Uranerz Energy Corporation Letter to Shareholders
05 März 2012 - 3:15PM
Marketwired
Development! Uranerz Energy Corporation (TSX:URZ)(NYSE
Amex:URZ)(FRANKFURT:U9E) is now building its first in-situ recovery
("ISR") uranium mine, called the Nichols Ranch ISR Uranium Project,
in the Powder River Basin area of Wyoming, U.S.A. This is an
exciting transition for the Company, on our way to becoming one of
North America's next uranium producers. Our current focus is on the
construction of the central processing plant and installation of
the environmental monitor and production wells for ISR mining. Six
drilling rigs have been engaged for well-field installation. The
Nichols Ranch project will serve as a platform for development of
the Company's other Powder River Basin projects.
ISR is a mining process that uses water wells to inject a
"leaching solution" to dissolve uranium from sandstone uranium
deposits; it is the generally accepted extraction technology used
in the Powder River Basin area of Wyoming (ISR comprised 41% of
world uranium production in 2010). Cameco and Uranium One, two of
the largest ISR uranium mining companies in the world, are
continuing to develop projects adjacent to Uranerz properties in
the Powder River Basin.
Several key milestones were achieved by Uranerz during 2011,
including:
-- the receipt of the Permit to Mine from the Wyoming Department of
Environmental Quality;
-- the closing of a financing (in late 2010) and the exercise of warrants
to bolster the Company's treasury;
-- the receipt of the Source Materials License from the Nuclear Regulatory
Commission;
-- the commencement of construction of the Nichols Ranch ISR Uranium
Project; and
-- the signing of a processing agreement with Cameco, which has allowed us
to reduce capital costs at the Nichols Ranch central processing plant.
Construction has continued throughout the winter, and completion
is expected in the second half of 2012. To date, activities on site
have included:
-- completion of project access roads;
-- completion of the electricity substation;
-- establishment of the water supply;
-- installation of a bulk cement silo and acquisition of ancillary service
equipment;
-- erection of the central processing plant, the site office, laboratory,
and the maintenance buildings;
-- erection of the ion exchange columns and sand filters in the central
processing plant;
-- hiring of new employees for well-field development at Nichols Ranch;
-- purchasing of well-field construction equipment; and
-- installation of 69 monitor wells and 77 production wells.
The Company believes that, notwithstanding the effects of the
March 2011 tsunami in Japan, the long term fundamentals for nuclear
energy remain strong. The demand for uranium far exceeds mined
supply, and nuclear is regarded as a safe, clean and sustainable
energy source. While some European countries have decided to phase
out their nuclear programs, there are currently more nuclear
reactors being built world-wide than are planned for
decommissioning. Most of that demand for new nuclear power plants
comes from emerging markets, especially in Asia, as the living
standards and energy demands of their large populations increase,
slowly catching up with per capita energy use in the United States
and other developed economies.
The United States is the largest market in the world for
uranium; it has the largest nuclear fleet of any country with 104
reactors. U.S. uranium mines produced four million pounds of U3O8
in 2011, but annual uranium consumption far exceeded that, at over
50 million pounds. Those market dynamics have allowed Uranerz to
enter into two long-term uranium sales contracts; one with Exelon
and the second with another of the largest nuclear utilities in the
country for a portion of our planned production. These contracts
include a mix of market-related and fixed-price contracts designed
to let us benefit when prices rise and protect us when prices
decline. They were negotiated in late 2008 and into 2009, when the
long term price of uranium was between $65 and $70 per pound. These
contracts will provide a solid base for future product sales growth
as the Uranerz Powder River Basin projects are developed.
The Company controls a large strategic land position in the
Pumpkin Buttes Uranium Mining District of the central Powder River
Basin of Wyoming, where we are continuing exploration for resource
growth while preparing permit applications for a third mining unit
called Jane Dough.
Uranerz Energy Corporation is looking forward to producing
uranium and generating revenues. We welcome you as shareholders to
participate in the potential rewards of building a successful
uranium company as we progress through this exciting transition for
our Company. For more information, we encourage you to call us at
1-800-689-1659, send an email directly to us at
investor@uranerz.com or visit our web site at www.uranerz.com. In
closing, we would like to thank all our shareholders for their
continued support and contribution towards building a successful
uranium company.
Sincerely,
Dennis L. Higgs, B.Com.
Executive Chairman President
Glenn Catchpole, M.S., P.Eng.
Chief Executive Officer
To view the central processing plant site please visit the
following link: http://media3.marketwire.com/docs/urz305i.pdf.
Contacts: Uranerz Energy Corporation Derek Iwanaka (604)
689-1659 (604) 689-1722 (FAX)investor@uranerz.com
www.uranerz.com