addition to the adverse economic and other
effects felt beyond the borders of Ukraine, the war may result in impacts felt
more directly by the nuclear fuel industries and uranium producers specifically.
The imposition of sanctions on Russia by the U.S. and other countries has
resulted in counter measures by Russia and may result in additional counter
sanctions including the possible termination of exports of enriched uranium from
Russia to the U.S. As described above, several pieces of legislation to prohibit
Russian imports of uranium have been introduced in Congress. Russia has
historically and very recently shown its willingness to utilize energy resources
as foreign policy "tools" in its relations with European nations, creating
supply disruptions and leveraging punitive pricing. Consistent with that
practice, Russia may influence Kazakhstan and Uzbekistan to halt uranium exports
to the U.S. or otherwise interfere with the shipments to the U.S. Trade
restrictions related to nuclear fuel, especially in the current market with
limited sources of uranium, could result in a reordering of global supply and
higher sales prices; especially in the short-term. The long-term impact on the
market is equally unpredictable, however. Finland has halted construction of a
reactor project led by Russia and other countries may follow suit. If sufficient
new builds are cancelled, the long-term fuel demand could be adversely impacted.
Conversely, some countries, especially those which are not energy independent,
may find it desirable to move away from imported fossil fuels in favor of
domestic nuclear power.

Mineral Rights and Properties





We have 12 U.S. uranium properties. Ten of our uranium properties are in the
Great Divide Basin, Wyoming, including Lost Creek. Currently, we control nearly
1,800 unpatented mining claims and three State of Wyoming mineral leases for a
total of more than 35,000 acres in the area of the Lost Creek Property,
including the Lost Creek permit area (the "Lost Creek Project"), and certain
adjoining properties referred to as LC East, LC West, LC North, LC South and EN
Project areas (collectively, with the Lost Creek Project, the "Lost Creek
Property"). Our Shirley Basin Project permit area, also in Wyoming, comprises
nearly 1,800 acres of Company-controlled mineral acres.



Lost Creek Property



Lost Creek continues to operate at reduced production levels, which have allowed
us to sustain operating cost reductions at Lost Creek, while continuing to
conduct preventative maintenance and optimize processes in preparation for

ramp
up to full production rates.




An advance development program at Lost Creek was implemented in late 2021, with
the intent to significantly improve our ability to quickly return to production
when ramp-up occurs. Specifically, we commenced a drilling and construction
program to complete the development of the fourth header house in MU2 (HH 2­4).
The header house, and its associated drilling and wellfield development, is
expected to be complete in 2022 and be ready for production. We have ordered all
necessary equipment to construct the fifth header house (HH 2­5) and the
long-lead items for the sixth header house in MU2. We are nearly finished with a
delineation drill program to assist with further wellfield design within MU2.
This includes delineation drilling for HHs 2-4 through 2-9. Together with our
optimization of plant processes, these wellfield programs will significantly
advance our readiness and shorten the time frame to production when ramp-up
occurs.



The first two mine units at Lost Creek (MU1 and MU2) have all appropriate
permits necessary for a return to operations, including new production resulting
from the ongoing MU2 advance development program, when ramp up occurs. We have
received Wyoming Uranium Recovery Program ("URP") approval of the amendment to
the Lost Creek source material license to include recovery from the LC East
Project (HJ and KM horizons) immediately adjacent to the Lost Creek Project and
additional HJ horizons at the Lost Creek Project. Currently, we await only
approval by the Wyoming Department of Environmental Quality, Land Quality
Division ("LQD") of the amendment to the Lost Creek permit to mine adding HJ and
KM horizons at LC East and HJ mine units at Lost Creek. We anticipate the LQD
review will be complete in 2022.




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Shirley Basin Project



Our Shirley Basin Project stands construction ready, having received the source
material license, permit to mine, and aquifer exemption for the project in 2021.
These approvals represent the final major permits required to begin construction
of the Shirley Basin Project. Situated in an historic mining district, the
project has existing access roads, power, waste disposal facility and shop
buildings onsite. Delineation and exploration drilling were completed
historically, and wellfield, pipeline and header house layouts are finalized.
Additional, minor on-the-ground preparations have been completed since the

authorizations were received.



Research and Development



We are actively engaged in several research and development ("R&D") projects
with the overall objective to introduce new methods of cost-effective technology
to our Lost Creek Project, and to Shirley Basin when it is constructed. The
technologic advances are at varying stages of development, although if analyses
continue to be successful, we anticipate that one or more may be implemented in
2022. The development projects include a new material for injection wells and
related well installation process, for which a provisional patent has been filed
with the U.S. Patent Office. During 2022 Q2, we received WDEQ authorization to
proceed with field testing the materials and engineering, and testing has
commenced. Although the technology will not be used for production wells, it
will be used for injection wells which generally represent approximately 65% of
the wells throughout wellfields designed with traditional "five-spot" recovery
patterns. In addition to its relatively low cost and availability of materials
in the midst of current supply chain challenges, the proposed method, if proven
out, is expected to reduce drill rig time on injection wells by about 70% and
reduce environmental impacts. It is anticipated that the cost savings from
reduced drill rig time will be partially offset by the need for additional
in-house labor.



Work continues on engineering of an advanced water treatment system. Beyond
water recycling gains already achieved with our industry-leading Class V
circuit, the new system may allow an additional 90% reduction of disposed water.
This project is in advanced-stage analyses expected to be completed by 2022 Q4.
The value of increasing the rate of recycling is that less wastewater requiring
disposal will be generated, which would allow us to minimize the number of
additional deep disposal wells required at Lost Creek and, in turn, recycle the
majority of that fluid as clean, Class V, injectate. As contemplated, the system
will also provide enhanced water filtration of injection fluids which will allow
for removal of existing and future header house filtration systems.

Casper Operations Headquarters





Work continues on the development and construction of our new operations
headquarters in Casper, Wyoming which will serve our ongoing and future Wyoming
operations as well as mineral exploration and development projects. We are
working with our contractor to advance the completed design work for a
multipurpose building which will allow for centralized construction activities
as well as housing our shared services chemistry laboratory. Construction is
expected to commence summer 2022 and be complete in approximately seven to nine
months. The additional facility will allow us to construct header houses for
Lost Creek and, when built and operational, Shirley Basin. Building, wiring and
automating header houses in Casper, as well as other construction activities,
will provide numerous safety, environmental and financial advantages to our
operations.

Changes in Senior Leadership





On June 2, 2022, Jeffrey T. Klenda, the Company's Chairman and President
retired. John W. Cash, who was named Chief Executive Officer and was appointed
to serve as a member of the Board of Directors effective March 1, 2022, was
elected as a Director at the Company's annual shareholders meeting on June 2,
2022. Thereafter, the Board of Directors named Mr. Cash the Chairman of the
Board. Following Mr. Klenda's retirement, Mr. Cash assumed the role of President
of the Company.




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Results of Operations

Reconciliation of Non-GAAP measures with US GAAP financial statement presentation


The U3O8 and cost per pound measures included in the following table do not have
a standardized meaning within US GAAP or a defined basis of calculation. These
measures are used by management to assess business performance and determine
production and pricing strategies. They may also be used by certain investors to
evaluate performance.

The following table provides information on our production and ending inventory of U3O8 pounds.

U3O8 Production and Ending Inventory





                      Unit       2021 Q3        2021 Q4        2022 Q1         2022 Q2       YTD 2022

U3O8 Production

Pounds captured        lb               70             74             83              83           166
Pounds drummed         lb                -              -              -               -             -
Pounds shipped         lb                -              -              -               -             -
Pounds purchased       lb                -              -              -               -             -

U3O8 Ending
Inventory

Pounds
In-process             lb
inventory                              999          1,069          1,146           1,223
Plant inventory        lb                -              -              -
Conversion
inventory -            lb
produced                           267,049        267,049        267,049         267,049
Conversion
inventory -            lb
purchased                           16,741         16,741         16,741          16,741
                       lb          284,789        284,859        284,936         285,013

Value
In-process
inventory              $000     $        -     $        -     $        -     $         -
Plant inventory        $000     $        -     $        -     $        -     $         -
Conversion
inventory -
produced               $000     $    7,486     $    7,488     $    7,488     $     7,488
Conversion
inventory -
purchased              $000     $      435     $      435     $      435     $       435
                       $000     $    7,921     $    7,923     $    7,923     $     7,923

Cost per Pound
In-process            $/lb
inventory                       $        -     $        -     $        -     $         -
Plant inventory       $/lb      $        -     $        -     $        -     $         -
Conversion
inventory -           $/lb
produced                        $    28.03     $    28.04     $    28.04     $     28.04
Conversion
inventory -           $/lb
purchased                       $    25.98     $    25.98     $    25.98     $     25.98
                      $/lb      $    27.81     $    27.81     $    27.81     $     27.81

Produced
conversion
inventory detail:
Ad valorem and        $/lb
severance tax                   $     0.59     $     0.59     $     0.59     $      0.59
Cash cost             $/lb      $    18.59     $    18.60     $    18.60     $     18.60
Non-cash cost         $/lb      $     8.85     $     8.85     $     8.85     $      8.85
                      $/lb      $    28.03     $    28.04     $    28.04     $     28.04





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During 2020, we intentionally reduced production operations at Lost Creek in
response to the depressed state of the uranium market at that time. As a result,
production rates declined significantly and will remain low until a decision to
ramp up is made. Recent spot price improvements are encouraging and long-term
contract pricing necessary to support a ramp up decision has slowly improved,
although not to a point sufficient to support a decision to ramp up.



As of June 30, 2022, we had approximately 283,790 pounds of U3O8 at the
conversion facility including 267,049 produced pounds at an average cost per
pound of $28.04, and 16,741 purchased pounds at an average cost per pound of
$25.98.

Three and six months ended June 30, 2022, compared to the three and six months ended June 30, 2021

The following table summarizes the results of operations for the three and six months ended June 30, 2022, and 2021:





                                   Three months ended                       Six months ended
                                        June 30,                                June 30,
                              2022         2021       Change        2022          2021         Change

Sales                             19            7          12            19             7           12
Cost of sales                 (1,662 )     (1,835 )       173        (3,384 )      (3,508 )        124
Gross profit (loss)           (1,643 )     (1,828 )       185        (3,365 )      (3,501 )        136

Operating costs               (3,460 )     (2,777 )      (683 )      (6,758 )      (4,589 )     (2,169 )
Loss from operations          (5,103 )     (4,605 )      (498 )     (10,123 )      (8,090 )     (2,033 )

Net interest expense            (163 )       (187 )        24          (337 )        (376 )         39
Warrant mark to market
gain (loss)                    4,888       (2,920 )     7,808         1,915        (6,324 )      8,239
Foreign exchange gain
(loss)                            21          (71 )        92            10          (367 )        377
Other income                       4          904        (900 )       1,254           906          348
Net loss                        (353 )     (6,879 )     6,526        (7,281 )     (14,251 )      6,970

Foreign currency
translation adjustment           158           34         124            50           253         (203 )
Comprehensive loss              (195 )     (6,845 )     6,650        (7,231 )     (13,998 )      6,767

Loss per common share:
Basic                              -        (0.04 )      0.04         (0.03 )       (0.08 )       0.05
Diluted                            -        (0.04 )      0.04         (0.03 )       (0.08 )       0.05




Sales

There were no sales of U3O8 in the first six months of 2022 or 2021. We billed disposal fees of $19 thousand during Q2 2022 and $7 thousand in Q2 2021.





Cost of Sales



Cost of sales per the financial statements includes ad valorem and severance
taxes related to the extraction of uranium, all costs of wellfield and plant
operations including the related depreciation and amortization of capitalized
assets, reclamation, and mineral property costs, plus product distribution
costs. These costs are also used to value inventory. The resulting inventoried
cost per pound is compared to the NRV of the product, which is based on the
estimated sales price of the product, net of any necessary costs to finish the
product. Any inventory value in excess of the NRV is charged to cost of sales in
the financial statements. NRV adjustments, if any, are excluded from the U3O8
cost of sales and U3O8 cost per pound sold figures because they relate to the
pounds of U3O8 in ending inventory and do not relate to the pounds of U3O8

sold
during the period.




In the three and six months ended June 30, 2022, and June 30, 2021, cost of
sales per the financial statements included $1.7 million and $3.4 million for
2022 and $1.8 million and $3.5 million for 2021, respectively, in lower of cost
or NRV adjustments. With production rates held to intentionally lower levels,
virtually all production costs during 2022 and 2021 were charged to cost of

sales as NRV adjustments.




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Gross Profit (Loss)




The gross losses per the financial statements for the three and six months ended
June 30, 2022 were $1.6 million and $3.4 million, respectively. For the three
and six months ended June 30, 2021 were $1.8 million and $3.5 million,
respectively. The losses were composed of NRV adjustments less the disposal

fee
revenue.



Operating Costs

Operating costs include exploration and evaluation expense, development expense, general and administration expense, and accretion expense.

The following table summarizes the operating costs for the three and six months ended June 30, 2022, and 2021:





                               Three months ended                                Six months ended
                                   June 30,                                          June 30,
   Operating
    Costs                2022              2021        Change             

2022              2021       Change

 Exploration
and evaluation             460               693          (233 )             999             1,156         (157 )

 Development             1,328               333           995             1,949               465        1,484
 General and
administration           1,559             1,628           (69 )          

3,585             2,722          863
 Accretion                 113               123           (10 )             225               246          (21 )

                         3,460             2,777           683             6,758             4,589        2,169




Total operating costs of $3.5 million in 2022 Q2 were $0.7 million more than
operating costs in 2021 Q2. Total operating costs for the six months ended June
30, 2022, and June 30, 2021 were $6.8 million and $4.6 million respectively. The
increase was primarily due to the MU2 advance development program being
conducted at Lost Creek and the payment of bonuses in 2022. Bonuses paid were
lower and there were no advance development costs incurred in the first six
months ended June 30, 2021.



Exploration and evaluation expense consists of labor and the associated costs of
the exploration, evaluation, and regulatory departments, as well as land holding
and exploration costs on properties that have not reached the development or
operations stage. Total exploration and evaluation expense decreased
approximately $0.2 million in 2022 Q2 and $0.2 million for the six months ended
June 30, 2022, compared to the comparable periods in 2021. The difference was
due to the transfer of a corporate officer to the general and administrative
department when he assumed the role of Chief Executive Officer and timing
differences related to bonus payments.



Development expense includes costs incurred at the Lost Creek Project not
directly attributable to production activities, including wellfield
construction, drilling, and development costs. It also includes costs associated
with the Shirley Basin Project, which is in a more advanced stageand has also
been classified as a development project. The $1.0 million and $1.5 million
increases in development expense for the three and six months ended
June 30, 2022, respectively, relate to the MU2 advance development program
currently underway. Drilling, drilling supplies, and related service costs
accounted for most of the increase.




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General and administration expense relates to the administration, finance,
investor relations, land, and legal functions, and consists principally of
personnel, facility, and support costs. The $0.9 million increase for the six
months ended June 30, 2022 included an increase in labor related costs ($0.5
million), stock based compensation ($0.2 million), and increased professional
services ($0.1 million).



Other Income and Expenses

Net interest expense remained consistent in 2022.





For the three months and six months ended June 30, 2022, the warrant liability
mark to market gain was $4.9 million and $1.9 million, respectively. As a part
of the September 2018 underwritten public offering, the August 2020 registered
direct offering, and the February 2021 underwritten public offering, we sold
warrants that were priced in U.S. dollars. Because the functional currency of
Ur-Energy Inc. is Canadian dollars, a derivative financial liability was
created. The liability was originally calculated, and is revalued monthly, using
the Black-Scholes model as there is no active market for the warrants. Any gain
or loss resulting from the revaluation of the liability is reflected in other
income and expenses for the period. During Q2 2021, the Company's stock price,
volatility, and other factors used in the Black-Scholes model rose
significantly, leading to a significant increase in the warrant liability and
corresponding mark to market losses. In 2022, these same factors decreased
significantly as well as there being fewer outstanding warrants due to exercises
and expirations which resulted in a gain in 2022.



As a result of the February 2021 underwritten public offering, the Company
received approximately $13.9 million in net proceeds from the offering. Because
the functional currency of the Ur­Energy Inc. entity is Canadian dollars, the
entity's USD bank account is revalued into Canadian dollars and any gain or loss
resulting from changes in the currency rates is reflected in other income and
expenses for the period. For the six months ended June 30, 2021, the average USD
balance in the entity's bank accounts was substantially higher and resulted in a
loss from the change in foreign exchange rates. For the six months ended June
30, 2022, there was substantial volatility in the exchange rate and resulted in
a gain from the change in foreign exchange rates.



During March 2022, we sold a royalty interest related to Strata Energy's Lance
Uranium ISR Project for $1.3 million. There were no assets related to the
royalty on our balance sheet therefore the entire amount was recognized as

other
income.

Earnings (loss) per Common Share


The basic and diluted losses per common share for the three and six months ended
June 30, 2022, was nil and $0.03, respectively. For the three and six months
ended June 30, 2021, the loss per share was $0.04 and $0.08, respectively. The
diluted loss per common share is equal to the basic loss per common share due to
the anti-dilutive effect of all convertible securities in periods of loss.

Liquidity and Capital Resources

Cash, cash equivalents, and restricted cash decreased from the December 31, 2021, balance of $54.2 million to $51.3 million as of June 30, 2022. Cash resources consist of Canadian and U.S. dollar denominated deposit and money market accounts, and U.S. treasury bills. During the six months ended June 30, 2022, we used $6.4 million for operating activities, had minimal investing activities, and generated $3.7 million from financing activities.






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Operating activities used $6.4 million of cash for the six months ended June 30,
2022. We spent $1.9 million on production related cash costs and operating costs
consumed $5.8 million of cash. This was partially offset by the $1.3 million
received from the sale of the royalty interest.

Investing activities used less than $0.1 million during the period.

Financing activities provided $3.7 million of cash in 2022. We received net proceeds of $3.3 million from the sale of common shares through our At Market Facility and $0.4 million from the exercise of warrants and stock options.





Wyoming State Bond Loan




On October 23, 2013, we closed a $34.0 million Sweetwater County, State of
Wyoming, Taxable Industrial Development Revenue Bond financing program loan
("State Bond Loan"). The State Bond Loan calls for payments of interest at a
fixed rate of 5.75% per annum on a quarterly basis, which commenced January 1,
2014. The principal was to be payable in 28 quarterly installments, which
commenced January 1, 2015. The State Bond Loan is secured by all the assets at
the Lost Creek Project. As of June 30, 2022, the balance of the State Bond

Loan
was $12.4 million.



On October 1, 2019, the Sweetwater County Commissioners and the State of Wyoming
approved an eighteen-month deferral of principal payments beginning October 1,
2019. On October 6, 2020, the State Bond Loan was again modified to defer
principal payments for an additional eighteen months. Quarterly principal
payments are scheduled to resume on October 1, 2022, and the last payment will
be due on October 1, 2024.

Universal Shelf Registration and At Market Facility


On May 15, 2020, we filed a universal shelf registration statement on Form S-3
with the SEC through which we may offer and sell, from time to time, in one or
more offerings, at prices and terms to be determined, up to $100 million of our
Common Shares, warrants to purchase our Common Shares, our senior and
subordinated debt securities, and rights to purchase our Common Shares and/or
senior and subordinated debt securities. The registration statement became
effective May 27, 2020, for a three-year period.



On May 29, 2020, we entered into an At Market Issuance Sales Agreement (the
"Sales Agreement") with B. Riley Securities, Inc. ("B. Riley Securities"),
relating to our Common Shares. On June 7, 2021, we amended and restated the
Sales Agreement to include Cantor Fitzgerald & Co. ("Cantor," and together with
B. Riley Securities, the "Agents") as a co-agent. Under the Sales Agreement, as
amended, we may, from time to time, issue and sell Common Shares at market
prices on the NYSE American or other U.S. market through the agents for
aggregate sales proceeds of up to $50 million.



On November 23, 2021, we filed a new universal shelf registration statement on
Form S-3 with the SEC through which we may offer and sell, from time to time, in
one or more offerings, at prices and terms to be determined, up to $100 million
of our Common Shares, warrants to purchase our Common Shares, our senior and
subordinated debt securities, and rights to purchase our Common Shares and/or
senior and subordinated debt securities. The registration statement became
effective December 17, 2021, for a three-year period.



On December 17, 2021, we entered into an amendment to the Sales Agreement
("Amendment No. 1" and together with the Sales Agreement, the "Amended Sales
Agreement") with the Agents to, among other things, reflect the new registration
statement under which we may sell up to $50 million from time to time through or
to the Agents under the Amended Sales Agreement, in addition to amounts
previously sold under the Sales Agreement. As of August 1, 2022, we have issued
and sold 1,884,309 common shares having aggregate gross proceeds of
approximately $3.3 million since December 17, 2021, under the Amended Sales

Agreement.




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For the three and six months ended June 30, 2022, we utilized the Amended Sales Agreement for gross proceeds of $1.2 million and $3.3 million, respectively.

2021 Underwritten Public Offering


On February 4, 2021, the Company closed a $15.2 million underwritten public
offering of 16,930,530 common shares and accompanying one-half common share
warrants to purchase up to 8,465,265 common shares, at a combined public
offering price of $0.90 per common share and accompanying one-half common share
warrant. The gross proceeds to Ur­Energy from this offering were approximately
$15.2 million. After fees and expenses of $1.3 million, net proceeds to the
Company were approximately $13.9 million.



Liquidity Outlook




As of August 1, 2022, we had $42.2 million of cash and cash equivalents. In
addition to our cash position, our finished, ready-to-sell, conversion facility
inventory, worth approximately $15.7 million at recent spot prices, is
immediately realizable, if necessary. We do not anticipate selling our existing
finished-product inventory in the next 12 months unless it is advantageous

to do
so.



Looking Ahead



The surge in interest by investors, policy- and lawmakers, and climate-change
advocates in all things nuclear continues in 2022. Global recognition of nuclear
energy's role in achieving net-zero carbon emissions continues to be more widely
accepted. Japan, several member nations of the European Union, and the United
Kingdom have all recently made announcements of action plans making nuclear
energy an integral part of the climate change solution. The Biden Administration
also continues to voice support for clean energy and the nuclear industry.



The DOE uranium reserve has moved forward: in June 2022, DOE NNSA issued a
solicitation for proposal to purchase qualified domestically produced uranium.
We have submitted a bid proposal. Although there can be no assurance that the
Company will be a successful bidder, our existing inventory has been classified
as current, reflecting our intention to participate in the bidding process.



The sustained support for nuclear energy has prompted financial funds and
uranium ETFs to purchase uranium inventories thereby supporting the uranium spot
price. It has been a year since the Sprott Physical Uranium Trust ("SPUT") began
its purchases of uranium. SPUT established the means in the equity markets to
raise more than $3 billion for such purchases and now holds more than 57 million
pounds U3O8. While others have established the vehicles by which to make
substantial purchases of uranium, SPUT remains the most prolific purchaser. The
rally in uranium spot prices which began in 2021 continues in 2022, with price
per-pound during the quarter remaining in the upper $40s and lower $50s.
Moreover, nuclear utilities and other purchasers are back in the market,
resulting in some strengthening of term pricing.



Our cash position as of August 1, 2022, is $42.2 million. In addition to our
strong cash position, we have nearly 324,000 pounds of finished, U.S. produced
U3O8 inventory at the conversion facility, worth approximately $15.7 million at
recent spot prices. Our financial position provides us with adequate funds to
maintain and enhance operational readiness at Lost Creek, as well as having
allowed us to preserve our existing inventory to sell into higher prices.



To heighten our readiness to return to production operations at Lost Creek, we
are advancing preparations in the fully permitted MU2 through a drilling and
construction program, which is being supplemented by purchases of mid- and
long-lead time items for additional development in MU2. When the advance work is
complete, Lost Creek operations can increase to full production rates in as
little as six months following a "go" decision.




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We continue to diligently work to optimize processes and refine production
plans, supported by our experienced Lost Creek operational staff, who stand
ready to expand Lost Creek production to an annualized run rate of up to 1.2
million pounds. We are prepared to ramp up and to deliver future Lost Creek
production into new sales contracts. A production ramp up will include further
development work in both of the first two mine units, followed by the ten
additional mining areas as defined in the Lost Creek Technical Report Summary
(March 7, 2022). The Lost Creek facility now has the constructed and licensed
capacity to process up to 2.2 million pounds of U3O8 per year and sufficient
mineral resources to feed the processing plant for many years to come.



We will continue to closely monitor the uranium market, the impact of the
uranium reserve program, and other developments in the markets or from Congress,
which may positively impact the uranium production industry. Until market
conditions signal a decision for the return to production operations, we will
focus on maintaining safe and compliant operations while continuing to enhance
and leverage our operational readiness.

Transactions with Related Parties

There were no reportable transactions with related parties during the quarter.





Proposed Transactions



A non-core, unpermitted, non-operating property held by Pathfinder is presently
considered to be an asset held for sale. The Company has a plan to sell the
asset and is considering an offer consisting of cash and mineral properties. The
asset's mineral property cost is shown in note 5 to the accompanying Interim
Consolidated Financial Statements.



Other than the proposed transaction, as is typical of the mineral exploration,
development, and mining industry, we will consider and review potential merger,
acquisition, investment and venture transactions and opportunities that could
enhance shareholder value. Timely disclosure of such transactions is made as
soon as reportable events arise.

Critical Accounting Policies and Estimates





We have established the existence of uranium resources at the Lost Creek
Property, but because of the unique nature of in situ recovery mines, we have
not established, and have no plans to establish, the existence of proven and
probable reserves at this project. Accordingly, we have adopted an accounting
policy with respect to the nature of items that qualify for capitalization for
in situ U3O8 mining operations to align our policy to the accounting treatment
that has been established as best practice for these types of mining operations.

The development of the wellfield includes injection, production and monitor well drilling and completion, piping within the wellfield and to the processing facility and header houses used to monitor production and disposal wells associated with the operation of the mine. These costs are expensed when incurred.

Mineral Properties

Acquisition costs of mineral properties are capitalized. When production is attained at a property, these costs will be amortized over a period of estimated benefit.

Development costs including, but not limited to, production wells, header houses, piping and power will be expensed as incurred as we have no proven and probable reserves.






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Inventory and Cost of Sales



Our inventories are valued at the lower of cost or net realizable value based on
projected revenues from the sale of that product. We are allocating all costs of
operations of the Lost Creek facility to the inventory valuation at various
stages of production with the exception of wellfield and disposal well costs
which are treated as development expenses when incurred. Depreciation of
facility enclosures, equipment and asset retirement obligations as well as
amortization of the acquisition cost of the related property is also included in
the inventory valuation. We do not allocate any administrative or other overhead
to the cost of the product.

Share-Based Expense and Warrant Liability

We are required to initially record all equity instruments including warrants, restricted share units and stock options at fair value in the financial statements.


Management utilizes the Black-Scholes model to calculate the fair value of the
warrants and stock options at the time they are issued. In addition, the fair
value of derivative warrant liability is recalculated monthly using the
Black-Scholes model with any gain or loss being reflected in the net income for
the period. Use of the Black-Scholes model requires management to make estimates
regarding the expected volatility of the Company's stock over the future life of
the equity instrument, the estimate of the expected life of the equity
instrument and the number of options that are expected to be forfeited.
Determination of these estimates requires significant judgment and requires
management to formulate estimates of future events based on a limited history of
actual results.

Impairment of long-lived assets


Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable.
Management applies significant judgment to assess mineral properties and capital
assets for impairment indicators that could give rise to the requirement to
conduct a formal impairment test. Circumstances that could trigger a review
include, but are not limited to: significant decreases in the market price of
the asset; significant adverse changes in the business climate or legal factors;
significant changes in expected capital, operating, or reclamation costs;
current period cash flow or operating losses combined with a history of losses
or a forecast of continuing losses associated with the use of the asset; and
current expectation that the asset will more likely than not be sold or disposed
of significantly before the end of its estimated useful life. Recoverability of
these assets is measured by comparison of the carrying amounts to the future
undiscounted net cash flows expected to be generated by the assets. An
impairment loss is recognized when the carrying amount is not recoverable and
exceeds fair value.  Management did not identify impairment indicators that
would require a formal impairment test.

Off Balance Sheet Arrangements





We have not entered into any material off balance sheet arrangements such as
guaranteed contracts, contingent interests in assets transferred to
unconsolidated entities, derivative instrument obligations, or with respect to
any obligations under a variable interest entity arrangement.



Outstanding Share Data

As of August 1, 2022, we had outstanding 222,806,028 Common Shares and 9,918,999 options to acquire Common Shares.






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