Ur-Energy Inc.

Ur-Energy Inc.

June 06, 2006 09:22 ET

Ur-Energy Inc./Resources at Lost Soldier Project: NI 43-101 Compliant Resource Estimation

DENVER, COLORADO--(CCNMatthews - June 6, 2006) - Ur-Energy Inc. (TSX:URE) (Ur-Energy) announced the completion of a NI 43-101 compliant resource estimation that establishes the resources on its Lost Soldier project in Wyoming from a relevant historic indicated and inferred resource of 10 million pounds U3O8 to 12.2 million pounds U3O8 of NI 43-101 compliant Measured and Indicated Resources (comprised of 9.4 million tons at an average grade of 0.0.65% U3O8) with an additional NI 43-101 Inferred Resource of 1.8 million pounds U3O8 (comprised of 1.6 million tons at an average grade of 0.055% U3O8).

Bill Boberg, President and CEO of Ur-Energy stated: "We are very pleased to be able to establish our NI 43-101 compliant resources at Lost Soldier based on our thorough re-evaluation of the historic resource plus additional drilling that confirmed the previous results. As with our Lost Creek Project work we believe that we are the first company to conduct a rigorous confirmation of historic uranium exploration data through drilling and intensive analysis. Our consultants have conducted a detailed audit of our confirmation drilling program and our resource estimation methodology 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 mineral resources at the Lost Soldier 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) for current mineral resources."


Classification Tons Average Grade Pounds U3O8
(Millions) Thickness (Ft) % U3O8 (Millions)

Measured 3.9 20.1 0.064 5.0
Indicated 5.5 17.1 0.065 7.2
TOTAL M&I 9.4 17.2 0.065 12.2
Inferred 1.6 14.5 0.055 1.8
Numbers rounded

"Mineralized drill holes were compiled in an Excel database. A total of 3,760 holes within the current property boundary contain mineralized intervals greater than 0.03% U3O8 of which 1,933 holes are used in the resource estimate. The majority of the data consist of U3O8 grade estimated from geophysical logs. Chemical assays are used where available representing approximately 2% of the intervals. Grade thickness (GT) values were then calculated for each hole, using a cut-off of 0.03% U3O8. All intervals above the cutoff were summed to provide a total interval thickness in each hole. Only intercepts deeper than 100 ft. contributed to the total thickness. A 0.3 GT boundary was used to create polygons, from which the area was measured. One hundred and fifty (150) holes within this GT boundary but with a GT value below the cutoff of 0.3 were excluded from the resource estimate."

"The average of the thickness and GT values for a given polygon were derived using the grade 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. There are also 237 holes above cutoff that lie outside the resource boundaries and were not included in the estimate. Further drilling is warranted to delineate additional resources in these areas."

"RPA reviewed selective geophysical drill logs, compared the Cameco and Kerr-McGee drill holes, chemical assays and geophysical logs with the twins drilled by URE and considers all of the drill hole data appropriate for use in a resource estimate."

"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 50 ft centres for measured resources, 100 ft centers for indicated and up to 200 feet for inferred resources."

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 US Department of Energy (DOE) in Casper, WY. The database includes 38 holes that have been chemically analysed, including the five holes recently drilled by URE. RPA carried out a limited statistical analysis on the URE drilling comparing 100 chemical assays with the geophysical results and notes that the average values are similar (0.083% U3O8 for chemical assays and 0.078% U3O8 for geophysical probe results) and the correlation coefficient is 0.057. RPA notes that the geophysical probe grades are higher at lower grade values, (less than 0.03% U3O8), approximately the same between 0.03% and 0.15% U3O8 and generally lower for grades greater than 0.15% U3O8, although RPA notes that at the higher grades one probe value was slightly greater than the chemical assay. Above a grade of 0.2% U3O8 the discrepancy can be significant. 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 since 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.

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