As a general rule, the most successful man in life is the man who has the best information
Ur Energy Inc. has recently announced that they have closed, after a very rigorous State due diligence process, their US$34 million Sweetwater County State of Wyoming Taxable Industrial Revenue Bond. The State Bond Loan calls for payments of interest at a fixed rate of 5.75% per annum on a quarterly basis commencing January 1, 2014. The principal is payable in 28 quarterly installments which do not commence until January 1, 2015. The loan matures in October 2021. The State Bond Loan is secured by the assets of Ur Energy’s Lost Creek Project.
Uranerz Energy Corp., TSX and NYSE MKT – URZ (Frankfurt Stock Exchange - U9E) controls a large strategic land position in the Pumpkin Buttes Uranium Mining District of the central Powder River Basin of Wyoming and has almost completed construction of its first in-situ recovery (ISR) uranium mine .
Ur Energy started their bond application process just a short time - two months - before Uranerz started the ball rolling on their US$20 million bond application. Both applications were very similar and Uranerz’ management is currently working with State administrators to complete the documentation for the closing of their Industrial Development Bond. The loan is expected to carry an annual interest rate of 5.75% and be repayable over seven years. Closing is subject to customary closing conditions and final approval of the State Treasurer and County Commissioners.
Uranerz currently has approximately US$6 million in the treasury, needs $2mm to complete the mine and has a US$6 million note due at the end of 2013.
Let’s crunch some numbers; $6mm in the bank minus $2mm to complete the mine and overhead of $1mm equals $3mm. Receiving the US$20mm bond jumps URZ’s treasury to $23mm, after payback of the $6mm note Uranerz has $17mm, more enough to get to the start of cash flow.