Ur-Energy Inc. (URE) Earnings Call Transcript & Summary

Greetings. Welcome to the Annual and Special Meeting of Shareholders of Ur-Energy, Inc. [Operator Instructions] I will now turn the conference over to Ur-Energy Chairman and CEO, Jeffrey Klenda. You may begin.

Great. Thank you very much. Good afternoon, everyone, and welcome to Ur-Energy's Annual and Special Meeting of Shareholders. The first one done virtually, I might add. My name is Jeff Klenda, and I am the Chairman of the Board of Directors and CEO of the company. I'd like to greet everyone who is listening on our telephone lines and webcast today as well. I'd like to introduce the nonmanagement directors of Ur-Energy who are with us by telephone today. They are James Franklin, Bill Boberg, Tom Parker, Gary Huber, Kathy Walker and Rob Chang. I'd like to also introduce the officers of Ur-Energy who are with us by telephone and in person. Roger Smith, our Chief Financial Officer and Chief Administrative Officer; John Cash, our Vice President of Regulatory Affairs; Steve Hatten, our Vice President of Operations; and Penne Goplerud, our General Counsel and Corporate Secretary. Additionally, I'd like to introduce Virginia Schweitzer of Fasken Martineau, our Canadian Legal Counsel; and our audit partner from Pricewaterhousecoopers, Len Wadsworth, both of whom join us by telephone today. I now call to order this Annual and Special Meeting of Shareholders of Ur-Energy, and I'm pleased to welcome you to the meeting. At today's meeting, holders of common shares are entitled to be present and to vote. I will be acting as Chairman of the meeting, and Penne Goplerud will act as Secretary. I hereby appoint with your consent, Computershare Investor Services Inc. to act as scrutineer for the meeting. I now table a statutory declaration of Computershare Investor Services, Inc., our transfer agent, certifying the due mailing and notice calling the meeting, the management proxy circular in form of proxy and the annual report, including the audited consolidated financial statements of the corporation for the year ended December 31, 2019. I will dispense with the reading -- with reading the notice calling the meeting. I directed a copy of the statutory declaration certifying the meaning of the aforementioned documents and copies of those documents be kept by the secretary as part of the records of the meeting. I am advised by the Secretary that there is a quorum present. As notice has been duly provided and a quorum of shareholders is present, I declare the meeting to be regularly called and properly constituted for the transaction of business. Before we proceed the business of the meeting, I will ask the secretary to read the customary caution with respect to forward-looking statements. Penne?

Thank you. During this meeting, there may be reference to forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements contain information that is generally stated to be anticipated, expected or projected by Ur-Energy and involves known and unknown risks, uncertainties and other factors that may cause the actual results and performance of Ur-Energy to be materially different from any future results and performance expressed or implied by such forward-looking statements. With regard to forward-looking statements, risk factors and projections, as well as other cautionary notes to U.S. investors, we direct your attention to the legal disclaimers, which are contained in the corporate presentation to be made later in this meeting. The disclaimers apply equally to the oral presentations this afternoon and the corporate PowerPoint presentation. We ask that you read and consider carefully these disclaimers before investing or trading in our shares. As well, the risk factors inherent in the forward-looking statements and projections are set forth and discussed in the corporation's annual report on Form 10-K filed in the United States Securities and Exchange EDGAR system and the Canadian SEDAR system both on February 28, 2020. Ur-Energy undertakes no obligation to update publicly or review any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Thank you, Penne. The Canada Business Corporations Act and bylaws of the corporation entitle any shareholder to request a vote by ballot rather than a show of hands. We will be conducting the voting by ballot on the special matters to be voted upon today. I will ask the secretary to read the scrutineer's report on the attendance and voting by proxy. Penne?

Scrutineer's report shows that there are present at the meeting: 1 registered shareholder representing 1,000 common shares; and there are also present at the meeting 175 proxy holders, representing 83,594,932 common shares for a total representation in person and by proxy of 83,595,932 common shares or 52.09% of the issued common shares of the corporation.

Thank you, Penne. A copy of the audited consolidated financial statements of the corporation for the year ended December 31, 2019, together with the report of the auditors thereon, has been mailed to all shareholders of the corporation. Our CFO, Roger Smith, who is available to answer any questions on the financial statements. As there are no shareholders present, we will not be asking for questions. In view of the need to attend to formal corporate matters, certain shareholders have volunteered to move and second resolutions where required. While this procedure will facilitate the handling of formal matters, it should not discourage any shareholder or proxy holder from speaking on any matter before the meeting. And we have no need to recognize shareholders as there will be no questions. The next item of business is the election of directors. I declare the meeting open for nominations for the election of directors for the ensuing year or until their successors are elected or appointed.

I nominate, Jeffrey T. Klenda; James M. Franklin; W. William Boberg; Thomas H. Parker; Gary C. Huber; Kathy E. Walker; and Rob Chang.

Thank you. As there are no further nominations then, I declare the nominations closed, and it is now in order for someone to move and someone to second a resolution electing the nominated as shareholders of the corporation.

I move that the persons who have been nominated for election as directors are elected directors of the corporation for the ensuing year or until their successors are elected or appointed.

I second the motion.

Thank you very much. I now put the motion to the meeting. All those in favor of the motion, please signify in the usual manner by raising your hand, aye. [Voting]

Any contrary? [Voting]

Great. As there are none, I declare those nominated to have been elected as directors of the corporation for the ensuing year or until their successors are elected or appointed. The next item of business is the appointment of auditors for the current year and authorization for the directors to fix their remuneration. It is now in order for a motion to be made appointing auditors for the current year.

I move that Pricewaterhousecoopers LLP, Chartered Professional Accountants, be appointed auditors of the corporation to hold office until the close of the next Annual Meeting of Shareholders or until their successors are appointed at such remuneration as may be fixed by the directors and the directors are authorized to fix such remuneration.

Thank you. May I have the seconder, please?

I second the motion.

Thank you. A motion has been made and seconded to appoint Pricewaterhousecoopers LLP as the corporation's auditors. Is there any discussion? As there is none. All those in favor of the motion, please signify in the usual manner by raising your hand, aye. [Voting]

Any contrary? [Voting]

Thank you. As there none, that motion is carried. The next item of business is the nonbinding advisory proposal on executive compensation or say-on-pay. For approval, the executive compensation proposal must receive the affirmative vote of a majority of the shares that are represented in person or by proxy at the meeting. The Board of Directors recommends that the shareholders approve this proposal. The vote on the proposal is advisory only and will be taken into consideration by the Board of Directors in establishing executive compensation in the future. Does anyone have any questions concerning this proposal? As there are none, it is therefore now in order for a motion to be made on the advisory nonbinding resolution on executive compensation.

I move that the company's executive compensation be approved.

Thank you. May I have a seconder, please?

I second the motion.

A motion has been made and seconded to put the advisory nonbinding vote on executive compensation to the shareholders. I now put the motion to the meeting. Voting on this resolution will be conducted by ballot. Upon registration, the scrutineer has identified those shareholders and proxy appointees who are eligible to vote on this and our other special matters that has -- and has provided those individuals with a ballot. If you have not registered with the scrutineer, please do so now. Please complete the ballot, mark say-on-pay by indicating a vote for or against the resolution and signing the ballot. We will collect all ballots at the conclusion of ballot votings. The next item of business is the advisory vote on the frequency of the votes on executive compensation or say-when-on-pay. The proposal seeks a vote for every 1 year, 2 years or 3 years or an extension. The vote -- the choice receiving the most votes of the shares that are represented in person or by proxy at the meeting will be deemed to be the preference of the shareholders. The Board of Directors recommends that the shareholders approve annually for the advisory vote on executive compensation on this proposal. The vote on this proposal is advisory only and will be taken into consideration by the Board of Directors in determining the frequency with which they will seek shareholder say-on-pay. Does anyone have any questions concerning the proposal? As they are known, it is therefore now in order for a motion to be made on the advisory nonbinding resolution of the frequency of shareholders say on executive compensation.

I move that the company's executive compensation be put to the shareholders for approval on a preferred frequency of every year, every 2 years, every 3 years or abstain.

Thank you. May I have a seconder, please?

I second the motion.

Thank you. A motion has been made and seconded to put the advisory nonbinding vote on the preferred frequency of shareholder vote on executive compensation to the shareholders. I now put the motion to the meeting. Voting on this resolution, again, will be conducted by ballot. Please complete the ballot marks say-when-on-pay advisory vote by indicating a vote on 1 year, 2 years, 3 years or abstaining and signing your ballot. We will collect all ballots at the conclusion of the balloted voting. The next item of business for consideration at this meeting is the renewal of Ur-Energy Inc. amended and restated stock option plan dated 2005 as amended and to approve and authorize for a period of 3 years, all unallocated options issued pursuant to the plan. The shareholders of the corporation last ratified, confirmed and approved the renewal of the option plan and approved the -- and authorized for a period of 3 years, all unallocated options issued pursuant to the plan in May 2017. The stock option plan is part of the corporation's overall share-based compensation plan for eligible employees, officers and directors of the corporation. The maximum number of common shares available for issuance in aggregate under the stock option plan, together with the corporation's restricted share unit plan, will not exceed 10% of the issued and outstanding shares of the corporation at the time of the grant. A majority of the votes must be cast in favor of the stock option plan resolution. I now ask for a motion in this regard.

I move that the stock option plan resolution as set out in the management proxy circular be approved.

Thank you. May I have a seconder, please?

I second the motion.

Thank you. The resolution has been moved. Are there any questions from the floor? As there are none, I now put the motion to the meeting. Voting on this resolution, again, will be conducted by ballot. Please complete the ballot marked stock option plan resolution by indicating a vote for or against the resolution and signing your ballot. The Scrutineer will now collect all of the ballots, and I would ask everyone to hand all of your ballots to the scrutineer. I don't think that we'll need a few moments. So we should have the -- now have results of that voting.

We do. With respect to the advisory vote on executive compensation on say-on-pay, the proposal has been approved by approximately 86% of the votes cast for the resolution. The advisory vote on executive compensation is approved. With respect to the advisory vote on say-when-on-pay, the proposal has returned with a vote of approximately 96% of the vote cast for 1 year, 1% of the vote cast for 2 years, 2.5% of the votes cast for 3 years and less than 1% of the vote abstaining. The shareholders preference is deemed to be 1 year or for an annual say-on-pay advisory vote. With respect to the stock option plan resolutions, the proposal has been approved by a vote of shareholders of approximately 80% of the votes cast for the resolution. The stock option plan resolution has been approved.

Thank you, Penne. With that, I believe there is no other business for the meeting at this time. And if not, I will entertain a motion to conclude the meeting.

I move that the meeting be concluded.

Thank you. May I have a seconder, please?

I second the motion.

Great. All those in favor of the motion, please signify by raising your hand, aye. [Voting]

Any contrary? [Voting]

None. Okay. Wonderful. Thank you. That motion is carried, and I now declare the formal part of the meeting to be concluded. So with that, what we would like to do now is just move on to our PowerPoint presentation, you should have that up in front of you. Yes? Okay. Good. Ladies and gentlemen, this is certainly a unique year, as I stated from the outset, we are conducting this meeting virtually as is just about every other publicly traded company that's holding their AGMs at this time of the year. So COVID-19 is with us and is something that's on all of our minds as we find ourselves isolating in place, working remotely and being deprived company of friends and family which something -- which we have all become so accustomed to. But with that, I would like to also say that our business, while we continue to run the plant and flow the plant, we have had to make changes and adapt to new COVID-19 rules, just as every other business has, and it's something to keep in mind. And as we move through today's presentation, if there are areas of our company, that, in particular, have been affected by COVID-19, we'll talk about those. We also -- you'll notice we're on the first page. That, of course, is the interior of our Lost Creek production facility. And on the right-hand side, you see our finished product, yellow cake that goes out the door approximately in 875-pound drums of finished product. And when we're selling it at around $50 a pound, each one of those goes out the door at about $43,000, $44,000 a barrel, and that is our for finished product. Next slide here. This page is standard disclosure. We won't read it, but I will be making some forward-looking statements. And as that is the case, I will attempt to point those out each time that I do. So -- but if I miss one, just know that I will from time to time make forward-looking statements. The next slide here is Ur-Energy at a glance. I think this slide does a particularly good job of talking about who we are as a corporation. We now, at the end of March, mark 16 years since the inception of the company. And for a good portion of that time, of course, we were permitting and licensing story. But now having gone into production and beginning production and after commissioning the plant, in 2013, we are now approaching 7 years of consistent production from the Lost Creek facility, having produced more than 2.7 million pounds through Q1 of 2020. We are now controlling production at what we believe to be an appropriate level. And by that, I mean, at a bare minimum. We are still finding ourselves in very, very challenged market conditions. And so until that changes, then we will continue to operate the plant at those -- at a very minimal level. But one thing that has become a reality for us over the course of the last 6, now almost 7 years, is that we have emerged as, we believe, the lowest cost producer outside of the country of Kazakhstan. And that is saying something we have a number of larger competitors that have been in business for much longer than we have. But the fact is that we've been blessed with just a great property in Lost Creek. But one of the other things that, I think, has particularly helped us as a corporation. And has aided in our resiliency going through what has been a difficult time really ever since March 3 -- March 11, 2011, when Fukushima occurred was that we had the foresight, and I commend our Board for this putting long-term contracts in place that have actually served us quite well, and we continue to deliver into those contracts right up to and including last month. So this year, we -- admittedly, we are now running out of those contracts, that it's the end of the contracting cycle. So one of the things that we will be doing is that we will be focusing on securing new contracts before the end of this year. And hopefully, we'll be successful in doing that. We've also been building our inventory at the conversion facility. And recently, because of COVID-19, we have seen a significant drop in primary production, and this has resulted in spot price rising by more than 30%. This is something we're going to talk more about a little bit later, but it is significant and something that needs to be addressed with respect to the company. But right now, with respect to the contracts, they are coming to an end. We delivered into our -- we made our last delivery last month for 2020. We have a couple of small deliveries moving forward in calendar year 2021. And then after that, we're out of contract. But that's not just us. That's everyone else that had contracts, including the largest in our industry Cameco. But when we saw that coming, we looked forward and we saw it back in 2017, we knew we were running out of contracts in 2020 and 2021. And as a result of that, we brought a federal trade action and put that in front of the Department of Commerce in the form of a Section 232 trade action in December of January -- excuse me, in January of 2018. Now that resulted in an investigation by the Department of Commerce, that was reported to the President of the United States. And after his consideration on July 12 last year, the decision was made to take no action at that time, but it did result in the formation of the President's nuclear fuel working group. And that report was finally released on April 23, just last month. And it was -- this is something else that we're going to be talking more about. But what it mandated by presidential memorandum was the rebuilding of the entire nuclear fuel cycle here in the United States. And of course, this is something critical to us. Because over the last couple of years, as we have seen our contracts diminish, one of the things that we focused on is making sure that we maintain our operational readiness. And that means keeping our best people, our most highly skilled people at our processing plant at Lost Creek. The simple fact of the matter is, over the last 4 to 5 years, we've gone from roughly 100 employees to 30 employees. That is how badly we've been decimated as an industry, and I think that's indicative of what's going on in the industry. And so we have to retain these people. They're absolutely critical for us to be able to ramp up, should we get the opportunity to and those contracts would give us the opportunity. On the next page, what we're looking at here is the demand scenario. It's important to remember that nuclear provides 20% of the electricity here in the United States and over 55% of carbon-free emissions worldwide, more than 11%. You can see here that there are more than 450 reactors up and running around the world with 54 under construction right now. And at least half of those will come online in the next 2 years. So the industry, despite all of its challenges, is, in fact, a growth industry. It's only about 3%, but it is, in fact, a growth industry. In 2019 here, last year, the total consumption, total demand globally was 187 million pounds. And as we -- as it stands right now, Cameco is far and away the largest buyer out in the marketplace. One of the things that I would mention here is, I was just reading an article this morning and it was regarding EDF, the large French nuclear entity, and their demand has diminished by 10%, in excess of 10% in the first quarter. I would expect that to be far greater as we get the results from the second quarter. The point being is that COVID-19 will impact our industry, and we will see a reduction in demand as a result of that. But now moving on to the next slide, what you'll be able to see here is that global supply destruction has been even more pronounced. As a matter of fact, over the course of the last, really, 6 weeks or so, we have seen a number of large production facilities close down. Cigar Lake, probably the most notable of those. And we also saw Cameco close their Port Hope conversion facility. This is important for the first time in history, there is no conversion taking place in North America. But just as importantly, if you go back to 2018 and '19, we saw about 30 million pounds of primary production come out of the market. Now in 2020, just over these last 6 weeks, we have lost an additional 46 million pounds of annualized primary production or the equivalent of approximately 35% of total global output. So when you look at the fact that total primary production was 139 million pounds last year, there was a 48 million pound deficit. And according to UX Consulting, in their last report, they stated that they expect the primary production for calendar year 2020 will be no more than 110 million to 120 million pounds So this is going to result in a massive deficit. And the simple fact of the matter is, is that now because of the shutdown of Cigar Lake up in Canada, for the first time in history, there is virtually no production of uranium and no conversion taking place in all of North America, not in the United States, not in Canada. And that is a truly sad state of affairs and one that I hope is not going to last for much longer. And we'll see that there are a number of things in the work and I hope we'll address that. But moving on now to the next slide. This is one that many of you are probably quite familiar with. What this bar graph is depicting so colorfully is the last 20 years of production in the United States. And as you can see, it cuts a pretty pathetic picture as we get down to the far right of the graph. And what we see here now is the very thing that we have feared for so long, and that is that the United States has now become 100% dependent on foreign countries for our nuclear fuel. Virtually, nothing is being created in the United States. Nothing is of U.S. origin. We do have foreign enrichers producing on our soil, but our own -- our lone conversion facility has been shut down. And there are only 2 producers, uranium producers, ourselves and Energy Fuels that are still producing in the United States. And even then that production is anticipated to be negligible. And as you can see, in the red, at the very end of that bar graph, is that in the first quarter of this year, we only produced a little over 8,000 pounds total as in the United States. This is a country that has a fleet of 98 reactors up and running and consumes upwards of 45 million to 50 million pounds every year, and our first quarter production was a little over 8,000 pounds. The simple fact of the matter is that COVID-19 has opened our eyes to a number of problems and specifically with respect to the Chinese. We find ourselves in a position where we are almost entirely dependent on that nation for everything from rare earths to critical minerals, to thousands of different technological components and pharmaceuticals. And now here, you take a look at this, and here we are. We find ourselves in a position where we have put ourselves where we are now 100% dependent on foreign countries for our nuclear fuel. We simply cannot allow nuclear fuel to go the way of rare earths and critical minerals or pharmaceuticals or some of the other products that we have become so dependent on our geostrategic rivals to provide to this country. And that is why we filed Section 232. We saw not only ourselves running out of contracts, but we saw this growing dependency, and we felt that this was something that absolutely had to be addressed. And to make this point even more strongly, I think that picture that you're seeing there is a picture of not only extremely poor energy policy, it is downright dangerous national security policy. Moving forward, what we see now at the federal level here in the United States is, as you can see that slide, a convergence of current market forces. What there are is there are 3 major issues that are being played out right now. And one of those is the Nuclear Fuel Working Group, and we're going to talk about each one of these. So I'm not going to go into a great deal of detail on any one of them right now, but the Nuclear Fuel Working Group has already had a result. The very first one came out more than a month ago, about 1.5 months ago. And that was the announcement that there will be a line item in the fiscal year 2021 budget. That would provide $150 million annually in the DOE's budget for roughly a 10-year period of time for the support of both uranium production and conversion. But in addition to that, the Russian Suspension Agreement. This was put in place early in the 1990s, and it expires at the end of this year but -- and finally, we have the Iran sanctions, which, right now are continued, waivers are continuing that allow the Iranians along with their Russian partners and Chinese partners to continue to ramp up their enrichment activities. And this is becoming a very dangerous situation, one that I don't believe we can continue to extend waivers into for very much longer. So let's talk about each one of these. The first one is the Nuclear Fuel Working Group. Now with the working group here, I think that it's important to understand that this was actually a very holistic report. Remember, it was intended to address the entire nuclear fuel program in the United States. So it's the whole fuel supply. And here, we find that it is recommending that not only will it provide a -- we hope, this has to clear budget and appropriations, but $150 million per year for 10 years for the rebuilding of a National Uranium Reserve. But in addition to that, we have the American assured fuel supply, which will also begin rebuilding. Now this is put in place specifically to provide backup to the commercial domestic utilities, the nuclear power providers here in the United States. And at the present time, there are only 6 reloads remaining in the United States. So what the working -- what with the Nuclear Fuel Working Group report is calling for is an increase by another 24 reloads, and that would be somewhere approximately between 17 million and 19 million pounds additional that would be going into the American Assured Fuel Supply. So in addition to that, it also addresses the converters. This would be a restart of ConverDyn by 2021, restart of domestic enrichment. We now have no enrichment. We do not enrich for our own purposes here in the United States. That means no unobligated material. And what that means is for military use, and that must all be sourced domestically. This is a big issue. So in addition to that, it would support the Department of Commerce efforts in their negotiations with the Russians, which is coming up next, we'll talk about it the Russian Suspension Agreement. And this is calling for not only less material coming in from the Russia, but perhaps even a cap be put on those imports coming in from Russia. But one of the things that I liked in particular about the working group report was that it's calling for a level playing field. Let's face it. This has not only been problematic for us, it's been problematic for our utility customers. They have to compete with wind and solar that are receiving massive tax credits at the federal level. And so that increases their competitiveness while it harms the competitiveness of our customers, the domestic utilities. But the working group also is helping to put in place the ability of the NRC to deny either Russian or Chinese imports if they believe that it's in the best interest of national security to do so. So I think that overall, it covers a great deal of material, and it -- I think that it could serve our purposes very, very well. The problem with it and why we haven't seen a big movement or a sustained movement upward in the price of the stock or in the spot price is because while it was a great report on a macro basis, it kind of -- it lacks specificity. It did not do a good job of defining when these programs would start purchasing, how much -- what the quantities would be and at what prices. So for the investors -- for the investment community, that's less than wanting. So we're waiting to get more from the working group. We are told that we will see that soon. But what is soon to the federal government, what is soon to you and I are, obviously, 2 different things. So we'll see that when it comes out of the Department of Energy. But the Russian Suspension Agreement right now is something that is a point of strong contention. The Russian Suspension Agreement was put in place in 1992 as a result of an antidumping action that was filed by uranium industry at that time. And what that did is that it limited the amount of material that could come in from Russia to 20% of our consumption on an annual basis. And if we were consuming upwards of 45 million to 50 million pounds a year, roughly 8 million to 10 million pounds per year of U308. In 2017, there was a sunset review that was undertaken. But one of the things that is important to point out is that even when we put -- or ideally, we put a new Russian suspension agreement in place that goes out for many years into the future, it does not -- it does not restrict Kazakh material from coming into this country, and the Kazakh material is roughly about 50% owned by the Russians. Now this expires at the end of the year on December 31. And I think that this is something that we're going to have to be -- that we're going to have to fight about. The domestic utilities would like to see a great deal more material coming in from Russia in the form of EUP, enriched uranium product. We obviously would like to see this material and the feedstock that goes into that enriched material be provided by domestic producers, the uranium producers and the converters here in the United States. If we do not -- if we are unsuccessful in restricting the amount that the utilities have entered into contracts for, then that means that, that number would go from 20% of Russian material allowed in the United States, to in some years moving out into the future in excess of 40%, which would obviously would be increasing our dependence on Russia. And this is -- I think that everybody in Congress is beginning to come to the realization, particularly on the heels of COVID-19 and our extreme dependency on the Chinese in so many areas, we're beginning to realize that this kind of dependence is something that we simply cannot have. So if that were to be the case, if the utilities were to get their way on this, it would result in -- it would be an outcome that would be completely contrary to the working group report and what is the mandated position of this administration. So that's certainly something that we're going to oppose, and that is something that we are engaged with commerce on right now, and we will continue to be until there is resolution. But moving on to the next slide on the Iran sanctions. This is something that is -- this is a dangerous topic. We, at the present time, as we all know, the Russians and the Chinese have been assisting, but primarily, the Russians have been assisting the Iranians in building out their civilian nuclear power program. The problem is that the Iranians are also enriching above civilian use and they are enriching to a point where they are creating a stockpile of fissionable material. So we are -- frankly, we find ourselves in a position where on an ongoing basis, the waivers that are in place they are expecting to expire again at the end of this month, they come up for renewal, and they have been consistently renewed. I think that the administration does not like renewing these. I think that it's very dangerous and allowing the Iranians to continue to build their stockpiles of fissionable material. It is speculated that they could have enough fissionable material to create 2 to 3 nuclear weapons by the end of 2020. Obviously, this is something that we can't have. And this administration has come out publicly and stated that they will not allow that to take place. Obviously, the Israelis have a lot to say about this as well. But this is something where we will be -- certainly, we are opposed to the waivers being continued. We'd like to see the sanctions go into place. But I think that we need more engagement by the Israelis on this. But we'll watch and see that it has come up for renewal, the waivers once again at the end of the month, so we'll see whether or not any action is taken. So as you can see, one of the things that I would point out is whether you're talking about the working group, the Russian suspension agreement or the Iranian sanctions, these are all unique to the United States. This does not -- if any one of these can help us and they can change our market tremendously and they could result in the contracts that we need in the -- I hope, before the end of this year. But it will not help foreign entities. The big explorers elsewhere outside of the United States, this is all unique to the United States. And so we are very actively engaged politically in all of these. So let's kind of pivot a little bit here, and let's move on and let's talk a little bit about company specifics and what's going on within our own company. As you all know, last week, as I mentioned from the outset, has been producing for nearly 7 years now. The project has just been a wonderful surprise. The fact is, is that the recovery there has been excellent, as you can see in that. We initially modeled roughly 80% recovery from the Lost Creek project. We have experienced an excess of 92% recovery from our first mine unit there. And as you can see from the map, the green areas, the entire property position inset in blue is the permitted area. And we have -- and so anything that we produce from Lost Creek can be pipelined right into our central processing plant there. And the reason that, that bar chart is down below is because I think it's important to note that we see this as a very scalable project, one where we will continue to grow the resources in the years ahead. Moving on, what we -- in our hopes that we will be securing new contracts, we certainly are assessing what projects we would ramp up production on and what time frames, and I have that coming up on the next slide. But as you can see here across our 3 primary projects, Lost Creek, Shirley Basin and Lost Soldier, we have in excess of 40 million pounds when inferred pounds are also included in this. And so we believe that we are in an excellent position to be able to ramp up production when we have the contracts. And so these are all very well-defined and very advanced projects. Moving on to the following slide. When we do have contracts in place. And as you can see here, this covers years 2014 through the end of last year in 2019. So it leaves off 2013 and also the deliveries that we've made so far in 2020. But we have made consistent -- we've made these deliveries consistently. We've never missed a delivery. And one of the things that I would point out, if you take a look at this slide, I know that it's a little busier this chart. But on the left-hand side, you can see sold from produced or purchased. You can see the number of pounds that we have delivered into the market, and that number below are the purchased pounds and those that are on the same line are the produced pounds. So what we've been doing is that we have been buying pounds in the marketplace and then delivering them into our contracts and preserving our own pounds for future contracts. But when we have produced, we've been able to produce at what are very, very competitive prices. And you can see I would direct your attention to calendar year 2015. That was the year that we produced the most pounds out at Lost Creek. And you can see that we got our C1 cash cost down to $16.27. Now this is a forward-looking statement, but we do believe that if we have the ability -- if we get the contracts, we have the ability to produce up to 1 million pounds a year, we think that we can bring that down still lower and perhaps get down into the $13, $14 range and perhaps even below. It just remains to be seen. But we did have a very good year last year. We delivered 665,000 pounds into the marketplace. That resulted in gross profits of a little over $12 million. And so over the last 3, 4 years with the exception of this last year, we've actually have been cash flow positive. Even last year, that was simply offset by having to revalue our inventories at current market prices. And so that offset our gross profits because now we have to declare those at a lower price. That is a little painful. But when you run out of contracts, that's what happens. But we had good sales last year. And again, we find ourselves in a solid position as a company. Moving forward to the next slide, what we'd like to demonstrate here is that we believe, based on our production that has taken place at Lost Creek, that we will be able to ramp up production and do it very efficiently. You can see here, Lost Creek would be represented in the blue, Shirley Basin in the orange and then Lost Soldier 5 years out in the gray on the right-hand side. But we believe that we're in a position here to be able to ramp position -- to ramp up production very quickly and efficiently. And there are 10 remaining mine units out there at Lost Creek. So we intend to be producing this property for many years to come. And if you take a look at it, this is a real competitive advantage on the slide that you're looking at now. What our ramp-up costs are? This is something that is not really being assets, not being talked about in the marketplace. You see all the federal programs that are at work right now, whether it's the suspension agreement, the working group, whether or not prices might rise from sanctions being put in place on the rent. But if we get the contracts that we need and we're able to ramp up production, we believe that our strategic advantage in the marketplace over any of our peers is that we can ramp up faster and at lower cost than any of our peers. At Lost Creek, we believe that we can ramp to roughly 1 million pound per year run rate and do it in a 6- to 9-month period of time. That's fast. And we can do that for approximately a little over $15 million. And in mining terms, that's not a lot of money. Shirley Basin, little more money there, over $26 million because we're going to have to build a satellite plant. But again, we should be able to do that in roughly a 15- to 18-month period of time and ramp that to about 0.5 million pounds per year run rate and perhaps even a bit higher. That would be a forward-looking statement, of course, because we have not begun -- it was a former producer but we have not produced out of Shirley Basin, but we believe that we're going to be able to ramp it quickly. It's one that's extremely well drilled out and one that is very well defined. So we think we have a pretty good idea of what we have there. Moving on, as we move forward, look, as I mentioned, the thing -- the question that's not being asked is what is going to be the CapEx? For us to get to about a 2 million-pound per year run rate in aggregate, it's going to be about $40 million. And we'll also have ancillary expenses as a corporation. But one of the things that I think we have done a better job than anybody else in our industry and for that matter, many other industries, over the course of the last 9 years since Fukushima is that we have really been able to protect our capital structure from excess dilution. You will notice here on this page, you see 3 of our peers. They have all diluted their shareholders to a far greater extent than we have. And one of the things I would point out here is that this has not been updated for the last couple of financings that have been done by some of our peers. So these numbers are actually -- those bars should be a bit higher for 2 of them and one of them is on the verge of doing another financing. So we're in a position right now where we've been able to protect ourselves because of the contracts we've had, and we've been able to keep our issued and outstanding shares at a fairly stable level. And you take a look now here in the share capital and cash position, we have issued an outstanding shares of approximately $160 million and cash as of the end of the last quarter of 6.5 -- approximately $6.5 million. We have inventory at ConverDyn of just under 270,000 pounds. This is something that -- while the market has moved up and we've gone from a little over $24 a pound to now a little over $34 a pound in the marketplace. So we're certainly happy to see spot prices moving in the right direction. We can sell the inventory anytime we want, but we are obviously hoping that some of the activities of the federal government will result in immediate purchases in the form of providing short-term relief to the uranium producers. And so we absolutely want to hang on to our inventories. We will not be selling them anytime soon. And -- so we hope that we will get the opportunity to sell those at higher prices as we move forward. But you can see that we're also well covered. The guys that cover us in the industry are the ones that understand the industry very well. These days because of how long things have been difficult in the uranium space, it's not the quantity of analysts you have covering you, but rather the quality. And I think we've got the best guys in the industry covering our story. As we move on to the following slide, I think that this gives you an idea of what we see as the catalysts out there in the marketplace. Now with respect to supply demand, we've been waiting for years for the supply-demand fundamentals to reassert themselves in the marketplace. And so it's been actually kind of gratifying now that when you take a look at the World Nuclear Association and even entities like Ux Consulting, they're calling for higher demand and higher prices in virtually all scenarios moving forward for the next several years. And that's something nice to see. There are, as we noted on the demand slide, 54 reactors under construction. So that's going to increase demand, and half of those will come online in the next 2 years. But the other area that I think is important to focus on is that the small modular reactors and the micro reactors will be a big part of our industry by the middle of the decade, and that will result in a significant increase in demand for both the small modulars and the micro reactors. And of course, we've seen roughly 35% of supply come out of the market over -- in just the last 6 weeks or so. Under current market forces, look, there's no ignoring COVID-19. The fact is yes, while this has pushed spot prices higher, nobody is going to be entering into long-term contracts at $34 a pound or $37 a pound. It simply won't happen. We are not economic there. Nobody is economic there. I don't -- I'm not sure that the Kazakhs would be economic at those prices. So what we see here is we will continue to contend with the pandemic, and it will be interesting to see how much demand has come out of the market when we see the second quarter numbers come in because that will be a full quarter under COVID-19, and we'll see what that has done to the demand scenario. We know what it's done in oil and gas, it will remain to be seen what it's done for electricity consumption. Cameco remains the primary buyer in the marketplace. The Nuclear Fuel Working Group, this has been a market for us and that we expect to get more color on the report any time now in terms of what type of short-term relief they might be willing to provide to the domestic producers, and we would hope that, that would be in the form of buying our inventories from us that something above current market prices. We simply don't know whether or not that will happen. But then with the expiration of the Russian Suspension Agreement, this is also something that could result in contracts for us. And I think that this is very important. Because if you really want to finance the company effectively and efficiently and at the lowest cost possible, we need contracts in place. And of course, the geopolitical risks are always with us. We talked about the Iran sanctions. This is a big problem. If we are not careful. And if we do not put those sanctions back in place, that's in the near term, then we risk the Iranians getting the bomb and destabilizing the Middle East. That's going to change everybody's world. That won't just change the Middle East. But in addition to that, we face uncertainty around the globe, whether it's South China Sea in various areas where we come into conflict. But then in addition to that, with the Russian Suspension Agreement, we had this dependence has been -- that has been developed over that last 28 year period of time. But it's not just the Russians, it's the Kazakhs, it's also the Uzbeks and we have simply got to break this dependency if we're going to function as a company. Finally, I'd like to just leave you with what we believe are the positive takeaways from this, and that is that we do have solid runway. We've gone through this internally. Roger is kind enough to provide us with an update on a regular basis as to how far we believe that our resources will carry us. We had a good year last year, as I mentioned, over $32 million in gross revenues that resulted in over $12 million in profits, we had cash resources at the end of the last quarter. We did restructure our industrial bond -- revenue bond with the state of Wyoming to where we are making interest payments only. That is helping us a great deal in extending that runway, and we do have inventory at the converter right now and we hope we're going to be able to sell as we move into the second half of 2020 here. But more recently, we were able to obtain just under $900,000 under the SBA payroll protection program (sic) [Paycheck Protection Program]. And this is something that has become a bit controversial, if you will. It's -- I'm sure we're all well aware of the problems that the program has seen in which we've had some very large, very well-funded, well-known entities that have taken very large sums of money from the PPP loan program and basically gave those back. One of them being Harvard University that received $65 million, but had an endowment of $43 billion that -- and so obviously, for an entity like that to take those loans is completely inappropriate. But I would suggest this, that while we are a public company, technically, as I mentioned earlier, when you take a look at what our funding options are, the state has the note on our industrial -- with the industrial revenue bond on our production property at Lost Creek. The capital markets remain challenged, although I think they're opening up. And I think that there's some more -- there's renewed optimism now with the spot price beginning to rise. So that's a positive. But until we have contracts, and this is the thing that I would stress, until we have contracts, we'll have to rely on the resources we have, the cash that we came into the year with, the revenues that we'll generate from the last remaining contractual sales and then ultimately, the sale of those -- of that inventory at a higher price. So we are a company that has, quite candidly, like everyone else in our industry struggled to make sure that we can maintain our operational force. We -- as I mentioned, lost 70% of our workforce over the last 5 years, and we can't get any smaller. I think that this type of a loan and this stimulus package was designed for a company just like ours. And I think that we are exactly the right type of company to take advantage of this. The legitimate need is there. It is being used for the right purpose to preserve a very highly technical and experienced workforce that we simply -- if we lose them, we simply cannot replace them. That's critical, and we're in a critical industry. So for us to receive that -- now despite the fact that we are a publicly traded company is 100% appropriate, and we are very thankful for it and grateful to the SBA that we were able to receive those funds, and it gives us just that much longer runway and where we are now able to retain our critical personnel. But beyond that, as I mentioned, our contracts are diminishing, but we have used purchase pounds to make those deliveries. Now we'll have only 2 remaining next year. But we have no one can take away from us is that we are one of the lowest cost producers in the world. And I think that the important thing to remember with respect to our story, your story as a shareholder of this company is that when we finally do get those contracts and things do turn around in this industry, we're not going to stay down forever. This industry is absolutely too critical. We believe that we're going to be in a position to be able to ramp up faster, at lower cost and at less damage in the form of dilution to our shareholders than any other company out there. So we believe that we are strategically positioned to be able to respond when the market does turn around, and we believe that, that is imminent, and we're going to see that before the end of the year. And just I'd like to close with the comments. I receive correspondences every week from shareholders that have been with us for many, many years. And while some of them offer constructive criticism, others have just are words of encouragement and gratitude that we continue to fight this battle and do it as ably and competently as our management staff has been able to over the last 9 years. And I'd just like to publicly say thank you to all of those people who offer all of those kind words. And if we have our way and we get a few things going our way here in 2020, we believe that, that long patience and endurance by our shareholders will be rewarded. So thank you very much, and we'll be back again next year, and I hope that it won't be virtually, so we'll see some of you in person. Thank you very much. That concludes our meeting for today.

Ladies and gentlemen, this does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.