Ur-Energy’s 2024 Results Highlight Growth Amid Profitability Struggles

Ur-Energy Inc. (NYSE American: URG) reported a challenging 2024 fiscal year marked by soaring production costs and narrowing margins, despite significant progress in production volumes and operational expansion. The company’s year-end results underscore the tension between its ambitious growth strategy and the economic headwinds facing uranium producers, particularly as it prepares to launch its flagship Shirley Basin project.

Financial Performance: Costs Outpace Revenues

Ur-Energy’s 2024 net loss widened to $53.2 million ($0.17 per share), more than doubling the $30.7 million loss reported in 2023. The stark deterioration stemmed from a dramatic inversion of its cost-to-revenue equation. The average cost per pound sold jumped to $64.34, more than double the 2023 level of $30.99, while the average sales price per pound dipped to $58.15, resulting in a $6.19 per-pound loss—a sharp reversal from the $30.90 per-pound profit in 2023. Gross losses swelled to $8.97 million, driven by $6 million in net realizable value (NRV) adjustments, including write-downs on non-produced inventory.

The company’s decision to sell 300,000 pounds of non-produced U3O8—purchased or borrowed at an average cost of $75.87 per pound—exacerbated losses, contributing a $20.87 per-pound deficit on those units. Even produced uranium delivered only a modest $10.12 per-pound profit, highlighting the strain of ramp-up costs at its Lost Creek mine.

Operational Growth and Capacity Expansion

Despite the financial struggles, Ur-Energy achieved notable operational milestones. Production at Lost Creek surged 157% year-over-year, with U3O8 captured reaching 265,746 pounds in 2024. Drummed production hit 249,209 pounds, signaling progress toward steady-state operations. However, higher-than-anticipated costs during the mine’s ramp-up phase—particularly at lower production levels—pressed margins.

The company also advanced its Shirley Basin project, a cornerstone of its long-term growth strategy. Six new header houses were added at Lost Creek in 2024, with two additional units operational by early 2025. At Shirley Basin, construction remains on track, with modular offices expected by Q3 2025, earthwork nearing completion, and wellfield development underway. Once online in early 2026, Shirley Basin will boost annual production capacity to 2.2 million pounds U3O8, positioning Ur-Energy as a mid-tier U.S. producer.

Sales Agreements and Liquidity Buffers

Ur-Energy’s seven long-term sales agreements provide a critical stabilizing force. These contracts, requiring annual deliveries of 440,000–1.3 million pounds U3O8 through 2030, include price escalation clauses designed to improve profitability as costs stabilize. Management emphasized that current production costs remain below contracted price floors, suggesting future upside if operational efficiencies materialize.

Liquidity remains a buffer: Ur-Energy ended 2024 with $76.1 million in cash, up from $59.7 million in 2023, though this dipped slightly to $71.8 million by April 2025. The company deferred 300,000 pounds of 2025 deliveries to 2026, reducing 2025 sales guidance to 440,000 pounds (projected $27.1 million in revenue) but preserving flexibility as it navigates production challenges.

Risks and Challenges

The path forward is fraught with risks. Lost Creek’s transition to steady-state production could take longer than anticipated, prolonging cost pressures. Uranium prices remain volatile, with spot prices hovering near $40/lb—far below the $64/lb production cost for 2024 sales. While long-term contracts offer price protection, near-term cash flow constraints could test the company’s ability to fund Shirley Basin’s $120 million budget.

Geopolitical factors, such as China’s dominance in global uranium consumption and U.S. trade policies, also loom large. Though tariffs haven’t directly impacted Ur-Energy’s operations, broader market disruptions could delay the anticipated uranium price recovery.

Conclusion: A High-Risk, High-Reward Gamble

Ur-Energy’s 2024 results are a mixed bag: production gains and Shirley Basin’s progress offer long-term promise, but current profitability remains elusive. The company’s cash reserves and contractual commitments provide a safety net, but investors must weigh the potential rewards of a U.S. uranium renaissance against the very real risks of prolonged underperformance.

With Shirley Basin’s 2026 start date looming, Ur-Energy’s fate hinges on two critical factors: reducing production costs at Lost Creek and securing higher uranium prices. If it can achieve steady-state efficiency and benefit from rising demand—driven by global energy policy shifts—the company could emerge as a key player in the U.S. uranium market. For now, however, the path to profitability remains narrow, and investors should monitor cost trends and operational milestones closely.