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SEC Company Response from UR-ENERGY INC (URG) (CIK 0001375205) (URG) — Jun 12, 2015

UR-ENERGY INC (URG) (CIK 0001375205)
Date: June 12, 2015 · CIK: 0001375205 · Accession: 0001144204-15-036939

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File numbers found in text: 001-33905

Date
June 12, 2015
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UR-ENERGY INC (URG) (CIK 0001375205)

Letter

VIA EDGAR Office of Beverages, Apparel and Mining Division of Corporation Finance RE: Ur-Energy Inc. Form 10-K for the Fiscal Year ended December 31, 2014 Filed March 2, 2015 File No. 001-33905

Dear Ms. Jenkins:

Ur-Energy Inc. (“Company”) is in receipt of the comment letter from the staff (“Staff”) of the United States Securities and Exchange Commission (“SEC”) dated June 2, 2015 (“SEC Letter”) regarding the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on March 2, 2015. The Company’s responses to the comments are set forth below. For convenience, the comments in the SEC Letter are reproduced below.

Form 10-K for the fiscal year ended December 31, 2014

Our Mineral Properties

Operating Properties, page 11

Comment No. 1: In future filings please provide a brief description of your ISL operation including an overview of your processing operation(s). In your response provide a draft of your proposed future disclosure.

Response to Comment No. 1: In our Form 10-K filed March 2, 2015, we disclose the following under Overview and Corporate Structure (pp 8-9); the placement was chosen because the discussion of in situ recovery is relevant to all of our current and anticipated operations:

“We utilize in situ recovery of the uranium at Lost Creek and will do so at other projects where this is possible. The in situ recovery (ISR) technique is employed in uranium extraction because it allows for a lower cost and effective recovery of roll front mineralization. The in situ technique does not require the installation of tailings facilities or significant surface disturbance. This mining method utilizes injection wells to introduce a mining solution, called lixiviant, into the mineralized zone. The lixiviant is made of natural groundwater fortified with oxygen as an oxidizer, sodium bicarbonate as a complexing agent, and carbon dioxide for pH control. The complexing agent bonds with the uranium to form uranyl carbonate which is highly soluble. The dissolved uranyl carbonate is then recovered through a series of production wells and piped to a processing plant where the uranyl carbonate is removed from the solution using Ion Exchange (IX). The groundwater is re-fortified with the oxidizer and complexing agent and sent back to the wellfield to recover additional uranium. Our Lost Creek processing facility includes all circuits for the production, drying and packaging of uranium yellowcake for delivery into sales.”

Tia L. Jenkins Division of Corporation Finance, SEC June 10, 2015 Page 2

We propose substituting the following expanded discussion, in substantive form, in subsequent Form 10-K filings, and will place the entire discussion under Operating Properties or include a cross-reference directing the reader to its location in the filing:

“We utilize in situ recovery of the uranium at Lost Creek and will do so at other projects where this is possible. The in situ recovery (ISR) technique is employed in uranium extraction because it allows for a lower cost and effective recovery of roll front mineralization. The in situ technique does not require the installation of tailings facilities or significant surface disturbance. This mining method utilizes injection wells to introduce a mining solution, called lixiviant, into the mineralized zone. The lixiviant is made of natural groundwater fortified with oxygen as an oxidizer, sodium bicarbonate as a complexing agent, and carbon dioxide for pH control. The complexing agent bonds with the uranium to form uranyl carbonate, which is highly soluble. The dissolved uranyl carbonate is then recovered through a series of production wells and piped to a processing plant where the uranyl carbonate is removed from the solution using Ion Exchange (IX) and captured on resin contained within the IX columns. The groundwater is re-fortified with the oxidizer and complexing agent and sent back to the wellfield to recover additional uranium. A low-volume bleed is permanently removed from the lixiviant flow. A reverse osmosis (RO) process is available to minimize the waste water stream generated. Brine from the RO process, if used, and excess bleed are disposed of by means of injection into deep disposal wells. Each wellfield is made up of dozens of injection and production wells installed in patterns to optimize the areal sweep of the uranium ore body.

“Our Lost Creek processing facility includes all circuits for the capture, concentration, drying and packaging of uranium yellowcake for delivery into sales. Our processing facility, in addition to the IX circuit, includes dual processing trains with separate elution, precipitation, filter press and drying circuits (this is in contrast to certain other uranium in situ recovery facilities which operate as a capture plant (IX) only, and rely on agreements with other producers for the finishing, drying and packaging of their yellowcake end-product). Additionally, a restoration circuit including a RO unit was installed during initial construction to complete groundwater restoration once mining is complete.

Tia L. Jenkins Division of Corporation Finance, SEC June 10, 2015 Page 3

“The elution circuit (the first step after ion exchange) is utilized to transfer the uranium from the IX resin and concentrate it to the point where it is ready for the next phase of processing. The resulting rich eluate is an aqueous solution containing uranyl carbonate, salt and sodium carbonate and/or sodium bicarbonate. The precipitation circuit follows the elution circuit and removes the carbonate from the concentrated uranium solution and combines the uranium with peroxide to create a yellowcake crystal slurry. Filtration and washing is the next step, in which the slurry is loaded into a filter press where excess contaminants such as chloride are removed and a large portion of the water is removed. The final stage occurs when the dewatered slurry is moved to a yellowcake dryer, which will further reduce the moisture content, yielding the final dried, free-flowing, product. Refined, salable yellowcake is packaged in 55-gallon steel drums.

“The restoration circuit is utilized in the production and post-mining phases of the operation. The RO is initially utilized to minimize the waste water stream generated during production. Once production is complete, the groundwater must be restored to its pre-mining class of use by removing a small portion of the groundwater and disposing of it (commonly known as sweep). Following sweep, the groundwater is treated utilizing RO and re-injecting the clean water. Finally, the groundwater is homogenized and sampled to insure the cleanup is complete, thus ending the mining process.”

*****

Additionally, it may be instructive to understand that our development at Lost Creek is conducted consistent with the practice throughout much of our industry; namely, our exploration and identification of resources is accomplished through analyses of widely-spaced drilling, which is then more densely (but, not closely spaced) drilled out in order to engineer the wellfield patterns for recovery. Finally, individual mine units are drilled out and constructed just prior to mining each unit. As a result of the level of density of drilling at these stages, our technical reports and other disclosure of mineral estimates are stated in terms of Measured, Indicated and Inferred Mineral Resources in accordance with Canadian National Instrument 43-101, and not reserves. Under CIM Definition Standards, and other relevant standards, we are best able to identify ‘reserves’ primarily at or during the time we are mining that area of our property (i.e., not throughout the Lost Creek Project, or the Lost Creek Property which comprises six contiguous projects at various stages of development).

Comment No. 2: Please tell us the capacity and utilization of your processing facility and disclose this in future filings pursuant to the Instructions to Item 102 of Regulation S-K.

Tia L. Jenkins Division of Corporation Finance, SEC June 10, 2015 Page 4

Response to Comment No. 2: The Lost Creek processing facilities capacity is two million pounds per year, of which approximately one million pounds per year could be produced from Lost Creek’s wellfields. Production of refined yellowcake was 547,992 pounds and 131,216 pounds in 2014 and 2013, respectively. Production of refined yellowcake through May 2015 was 292,076 pounds and is projected to be between 750,000 and 850,000 pounds in 2015.

We propose adding the following discussion, in substantive form, prospectively to our future Form 10-K filings:

Our Lost Creek processing facility was constructed during 2012 – 2013, with production operations commencing August 3, 2013. Our first sales were made in December 2013. Nameplate design and NRC-licensed capacity of our Lost Creek processing plant is two million pounds per year, of which approximately one million pounds per year may be produced from our wellfields. The Lost Creek plant and the allocation of resources to mine units and resource areas were designed to generate approximately one million pounds of production per year at certain flow rates and uranium concentrations subject to regulatory and license conditions. Production of refined yellowcake was [TBD] pounds and 547,992 pounds in 2015 and 2014, respectively. The excess capacity in the design of the processing circuits of the plant is intended, first, to facilitate routine (and, non-routine) maintenance on any particular circuit without hindering production operational schedules. The capacity was also designed to permit us to process uranium from other of our mineral projects in proximity to Lost Creek if circumstances warrant in the future (e.g., Shirley Basin Project), or, alternatively to be able to contract to toll mill/process product from other in situ uranium mine sites in the region. This design would permit us to conduct either of these activities while Lost Creek is producing and processing uranium and/or in years following Lost Creek production from wellfields during final restoration activities.”

Comment No. 3: Please tell us your actual leaching and processing recovery factor(s) and include this information in future filings.

Response to Comment No. 3: As is set forth in our various technical reports (NI 43-101) and other disclosures, Ur-Energy and its predecessors at the Lost Creek Project have performed leach testing on various samples from the project. Most recently in 2010, we performed leach testing on samples from the KM Horizon of our project (currently in the permit-licensing stage). Seven samples obtained from one-foot sections of core were tested for mineral recovery using the same test methods as in prior tests from the HJ Horizon (currently licensed for production at Lost Creek, and being recovered in Mine Unit 1). Twenty-five pore volumes of bicarbonate leach solution were passed through the samples. Uranium recovery ranged from 54.1 to 93.0% with an average uranium recovery of 80.6%. These results are similar to earlier leaching and recovery tests conducted in behalf of the Company, which returned results consistently averaging 82 – 83%. We believe these results are consistent with historical industry experience.

Through the first six quarters of production, recoveries from our first mine unit have exceeded our projections. Various analyses have been conducted to better understand what has appeared to be an inconsistency and to reconcile the higher-than-expected recoveries from production operations. These analyses, including detailed remapping of mineralized trends within ten sand horizons and data from an additional 85 closely-spaced wells and core-holes, have resulted in the re-estimation of the mineral resources and the conclusion that it is most appropriate to lower the grade-thickness (GT) cut-offs from 0.30 to 0.20 within the Company’s GT contouring resource estimation technique. The Company has disclosed these changes, and is preparing an updated technical report currently which will be released this month.

Tia L. Jenkins Division of Corporation Finance, SEC June 10, 2015 Page 5

With respect to other aspects of the Lost Creek plant’s performance, plant IX capture efficiency was 94.3% and plant processing efficiency was 98.2% in 2014.

We propose adding the following discussion, in substantive form (and updated to year-end 2015), prospectively:

Ur-Energy occasionally performs leach testing on various samples from the Lost Creek Project. Most recently, in 2010 we performed leach testing on samples from the KM Horizon of our project (currently in the permit-licensing stage). Seven samples obtained from one-foot sections of core were tested for mineral recovery using the same test methods as in prior tests from the HJ Horizon (currently licensed for production at Lost Creek, and being recovered in Mine Unit 1). Twenty-five pore volumes of bicarbonate leach solution were passed through the samples. Uranium recovery ranged from 54.1 to 93.0% with an average uranium recovery of 80.6%. These results are similar to earlier leaching and recovery tests conducted in behalf of the Company, which returned results consistently averaging 82 – 83%. We believe these results are consistent with historical industry experience.

Critical Accounting Policies and Estimates, page 60

Comment No. 4: We note the total capitalized costs of $32.97 million that are classified as Lost Creek enclosures (page 85), and that the estimate life for plant enclosures is 20 years for depreciation purposes (page 79). Please advise us of the following:

(a) Describe to us the nature of the significant components that are included in the enclosures line item of your capital assets.

(b) Given that you have not established proven and probable reserves at Lost Creek, please explain to us why you believe capitalization of these costs was appropriate and cite the authoritative literature that you relied upon to support your accounting treatment. Also explain to us your basis for the 20 year estimate life for the enclosures.

Tia L. Jenkins Division of Corporation Finance, SEC June 10, 2015 Page 6

(c) Finally confirm to us that you will expand your disclosure in future filings to clearly describe your accounting policy for capital assets, including your basis for capitalization in instances where proven and probable reserves have not been established. Please provide your proposed future disclosure in your response.

Response to Comment No. 4 (a): The components of the enclosures are buildings and equipment and these components include the following costs (expressed in 000s of US$):

Construction contract 15,753

Construction materials and other direct expenses 8,692

Processing equipment 2,120

Labor 1,929

Capitalized interest and fees 1,418

Initial chemical load 1,140

Engineering 1,067

Other buildings

Allocated overhead

32,967

*****

Additionally, it may be instructive to understand that:

· The building itself is a designed to house the equipment necessary to gather fluids which have been impregnated with uranium and process and package the mineral into a salable yellowcake form. The building has no economic life or usage beyond the housing of our processing equipment.

· A significant portion of the cost of constructing the building related specifically to the installation of and

Show Raw Text
CORRESP
1
filename1.htm

    Colorado Office
     Wyoming Office

    10758 W. Centennial Rd., Ste. 200
    5880 Enterprise Dr., Ste. 200

    Littleton, CO 80127
     Casper, WY 82609

    Tel: (866) 981-4588
    Tel: (307) 265-2373

    Fax: (720) 981-5643
    Fax: (307) 265-2801

June 12, 2015

VIA EDGAR

Tia L. Jenkins, Senior Assistant Chief Accountant

Office of Beverages, Apparel and Mining

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

 RE: Ur-Energy Inc.

Form 10-K for the Fiscal Year ended December
31, 2014

Filed March 2, 2015

File No. 001-33905

Dear Ms. Jenkins:

Ur-Energy Inc. (“Company”)
is in receipt of the comment letter from the staff (“Staff”) of the United States Securities and Exchange Commission
(“SEC”) dated June 2, 2015 (“SEC Letter”) regarding the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2014 filed with the SEC on March 2, 2015. The Company’s responses to the comments are
set forth below. For convenience, the comments in the SEC Letter are reproduced below.

Form 10-K for the fiscal year ended
December 31, 2014

Our Mineral Properties

Operating Properties, page 11

Comment No. 1: In future
filings please provide a brief description of your ISL operation including an overview of your processing operation(s). In your
response provide a draft of your proposed future disclosure.

Response to Comment No. 1:
In our Form 10-K filed March 2, 2015, we disclose the following under Overview and Corporate Structure (pp 8-9); the placement
was chosen because the discussion of in situ recovery is relevant to all of our current and anticipated operations:

“We utilize in situ recovery
of the uranium at Lost Creek and will do so at other projects where this is possible. The in situ recovery (ISR) technique is employed
in uranium extraction because it allows for a lower cost and effective recovery of roll front mineralization. The in situ technique
does not require the installation of tailings facilities or significant surface disturbance. This mining method utilizes injection
wells to introduce a mining solution, called lixiviant, into the mineralized zone. The lixiviant is made of natural groundwater
fortified with oxygen as an oxidizer, sodium bicarbonate as a complexing agent, and carbon dioxide for pH control. The complexing
agent bonds with the uranium to form uranyl carbonate which is highly soluble. The dissolved uranyl carbonate is then recovered
through a series of production wells and piped to a processing plant where the uranyl carbonate is removed from the solution using
Ion Exchange (IX). The groundwater is re-fortified with the oxidizer and complexing agent and sent back to the wellfield to recover
additional uranium. Our Lost Creek processing facility includes all circuits for the production, drying and packaging of uranium
yellowcake for delivery into sales.”

    Tia L. Jenkins
Division of Corporation Finance, SEC
June 10, 2015
Page 2

We propose substituting the following expanded
discussion, in substantive form, in subsequent Form 10-K filings, and will place the entire discussion under Operating Properties
or include a cross-reference directing the reader to its location in the filing:

“We utilize in situ recovery
of the uranium at Lost Creek and will do so at other projects where this is possible. The in situ recovery (ISR) technique is employed
in uranium extraction because it allows for a lower cost and effective recovery of roll front mineralization. The in situ technique
does not require the installation of tailings facilities or significant surface disturbance. This mining method utilizes injection
wells to introduce a mining solution, called lixiviant, into the mineralized zone. The lixiviant is made of natural groundwater
fortified with oxygen as an oxidizer, sodium bicarbonate as a complexing agent, and carbon dioxide for pH control. The complexing
agent bonds with the uranium to form uranyl carbonate, which is highly soluble. The dissolved uranyl carbonate is then recovered
through a series of production wells and piped to a processing plant where the uranyl carbonate is removed from the solution using
Ion Exchange (IX) and captured on resin contained within the IX columns. The groundwater is re-fortified with the oxidizer and
complexing agent and sent back to the wellfield to recover additional uranium. A low-volume bleed is permanently removed from the
lixiviant flow. A reverse osmosis (RO) process is available to minimize the waste water stream generated. Brine from the RO process,
if used, and excess bleed are disposed of by means of injection into deep disposal wells. Each wellfield is made up of dozens of
injection and production wells installed in patterns to optimize the areal sweep of the uranium ore body.

“Our Lost Creek processing
facility includes all circuits for the capture, concentration, drying and packaging of uranium yellowcake for delivery into sales.
Our processing facility, in addition to the IX circuit, includes dual processing trains with separate elution, precipitation, filter
press and drying circuits (this is in contrast to certain other uranium in situ recovery facilities which operate as a capture
plant (IX) only, and rely on agreements with other producers for the finishing, drying and packaging of their yellowcake end-product).
Additionally, a restoration circuit including a RO unit was installed during initial construction to complete groundwater restoration
once mining is complete.

    Tia L. Jenkins
Division of Corporation Finance, SEC
June 10, 2015
Page 3

“The elution circuit (the
first step after ion exchange) is utilized to transfer the uranium from the IX resin and concentrate it to the point where it is
ready for the next phase of processing. The resulting rich eluate is an aqueous solution containing uranyl carbonate, salt and
sodium carbonate and/or sodium bicarbonate. The precipitation circuit follows the elution circuit and removes the carbonate from
the concentrated uranium solution and combines the uranium with peroxide to create a yellowcake crystal slurry. Filtration and
washing is the next step, in which the slurry is loaded into a filter press where excess contaminants such as chloride are removed
and a large portion of the water is removed. The final stage occurs when the dewatered slurry is moved to a yellowcake dryer, which
will further reduce the moisture content, yielding the final dried, free-flowing, product. Refined, salable yellowcake is packaged
in 55-gallon steel drums.

“The restoration circuit
is utilized in the production and post-mining phases of the operation. The RO is initially utilized to minimize the waste water
stream generated during production. Once production is complete, the groundwater must be restored to its pre-mining class of use
by removing a small portion of the groundwater and disposing of it (commonly known as sweep). Following sweep, the groundwater
is treated utilizing RO and re-injecting the clean water. Finally, the groundwater is homogenized and sampled to insure the cleanup
is complete, thus ending the mining process.”

*****

Additionally, it may be instructive to
understand that our development at Lost Creek is conducted consistent with the practice throughout much of our industry; namely,
our exploration and identification of resources is accomplished through analyses of widely-spaced drilling, which is then more
densely (but, not closely spaced) drilled out in order to engineer the wellfield patterns for recovery. Finally, individual mine
units are drilled out and constructed just prior to mining each unit. As a result of the level of density of drilling at these
stages, our technical reports and other disclosure of mineral estimates are stated in terms of Measured, Indicated and Inferred
Mineral Resources in accordance with Canadian National Instrument 43-101, and not reserves. Under CIM Definition Standards, and
other relevant standards, we are best able to identify ‘reserves’ primarily at or during the time we are mining that
area of our property (i.e., not throughout the Lost Creek Project, or the Lost Creek Property which comprises six contiguous projects
at various stages of development).

Comment No. 2: Please
tell us the capacity and utilization of your processing facility and disclose this in future filings pursuant to the Instructions
to Item 102 of Regulation S-K.

    Tia L. Jenkins
Division of Corporation Finance, SEC
June 10, 2015
Page 4

Response to Comment No. 2: The
Lost Creek processing facilities capacity is two million pounds per year, of which approximately one million pounds per year could
be produced from Lost Creek’s wellfields. Production of refined yellowcake was 547,992 pounds and 131,216 pounds in 2014
and 2013, respectively. Production of refined yellowcake through May 2015 was 292,076 pounds and is projected to be between 750,000
and 850,000 pounds in 2015.

We propose adding the following discussion,
in substantive form, prospectively to our future Form 10-K filings:

Our Lost Creek processing facility
was constructed during 2012 – 2013, with production operations commencing August 3, 2013. Our first sales were made in December
2013. Nameplate design and NRC-licensed capacity of our Lost Creek processing plant is two million pounds per year, of which approximately
one million pounds per year may be produced from our wellfields. The Lost Creek plant and the allocation of resources to mine units
and resource areas were designed to generate approximately one million pounds of production per year at certain flow rates and
uranium concentrations subject to regulatory and license conditions. Production of refined yellowcake was [TBD] pounds and 547,992
pounds in 2015 and 2014, respectively. The excess capacity in the design of the processing circuits of the plant is intended, first,
to facilitate routine (and, non-routine) maintenance on any particular circuit without hindering production operational schedules.
The capacity was also designed to permit us to process uranium from other of our mineral projects in proximity to Lost Creek if
circumstances warrant in the future (e.g., Shirley Basin Project), or, alternatively to be able to contract to toll mill/process
product from other in situ uranium mine sites in the region. This design would permit us to conduct either of these activities
while Lost Creek is producing and processing uranium and/or in years following Lost Creek production from wellfields during final
restoration activities.”

Comment No. 3: Please
tell us your actual leaching and processing recovery factor(s) and include this information in future filings.

Response to Comment No. 3: As
is set forth in our various technical reports (NI 43-101) and other disclosures, Ur-Energy and its predecessors at the Lost Creek
Project have performed leach testing on various samples from the project. Most recently in 2010, we performed leach testing on
samples from the KM Horizon of our project (currently in the permit-licensing stage). Seven samples obtained from one-foot sections
of core were tested for mineral recovery using the same test methods as in prior tests from the HJ Horizon (currently licensed
for production at Lost Creek, and being recovered in Mine Unit 1). Twenty-five pore volumes of bicarbonate leach solution were
passed through the samples. Uranium recovery ranged from 54.1 to 93.0% with an average uranium recovery of 80.6%. These results
are similar to earlier leaching and recovery tests conducted in behalf of the Company, which returned results consistently averaging
82 – 83%. We believe these results are consistent with historical industry experience.

Through the first six quarters of production,
recoveries from our first mine unit have exceeded our projections. Various analyses have been conducted to better understand what
has appeared to be an inconsistency and to reconcile the higher-than-expected recoveries from production operations. These analyses,
including detailed remapping of mineralized trends within ten sand horizons and data from an additional 85 closely-spaced wells
and core-holes, have resulted in the re-estimation of the mineral resources and the conclusion that it is most appropriate to lower
the grade-thickness (GT) cut-offs from 0.30 to 0.20 within the Company’s GT contouring resource estimation technique. The
Company has disclosed these changes, and is preparing an updated technical report currently which will be released this month.

    Tia L. Jenkins
Division of Corporation Finance, SEC
June 10, 2015
Page 5

With respect to other aspects of the Lost
Creek plant’s performance, plant IX capture efficiency was 94.3% and plant processing efficiency was 98.2% in 2014.

We propose adding the following discussion,
in substantive form (and updated to year-end 2015), prospectively:

Ur-Energy occasionally performs leach
testing on various samples from the Lost Creek Project. Most recently, in 2010 we performed leach testing on samples from the KM
Horizon of our project (currently in the permit-licensing stage). Seven samples obtained from one-foot sections of core were tested
for mineral recovery using the same test methods as in prior tests from the HJ Horizon (currently licensed for production at Lost
Creek, and being recovered in Mine Unit 1). Twenty-five pore volumes of bicarbonate leach solution were passed through the samples.
Uranium recovery ranged from 54.1 to 93.0% with an average uranium recovery of 80.6%. These results are similar to earlier leaching
and recovery tests conducted in behalf of the Company, which returned results consistently averaging 82 – 83%. We believe
these results are consistent with historical industry experience.

Critical
Accounting Policies and Estimates, page 60

Comment No. 4: We note
the total capitalized costs of $32.97 million that are classified as Lost Creek enclosures (page 85), and that the estimate life
for plant enclosures is 20 years for depreciation purposes (page 79). Please advise us of the following:

 (a) Describe to us the nature of the significant components that are included in the enclosures
line item of your capital assets.

 (b) Given that you have not established proven and probable reserves at Lost Creek, please explain
to us why you believe capitalization of these costs was appropriate and cite the authoritative literature that you relied upon
to support your accounting treatment. Also explain to us your basis for the 20 year estimate life for the enclosures.

    Tia L. Jenkins
Division of Corporation Finance, SEC
June 10, 2015
Page 6

 (c) Finally confirm to us that you will expand your disclosure in future filings to clearly describe
your accounting policy for capital assets, including your basis for capitalization in instances where proven and probable reserves
have not been established. Please provide your proposed future disclosure in your response.

Response to Comment No. 4 (a): The
components of the enclosures are buildings and equipment and these components include the following costs (expressed in 000s of
US$):

    Construction contract
      15,753

    Construction materials and other direct expenses
      8,692

    Processing equipment
      2,120

    Labor
      1,929

    Capitalized interest and fees
      1,418

    Initial chemical load
      1,140

    Engineering
      1,067

    Other buildings
      127

    Allocated overhead
      721

      32,967

*****

Additionally, it may be instructive to understand that:

 · The building itself is a designed to house the equipment necessary to gather fluids which have
been impregnated with uranium and process and package the mineral into a salable yellowcake form. The building has no economic
life or usage beyond the housing of our processing equipment.

 · A significant portion of the cost of constructing the building related specifically to the installation
of and