Ur-Energy Inc.

Ur-Energy Inc.

June 05, 2006 09:05 ET

Ur-Energy Announces NI 43-101 Compliant Resources for Lost Creek Project, Pounds of Uranium Nearly Double

DENVER, COLORADO--(CCNMatthews - June 5, 2006) - Ur-Energy Inc. (TSX:URE)(Ur-Energy) announced results of a NI 43-101 compliant resource estimation that significantly increases the resources on its Lost Creek project in Wyoming from a relevant historic resource of 5.7 million pounds U3O8 (4.6 million tons at an average grade of 0.062% U3O8) to 9.8 million pounds U3O8 of Indicated Resource (8.5 million tons at an average grade of 0.058% U3O8) and 1.1 million pounds U3O8 of Inferred Resource (0.7 million tons at an average grade of 0.076% U3O8). Bill Boberg, President and CEO of Ur-Energy stated: "We are very pleased to be able to increase our NI 43-101 compliant resources from our original historic relevant resource at Lost Creek. We believe that we are the first company to conduct a rigorous confirmation of historic uranium exploration data through drilling and intensive analysis. Our detailed re-evaluation of the historic data is now completed and we have prepared a new resource estimation that is NI 43-101 compliant. In addition, our consultants have conducted a detailed audit of our confirmation drilling program and our resource estimations to assure compliance with NI 43-101."

The following is quoted from a letter dated May 30, 2006 prepared by C. Stewart Wallis of Roscoe Postle Associates Inc. (RPA):

"The current resources at the Lost Creek Property as at May 30, 2006 based on a minimum grade of 0.03% U3O8 and a grade thickness (GT) equal to or greater than 0.3 are reported in the following table. RPA is of the opinion that the classification of resources as stated meets the CIM definitions as adopted by the CIM Council November 14, 2004 as required by National Instrument 43-101 (NI 43-101)."


Classification Tons Average Grade Pounds U3O8
Millions Thickness (Ft) % U3O8 Millions
Indicated 8.5 19.5 0.058 9.8
Inferred 0.7 9.6 0.076 1.1
Number rounded

A total of 576 holes were identified within the current property boundary. These holes contain 628 mineralized intervals equal to or greater than 0.03% U3O8. The majority of the data consist of U3O8 grade estimated from geophysical logs. Chemical assays are used where available (17 holes) representing approximately 4% of the intervals. Grade thickness (GT) values were then calculated for each hole, using a cut-off of 0.03% U3O8. All intercepts below the water table contributed to the total thickness. A 0.3 GT boundary was used to create polygons, from which the area was calculated.

The average of the thickness and GT values for a given polygon were derived using the holes contained within the polygon, and used in the calculation of volume, grade, and tons. A tonnage factor of 16 cu ft/ton was used.

A cut-off grade of 0.03% U3O8 and a grade thickness product (GT) equal to or greater than 0.3 were used to define the mineral resources. This is based on a uranium price of US$40 per pound and estimated operating costs of approximately US$20 per pound.

Classification of the resources was determined by a combination of grade continuity and drill hole spacing, nominally 200 ft centers for indicated resources but several section lines have been drilled off at 50 ft. spacing along the sections.

In addition to the audit of the resource estimations, RPA conducted a review of the disequilibrium studies completed by Ur-Energy to assure that the historic data, consisting of equivalent uranium (eU3O8) values calculated from probe logs would be appropriate for use in the resource estimations. The following is a quote of the RPA discussion of disequilibrium:

"Downhole gamma logging provides equivalent uranium values, usually referred to as equivalent U3O8 (eU3O8). Geophysical logging is considered standard industry practice and the geophysical probes are calibrated using test pits established by the Department of Energy (DOE) in Casper, Wyoming. The database includes 17 holes in the deposit that have been chemically analysed, including the eight holes recently drilled by URE. RPA carried out a limited statistical analysis on the URE drilling comparing 188 chemical assays with the geophysical results and found that the geophysical derived grades are higher at lower grade values, (less than 0.025% U3O8), approximately the same between 0.025% and 0.04% U3O8 and lower for grades greater than 0.04% U3O8. Above a grade of 0.11% U3O8 the discrepancy can be as much as 150%. Geologically the lower grades occur in the tails of the deposit whereas the high grades occur within the nose of the roll front."

"This disequilibrium effect is not unexpected as sandstone uranium deposits are contained within actively flowing groundwater systems. The gamma probe indirectly measures the uranium content by measuring the gamma radiation of its daughter product, Bi-214. This element may be displaced from the original uranium or not yet completely formed in equilibrium. This causes disequilibrium between uranium content as measured by the probe and as measured by chemical assay. Negative disequilibrium results if the uranium has been preferentially leached from the sandstone and positive disequilibrium results if the uranium is less than a million years old and the chemical grade is greater than the gamma equivalent grade. As the tails or back of the roll front are generally below cut-off, the average grade of the deposit as determined by the gamma logs may underestimate the total contained uranium in the deposit. RPA is of the opinion that the eU3O8 values are appropriate for use in the resource estimate."

The company is currently in the process of gathering data for the permitting process as well as preparing to conduct additional drilling. There are no other known material environmental or permitting issues that would affect this estimation of mineral resources.

An NI 43-101 Technical Report will be available for filing within 45 days.

Ur-Energy is a dynamic junior mining company engaged in the identification, acquisition and exploration of uranium properties in Canada and in the United States. Shares of the corporation trade on the Toronto Stock Exchange under the symbol URE. Ur-Energy has its registered corporate office in Ottawa, Canada. The Company's website is at www.ur-energy.com.

The Qualified Person for Ur-Energy Inc., as defined by National Instrument 43-101, is W. William Boberg, President and CEO.

This release contains forward-looking statements regarding capital and processing cost estimates, production rates, amounts, timetables and methods, mining methods, metallurgical recovery rates, government permitting timetables and strategic plans and are based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and other costs varying significantly from estimates, production rates, methods and amounts varying from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in development and other factors. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward looking statements. The forward-looking statements contained herein are made as of the date hereof and we assume no responsibility to update them or revise them to reflect new events or circumstances.

Contact Information