The Lost Creek deposit – 4 miles north of Rio Tinto’s Sweetwater Mill in Wyoming’s Great Divide Basin – is about three miles long with mineralization occurring in five main sandstone horizons extending to 700 feet deep. The Lost Creek area consists of 969 unpatented mining claims and one Wyoming State lease for a total of 20,540 acres.
       Wyoming is the leading producer of uranium in the U.S., hosting four major uranium mining districts that together have produced over 200 million pounds of uranium from sandstone hosted deposits. Wyoming utilizes in-situ recovery methods (ISR) for extracting uranium from underground ore bodies, leaving overlying rock strata and land surfaces intact. Groundwater, charged with oxygen and bicarbonate soda, is injected into the deposit through a series of wells and the uranium bearing solution is then pumped to the surface and piped to the plant for extraction of the uranium from the solution. The resulting solution, now barren of uranium, is then refortified with oxygen and re-injected into the ore body. The uranium slurry is processed and dried into U3O8 or “yellowcake” and packaged for transport. This process continues until uranium levels in the production fluid drop to a point where recovery is no longer economical.
       The Lost Creek deposit contains NI 43-01 compliant indicated resources of 9.8 million pounds of U3O8 at 0.058% and additional inferred resources of 1.1 million pounds of U3O8 at 0.076%.
       In 2008, seven rigs at Lost Creek to drilled 459 holes for a total of 303,040 feet, including delineation drill holes, monitoring wells and exploration drill holes. This aggressive drilling program was to better define the orebody within Mine Unit #1 for wellfield planning.
       The program included installation of 46 monitor wells and two pump test wells for the first proposed mine unit. The wells will be maintained long-term and eventually used for production monitoring. Ten additional regional baseline monitoring wells were installed at the request of the Wyoming Department of Environmental Quality. Two water wells were also completed.
       Ur-Energy also drilled 99 exploration boreholes to depths ranging up to 1200 feet, identifying potential extensions of the main mineral trend to the south and a new roll front system around 850 feet deep – including a drill intercept of 9.5 feet with a Prompt Fission Neutron value of 0.137% pU3O8.
       The Nuclear Regulatory Commission completed its initial Technical Review of the Lost Creek Application for a Source Material License in November. Ur-Energy is reviewing and assembling responsive information as requested.
Production at Lost Soldier Planned Next
       Ur-Energy’s Lost Soldier project, located about 14 miles northeast of Lost Creek, is slated to become the Company’s second production project. Lost Soldier already has 4,000 historic drill holes defining 14 mineralized sandstone units. The property has NI 43-101 compliant, measured resources of 5 million pounds of U3O8 at 0.064%, as well as 7.2 million pounds of U3O8 at 0.065% indicated, and 1.8 million pounds of U3O8 at 0.055% inferred.
       Production of about 1 million pounds of annually is anticipated from Lost Soldier about two years after Lost Creek’s startup. Currently, the Ur-Energy team is performing detailed geologic and engineering evaluations of the Lost Soldier project in preparation for the permitting and licensing applications.

       Early stage exploration drilling of 12 holes for a total of 11,370 feet was completed at the EN project in August and early September. Roll fronts and mineralization were identified in several horizons of sandstones. In addition, over the summer, more than 746 miles of airborne geophysical surveys were completed in Wyoming. The Company put its other U.S. properties, including LC North and North Hadsell projects, on hold to further advance the development of the Lost Creek Project. In September, the Company dropped exploration lands in South Dakota (approximately 72,000 acres) while maintaining in excess of 67,000 acres in Wyoming and Arizona. An in-house team of geologists continues to evaluate the Company’s massive well log and exploration database for generating new exploration targets.
       The Bootheel Project, LLC, in which Target Exploration & Mining Corp. (“Target”) is earning into a 75% interest over a four-year period, now covers a defined area of approximately 10,500 acres. In October, Target confirmed its completion of 93 drill holes for a 50,163 foot drilling program. The purpose of the program was to bring the historic resources into NI 43-101 compliance.
       In Canada, Ur-Energy is focused on finding “unconformity” uranium deposits, a relatively rare and extremely high-grade ore deposit. These deposits, first recognized and discovered in Australia, were later found in Saskatchewan under the Athabasca Basin and in the Thelon Basin in the eastern Arctic. Ur-Energy holds three exploration properties in the Thelon Basin and one in Baker Lake Basin.
       The company’s wholly-owned uranium exploration properties encompass more than 129,000 acres in Canada. Land holdings in the Northwest Territories include the Screech Lake, Gravel Hill and Eyeberry Properties in the Thelon Basin, as well as the Bugs Property in Kivallig region, Baker Lake Basin of Nunavut.
       Several targets were examined and prioritized during the 2008 summer program at the Bugs Project located in the Baker Lake Basin, Nunavut. Radon sampling techniques, prospecting and rock sampling were all utilized. This work, completed in early August, led to interpreted areas of hydrothermal alteration, elevated radioactivity and high radon flux. From late August to mid-September 2008, a total of 2,905 feet of exploration drilling consisting of six drill holes was completed. The program was terminated early due to drilling equipment problems. Results of the program are being evaluated by the Company’s Canadian Exploration office, and drill core assays are pending.
       The Company continues its ongoing discussions with First Nations groups and Aboriginal-owned business corporations to secure an exploration agreement for the Screech Lake Project in the Thelon Basin, Northwest Territories, which would allow the Company to proceed with a re-filing of a drilling proposal.

       Despite recent declines in uranium prices, demand for uranium continues to exceed production. The U.S. alone only produces 8% of the uranium it consumes. Considering that less than 10 companies supply about 80% of the estimated world’s uranium production, and that only eight countries produce almost 60% of that uranium, Ur-Energy will play into a rather rarefied company as it joins the ranks of uranium producers. The mining operation, Boberg says, will be relatively low cost and therefore not be affected by lower uranium prices.
       Ur-Energy also sits at a fortuitous confluence of events – growing demand for uranium in a power-starved world, a healthy bank account, and an anticipated solid and growing cash flow from production. These conditions present intriguing opportunities for Ur-Energy to acquire new uranium properties from underfunded companies struggling to succeed in a down market.
       “We won’t go on a buying spree, but if a really worthwhile opportunity comes up, we’ll definitely take a hard look,” says Boberg.
       Meanwhile, production planning remains on track. Permitting is nearing completion. The final plant design is clearing the way for equipment ordering. Boberg says supply contracts should be finalized in the coming months, the first well field should be operating by Q4 2010, and income will begin filling the company’s coffers. Ur-Energy is also moving forward with “exciting” exploration programs on its multiple properties.
       “We have the money to take us into production,” says Ur-Energy President Bill Boberg. “We have capable and dedicated people with nearly 300 total years of direct uranium experience in all phases from exploration and development to mining. These people make up one of the best uranium exploration and operational staffs that exist in the world today. And in the very near future, we will be producing real product from Lost Creek, at the rate of about 1 million pounds of uranium a year.”