UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
20-F





(Mark
One)





 ̈
            REGISTRATION STATEMENT PURSUANT
      TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
      1934





OR





T
            ANNUAL REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934





For
the fiscal year ended December 31, 2009





OR





 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





OR





 ̈
            SHELL COMPANY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





Date of
event requiring this shell company report...................





For the transition period from
___________________________to _______________________





Commission
file number 001-33905





UR-ENERGY
      INC.(Exact
      name of Registrant as specified in its charter)N/A(Translation
      of Registrant’s name into English)Canada(Jurisdiction
      of incorporation or organization)10758 W. Centennial Road, Suite 200, Littleton,
      Colorado 80127(Address
      of principal executive offices)Roger Smith, 720-981-4588,
      roger.smith@ur-energyusa.com, 10758 W. Centennial Road, Suite 200,
      Littleton, Colorado 80127(Name,
      Telephone, E-mail and/or Facsimile number and Address of Corporation
      Contact Person)












Securities
registered or to be registered pursuant to Section 12(b) of the
Act.





Title of each class
            
            Name of each exchange on which
      registeredCommon
      Shares, no par value
            
            NYSE
      Amex








Securities
registered or to be registered pursuant to Section 12(g) of the
Act.





None(Title
      of Class)





Securities
for which there is a reporting obligation pursuant to Section 15(d) of the
Act.





None(Title
      of Class)





Indicate
the number of outstanding shares of each of the issuer’s classes of capital or
common stock as of the close of the period covered by the annual
report.





93,940,568





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.





 ̈  Yes             T  No





If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.





 ̈  Yes             T  No





Note –
Checking the box above will not relieve any registrant required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from
their obligations under those Sections.





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.





T  Yes              ̈  No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).





 ̈  Yes              ̈  No














Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Securities Exchange Act
of 1934. (Check One):





Large accelerated filer ̈Accelerated
filer ̈Non-accelerated
filerT





Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:





U.S.
      GAAP  ̈
            International
      Financial Reporting Standards as issued by the International Accounting
      Standards Board   ̈
            Other
      T





If
“Other” has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow.





T  Item
17             ̈  Item
18





If this
is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Securities Exchange Act of
1934).





 ̈  Yes            T  No





(APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.





 ̈  Yes              ̈  No










TABLE OF CONTENTS








PART I
            1Introduction
            1Forward-Looking Information
            1Cautionary Note to U.S. Investors – Resource and Reserve
      Estimates
            2Metric/Imperial Conversion Table
            2Item 1.
            Identity of Directors, Senior Management and
      Advisers.
            2Item 2.
            Offer Statistics and Expected Timetable.
            3Item 3.
            Key Information.
            3A.
            
            Selected financial data.
            3Currency and Exchange Rates
            4B.
            
            Capitalization and indebtedness.
            4C.
            
            Reasons for the offer and use of proceeds.
            4D.
            
            Risk factors.
            4Item 4.
            Information on the Corporation.
            9A.
            
            History and development of the Corporation.
            9B.
            
            Business overview.
            12C.
            
            Organizational structure.
            21D.
            
            Property, plants and equipment.
            22Item 4A.
            Unresolved Staff Comments.
            25Item 5.
            Operating and Financial Review and
    Prospects.
            25A.
            
            Operating results.
            25B.
            
            Liquidity and capital resources.
            39C.
            
            Research and development, patents and licenses,
      etc.
            47D.
            
            Trend information.
            47E.
            
            Off-balance sheet arrangements.
            47F.
            
            Tabular disclosure of contractual
    obligations.
            47Item 6.
            Directors, Senior Management and Employees.
            48A.
            
            Directors and senior management.
            48B.
            
            Compensation.
            51C.
            
            Board practices.
            55D.
            
            Employees.
            57E.
            
            Share ownership.
            58Item 7.
            Major Shareholders and Related Party
      Transactions.
            59A.
            
            Major shareholders.
            59B.
            
            Related party transactions.
            59C.
            
            Interests of experts and counsel.
            59Item 8.
            Financial Information.
            60Item 9.
            The Offer and Listing.
            60A.
            
            Offer and listing details.
            60B.
            
            Plan of distribution.
            61C.
            
            Markets.
            61D.
            
            Selling shareholders.
            61E.
            
            Dilution.
            61F.
            
            Expenses of the issue.
            62Item 10.
            Additional Information.
            62A.
            
            Share capital.
            62B.
            
            Memorandum and articles of association.
            62C.
            
            Material contracts.
            64D.
            
            Exchange controls.
            64E.
            
            Taxation.
            65F.
            
            Dividends and paying agents.
            69G.
            
            Statement by experts.
            69





Table of Contents




H.
            
            Documents on display.
            69I.
            
            Subsidiary Information.
            70Item 11.
            Quantitative and Qualitative Disclosures About Market
      Risk.
            70Item 12.
            Description of Securities Other than Equity
      Securities.
            70PART II
            70Item 13.
            Defaults, Dividend Arrearages and
      Delinquencies.
            70Item 14.
            Material Modifications to the Rights of Security Holders and
      Use of Proceeds.
            70Item 15.
            Controls and Procedures.
            70Item 15T.
            Controls and Procedures.
            71Item 16.
            [Reserved]
            71Item 16A.
            Audit Committee Financial Expert.
            71Item 16B.
            Code of Ethics.
            72Item 16C.
            Principal Accountant Fees and Services.
            72Item 16D.
            Exemptions from the Listing Standards for Audit
      Committees.
            72Item 16E.
            Purchases of Equity Securities by the Issuer and Affiliated
      Purchasers.
            72Item 16F.
            Change in Registrant’s Certifying
    Accountant.
            73Item 16G.
            Corporate Governance.
            73PART III
            73Item 17.
            Financial Statements.
            73A.
            
            Consolidated Statements and Other Financial
      Information
            73B.
            
            Significant Changes
            95Item 18.
            Financial Statements.
            95Item 19.
            Exhibits.
            95EXHIBIT INDEX





Table of Contents





PART I





Introduction





Ur-Energy
Inc. is incorporated under the laws of Canada and is referred to in this
document, together with its subsidiaries, as "Ur-Energy" or the "Corporation" or
the “Company”.





The
Corporation’s consolidated financial statements are prepared in accordance with
accounting principles generally accepted in Canada ("Canadian GAAP") and are
presented in Canadian dollars unless otherwise indicated. All references in this
Annual Report on Form 20-F (Annual Information Form) to financial information
concerning the Corporation refer to such information in accordance with Canadian
GAAP and all dollar amounts in this Annual Report on Form 20-F (Annual
Information Form) are in Canadian dollars unless otherwise
indicated.





In this
document, cross-references relevant to the information being requested may be
provided for ease of reference.





Forward-Looking
Information





This
Annual Report on Form 20-F (Annual Information Form) contains "forward-looking
statements" within the meaning of applicable United States and Canadian
securities laws. Shareholders can identify these forward-looking statements by
the use of words such as "expect", "anticipate", "estimate", "believe", "may",
"potential", "intends", "plans" and other similar expressions or statements that
an action, event or result "may", "could" or "should" be taken, occur or be
achieved, or the negative thereof or other similar statements. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors which may cause the Corporation’s actual results, performance or
achievements, or industry results, to be materially different from any future
results, performance, or achievements expressed or implied by these
forward-looking statements. Such statements include, but are not limited to: (i)
the Corporation’s belief that it will have sufficient cash to fund its capital
requirements; (ii)receipt of (and related
timing of) a United States Nuclear Regulatory Commission  Source and
Byproduct Material License; Wyoming Department of Environmental
Quality  Permit and License to Mine and all other necessary permits
related to Lost Creek;(iii) Lost Creek and Lost Soldier will advance to production and the
production timeline at Lost Creek scheduled for early 2011; (iv) production
rates, timetables and methods at Lost Creek and Lost Soldier; (v) the
Corporation’s procurement and construction plans at Lost Creek; (vi) the
licensing process at Lost Soldier; (vii) the timing, the mine design planning
and the preliminary assessment at Lost Soldier; (viii) the completion and timing
of various exploration programs, including without limitation, those as LC North
and LC South ; (ix) the potential of new exploration targets in the area of Lost
Creek, including those at LC North and LC South, to contain 24 – 28 million
pounds of U3O8(not NI 43-101 compliant);
(x) timing, completion, and funding for and results of further exploration
programs at the Bootheel Project and Hauber Project; and (xi) the community and
regulatory issues with the Screech Lake project and related
exploration.  The potential quantity and grade ranges set forth in
regards exploration targets at Lost Creek, LC North and LC South are conceptual
in nature only. There has been insufficient exploration to define a mineral
resource at the new exploration targets at Lost Creek, LC North and LC
South.  It is uncertain if further exploration will result in the
target(s) being delineated as a mineral resource.  These other factors
include, among others, the following: future estimates for production,
production start-up and operations (including any difficulties with
startup),  capital expenditures, operating costs, mineral resources,
recovery rates, grades and prices; business strategies and measures to implement
such strategies; competitive strengths; estimated goals; expansion and growth of
the business and operations; plans and references to the Corporation’s future
successes; the Corporation’s history of operating losses and uncertainty of
future profitability; the Corporation’s status as an exploration and development
stage Corporation; the Corporation’s lack of mineral reserves; the hazards
associated with mining construction and production; compliance with
environmental laws and regulations; risks associated with obtaining permits in
Canada and the United States; risks associated with current variable economic
conditions; the possible impact of future financings; uncertainty regarding the
pricing and collection of accounts; risks associated with dependence on sales in
foreign countries; the possibility for adverse results in potential litigation;
fluctuations in foreign exchange rates; uncertainties associated with changes in
government policy and regulation; uncertainties associated with the Canadian
Revenue Agency’s audit of any of the Corporation’s cross border transactions;
adverse changes in general business conditions in any of the countries in which
the Corporation does business; changes in the Corporation’s size and structure;
the effectiveness of the Corporation’s management and its strategic
relationships; risks associated with the Corporation’s ability to attract and
retain key personnel; uncertainties regarding the Corporation’s need for
additional capital; uncertainty regarding the fluctuations of the Corporation’s
quarterly results; uncertainties relating to the Corporation’s status as a
non-U.S. corporation; uncertainties related to the volatility of the
Corporation’s shares price and trading volumes; foreign currency exchange risks;
ability to enforce civil liabilities under U.S. securities laws outside the
United States; ability to maintain the Corporation’s listing on the NYSE Amex
(the “NYSE Amex”) and Toronto Stock Exchange (the “TSX”); risks associated with
the Corporation’s possible status as a "passive foreign investment Corporation"
or a "controlled foreign corporation" under the applicable provisions of the
U.S. Internal Revenue Code of 1986, as amended; risks associated with the
Corporation’s investments and other risks and uncertainties described under the
heading “Risk Factors” of this Annual Report on Form 20-F (Annual Information
Form).





Table of Contents




Cautionary Note to U.S. Investors - Resource and Reserve
Estimates





The terms
“mineral reserve,” “proven mineral reserve” and “probable mineral reserve” used
in the Corporation’s disclosure are Canadian mining terms that are defined in
accordance with National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”) under the guidelines set out in the Canadian Institute of
Mining, Metallurgy and Petroleum (the “CIM”) Best Practice Guidelines for the
Estimation of Mineral Resource and Mineral Reserves (the “CIM Standards”),
adopted by the CIM Council on November 23, 2003. These definitions differ from
the definitions in the United States Securities and Exchange Commission (the
“SEC”) Industry Guide 7 under the Securities Act of 1933, as amended (the
“Securities Act”). Under Industry Guide 7 standards, mineralization may not be
classified as a “reserve” unless the determination has been made that the
mineralization could be economically and legally produced or extracted at the
time the reserve determination is made.  Under Industry Guide 7
standards, a “final” or “bankable” feasibility study is required to report
reserves, the three-year historical average price is used in any reserve or cash
flow analysis to designate reserves and the primary environmental analysis or
report must be filed with the appropriate governmental authority.





The terms
“mineral resource,” “measured mineral resource,” “indicated mineral resource”
and “inferred mineral resource” used in the Corporation’s disclosure are
Canadian mining terms that are defined in accordance with NI 43-101 under the
guidelines set out in the CIM Standards; however, these terms are not defined
terms under Industry Guide 7 and are normally not permitted to be used in
reports and registration statements filed with the SEC.  Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves.  “Inferred mineral
resources” have a great amount of uncertainty as to their existence, and great
uncertainty as to their economic feasibility.  It cannot be assumed
that all or any part of an inferred mineral resource will ever be upgraded to a
higher category.  Under Canadian rules, estimates of inferred mineral
resources may not form the basis of feasibility or pre-feasibility studies,
except in rare cases.  Investors are cautioned not to assume that all
or any part of an inferred mineral resource exists or is economically
mineable.





Accordingly,
information contained in this report containing descriptions of the
Corporation’s mineral deposits may not be comparable to similar information made
public by U.S. companies subject to the reporting and disclosure requirements
under the United States federal securities laws and the rules and regulations
thereunder.





Metric/Imperial Conversion Table





The
imperial equivalents of the metric units of measurement used in this Annual
Report on Form 20-F (Annual Information Form) are as follows:





Metric Unit
            Imperial Equivalentgram
            0.03215
      troy ounceshectare
            2.4711
      acreskilogram
            2.2046223
      poundskilometer
            0.62139
      milesmeter
            3.2808
      feettonne
            1.1023
      short tons





Item 1. Identity of Directors, Senior Management and
Advisers.





Not
applicable.





Page
2
 Table of Contents




Item2. Offer Statistics and Expected Timetable.





Not
applicable.





Item 3. KeyInformation.





A.Selectedfinancial
data.





The
following table summarizes certain of the Corporation’s selected financial
information (stated in thousands of Canadian dollars) prepared in accordance
with Canadian GAAP. The information in the table was derived from the more
detailed financial statements for the periods ended December 31, 2005 through
the fiscal year ended December 31, 2009, inclusive, and the related notes, and
should be read in conjunction with the financial statements and with the
information appearing under the headings Item 5 – Operating and Financial
Review and Prospects and Item 17 – Financial
Statements.





Historical
results are not necessarily indicative of results to be expected for any future
period. No dividends have been paid in any of the fiscal years ended December
31, 2005 through the fiscal year ended December 31, 2009.











2009
            
            
            2008
            
            
            2007
            
            
            2006
            
            
            2005(In thousands of Canadian
      dollars)Results
      from operationsRevenue
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilTotal
      expenses
            
            
            (17,408
            )
            
            
            (25,968
            )
            
            
            (22,959
            )
            
            
            (12,396
            )
            
            
            (6,151
            )Interest
      income
            
            
            891
            
            
            
            2,495
            
            
            
            2,816
            
            
            
            630
            
            
            
            126Foreign
      exchange gain (loss)
            
            
            (3,506
            )
            
            
            5,656
            
            
            
            (806
            )
            
            
            (177
            )
            
            
            909Other
      income (loss)
            
            
            922
            
            
            
            (37
            )
            
            
            -
            
            
            
            -
            
            
            
            -Loss
      before income taxes
            
            
            (19,101
            )
            
            
            (17,854
            )
            
            
            (20,949
            )
            
            
            (11,943
            )
            
            
            (5,116
            )Recovery
      of future income taxes
            
            
            368
            
            
            
            -
            
            
            
            429
            
            
            
            -
            
            
            
            -Net
      loss
            
            
            (18,733
            )
            
            
            (17,854
            )
            
            
            (20,520
            )
            
            
            (11,943
            )
            
            
            (5,116
            )Net
      loss per share, basic and diluted
            
            
            (0.20
            )
            
            
            (0.19
            )
            
            
            (0.24
            )
            
            
            (0.20
            )
            
            
            (0.15
            )Financial
      positionTotal
      assets
            
            
            81,702
            
            
            
            101,534
            
            
            
            110,931
            
            
            
            59,927
            
            
            
            38,000Capital
      stock and additional paid-in capital
            
            
            157,725
            
            
            
            157,118
            
            
            
            149,826
            
            
            
            64,137
            
            
            
            26,698Accumulated
      deficit and accumulated other comprehensive loss
            
            
            (77,573
            )
            
            
            (58,841
            )
            
            
            (40,987
            )
            
            
            (20,467
            )
            
            
            (8,523
            )Net
      assets
            
            
            80,152
            
            
            
            98,277
            
            
            
            108,839
            
            
            
            43,670
            
            
            
            18,175Outstanding shares, in
      thousands
            
            
            93,857
            
            
            
            92,996
            
            
            
            93,857
            
            
            
            59,464
            
            
            
            33,354





Page
3
 Table of Contents




Currency and Exchange Rates





The following table sets out the
exchange rates for currencies expressed in terms of equivalent Canadian dollars
for one U.S. dollar:





Years
      ended December 31,Canadian
      dollar
            
            2009
            
            
            2008
            
            
            2007
            
            
            2006
            
            
            2005End
      of period
            
            $
            1.04940
            
            
            $
            1.22280
            
            
            $
            0.98200
            
            
            $
            1.16640
            
            
            $
            1.16600Average
      for the period
            
            $
            1.14235
            
            
            $
            1.06669
            
            
            $
            1.07440
            
            
            $
            1.13461
            
            
            $
            1.21173








September
            
            
            October
            
            
            November
            
            
            December
            
            
            January
            
            
            FebruaryCanadian
      dollar
            
            2009
            
            
            2009
            
            
            2009
            
            
            2009
            
            
            2010
            
            
            2010High
      for the month
            
            $
            1.10440
            
            
            $
            1.08550
            
            
            $
            1.08520
            
            
            $
            1.06830
            
            
            $
            1.07090
            
            
            $
            1.07310Low
      for the month
            
            $
            1.06490
            
            
            $
            1.02690
            
            
            $
            1.04760
            
            
            $
            1.04210
            
            
            $
            1.02670
            
            
            $
            1.03960





Exchange
rates are the historical interbank foreign exchange rates for the appropriate
period as quoted by OANDA Corporation on its website www.oanda.com.  The
rate quoted by OANDA for the conversion of United States dollars into Canadian
dollars on March 5,2010
is CDN$1.0314 = US$1.00.





B.Capitalizationand
indebtedness.





Not
applicable.





C.Reasonsfor the offer
and use of proceeds.





Not
applicable.





D.Riskfactors.





The
Corporation operates in a dynamic and rapidly changing environment that involves
numerous risks and uncertainties. The risks described below should be considered
carefully when assessing an investment in the common shares of the Corporation
(the “Common Shares”).  The occurrence of any of the following events
could harm the Corporation. If these events occur, the trading price of the
Corporation’s Common Shares could decline, and shareholders may lose part or
even all of their investment.





The
Corporation faces numerous risks as an exploration and development stage
company.





The
Corporation is engaged in the business of acquiring and exploring mineral
properties in the hope of locating economic deposits of minerals. The
Corporation’s property interests are in the exploration and development stage
only. Accordingly, there is little likelihood that the Corporation will realize
profits in the short term. Any profitability in the future from the
Corporation’s business will be dependent upon development of an economic deposit
of minerals and further exploration and development of other economic deposits
of minerals, each of which is subject to numerous risk factors. Further, there
can be no assurance, even when an economic deposit of minerals is located, that
any of the Corporation's property interests can be commercially mined. The
exploration and development of mineral deposits involve a high degree of
financial risk over a significant period of time which a combination of careful
evaluation, experience and knowledge of management may not eliminate. While
discovery of additional ore-bearing structures may result in substantial
rewards, few properties which are explored are ultimately developed into
producing mines.  It is impossible to ensure that the current
exploration programs of the Corporation will result in profitable commercial
mining operations. The profitability of the Corporation's operations will be, in
part, directly related to the cost and success of its exploration and
development programs which may be affected by a number of factors. Substantial
expenditures are required to establish resources and reserves which are
sufficient to commercially mine some of the Corporation's properties and to
construct, complete and install mining and processing facilities in those
properties that are actually mined and developed.





Page
4
 Table of Contents




The
price of uranium is affected by demand.





The price
of uranium fluctuates. The future direction of the price of uranium will depend
on numerous factors beyond the Corporation’s control including international,
economic and political trends, governmental regulations, expectations of
inflation, currency exchange fluctuations, interest rates, global or regional
consumption patterns, speculative activities and increased production due to new
extraction developments and improved extraction and production methods. The
effect of these factors on the price of uranium, and therefore on the economic
viability of the Corporation’s properties, cannot accurately be predicted. As
the Corporation is only at the exploration and development stage, it is not yet
possible for it to adopt specific strategies for controlling the impact of
fluctuations in the price of uranium.





Permitting,
licensing and approval processes are required for the Corporation’s operations
and obtaining and maintaining these permits and licenses is subject to many
conditions which the Corporation may be unable to achieve.





Many of
the operations of the Corporation require licenses and permits from various
governmental authorities. The Corporation believes it holds or is in the process
of obtaining all necessary licenses and permits to carry on the activities which
it is currently conducting or proposes to conduct under applicable laws and
regulations. Such licenses and permits are subject to changes in regulations and
changes in various operating circumstances. There can be no guarantee that the
Corporation will be able to obtain all necessary licenses and permits that may
be required to maintain its exploration and mining activities including
constructing mines or milling facilities and commencing operations of any of its
exploration properties. In addition, if the Corporation proceeds to production
on any exploration property, it must obtain and comply with permits and licenses
which may contain specific operating conditions. There can be no assurance that
the Corporation will be able to obtain such permits and licenses or that it will
be able to comply with any such conditions.





The
Corporation’s operations are subject to environmental risks and compliance with
environmental regulations which are increasing and costly.





Environmental
legislation and regulation is evolving in a manner which will require stricter
standards and enforcement, increased fines and penalties for non-compliance,
more stringent environmental assessments of proposed projects and a heightened
degree of responsibility for companies and their officers, directors and
employees. Compliance with environmental quality requirements and reclamation
laws imposed by federal, state, provincial, and local governmental authorities
may require significant capital outlays, materially affect the economics of a
given property, cause material changes or delays in intended activities, and
potentially expose the Corporation to litigation. The Corporation cannot
accurately predict or estimate the impact of any such future laws or
regulations, or future interpretations of existing laws and regulations, on the
Corporation’s operations.  Historic mining activities have occurred on
and around certain of the Corporation’s properties. If such historic activities
have resulted in releases or threatened releases of regulated substances to the
environment, potential for liability may exist under federal or state
remediation statutes.





The
only market for uranium is nuclear power plants worldwide, and there are a
limited number of customers.





The
marketability of uranium and acceptance of uranium mining is subject to numerous
factors beyond the control of the Corporation. The price of uranium may
experience volatile and significant price movements over short periods of time.
Factors affecting the market and price include demand for nuclear power,
political and economic conditions in uranium mining, producing and consuming
countries, reprocessing of spent fuel and the re-enrichment of depleted uranium
tails or waste, sales of excess civilian and military inventories (including
from the dismantling of nuclear weapons) by governments and industry
participants, and production levels and costs of production in geographical
areas such as Russia, Africa and Australia.





Deregulation
of the electrical utility industry and acceptance of nuclear energy affects the
demand for uranium.





The
Corporation’s future prospects are tied directly to the electrical utility
industry worldwide. Deregulation of the utility industry, particularly in the
United States and Europe, is expected to affect the market for nuclear and other
fuels for years to come, and may result in a wide range of outcomes including
the expansion or the premature shutdown of nuclear
reactors.  Maintaining the demand for uranium at current levels and
future growth in demand will depend upon acceptance of the nuclear technology as
a means of generating electricity.  Lack of public acceptance of
nuclear technology would adversely affect the demand for nuclear power and
potentially increase the regulation of the nuclear power industry.





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The
Corporation’s share price is subject to significant fluctuations.





The value
of the Corporation’s Common Shares could be subject to significant fluctuations
in response to variations in quarterly and yearly operating results, the success
of the Corporation's business strategy, competition, financial markets,
commodity prices or applicable regulations which may affect the business of the
Corporation and other factors.





While the
Corporation has mineral resources, it currently does not have any mineral
reserves.  Calculations of
mineral resources and recovery are only estimates, and there can be no assurance
about the quantity and grade of minerals until reserves or resources are
actually mined.





Until
reserves or resources are actually mined and processed, the quantity of reserves
or resources and grades must be considered as estimates only. In addition, the
quantity of reserves or resources may vary depending on commodity prices. Any
material change in the quantity of resources, grade, or production
costs   may affect the economic viability of the Corporation’s
properties.





The
Corporation is dependent on key personnel, contractors and service providers,
the loss of whom could harm the Corporation’s business.





Shareholders
will be relying on the good faith, experience and judgment of the Corporation’s
management and advisors in supervising and providing for the effective
management of the business and the operations of the Corporation and in
selecting and developing new investment and expansion opportunities. The
Corporation may need to recruit additional qualified employees, contractors and
service providers to supplement existing management, the availability of which
cannot be assured. The Corporation will be dependent on a relatively small
number of key persons including specifically W. William Boberg, President and
Chief Executive Officer, Harold Backer, Executive Vice President, Geology &
Exploration and Wayne Heili, Vice President Mining & Engineering, the loss
of any one of whom could have an adverse effect on the Corporation’s business
and operations.  The Corporation does not hold key man insurance in
respect of any of its executive officers.





Mining
operations involve a high degree of risk and the results of exploration and
ultimate productions are highly uncertain.





The
exploration for, and development of, mineral deposits involves significant risks
which a combination of careful evaluation, experience and knowledge may not
eliminate. While the discovery of an ore body may result in substantial rewards,
few properties which are explored are ultimately developed into producing mines.
Major expenses may be required to establish ore reserves, to develop
metallurgical processes and to construct mining and processing facilities at a
particular site. It is impossible to ensure that the current exploration and
development programs planned by the Corporation will result in a profitable
commercial operation.





Whether a
mineral deposit will be commercially viable depends on a number of factors, some
of which are the particular attributes of the deposit, such as size, grade and
proximity to infrastructure, as well as uranium prices which are highly cyclical
and government regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of uranium and
environmental protection. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in the Corporation
not receiving an adequate return on invested capital.





Mining
operations generally involve a high degree of risk. The Corporation's operations
will be subject to all the hazards and risks normally encountered in the
exploration and development of uranium, including unusual and unexpected geology
formations, flooding and other conditions involved in the drilling and removal
of material, any of which could result in damage to, or destruction of, mines
and other producing facilities, damage to life or property, environmental damage
and possible legal liability.





The
Corporation’s operations are subject to many regulatory
requirements.





The
Corporation's business is subject to various federal, state, provincial and
local laws governing prospecting and development, taxes, labor standards and
occupational health, mine and radiation safety, toxic substances, environmental
protection and other matters. Exploration and development are also subject to
various federal, state, provincial and local laws and regulations relating to
the protection of the environment. These laws impose high standards on the
mining industry to monitor the discharge of waste water and report the results
of such monitoring to regulatory authorities, to reduce or eliminate certain
effects on or into land, water or air, to progressively restore mine properties,
to manage hazardous wastes and materials and to reduce the risk of worker
accidents. A violation of these laws may result in the imposition of substantial
fines and other penalties and potentially expose the Corporation to
litigation.  There can be no assurance that the Corporation will be
able to meet all the regulatory requirements in a timely manner or without
significant expense or that the regulatory requirements will not change to delay
or prohibit the Corporation from proceeding with certain exploration and
development.





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Possible
Amendment to Mining Law of 1872 may significantly impact the Corporation’s
ability to develop certain unpatented mining claims.





Members
of the United States Congress have repeatedly introduced bills which would
supplant or alter the provisions of the United States Mining Law of 1872, as
amended. If enacted, such legislation could change the cost of holding
unpatented mining claims and could significantly impact the Corporation’s
ability to develop mineralized material on unpatented mining claims. Such bills
have proposed, among other things, to either eliminate or greatly limit the
right to a mineral patent and to impose a federal royalty on production from
unpatented mining claims.   Although it is impossible to predict
at this point what any legislated royalties might be, enactment could adversely
affect the potential for development of such mining claims and the economics of
existing operating mines on federal unpatented mining claims. Passage of such
legislation could adversely affect the financial performance of the
Corporation.





Competition
from larger or better capitalized companies may affect the Corporation’s Common
Share price and the Corporation’s ability to acquire properties.





The
international uranium industry is highly competitive. The Corporation's
activities are directed toward the search, evaluation, acquisition and
development of uranium deposits. There is no certainty that the expenditures to
be made by the Corporation will result in discoveries of commercial quantities
of uranium deposits. There is aggressive competition within the mining industry
for the discovery and acquisition of properties considered to have commercial
potential. The Corporation will compete with other interests, many of which have
greater financial resources than it will have, for the opportunity to
participate in promising projects. Significant capital investment is required to
achieve commercial production from successful exploration and development
efforts.





Nuclear
energy competes with other sources of energy, including oil, natural gas, coal
and hydro-electricity. These other energy sources are to some extent
interchangeable with nuclear energy, particularly over the longer term. Lower
prices of oil, natural gas, coal and hydro-electricity may result in lower
demand for uranium concentrate and uranium conversion services. Furthermore, the
growth of the uranium and nuclear power industry beyond its current level will
depend upon continued and increased acceptance of nuclear technology as a means
of generating electricity. Because of unique political, technological and
environmental factors that affect the nuclear industry, the industry is subject
to public opinion risks which could have an adverse impact on the demand for
nuclear power and increase the regulation of the nuclear power
industry.





Uncertain
global economic conditions will affect the Corporation and its Common Share
price.





Current
conditions in the domestic and global economies are uncertain. There continues
to be a high level of market instability and market volatility with
unpredictable and uncertain financial market projections. The impacts of a
global recession or depression, commodity price fluctuations, the availability
of capital and the acceptance of nuclear energy may have consequences on the
Corporation and its share price.  In addition, it could have
consequences on the nuclear industry’s ability to finance future construction of
nuclear generating facilities.  Global financial problems and lack of
confidence in the strength of global financial institutions have created many
economic and political uncertainties that have impacted the global economy. As a
result, it is difficult to estimate the level of growth for the world economy as
a whole. It is even more difficult to estimate growth in various parts of the
world economy, including the markets in which the Corporation participates. All
components of the Corporation's budgeting and forecasting are dependent on
commodity prices and their fluctuations as well as political acceptance and
policy. The prevailing economic uncertainties render estimates of future
expenditures difficult.





The
Corporation will need to obtain additional funding in the medium to long term in
order to implement the Corporation’s business plan, and the inability to obtain
it could cause the Corporation’s business plan to fail.





Additional
funds will be required for future exploration, development and production. The
source of future funds available to the Corporation is through the sale of
additional equity capital, proceeds from the exercise of convertible equity
instruments outstanding or borrowing of funds. There is no assurance that such
funding will be available to the Corporation. Furthermore, even if such
financing is successfully completed, there can be no assurance that it will be
obtained on terms favorable to the Corporation or will provide the Corporation
with sufficient funds to meet its objectives, which may adversely affect the
Corporation's business and financial position. In addition, any future equity
financings by the Corporation may result in substantial dilution for existing
shareholders of the Corporation.





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The
Corporation lacks a history of earnings and dividend record.





The
Corporation has no earnings or dividend record. It has not paid dividends on its
Common Shares since incorporation and does not anticipate doing so in the
foreseeable future. Payments of any dividends will be at the discretion of the
board of directors of the Corporation after taking into account many factors,
including the Corporation’s financial condition and current and anticipated cash
needs.





The
impact of hedging activities may affect the Corporation’s
profitability.





Although
the Corporation has no present intention to do so, it may hedge a portion of its
future uranium production to protect it against low uranium prices and/or to
satisfy covenants required to obtain project financings. Hedging activities are
intended to protect the Corporation from the fluctuations of the price of
uranium and to minimize the effect of declines in uranium prices on results of
operations for a period of time. Although hedging activities may protect a
company against low uranium prices, they may also limit the price that can be
realized on uranium that is subject to forward sales and call options where the
market price of uranium exceeds the uranium price in a forward sale or call
option contract.





The
Corporation’s title to certain properties may be uncertain.





Although
the Corporation has obtained title opinions with respect to certain of its
properties and has taken reasonable measures to ensure proper title to its
properties, there is no guarantee that title to any of its properties will not
be challenged or impugned.  Third parties may have valid claims
underlying portions of the Corporation's interests.  The Corporation’s
mineral properties in the United States consist of leases to private mineral
rights, leases covering state lands and unpatented mining claims. Many of the
Corporation’s mining properties in the United States are unpatented mining
claims to which the Corporation has only possessory title. Because title to
unpatented mining claims is subject to inherent uncertainties, it is difficult
to determine conclusively ownership of such claims.  These
uncertainties relate to such things as sufficiency of mineral discovery, proper
posting and marking of boundaries and possible conflicts with other claims not
determinable from descriptions of record. The present status of the
Corporation’s unpatented mining claims located on public lands allows the
Corporation the exclusive right to mine and remove valuable minerals. The
Corporation is allowed to use the surface of the public lands solely for
purposes related to mining and processing the mineral-bearing ores. However,
legal ownership of the land remains with the United States. The Corporation
remains at risk that the mining claims may be forfeited either to the United
States or to rival private claimants due to failure to comply with statutory
requirements. The Corporation has taken or will take all curative measures to
ensure proper title to its properties where necessary and where
possible.





The
Corporation may be subject to aboriginal land claims.





Certain
properties in which the Corporation has an interest may be the subject of
aboriginal land claims.  As a result of these claims, the Corporation
may be significantly delayed or unable to pursue exploration and production
activities in respect of these properties or may have to expend considerable
management resources and funds to adequately meet the regulatory requirements to
pursue activities in respect of these properties.





Some
hazards which the Corporation may face are uninsurable.





The
Corporation currently carries insurance coverage for general liability,
directors’ and officers’ liability and other matters. The Corporation intends to
carry insurance to protect against certain risks in such amounts as it considers
adequate. The nature of the risks the Corporation faces in the conduct of its
operations is such that liabilities could exceed policy limits in any insurance
policy or could be excluded from coverage under an insurance policy. The
potential costs that could be associated with any liabilities not covered by
insurance or in excess of insurance coverage or compliance with applicable laws
and regulations may cause substantial delays and require significant capital
outlays, adversely affecting the Corporation’s business and financial
position.





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The
Corporation’s board of directors may face the possibility of conflicts of
interest with other resource companies with which they are
involved.





Certain
directors of the Corporation also serve as directors and officers of other
companies involved in natural resource exploration, development and production.
Consequently, there exists the possibility that such directors will be in a
position of conflict of interest. Any decision made by such directors involving
the Corporation will be made in accordance with their duties and obligations to
deal fairly and in good faith with the Corporation and such other companies. In
addition, such directors will declare, and refrain from voting on, any matter in
which such directors may have a material interest.





U.S.
holders of the Corporation’s shares may have potential adverse U.S. Federal
Income Tax consequences.





A
non-U.S. corporation generally will be considered a “passive foreign investment
company” (a “PFIC”) as such term is defined in the U.S. Internal Revenue Code of
1986, as amended (the “Code”) for any taxable year if either (1) at least 
75% of its gross income is passive income or (2) at least
50% of the value of its assets is attributable to assets that produce or are
held for the production of passive income.  If the Corporation were
treated as a PFIC for any taxable year in which a U.S. holder held the
Corporation’s shares, certain adverse consequences could apply, including a
material increase in the amount of tax that the U.S. holder would owe, an
imposition of tax earlier than would otherwise be imposed, interest charges and
additional tax form filing requirements.





The
determination of whether a corporation is a PFIC involves the application of
complex tax rules.  The Corporation has not made a conclusive
determination as to whether it has been in prior tax years or is currently a
PFIC.  The Corporation could have qualified as a PFIC for past tax
years and may qualify as a PFIC currently or in future tax
years.  However, no assurance can be given as to such status for prior
tax years, for the current tax year or future tax years.  U.S. holders
of Corporation’s shares are urged to consult their own tax advisors regarding
the application of U.S. income tax rules.





The
Corporation may lose its status as a foreign private issuer.





Ur-Energy
is a “foreign private issuer,” as such term is defined in Rule 405 under the
Securities Act, and, therefore, it is not required to comply with all the
periodic disclosure and current reporting requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and related rules and
regulations.  In order for the Corporation to maintain its current
status as a foreign private issuer, a majority of its Common Shares must be
either directly or indirectly owned of record by non-residents of the U.S., as
it does not currently satisfy any of the additional requirements necessary to
preserve this status.





The
Corporation may in the future lose its foreign private issuer status if a
majority of its shares are owned of record by residents of the U.S. and it
continues to fail to meet the additional requirements necessary to avoid loss of
foreign private issuer status.  The regulatory and compliance costs to
the Corporation under U.S. securities laws as a U.S. domestic issuer may be
significantly more than the costs it incurs as a Canadian foreign private issuer
eligible to use the Multi-Jurisdictional Disclosure System
(“MJDS”).  If it is not a foreign private issuer, it would not be
eligible to use the MJDS or other foreign issuer forms and would be required to
file periodic and current reports and registration statements on U.S. domestic
issuer forms with the SEC, which are more detailed and extensive than the forms
required of a foreign private issuer.  The Corporation may also be
required to prepare its financial statements in accordance with U.S. generally
accepted accounting principles (“GAAP”). In addition, the Corporation may lose
the ability to rely upon exemptions from certain corporate governance
requirements on U.S. stock exchanges that are available to foreign private
issuers.  Further, if the Corporation engages in capital raising
activities through private placements after losing its foreign private issuer
status, there is a higher likelihood that investors may require the Corporation
to file resale registration statements with the SEC as a condition to any such
financing.





Item 4. Informationon the Corporation.





A.Historyand development of the Corporation.





Ur-Energy
is a corporation continued under the laws of Canada pursuant to the Canada Business Corporations Act(the “CBCA”) on August 8, 2006. The registered office of the Corporation
is located at 55 Metcalfe Street, Suite 1300, Ottawa, Ontario, K1P 6L5. The
Corporation’s head office and United States headquarters is located at 10758
West Centennial Road, Suite 200, Littleton, Colorado, 80127. The Corporation
also has offices at 5880 Enterprise Drive, Suite 200, Casper, Wyoming 82609 and
341 Main Street North, Suite 206, Brampton, Ontario L6X 3C7. The Corporation’s
Littleton telephone number is (720) 981-4588 and its facsimile number is (720)
981-5643. The Corporation’s Common Shares are listed on the TSX under the symbol
"URE" and on the NYSE Amex under the symbol "URG".





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Incorporated
on March 22, 2004, Ur-Energy is a development stage junior mining company
engaged in the identification, acquisition, evaluation, exploration and
development of uranium mineral properties in Canada and the United States. The
Corporation’s land portfolio includes 12properties in Wyoming,
USA.  Of these, 10 are located in the Great Divide Basin, of which two
(the Lost Creek property and the Lost Soldier property) contain defined
resources that the Corporation expects to advance to production.





The
Corporation also has two properties, known as Screech Lake and Gravel Hill, in
the Northwest Territories, Canada; and the Bugs property in the Kivalliq region
of the Baker Lake Basin in Nunavut, Canada.





The
Corporation has various royalty interests in properties in Wyoming, USA and
Nunavut, Canada.





Background





The
Corporation, through its wholly-owned subsidiary, Ur-Energy USA Inc. (“Ur-Energy
USA”), acquired Wyoming properties comprising certain of its Great Divide Basin
and the Shirley Basin projects, effective June 30, 2005, when Ur-Energy USA
entered into the Membership Interest Purchase Agreement (“MIPA”) with New
Frontiers Uranium, LLC (“New Frontiers”).  Under the terms of the
MIPA, the Corporation purchased from New Frontiers all of the issued and
outstanding membership interests (the “Membership Interests”) in NFU Wyoming,
LLC (“NFU Wyoming”).  Assets acquired from New Frontiers include the
extensively explored and drilled Lost Creek and Lost Soldier projects, other
properties, and a development database including more than 10,000 electric well
logs, over 100 geologic reports and over 1,000 geologic and uranium maps
covering large areas of Wyoming, Montana and South Dakota. The 100% interest in
NFU Wyoming was purchased for an aggregate consideration of $24,515,832
(US$20,000,000), plus capitalized interest.





Since
2005, the exploration and development of Lost Creek has
progressed.  The Corporation commissioned an NI 43-101 Preliminary
Assessment in 2008, which established the economics of the Lost Creek
project.  Beginning in 2007, the Corporation has proceeded with its
applications for a Source Material and Byproduct License from the U.S. Nuclear
Regulatory Commission (“NRC”) and a Permit and License to Mine from the Wyoming
Department of Environmental Quality (“WDEQ”).  The applications were
deemed complete by both agencies and the technical review process is
ongoing.   See also Item 4.B - Business Overview: Lost
Creek Project.





Recent
Developments





Corporate





The
Corporation has continued to add essential technical personnel including three
new people based out of the Corporation’s Casper, Wyoming office: Sam Talbott,
Chief Geologist; Dr. Charles Kelsey, Radiation Safety Officer and Leland
Huffman, Senior Scientist.





On April
28, 2009, at the Corporation’s annual and special meeting of shareholders, the
shareholders approved and ratified the Corporation’s Shareholder Rights Plan
which became effective on November 7, 2008.  Through a Successor
Rights Plan Agreement, effective as of January 1, 2010, the Successor Rights
Agent is now Computershare Investor Services Inc.





Regulatory





In May
2009, the Corporation received new guidance from the NRC concerning the NRC’s
schedule for the first three pending applications for in siturecovery (“ISR”)
operations which included the Corporation’s application for the Lost Creek
project.  The NRC determined that it will complete a site-specific
Supplemental Environmental Impact Statement (“SEIS”) for each of the ISR
applications rather than an environmental assessment.  In December
2009, the NRC issued the Draft SEIS for the Lost Creek project, and continued
its guidance for the completion of a SEIS for each pending application in second
quarter 2010 and the probable issuance of licenses in third quarter 2010. 
The
Corporation submitted comments to the NRC in response to the Lost Creek Draft
SEIS in February 2010.  The NRC extended the comment period through March
3, 2010,  and  the NRC is processing comments received from
the public and other regulators that were submitted on or before that
date.





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In June
2009, the Corporation submitted an application for a Class I Underground
Injection Control (“UIC”) permit to the WDEQ which supports the suitability of a
Class I UIC permit for the Lost Creek disposal well system, including up to five
disposal wells.  In November 2009, the WDEQ provided its technical
comments on the application, and notified the Corporation that the agency will
proceed with drafting of the permit, while it awaits the responses to technical
comments.  The Corporation provided responses to the technical
comments on February 1, 2010.





Throughout
2009, the Corporation worked with the WDEQ in its review of the Lost Creek
Application for Permit to Mine, submitting additional technical data and
information, holding meetings and, in December 2009, submitting the data package
for Mine Unit #1. Initial
comments were received from WDEQ in February 2010.  The Company anticipates
filing its responses to those comments before the end of first quarter
2010.Ur-Energy anticipates the issuance of Lost Creek's WDEQ Permit in the summer of
2010.





On
December 3, 2009, the Corporation announced the approval of its Lost Creek
Development Plan by the officials of Sweetwater County, Wyoming.  The
Development Plan describes in detail the infrastructure and facilities which
will be constructed at the planned uranium ISR production site.





On
March 5, 2010, the U.S. Fish and Wildlife Service (“USFWS”), in compliance with
a federal court order, submitted a finding of “warranted for listing but
precluded by higher priorities” with regard to the greater sage grouse – whose
habitat includes Wyoming. A finding that listing is “warranted but
precluded” results in recognition of the greater sage grouse as a candidate for
listing. This finding is reconsidered annually, taking into account changes in
the status of the species. When higher priority listing actions have been
addressed by the USFWS for other species, a proposed listing rule is prepared
and issued for public comment. This means that until the USFWS finalizes a
listing determination, the greater sage grouse will remain under state
management.  As a part of its WDEQ Application, the Corporation has
submitted a Wildlife Protection Plan regarding, among other issues, the sage
grouse. The Corporation conducted several meetings during fourth quarter 2009 –
first quarter 2010 with the WDEQ and Wyoming Department of Game and
Fish to facilitate the processing and acceptance of the mitigation plan as
a part of the WDEQ Permit.





Technical





As of
March 31, 2009, as part of its winter drilling program, the Corporation had
drilled and installed 15 monitoring wells; completed groundwater sampling of an
approximately 10,000 foot deep test well; and, assisted by TREC, Inc., completed
detailed designs and specifications for all components of the Lost Creek ISR
Plant.





The
drilling program at Lost Creek resumed in July 2009 following the earlier winter
drilling program.  The primary purpose of the 2009 drilling program
was delineation of the ISR recoverable uranium resources within the planned Mine
Unit #2 area.





On August
10, 2009, the Corporation announced that geophysical and survey crews started
work on the Screech Lake project in the Thelon Basin, Northwest Territories,
Canada.  The Corporation continues discussions with the First Nations
groups towards an exploration agreement on the Screech Lake
project.





On August
12, 2009, the Corporation announced the results of geologic evaluations of the
Lost Creek Permit Area and adjacent properties held by the Corporation, namely,
LC North and LC South, which contain multiple exploration targets and
demonstrate the potential to contain 24 to 28 million pound U3O8(not NI
43-101 compliant). These potential quantity and grade ranges are conceptual in
nature, only. There has been insufficient exploration to define a mineral
resource.  It is uncertain if further exploration will result in the
target(s) being delineated as a mineral resource. The Corporation’s drilling and
historic data have identified a minimum of an additional 120 compiled linear
miles of new redox fronts stacked with multiple stratigraphic horizons with
potential for resource development on these properties.  The newly
identified fronts occur within the same stratigraphic horizons that are present
in the area of the Lost Creek deposit.   Estimation of the
potential of the new fronts is based on the observed similarity of alteration
characteristics, grade and thickness of mineralization to that currently
identified in the Lost Creek deposit.





The
Corporation announced in November 2009 that it had selected Fagen Inc. to serve
as General Contractor in the construction of the process plant facilities at
Lost Creek.





As part
of its third quarter 2009 update in November 2009, the Corporation detailed the
US$22 million of capital and development expenditures made on the Lost Creek
project from 2007 through third quarter which included
800  exploration and delineation drill holes, drilling and
installation of 153 monitor wells, complete delineation of Mine Unit #1 and
commencement of delineation of Mine Unit #2, prepayment for key long-lead time
plant equipment, and acquisition of operational support equipment for ongoing
use now and during production operations.





Joint
Ventures





During
the third quarter of 2009, Crosshair Exploration & Mining Corporation
(“Crosshair”) completed its earn-in to a 75% interest in The Bootheel Project,
LLC in the Shirley Basin, Wyoming which comprises the Bootheel and Buck Point
properties (the “Bootheel Project”).  Crosshair earned its 75%
interest in the Bootheel Project by spending US$3 million in exploration costs
and issuing 125,000 common shares of Target Exploration & Mining Corporation
(an acquisition by Crosshair subsequent to the buy-in agreement) to the
Corporation.  Earlier in the third quarter, Crosshair completed an
independent NI 43-101 mineral resource estimate on the Bootheel
property.





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Effective
December 1, 2009, Bayswater Uranium Corporation (“Bayswater”) joined the
Corporation’s wholly-owned subsidiary, Hauber Project LLC, as an earn-in Member
and Manager of the Hauber project (the “Hauber Project”).  The Hauber
Project is located in Crook County, Wyoming.  Pursuant to the terms of
the operating agreement, Bayswater can earn a 75% interest by incurring eligible
exploration expenditures of US$1 million over a four-year period.  On
January 11, 2010, the Corporation further announced that Bayswater completed an
independent NI 43-101 mineral resource estimate on the Hauber
Project





Principal
Capital Expenditures and Divestitures





In August
2009, the Corporation completed the sale of its “Moorcroft Database” to
Peninsula Minerals Limited for US$1 million and a royalty on future production
from a broad-ranging project area in the Eastern Powder River Basin,
Wyoming.  The Corporation obtained the Moorcroft Database as part of
its acquisition of NFU Wyoming in 2005, which also included several other
historic databases.





Although
construction of the Lost Creek plant will not begin until receipt of the
necessary permits, requests for quotations for all major process equipment were
prepared and solicited from vendors and contractors.  During 2009, the
Corporation spent approximately $1.1 million on construction related activities,
including plant design work and the purchase of certain long-lead construction
items.





No
significant capital expenditures are currently in progress.  Pursuant
to the Corporation’s policy, other continuing development costs on the Lost
Creek project are presently being charged to expense as incurred.





B.Businessoverview.





Lost Creek
Project





The Lost
Creek uranium deposit is located in the Great Divide Basin, Wyoming. The deposit
is approximately three miles (4.8 kilometers) long and the mineralization occurs
in four main sandstone horizons between 315 feet (96 meters) and 700 feet (213
meters) in depth.





As
identified in the June 2006 Technical Report on Lost Creek, NI 43-101 compliant
resources are 9.8 million pounds of U3O8 at 0.058%
as an indicated resource and an additional 1.1 million pounds of U3O8 at 0.076%
as an inferred resource.





A royalty
on future production of 1.67% is in place with respect to 20 claims comprising a
small portion of the Lost Creek project.





The Corporation continues
to advance matters to obtain an NRC Source Material and Byproduct License (the
“NRC License”) for the Lost Creek project.   In October 2007, the
Corporation submitted its Application for the NRC License (the
“Application”).In June 2008, the NRC
notified the Corporation that the acceptance review had been completed and theApplication was found sufficient for technical review.  Since
November 2008, the NRC has submitted various Request for Additional Information
(“RAI”) inquiries to the Corporation for both the Technical Report and
Environmental Report portions of the Application and the Corporation has
submitted responses.  In June 2009, the NRC issued its Generic
Environmental Impact Study (“GEIS”).  In addition to the GEIS
guidelines, the NRC has advised all applicants for new ISR operations that a
site-specific SEIS is required.  The Corporation received the Lost
Creek Draft SEIS in December 2009, and submitted comments to the NRC in response
in February 2010. The
NRC extended the comment period through March 3,
2010,  and  the NRC is processing comments received from the
public and other regulators that were submitted on or before that date. Current NRC guidance calls
for the completion of an SEIS for each pending application in second quarter
2010 and the probable issuance of licenses in third quarter
2010.The Corporation anticipates the issuance of Lost Creek's
NRC License in the summer of 2010.





The U.S.
Bureau of Land Management (“BLM”) has determined that its project environmental
review and approval will be independent of the environmental review process
carried out by the NRC. In response, the Corporation submitted a Plan of
Operations to the BLM in November 2009. The BLM appointed a coordinator for the
review process and the review, including public comment and selection of a
contractor for the environmental review, has commenced. The BLM’s decision of
record on the Plan is expected in the summer of 2010.





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The
Corporation continues to advance matters to obtain a WDEQ Permit to Mine (the
“WDEQ Permit”) for the Lost Creek project.  In December 2007, the
Corporation submitted the Lost Creek Permit to Mine Application (the “WDEQ
Application”) to the WDEQ.  The WDEQ Application was deemed complete
in May 2008.  WDEQ has issued various sets of technical comments to
which the Corporation has responded.  The Corporation submitted its
data package for Mine Unit #1 in December 2009, and initial comments were
received from WDEQ in February 2010.  The Company anticipates filing
its responses to those comments before the end of first quarter
2010.  Ur-Energy anticipates the issuance of Lost Creek's WDEQ Permit
in the summer of 2010.





On March
5, 2010, the U.S. Fish and Wildlife Service (“USFWS”), in compliance with a
federal court order, submitted a finding of “warranted for listing but precluded
by higher priorities” with regard to the greater sage grouse – whose habitat
includes Wyoming. A finding that listing is “warranted but precluded” results in
recognition of the greater sage grouse as a candidate for listing. This finding
is reconsidered annually, taking into account changes in the status of the
species. When higher priority listing actions have been addressed by the USFWS
for other species, a proposed listing rule is prepared and issued for public
comment. This means that until the USFWS finalizes a listing determination, the
greater sage grouse will remain under state management.  As a part of
its WDEQ Application, the Corporation has submitted a Wildlife Protection Plan
regarding, among other issues, the sage grouse. The Corporation conducted
several meetings during fourth quarter 2009 – first quarter 2010 with
the WDEQ and Wyoming Department of Game and Fish to facilitate the
processing and acceptance of the mitigation plan as a part of the WDEQ
Permit.





The
Corporation submitted to the WDEQ-Water Quality Division an application for a
permit for up to five Class 1 UIC disposal wells.  These wells,
utilized for deep geologic disposal of liquid waste, will be located within the
Lost Creek permit area.  The Corporation acquired detailed data
including formation stratigraphy, reservoir extent and properties, water quality
and assessment of well injection rates from a deep test well drilled in
2008.   This data set was used to support the application which
was submitted to WDEQ-Water Quality Division in June 2009. WDEQ processing of
this particular application was delayed initially as a result of WDEQ staffing
issues, but progressed with the issuance in late November 2009 of technical
comments, to which the Corporation submitted its responses on February 1,
2010.  The Corporation anticipates receipt of this permit in the
second quarter of 2010.





The
Corporation continued its development program at Lost Creek during
2009.  The first phase of the 2009 program included the drilling and
installation of 15 monitoring wells (11,770 feet / 3,590 meters) to obtain and
monitor water quality and hydrologic data for the purpose of permitting an
additional mineralized horizon underlying the horizon presently being
permitted.  The Corporation also completed mechanical integrity
testing of installed baseline and monitoring wells and the installation of
submersible pump equipment to facilitate ongoing water sampling
requirements.





In July
2009, the delineation drilling program at Lost Creek continued with 235
additional drill holes originally planned.  As the program progressed,
additional drill holes were planned, and the program was extended through
February 2010, to further investigate mineralization found in unanticipated
locations.  As of February 28, 2010, 277 holes were completed for a
total of 196,840 feet (59,741 meters) drilling completed to support definition
of future proposed mining areas.   As well, in early 2010,
additional monitor wells were drilled and other work completed.





In 2009,
the Corporation’s engineering staff, assisted by TREC,Inc., completed the
detailed designs and specifications for all components of the Lost Creek
plant.





Although
construction of the Lost Creek plant will not begin until receipt of the
necessary permits, requests for quotations for all major process equipment at
the Lost Creek project were solicited from vendors and
contractors.  Bids were evaluated and procurement was ongoing
throughout 2009.  One purchase order totaling US$1,323,834 was issued
during the second quarter of 2009 for ion exchange columns and other process
equipment.  An additional purchase order for US$319,357 was issued
during the second quarter in order to initiate the drawing and approval process
for other plant equipment.





During
the year ended December 31, 2008, the Corporation invested $3.5 million in
mineral properties, bonding deposits, capital assets and design work on the Lost
Creek plant.  The majority of these expenditures went toward bonding
deposits and the purchase of capital assets.  The capital asset
purchases were primarily for field vehicles and field equipment purchased to
facilitate the exploration and development work programs in
Wyoming.





During
the year ended December 31, 2007, the Corporation invested $3.5 million in
mineral properties, bonding deposits and capital assets.  The majority
of these expenditures went toward mineral properties and bonding
deposits.  The capital asset purchases were primarily for field
vehicles and field equipment purchased to facilitate the exploration and
development work programs in Wyoming.





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Technical
Report Summaries





The
following are the executive summaries from the two technical reports completed
on the Lost Creek project.  A Preliminary Assessment, completed in
2008 by John I. Kyle, P.E. and Douglas K. Maxwell, P.E. of Lyntek Incorporated
(“Lyntek”), is the more recent NI 43-101 Technical Report and was prepared to
provide an independent analysis and preliminary assessment of the potential
economic viability of the mineral resource of the Lost Creek project. In 2006,
an NI 43-101 Technical Report was prepared by C. Stewart Wallis, P.Geo, then a
consulting geologist associated with Scott Wilson Roscoe Postle Associates Inc.
(formerly, Roscoe Postle Associates Inc. (“RPA”)).





As noted
above, considerable development and changes have been made on the Lost Creek
property since these reports, particularly the initial Wallis report, were
produced.  Total drilling on the project to date by Ur-Energy is 1048
holes for a total of 689,824 feet (210,007 meters).  Most of this
drilling, however, has been geared toward advancing the primary resource at the
Lost Creek deposit toward production.  For the most part, the detailed
drill holes (300 or more holes to delineate each mine unit at 100 foot spacing)
were drilled for mine unit design and layout purposes. These holes are closely
spaced for the mine unit planning and specifically not for the purpose of adding
resources.





April
2008





The
following is the Executive Summary extracted from the technical report dated
April 2, 2008 and titled “Preliminary Assessment for the Lost Creek Project
Sweetwater County, Wyoming”, which was prepared for the Corporation in
accordance with NI 43-101 by Lyntek (“Preliminary Assessment – Lost
Creek”).  The full Preliminary Assessment – Lost Creek can be viewed
under the Corporation’s profile on the SEDAR website at www.sedar.com.





EXECUTIVE
SUMMARY





Lyntek
has generated a preliminary assessment or scoping study of the Lost Creek
uranium in situ recovery (ISR) project located in Sweetwater County,
Wyoming.  Lost Creek ISR, LLC a wholly owned subsidiary of Ur-Energy
USA Inc. controls the property and has evaluated the potential to place the
property in production through the use of an in-house economic
analysis.  Lyntek has reviewed the analysis and has made changes as
necessary to represent the project’s economics.  During this effort,
we reviewed several technical details regarding the project.





Lyntek
has relied upon work conducted by an earlier NI 43-101 study that defined the
uranium resources (C. Stewart Wallis, 2006).  The Lost
Creek  resources are based on a minimum grade of 0.03 % U3O8
and  a minimum grade thickness (GT) equal to or greater than 0.3 are
reported in the table below.





Table
      1.1 Lost Creek Resources: C. Stewart Wallis, Rostle Postle Associates,
      Inc., June 15, 2006Reserve
      Classification
            
            Tons
              (millions)
            
            
            Average Ore Zone
              Thickness (feet)
            
            
            Uranium Grade
              (Percent U3O8)
            
            
            Pounds U3O8
              (millions)Indicated
            
            
            8.5
            
            
            
            19.5
            
            
            
            0.058
            
            
            
            9.8Inferred
            
            
            0.7
            
            
            
            9.6
            
            
            
            0.076
            
            
            
            1.1





Indicated
Resources were defined by 200 feet spacing with the exception of a few sections
drilled off at 50 feet spacing.  Detailed drilling on closer spacing
(up to 50 feet) will be necessary prior to the final engineering designs and the
ISR mining of individual mine units during the life of the mine. Individual mine
units will be drilled out with hydrologic testing just prior to mining each mine
unit.  Detail drilling of the first mine unit planned is not completed
at this time. The size and shape of individual mine units may vary when detailed
drilling is carried out on each unit and the hydrologic characteristics of each
mine unit may vary from mine unit to mine unit.





Since the
practice of ISR mining is to drill out individual mine units just prior to
mining each unit, this Preliminary Assessment report can only use indicated
mineral resources which are considered too speculative geologically to have
economic considerations applied to them to be categorized as Mineral Reserves. A
conservative approach to this preliminary assessment of the Lost Creek Project
has been employed by using an in-place indicated resource of 8.1 million pounds
of U3O8 defined by
a model of 6 individual mine units averaging 1.2 to 1.4 million pounds of U3O8.   Assuming
an 80 % uranium recovery, it is projected that there will be 6.5 million pounds
of U3O8
produced.  The uranium mineralization is primarily located in the HJ
and the UKM sandstone horizons at average depths of 435 feet and 555 feet,
respectively.





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Lost
Creek ISR, LLC has conducted hydrologic studies through its contractor Petrotek
Engineering Corporation (October 2007) of the mineralized HJ sandstone
horizon.  These studies show that the sandstones appear to have
adequate hydrologic characteristics that will support ISR
operations.  In addition, it has been concluded that the shale layers
above and below the HJ ore zone will act as adequate geologic members to contain
the lixiviant within the desired production zone and prevent the migration of
the lixiviant to water bearing geologic zones above and below the target
mineralized zone.





It is
important to note that there is an east-west scissor fault located down the axis
of a significant portion of the resources.  This fault will impact
mining operations. The hydrology studies also defined the scissor fault as a
tight zone which acts as a barrier to groundwater flow across the
fault.  In addition, there is a difference in ground water elevations
within the HJ structure as the fault line is crossed.  The water level
on the south side of the fault lies below the water level on the north side of
the fault.  Work in evaluating the UKM sandstone horizon has begun but
needs to be finalized to determine if it has suitable characteristics consistent
with the HJ horizon.





Leach
studies have been conducted in 2005 and 2007.  The leach studies
conducted in 2005 used bottle roll tests on six one-foot core sections from five
drill holes.  The uranium grades within these six samples ranged from
a low of 0.040 to a high of 0.480.  With the application of 25 pore
volumes of lixiviant containing 2 grams/liter HCO3 and 500 milligrams/liter of
H2O2, the recoveries ranged from 59.4 to 92.8 %.  Interestingly, the
high grade sample showed the lowest recovery and it is quite possible that
additional pore volumes of lixiviant would remove additional uranium as the last
pore volume contained 68 milligrams of uranium, so recovery would likely improve
to some degree on this high grade ore.  The next lowest recovery was
75.0 %.  The 2007 leach study focused on a homogenized production zone
from one hole in the HJ horizon.  The goal of this test group was to
review a matrix of different chemistries in an effort to determine the most
appropriate lixiviate chemistry for the project.  Results of the tests
show an elevated bicarbonate concentration may be required to maximize
productivity at the Project.  Natural groundwater with peroxide
yielded a 20 % ultimate recovery while all lixiviants with a bicarbonate
concentration greater than 1.0 g/L averaged 88.6 % ultimate recovery with a
range of 84.1 to 93.3 %.





Project
economics have been developed assuming a 6000 gpm ISR processing plant producing
one million pounds of U3O8 per
year.  During the first two years, yellowcake slurry will be produced
while a dryer is being permitted and constructed so that afterwards dry
yellowcake can be produced.  The capital costs for plant equipment and
facilities also include capital costs for a larger plant that will accommodate
an additional one million pounds of U3O8 for
processing resin from other properties including those belonging to Ur-Energy
USA Inc.  However the operating costs and sales of this additional
yellowcake capacity have not been included in the economics
analysis.  It is assumed that the additional capital investment will
present an un-quantified opportunity.





In
Lyntek’s assessment of the economics for the project, we find that the project
will produce results that are quite robust.  The economic assessment
assumes contingencies of 20 % for both capital and operating
costs.  Lyntek has used a price forecast of $80 as an indicator of
likely uranium prices in the future.  Per Nuclear Market Review, this
price is $15 below the current fixed price contract and $7 above the spot price
indicator of February 29, 2008.  Because of the volatility of uranium
prices, this price appears to be a reasonable price upon which the project’s
economics can be based.  To allow for the volatility of the uranium
price, we have assumed a price swing potential of $40 per pound of U3O8 and
developed additional economic cases upon those swings to allow stakeholders to
properly evaluate the potential economics of the project under possible price
conditions.  Because of the extreme difficulty in forecasting current
uranium prices, it is recommended that stakeholders pay particular attention to
the lower limit price forecast as a measure of evaluating risk for the
project.  In addition to assist with forecast issues, cost
sensitivities were also modeled to evaluate potential cost
variances.  The results of these economic analyses are shown in Table
1-2.





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Table
      1-2 Economic IndicatorsCase
            
            Revenue
              ($MM)
            
            
            Pre-tax
              IRR (%)
            
            
            NPV @ 10%
              ($MM)Case
      1 Base Case U3O8
      $80
            
            
            516.2
            
            
            
            43.6
            
            
            
            106.8Case
      2 U3O8
      $40
            
            
            258.1
            
            
            
            -1.9
            
            
            
            -23.2Case
      3 U3O8
      $120
            
            
            774.3
            
            
            
            73.8
            
            
            
            236.8Case
      4 U3O8 $80
      Operating Costs +20%
            
            
            516.2
            
            
            
            39
            
            
            
            90.6Case
      5 U3O8 $80
      Operating Costs – 20%
            
            
            516.2
            
            
            
            48.2
            
            
            
            122.9Case
      6 U3O8 $80
      Capital Costs +20%
            
            
            516.2
            
            
            
            36.7
            
            
            
            94.3Case
      7 U3O8 $80
      Capital Costs -20%
            
            
            516.2
            
            
            
            52.5
            
            
            
            119.3Case
      8 Worst Case U3O8 $40
      Op. & Cap. Costs + 20%
            
            
            258.1
            
            
            
            -7.6
            
            
            
            -51.7Case
      8 Best Case U3O8 $120
      Op. & Cap. Costs - 20%
            
            
            774.3
            
            
            
            90
            
            
            
            265.7





(a)
This analysis is conducted upon operating and capital costs that include
contingencies of 20%, respectively.  The ranges cited above assume
that the operating and capital estimates, inclusive of contingencies, may range
in actuality by 20 %.





For the
life of the mine, the economic assessment estimates the average operating cost
at $19.46 per pound and, with a 20 % contingency, 23.36 per pound of U3O8.  The
capital cost for the plant is estimated at $30.0 million.  The
development of the property, inclusive of header houses, drilling,
environmental, engineering, and permitting is forecast at $23.9
million.  Contingencies of $8.6 million are added to provide a total
capital cost of $62.5 million to start the project in 2009.  Of this
amount, $5.5 million has already been spent to advance the project to the
current stage.  The bonding estimate, which is included in the cash
flow assessment, requires $5.5 million in spending up to the start of
production, of which $1 million has already been spent.  The allocated
purchase price of the property, which is included in the economics as sunk
capital, is $9 million.  The remaining expenditures to bring the
project into production, at this point in time is then, $61.5 million, including
contingencies.  Lyntek is of the opinion that these costs fairly
represent the expected capital and operating costs of the project.





Based
upon this economic assessment, it is recommended that work continue upon this
project to further analyze the project, work to reduce risks, continue to permit
and plan to execute the project as it appears to be worthwhile to continue these
efforts.  It is recommended that more extensive hydrologic and leach
tests be conducted to better define these important
considerations.  Furthermore, there is no certainty that the results
projected in the Preliminary Assessment will be realized and actual results may
vary substantially.





June
2006





The
following is the Executive Summary extracted from the technical report dated
June 15, 2006 and titled “Technical Report on the Lost Creek Property, Wyoming”,
which was prepared for the Corporation in accordance with NI 43-101 by C.
Stewart Wallis, P.Geo, who at the time of the preparation of the report was a
consulting geologist associated with Scott Wilson Roscoe Postle Associates Inc.
(formerly, Roscoe Postle Associates Inc.) (“Technical Report – Lost
Creek”).  The full Technical Report – Lost Creek can be viewed under
the Corporation’s profile on the SEDAR website at www.sedar.com.





EXECUTIVE
SUMMARY





RPA was
retained by Ur-Energy to prepare an independent Technical Report on the Lost
Creek Project in the State of Wyoming, USA.





The Lost
Creek Project consists of 184 unpatented lode claims and one state section lease
totaling 4,379 acres, 90 miles southwest of Casper, Wyoming. The property was
extensively drilled in the 1970s by Texasgulf Inc. (TG) and, more recently,
Ur-Energy has completed a program of data compilation and 10,420 ft. of
confirmation drilling.





The
current resources at the Lost Creek Project 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 Table
1-1.  RPA is of the opinion that the classification of resources as
stated meets the CIM definitions as adopted by the CIM Council on November 14,
2004, as required by National Instrument 43-101.





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 Table of Contents




Table
      1.1 Lost Creek Resources - 2006
              Ur-Energy,
      Inc.Classification
            
            Tons
              (millions)
            
            
            Average
              Thickness (Ft.)
            
            
            Grade
              (% U3O8)
            
            
            Pounds U3O8
              (millions)Indicated
            
            
            8.5
            
            
            
            19.5
            
            
            
            0.058
            
            
            
            9.8Inferred
            
            
            0.7
            
            
            
            9.6
            
            
            
            0.076
            
            
            
            1.1





Preliminary
leach tests indicate that the mineralization is amenable to leaching with an
oxygenated lixiviant. The main mineralized horizons, which have an approximate
stratigraphic thickness in excess of 130 ft., are confined by impermeable
mudstones above and below the mineralization and, therefore, are considered to
be ideal for the use of in situ leaching (ISL) methodology.





Ur-Energy
has proposed a US$2.975 million budget to advance the project during the year
ending June 2007. The proposed program includes the drilling of 17 wells in
order to carry out pump tests and water quality analysis, permitting, collection
of environmental data, and feasibility studies. Ur-Energy is planning to submit
an application for mine permits by mid 2007.





RPA is of
the opinion that Ur-Energy should continue with the drilling, pump tests,
permitting and feasibility studies leading to a production
decision.





TECHNICAL
SUMMARY





The Lost
Creek Project is located 90 miles southwest of Casper, Wyoming, and 25 miles
south of Jeffrey City, which is located on U.S. Highway 287. The property is
readily accessible year round by an extensive system of gravel and dirt roads
extending from Jeffrey City.





Climax
Amax Inc. acquired the property in 1968 and discovered low-grade mineralization
in the Battle Springs formation. TG acquired the property in 1976, optioned the
adjoining Conoco ground in 1978, and completed drilling with the discovery of
the continuation of the Main Mineral Trend (MMT) eastward from the Lost Creek
Project. Leach tests using bicarbonate lixiviant resulted in uranium extraction
ranging from 60% to 80%. TG dropped the project in 1983 due to economic
conditions.





From 1986
to 1988, Power Nuclear Corporation (PNC) Exploration of Japan acquired a 100%
interest in the project from Cherokee Exploration Inc., the then owner of the
property, and conducted geologic and in situ leach evaluations. In 2000, New
Frontiers Uranium LLC acquired the property and the database from
PNC.





About
3,000 rotary drill holes totaling some 1.36 million ft. have been completed on
or near the property, with the MMT being drilled off at 200 ft. centers with
some infill at closer spacing.





There
have been a number of resource estimates completed by the various owners since
1978. In 1982, TG reported a total resource of 5.7 million lbs of contained
U3O8 in 4.6 Mt
at an average grade of 0.062% U3O8using a
polygonal method with varying cut-offs. These resources are historical in nature
and Ur-Energy is not treating the historical estimates as NI 43-101 defined
resources or reserves verified by a qualified person, and the historical
estimates should not be relied upon.





Mineralization
is found at depths ranging from 150 ft. to 1,150 ft. in fluvial arkosic
sandstones of the Eocene Battle Spring Formation that dip from 3° northwest to
3° southwest. Thick-bedded (up to 50 ft. thick), medium- to coarse-grained
sandstones make up about 60% of the section at Lost Creek and host the uranium
deposits. Siltstone, shale, and claystone are interbedded with the sandstones.
The main zone of mineralization at Lost Creek strikes east-west for at least
four miles (half of which is well defined) and is up to 2,000 ft. wide, with
intercepts ranging from 350 ft. to 700 ft. deep. Mineralization is in the form
of fine-grained intergrowths of coffinite with pyrite, as coatings, fracture
fillings, and rimming voids. Grade ranges from 0.03% U3O8 to 0.20%
U3O8, with an
average of intercepts in the mineralized envelope of the MMT at 0.04% U3O8.  The
thickness of individual mineralized beds at Lost Creek locally ranges from 5 ft.
to 28 ft., and averages 16 ft. It appears that there are no high-grade
intercepts greater than 0.5% U3O8.
Generally, the deposit has uniformly low grade intercepts in thick mineralized
horizons, with continued alteration to the north.





Ur-Energy
carried out a drill program totaling 10,420 ft. in 14 holes during October and
November 2005. Twelve holes were spotted within 5 ft. to 10 ft. of the
historical drill holes in order to verify mineralization intersected in those
older holes and to allow comparison of the mineralized intervals. One hole was
drilled between two historical holes 200 ft. apart in order to verify continuity
of the mineralization. The holes were surveyed with a down-hole geophysical
probe and selected intervals of core were sampled for chemical assays.
Measurements taken by the down-hole probe include gamma logs, self potential,
resistivity, and hole deviation. A total of 188 samples were chemically analyzed
at Energy Laboratories Inc. (Energy Labs) of Casper, Wyoming, using standard
industry analyses. Energy Labs has been carrying out uranium analysis for over
25 years and is considered to be a recognized laboratory.





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 Table of Contents




Ur-Energy
selected a total of six one-foot samples from the recent drilling to undergo
bottle roll leach tests. The work was carried out over an 80 hour period at
Energy Labs using a lixiviant of sodium bicarbonate and hydrogen peroxide.
Analysis of the leach solutions indicated leach efficiencies of 52% to 94%.
Tails analysis indicated an average U3O8 extraction
of 82.8%.





AATA
International Inc., an environmental consultancy at Fort Collins, Colorado,
reports that, based on the experience of two permitted projects, approval of a
new greenfield ISL project could require three to four years after the decision
to proceed with a baseline data collection. Ur-Energy will fast-track the
project to shorten the timetable by one year by carrying out concurrent studies
wherever possible and being proactive with the agencies. The schedule is driven
by the collection of the environmental baseline data and project data. Ur-Energy
has commenced collection of the baseline data required, and permission has been
received from the Wyoming Department of Environmental Quality (WDEQ) for the
drilling of 17 wells to be used for pump tests that will commence in June. The
pump tests will provide information on water quality and permeability of the
sandstones relative to the horizontal and vertical flow. Wildlife,
meteorological, soil and vegetation surveys have commenced, and archaeological
and radiology surveys are scheduled for this summer.





A total
of 576 holes were identified within the current property boundary. These holes
contained 628 mineralized intervals equal to or greater than 0.03% U3O8. The
majority of the data consisted of U3O8 grade
estimated from geophysical logs. Chemical assays were used where available (17
holes), representing approximately 4% of the intervals. GT values were
calculated for each hole, using a cut-off of 0.03% U3O8. All
intercepts below the water table contributed to the total thickness. A 0.3 GT
boundary was used to create polygons, from which the area was calculated.
Nineteen (19) holes within this boundary, but with a GT value of less than 0.3,
were excluded from the estimate.





RPA
reviewed selective geophysical drill logs, compared the TG drill holes and
geophysical logs with the twins drilled by Ur-Energy, and considers the data
appropriate for use in a resource estimate.





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





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





Lost Soldier
Project





The Lost
Soldier project is located approximately 14 miles (22.5 kilometers) to the
northeast of the Lost Creek project. The property has over 3,700 historical
drill holes defining 14 mineralized sandstone units.  The Corporation
maintains 143 lode mining claims at Lost Soldier, totaling approximately 2,710
mineral acres (1,097 hectares).  A royalty on future production of one
percent (1%), which arises from a data purchase, is in place with respect to
certain claims within the project.





Following
the completion, in 2007, of all environmental baseline studies, the Lost Soldier
project was turned over to the Corporation’s engineering staff for detailed
engineering evaluation and study, which has been ongoing; detailed mapping of
the roll-front geology, and detailed mine design planning have been
prepared.  Corporation staff continued with engineering studies and
mine design analyses in 2009.  The Corporation continues to anticipate
that regulatory applications for Lost Soldier will be made after the Corporation
obtains the Lost Creek licenses and permit to mine, and as corporate priorities
are determined for the development of the lands adjacent to Lost
Creek.





Technical
Report





The
following Executive Summary is extracted from the technical report dated July
10, 2006 and titled “Technical Report on the Lost Soldier Property, Wyoming”,
which was prepared for the Corporation in accordance with NI 43-101 by C.
Stewart Wallis, P.Geo, who at the time of the preparation of the report was a
consulting geologist associated with Scott Wilson Roscoe Postle Associates Inc.
(formerly, Roscoe Postle Associates Inc.) (“Technical Report – Lost
Solider”).  The Technical Report – Lost Soldier can be viewed under
the Corporation’s profile on the SEDAR website at www.sedar.com.





Page
18
 Table of Contents




EXECUTIVE
SUMMARY





RPA was
retained by Ur-Energy, to prepare an independent Technical Report on the Lost
Soldier Project in the State of Wyoming, USA.





The Lost
Soldier Project consists of 70 unpatented claims totaling 1,400 acres located in
Sweetwater County, 90 miles southwest of Casper, Wyoming. The property was
extensively drilled in the 1970s and more recently Ur-Energy has completed a
program of data compilation and continuation drilling.





The
current resources at the Lost Soldier Project 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 Table 1-1. RPA
is of the opinion that the classification of resources as stated meets the CIM
definitions as adopted by the CIM Council on November 14, 2004 as required by
National Instrument 43-101.








Table
      1-1 Lost Soldier Resources – 2006
              Ur-Energy
      Inc. Lost Soldier ProjectClassification
            
            Tons
              (millions)
            
            
            Average
              Thickness (Ft.)
            
            
            Grade
              (% U3O8)
            
            
            Pounds U3O8
              (millions)Measured
            
            
            3.9
            
            
            
            21.1
            
            
            
            0.064
            
            
            
            5Indicated
            
            
            5.5
            
            
            
            17.1
            
            
            
            0.065
            
            
            
            7.2Total
      M+I
            
            
            9.4
            
            
            
            17.2
            
            
            
            0.065
            
            
            
            12.2Inferred
            
            
            1.6
            
            
            
            14.5
            
            
            
            0.055
            
            
            
            1.8





Preliminary
leach tests indicate that the mineralization is amenable to leaching with an
oxygenated lixiviant. The main mineralized horizons consist of nine sand units
ranging from depths of 100 ft. to greater than 450 ft. below the surface and are
separated by impermeable mudstones and therefore are considered to be ideal for
the use of ISL methodology.





Ur-Energy
has proposed a US$3.145 million budget to advance the project during the year
ending June 2007. The proposed program includes the drilling of 17 wells in
order to carry out pump tests and water quality analysis, permitting, collection
of environmental data and feasibility studies. Ur-Energy is planning to submit
an application for mine permits by mid 2007.





RPA is of
the opinion that Ur-Energy should continue with the drilling, pump tests,
permitting and feasibility studies leading to a production
decision.





TECHNICAL
SUMMARY





The Lost
Soldier Project is readily accessible year round by three miles of gravel road
from Bairoil, which is approximately 90 miles southwest of Casper.





In the
late 1960s, Kerr-McGee Corp. (Kermac) carried out reconnaissance exploration and
drilling that showed potential for low-grade mineralization in the Lost Soldier
area. Kermac continued drilling through May, 1974 but let the property expire in
1986. More than 5,900 exploration, development, and core holes, totaling over
3.3 million ft. have been drilled in the area, half of which were drilled on 50
ft. to 100 ft. spacing.





Several
individuals restaked the property and from 1992 to 1994, Cameco Corporation
(Cameco) re-evaluated the property in 1993 and 1994. Cameco completed 28 holes
totaling 13,481 ft. including 911 ft. of coring in 19 holes to provide samples
for porosity and permeability tests. It is reported that there was excellent
permeability in the mineralized sands and low permeability in the confining
zones. The leach tests confirmed that the mineralization was amenable to
leaching with bicarbonate lixiviant.





Cameco
transferred the property to its subsidiary Power Resources in January 1997 and
the property was returned to the original owners in 2000. In 2003, New Frontiers
) consolidated the 53 claim property.





Effective
June 30, 2005, Ur-Energy entered into the Membership Interest Purchase Agreement
where under it agreed to purchase all of the issued and outstanding membership
interests in NFU Wyoming for US$20 million as part of a package of properties
that includes an extensive database. Ur-Energy staked an additional 17 claims
adjoining the original property.





There
have been a number of historic resource estimates completed by various owners of
the property with the most recent being Cameco, (1994) that reported the
following resources:





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•
Demonstrated: 8.4 million pounds of U3O8





•
Inferred: 7.3 million pounds of U3O8





The
resources stated above are historical in nature and Ur-Energy is not treating
the historical estimates as National Instrument 43-101 defined resources or
reserves verified by a qualified person and the historical estimates should not
be relied upon.





The Lost
Soldier deposit occurs in the eastern part of the Great Divide Basin in arkosic
sandstones of the Eocene Battle Spring Formation. Pliocene pediment and gravel
deposits cover the sedimentary rocks and average four ft. thick. The Battle
Spring Formation is 900 ft. thick locally and dips 1.5° to 15° west reflecting
the Lost Soldier anticline. Mineralized intervals are found at depths ranging
from less than 75 ft. to 500 ft. with individual sandstone beds up to 120 ft.
thick containing uranium mineralization. Siltstone and mudstone intervals up to
30 ft. thick correlate across the area and separate the upper and lower
sandstones. Alteration in barren zones within the geochemical cell shows
limonite and hematite staining, kaolinization of feldspar, bleaching, and
greenish coloration by chlorite. The area has a static water table 30 ft. to 100
ft. deep, typically 70 ft. to 80 ft.





Uranium
occurs as uraninite and coffinite, in roll fronts and in stacked tabular bodies
in arkosic sandstones. Some of the mineralization is also related to
post-mineral faulting and remobilization. Mineralization occurs in nine or more
sandstone horizons, generally 7 ft. to 16 ft. thick. An upper sandstone unit
about l00 ft. thick contains most of the uranium mineralization. Grade ranges
from 0.04% to 0.20% U3O8 with an
average of intercepts in the mineralized zone of 0.078% U3O8.  Several
mineralized fronts extend beyond the core area, providing possible extensions to
the deposit to the west-northwest and south.





Ur-Energy
completed five rotary holes totaling 1,857 ft. during October and November 2005.
The holes were spotted within 5 ft. or 10 ft. of the historical holes in order
to verify mineralization intersected in these older holes and allow comparison
of the mineralized intervals. Century Geophysical Corp of Tulsa, Oklahoma
carried out downhole surveys which included gamma logs, self potential,
resistivity and deviation surveys for all the holes. Of the total footage, 197
ft. in five holes were cored and 97 one-foot or 0.5 foot samples were chemically
assayed at Energy Laboratories in Casper, Wyoming using a four-acid leach and
ICP analysis. Energy Labs has been carrying out uranium analysis for over 25
years and is considered to be a recognized laboratory.





Ur-Energy
selected six one-foot samples from the recent drilling to undergo bottle roll
leach tests. The work was carried out over an 80 hour period at Energy Labs
using a lixiviant of sodium bicarbonate and hydrogen peroxide. Analysis of the
leach solutions indicated leach efficiencies of 53% to 94%. Tails analysis
indicated an average U3O8 extraction
of 65.2%.





AATA
International Inc., an environmental consultancy at Fort Collins, Colorado,
reports that based on the experience of two permitted projects, approval of a
new greenfield ISL project could require three to four years after the decision
to proceed with a baseline data collection. Ur-Energy will fast-track the
project to shorten the timetable by one year by carrying out concurrent studies
wherever possible and being proactive with the agencies. The schedule is driven
by the collection of the environmental baseline data and project
data.  Ur-Energy has commenced collection of the baseline data
required, and permission has been received from the Wyoming Department of
Environmental Quality (WDEQ) for the drilling of 17 wells to be used for
monitoring wells and pump tests that will commence in June. The pump tests will
provide information on water quality and permeability of the sandstones relative
to the horizontal and vertical flow. Wildlife, meteorological, soil and
vegetation surveys have commenced and archaeological and radiology surveys are
scheduled for this summer.





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 cut-offs 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, for which the area was
measured. One hundred and fifty (150) holes within this GT boundary but with a
GT value below the cut-off of 0.3 were excluded from the resource
estimate.





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





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A cut-off
grade of 0.03% U3O8and 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. centres
for indicated and up to 200 ft. for inferred resources.




C.Organizationalstructure.





The
Corporation has three wholly-owned subsidiaries:  Ur-Energy USA Inc.
(“Ur-Energy USA”), a company incorporated under the laws of the State of
Colorado for the acquisition and development of properties and, subsequently,
more generally for operations in the United States; ISL Resources Corporation
(“ISL”), a company incorporated under the laws of the Province of Ontario; and
CBM-Energy Inc. (“CBM”), a company incorporated under the laws of the Province
of Ontario.  The latter two entities are shell companies with no
assets or liabilities other than those related to their
incorporation.





ISL has
one wholly-owned subsidiary, ISL Wyoming, Inc., a company incorporated under the
laws of the State of Wyoming.





Ur-Energy
USA has four wholly-owned subsidiaries: NFU Wyoming, LLC (“NFU Wyoming”), a
limited liability company formed under the laws of the State of Wyoming to
facilitate the Corporation’s acquisition of certain property and assets and
subsequently to be the land holding and exploration branch of the companies;
NFUR Bootheel, LLC (“NFUR Bootheel”), a limited liability company formed under
the laws of the State of Colorado to facilitate the
Corporation’s  participation in a limited liability company venture
agreement with Crosshair; NFUR Hauber, LLC (“NFUR Hauber”), a limited liability
company initially formed under the laws of the State of Colorado to facilitate
the Corporation’s  participation in venture at the Corporation’s
Hauber project (now with Bayswater); and, Lost Creek ISR, LLC, a limited
liability company formed under the laws of the State of Wyoming to hold and
operate the Corporation’s Lost Creek property and assets.





NFUR
Bootheel is a Member in The Bootheel Project, LLC, a limited liability company
formed under the laws of the State of Colorado to hold the Corporation’s
Bootheel and Buck Point properties and the venture formed with Crosshair.
Crosshair completed its earn-in to a 75% interest in the Bootheel Project in
2009.  See Item 4.D
– Property, plants and equipment.





NFUR
Hauber has one wholly-owned subsidiary:  Hauber Project LLC, a limited
liability company formed under the laws of the State of Colorado to hold the
Corporation’s Hauber project and the venture in which Bayswater has become a
Member.  Bayswater is an earn-in Member and the current Manager of the
Hauber Project.  Bayswater can earn a 75% interest by incurring
eligible exploration expenditures over a four-year period.  See Item 4.D – Property, plants and
equipment.





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The
principal direct and indirect subsidiaries of the Corporation and the
jurisdictions in which they were incorporated or organized are set out
below:








D.Property, plants and equipment.





In
addition to Lost Creek and Lost Soldier, described above, the Corporation has a
number of other exploration properties in the United States and Canada, totaling
more than 220,000 mineral acres (approximately, 89,000 hectares).





The
Corporation also holds an extensive well log and exploration database, which an
in-house team of geologists continues to evaluate for the purpose of generating
new exploration targets and creating value by identifying other marketable
portions of the database.





Lost
Creek and Lost Soldier Projects





See Item 4B – Business overview
for detailed descriptions and backgrounds of the Lost Creek and Lost Soldier
projects.





Corporation’s
Projects Adjacent to Lost Creek





The
Corporation has expanded its land holdings around Lost Creek, and currently
controls a total of 1,753 unpatented mining claims and two State of Wyoming
sections for a total of almost 34,000 mineral acres including the Lost Creek
permit area, LC North, LC South, EN and Toby project areas.  These
totals include the 292 lode mining claims acquired by the Corporation during
2009 through staking and two purchase agreements.





Initial
drilling at LC North in 2007 was conducted for purposes of investigating
numerous occurrences of uranium-bearing intercepts detected by historical
exploration drilling by previous operators in the 1970s and examining the
relationships to the mineralization to be mined at Lost Creek. In the 2007 drill
program, 30 holes were drilled for a total of 29,600 feet (9,022
meters).





In 2008,
exploration drilling of 11,370 feet (3,468 meters) was completed at the EN
project. In January 2009, the Corporation completed an agreement reducing an
existing royalty within an area of interest arising from transactions dating
back to 2006.  With regard to the EN project, and three other areas,
the Corporation was able to eliminate the area of interest, and to reduce the
royalty (from two percent (2%) to one percent (1%)) on certain specified mining
claims.  The results of the 2007 and 2008 drilling programs outside of
the Lost Creek permit area along with information from over 725 historic drill
holes confirmed mineralization occurring in multiple horizons.





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In August
2009, the Corporation announced the results of in-house geologic evaluations of
the Lost Creek permit area and adjacent properties held by the Corporation which
contain multiple exploration targets demonstrating the potential to contain 24
to 28 million pounds U3O8 (not NI
43-101 compliant).  These potential quantity and grade ranges are
conceptual in nature, only. There has been insufficient exploration to define a
mineral resource.  It is uncertain if further exploration will result
in the target(s) being delineated as a mineral resource. Corporation geologists,
using Ur-Energy drilling and historic data, have identified a minimum of an
additional 120 compiled linear miles (193 kilometers) of new redox fronts with
potential for resource development on these properties. This is in addition to
the approximately 36 miles of redox fronts containing the current Lost Creek
deposit.  The new exploration targets on LC North and LC South
properties (adjacent to the Lost Creek permit area) consist of at least 10
individual sinuous redox fronts within four major stratigraphic horizons
identified by Ur-Energy geologists using an in-house database of historic drill
holes and Ur-Energy drill holes.  The Corporation continues to
evaluate the exploration potential and is recommending future exploration
programs for these areas. The newly identified fronts occur within the same
stratigraphic horizons that are present in the area of the Lost Creek
deposit.   Estimation of the potential of the new fronts is based
on the observed similarity of alteration characteristics, grade and thickness of
mineralization to that currently identified in the Lost Creek
deposit.





Hauber
Project LLC





In 2007,
the Corporation entered into agreements with Trigon Uranium Corporation and its
subsidiary ("Trigon").  Under the terms of the agreements, the
Corporation contributed its Hauber property to Hauber Project.  The
Hauber Project is located in Crook County, Wyoming and consists of 205
unpatented lode mining claims and one state uranium lease totaling approximately
4,570 mineral acres.  Effective August 1, 2008, Trigon tendered its
resignation as a Member and the Manager of the Hauber Project, after which
management of the Hauber Project was returned to the Corporation.  A
settlement of the remaining obligations of Trigon was reached in July
2009.





Effective
December 1, 2009, the Corporation entered into an agreement with
Bayswater.  Under the terms of the agreement, Bayswater joined the
Hauber Project as the earn-in Member and Manager of Hauber Project, and can earn
a 75% interest by incurring eligible exploration expenditures of US$1 million
dollars over a four-year period.  The first year’s expenditures will
include at least two core drill holes for the purpose of testing the ISR
amenability through selected mineralized zones. On January 11, 2010, the
Corporation further announced that Bayswater completed an independent NI 43-101
mineral resource estimate on the Hauber Project which concludes the properties
hold approximately 1.45 million pounds eU3O8 indicated
resources in 432,000 tons at an average grade of 0.17% eU3O8.





The
Bootheel Project, LLC





Crosshair
completed its earn-in of a 75% interest in the Corporation’s subsidiary, The
Bootheel Project, LLC during third quarter 2009.  The interest arises
from a venture agreement entered into by the Corporation and a subsidiary of
then-Target in June 2007.    Effective March 31, 2009,
Target became a wholly-owned subsidiary of Crosshair through a plan of
arrangement.  Crosshair’s 75% interest was acquired by spending US$3.0
million in qualified exploration costs, and issuing 125,000 common shares of
Target to the Corporation (which was exchanged for 150,000 shares of Crosshair
in its acquisition of Target).





Under the
terms of the 2007 agreement, the Corporation contributed its Bootheel and Buck
Point properties to the Bootheel Project.  The properties cover an
area of known uranium occurrences within the Shirley Basin. Crosshair completed
agreements in 2008 for additional rights and leased lands in the Bootheel
property area, in which the lessor has a 75% mineral interest in the net mineral
acres. With the completion of those agreements, the Bootheel Project covers
total defined areas at the Bootheel property and the Buck Point property of
approximately 8,524 gross, and 7,895 net, mineral acres.  Various
royalties exist on future production of uranium and other minerals from the
Bootheel Project.





Crosshair
released an independent resource estimate on the Bootheel property under NI
43-101 in the third quarter of 2009.This NI
43-101 resource estimate reports that the Bootheel property contains an
indicated resource of 1.09 million pounds U3O8 (indicated
resource) in 1.4 million short tons, at a grade of 0.038% U3O8and an
inferred resource of 3.25 million pounds U3O8(in 4.4
million short tons) at an average grade of 0.037% U3O8.  This
NI 43-101 report was filed by Crosshair on www.sedar.com. As a
result of the Corporation having a 25% interest in the project, it is no longer
the controlling Member of the Bootheel Project. Therefore the manner in which
the costs for the project’s Bootheel and Buck Point properties are reported in
the financial statements has changed from being fully consolidated in the
Corporation’s accounts to the investment in the project being treated as an
equity investment.  This equity investment is accounted for under the
equity accounting method with the net investment reflected on the Corporation’s
Balance Sheet.  The Corporation’s share of expenses incurred is shown
as loss from affiliate on the Statement of Operations.





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Additional
U.S. Exploration Activities and Corporation Databases





Ongoing
evaluation continues on the Corporation’s historic exploration databases.
Throughout 2009, the Corporation acquired rights in additional lands, and field
exploration programs continued.  The Corporation dropped its mining
claims in Arizona in the third quarter of 2009.  The Corporation holds
production royalty interests in various properties in the United States by
virtue of land transactions and the sale of the Moorcroft Database.





Canadian
Properties





The
Corporation has three properties in northern Canada:  Screech Lake,
Gravel Hill and Bugs.  The Corporation also retains a 5% royalty
interest in the Mountain Lake and Dismal Lake West properties held by Triex
Minerals Corporation, which together comprise 58 claims.





Screech
Lake and Gravel Hill Properties, Thelon Basin, Northwest Territories
Canada





The
Thelon Basin is host to the undeveloped Kiggavik-Andrew Lake and End uranium
deposits.  The Corporation’s Thelon Basin properties are grass roots
projects which the Corporation believes have potential for discovery of
high-grade unconformity uranium deposits of the Athabasca style. Of these, the
Screech Lake project remains the Corporation’s priority.  The
Corporation holds 24 claims, totaling more than 24,000 hectares (59,000
acres).





Various
geophysical work has been conducted on the property since 2005, including a
field exploration program in 2009.  Highly anomalous radon
concentrations and trends have been identified.  The coincidence of
consistent high to extremely high radon with deep structure and conductivity
combine to make the North Screech radon trend the primary focus of more advanced
exploration on the Screech Lake project.





In 2006,
an environmental screening study was completed, and an application for a land
use permit to conduct drill testing of the Screech Lake anomalies was referred
to the Mackenzie Valley Environmental Impact Review Board (“Review Board”) for
environmental assessment.  In 2007, an environmental assessment was
completed and a report and recommendation from the Review Board was issued. The
Review Board recommended to the Minister of Indian and Northern Affairs Canada
(the “Minister”) that the Corporation’s  application to conduct
exploratory drilling at the Screech Lake property be rejected due to local
native community concerns.  In October 2007, the Corporation received
notification that the Minister had adopted the recommendation of the Review
Board. As part of the decision, the Minister did confirm that the decision does
not affect the legal standing of the Corporation’s Screech Lake mineral
claims.





To date,
the Corporation continues its discussions with First Nations groups toward
securing an exploration agreement to facilitate the Review Board permitting
process for a drill program and further exploration.  In July 2009, an
agreement was secured with Lutsel K’e Dene First Nation to conduct surface
exploration work (not drilling).  Work carried out in the third
quarter of 2009 included claim maintenance, an audio-magnetotelluric (“AMT”)
survey and collection of over 500 surface samples for bio-leach and soil gas
analysis. Commenced in August 2009, this field program was completed in early
September 2009. The primary purpose of the AMT geophysics was to determine depth
to the top of the unconformity.  The two geochemical techniques
utilized are tools recently developed in the Athabasca Basin to locate anomalous
geochemical signatures over blind uranium orebodies. The choice of the survey
parameters resulted from the Corporation’s participation in the Canadian Mining
Industry Research Organization research program on the application of surface
geochemical methods in the Athabasca Basin.  Although no drilling was
conducted in 2009, the calculated depth measurements will better define drill
equipment requirements for future programs and defined, in part, near-surface
unconformity targets and better definition of cross-structures.





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The
Gravel Hill property consists of approximately 14,000 hectares (35,000
acres).  Assessment work was conducted at Gravel Hill in
2008.  No work was conducted at Gravel Hill in 2009 and there are
currently no plans for exploration work in 2010.





Bugs
Property, Baker Lake Basin, Nunavut Canada





The
Corporation conducted a drilling and field exploration program in 2008 on the
Bugs property in the Kivalliq region of the Baker Lake Basin, incurring total
exploration and acquisition costs of approximately $2.0 million.  As
part of this program, the Corporation utilized funds from the flow-through
financing it raised in March 2008.No field work was
conducted at the Bugs property in 2009.  The Corporation earned its
100% interest in the property in 2007 by issuing 85,000 Common Shares and
reserving a 2% net smelter royalty to the vendor. The Bugs property consists of
19 mineral claims totaling approximately 45,000 acres (18,000
hectares).  There are currently no plans for exploration work at the
Bugs property in 2010.





Item 4A. UnresolvedStaff Comments.





Not
applicable.





Item 5. Operatingand Financial Review and Prospects.





MANAGEMENT’S DISCUSSION AND ANALYSIS





Introduction





The
following provides management’s discussion and analysis of results of operations
and financial condition for the years ended December 31, 2009, 2008 and
2007.  Management’s Discussion and Analysis (“MD&A”) was prepared
by Company management and approved by the board of directors on March 5,
2010.  This discussion and analysis should be read in conjunction with
the Company’s audited consolidated financial statements for the years ended
December 31, 2009, 2008 and 2007.  All figures are presented in
Canadian dollars, unless otherwise noted, and are in accordance with Canadian
generally accepted accounting principles.





The
Company was incorporated on March 22, 2004 and completed its first year-end on
December 31, 2004.  The consolidated financial statements include all
of the assets, liabilities and expenses of the Company and its wholly-owned
subsidiaries Ur-Energy USA Inc.; NFU Wyoming, LLC; Lost Creek ISR, LLC; NFUR
Bootheel, LLC; Hauber Project LLC; NFUR Hauber, LLC; ISL Resources Corporation;
ISL Wyoming, Inc.; and CBM-Energy Inc.  All inter-company balances and
transactions have been eliminated upon consolidation. Ur-Energy Inc. and its
wholly-owned subsidiaries are collectively referred to herein as “Ur-Energy” or
the “Company”.





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Forward-Looking
Information
 
 This MD&A contains "forward-looking statements"
within the meaning of applicable United States and Canadian securities laws.
Shareholders can identify these forward-looking statements by the use of words
such as "expect", "anticipate", "estimate", "believe", "may", "potential",
"intends", "plans" and other similar expressions or statements that an action,
event or result "may", "could" or "should" be taken, occur or be achieved, or
the negative thereof or other similar statements. These statements are only
predictions and involve known and unknown risks, uncertainties and other factors
which may cause the Company’s actual results, performance or achievements, or
industry results, to be materially different from any future results,
performance, or achievements expressed or implied by these forward-looking
statements. Such statements include, but are not limited to: (i) the Company’s
belief that it will have sufficient cash to fund its capital requirements;
(ii)receipt of (and related
timing of) aUnited States Nuclear Regulatory Commission Source and Byproduct Material
License;Wyoming Department of Environmental Quality Permit and License to Mine and all
other necessary permits related to Lost Creek;(iii)
Lost Creek and Lost Soldier will advance to production and the production timeline at Lost Creek
scheduled for early 2011; (iv) production rates, timetables and methods
at Lost Creek and Lost Soldier; (v) the Company’s procurement and construction
plans at Lost Creek; (vi) the licensing process at Lost Soldier; (vii) the
timing, the mine design planning and the preliminary assessment at Lost Soldier;
(viii) the completion and timing of various exploration programs, including
without limitation, those as LC North and LC South ; (ix) the potential of new
exploration targets in the area of Lost Creek, including those at LC North and
LC South, to contain 24 – 28 million pounds of U3O8(not NI
43-101 compliant); (x) timing, completion, and funding for and results of
further exploration programs at the Bootheel Project and Hauber Project; and
(xi) the community and regulatory issues with the Screech Lake project and
related exploration.  These other factors include, among others, the
following: future estimates for production, production start-up and operations
(including any difficulties with startup),  capital expenditures,
operating costs, mineral resources, recovery rates, grades and prices; business
strategies and measures to implement such strategies; competitive strengths;
estimated goals; expansion and growth of the business and operations; plans and
references to the Company’s future successes; the Company’s history of operating
losses and uncertainty of future profitability; the Company’s status as an
exploration and development stage Company; the Company’s lack of mineral
reserves; the hazards associated with mining construction and production;
compliance with environmental laws and regulations; risks associated with
obtaining permits in Canada and the United States; risks associated with current
variable economic conditions; the possible impact of future financings;
uncertainty regarding the pricing and collection of accounts; risks associated
with dependence on sales in foreign countries; the possibility for adverse
results in potential litigation; fluctuations in foreign exchange rates;
uncertainties associated with changes in government policy and regulation;
uncertainties associated with the Canadian Revenue Agency’s audit of any of the
Company’s cross border transactions; adverse changes in general business
conditions in any of the countries in which the Company does business; changes
in the Company’s size and structure; the effectiveness of the Company’s
management and its strategic relationships; risks associated with the Company’s
ability to attract and retain key personnel; uncertainties regarding the
Company’s need for additional capital; uncertainty regarding the fluctuations of
the Company’s quarterly results; uncertainties relating to the Company’s status
as a non-U.S. corporation; uncertainties related to the volatility of the
Company’s shares price and trading volumes; foreign currency exchange risks;
ability to enforce civil liabilities under U.S. securities laws outside the
United States; ability to maintain the Company’s listing on the NYSE Amex (the
“NYSE Amex”) and Toronto Stock Exchange (the “TSX”); risks associated with the
Company’s possible status as a "passive foreign investment corporation" or a
"controlled foreign corporation" under the applicable provisions of the U.S.
Internal Revenue Code of 1986, as amended; risks associated with the Company’s
investments and other risks and uncertainties described under the heading “Risk
Factors” of the Company’s Annual Report on Form 20-F (“Annual Information Form”)
dated March 5, 2010 which is filed on SEDAR at www.sedar.comand with the U.S.
Securities and Exchange Commission at www.sec.gov.





The
potential quantity and grade ranges set forth in regards exploration targets at
Lost Creek, LC North and LC South are conceptual in nature only. There has been
insufficient exploration to define a mineral resource at the new exploration
targets at Lost Creek, LC North and LC South.  It is uncertain if
further exploration will result in the target(s) being delineated as a mineral
resource.





Nature
of Operations and Description of Business





The
Company is a development stage junior mining company engaged in the
identification, acquisition, evaluation, exploration and development of uranium
mineral properties in Canada and the United States.  Due to the nature
of the uranium mining methods to be used by the Company on the Lost Creek
property, and the definition of “mineral reserves” under National Instrument
43-101 (“NI 43-101”), which uses the CIM Definition Standards, the Company has
not determined whether the properties contain mineral
reserves.  However, the Company’s April 2008 NI 43-101 “Preliminary
Assessment for the Lost Creek Project Sweetwater County, Wyoming” outlines the
economic viability of the Lost Creek project, which is currently in the
permitting process with state and federal regulators.  The
recoverability of amounts recorded for mineral properties is dependent upon the
discovery of economically recoverable resources, the ability of the Company to
obtain the necessary financing to develop the properties and upon attaining
future profitable production from the properties or sufficient proceeds from
disposition of the properties.





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The
Company is primarily focused on uranium exploration in Wyoming, USA where the
Company has 12 properties.  Of those, ten properties are in the Great
Divide Basin, and two of those (Lost Creek and Lost Soldier) contain defined
resources that the Company expects to advance to
production.    Among its other properties, the Company also
has two uranium exploration properties in the Thelon Basin, Northwest
Territories, Canada.





Selected
Information





The
following table contains selected financial information as at December 31, 2009
and December 31, 2008.





As
      at
              December 31,
              2009
              $
            
            
            As
      at
              December 31,
              2008
              $Total
      assets
            
            
            81,702,205
            
            
            
            101,533,965Liabilities
            
            
            (1,550,675
            )
            
            
            (3,256,634
            )Net
      assets
            
            
            80,151,530
            
            
            
            98,277,331Capital
      stock and contributed surplus
            
            
            157,725,036
            
            
            
            157,118,019Deficit
            
            
            (77,573,506
            )
            
            
            (58,840,688
            )Shareholders’
      equity
            
            
            80,151,530
            
            
            
            98,277,331





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27
 Table of Contents




The
following table contains selected financial information for the years ended
December 31, 2009, 2008 and 2007 and cumulative information from inception of
the Company on March 22, 2004 to December 31, 2009.





Year
              Ended
              December 31,
              2009
              $
            
            
            Year
              Ended
              December 31,
              2008
              $
            
            
            Year
              Ended
              December 31,
              2007
              $
            
            
            Cumulative
              from
              March 22,
              2004
              through
              December 31,
              2009
              $Revenue
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilTotal
      expenses (1)
            
            
            (17,408,449
            )
            
            
            (25,967,711
            )
            
            
            (22,959,356
            )
            
            
            (88,288,232
            )Interest
      income
            
            
            890,915
            
            
            
            2,494,445
            
            
            
            2,816,398
            
            
            
            6,969,354Loss
      from equity investment
            
            
            (17,855
            )
            
            
            -
            
            
            
            -
            
            
            
            (17,855
            )Foreign
      exchange gain (loss)
            
            
            (3,506,111
            )
            
            
            5,656,319
            
            
            
            (806,420
            )
            
            
            2,062,128Other
      income (loss)
            
            
            940,237
            
            
            
            (36,638
            )
            
            
            -
            
            
            
            903,599Loss
      before income taxes
            
            
            (19,101,263
            )
            
            
            (17,853,585
            )
            
            
            (20,949,378
            )
            
            
            (78,371,006
            )Recovery
      of future income taxes
            
            
            368,445
            
            
            
            -
            
            
            
            429,055
            
            
            
            797,500Net
      loss for the period
            
            
            (18,732,818
            )
            
            
            (17,853,585
            )
            
            
            (20,520,323
            )
            
            
            (77,573,506
            )(1)
      Stock based compensation included in total expenses
            
            
            950,874
            
            
            
            4,567,206
            
            
            
            6,138,922
            
            
            
            15,713,071Loss
      per common share:Basic
      and diluted
            
            
            (0.20
            )
            
            
            (0.19
            )
            
            
            (0.24
            )Cash
      dividends per common share
            
            Nil
            
            
            Nil
            
            
            Nil





The
Company has not generated any revenue from its operating activities to
date.  The Company’s expenses include general and administrative
(“G&A”) expense, exploration and evaluation expense, development expense and
write-off of mineral property costs.  Acquisition costs of mineral
properties are capitalized.  Exploration, evaluation and development
expenditures, including annual maintenance and lease fees, are charged to
earnings as incurred until the mineral property becomes commercially
mineable.





No cash
dividends have been paid by the Company.  The Company has no present
intention of paying cash dividends on its common shares as it anticipates that
all presently available funds will be invested to finance new and existing
exploration and development activities.





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28
 Table of Contents




Summary of Quarterly
Financial Information





The
following table contains summary quarterly financial information for each of the
8 most recently completed quarters.





Quarter EndedDec.
      31
              2009
            
            
            Sep.
      30
              2009
            
            
            Jun.
      30
              2009
            
            
            Mar.
      31
              2009
            
            
            Dec.
      31
              2008
            
            
            Sep.
      30
              2008
            
            
            Jun.
      30
              2008
            
            
            Mar.
      31
              2008$
            
            
            $
            
            
            $
            
            
            $
            
            
            $
            
            
            $
            
            
            $
            
            
            $(Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)
            
            
            (Unaudited)Revenue
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilTotal
      expenses
            
            
            (3,419,379
            )
            
            
            (5,336,536
            )
            
            
            (3,616,032
            )
            
            
            (5,036,502
            )
            
            
            (7,947,470
            )
            
            
            (9,186,720
            )
            
            
            (5,502,306
            )
            
            
            (3,331,215
            )Interest
      income
            
            
            141,016
            
            
            
            130,519
            
            
            
            218,637
            
            
            
            400,743
            
            
            
            531,148
            
            
            
            573,608
            
            
            
            600,409
            
            
            
            789,280Loss
      from equity investment
            
            
            (4,365
            )
            
            
            (13,490
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Foreign
      exchange gain (loss)
            
            
            (1,393,136
            )
            
            
            (814,255
            )
            
            
            (1,933,051
            )
            
            
            634,331
            
            
            
            5,585,970
            
            
            
            (425,801
            )
            
            
            (156,296
            )
            
            
            652,446Other
      income (loss)
            
            
            (34,878
            )
            
            
            1,085,947
            
            
            
            (117,332
            )
            
            
            6,500
            
            
            
            -
            
            
            
            (18,203
            )
            
            
            3,000
            
            
            
            (11,685
            )Loss
      before income taxes
            
            
            (4,710,742
            )
            
            
            (4,947,815
            )
            
            
            (5,447,778
            )
            
            
            (3,994,928
            )
            
            
            (1,830,352
            )
            
            
            (9,057,116
            )
            
            
            (5,055,193
            )
            
            
            (1,901,174
            )Recovery
      of future income taxes
            
            
            (429,055
            )
            
            
            797,500
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Net
      loss for the period
            
            
            (5,139,797
            )
            
            
            (4,150,315
            )
            
            
            (5,447,778
            )
            
            
            (3,994,928
            )
            
            
            (1,830,352
            )
            
            
            (9,057,116
            )
            
            
            (5,055,193
            )
            
            
            (1,901,174
            )Loss
      per share – basic and diluted
            
            
            (0.06
            )
            
            
            (0.04
            )
            
            
            (0.06
            )
            
            
            (0.04
            )
            
            
            (0.02
            )
            
            
            (0.09
            )
            
            
            (0.06
            )
            
            
            (0.02
            )





Overall
Performance and Results of Operations





From
inception to December 31, 2009, the Company has raised net cash proceeds from
the issuance of common shares and warrants and from the exercise of warrants and
stock options of $138.7 million.  As at December 31, 2009, the Company
held cash and cash equivalents, and short-term investments of $43.4
million.  The Company's cash resources are invested with banks in
Canada and the United States in deposit accounts, guaranteed investment
certificates, certificates of deposit, and money market accounts. The Company
has made significant investments in mineral properties and exploration,
evaluation and development expenditures.





Mineral
Properties





The
Company holds mineral properties in the United States and Canada, including in
Wyoming and the Northwest Territories, which total more than 220,000 acres
(approximately 89,000 hectares).





USA
Properties





Lost
Creek Project – Great Divide Basin, Wyoming





The
Company acquired certain of its Wyoming properties when Ur-Energy USA entered
into a Membership Interest Purchase Agreement (“MIPA”) with New Frontiers
Uranium, LLC effective June 30, 2005.  Under the terms of the MIPA,
the Company purchased all of the issued and outstanding membership interests in
NFU Wyoming, LLC.  Assets acquired in this transaction include the
extensively explored and drilled Lost Creek and Lost Soldier projects, other
properties, and a development database including more than 10,000 electric well
logs, over 100 geologic reports and over 1,000 geologic and uranium maps
covering large areas of Wyoming, Montana and South Dakota.  The 100%
interest in NFU Wyoming was purchased for an aggregate consideration of
$24,515,832 (US$20,000,000), plus capitalized interest.





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29
 Table of Contents




A royalty
on future production of 1.67% is in place with respect to 20 claims comprising a
small portion of the Lost Creek Project claims.





The Lost
Creek uranium deposit is located in the Great Divide Basin, Wyoming. The deposit
is approximately three miles (4.8 kilometers) long and the mineralization occurs
in four main sandstone horizons between 315 feet (96 meters) and 700 feet (213
meters) in depth.





As
identified in the June 2006 Technical Report on Lost Creek, NI 43-101 compliant
resources are 9.8 million pounds of U3O8 at 0.058 %
as an indicated resource and an additional 1.1 million pounds of U3O8 at 0.076 %
as an inferred resource.





Lost Creek Regulatory
History





The
Company continues to advance matters to obtain an NRC Source and Byproduct
Material License (the “NRC License”) for the Lost Creek
project.   The NRC is required to complete two reports, the
Safety and Environmental Report (“SER”) and the Supplemental Environmental
Impact Statement (“SEIS”), prior to issuing an NRC License.  Based
upon guidance from the NRC, Ur-Energy anticipates the issuance of its NRC
License in the third quarter 2010.  The history and milestones to date
of the NRC application process for Lost Creek are as follows:





DATE
            
            
            EVENTOctober
      2007
            
            
            Company
      submitted Application to the NRCJune
      2008
            
            
            NRC
      notified the Company that the Acceptance Review was complete: the Application was
      found sufficient to proceed with technical
reviewSeptember
      2008
            
            
            NRC
      delay in completion of the draft Generic
      Environmental Impact Study (“GEIS”) for in-situ recovery
      announced; anticipated publication delayed until June
  2009November
      2008
            
            
            NRC
      provided the Company with a Request for Additional Information (“RAI”) for
      the technical review portion of the ApplicationFourth
      quarter 2008-first
      quarter 2009
            
            
            The
      Company submitted responses to the NRC’s RAI for Lost Creek technical
      review.March
      2009
            
            
            NRC
      provided the Company with an RAI for the environmental review portion of
      the ApplicationMay
      2009
            
            
            NRC
      advised all applicants for new ISR operations that, in addition to the
      GEIS guidelines, a site-specific SEIS will be requiredJune
      2009
            
            
            The
      Company submitted responses to the NRC’s RAI for Lost Creek environmental
      reviewJune  2009
            
            
            GEIS
      issued by NRCAugust
      2009
            
            
            The
      Company submitted additional responses to health physics RAI
      itemsDecember
      2009
            
            
            Draft
      SEIS on Lost Creek issued by NRC and draft SER completed by
      NRCFebruary
      2010
            
            
            The
      Company submitted comments regarding Draft SEISMarch
      2010
            
            
            NRC extends comment period until March 3; the NRC is
      processing comments received from the public and other
      regulators


The U.S.
Bureau of Land Management (“BLM”) has determined that its project environmental
review and approval will be independent of the environmental review process
carried out by the NRC. In response, the Company submitted a Plan of Operations
to the BLM in November 2009. The BLM appointed a coordinator for the review
process and the review, including public comment and selection of a contractor
for the environmental review, has commenced. The BLM’s decision of record on the
Plan is expected in the summer of 2010.





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The
Company continues to advance matters to obtain a WDEQ Permit to Mine for the
Lost Creek project.  In December 2007, the Company submitted the Lost
Creek Permit to Mine Application to the WDEQ.  The WDEQ Application
was deemed complete in May 2008.  Throughout 2009, WDEQ issued various
technical comments in its review of the Application, and the Company has filed
responses to those comments.  The data package for Mine
Unit #1 was submitted to the WDEQ in December 2009 and initial comments were
received from WDEQ in February 2010.  The Company anticipates filing
its responses to those comments before the end of first quarter
2010. Ur-Energy anticipates the issuance of Lost Creek's WDEQ
Permit to Mine in the summer of 2010.





On March
5, 2010, the U.S. Fish and Wildlife Service (“USFWS”), in compliance with a
federal court order, submitted a finding of “warranted for listing but precluded
by higher priorities” with regard to the greater sage grouse – whose habitat
includes Wyoming. A finding that listing is “warranted but precluded” results in
recognition of the greater sage grouse as a candidate for listing. This finding
is reconsidered annually, taking into account changes in the status of the
species. When higher priority listing actions have been addressed by the USFWS
for other species, a proposed listing rule is prepared and issued for public
comment. This means that until the USFWS finalizes a listing determination, the
greater sage grouse will remain under state management.  As a part of
its WDEQ Application, the Company has submitted a Wildlife Protection Plan
regarding, among other issues, the sage grouse. The Company conducted several
meetings during 2009 and early  2010 with the WDEQ and Wyoming
Department of Game and Fish to facilitate the processing and acceptance of
the mitigation plan as a part of the WDEQ Permit.





The
Company has submitted to the WDEQ-Water Quality Division an application for a
permit for up to five Class 1 Underground Injection Control (“UIC”) disposal
wells.  These wells, utilized for deep geologic disposal of liquid
waste, will be located within the Lost Creek permit area.  The Company
acquired detailed data including formation stratigraphy, reservoir extent and
properties, water quality and assessment of well injection rates from a deep
test well drilled in 2008.   This data set was used to support
the application which was submitted to WDEQ – Water Quality Division on June 29,
2009. WDEQ processing of this particular application was delayed initially as a
result of WDEQ staffing issues, but progressed with the issuance in late
November 2009 of technical comments, to which the Company submitted its
responses on February 1, 2010.  The Company anticipates the receipt of
this permit in the second quarter of 2010.





The
Sweetwater County Development Plan was approved in December 2009.  The
Air Quality permit was issued by the WDEQ to Lost Creek on January 20,
2010.  Additional permit applications are under review by various
agencies, with approvals expected in advance of the NRC License.





Lost Creek Development
Program – Drilling, Planning and Procurement





The
Company established a framework to demonstrate the economic viability of the
Lost Creek project.  In April 2008, the Company released an
independent technical report under NI 43-101 prepared by Lyntek Inc. (“Lyntek”),
entitled Preliminary Assessment for the Lost Creek Project Sweetwater County,
Wyoming (“Preliminary Assessment”).   The Preliminary Assessment
provides an analysis of the economic viability of the mineral resource of the
Lost Creek project.  The base case in the Preliminary Assessment
returned a pre-tax internal rate of return of 43.6% at a price of US$80 per
pound U3O8, and
demonstrated that the project would be economic at prices above US$40 per pound
U3O8.  Lyntek
also concluded that the uranium is leachable with a reasonable solution of
bicarbonate and peroxide (and by extension, oxygen) and that an overall recovery
of uranium in the range of 85% appears reasonable.  The Preliminary
Assessment is available for review on www.sedar.com.





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31
 Table of Contents




The
Company continued its development program at Lost Creek during
2009.  The first phase of the 2009 program included the drilling and
installation of 15 monitoring wells (11,770 feet / 3,590 meters) to obtain and
monitor water quality and hydrologic data for the purpose of permitting an
additional mineralized horizon underlying the horizon presently being
permitted.  The Company also completed mechanical integrity testing of
installed baseline and monitoring wells and the installation of submersible pump
equipment to facilitate ongoing water sampling requirements.





In July
2009, the delineation drilling program at Lost Creek continued with 235
additional drill holes originally planned.  As the program progressed,
additional drill holes were planned and the program was extended through
February 2010, to further investigate mineralization found in unanticipated
locations.  As of February 28, 2010, 277 holes were completed (for a
total of 196,840 feet (59,341 meters)) to support definition of future proposed
mining areas.   As well, in early 2010, additional monitor wells
were drilled and other work completed





During
2009, the Company’s engineering staff, assisted by TREC Inc., completed the
detailed designs and specifications for all components of the Lost Creek
plant.  The Company’s bid process was completed in fourth quarter
2009, when the Company announced its selection of Fagen, Inc. as general
contractor of the Lost Creek plant construction project.  Although
construction of the Lost Creek plant will not begin until receipt of the
necessary permits, requests for quotations for all major process equipment at
Lost Creek were prepared and solicited from vendors and
contractors.  Bids were evaluated and procurement was ongoing
throughout 2009.





One
purchase order totaling US$1,323,834 was issued during the second quarter of
2009 for ion exchange columns and other process equipment.  Payments
of US$861,525 have been made, with a final payment due upon
completion.  An additional purchase order for US$319,357 was issued
during the second quarter of 2009 to initiate the drawing and approval process
for other plant equipment.  Progress payments will be required once
the final drawings are approved, the final configuration is decided upon and the
final price is determined.





Company
Projects Adjacent to Lost Creek





In 2009,
the Company expanded its land holdings around Lost Creek and currently controls
a total of 1,753 unpatented mining claims and two State of Wyoming sections for
a total of almost 34,000 mineral acres including the Lost Creek permit area, LC
North, LC South, EN and Toby project areas.  These totals include the
292 lode mining claims acquired by the Company during 2009 by way of staking and
purchase agreements.





Initial
drilling at LC North in 2007 was conducted for the purpose of investigating
numerous occurrences of uranium-bearing intercepts detected by historical
exploration drilling by previous operators in the 1970s and examining their
relationships to the mineralization to be mined at the Lost Creek
project.  In the 2007 drill program, 30 holes were drilled for a total
of 29,600 feet (9,022 meters).





In 2008,
exploration drilling of 11,370 feet (3,468 meters) was completed at the EN
project. In January 2009, the Company completed an agreement with regard to the
EN project reducing an existing royalty from two percent (2%) to one percent
(1%) on specified mining claims and eliminating an area of interest arising from
transactions dating back to 2006.  The results of the 2007 and 2008
drilling programs outside of the Lost Creek permit area along with information
from over 725 historic drill holes confirmed mineralization occurring in
multiple horizons within the EN project area.





In August
2009, the Company announced the results of in-house geologic evaluations of the
Lost Creek permit area and adjacent properties held by the Company which contain
multiple exploration targets demonstrating the potential to contain 24 to 28
million pounds U3O8 (not NI
43-101 compliant).  These potential quantity and grade ranges are
conceptual in nature, only. There has been insufficient exploration to define a
mineral resource.  It is uncertain if further exploration will result
in the target(s) being delineated as a mineral resource. Company geologists,
using Ur-Energy drilling and historic data, have identified a minimum of an
additional 120 compiled linear miles (193 kilometers) of new redox fronts with
potential for resource development on these properties. This is in addition to
the approximately 36 miles of redox fronts containing the current Lost Creek
deposit.  The new exploration targets on LC North and LC South
properties (adjacent to the Lost Creek permit area) consist of at least 10
individual sinuous redox fronts within four major stratigraphic horizons
identified by Ur-Energy geologists during the evaluation.  The Company
continues to evaluate the exploration potential and is recommending future
exploration programs for these areas. The newly identified fronts occur within
the same stratigraphic horizons that are present in the area of the Lost Creek
deposit.   Estimation of the potential of the new fronts is based
on the observed similarity of alteration characteristics, grade and thickness of
mineralization to that currently identified in the Lost Creek
deposit.





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Lost
Soldier Project – Great Divide Basin, Wyoming





The Lost
Soldier project is located approximately 14 miles (22.5 kilometers) to the
northeast of the Lost Creek project. The property has over 3,700 historical
drill holes defining 14 mineralized sandstone units.  The Company
maintains 143 lode mining claims at Lost Soldier, totaling approximately 2,710
mineral acres.  A royalty on future production of one percent (1%),
which arises from a data purchase, is in place with respect to certain claims
within the project.  In 2009, the Company’s staff continued with
engineering studies and mine design analysis of Lost Soldier.  The
Company continues to anticipate development of regulatory applications for Lost
Soldier will come be made the Company obtains the Lost Creek licenses and permit
to mine, and as corporate priorities are determined for the development of the
lands adjacent to Lost Creek.





Hauber
Project LLC – Northeastern Wyoming





The
Company’s Hauber property is located in Crook County, Wyoming and consists of
205 unpatented lode mining claims and one state uranium lease totaling
approximately 4,570 mineral acres.  In 2007, the Company entered into
agreements with Trigon Uranium Corporation and its subsidiary ("Trigon") for the
formation of a venture project to be known as Hauber Project LLC (the “Hauber
Project”).  Under the terms of the agreements, the Company contributed
its Hauber property, and Trigon was to make contributions through eligible
exploration expenditures on the property.   Having resigned from
the Hauber Project effective August 1, 2008, Trigon and the Company resolved the
continuing obligations of Trigon by settlement agreement in July
2009.





Effective
December 1, 2009, NCA Nuclear, Inc. (“NCA Nuclear”), a subsidiary of Bayswater
Uranium Corporation, entered the Hauber Project as a Member, entitled to earn in
to 75% interest through the expenditure of US$1,000,000 in qualified exploration
costs over a four-year period.  NCA Nuclear will also act as Manager
of Hauber Project.





In
January 2010, NCA Nuclear completed an NI 43-101 mineral resource estimate of
the properties at the Hauber Project, authored by Thomas C. Pool, P.E., of
International Nuclear, Inc. The resource estimate concludes the Hauber Project
properties hold approximately 1.45 million pounds of eU3O8(Indicated
Resources) in 423,000 tons at an average grade of 0.17% eU3O8.Bayswater
has filed the NI 43-101 report on www.sedar.com.





As a part
of its 2010 obligations under the venture agreement, NCA Nuclear will drill at
least two drill holes for the purpose of testing in situ recovery amenability of
the uranium mineralization.





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33
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The
Bootheel Project, LLC – Shirley Basin, Wyoming





Crosshair
Exploration & Mining Corp (“Crosshair”) completed its earn-in of a 75%
interest in the Company’s subsidiary, The Bootheel Project, LLC (the “Bootheel
Project”) during the third quarter of 2009.  The interest arises from
a venture agreement entered into by the Company and a subsidiary of then Target
Exploration & Mining Corp. (“Target”) in June
2007.    Effective March 31, 2009, Target became a
wholly-owned subsidiary of Crosshair through a plan of
arrangement.  Crosshair’s 75% interest was acquired by spending US$3.0
million in qualified exploration costs, and issuing 125,000 common shares of
Target to the Company (which was exchanged for 150,000 common shares of
Crosshair in its acquisition of Target).





Under the
terms of the 2007 agreement, the Company contributed its Bootheel and Buck Point
properties to the Bootheel Project.  The properties cover an area of
known uranium occurrences within the Shirley Basin.  Crosshair
completed agreements in 2008 for additional rights and leased lands in the
Bootheel property area, in which the lessor has a 75% mineral interest in the
net mineral acres. With the completion of those agreements, the Bootheel Project
covers total defined areas at the Bootheel property and the Buck Point property
of approximately 8,524 gross, and 7,895 net, mineral acres.  Various
royalties exist on future production of uranium and other minerals from the
Bootheel Project properties.





In 2008,
Crosshair completed a 50,000 feet (15,250 meters) drilling program on the
Bootheel property. In January 2009, Crosshair announced that, on behalf of the
Bootheel Project, it had completed the acquisition of the final historic data
package comprising geophysical and geological data from approximately 290,000
feet (88,400 meters) of drilling carried out by Cameco, Kerr McGee and
Uradco.  Additional historic data, acquired by the Company in 2007,
has also been made available to the Bootheel Project.





Crosshair
released an independent resource estimate on the Bootheel property under NI
43-101 in the third quarter of 2009.This NI
43-101 resource estimate reports that the Bootheel property contains 1.09
million pounds of U3O8(indicated
resource) in 1.4 million short tons, at a grade of 0.038% U3O8, and an
inferred resource of 3.25 million pounds U3O8(in 4.4
million short tons) at an average grade of 0.037% U3O8.This NI
43-101 report was filed by Crosshair on www.sedar.com.





As a
result of Crosshair’s earn-in, the Company now has a 25% interest in the
Bootheel Project.  As the Company is no longer the controlling Member
of the Bootheel Project from the date Crosshair completed its earn-in, the
Project is now accounted for using the equity accounting method with the
Company’s proportionate share of the Project’s loss included in the Statement of
Operations from the date of earn-in and the Company’s net investment reflected
on the Balance Sheet.





Additional
U.S. Exploration Activities and Company Databases





In August
2009, the Company completed the sale of the Moorcroft Database to Peninsula
Minerals Limited (“Peninsula”) for US$1,000,000, and a royalty on future
production from a broad-ranging project area in the Eastern Powder River Basin
of Wyoming in which Peninsula reports that it is the dominant mineral rights
holder in the area.  The Company obtained the Moorcroft Database as a
part of its acquisition of NFU Wyoming, LLC in 2005, which also included several
other historic databases.  The net profit of $1,079,475 from this sale
is included in the Company’s Other Income in the Statement of
Operations.





Ongoing
evaluation continues of the exploration databases owned by the
Company.





Throughout
2009, the Company acquired rights in additional lands, and field exploration
programs continued. The Company dropped its mining claims in Arizona in the
third quarter of 2009.





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Canadian
Properties





Screech
Lake Property, Thelon Basin, Northwest Territories





Throughout
2009, the Company continued its discussions with First Nations groups in respect
to its Screech Lake property.  An agreement was secured with Lutsel
K’e Dene First Nation to conduct surface exploration work in 2009 but no
agreement has been obtained to carry out drilling.





Work
carried out in the third quarter of 2009 included claim maintenance, an
audio-magnetotelluric (“AMT”) survey and collection of over 500 surface samples
for bio-leach and soil gas analysis. Commenced in August 2009, this field
program was completed in early September 2009. The primary purpose of the AMT
geophysics was to determine depth to the top of the unconformity.  The
two geochemical techniques utilized are tools recently developed in the
Athabasca Basin to locate anomalous geochemical signatures over blind uranium
ore bodies. The choice of the survey parameters resulted from Ur-Energy’s
participation in the Canadian Mining Industry Research Organization research
program on the application of surface geochemical methods in the Athabasca
Basin. No drilling was conducted in 2009.  However, for future
programs, the calculated depth measurements obtained through this year’s
geophysical work will better define drill equipment requirements and have
defined, in part, near-surface unconformity targets and better definition of
cross-structures.





Year
Ended December 31, 2009 Compared to Year Ended December 31, 2008





The
following table summarizes the results of operations for the years ended
December 31, 2009 and 2008.





Year Ended December 31,2009
            
            
            2008
            
            
            Change
            
            
            Change$
            
            
            $
            
            
            $
            
            
            %Revenue
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilGeneral
      and administrative
            
            
            (5,430,480
            )
            
            
            (6,904,564
            )
            
            
            1,474,084
            
            
            
            -21
            %Exploration
      and evaluation expense
            
            
            (4,944,227
            )
            
            
            (9,922,798
            )
            
            
            4,978,571
            
            
            
            -50
            %Development
      expense
            
            
            (6,931,303
            )
            
            
            (8,854,536
            )
            
            
            1,923,233
            
            
            
            -22
            %Write-off
      of mineral properties
            
            
            (102,439
            )
            
            
            (285,813
            )
            
            
            183,374
            
            
            
            -64
            %Total
      expenses
            
            
            (17,408,449
            )
            
            
            (25,967,711
            )
            
            
            8,559,262
            
            
            
            -33
            %Interest
      income
            
            
            890,915
            
            
            
            2,494,445
            
            
            
            (1,603,530
            )
            
            
            -64
            %Loss
      from equity investment
            
            
            (17,855
            )
            
            Nil
            
            
            
            (17,855
            )
            
            NAForeign
      exchange gain (loss)
            
            
            (3,506,111
            )
            
            
            5,656,319
            
            
            
            (9,162,430
            )
            
            
            -162
            %Other
      income (loss)
            
            
            940,237
            
            
            
            (36,638
            )
            
            
            976,875
            
            
            
            -2666
            %Loss
      before income taxes
            
            
            (19,101,263
            )
            
            
            (17,853,585
            )
            
            
            (1,247,678
            )
            
            
            7
            %Recovery
      of future income taxes
            
            
            368,445
            
            
            Nil
            
            
            
            368,445
            
            
            NANet
      loss for the period
            
            
            (18,732,818
            )
            
            
            (17,853,585
            )
            
            
            (879,233
            )
            
            
            5
            %Loss
      per share – basic and diluted
            
            
            (0.20
            )
            
            
            (0.19
            )
            
            
            (0.01
            )
            
            
            5
            %





Expenses





Total
expenses for the year 2009 were $17.4 million which include G&A expense,
exploration and evaluation expense, development expense and write-off of mineral
property costs.  These expenses decreased by $8.6 million from a 2008
total of $26.0 million.  This decrease was driven in large part by the
decrease in stock compensation expense of $3.6 million.  This decrease
is a result of lower ongoing expense due to a decrease in the weighted-average
option price and the voluntary return to the Company by option holders of
options with an exercise price of $4.75 or higher in the third quarter of
2008.  Previously unrecognized stock based compensation cost of $2.2
million was recognized at the cancellation date out of which $0.9 million was
recorded in G&A expense and $1.3 million was recorded in exploration and
evaluation expense.





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G&A
expense relates to the Company’s administration, finance, investor relations,
land and legal functions.  The primary reason for the decrease in
these expenses in 2009 was lower stock compensation expense, which decreased
$1.5 million during the year due to the 2008 cancellation discussed
above.  Excluding stock compensation expense, G&A expense remained
constant for the year.





The
primary reason for the decrease in exploration and evaluation expense was the
transition of the Company’s Lost Creek property from the evaluation stage to the
development stage.  This transition happens when sufficient evidence
of mineral resources has been identified to justify the development of the
property for mining activities and filing the applications for the mining
permits.  As a result, direct project evaluation expenditures
decreased $1.6 million during the year.  Exploration costs in Canada
decreased $1.1 million as a result of a larger exploration program at the
Company’s Bugs project in Nunavut in 2008 compared to the program conducted at
Screech Lake in 2009. Stock compensation expense charged to exploration and
evaluation declined $1.4 million in the year.





Development
expense relates entirely to the Company’s Lost Creek property, which entered the
development stage in the second quarter of 2008.  Total costs were
lower by $1.9 million for the year compared with 2008.  The primary
changes in development costs for the year were reductions in costs related to
the deep test well for ground water sampling in support of the application for
Class I UIC permit of $2.2 million, decreases in drilling costs of $0.9 million,
decrease in stock compensation of $0.3 million and decreases in logging costs of
$0.2 million.  These were offset by increases in labor of $0.6 million
and permitting of $1.2 million for the year.  Combined expenditures
for mineral development activities (exploration, evaluation and development)
decreased by $6.0 million for the year ended December 31, 2009, when compared to
the comparable period in 2008.





During
2009, the Company wrote off $38,878 in mineral property costs associated with
claims in Yuma County, Arizona and $63,561 of Eyeberry property costs in
Canada.    In 2008, the Company wrote off $0.3 million of
mineral property costs related to the Harding and Fall River projects in South
Dakota.





Other
income and expenses





The
Company's cash resources are invested with banks in deposit accounts, guaranteed
investment certificates, certificates of deposit, and money market
accounts.  The decrease in interest income was driven by lower average
cash resources and lower average interest rates in 2009 as compared to those in
2008.





During
the year ended December 31, 2009, the Company sold its database of geologic
information related to its Moorcroft project in Wyoming for US$1.0
million.  The gain of $1.1 million on this sale is reported in Other
Income for 2009.





The net
foreign exchange loss for the year ended December 31, 2009 arose primarily due
to cash resources held in U.S. dollar accounts as the U.S. dollar weakened
relative to the Canadian dollar during the period.





Income
taxes





During
2008, the Company raised $2,750,000 through the sale of common shares covered by
a flow-through election.  This election requires that all capital
raised under this election be used for exploration and evaluation of Canadian
mineral interests prior to the end of the following calendar
year.  The Company then files a document with Revenue Canada
renouncing its right to claim those expenditures for income tax purposes and
passes them through to the purchasers of the common shares.





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During
2009, the Company filed the renouncement with the taxing authorities and
completed the expenditure of the funds raised in 2008.  As a result,
the Company recognized a future tax liability in 2009 for the tax benefit that
was renounced, while reducing capital stock by the same amount.





In 2009
and 2008, the Company recorded operating losses in both Canada and the United
States.  The benefit of these losses has been recognized only to the
extent that the Company had future income tax liabilities arising from the
issuance of flow-through shares.  Consequently, the Company recorded
an income tax recovery in 2009 to offset the future income
tax.  Management has concluded that it is not yet more likely than not
that the remaining losses, and prior years’ loss carryforwards and other tax
assets will be realized, and therefore the Company has recorded a full valuation
allowance against these amounts.





Loss
per Common Share





Both
basic and diluted loss per common share for the year ended December 31, 2009
were $0.20 (2008 – $0.19).  The diluted loss per common share is equal
to the basic loss per common share due to the anti-dilutive effect of all
convertible securities outstanding given that net losses were
experienced.





Year
Ended December 31, 2008 Compared to Year Ended December 31, 2007





The
following table summarizes the results of operations for the years ended
December 31, 2008 and 2007.





Year Ended December 31,2008
            
            
            2007
            
            
            Change
            
            
            Change$
            
            
            $
            
            
            $
            
            
            %Revenue
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilGeneral
      and administrative
            
            
            (6,904,564
            )
            
            
            (7,305,315
            )
            
            
            400,751
            
            
            
            -5
            %Exploration
      and evaluation expense
            
            
            (9,922,798
            )
            
            
            (15,654,041
            )
            
            
            5,731,243
            
            
            
            -37
            %Development
      expense
            
            
            (8,854,536
            )
            
            Nil
            
            
            
            (8,854,536
            )
            
            NAWrite-off
      of mineral properties
            
            
            (285,813
            )
            
            Nil
            
            
            
            (285,813
            )
            
            NATotal
      expenses
            
            
            (25,967,711
            )
            
            
            (22,959,356
            )
            
            
            (3,008,355
            )
            
            
            13
            %Interest
      income
            
            
            2,494,445
            
            
            
            2,816,398
            
            
            
            (321,953
            )
            
            
            -11
            %Foreign
      exchange gain (loss)
            
            
            5,656,319
            
            
            
            (806,420
            )
            
            
            6,462,739
            
            
            
            -801
            %Other
      income (loss)
            
            
            (36,638
            )
            
            Nil
            
            
            
            (36,638
            )
            
            NALoss
      before income taxes
            
            
            (17,853,585
            )
            
            
            (20,949,378
            )
            
            
            3,095,793
            
            
            
            -15
            %Recovery
      of future income taxes
            
            Nil
            
            
            
            429,055
            
            
            
            (429,055
            )
            
            NANet
      loss for the period
            
            
            (17,853,585
            )
            
            
            (20,520,323
            )
            
            
            2,666,738
            
            
            
            -13
            %Loss
      per share – basic and diluted
            
            
            (0.19
            )
            
            
            (0.24
            )
            
            
            0.05
            
            
            
            -21
            %





Expenses





Total
expenses for the year ended December 31, 2008 were $26.0 million as compared to
$23.0 million in 2007.  Total expenses include G&A expense,
exploration and evaluation expense, development expense and write-off of mineral
property costs.





Overall,
2008 total expenses increased $3.0 million as compared to 2007.  The
increase in total expenses was primarily due to increased expenditures on the
Company’s exploration and development projects, the continued expansion of the
Littleton, Colorado and Casper, Wyoming offices, and increases in non-cash
amortization of capital assets and write-off expenses.  The increase
in total expenses was partially offset by a decrease in non-cash stock based
compensation expense.





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G&A
expense relates primarily to the Company’s administration, finance, investor
relations, land and legal functions in Littleton, Colorado.  During
2008, the Company continued to expand the Casper, Wyoming office.  The
Company strengthened key staffing areas adding eight positions primarily aimed
at enhancing operating expertise at the Casper office.  Accordingly,
the Denver and Casper offices were also expanded to accommodate and support the
staffing additions.





Exploration,
evaluation and development expenditures increased $3.1 million in 2008,
primarily due to the transition of the Company’s Lost Creek property from the
evaluation stage to the development stage.  During 2008, the Company
spent approximately $1.9 million in evaluation activities and $8.8 million in
development activities related to the Lost Creek property, which were expensed
in accordance with the Company’s revised accounting
policies.  Additionally, the Company incurred significant expenditures
on other exploration and evaluation properties including the Bugs property in
Canada and the Lost Soldier property in the United States.





During
the year, the Company recorded significant non-cash stock based compensation
expenses related to stock options.  In September 2008, the Company
gave the holders of options with an exercise price of $4.75 or higher the
opportunity to voluntarily return all or a portion of these options to the
Company by September 30, 2008 without any promise or guarantee that the option
holders will receive any further options.  Options for 2,490,000
shares with a weighted exercise price of $4.82 were returned to the
Company.  Previously unrecognized stock based compensation cost of
$2.2 million was recognized at the cancellation date.  Including the
above, for 2008, stock based compensation expenses of $4.6 million (2007 – $6.1
million) were included in total expenses.  These non-cash expenses
represent approximately 18% of total expenses (2007 – 27%).





During
the third quarter of 2008, the Company relinquished leases associated with the
Harding and Fall River projects in South Dakota and wrote-off the approximately
$0.3 million in costs related to these projects.  There were no write
offs in 2007.





Other income and
expenses





The
Company's cash resources are invested with major banks in bankers' acceptances,
guaranteed investment certificates, certificates of deposit, and money market
accounts.  During the year ended December 31, 2008, the Company earned
interest income on these investments of $2.5 million, as compared to $2.8
million in 2007.  After the May 2007 bought deal public offering and
the March 2008 flow-through share private placement financing, the Company’s
average cash resources increased significantly.  However, the Company
does not generate any revenue from operating activities and its average cash
resources, and the resulting interest income, have declined since the two
financings were completed.





During
the year ended December 31, 2008, the Company recorded a net foreign exchange
gain of $5.7 million as compared to a $0.8 million loss during the same period
in 2007.  This 2008 net foreign exchange gain arose primarily due to
cash balances held in U.S. dollar accounts as the U.S. dollar strengthened
relative to the Canadian dollar during the period, while in 2007 the U.S. dollar
declined in value relative to the Canadian dollar.





Income
taxes





In 2008,
the Company recorded operating losses in both Canada and the United
States.  Management has concluded that it is not yet more likely than
not that these losses, and prior years’ loss carryforwards and other tax assets
will be realized, and therefore the Company has recorded a full valuation
allowance against these amounts.





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In 2007,
the Company also recorded losses in both jurisdictions against which full
valuation allowances were applied, except in respect of the Company’s ISL
Resources Corporation (“ISL Resources”) subsidiary.  The Company
acquired ISL Resources in 2004 and recorded a future tax liability upon the
acquisition related to the difference between management’s estimate of the tax
basis and the fair value assigned to the assets acquired.  In 2007,
management filed tax returns for ISL Resources for the pre-acquisition period
and established additional tax basis for the ISL Resources assets and
consequently recorded a reduction in the future tax liability related to these
assets.





Loss per Common
Share





Both
basic and diluted loss per common share for the year ended December 31, 2008
were $0.19 (2007 – $0.24).  The diluted loss per common share is equal
to the basic loss per common share due to the anti-dilutive effect of all
convertible securities outstanding given that net losses were
experienced.





Liquidity and Capital Resources





As at
December 31, 2009, the Company had cash resources, consisting of cash and cash
equivalents and short-term investments, of $43.4 million, a decrease of $21.6
million from the December 31, 2008 balance of $65.0 million.  The
Company's cash resources consist of Canadian and U.S. dollar denominated deposit
accounts, guaranteed investment certificates, money market funds and
certificates of deposit.  During the twelve months ended December 31,
2009, the Company used $17.0 million of its cash resources to fund operating
activities and $1.5 million for investing activities (excluding short term
investment transactions), with the remaining $2.7 million decrease being related
to the effects of foreign exchange rate changes on cash resources.





The
Company has financed its operations from its inception primarily through the
issuance of equity securities and has no source of cash flow from
operations.  The Company does not expect to generate any cash
resources from operations until it is successful in commencing production from
its properties.  Operating activities used $17.0 million of cash
resources during the year ended December 31, 2009, as compared to $16.5 million
for the same period in 2008.  The primary reasons for the increased
expenditures was cash used to settle payables, and lower interest income that
was offset by the sale of the Moorcroft Database.  The Company
received less interest income in 2009 due to lower average cash resource
balances and lower interest rates.





During
the year ended December 31, 2009, the Company invested cash resources of $2.0
million in mineral properties, bonding deposits, capital assets and
pre-construction activities related to plant design and equipment purchases at
Lost Creek.  The majority of these expenditures went toward increased
bonding deposits ($0.9 million) and deposits related to ordering Lost Creek
processing facility equipment that has a long manufacturing lead time ($1.1
million).





Financing
Transactions





On
November 7, 2008, the Company’s board of directors approved the adoption of a
shareholder rights plan (the “Rights Plan”) designed to encourage the fair and
equal treatment of shareholders in connection with any take-over bid for the
Company's outstanding securities.  The Rights Plan is intended to
provide the Company’s board of directors with adequate time to assess a
take-over bid, to consider alternatives to a take-over bid as a means of
maximizing shareholder value, to allow competing bids to emerge, and to provide
the Company’s shareholders with adequate time to properly assess a take-over bid
without undue pressure.





Although
the Rights Plan took effect immediately, in accordance with TSX requirements,
the Company sought approval and ratification by its shareholders.  At
the annual and special meeting of shareholders held on April 28, 2009, the
shareholders of the Company approved and ratified the Rights Plan.





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Effective
January 1, 2010, the Rights Agent was changed to Computershare Investor Services
Inc., pursuant to a successor agreement to the Rights
Plan.   Notice of the change of Rights Agent was provided to
shareholders of the Company.





The
Company has established a corporate credit card facility with a U.S. bank. This
facility has an aggregate borrowing limit of US$250,000 and is used for
corporate travel and incidental expenses.  The Company has provided a
letter of credit and a guaranteed investment certificate in the amount of
$287,500 as collateral for this facility.





Outstanding
Share Data





Information
with respect to outstanding common shares, warrants, compensation options and
stock options as at December 31, 2009 and December 31, 2008 is as
follows:





December 31, 2009
            
            
            December 31, 2008
            
            
            ChangeCommon
      shares
            
            
            93,940,568
            
            
            
            93,243,607
            
            
            
            696,961Stock
      options
            
            
            8,361,452
            
            
            
            6,228,700
            
            
            
            2,132,752Fully
      diluted shares outstanding
            
            
            102,302,020
            
            
            
            99,472,307
            
            
            
            2,829,713





Off-Balance
Sheet Arrangements





The
Company has not entered into any material off-balance sheet arrangements such as
guarantee contracts, contingent interests in assets transferred to
unconsolidated entities, derivative instrument obligations, or with respect to
any obligations under a variable interest entity arrangement.





Financial
Instruments and Other Instruments





The
Company’s cash and cash equivalents are composed of:





As
      at
              December
              31,
              2009
            
            
            As
      at
              December
              31,
              2008$
            
            
            $Cash
      on deposit at banks
            
            
            308,918
            
            
            
            392,170Guaranteed
      investment certificates
            
            
            287,500
            
            
            
            9,087,500Money
      market funds
            
            
            25,564,505
            
            
            
            1,031,882Certificates
      of deposit
            
            
            6,296,400
            
            
            
            15,288,18332,457,323
            
            
            
            25,799,735





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The
Company’s short term investments are composed of:





As
      at
              December
              31,
              2009
            
            
            As
      at
              December
              31,
              2008$
            
            
            $Guaranteed
      investment certificates
            
            
            2,342,637
            
            
            
            25,693,540Certificates
      of deposit
            
            
            8,589,464
            
            
            
            13,480,66010,932,101
            
            
            
            39,174,200





Credit
risk





Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash and cash equivalents, short term investments and bonding
deposits.  The Company’s cash equivalents and short-term investments
consist of Canadian dollar and U.S. dollar denominated guaranteed investment
certificates and certificates of deposits.  They bear interest at
annual rates ranging from 0.25% to 2.50% and mature at various dates up to
December 15, 2010.  These instruments are maintained at financial
institutions in Canada and the United States.  Of the amount held on
deposit, approximately $7.2 million is covered by either the Canada Deposit
Insurance Corporation or the Federal Deposit Insurance
Corporation.  Another $1.3 million is guaranteed by a Canadian
provincial government, leaving approximately $37.7 million at risk should the
financial institutions with which these amounts are invested cease
trading.  As at December 31, 2009, the Company does not consider any
of its financial assets to be impaired.





Liquidity
risk





Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due.





The
Company manages liquidity risk through regular cash flow forecasting of cash
requirements to fund exploration and development projects and operating
costs.





As at
December 31, 2009 the Company’s liabilities consisted of trade accounts payable
of $1,046,963, all of which are due within normal trade terms of generally 30 to
60 days.





Market
risk





Market
risk is the risk to the Company of adverse financial impact due to changes in
the fair value or future cash flows of financial instruments as a result of
fluctuations in interest rates and foreign currency exchange
rates.  Market risk arises as a result of the Company incurring a
significant portion of its expenditures and a significant portion of its cash
equivalents and short-term investments in U.S. dollars, and holding cash
equivalents and short term investments which earn interest.





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Interest
rate risk





Financial
instruments that expose the Company to interest rate risk are its cash
equivalents and short term investments. The Company’s objectives for managing
its cash and cash equivalents are to ensure sufficient funds are maintained on
hand at all times to meet day to day requirements and to place any amounts which
are considered in excess of day to day requirements on short-term deposit with
the Company's banks so that they earn interest. When placing amounts of cash and
cash equivalents on short-term deposit, the Company only uses high quality
commercial banks and ensures that access to the amounts placed can generally be
obtained on short notice.





Currency
risk





The
Company incurs expenses and expenditures in Canada and the United States and is
exposed to risk from changes in foreign currency rates. In addition, the Company
holds financial assets and liabilities in Canadian and U.S. dollars. The Company
does not utilize any financial instruments or cash management policies to
mitigate the risks arising from changes in foreign currency rates.





At
December 31, 2009 the Company had cash and cash equivalents, short term
investments and bonding deposits of approximately US$38.1 million (US$26.5
million as at December 31, 2008) and had accounts payable of US$0.8 million
(US$1.7 million as at December 31, 2008) which were denominated
in  U.S. dollars.





Sensitivity
analysis





The
Company has completed a sensitivity analysis to estimate the impact that a
change in foreign exchange rates would have on the net loss of the Company,
based on the Company’s net U.S. dollar denominated assets and liabilities at
year end. This sensitivity analysis assumes that changes in market interest
rates do not cause a change in foreign exchange rates.  This
sensitivity analysis shows that a change of +/- 10% in U.S. dollar foreign
exchange rate would have a +/- $3.9 million impact on net loss for the year
ended December 31, 2009.  This impact is primarily as a result of the
Company having yearend cash and investment balances denominated in U.S. dollars
and U.S. dollar denominated trade accounts payables.  The financial
position of the Company may vary at the time that a change in exchange rates
occurs causing the impact on the Company’s results to differ from that shown
above.





The
Company has also completed a sensitivity analysis to estimate the impact that a
change in interest rates would have on the net loss of the Company. This
sensitivity analysis assumes that changes in market foreign exchange rates do
not cause a change in interest rates.  This sensitivity analysis shows
that a change of +/- 100 basis points in interest rate would have a +/- $0.6
million impact on net loss for the year ended December 31, 2009.  This
impact is primarily as a result of the Company having cash and short-term
investments invested in interest bearing accounts.  The financial
position of the Company may vary at the time that a change in interest rates
occurs causing the impact on the Company’s results to differ from that shown
above.





Transactions
with Related Parties





During
the twelve months ended December 31, 2009 and 2008, the Company did not
participate in any material transactions with related parties.





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Proposed
Transactions





As is
typical of the mineral exploration and development industry, the Company is
continually reviewing potential merger, acquisition, investment and venture
transactions and opportunities that could enhance shareholder
value.  Timely disclosure of such transactions is made as soon as
reportable events arise.





Critical
Accounting Policies and Estimates





Mineral
Properties





Acquisition
costs of mineral properties are capitalized. When production is attained, these
costs will be amortized on the unit-of-production method based upon the
estimated recoverable resource of the mineral property.





As a part
of their annual mineral property analysis, management reviewed all of the
Company’s significant mineral properties for potential impairment as at December
31, 2009.





For the
Company’s Lost Creek property, management reviewed the calculations done as of
December 31, 2009 and determined that despite a slight decline in the future
prices of uranium, the underlying costs, assumptions and timelines had not
changed significantly and therefore no impairment existed as of December 31,
2009.  Management calculated the future net cash flows using estimated
future prices, indicated resources, and estimated operating, capital and
reclamation costs.





Other
than for those properties written off during the year, management did not
identify impairment indicators for any of the Company’s mineral
properties.





At
December 31, 2008, the disruption and uncertainty in the global economy and the
decrease in the Company’s share price over the previous year caused management
to review all of the Company’s significant mineral properties for potential
impairment.  Management concluded that the fair value of these
properties exceeded the carrying amount.  No impairment charges were
recorded as at December 31, 2008 as a result of those reviews.





Stock Based
Compensation





The
Company is required to record all equity instruments including warrants,
compensation options and stock options at fair value in the financial
statements. Management utilizes the Black-Scholes model to calculate the fair
value of these equity instruments at the time they are issued.  Use of
the Black-Scholes model requires management to make estimates regarding the
expected volatility of the Company’s stock over the future life of the equity
instrument, the estimate of the expected life of the equity instrument, the
expected volatility of the Company’s common shares, and the number of options
that are expected to be forfeited.  Determination of these estimates
requires significant judgment and requires management to formulate estimates of
future events based on a limited history of actual results and by comparison to
other companies in the uranium exploration and development segment.





Changes
in Accounting Policies Including Initial Adoption





New
Accounting Standards





Effective
January 1, 2009, the Company adopted CICA Handbook Section 3064, “Goodwill and
Intangible Assets”, which replaces Section 3062, “Goodwill and Intangible
Assets”. The new standard establishes revised standards for the recognition,
measurement, presentation and disclosure of goodwill and intangible assets. The
new standard also provides guidance for the treatment of pre-production and
start-up costs and requires that these costs be expensed as
incurred.  The adoption of this standard did not have a material
impact on these consolidated financial statements.





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International
Financial Reporting Standards





In
February 2008, the Canadian Accounting Standards Board ("AcSB") announced that
the requirement for publicly-accountable companies to adopt International
Financial Reporting Standards (“IFRS”) will be effective for interim and annual
financial statements relating to fiscal years beginning on or after January 1,
2011.  The transition date of January 1, 2010 will require the
restatement for comparative purposes of amounts reported by the Company for the
year ended December 31, 2010.





During
the second quarter of 2009, the Company’s senior finance staff attended IFRS
training classes and identified an IFRS project team leader.  In the
third quarter of 2009, staff members attended an intensive workshop and
conducted  an IFRS scoping study and IFRS management plan to assess
the impact of the transition to IFRS on the Company’s accounting policies and to
establish a project plan to implement IFRS.  The scoping and
management plan were approved by the Company’s Audit Committee on October 28,
2009.





The
following table summarizes the Company’s plans for implementing the IFRS
Changeover.


Key Activity
            
            Milestones/Deadlines
            
            Effort Accomplished by December 31,
      2009Phase
      1:  Preliminary Scoping StudyPreparation
      of the IFRS Scoping Study
              Understand,
      identify and assess the overall effort required by the Company to produce
      financial information in accordance with IFRS
              
              Preparation
      of a Project Management Plan to accomplish the conversion
            
            IFRS
      Scoping Study and Project Management Plan prepared by the end of Q4
      2009
            
            Draft
      IFRS Scoping Study and Project Management Plan approved by the Company’s
      Audit Committee on October 28, 2009Phase
      2:  Project Setup and EvaluationProject
      set up
            
            Identification
      of key differences between Canadian GAAP and IFRS for each significant
      accounting component by end of Q4 2009
            
            Key
      components identified and ranked in terms of financial statement impact
      and implementation effort/complexityComprehensive
      Component Evaluation and Issues Resolution
            
            Comprehensive
      component evaluations completed by Q2 2010
            
            As
      part of the Phase 1 IFRS Scoping Study, preliminary component evaluations
      were completed and significant accounting policy choices
      identified;
              Comprehensive
      component evaluations are underway





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Key Activity
            
            Milestones/Deadlines
            
            Effort Accomplished by December 31,
      2009Systems
      Evaluations and Training
            
            Systems
      and internal control evaluations completed by Q2 2010
            
            Internal
      and Financial Reporting Control Documentation was completed with
      consideration of the changes that the conversion to IFRS will
      requireEducation
      and  training programs for board members and top management
      commenced by Q4 2009 and staff by Q2 2010
            
            Executive
      Summary of Phase 1 Scoping Study presented in October 2009;
              Training
      program commencedFinancial
      Statement Presentation
            
            Preliminary
      outline of basic financial statements under IFRS by end of Q2
      2010
              Work
      to commence following comprehensive component evaluation and issues
      resolution
              
              Ready
      for implementation by end of Q3 2010Phase
      3:  Implementation and EmbeddingImplement  changes
            
            Quantification
      of changes to Canadian GAAP statements to arrive at IFRS based
      numbers
              Will
      commence in Q2 2010 for the 2010 opening balances and continue through Q1
      2011 for all 2010 statementsEmbed the change
            
            Embed the changes into the accounting and
      reporting systems  in order to be ready for conversion in Q1
      2011
            
            Overall IFRS implementation on
      track





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Evaluation
of Disclosure Controls and Procedures





As of the
end of the period covered by this MD&A under the supervision of our Chief
Executive Officer and our Chief Financial Officer, we evaluated the
effectiveness of our disclosure controls and procedures, as such term is defined
in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934
(the “Exchange Act”). Based on this evaluation, our Chief Executive Officer and
our Chief Financial Officer have concluded that the Company’s disclosure
controls and procedures are effective to ensure that information the Company is
required to disclose in reports that are filed or submitted under the Exchange
Act: (1) is recorded, processed and summarized effectively and reported within
the time periods specified in Securities and Exchange Commission rules and
forms, and (2) is accumulated and communicated to Company management, including
our Chief Executive Officer and our Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure. The Company’s disclosure
controls and procedures include components of internal control over financial
reporting. Management's assessment of the effectiveness of the Company’s
internal control over financial reporting set forth below is expressed at the
level of reasonable assurance because a control system, no matter how well
designed and operated, can provide only reasonable, but not absolute, assurance
that the control system's objectives will be met.





Management’s
Report on Internal Control over Financial Reporting





Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, the Company’s management is
responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and
15d-15(f).  The Company’s internal control over financial reporting is
a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.





All
internal control systems, no matter how well designed, have inherent
limitations. Therefore even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and
presentation. Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.





Under the
supervision and with the participation of Company’s management, including our
Chief Executive Officer and Chief Financial Officer, an evaluation was conducted
of the effectiveness of the Company’s internal control over financial reporting
as of December 31, 2009 based on the framework set forth in Internal Control —
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on that evaluation, Company management
concluded that, as of December 31, 2009, our internal control over financial
reporting was effective.





Changes
in Internal Control over Financial Reporting





There has
been no change in our internal control over financial reporting during the
fiscal year ended December 31, 2009 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.





Risks
and Uncertainties





The
Company is subject to a number of risks and uncertainties due to the nature of
its business and the present stage of development of its
business.  Investment in the natural resource industry in general, and
the exploration and development sector in particular, involves a great deal of
risk and uncertainty.  Current and potential investors should give
special consideration to the risk factors involved.  These factors are
discussed more fully in our Annual Report on Form 20-F (Annual Information Form)
dated March 5, 2010 which is filed on SEDAR at www.sedar.com and on
the U.S. Securities and Exchange Commission’s website at www.sec.gov.





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Other
Information





Other
information relating to the Company may be found on the SEDAR website at www.sedar.comor on the U.S. Securities
and Exchange Commission’s website at www.sec.gov.





Item 5C– Research and development, patents and licenses,
etc.





None





Item 5D– Trend Information.





As the
corporation is still in the development stage, there are no trends affecting
operations or the related results.





Item 5F– Tabular disclosure of contractual
obligations





As of December 31, 2009Less
      than
              1
      year
            
            
            1
      to 3
              years
            
            
            4
      to 5
              years
            
            
            Over
      5
              years
            
            
            Total$
            
            
            $
            
            
            $
            
            
            $
            
            
            $Operating
      Lease commitments
            
            
            288,082
            
            
            
            253,016
            
            
            
            -
            
            
            
            -
            
            
            
            541,098Asset retirement obligations (1)
            
            
            348,401
            
            
            
            
            
            
            
            -
            
            
            
            155,311
            
            
            
            503,712Purchase
      obligations
            
            
            820,443
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            820,443Total
            
            
            1,456,926
            
            
            
            253,016
            
            
            
            -
            
            
            
            155,311
            
            
            
            1,865,253(1) Asset retirement obligations include estimates about
      future reclamation costs, mining schedules, timing of the performance of
      reclamation work, obtaining permits on a timely basis and the quantity of
      ore reserves, an analysis of which determines the ultimate closure date
      and impacts the discounted amounts of future asset retirement liabilities.
      The amounts shown above are undiscounted to show full expected cash
      requirements


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Item6. Directors, Senior Management and Employees.





A. Directorsand senior management.





Directors





Set out
below are the names, committee memberships (as at the date hereof),
municipalities of residence, principal occupations and periods of service of the
directors of the Corporation.





Name
            
            Position with Corporation and Principal Occupation
      Within the Past Five Years
            
            Period of Service as a
    DirectorJeffrey
      T. Klenda
              Golden,
      Colorado
            
            Chair
      and Executive Director
            
            August
      2004 – presentW.
      William Boberg (5)
              Morrison,
      Colorado
            
            President,
      Chief Executive Officer and Director
            
            January
      2006 – presentJames
      M. Franklin(5)
              Ottawa,
      Ontario
            
            Director,
      Consulting Geologist / Adjunct Professor of Geology Queen’s University,
      Laurentian University and University of Ottawa
            
            March
      2004 – presentPaul
      Macdonell (1)(2)(3)(4)(6)
              Mississauga,
      Ontario
            
            Director
              Senior
      Mediator, Government of Canada
            
            March
      2004 – presentRobert
      Boaz (1)(2)(3)(4)
              Mississauga,
      Ontario
            
            Director
              Mining
      Company Executive
            
            March
      2006 – presentThomas
      Parker (1)(2)(3(4)(5)
              Kalispell,
      Montana
            
            Director
              Mining
      Company Executive
            
            July
      2007 – present


__________


(1)
            Member
      of the Audit Committee.


(2)
            Member
      of the Compensation Committee.


(3)
            Member
      of the Corporate Governance and Nominating
  Committee.


(4)
            Member
      of the Treasury & Investment
Committee.


(5)
            Member
      of the Technical Committee.


(6)
            Mr.
      Macdonell was a former director of Wedge Energy International Inc.
      (“Wedge”).  Wedge was subject to a Management Cease Trade Order
      imposed by the Ontario Securities Commission (“OSC”) on May 31, 2007 for
      the late filing of Wedge’s financial statements for the period ended March
      31, 2007.  The Order was lifted by the OSC on August 14,
      2007.





The
following sets out additional information with respect to the age, education,
experience and employment history of each of the directors and officers referred
to above during the past five years.





Jeffrey T. Klenda, 53,
      B.A.
            Chair
      & Executive Director





Mr.
Klenda graduated from the University of Colorado in 1980 and began his career as
a stockbroker specializing in venture capital offerings. Prior to founding the
Corporation in 2004, he worked as a Certified Financial Planner and was a member
of the International Board of Standards and Practices.  In 1986, he
started Klenda Financial Services, an independent financial services company
providing investment advisory services to high-end individual and corporate
clients as well as providing venture capital to corporations seeking entry to
the U.S. securities markets. In the same year Mr. Klenda formed Independent
Brokers of America, Inc., a national marketing organization. He also served as
President of Security First Financial, a company he founded to provide
consultation to individuals and corporations seeking investment management and
early stage funding. Over the last 30 years, Mr. Klenda has acted as an officer
and/or director for numerous publicly traded companies.  Mr. Klenda
has served as the Chair of the Board of Directors and Executive Director of the
Corporation since 2006.





W. William (Bill)
      Boberg,70,M.Sc., P
      Geo
            President,
      Chief Executive Officer&
Director





Mr.
Boberg is the Corporation’s President and Chief Executive Officer and a director
(since January 2006).  Previously, Mr. Boberg was the Corporation’s
senior U.S. geologist and Vice President U.S. Operations (September 2004 to
January 2006). Before his initial involvement with the Corporation in 2004, he
was a consulting geologist having over 40 years experience investigating,
assessing and developing a wide variety of mineral resources in a broad variety
of geologic environments in western North America, South America and
Africa.  Companies that Mr. Boberg has worked for include Gulf
Minerals, Hecla Mining, Anaconda, Continental Oil Minerals Department, Wold
Nuclear, Kennecott, Western Mining, Canyon Resources and Africa Mineral Resource
Specialists.  Mr. Boberg has over twenty years of experience exploring
for uranium in the continental US. He discovered the Moore Ranch Uranium
Deposit, the Ruby Ranch Uranium Deposit as well as several smaller deposits in
Wyoming's Powder River Basin.  He received his Bachelor’s Degree in
Geology from Montana State University and his Master’s Degree in Geology from
the University of Colorado.  He is a registered Wyoming Professional
Geologist and fellow of the Society of Economic Geologists.  He is a
member of the Society for Mining, Metallurgy & Exploration Inc., American
Institute of Professional Geologists (for which he is a certified geologist),
the Denver Regional Exploration Society and the American Association of
Petroleum Geologists.  Mr. Boberg is also a director for Aura Silver
Resources Inc. (since June 2008).





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James M. Franklin, 67,
      Ph. D., FRSC, P.
      Geo
            Director & Chair of the
      Technical Committee





Dr.
Franklin has over 40 years experience as a geologist. He is a Fellow of the
Royal Society of Canada. Since January 1998, he has been an Adjunct Professor at
Queen’s University, since 2001, at Laurentian University and since 2006 at the
University of Ottawa. He is a past President of the Geological Association of
Canada and of the Society of Economic Geologists. He retired as Chief
Geoscientist, Earth Sciences Sector, the Geological Survey of Canada in 1998.
Since that time, he has been a consulting geologist and is currently a director
of Aura Silver Resources Inc. (since October 2003) and Spider Resources Ltd.
(since July 2006).





Paul Macdonell, 57,
      Diploma Public
      Admin.
            Director
      & Chair of Compensation
Committee





Mr.
Macdonell is a Senior Mediator, Federal Mediation and Conciliation Service for
the Government of Canada. Previously Mr. Macdonell was employed since 1976 by
the Amalgamated Transit Union, serving as President of the Union from 1996 to
2000 and Financial Secretary 1991 to 1995.  Mr. Macdonell was
Municipal Councillor of the City of Cumberland from 1978 to 1988 and was on the
City’s budget committee during that time. He graduated (diploma) at University
of Western Ontario in Public Administration and completed programs at University
of Waterloo (Economic Development Certificate), The George Meany Centre in
Washington (Labour Studies) and Harvard University (Program on Negotiations).





Robert Boaz,58,M. Economics, Hon.
      BA
            Director
      & Chair of the Corporate Governance and Nominating
      Committee





Mr. Boaz
has 18 years of experience in the investment banking business after a career in
the power and natural gas industry where he held management positions for
Ontario Hydro, Saskatchewan Power and Consumers Gas.  He has held
senior management positions in a number of firms in the investment industry with
direct responsibilities related to research, portfolio management, institutional
sales and investment banking.  From 2004 to March 2006, Mr. Boaz
served as Managing Director Investment Banking with Raymond James Ltd. in
Toronto.  From 2000 to 2004, Mr. Boaz was Vice President and Head of
Research and in-house portfolio strategist for Dundee Securities
Corporation.  Mr. Boaz is currently the President, Chief Executive
Officer and a director of Aura Silver Resources Inc., a director of AuEx
Ventures Inc. and chair of the board of directors and audit committee of Solex
Resources Corp.





Thomas Parker, 67, M.Sc.,
    P.E.
            Director
      & Chair of the Audit Committee





Mr.
Parker has worked extensively in senior management positions in the mining
industry for the past 43 years.  Mr. Parker is a mining engineer
graduate from South Dakota School of Mines, with a Master’s Degree in Mineral
Engineering Management from Penn State. Mr. Parker is President and CEO of US
Silver Corporation before which he was President and CEO of Gold Crest Mines,
Inc., a Spokane-based gold exploration company. Prior to such position, he was
the President and CEO of High Plains Uranium, Inc. a junior uranium mining
company acquired by Energy Metals in January 2007. Mr. Parker also served for 10
years as Executive Vice President of Anderson and Schwab, a management
consulting firm. Prior to Anderson and Schwab, Mr. Parker held many executive
management positions with, including Costain Minerals Corporation, ARCO, Kerr
McGee Coal Corporation and Conoco.  He also has worked in the potash,
limestone, talc, coal and molybdenum industries and has extensive experience in
Niger, France and Venezuela.





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Additional
Executive Officers





Roger L. Smith, 51,
      CPA,
      MBA
            Chief
      Financial Officer and Vice President, Finance, IT and
      Administration





Mr. Smith
has 25 years of mining and manufacturing experience including finance,
accounting, IT, ERP and systems implementations, mergers, acquisitions, audit,
tax and public and private reporting in international
environments.  Mr. Smith joined Ur-Energy in May 2007 after having
served as Vice President, Finance for Luzenac America, Inc., a subsidiary of Rio
Tinto PLC and Director of Financial Planning and Analysis for Rio Tinto
Minerals, a division of Rio Tinto PLC from September 2000 to May
2007.  Mr. Smith has also held such positions as Vice President
Finance, Corporate Controller, Accounting Manager, Internal Auditor with
companies such as Vista Gold Corporation, Westmont Gold Inc. and Homestake
Mining Corporation.  He has a Masters of Business Administration and
Bachelor of Arts in Accounting from Western State College, Gunnison,
Colorado.





Harold A. Backer, 68,
      B.Sc.
            Executive
      Vice President, Geology &
Exploration





Mr.
Backer is the Corporation’s Executive Vice President, Geology & Exploration.
He has over 42 years experience in the mining industry participating in major
exploration programs in the commodities of gold, uranium, copper, and phosphate.
In exploration, he has worked for Kalium Chemicals, Chevron Resources and as
Senior VP Exploration for Goldbelt Resources. As a Consulting Economic
Geologist, he has participated in numerous pre-feasibility mining studies (open
pit and underground projects) as a team leader and in a management position on
projects in North America and in the countries of the former Soviet
Union.  Mr. Backer joined Ur-Energy more than five years ago and has
assumed various responsibilities as an officer before becoming Executive VP of
Geology & Exploration.





Paul W. Pitman, 62,
      B.Sc. Hon. Geo.,
      P.
      Geo
            Vice
      President, Canadian Exploration





Mr.
Pitman has over 40 years experience as an exploration geologist. He began his
career with Gulf Minerals as a field geologist at the Rabbit Lake uranium
discovery, Saskatchewan, in 1969, followed by work in the late 1970s -1980s as a
senior geologist for BP Minerals exploring for uranium across Canada. Mr. Pitman
was President of Ur-Energy from its inception up to January 2006.





Wayne W. Heili, 44,
      B.Sc.
            Vice
      President, Mining & Engineering





Mr. Heili
is the Corporation’s Vice President, Mining & Engineering.  His
career spans more than 20 years in which he has provided engineering,
construction, operations and technical support in the uranium mining industry.
He spent 16 years in various operations level positions with Total Minerals and
Cogema Mining at their properties in Wyoming and Texas. He was Operations
Manager of Cogema’s Wyoming in-situ recovery projects from 1998 to 2004. Since
then, Mr. Heili acted as a consultant for such companies as High Plains Uranium,
Energy Metals and Behre Dolbear. His experience includes conventional and ISR
uranium processing facility operations. Mr. Heili received a Bachelor of Science
in Metallurgical Engineering from Michigan Technological University, with an
emphasis in mineral processing.





Paul G. Goss,67, JD, MBA
            General
      Counsel & Corporate Secretary





Mr. Goss
has over 35 years of diverse transactional experience in complex business, real
estate and natural resources transactions, including more than five years with a
national-practice firm.  In addition to his transactional experience,
he has represented clients in commercial litigation, arbitration and mediation,
involving mining, oil and gas, real estate, corporate law, securities and
environmental law. He served in the capacities of President and General Counsel
of Polaris Coal Company from 1990 through 2001. He obtained his Juris Doctor,
cum laude from the
University of Denver College of Law.  He also obtained a Master of
Business Administration from Indiana State University and a Bachelor of Science
from Rose-Hulman Institute of Technology.





As at
March 5, 2010, the directors and executive officers of the Corporation, as a
group, beneficially own, directly or indirectly, or exercised control or
direction over 1,877,307 Common Shares, representing approximately 6.93% of the
Corporation’s outstanding Common Shares. The information as to securities
beneficially owned or over which control or direction is exercised is not within
the knowledge of the Corporation and has been furnished by the directors and
executive officers individually.





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B.Compensation.





Compensation
of Executive Officers





The
following table sets forth the summary information concerning compensation paid
to or earned during the financial years ended December 31, 2007, 2008 and 2009
by the Corporation’s Chief Executive Officer and Chief Financial Officer and the
three highest paid executive officers, who were serving as executive officers at
December 31, 2009 (collectively, the “Named Executive Officers”).





Summary Compensation Table(1)





Non-equity incentive
              plan compensationName and principal position
            Year
            
            Salary
              ($)
            
            Share-
              based
              awards
              ($)
            
            Option-
              based
              awards
              ($)
            
            
            Annual
              incentive
              plans
              ($)
            
            Long-
              term
              incentive
              plans
              ($)
            
            Pension
              Value
              ($)
            
            All other compensation
              ($)
            
            Total
              compensation
              ($)W. William Boberg(2) (3)
            2009
            
            $
            289,190
            
            Nil
            
            $
            91,803
            
            
            $
            4,215
            
            Nil
            
            Nil
            
            Nil
            
            $
            385,208Director,
      President, and
            2008
            
            $
            255,843
            
            Nil
            
            $
            68,000
            
            
            $
            3,934
            
            Nil
            
            Nil
            
            Nil
            
            $
            327,777Chief
      Executive Officer
            2007
            
            $
            247,250
            
            Nil
            
            $
            980,000
            
            
            Nil
            
            Nil
            
            Nil
            
            Nil
            
            $
            1,227,250Roger L. Smith(4) (5)
            2009
            
            $
            271,116
            
            Nil
            
            $
            61,967
            
            
            $
            3,952
            
            Nil
            
            Nil
            
            Nil
            
            $
            337,035Chief
      Financial Officer
            2008
            
            $
            239,853
            
            Nil
            
            $
            34,000
            
            
            $
            3,688
            
            Nil
            
            Nil
            
            Nil
            
            $
            277,541and
      Vice President, Finance
            2007
            
            $
            142,010
            
            Nil
            
            $
            724,500
            
            
            Nil
            
            Nil
            
            Nil
            
            Nil
            
            $
            866,510Harold A. Backer(6) (7)
            2009
            
            $
            240,992
            
            Nil
            
            $
            55,082
            
            
            $
            3,513
            
            Nil
            
            Nil
            
            Nil
            
            $
            299,587Executive
      Vice President,
            2008
            
            $
            213,203
            
            Nil
            
            $
            51,000
            
            
            $
            3,278
            
            Nil
            
            Nil
            
            Nil
            
            $
            267,481Geology
      & Exploration
            2007
            
            $
            148,350
            
            Nil
            
            $
            367,500
            
            
            Nil
            
            Nil
            
            Nil
            
            Nil
            
            $
            515,850Wayne W. Heili(8) (9)
            2009
            
            $
            253,041
            
            Nil
            
            $
            86,754
            
            
            $
            3,688
            
            Nil
            
            Nil
            
            Nil
            
            $
            343,483Vice
      President,
            2008
            
            $
            223,863
            
            Nil
            
            $
            34,000
            
            
            $
            3,442
            
            Nil
            
            Nil
            
            Nil
            
            $
            261,305Mining
      & Engineering
            2007
            
            $
            169,091
            
            Nil
            
            $
            1,780,000
            
            
            Nil
            
            Nil
            
            Nil
            
            Nil
            
            $
            1,949,091Jeffrey T. Klenda(10) (11)
            2009
            
            $
            231,352
            
            Nil
            
            $
            58,754
            
            
            $
            3,372
            
            Nil
            
            Nil
            
            Nil
            
            $
            293,478Chair
      and
            2008
            
            $
            204,675
            
            Nil
            
            $
            68,000
            
            
            $
            3,147
            
            Nil
            
            Nil
            
            Nil
            
            $
            275,822Executive
      Director
            2007
            
            $
            176,300
            
            Nil
            
            $
            490,000
            
            
            Nil
            
            Nil
            
            Nil
            
            Nil
            
            $
            666,300


(1)
            United
      States dollar figures have been converted to Canadian dollar figures at
      the average exchange rate for 2009 of US$1.00 = CDN$1.14235 as quoted by
      OANDA Corporation on its website www.oanda.com.
      The figures for 2008 and 2007 have been converted to Canadian dollar
      figures at the average exchange rate for 2008 of US$1.00 = CDN$1.0660 and 2007 of
      $US$1.00 = CDN$1.075 as posted by the Bank of
  Canada.


(2)
            Mr.
      Boberg was a consultant to the Corporation from September 21, 2004 to
      December 31, 2006.  Mr. Boberg entered into an employment
      agreement with the Corporation dated January 1, 2007, as
      amended.  See heading “Employment Contracts” below. Mr. Boberg
      was confirmed as President and Chief Executive Officer on May 29, 2006
      after having been appointed President, Acting Chief Executive Officer and
      a Director on January 11, 2006.  Previously, from September 2004
      to January 11, 2006, Mr. Boberg had been a consultant and Vice President,
      US Operations of the Corporation.


(3)
            In
      2009, Mr.  Boberg received options for 107,143 Common Shares on
      February 9, 2009 at an exercise price of $0.71.  These options
      expire on February 9, 2014.  In addition, he received options
      for 107,143 Common Shares on September 2, 2009 at an exercise price of
      $0.90.  These options expire on September 2, 2014.  In
      2008, Mr. Boberg received options for 80,000 Common Shares on May 8, 2008
      at an exercise price of $1.65 per share.  These options expire
      on May 8, 2013. In 2007, Mr Boberg received options for 400,000 Common
      Shares on May 22, 2007, at an exercise price of $4.75.  These
      options were to expire on May 15, 2012.  On September 30, 2008,
      Mr. Boberg voluntarily forfeited options for 400,000 Common Shares that
      were granted on May 22, 2007 at an exercise price of $4.75 per share and
      these options were subsequently cancelled by the
    Corporation.


(4)
            Roger
      Smith joined the Corporation in May 2007 and was appointed to the position
      of Chief Financial Officer pursuant to an employment agreement with the
      Corporation.  In August 2007, Mr. Smith was further appointed as
      Vice President, Finance, IT & Administration. See heading “Employment
      Contracts” below.





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(5)
            In
      2009, Mr. Smith received options for 72,321 Common Shares on February 9,
      2009 at an exercise price of $0.71.  These options expire on
      February 9, 2014.  In addition, he received options for 72,321
      Common Shares on September 2, 2009 at an exercise price of
      $0.90.  These options expire on September 2, 2014. In 2008, Mr.
      Smith received options for 40,000 Common Shares on May 8, 2008 at an
      exercise price of $1.65 per share. These options expire on May 8,
      2013.  In 2007, Mr. Smith received options for 225,000 Common
      Shares on May 22, 2007 at an exercise price of $4.75 per
      share.  These options were to expire on May 15,
      2012.  Mr. Smith also received options for 112,500 Common Shares
      on August 9, 2007 at an exercise price of $3.00.  These options
      expire on August 9, 2012. On September 30, 2008, Mr. Smith voluntarily
      forfeited options for 225,000 Common Shares at an exercise price of $4.75
      per share that were granted on May 22, 2007 and these options were
      subsequently cancelled by the
Corporation.


(6)
            Mr.
      Backer was a consultant to the Corporation from May 2005 to December 31,
      2006.  Mr. Backer entered into an employment agreement with the
      Corporation on January 1, 2007, as amended. See heading “Employment
      Contracts” below.


(7)
            In
      2009, Mr. Backer received options for 64,286 Common Shares on February 9,
      2009 at an exercise price of $0.71.  These options expire on
      February 9, 2014.  In addition, he received options for 64,286
      Common Shares on September 2, 2009 at an exercise price of
      $0.90.  These options expire on September 2,
      2014.   In 2008, Mr. Backer received options for 60,000
      Common Shares on May 8, 2008 at an exercise price of $1.65 per
      share.  These options expire on May 8, 2013.  In 2007,
      Mr. Backer received options for 150,000 Common Shares on May 22, 2007 at
      an exercise price of $4.75 per share.  These options were to
      expire on May 15, 2012.  On September 30, 2008, Mr. Backer
      voluntarily forfeited options for 150,000 Common Shares at an exercise
      price of $4.75 per share that were granted on May 22, 2007 and these
      options were subsequently cancelled by the
  Corporation.


(8)
            Mr.
      Heili joined the Corporation in February 2007 pursuant to an employment
      agreement with the Corporation and was appointed to the position of Vice
      President, Mining & Engineering.  Until April 23, 2007, Mr.
      Heili worked for the Corporation on a part time basis for a reduced salary
      while finalizing certain personal matters.  See “Employment
      Contracts” below.


(9)
            In
      2009, Mr. Heili received options for 101,250 Common Shares on February 9,
      2009 at an exercise price of $0.71.  These options expire on
      February 9, 2014.  In addition, he received options for 101,250
      Common Shares on September 2, 2009 at an exercise price of
      $0.90.  These options expire on September 2,
      2014.   In 2008, Mr. Heili received options for 40,000
      Common Shares on May 8, 2008 at an exercise price of $1.65 per
      share.  These options expire on May 8, 2013. In 2007, Mr. Heili
      received options for 600,000 Common Shares, subject to certain performance
      milestones, on February 19, 2007 at an exercise price of $5.03 per
      share.  These options were to expire on February 15,
      2012.  Mr. Heili also received options for 100,000 Common Shares
      on August 9, 2007 at an exercise price of $3.00 per
      share.  These options expire on August 9, 2012.  On
      September 30, 2008, Mr. Heili voluntarily forfeited options for 600,000
      Common Shares at an exercise price of $5.03 per share that were granted on
      February 19, 2007 and these options were subsequently cancelled by the
      Corporation.


(10)
            Mr.
      Klenda became a director of the Corporation in August 2004 and Chair of
      the Board of Directors and Executive Director in January
      2006.  Mr. Klenda was a consultant to the Corporation from
      August 2004 to December 31, 2006.  Mr. Klenda entered into an
      employment agreement with the Corporation on January 1, 2007, as amended.
      See heading “Employment Contracts”
below.


(11)
            In
      2009, Mr. Klenda received options for 68,571 Common Shares on February 9,
      2009 at an exercise price of $0.71.  These options expire on
      February 9, 2014.  In addition, he received options for 68,571
      Common Shares on September 2, 2009 at an exercise price of
      $0.90.  These options expire on September 2, 2014.  In
      2008, Mr. Klenda received options for 80,000 Common Shares on May 8, 2008,
      at an exercise price of $1.65 per share.  These options expire
      on May 8, 2013.  In 2007, Mr. Klenda received options for
      200,000 Common Shares on May 22, 2007 at an exercise price of $4.75 per
      share.  These options were to expire on May 15,
      2012.  On September 30, 2008, Mr. Klenda voluntarily forfeited
      options for 200,000 Common Shares at an exercise price of $4.75 per share
      which were granted on May 22, 2007 and these options were subsequently
      cancelled by the Corporation.





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The
following table sets forth information concerning outstanding option-based and
share-based awards granted by the Corporation to each of the Named Executive
Officers as of December 31, 2009.





Option
Based and Share Based Awards Granted as of December 31, 2009





Option-based Awards
            
            
            Share-based AwardsNumber
      of securities underlying unexercised options
            
            
            Option
      exercise price
            
            Option
      expiration
            
            Value
      of unexercised in-the-money options
            
            
            Number
      of shares or units of shares that have not vested
            
            
            Market
      or payout value of share-based awards that have not vestedName
            
            
            (#)
            
            
            
            ($)
            
            date
            
            
            ($)
            
            
            
            (#)
            
            
            
            ($)W.
      William Boberg
            
            
            107,143
            
            
            
            0.71
            
            09-Feb-2014
            
            
            10,714
            
            
            Nil
            
            
            Nil107,143
            
            
            
            0.9
            
            02-Sep-2014
            
            Nil
            
            
            Nil
            
            
            Nil200,000
            
            
            
            1.25
            
            17-Nov-2010
            
            Nil
            
            
            Nil
            
            
            Nil80,000
            
            
            
            1.65
            
            08-May-2013
            
            Nil
            
            
            Nil
            
            
            Nil400,000
            
            
            
            2.35
            
            21-Apr-2011
            
            Nil
            
            
            Nil
            
            
            NilRoger
      L. Smith
            
            
            72,321
            
            
            
            0.71
            
            09-Feb-2014
            
            
            7,232
            
            
            Nil
            
            
            Nil72,321
            
            
            
            0.9
            
            02-Sep-2014
            
            Nil
            
            
            Nil
            
            
            Nil40,000
            
            
            
            1.65
            
            08-May-2013
            
            Nil
            
            
            Nil
            
            
            Nil112,500
            
            
            
            3
            
            09-Aug-2012
            
            Nil
            
            
            Nil
            
            
            NilHarold
      A. Backer
            
            
            64,286
            
            
            
            0.71
            
            09-Feb-2014
            
            
            6,429
            
            
            Nil
            
            
            Nil64,286
            
            
            
            0.9
            
            02-Sep-2014
            
            Nil
            
            
            Nil
            
            
            Nil200,000
            
            
            
            1.25
            
            17-Nov-2010
            
            Nil
            
            
            Nil
            
            
            Nil60,000
            
            
            
            1.65
            
            08-May-2013
            
            Nil
            
            
            Nil
            
            
            Nil200,000
            
            
            
            2.35
            
            21-Apr-2011
            
            Nil
            
            
            Nil
            
            
            NilWayne
      W. Heili
            
            
            101,250
            
            
            
            0.71
            
            09-Feb-2014
            
            
            10,125
            
            
            Nil
            
            
            Nil101,250
            
            
            
            0.9
            
            02-Sep-2014
            
            Nil
            
            
            Nil
            
            
            Nil25,000
            
            
            
            1.25
            
            17-Nov-2010
            
            Nil
            
            
            Nil
            
            
            Nil40,000
            
            
            
            1.65
            
            08-May-2013
            
            Nil
            
            
            Nil
            
            
            Nil100,000
            
            
            
            3
            
            09-Aug-2012
            
            Nil
            
            
            Nil
            
            
            NilJeffrey
      T. Klenda
            
            
            68,571
            
            
            
            0.71
            
            09-Feb-2014
            
            
            6,857
            
            
            Nil
            
            
            Nil68,571
            
            
            
            0.9
            
            02-Sep-2014
            
            Nil
            
            
            Nil
            
            
            Nil400,000
            
            
            
            1.25
            
            17-Nov-2010
            
            Nil
            
            
            Nil
            
            
            Nil80,000
            
            
            
            1.65
            
            08-May-2013
            
            Nil
            
            
            Nil
            
            
            Nil400,000
            
            
            
            2.35
            
            21-Apr-2011
            
            Nil
            
            
            Nil
            
            
            Nil





For
information regarding the Ur-Energy Stock Option Plan 2005, as amended, see
Item 6.E - Share
Ownership.





The
following table sets forth information concerning the value vested or earned in
respect of incentive plan awards during the financial year ended December 31,
2009 by each of the Named Executive Officers.





Incentive
Plan Awards - Value Vested or Earned During the


Financial
Year Ended December 31, 2009





Option-based Awards
            
            
            Share-based Awards
            
            
            Non-equity incentive plan
      compensationName
            
            Number of Securities Underlying Options
      Vested
              (#)
            
            
            Value vested during the year
              ($)
            
            
            Number of Shares or Units of Shares
      Vested
              (#)
            
            
            Value vested during the year
              ($)
            
            
            Value earned during the year
              ($)W.
      William Boberg
            
            
            122,971
            
            
            
            9,664
            
            
            
            Nil
            
            
            
            Nil
            
            
            $
            4,215Roger
      L. Smith
            
            
            100,485
            
            
            
            6,523
            
            
            Nil
            
            
            Nil
            
            
            $
            3,952Harold
      A. Backer
            
            
            81,943
            
            
            
            5,798
            
            
            Nil
            
            
            Nil
            
            
            $
            3,513Wayne
      W. Heili
            
            
            116,000
            
            
            
            9,133
            
            
            Nil
            
            
            Nil
            
            
            $
            3,688Jeffrey
      T. Klenda
            
            
            98,285
            
            
            
            6,185
            
            
            Nil
            
            
            Nil
            
            
            $
            3,372





Employment
Contracts





The
Corporation entered into an employment agreement with Mr. W. William Boberg
dated January 1, 2007, as amended.  Currently, Mr. Boberg is entitled
to a salary of US$252,150 per year and a discretionary bonus to be set by the
Board of Directors.  Mr. Boberg is entitled to receive stock option
grants under the terms and conditions of the Option Plan and as determined by
the Board of Directors.  In the event that the Corporation terminates
the employment agreement with Mr. Boberg for non-causal reasons, Mr. Boberg will
be entitled to a lump sum payment equivalent to two years base
salary.  In the event of a change of control of the Corporation and
Mr. Boberg’s termination by, or resignation from, the Corporation within 12
months of the change of control, Mr. Boberg may be entitled to a lump sum
payment equivalent to two years base salary.  Mr. Boberg is subject to
non-competition and non-solicitation restrictions for a period of one year upon
termination of the employment agreement.





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The
Corporation entered into an employment agreement with Mr. Roger Smith dated May
15, 2007, as amended.  Currently, Mr. Smith is entitled to a salary of
US$236,391 per year and a discretionary bonus to be set up by the Board of
Directors.  Mr. Smith is entitled to receive stock option grants under
the terms and conditions of the Option Plan and as determined by the Board of
Directors.  In the event that the Corporation terminates the
employment agreement with Mr. Smith for non-causal reasons, Mr. Smith will be
entitled to a lump sum payment equivalent to two years base
salary.  In the event of a change of control of the Corporation, and
Mr. Smith’s termination by, or resignation from, the Corporation within 12
months of the change of control, Mr. Smith may be entitled to a lump sum payment
equivalent to two years base salary.  Mr. Smith is subject to
non-competition and non-solicitation restrictions for a period of one year upon
termination of the employment agreement.





The
Corporation entered into an employment agreement with Mr. Harold Backer dated
January 1, 2007, as amended.  Currently, Mr. Backer is entitled to a
salary of US$210,125 per year and a discretionary bonus to be set by the Board
of Directors of the Corporation.  Mr. Backer is entitled to receive
stock option grants under the terms and conditions of the Option Plan and as
determined by the Board of Directors.  In the event the Corporation
terminates the employment agreement with Mr. Backer for non-causal reasons, Mr.
Backer will be entitled to a lump sum payment equivalent to two years base
salary.  In the event of change of control of the Corporation and Mr.
Backer’s termination by, or resignation from, the Corporation within 12 months
of the change of control, Mr. Backer may be entitled to a lump sum payment
equivalent to two years base salary.  Mr. Backer is subject to
non-competition and non-solicitation restrictions for a period of one year upon
termination of the employment agreement.





The
Corporation entered into an employment agreement with Mr. Wayne Heili dated
February 19, 2007, as amended. Currently, Mr. Heili is
entitled to a salary of US$220,631 per year and a discretionary bonus to be set
by the Board of Directors of the Corporation.  Mr. Heili is entitled
to receive stock option grants under the terms and conditions of the Option Plan
and as determined by the Board of Directors.  In the event the
Corporation terminates the employment agreement with Mr. Heili for non-causal
reasons, Mr. Heili will be entitled to a lump sum payment equivalent to two
years base salary.  In the event of change of control of the
Corporation, and Mr. Heili’s termination by, or resignation from, the
Corporation within 12 months of the change of control, Mr. Heili may be entitled
to a lump sum payment equivalent to two years base salary.  Mr. Heili
is subject to non-competition and non-solicitation restrictions for a period of
one year upon termination of the employment agreement.





The
Corporation entered into an employment agreement with Mr. Jeffrey Klenda dated
January 1, 2007, as amended.  Currently, Mr. Klenda is entitled to a
salary of US$201,720 per year and a discretionary bonus to be set by the Board
of Directors.  Mr. Klenda is entitled to receive stock option grants
under the terms and conditions of the Option Plan and as determined by the Board
of Directors.  In the event that the Corporation terminates the
employment agreement with Mr. Klenda for non-causal reasons, Mr. Klenda will be
entitled to a lump sum payment equivalent to two years base
salary.  In the event of a change of control of the Corporation and
Mr. Klenda’s termination by, or resignation from, the Corporation within 12
months of the change of control Mr. Klenda may be entitled to a lump sum payment
equivalent to two years base salary.  Mr. Klenda is subject to
non-solicitation restrictions for a period of one year upon termination of the
employment agreement.





On
December 31, 2008, all the executive employment agreements were amended to
insert necessary provisions for compliance with Section 409A provision of the
Internal Revenue Code of 1986 (“IRC”), as amended, including the timing of
payments or deferred compensation in the event of a change of control or
termination from the Corporation.





In
November 2009, all the executive employment agreements were amended to insert
provisions to provide for the establishment of a trust to hold and invest
certain separation payments which the Corporation becomes obligated to pay
because of a voluntary termination by the executive or involuntary termination
by the Corporation or in the event of a change of a control but which payments
have been delayed under Section 490A of the IRC.





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Compensation
of Directors





In
December 2008, the Compensation Committee reviewed the director compensation and
recommended changes to the director compensation scheme which was adopted by the
Compensation Committee and the Board of Directors in January
2009.  Commencing in 2009, each non-management director received a
base retainer for the fiscal year ended December 31, 2009 in cash of
$18,000.  In addition to the base retainer, each non-management
director receives compensation for each meeting attended ($1,000 attendance in
person; $500 attendance by telephone).  The non-management directors
are also eligible to receive grants of options at the discretion of the Board of
Directors.  In addition, the Compensation Committee recommended, and
Board of Directors adopted, a resolution requiring mandatory minimum share
ownership by the non-management directors to encourage the alignment of
interests between the Corporation and its
shareholders.  Non-management directors are required to invest an
amount equal to the non-management director’s annual retainer in shares or
securities exercisable into shares on or before the later of (i) December 31,
2013, or (ii) the fifth anniversary of the non-management director’s election or
appointment.  The retainer amount will be calculated using the amount
of the annual retainer at the later of (i) January 1, 2009, or (ii) the date of
the non-management director’s election or appointment.





In
addition to other compensation received by directors of the Corporation, the
Compensation Committee recommended, and the Board of Directors adopted a
resolution in 2008 that non-management directors participating on ad hoc or special committees
of the Board of Directors, which may be constituted from time to time, would be
entitled to additional director fees, to be determined in accordance with
additional duties and requirements requested of those individuals from time to
time.  In respect of the Ad Hoc Committee on Screech Lake, it was
determined that non-management directors would receive fees of $1,000 per day
spent in respect of the Ad Hoc Committee activities except in the event that
such non-management director is already under a consulting agreement with the
Corporation.





Non-Management
Director Compensation For the Financial Year Ended December 31,
2009





Name
            
            Fees
              earned
              ($)
            
            
            Share-
              based
              awards
              ($)
            
            
            Option-
              based
              awards
              ($)
            
            
            Non-equity
              incentive
              plan
              compensation
              ($)
            
            
            Pension
              value
              ($)
            
            
            All other
              compensation
              ($)
            
            
            Total
              ($)Robert Boaz(1)
            
            $
            23,000
            
            
            
            Nil
            
            
            $
            11,016
            
            
            
            Nil
            
            
            
            Nil
            
            
            $
            25,000
            
            
            $
            59,016James M. Franklin(2)
            
            $
            24,000
            
            
            Nil
            
            
            $
            11,016
            
            
            Nil
            
            
            Nil
            
            
            $
            20,000
            
            
            $
            55,016Paul
      Macdonell
            
            $
            22,500
            
            
            Nil
            
            
            $
            11,016
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            $
            33,516Thomas
      Parker
            
            $
            23,500
            
            
            Nil
            
            
            $
            11,016
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            $
            34,516


(1)
            Mr.
      Boaz has received additional per diem fees as a director for his work on
      the Ad Hoc Committee on Screech
Lake.


(2)
            Dr.
      Franklin has a consulting agreement with the Corporation and invoices the
      Corporation for consulting projects on which he is
    involved.





C.Boardpractices.





Director
Term





The term
of office for each director is from the date of the meeting at which he or she
is elected until the next annual meeting of shareholders of the Corporation or
until his or her successor is elected or appointed, unless his or her office is
vacated before that time in accordance with the by-laws of the
Corporation.  None of the non-management directors has a service
contract with the Corporation.  One of the non-management directors,
James Franklin, has a consulting agreement with the Corporation.





Audit
Committee





The Audit
Committee assists the Board of Directors in carrying out its responsibilities
relating to corporate accounting and financial reporting practices. The duties
and responsibilities of the Audit Committee include the following:





·
            reviewing
      for recommendation to the Board of Directors for its approval the
      principal documents comprising the Corporation’s continuous disclosure
      record, including interim and annual financial statements and management’s
      discussion and analysis;


·
            recommending
      to the Board of Directors a firm of independent auditors for appointment
      by the shareholders and reporting to the Board of Directors on the fees
      and expenses of such auditors.  The Audit Committee has the
      authority and responsibility to select, evaluate and if necessary, replace
      the independent auditor.  The Audit Committee has the authority
      to approve all audit engagement fees and terms and the Audit Committee, or
      a member of the Audit Committee, must review and pre-approve any non-audit
      services provided to the Corporation by the Corporation’s independent
      auditor and consider the impact on the independence of the
      auditor;





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·
            reviewing
      periodic reports from the Chief Financial
  Officer;


·
            discussing
      with management and the independent auditor, as appropriate, any audit
      problems or difficulties and management’s response;
  and


·
            establishing
      procedures for the receipt, retention and treatment of complaints
      regarding accounting, internal accounting controls or auditing
      matters.





The Audit
Committee maintains direct communication during the year with the Corporation’s
independent auditor and the Corporation’s officers responsible for accounting
and financial matters.





All of
the members of the Audit Committee, Messrs. Macdonell, Boaz and Parker, are
independent directors pursuant to National Instrument 52-110 Audit
Committees (“NI 52-110”) and the listing standards of the NYSE Amex. Each
of the members is financially literate as defined in NI 52-110.  The
Audit Committee has designated Robert Boaz as an “audit committee financial
expert” as currently defined by the rules of the SEC regulating such
disclosures.  The members of the Audit Committee were during 2009, and
currently are, Thomas Parker (Chair), Robert Boaz and Paul Macdonell. The
education and experience of each member of the Audit Committee that is relevant
to the performance of his responsibilities as an Audit Committee member is set
out under the Heading Item 6 –
Directors, Senior Management and Employees.





Report of the Audit
Committee





During
2009, the Audit Committee met five times.  The activities of the Audit
Committee over the past year included the following:





·
            reviewing
      annual financial statements of the Corporation and management’s discussion
      and analysis prior to filing with the regulatory
    authorities;


·
            reviewing
      the quarterly interim financial statements of the Corporation and
      management’s discussion and analysis prior to filing with regulatory
      authorities;


·
            reviewing
      periodic reports from the Chief Financial
  Officer;


·
            reviewing
      applicable Canadian corporate disclosure reporting and control processes,
      including Chief Executive Officer and Chief Financial Officer
      certifications;


·
            reviewing
      and approval of International Financial Reporting Standards (“IFRS”)
      changeover and project management plan as
  developed;


·
            reviewing
      Audit Committee governance practices to ensure its terms of reference
      incorporate all regulatory requirements;
and


·
            reviewing
      the engagement letter with the independent auditors and annual audit fees
      prior to approval by the Board of Directors, as well as pre-approving
      non-audit services and their cost prior to
  commencement.





The Audit
Committee has reviewed and discussed with management and the independent
auditors the Consolidated Financial Statements of the Corporation as at December
31, 2009 and Management’s Discussion and Analysis. Based on that review and on
the report of the independent auditor of the Corporation, the Audit Committee
recommended to the Board of Directors that such Financial Statements and
Management’s Discussion and Analysis be approved and filed with Canadian
regulatory authorities and the SEC. The Audit Committee reviews its charter on a
yearly basis.





Compensation
Committee





The
Compensation Committee assists the Board of Directors in carrying out its
responsibilities relating to personnel matters, including performance,
compensation and succession.  The Compensation Committee has prepared
terms of reference which include annual objectives against which to assess
members of management including the President and Chief Executive Officer and
reviews and makes recommendations to the Board of Directors with respect to
employee and consultant compensation arrangements including stock options and
management succession planning.  The Compensation Committee reviews
its charter on a yearly basis.





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The
Compensation Committee met four times in 2009.  Portions of meetings
are conducted without management present, including for the purpose of
specifically discussing the compensation of the President and Chief Executive
Officer.  The members of the Committee during 2009 were, and currently
are, Paul Macdonell (Chair), Thomas Parker and Robert Boaz.  All the
members of the Compensation Committee are independent pursuant to NI 52-110 and
the listing standards of the NYSE Amex.





D.Employees.





At
December 31 2009, the Corporation had 49 employees.  Currently,
approximately 25 employees are located at the Corporation’s offices in
Littleton, Colorado and 23 employees are located at the Corporation’s offices in
Casper, Wyoming.





As
      of December 31,Employment
      category
            
            2009
            
            
            2008
            
            
            2007Administration
            
            
            17
            
            
            
            16
            
            
            
            15Exploration
            
            
            10
            
            
            
            12
            
            
            
            12Engineering
      and field
            
            
            22
            
            
            
            18
            
            
            
            11Consulting
      and temporary
            
            
            1
            
            
            
            1
            
            
            
            1Total
            
            
            50
            
            
            
            47
            
            
            
            39





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57
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E.Shareownership.





The
following table sets forth information concerning the beneficial ownership of
the Corporation’s outstanding Common Shares by each of the directors and
executive officers of the Corporation, and by all directors and executive
officers as a group, as at March 5, 2010.





Amount
and Nature of Beneficial Ownership (1)





Name
            
            Shares
            
            
            Options
              Exercisable
              by
      May 11, 2010
            
            
            Percentage
              of
      Class (2)Harold
      A. Backer
            
            
            0
            
            
            
            529,429
            
            
            
            *Robert
      Boaz
            
            
            0
            
            
            
            453,885
            
            
            
            *W. William Boberg (3)
            
            
            550,000
            
            
            
            795,715
            
            
            
            1.42
            %James M. Franklin (4)
            
            
            100,000
            
            
            
            403,885
            
            
            
            *Paul
      G. Goss
            
            
            0
            
            
            
            204,361
            
            
            
            *Wayne
      W. Heili
            
            
            5,000
            
            
            
            274,350
            
            
            
            *Jeffrey T. Klenda (5)
            
            
            1,166,325
            
            
            
            954,057
            
            
            
            2.23
            %Paul Macdonell (6)
            
            
            20,000
            
            
            
            253,885
            
            
            
            *Thomas
      Parker
            
            
            4,000
            
            
            
            253,885
            
            
            
            *Paul
      W. Pitman
            
            
            0
            
            
            
            621,000
            
            
            
            *Roger
      L. Smith
            
            
            31,982
            
            
            
            230,607
            
            
            
            *All
      Directors and Executive Officers as a group (11
    individuals)
            
            
            1,877,307
            
            
            
            4,975,059
            
            
            
            6.93
            %*
      Represents less than 1% of the Corporation's outstanding
      shares.





(1)
            For
      purposes of this table, beneficial ownership has been determined in
      accordance with the provisions of Rule 13d-3 of the Exchange Act under
      which, in general, a person is deemed to be the beneficial owner of a
      security if he has or shares the power to vote or direct the voting of the
      security or the power to dispose of or direct the disposition of the
      security, or if he has the right to acquire beneficial ownership of the
      security within sixty days.


(2)
            Based
      on 93,940,568 Common Shares outstanding as of March 5,
    2010.


(3)
            Includes
      53,125 shares Mr. Boberg holds jointly with his
  spouse.


(4)
            Dr.
      Franklin holds these shares jointly with his
  spouse.


(5)
            Mr.
      Klenda holds these shares jointly with his
  spouse.


(6)
            Does not include 20,000 shares
      held in Mr. Macdonell’s spouse’s name.  Mr. Macdonell disclaims
      beneficial ownership of such
shares.





Ur-Energy
Inc. Stock Option Plan 2005





The
Corporation adopted the Ur-Energy Inc. Stock Option Plan 2005, as amended (the
“Option Plan”), in order to advance the interests of the Corporation by
providing directors, officers, employees and consultants with a financial
incentive tied to the long-term financial performance of the Corporation and
continued service or employment with the Corporation.





A total
of 10% of the Corporation’s issued and outstanding Common Shares are reserved
for issuance pursuant to the Option Plan.  Of these, 8,287,102
(representing 8.82% of the currently outstanding Common Shares) are issuable
upon the exercise of currently outstanding options. The number of shares
reserved is subject to adjustment if the Common Shares are subdivided,
consolidated, converted or reclassified or the number of Common Shares varies as
a result of a stock dividend or an increase or a reduction in the share capital
of the Corporation.





Under the
Option Plan, options may be granted to all directors, officers, employees and
consultants of the Corporation. The maximum number of Common Shares that may be
reserved for issuance to any one person under the Option Plan is 5% of the
number of Common Shares outstanding at the time of reservation.  The
exercise price for Common Shares subject to an option is determined by the Board
of Directors at the time of grant and may not be less than the market price of
the Common Shares at the time the option is granted. Options are generally
exercisable as to 10% immediately on the date of grant; with an additional 22%
becoming exercisable four and one-half months after the date of grant; 22%
becoming exercisable nine months after the date of grant; 22% thirteen and
one-half months after the date of grant; and, the balance of 24% becoming
exercisable eighteen months after the date of grant, subject to the right of the
Board of Directors to determine at the time of a particular grant that such
options will become exercisable on different dates. An option may be for a term
of up to five years and may not be assigned.





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Options
granted under the Option Plan are subject to early termination under certain
circumstances, including (i) one year after the death of the option holder, (ii)
three months after the option holder’s resignation or dismissal without cause as
an employee, or (iii) immediately upon the option holder’s dismissal for cause
as an employee. In each case, only options exercisable at the time of the event
which gave rise to such early termination may be exercised by the option holder
during such period.  The Option Plan also provides that on a change of
control all options under the Option Plan vest immediately and are immediately
exercisable.  On November 8, 2007, the Board amended the Option Plan
to allow the CEO the ability to grant options for up to an aggregate 100,000
Common Shares between Board meetings to non-executive employees and
consultants.  All such grants must be reported to the Board at the
next meeting.  This amendment did not require shareholder
approval.





The
Option Plan and the terms of any outstanding option may be amended at any time
by the Board of Directors subject to any required regulatory or shareholder
approvals, provided that where such an amendment would prejudice the rights of
an option holder under any outstanding option, the consent of the option holder
is required to be obtained.





The Board
of Directors of the Corporation implemented of a Restricted Share Unit Plan
(“RSU Plan”) in January 2009, subject to shareholder approval; however, the
shareholders did not approve the implementation of the RSU Plan at the annual
shareholders’ meeting in April 2009.





Item7. MajorShareholders and Related Party Transactions.





A.Majorshareholders.





As of
March 5, 2010, to the knowledge of the directors and senior officers of the
Corporation, the following persons beneficially own, directly or indirectly, or
exercise control or direction over more than 5% of the Common
Shares:





Name of
      Holder
            Number of Common Shares of the
              Corporation
            Percentage of Issued and
              Outstanding Common
              Shares of the
CorporationBlackRock,
      Inc(1).
            10,176,450
      Common Shares
            10.83%





(1)
            On
      behalf of its investment advisory subsidiaries: BlackRock Asset Management
      U.K. Limited, and BlackRock (Luxembourg) S.A.  As reported by
      BlackRock, Inc. on Form 13G dated January 8, 2010 filed with the
      SEC.





These
entities do not having voting rights that differ from any other shareholder of
the Corporation.





As of
June 30, 2009, there were 21 registered holders of Ur-Energy’s 93,893,607
outstanding Common Shares, of which 43,980,742 were held in Canada and
40,546,926 were held in the United States.





The
Corporation is not aware of any arrangements the operation of which may at a
subsequent date result in a change in control of the Corporation.  To
the knowledge of the Corporation, it is not directly or indirectly owned or
controlled by another corporation, by any government or by any natural or legal
person severally or jointly.





B.Relatedparty transactions.





Other
than employment agreements with executive officers and a consulting arrangement
with Dr. James Franklin, stock option grants described elsewhere in this report
or as otherwise disclosed in this report, the Corporation is not aware of any
related party transactions occurring or being made, or any loans made by the
Corporation or any of its subsidiaries to relatedparties, since January 1,
2007.





C.Interestsof experts and counsel.





Not
applicable.





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59
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Item 8. FinancialInformation.





See Item
17.





Item 9. TheOffer and Listing.





A.Offerand listing details.





Ur-Energy’s
Common Shares have been listed and traded in Canada on the TSX since November
29, 2005 and in the United States on the NYSE Amex since July 24,
2008.  The following table sets forth the price range per share and
trading volume for the Common Shares:





TSX
(C$)





Common SharesAverage Daily Volume
            
            
            High
            
            
            Low2005
      (Nov. 29 to Dec 31)
            
            
            887,164
            
            
            
            1.14
            
            
            
            0.782006
            
            
            742,382
            
            
            
            4.70
            
            
            
            0.952007
            
            
            778,284
            
            
            
            5.45
            
            
            
            2.172008
            
            
            476,618
            
            
            
            3.60
            
            
            
            0.342009
            
            
            423,253
            
            
            
            1.39
            
            
            
            0.562008First
      Quarter
            
            
            518,629
            
            
            
            3.60
            
            
            
            1.76Second
      Quarter
            
            
            375,258
            
            
            
            2.41
            
            
            
            1.37Third
      Quarter
            
            
            303,468
            
            
            
            2.42
            
            
            
            0.57Fourth
      Quarter
            
            
            711,392
            
            
            
            0.79
            
            
            
            0.342009First
      Quarter
            
            
            244,435
            
            
            
            0.93
            
            
            
            0.56Second
      Quarter
            
            
            882,627
            
            
            
            1.39
            
            
            
            0.64Third
      Quarter
            
            
            243,505
            
            
            
            1.14
            
            
            
            0.88Fourth
      Quarter
            
            
            319,608
            
            
            
            1.06
            
            
            
            0.782009September
            
            
            335,300
            
            
            
            1.00
            
            
            
            0.88October
            
            
            507,043
            
            
            
            1.06
            
            
            
            0.87November
            
            
            267,733
            
            
            
            0.96
            
            
            
            0.78December
            
            
            184,048
            
            
            
            0.88
            
            
            
            0.782010January
            
            
            306,990
            
            
            
            1.03
            
            
            
            0.81February
            
            
            225,263
            
            
            
            0.90
            
            
            
            0.77March
      1 to 5
            
            
            217,366
            
            
            
            0.84
            
            
            
            0.79





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NYSE
Amex (US$)





Common
      SharesAverage Daily Volume
            
            
            High
            
            
            Low2008(July 25 to Dec
      31)
            
            
            173,018
            
            
            
            1.96
            
            
            
            0.282009
            
            
            117,008
            
            
            
            1.18
            
            
            
            0.462008Third
      Quarter (July 25 to Sept 30)
            
            
            95,479
            
            
            
            1.96
            
            
            
            0.55Fourth
      Quarter
            
            
            229,961
            
            
            
            0.75
            
            
            
            0.282009First
      Quarter
            
            
            110,720
            
            
            
            0.77
            
            
            
            0.46Second
      Quarter
            
            
            177,367
            
            
            
            1.18
            
            
            
            0.52Third
      Quarter
            
            
            97,045
            
            
            
            1.07
            
            
            
            0.79Fourth
      Quarter
            
            
            83,550
            
            
            
            1.00
            
            
            
            0.612009September
            
            
            130,319
            
            
            
            0.95
            
            
            
            0.81October
            
            
            92,055
            
            
            
            1.00
            
            
            
            0.78November
            
            
            108,720
            
            
            
            0.89
            
            
            
            0.74December
            
            
            52,164
            
            
            
            0.84
            
            
            
            0.612010January
            
            
            73,532
            
            
            
            1.00
            
            
            
            0.78February
            
            
            103,716
            
            
            
            0.92
            
            
            
            0.73March
      1 to 5
            
            
            151,487
            
            
            
            0.82
            
            
            
            0.77





On March
5, 2010 the closing price of the Common Shares was $0.80 on the TSX and US$0.78
on the NYSE Amex.  The registrar and transfer agent for the Common
Shares as of January 1, 2010, is Computershare Investor Services Inc., Toronto,
Ontario and the co-registrar and transfer agent is Computershare Trust Company
N.A., Golden, Colorado.  Prior to January 1, 2010, Equity Transfer
& Trust Corporation, Toronto, Ontario acted as registrar and transfer agent
and Registrar and Transfer Corporation, New York, New York was the co-registrar
and transfer agent.





B. Planof distribution.





Not
applicable.





C.Markets.





The
Corporation’s Common Shares are listed on the TSX under the symbol "URE" and on
the NYSE Amex under the symbol "URG".





D.Sellingshareholders.





Not
applicable.





E.Dilution.





Not
applicable.





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61
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F.Expensesof the issue.





Not
applicable.





Item 10.Additional Information.





A.Sharecapital.





Not
applicable.





B.Memorandumand articles of association.





The
Corporation’s articles of continuance do not place any restrictions on the
Corporation’s objects and purposes.  The authorized capital of the
Corporation consists of an unlimited number of Common Shares and an unlimited
number of Class A Preference Shares.  As of March 5, 2010, 93,940,568
Common Shares were issued and outstanding and no preferred shares were issued
and outstanding.  The holders of the Common Shares are entitled to one
vote per share at all meetings of the shareholders of the
Corporation.  The holders of Common Shares are also entitled to
dividends, if and when declared by the directors of the Corporation and the
distribution of the residual assets of the Corporation in the event of a
liquidation, dissolution or winding up of the Corporation. The Corporation's
Common Shares do not have pre-emptive rights to purchase additional
shares.





The
Corporation’s Class A Preference Shares are issuable by the directors in one or
more series and the directors have the right and obligation to fix the number of
shares in, and determine the designation, rights, privileges, restrictions and
conditions attaching to the shares of each series.  The rights of the
holders of Common Shares will be subject to, and may be adversely affected by,
the rights of the holders of any Class A Preference Shares that may be issued in
the future.  The Class A Preference Shares, may, at the discretion of
the Board of Directors, be entitled to a preference over the Common Shares and
any other shares ranking junior to the Class A Preference Shares with respect to
the payment of dividends and distribution of assets in the event of liquidation,
dissolution or winding up.





Certain
Powers of Directors





The CBCA
requires that every director or officer who is a party to a material contract or
transaction or a proposed material contract or transaction with the corporation,
or who is a director or officer of, or has a material interest in, any person
who is a party to a material contract or transaction 
or a
proposed material contract or transaction with the corporation, shall disclose
in writing to the corporation or request to have entered in the minutes of the
meetings of directors the nature and extent of his or her interest, and shall
refrain from voting in respect of the material contract or transaction or
proposed material contract or transaction unless the contract or transaction is:
(a) one relating primarily to his or her remuneration as a director, officer,
employee or agent of the corporation or an affiliate; (b) one for indemnity of
or insurance for directors as contemplated under the CBCA; or (c) one with an
affiliate. However, a director who is prohibited by the CBCA from voting on a
material contract or proposed material contract may be counted in determining
whether a quorum is present for the purpose of the resolution, if the director
disclosed his or her interest in accordance with the CBCA, the directors
approved the contract or transaction and the contract or transaction was
reasonable and fair to the corporation at the time it was approved.





The
directors may, by resolution, amend or repeal any by-laws that regulate the
business or affairs of the Corporation unless the articles, the by-laws or a
unanimous shareholder agreement provide otherwise. The CBCA requires the
directors to submit any such amendment or repeal to the Corporation’s
shareholders at the next meeting of shareholders, and the shareholders may
confirm, reject or amend the amendment or repeal.





Directors'
Share Ownership





In
December 2008, the Compensation Committee reviewed the director compensation and
recommended changes to the director compensation scheme which was adopted by the
Compensation Committee and the Board of Directors in January
2009.  Each non-management director will receive a base retainer in
cash of $18,000 and will be eligible to receive grants of options at the
discretion of the Board of Directors.  In addition, the Compensation
Committee recommended, and Board of Directors adopted, a resolution requiring
mandatory ownership of the non-management directors to encourage the alignment
of interests between the Corporation and its
shareholders.  Non-management directors are required to invest an
amount equal to the non-management director’s annual retainer in shares or
securities exercisable into shares on or before the later of (i) December 31,
2013, or (ii) the fifth anniversary of the non-management director’s election or
appointment.  The retainer amount will be calculated using the amount
of the annual retainer at the later of (i) January 1, 2009, or (ii) the date of
the non-management director’s election or appointment.





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See Item 6.B – Compensation –
Compensation of Directors.





Meetings
of Shareholders





The CBCA
requires the Corporation to call an annual shareholders' meeting within 15
months after holding the last preceding annual meeting but not later than six
months after the end of the Corporation’s preceding financial year and permits
the Corporation to call a special shareholders' meeting at any time. In
addition, in accordance with the CBCA, the holders of not less than 5% of the
Corporation’s shares carrying the right to vote at a meeting sought to be held
may requisition the Corporation’s directors to call a special shareholders'
meeting for the purposes stated in the requisition. The Corporation is required
to mail a notice of 
meeting and management information
circular to registered shareholders not less than 21 days and not more than 60
days prior to the date of any annual or special shareholders' meeting. These
materials also are filed with Canadian securities regulatory authorities and the
SEC. The Corporation's by-laws provide that a quorum of two shareholders in
person or represented by proxy holding or representing by proxy not less than
10% of the Corporation's issued shares carrying the right to vote at the meeting
is required to transact business at a shareholders' meeting. Shareholders, and
their duly appointed proxies and corporate representatives, as well as the
Corporation's auditors, are entitled to be admitted to the Corporation's annual
and special shareholders' meetings.





Disclosure
of Share Ownership





The Securities Act (Ontario)
provides that a person or company that beneficially owns, directly or
indirectly, voting securities of an issuer or that exercises control or
direction over voting securities of an issuer or a combination of both, carrying
more than 10% of the voting rights attached to all the issuer's outstanding
voting securities (an "insider") must, within 10 days of becoming an insider,
file a report in the required form effective the date on which the person became
an insider, disclosing any direct or indirect beneficial ownership of, or
control or direction over, securities of the reporting issuer. The Securities Act (Ontario) also
provides for the filing of a report by an insider of a reporting issuer who
acquires or transfers securities of the issuer. This report must be filed within
10 days after the end of the month in which the acquisition or transfer takes
place.





The Securities Act (Ontario) also
provides that a person or company that acquires (whether or not by way of a
take-over bid, issuer bid or offer to acquire) beneficial ownership of voting or
equity securities or securities convertible into voting or equity securities of
a reporting issuer that, together with previously held securities brings the
total holdings of such holder to 10% or more of the outstanding securities of
that class, must (a) issue and file forthwith a news release containing the
prescribed information and (b) file a report within two business days containing
the same information set out in the news release. The acquiring person or
company must also issue a press release and file a report each time it acquires
an additional 2% or more of the outstanding securities of the same class and
every time there is a "material change" to the contents of the news release and
report previously issued and filed.





The rules
in the United States governing the ownership threshold above which shareholder
ownership must be disclosed are more stringent than those discussed above.
Section 13 of the Exchange Act imposes reporting requirements on persons who
acquire beneficial ownership 
(as such term is defined in
Rule 13d-3 under the Exchange Act) of more than 5% of a class of an equity
security registered under Section 12 of the Exchange Act. In general, such
persons must file, within 10 days after such acquisition, a report of beneficial
ownership with the SEC containing the information prescribed by the regulations
under Section 13 of the Exchange Act. This information is also required to be
sent to the issuer of the securities and to each exchange where the securities
are traded.





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63
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C.Materialcontracts.





No
material contracts were entered into by the Corporation for each of the fiscal
years ending December 31, 2008 and 2009 which were material and entered into
outside the ordinary course of business.





D.Exchangecontrols.





There is
no law, governmental decree or regulation in Canada that restricts the export or
import of capital or affects the remittance of dividends, interest or other
payments to a non-resident holder of common shares other than withholding tax
requirements. Any such remittances to United States residents are subject to
withholding tax. See Item 10E
– Taxation.There is no limitation imposed by the laws of
Canada or by the charter or other constituent documents of the Corporation on
the right of a non-resident to hold or vote the common shares, other than as
provided in the Investment Canada Act.





The
following discussion summarizes the principal features of the Investment Canada
Act for a non-resident who proposes to acquire the common shares. The Investment
Canada Act generally prohibits implementation of a reviewable investment by an
individual, government or agency thereof, corporation, partnership, trust or
joint venture (each an “entity”) that is not a “Canadian” as defined in the
Investment Canada Act (a “non-Canadian”), unless after review, the minister
responsible for the Investment Canada Act is satisfied that the investment is
likely to be of net benefit to Canada.  Certain Government of Canada
uranium policies may be material in respect of such a review.





An
investment in the common shares by a non-Canadian other than a “WTO Investor”
(as that term is defined by the Investment Canada Act, and which term includes
entities which are nationals of or are controlled by nationals of member states
of the World Trade Organization) when the Corporation was not controlled by a
WTO Investor, would be reviewable under the Investment Canada Act if it was an
investment to acquire control of the Corporation and the value of the assets of
the Corporation, as determined in accordance with the regulations promulgated
under the Investment Canada Act, was $5 million or more.  An
investment in the common shares by a WTO Investor, or by a non-Canadian when the
Corporation was controlled by a WTO Investor, would be reviewable under the
Investment Canada Act if it was an investment to acquire control of the
Corporation and the value of the assets of the Corporation, as determined in
accordance with the regulations promulgated under the Investment Canada Act was
not less than a specified amount, which for 2010 was any amount in excess of
$299 million.  Amendments to the Investment Canada Act are expected to
come into force that will change the financial threshold that will trigger a
review.  These amendments will make an acquisition of control
reviewable if the enterprise value (which term is to be defined in regulations
not yet in force) of the Corporation exceeds $5 million (in respect of a non-WTO
Investor transaction) or $600 million (in respect of a WTO Investor
transaction), as the case may be (which amount will increase in subsequent
years).





A
non-Canadian would acquire control of the Corporation for the purposes of the
Investment Canada Act if the non-Canadian acquired a majority of the common
shares. The acquisition of one third or more, but less than a majority of the
common shares would be presumed to be an acquisition of control of the
Corporation unless it could be established that, on the acquisition, the
Corporation was not controlled in fact by the acquirer through the ownership of
the common shares.





A
completed or proposed acquisition of common shares of the Corporation (whether
or not control is acquired) may also be reviewable if the Minister of Industry,
after consultation with the Minister of Public Safety and Emergency
Preparedness, considers that the investment could be injurious to national
security and the Canadian federal cabinet makes an order for the review of the
investment.  Furthermore, to the extent that the investor has not
implemented the proposed acquisition of common shares of the Corporation and the
Minister of Industry has reasonable grounds to believe that the investment could
be injurious to national security, the investor may not implement the
acquisition without clearance if the minister sends a notice to the investor
that an order for the review of the investment may be made.





Certain
transactions relating to the common shares may be exempt from the Investment
Canada Act, including: (a) an acquisition of the common shares by a person in
the ordinary course of that person’s business as a trader or dealer in
securities; (b) an acquisition of control of the Corporation in connection with
the realization of security granted for a loan or other financial assistance and
not for a purpose related to the provisions of the Investment Canada Act; and
(c) an acquisition of control of the Corporation by reason of an amalgamation,
merger, consolidation or corporate reorganization following which the ultimate
direct or indirect control in fact of the Corporation, through the ownership of
the common shares, remained unchanged.





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E.Taxation.





Canadian Federal Income Tax
Considerations





The
following is a summary of the principal Canadian federal income tax consequences
generally applicable to the holding and disposition of Common Shares in the
capital of the Corporation by a person who is a resident of the United States
and not resident in Canada for purposes of the Income Tax Act (Canada) (the “Tax
Act”) and the Canada-United States Income Tax Convention, 1980, as amended (the
“Treaty”), who is entitled to the benefit of the Treaty, who holds common shares
solely as capital property and does not use or hold a common share in carrying
on business in Canada (“US Holder”).  Generally the common shares will
be considered to be capital property to a US Holder provided the holder does not
hold the common shares in the course of carrying on a business of trading in
securities and has not acquired them in one or more transactions considered to
be an adventure in the nature of trade.  Special rules, which are not
discussed herein, may apply to a holder of common shares who is a non-resident
insurer which carries on business in Canada and elsewhere.





This
summary is based on the current provisions of the Tax Act and the regulations
thereunder (the “Regulations”), the Treaty, all specific proposals to amend the
Tax Act, the Regulations and the Treaty publicly announced by the Minister of
Finance (Canada) prior to the date hereof (the “Proposals”) and the
administrative practices and assessing policies of the of Canada Revenue Agency
published in writing by it prior to the date hereof.





This
summary is not exhaustive of all possible Canadian federal income tax
considerations and except for the Proposals, does not take into account or
anticipate any changes in the law or practice, whether by judicial,
governmental, or legislative decision or action, nor does it take into account
any provincial, territorial or foreign (including without limitation, any United
States) tax law or treaty, which may differ significantly from those discussed
herein. It is assumed that all Proposals will be enacted substantially as
proposed and that there is no other relevant change in any governing law or
practice, although no assurance can be given in these respects. Each US Holder
is advised to obtain tax and legal advice applicable to such US Holder’s
particular circumstances.





Dividends





Dividends
on common shares paid or credited by the Corporation to a US Holder will be
subject to Canadian withholding tax at the rate of 25% of the gross amount of
the dividends. In general, the Treaty reduces the rate of withholding with
respect to dividends paid to a US Holder to 15% of the gross amount of the
dividend.  If the US Holder is a company that owns at least 10% of the
voting stock of the Corporation and beneficially owns the dividend, the rate of
withholding tax is reduced to 5% under the Treaty.  Further, under the
Treaty dividends paid to certain religious, scientific, literary, educational or
charitable organizations and certain pension organizations that are resident in,
and generally exempt from tax in the United States, are generally exempt from
Canadian withholding tax.  The Corporation is required to withhold the
applicable tax from the dividend payable to the US Holder, and to remit the tax
to the Receiver General of Canada for the account of the US Holder.





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Disposition
of Common Shares





A US
Holder will not be subject to tax under the Tax Act on any capital gain realized
on an actual or deemed disposition of a common share, provided the common shares
are not “taxable Canadian property” to the US Holder.





A common
share will be taxable Canadian property to a US Holder at a particular time if
at any time in the 60-month period that ends at that time, (i) 25% or more of
the issued shares of any class of the capital stock of the corporation, were
owned by or belonged to one or any combination of (A) the US Holder, and (B)
persons with whom the US Holder did not deal at arm’s length, and (ii) more than
50% of the fair market value of the common share was derived directly or
indirectly from one or any combination of (A) real or immovable property
situated in Canada, (B) Canadian resource properties, (C) timber resource
properties, and (D) options in respect of, or interests in, or for civil law
rights in, property described in any of subparagraphs (ii)(A) to (C), whether or
not the property exists.





United States Federal Income
Tax Considerations





TO
ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, PROSPECTIVE INVESTORS
ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS
PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED
UPON, BY INVESTORS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED
UNDER THE CODE; (B) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE
PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C)
PROSPECTIVE INVESTORS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES
FROM AN INDEPENDENT TAX ADVISOR.





The
following summary describes certain material U.S. federal income tax
considerations generally applicable to U.S. Holders (as defined below) with
respect to the ownership and disposition of the Corporation’s Common Shares
offered hereunder.  It addresses only U.S. Holders that hold the
Corporation’s Common Shares as capital assets within the meaning of Section 1221
of the Internal Revenue Code of 1986, as amended (the “Code”) (generally, assets
held for investment purposes).  The following summary does not purport
to be a complete analysis of all of the potential U.S. federal income tax
considerations that may be relevant to particular U.S. Holders in light of their
particular circumstances, nor does it deal with persons that are subject to
special tax rules, such as brokers, dealers in securities or currencies,
financial institutions, mutual funds, insurance companies, tax-exempt entities,
qualified retirement plans, U.S. Holders that own stock constituting 10% or more
of the Corporation’s voting power (whether such stock is directly, indirectly or
constructively owned), regulated investment companies, common trust funds, U.S.
Holders subject to the alternative minimum tax, U.S. Holders holding the
Corporation’s Common Shares as part of a straddle, hedge or conversion
transaction or as part of a synthetic security or other integrated transaction,
traders in securities that elect to use a mark-to-market method of accounting
for their securities holdings, U.S. Holders that have a “functional currency”
other than the U.S. dollar, U.S. expatriates, and persons that acquired the
Corporation’s Common Shares in connection with the performance of
services.  In addition, this summary does not address persons that
hold an interest in a partnership or other pass-through entity that holds the
Corporation’s Common Shares, or tax considerations arising under the laws of any
state, local or non-U.S. jurisdiction or other U.S. federal tax considerations
(e.g., estate or gift tax) other than those pertaining to the income
tax.





The
following is based on the Code, Treasury regulations promulgated thereunder
(“Treasury Regulations”), and administrative rulings and court decisions, in
each case as in effect on the date hereof, all of which are subject to change,
possibly with retroactive effect.





As used
herein, the term “U.S. Holder” means a beneficial owner of the Corporation’s
Common Shares that is (i) a citizen or individual resident of the U.S., (ii) a
corporation (or an entity classified as a corporation for U.S. federal income
tax purposes) created or organized in or under the laws of the U.S. or any
political subdivision thereof, (iii) an estate, the income of which is subject
to U.S. federal income taxation regardless of its source, or (iv) a trust if (A)
a U.S. court is able to exercise primary supervision over its administration and
one or more U.S. persons, within the meaning of Section 7701(a)(30) of the Code,
have authority to control all of its substantial decisions or (B) it has
properly elected under applicable Treasury Regulations to be treated as a U.S.
person.





The tax
treatment of a partner in a partnership (or other entity classified as a
partnership for U.S. federal income tax purposes) may depend on both the
partner’s and the partnership’s status and the activities of such
partnership.  Partnerships that are beneficial owners of the
Corporation’s Common Shares, and partners in such partnerships, should consult
their own tax advisors regarding the U.S. federal, state, local and non-U.S. tax
considerations applicable to them with respect to the ownership and disposition
of the Corporation’s Common Shares.





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This
summary is of a general nature only.  It is not intended to
constitute, and should not be construed to constitute, legal or tax advice to
any particular U.S. Holder.  U.S. Holders should consult their own tax
advisors as to the tax considerations applicable to them in their particular
circumstances.





Ownership
and Disposition of the Corporation’s Common Shares





Distributions.  Subject
to the discussion below under “Certain United States Federal Income Tax
Considerations — Passive Foreign Investment Company Rules” and under “Certain
United States Federal Income Tax Considerations – Controlled Foreign
Corporations,” distributions made with respect to the Corporation’s Common
Shares (including any Canadian taxes withheld from such distributions) generally
will be included in the gross income of a U.S. Holder as dividend income to the
extent of the Corporation’s current and accumulated earnings and profits, as
determined under U.S. federal income tax principles.  So long as the
Corporation is not a passive foreign investment company (see discussion under
“Certain United States Federal Income Tax Considerations – Passive Foreign
Investment Company” below), the Corporation is expected to be eligible for the
benefits of a comprehensive income tax treaty with the U.S., so that dividends
paid by the Corporation to non-corporate U.S. Holders are generally expected to
be eligible for the reduced rate of U.S. federal income tax available with
respect to certain dividends received in taxable years beginning before January
1, 2011.  Note, however, that if the Corporation is a PFIC, for the
taxable year during which the Corporation pays a dividend or for the preceding
year, the reduced rates described in the preceding sentence will not
apply.  A corporate U.S. Holder will not be entitled to a dividends
received deduction that is otherwise generally available upon the receipt of
dividends distributed by U.S. corporations.





Distributions
in excess of the Corporation’s current and accumulated earnings and profits, if
made with respect to the Corporation’s Common Shares, will be treated as a
return of capital to the extent of the U.S. Holder’s adjusted tax basis in such
Common Shares, and thereafter as capital gain.





If any
dividends are paid in Canadian dollars, the amount includible in gross income
will be the U.S. dollar value of such dividend, calculated by reference to the
exchange rate in effect on the date of actual or constructive receipt of the
payment, regardless of whether the payment is actually converted into U.S.
dollars.  If any Canadian dollars actually or constructively received
by a U.S. Holder are later converted into U.S. dollars, such U.S. Holder may
recognize gain or loss on the conversion, which will be treated as ordinary gain
or loss.  Such gain or loss generally will be treated as gain or loss
from sources within the U.S. for U.S. foreign tax credit purposes.





A U.S.
Holder may be entitled to deduct or claim a credit for Canadian withholding
taxes, subject to applicable limitations in the Code.  Dividends paid
on the Corporation’s Common Shares will be treated as income from sources
outside the U.S. and generally will be “passive category income” for U.S.
foreign tax credit limitation purposes.  The rules governing the
foreign tax credit are complex and the availability of the credit is subject to
limitations.  U.S. Holders should consult their own tax advisors
regarding the availability of the foreign tax credit in their particular
circumstances.





Dispositions.  Subject
to the discussion below under “Certain United States Federal Income Tax
Considerations — Passive Foreign Investment Company Rules” and “Certain United
States Federal Income Tax Considerations – Controlled Foreign Corporations,”
upon the sale, exchange or other taxable disposition of the Corporation’s Common
Shares, a U.S. Holder generally will recognize capital gain or loss equal to the
difference between (i) the amount of cash and the fair market value of any other
property received upon the sale, exchange or other taxable disposition and (ii)
the U.S. Holder’s adjusted tax basis in such Common Shares.  Capital
gain or loss recognized upon a sale, exchange or other taxable disposition of
the Corporation’s Common Shares will generally be long-term capital gain or loss
if the U.S. Holder’s holding period with respect to such Common Shares disposed
of is more than one year at the time of the sale, exchange or other taxable
disposition.  The deductibility of capital loss is subject to
limitations.





Passive
Foreign Investment Company Rules





Certain
adverse U.S. federal income tax rules generally apply to a U.S. person that owns
or disposes of stock in a non-U.S. corporation that is treated as a passive
foreign investment company (a “PFIC”).  In general, a non-U.S.
corporation will be treated as a PFIC for any taxable year during which, after
applying relevant look-through rules with respect to the income and assets of
subsidiaries, either (i) 75% or more of the non-U.S. corporation’s gross income
is passive income, or (ii) 50% or more of the average value of the non-U.S.
corporation’s assets produce or are held for the production of passive
income.  For these purposes, passive income generally includes
dividends, interest, certain rents and royalties, and the excess of gains over
losses from certain commodities transactions, including transaction involving
oil and gas.  However, gains and losses from commodities transactions
generally are excluded from the definition of passive income if (i) such gains
or losses are derived by a non-U.S. corporation in the active conduct of a
commodity business, and (ii) “substantially all” of such corporation’s business
is as an active producer, processor, merchant or handler of commodities of like
kind (the “active commodities business exclusion”).





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The
Corporation has not made a determination as to its PFIC status for the current
or any past taxable years.  PFIC classification is factual in nature,
generally cannot be determined until the close of the taxable year in question,
and is determined annually.  Thus, there can be no assurance that the
Corporation is not a PFIC for the current taxable year, has not been for any
past taxable years or will not be a PFIC for any future taxable
years.





The
following U.S. federal income tax consequences generally will apply to a U.S.
Holder of the Corporation’s Common Shares if the Corporation is treated as a
PFIC:





Distributions.  Distributions
made by the Corporation with respect to its Common Shares, to the extent such
distributions are treated as “excess distributions” pursuant to Section 1291 of
the Code, must be allocated ratably to each day of the U.S. Holder’s holding
period for such Common Shares.  The amounts allocated to the taxable
year during which the distribution is made, and to any taxable years in such
U.S. Holder’s holding period which are prior to the first taxable year in which
the Corporation is treated as a PFIC, are included in such U.S. Holder’s gross
income as ordinary income for the taxable year of the
distribution.  The amount allocated to each other taxable year is
taxed as ordinary income in the taxable year of the distribution at the highest
tax rate in effect for the U.S. Holder in that other taxable year and is subject
to an interest charge at the rate applicable to underpayments of
tax.  Any distribution made by the Corporation that does not
constitute an excess distribution would be treated in the manner described under
“Certain United States Federal Income Tax Considerations — Ownership and
Disposition of the Corporation’s Common Shares — Distributions,”
above.





Dispositions.  The
entire amount of any gain realized upon the U.S. Holder’s disposition of the
Corporation’s Common Shares generally will be treated as an excess distribution
made in the taxable year during which such disposition occurs, with the
consequences described above.





Elections.  In
general, the adverse U.S. federal income tax consequences of holding stock of a
PFIC described above may be mitigated if a U.S. shareholder of the PFIC is able
to, and timely makes, a valid qualified electing fund (“QEF”) election with
respect to the PFIC or a valid mark-to-market election with respect to the stock
of the PFIC.  U.S. Holders should be aware that there can be no
assurance that the Corporation will supply U.S. Holders with the information and
statements that such U.S. Holder requires to make a QEF election under Section
1295 of the Code.





U.S.
Holders should consult their own tax advisors as to the tax consequences of
owning and disposing of stock in a PFIC, including the availability of any
elections that may mitigate the adverse U.S. federal income tax consequences of
holding stock of a PFIC.





Certain
Controlled Foreign Corporation Rules





If more
than 50% of the total voting power or the total value of the Corporation’s
outstanding shares is owned, directly or indirectly, by citizens or residents of
the U.S., U.S. partnerships or corporations, or U.S. estates or trusts (as
defined by Section 7701(a)(30) of the Code), each of which own, directly or
indirectly, 10% or more of the total voting power of the Corporation’s
outstanding shares (each a “10% Shareholder”), the Corporation could be treated
as a “Controlled Foreign Corporation” (“CFC”) under Section 957 of the
Code.





The
Corporation’s classification as a CFC would effect many complex results,
including that under Section 1248 of the Code, gain from the disposition of the
Corporation’s common stock by a U.S. Holder that is or was a 10% Shareholder at
any time during the five-year period ending with the disposition will be treated
as a dividend to the extent of the Corporation’s earnings and profits
attributable to the Common Shares sold or exchanged.





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If the
Corporation is classified as both a PFIC and a CFC, the Corporation generally
will not be treated as a PFIC with respect to 10% Shareholders.





The
Corporation has made no determination as to whether it currently meets or has
met the definition of a CFC, and there can be no assurance that it will not be
considered a CFC for the current or any future taxable year.





The
CFC rules are very complicated, and U.S. Holders should consult their own
financial advisor, legal counsel or accountant regarding the CFC rules and how
these rules may impact their U.S. federal income tax situation.





Information
Reporting and Backup Withholding Tax





If
certain information reporting requirements are not met, a U.S. Holder may be
subject to backup withholding tax (currently imposed at a rate of 28%) on the
distributions made with respect to the Corporation’s Common Shares or proceeds
received on the disposition of the Corporation’s Common
Shares.  Backup withholding tax is not an additional tax.  A
U.S. Holder subject to the backup withholding tax rules will be allowed a credit
of the amount withheld against such U.S. Holder’s U.S. federal income tax
liability and, if backup withholding tax results in an overpayment of U.S.
federal income tax, such U.S. Holder may be entitled to a refund, provided that
the requisite information is correctly furnished to the Internal Revenue Service
in a timely manner.  U.S. Holders should consult their own tax
advisors as to the information reporting and backup withholding tax
rules.





THE ABOVE
SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX
CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE OWNERSHIP AND
DISPOSITION OF THE CORPORATION’S COMMON SHARES.  U.S. HOLDERS SHOULD
CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM
IN THEIR PARTICULAR CIRCUMSTANCES.





F.Dividendsand paying agents.





Not
applicable.





G.Statementby experts.





Not
applicable.





H.Documentson display.





Public
documents are available for inspection at the Corporation’s head offices located
at 10758 W. Centennial Road, Suite 200, Littleton, Colorado 80127, and, for
certain documents, on the Internet at www.sedar.com and at
www.sec.gov.





The
Corporation is subject to the information requirements of the Exchange Act and,
to the extent required of Canadian companies, files periodic reports and other
information with the SEC. All such reports and information may be read and
copied at the public reference facilities listed below. The Corporation intends
to give its shareholders annual reports containing audited financial statements
and a report thereon from its independent chartered accountants and quarterly
reports for the first three quarters of each fiscal year containing unaudited
interim financial information.





Statements
made in this Annual Report on Form 20-F (Annual Information Form) about the
contents of contracts or other documents are not necessarily complete and
shareholders are referred to the copy of such contracts or other documents filed
as exhibits to this annual report.





The
Corporation’s SEC filings, and the exhibits thereto, are available for
inspection and copying at the public reference facilities maintained by the SEC
in Judiciary Plaza, Room 1580, 100 F Street N.W., Washington, D.C., 20549.
Copies of these filings may be obtained from these offices after the payment of
prescribed fees. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. These filings are also available on the SEC’s
website at www.sec.gov.





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The
Corporation will also provide its shareholders with proxy statements prepared in
accordance with Canadian law. As a Canadian company, the Corporation is exempt
from the Exchange Act rules regarding the furnishing and content of proxy
statements to shareholders and is also exempt from the short-swing profit
recovery and disclosure regime of Section 16 of the Exchange Act.





I.SubsidiaryInformation.





Not
applicable.





Item 11. Quantitativeand Qualitative Disclosures About Market
Risk.





The
Corporation is engaged in the acquisition and development of uranium projects
and related activities including exploration, evaluation, development,
engineering, permitting, and the preparation of related economical analysis. The
value of the Corporation’s properties is related to uranium prices and changes
in the price of uranium could affect its ability to generate revenue from its
portfolio of uranium projects.





Uranium
prices may fluctuate widely from time to time and are affected by numerous
factors, including the following: expectations with respect to the rate of
inflation, exchange rates, interest rates, global and regional political and
economic circumstances and governmental policies, including those with respect
to uranium production and nuclear energy. The demand for, and supply of, uranium
affect uranium prices, but not necessarily in the same manner as demand and
supply affect the prices of other commodities. The supply of uranium consists of
a combination of new mine production and existing stocks of uranium held by
governments, and public and private organizations. The demand for uranium is
primarily derived from nuclear energy production. Uranium cannot be readily sold
in commodities markets and its market value cannot be predicted for any
particular time.





Because
the Corporation has several exploration operations in North America and Canada,
it is subject to foreign currency fluctuations. The Corporation holds financial
assets and liabilities in Canadian and U.S. dollars.  The Corporation
does not engage in currency hedging to offset any risk of currency
fluctuations.





As of
December 31, 2009, the Corporation had neither debt outstanding, nor any
investment in debt instruments other than highly liquid short-term
investments.





Item 12. Descriptionof Securities Other than Equity
Securities.





Not
applicable.








PART II





Item 13. Defaults, Dividend Arrearages and
Delinquencies.





None.





Item 14.Material Modifications to the Rights of Security Holders
and Use of Proceeds.





None.





Item 15. Controlsand Procedures.





Disclosure
Controls and Procedures.





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As of the
end of the period covered by this Annual Report on Form 20-F (Annual Information
Form) under the supervision of the Corporation’s Chief Executive Officer and
Chief Financial Officer, the Corporation evaluated the effectiveness of the
design and operation of the Corporation’s disclosure controls and procedures, as
defined in Rule 13a-15(e) under the Exchange Act. Based on this evaluation, the
Corporation’s Chief Executive Officer and Chief Financial Officer have concluded
that as of December 31, 2009, the Corporation’s disclosure controls and
procedures were effective to ensure that information required to be disclosed in
reports that the Corporation files or submits under the Exchange Act: (1) is
recorded, processed, summarized and reported within the time periods specified
in SEC’s rules and forms, and (2) is accumulated and communicated to the
Corporation’s management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.





Management’s
annual report on internal control over financial reporting.





Management
of the Corporation is responsible for establishing and maintaining adequate
internal control over financial reporting, and has designated such internal
control over financial reporting to provide reasonable assurance regarding the
reliability of financial reporting and preparation of financial statements for
external purposes in accordance with Canadian GAAP, including a reconciliation
to GAAP.





Management
has used the Internal Control – Integrated Framework to evaluate the
effectiveness of internal control over financial reporting, which is a
recognized and suitable framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.





Management
assessed the effectiveness of the Corporation’s internal control over financial
reporting as of December 31, 2009.  As a result, management concluded
that the Corporation’s internal control over financial reporting was effective
as at that date.





W.
William Boberg, President and Chief Executive Officer





Roger L.
Smith, Chief Financial Officer and Vice President, Finance





Changes
in internal control over financial reporting.





There has
been no change in the Corporation’s internal control over financial reporting
during the fiscal year ended December 31, 2009 that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.





Item 15T. Controls and Procedures.





Not
applicable.





Item 16. [Reserved]





Item 16A. Audit Committee Financial Expert.





The Audit
Committee has determined that Robert Boaz is the Corporation’s “audit committee
financial expert,” as defined in the rules promulgated by the SEC.





See Item 6B – Board Practices – Audit
Committee for more detailed information on the responsibilities and
activities of the Audit Committee.





For
biographical information on, and disclosure regarding the independence of, each
member of the Audit Committee, see Item 6 – Directors, Senior
Management and Employees.





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Item 16B. Code of Ethics.





The
Corporation adopted a written Code of Business Conduct and Ethics (the “Code”)
on August 9, 2007 and amended and restated the Code on January 29, 2008 in
advance of filing its registration statement on Form 40-F with the SEC to comply
with U.S. securities law requirements.  The Corporation made a
non-substantive amendment to the Code effective February 1, 2010 to reflect a
change in name of the third party whistle-blower services
provider.  All directors, officers and employees of the Corporation
are expected to be familiar with the Code and to adhere to those principles and
procedures set forth in the Code that apply to them.  The Corporate
Governance and Nominating Committee oversees the implementation of the Code and
compliance with various regulatory requirements.  The Code is
available at the Corporation’s website at www.ur-energy.com.





Item 16C. Principal Accountant Fees and Services.





The
following table presents the fees for professional audit services rendered by
PricewaterhouseCoopers LLP for the audits of the Corporation’s consolidated
financial statements for the fiscal years ended December 31, 2009 and 2008, and
fees billed for other services rendered by PricewaterhouseCoopers LLP during
those periods.  The Corporation paid all amounts in the following
table to PricewaterhouseCoopers LLP.  All services reflected in the
following table for 2009 and 2008 were preapproved in accordance with the policy
of the Audit Committee of the Board of Directors.





Principal
Accounting Fees





For the years ended December
      31,2009
            
            
            2008$
            
            
            $Audit Fees(1)
            
            
            115,000
            
            
            
            90,000Audit Related Fees(2)
            
            
            50,790
            
            
            
            82,300Tax Fees(3)
            
            
            41,670
            
            
            
            18,760All Other Fees (4)
            
            
            -
            
            
            
            97,152Total
            
            
            207,460
            
            
            
            288,212





(1)
            Audit
      fees consisted of audit services, reporting on internal control over
      financial reporting and review of documents filed with the securities
      offices.  The 2009 audit fees were paid in 2010 and the 2008
      fees were paid in 2009.


(2)
            Audit
      related fees were for services in connection with quarterly reviews of the
      consolidated financial statements and work in connection with the
      Corporation’s securities filings as required by the Canadian and United
      States government.  Of the 2009 fees, $7,000 were paid in
      2010.


(3)
            Tax
      fees consisted of preparation of Federal and State income tax returns and
      consultation regarding tax compliance issues.  Tax services are
      normally billed in arrears, so the fees reflected above are for all tax
      services provided during the year for prior years.  All fees
      were paid in the year incurred.


(4)
            Other
      fees were for other consulting services provided to the
      Corporation.





The Audit
Committee has determined that the provision by PricewaterhouseCoopers LLP of the
non-audit services referred to above is compatible with the maintenance of that
firm’s independence.





Pre-Approval Policies and
Procedures





The Audit
Committee has instituted a policy to pre-approve audit and non-audit services
(audit-related services, tax services, and all other services).  The
Chair of the Audit Committee is given limited delegated authority from time to
time by the Committee to pre-approve permitted non-audit
services.  Pre-approval is obtained prior to the commencement of the
services.  The Audit Committee also considers on a continuing basis
whether the provision of non-audit services is compatible with maintaining the
independence of the external auditor.





Item 16D. Exemptions from the Listing Standards for Audit
Committees.





Not
applicable.





Item 16E. Purchases of Equity Securities by the Issuer and
Affiliated Purchasers.





Ur-Energy
did not make any purchases of equity securities since January 1,
2009.





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Item 16F. Change in Registrant’s Certifying Accountant.





None





Item 16G. Corporate Governance.





NYSE
Amex Corporate Governance Matters





The
Corporation’s Common Shares are listed on NYSE Amex. Section 110 of the NYSE
Amex Company Guide permits the NYSE Amex to consider the laws, customs and
practices of the foreign issuer’s country of domicile in relaxing certain NYSE
Amex listing criteria, and to grant exemptions from NYSE Amex listing criteria
based on these considerations. A corporation seeking relief under these
provisions is required to provide written certification from independent local
counsel that the non-complying practice is not prohibited by home country law. A
description of the significant ways in which the Corporation’s governance
practices differ from those followed by domestic companies pursuant to NYSE Amex
standards is as follows:





·
            Shareholder Meeting Quorum
      Requirement: The NYSE Amex minimum quorum requirement for a
      shareholder meeting is one-third of the outstanding common shares. In
      addition, a Corporation listed on NYSE Amex is required to state its
      quorum requirement in its bylaws. The Corporation’s quorum requirement as
      set forth in its bylaws is 10% of the issued and outstanding common shares
      entitled to vote at a meeting of shareholders whether present in person or
      represented by proxy.





·
            Proxy Delivery
      Requirement: NYSE Amex requires the solicitation of proxies and
      delivery of proxy statements for all shareholder meetings, and requires
      that these proxies shall be solicited pursuant to a proxy statement that
      conforms to SEC proxy rules. The Corporation is a “foreign private issuer”
      as defined in Rule 3b-4 under the Exchange Act and Rule 405 under the
      Securities Act and the equity securities of the Corporation are
      accordingly exempt from the proxy rules set forth in Sections 14(a),
      14(b), 14(c) and 14(f) of the Exchange Act. The Corporation solicits
      proxies in accordance with applicable rules and regulations in
      Canada.





·
            Shareholder Approval
      Requirement: The Corporation intends to follow the Canadian
      securities regulatory authorities and Toronto Stock Exchange rules for
      shareholder approval of new issuances of its common shares. Following
      securities and exchange rules, shareholder approval is required for
      certain issuances of shares that: (i) materially affect control of the
      Corporation; or (ii) provide consideration to insiders in the aggregate of
      10% or greater of the market capitalization of the listed issuer and have
      not been negotiated at arm’s length.  Shareholder approval is
      also required, pursuant to Toronto Stock Exchange rules, in the case of
      most private placements: (x) for an aggregate number of listed securities
      issuable greater than 25% of the number of securities of the listed issuer
      which are outstanding, on a non-diluted basis, prior to the date of
      closing of the transaction if the price per security is less than the
      market price; or (y) that during any six month period are to insiders for
      listed securities or options, rights or other entitlements to listed
      securities greater than 10% of the number of securities of the listed
      issuer which are outstanding, on a non-diluted basis, prior to the date of
      the closing of the first private placement to an insider during the six
      month period.





The
      foregoing are consistent with the laws, customs and practices in
      Canada.





In
addition, the Corporation may from time-to-time seek relief from NYSE Amex
corporate governance requirements on specific transactions under Section 110 of
the NYSE Amex Company Guide by providing written certification from independent
local counsel that the non-complying practice is not prohibited by the
Corporation’s home country law.





PART III





Item
17. FinancialStatements.





A.ConsolidatedStatements and Other Financial Information.





Page
73
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)





Audited
Consolidated Financial Statements





December
31, 2009





(expressed
in Canadian dollars)





Page
74
 Table of Contents












PricewaterhouseCoopers
      LLPChartered
      AccountantsPricewaterhouseCoopers
      Place250
      Howe Street, Suite 700Vancouver,
      British ColumbiaCanada
      V6C 3S7Telephone
      +1 604 806 7000Facsimile
      +1 604 806 7806





Auditors’
Report
 To
the Shareholders of Ur-Energy Inc.
 
  We have
audited the consolidated balance sheets of Ur-Energy Inc. (the “Company”) as at
December 31, 2009 and 2008 and the consolidated statements of
operations, comprehensive loss and deficit and cash flows for the three years
ended December 31, 2009, 2008 and 2007 and the cumulative period from
March 22, 2004 to December 31, 2009.  These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
  We
conducted our audits in accordance with Canadian generally accepted auditing
standards and the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.
  In our
opinion, these consolidated financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2009 and 2008
and the results of its operations and its cash flows for the years ended
December 31, 2009, 2008 and 2007 and the cumulative period from
March 22, 2004 to December 31, 2009 in accordance with Canadian
generally accepted accounting principles.
    
  Chartered
Accountants
 Vancouver,
Canada
 March 5,
2010


“PricewaterhouseCoopers” refers to
PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the
context requires, the PricewaterhouseCoopers global network or other member
firms of the network, each of which is a separate legal entity.


Page
75
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Consolidated
Balance Sheet





(expressed
in Canadian dollars)





December 31, 2009
              
              
              December 31, 2008$
              
              
              $AssetsCurrent
      assetsCash
      and cash equivalents (note 3)
              
              
              32,457,323
              
              
              
              25,799,735Short-term
      investments (note 3)
              
              
              10,932,101
              
              
              
              39,174,200Marketable
      securities
              
              
              29,250
              
              
              
              7,500Amounts
      receivable
              
              
              19,509
              
              
              
              132,710Prepaid
      expenses
              
              
              101,653
              
              
              
              77,77743,539,836
              
              
              
              65,191,922Bonding
      and other deposits (note 4)
              
              
              2,920,835
              
              
              
              2,578,825Mineral
      properties (note 5)
              
              
              29,733,296
              
              
              
              31,808,821Capital
      assets (note 6)
              
              
              2,739,121
              
              
              
              1,954,397Equity
      investments (note 7)
              
              
              2,769,117
              
              
              
              -38,162,369
              
              
              
              36,342,04381,702,205
              
              
              
              101,533,965Liabilities
      and shareholders' equityCurrent
      liabilitiesAccounts
      payable and accrued liabilities
              
              
              1,046,963
              
              
              
              2,265,058Future
      income tax liability (note 10)
              
              
              -
              
              
              
              478,000Asset
      retirement obligation (note 8)
              
              
              503,712
              
              
              
              513,5761,550,675
              
              
              
              3,256,634Shareholders'
      equity (note 9)Capital
      stock
              
              
              144,053,337
              
              
              
              144,396,460Contributed
      surplus
              
              
              13,671,699
              
              
              
              12,721,559Deficit
              
              
              (77,573,506
              )
              
              
              (58,840,688
              )80,151,530
              
              
              
              98,277,33181,702,205
              
              
              
              101,533,965





The
accompanying notes are an integral part of these consolidated financial
statements





Approved
by the Board of Directors





(signed)  /s/ Jeffery T. Klenda,
      Director
            (signed)   /s/ Thomas Parker,
      Director





Page
76
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Consolidated
Statements of Operations, Comprehensive Loss and Deficit





(expressed
in Canadian dollars)





Year
              Ended
              December 31,
              2009
            
            
            Year
              Ended
              December 31,
              2008
            
            
            Year
              Ended
              December 31,
              2007
            
            
            Cumulative
              from
              March 22,
      2004
              Through
              December 31,
              2009$
            
            
            $
            
            
            $
            
            
            $ExpensesGeneral
      and administrative
            
            
            5,430,480
            
            
            
            6,904,564
            
            
            
            7,305,315
            
            
            
            27,353,529Exploration
      and evaluation
            
            
            4,944,227
            
            
            
            9,922,798
            
            
            
            15,654,041
            
            
            
            44,726,780Development
            
            
            6,931,303
            
            
            
            8,854,536
            
            
            
            -
            
            
            
            15,785,839Write-off
      of mineral properties
            
            
            102,439
            
            
            
            285,813
            
            
            
            -
            
            
            
            422,084(17,408,449
            )
            
            
            (25,967,711
            )
            
            
            (22,959,356
            )
            
            
            (88,288,232
            )Interest
      income
            
            
            890,915
            
            
            
            2,494,445
            
            
            
            2,816,398
            
            
            
            6,969,354Loss
      on equity investments (note 7)
            
            
            (17,855
            )
            
            
            -
            
            
            
            -
            
            
            
            (17,855
            )Foreign
      exchange gain (loss)
            
            
            (3,506,111
            )
            
            
            5,656,319
            
            
            
            (806,420
            )
            
            
            2,062,128Other
      income (loss) (note 5)
            
            
            940,237
            
            
            
            (36,638
            )
            
            
            -
            
            
            
            903,599Loss
      before income taxes
            
            
            (19,101,263
            )
            
            
            (17,853,585
            )
            
            
            (20,949,378
            )
            
            
            (78,371,006
            )Recovery
      of future income taxes (note 10)
            
            
            368,445
            
            
            
            -
            
            
            
            429,055
            
            
            
            797,500Net
      loss and comprehensive loss for the period
            
            
            (18,732,818
            )
            
            
            (17,853,585
            )
            
            
            (20,520,323
            )
            
            
            (77,573,506
            )Deficit
      - Beginning of period
            
            
            (58,840,688
            )
            
            
            (40,987,103
            )
            
            
            (20,466,780
            )
            
            
            -Deficit
      - End of period
            
            
            (77,573,506
            )
            
            
            (58,840,688
            )
            
            
            (40,987,103
            )
            
            
            (77,573,506
            )Weighted
      average number of common shares outstanding:Basic
      and diluted
            
            
            93,857,257
            
            
            
            92,996,339
            
            
            
            85,564,480Loss
      per common share:Basic
      and diluted
            
            
            (0.20
            )
            
            
            (0.19
            )
            
            
            (0.24
            )





The
accompanying notes are an integral part of these consolidated financial
statements





Page
77
 Table of Contents








Ur-Energy
Inc.


(a
Development Stage Company)


Consolidated
Statements of Cash Flow





(expressed
in Canadian dollars)





Year
                Ended
                December 31,
                2009
              
              
              Year
                Ended
                December 31,
                2008
              
              
              Year
                Ended
                December 31,
                2007
              
              
              Cumulative
                from
                March 22,
      2004
                Through
                December 31,
                2009$
              
              
              $
              
              
              $
              
              
              $Cash
      provided by (used in)Operating
      activitiesNet
      loss for the period
              
              
              (18,732,818
              )
              
              
              (17,853,585
              )
              
              
              (20,520,323
              )
              
              
              (77,573,506
              )Items
      not affecting cash:Stock
      based compensation
              
              
              950,874
              
              
              
              4,567,206
              
              
              
              6,138,922
              
              
              
              15,713,071Amortization
      of capital assets
              
              
              526,551
              
              
              
              515,138
              
              
              
              76,069
              
              
              
              1,152,615Provision
      for reclamation
              
              
              75,526
              
              
              
              260,924
              
              
              
              181,672
              
              
              
              518,122Write-off
      of mineral properties
              
              
              102,439
              
              
              
              285,813
              
              
              
              -
              
              
              
              422,084Foreign
      exchange loss (gain)
              
              
              3,506,180
              
              
              
              (5,656,319
              )
              
              
              806,420
              
              
              
              (2,062,059
              )Gain
      on sale of assets
              
              
              (1,073,635
              )
              
              
              (5,361
              )
              
              
              -
              
              
              
              (1,078,996
              )Non-cash
      exploration costs (credits)
              
              
              (907,055
              )
              
              
              -
              
              
              
              (87,389
              )
              
              
              1,819,225Other
      loss (income)
              
              
              (13,250
              )
              
              
              51,998
              
              
              
              (37,000
              )
              
              
              1,748Future
      income taxes
              
              
              (368,445
              )
              
              
              -
              
              
              
              (429,055
              )
              
              
              (797,500
              )Change
      in non-cash working capital items:Amounts
      receivable
              
              
              107,230
              
              
              
              760,809
              
              
              
              (795,998
              )
              
              
              (8,335
              )Prepaid
      expenses
              
              
              (46,734
              )
              
              
              557
              
              
              
              86,755
              
              
              
              (107,665
              )Accounts
      payable and accrued liabilities
              
              
              (1,090,163
              )
              
              
              535,491
              
              
              
              796,375
              
              
              
              877,952(16,963,300
              )
              
              
              (16,537,329
              )
              
              
              (13,783,552
              )
              
              
              (61,123,244
              )Investing
      activitiesMineral
      property costs
              
              
              (497,761
              )
              
              
              (874,762
              )
              
              
              (1,400,202
              )
              
              
              (10,958,573
              )Purchase
      of short-term investments
              
              
              (37,206,445
              )
              
              
              (64,851,470
              )
              
              
              (49,999,021
              )
              
              
              (164,886,936
              )Sale
      of short-term investments
              
              
              64,971,242
              
              
              
              77,781,918
              
              
              
              -
              
              
              
              155,593,160Decrease
      (increase) in bonding and other deposits
              
              
              (879,758
              )
              
              
              (602,778
              )
              
              
              (1,342,425
              )
              
              
              (2,991,112
              )Payments
      from venture partner
              
              
              146,806
              
              
              
              -
              
              
              
              -
              
              
              
              146,806Proceeds
      from sale of data base and capital assets
              
              
              1,082,956
              
              
              
              26,344
              
              
              
              -
              
              
              
              1,109,300Purchase
      of capital assets
              
              
              (1,317,221
              )
              
              
              (1,586,784
              )
              
              
              (784,895
              )
              
              
              (3,876,073
              )26,299,819
              
              
              
              9,892,468
              
              
              
              (53,526,543
              )
              
              
              (25,863,428
              )Financing
      activitiesIssuance
      of common shares and warrants for cash
              
              
              -
              
              
              
              2,750,000
              
              
              
              77,744,735
              
              
              
              122,668,053Share
      issue costs
              
              
              -
              
              
              
              (115,314
              )
              
              
              (246,119
              )
              
              
              (2,569,025
              )Proceeds
      from exercise of warrants and stock options
              
              
              1,393
              
              
              
              90,000
              
              
              
              1,334,547
              
              
              
              18,569,324Payment
      of New Frontiers obligation
              
              
              -
              
              
              
              -
              
              
              
              (11,955,375
              )
              
              
              (17,565,125
              )1,393
              
              
              
              2,724,686
              
              
              
              66,877,788
              
              
              
              121,103,227Effects
      of foreign exchange rate changes on cash
              
              
              (2,680,324
              )
              
              
              3,407,153
              
              
              
              (1,982,760
              )
              
              
              (1,659,232
              )Net
      change in cash and cash equivalents
              
              
              6,657,588
              
              
              
              (513,022
              )
              
              
              (2,415,067
              )
              
              
              32,457,323Beginning
      cash and cash equivalents
              
              
              25,799,735
              
              
              
              26,312,757
              
              
              
              28,727,824
              
              
              
              -Ending
      cash and cash equivalents
              
              
              32,457,323
              
              
              
              25,799,735
              
              
              
              26,312,757
              
              
              
              32,457,323Non-cash
      financing and investing activities:Common
      shares issued for properties
              
              
              452,250
              
              
              
              -
              
              
              
              712,500





The
accompanying notes are an integral part of these consolidated financial
statements





Page
78
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)





1.
            Nature
      of operations





Ur-Energy
Inc. (the "Company") is a development stage junior mining company engaged in the
identification, acquisition, evaluation, exploration and development of uranium
mineral properties in Canada and the United States.  Due to the nature
of the uranium mining methods to be used by the Company on the Lost Creek
property, and the definition of “mineral reserves” under NI 43-101, which uses
the CIM Definition Standards, the Company has not determined whether the
properties contain mineral reserves.  However, the Company’s April
2008 “NI 43-101 Preliminary Assessment for the Lost Creek Project Sweetwater
County, Wyoming” outlines the economic viability of the Lost Creek project,
which is currently in the permitting process with state and federal
regulators.  The recoverability of amounts recorded for mineral
properties is dependent upon the discovery of economically recoverable
resources, the ability of the Company to obtain the necessary financing to
develop the properties and upon attaining future profitable production from the
properties or sufficient proceeds from disposition of the
properties.





2.
            Significant
      accounting policies





Basis
of presentation





Ur-Energy
Inc. was incorporated on March 22, 2004 under the laws of the Province of
Ontario.  The Company continued under the Canada Business Corporations
Act on August 8, 2006.  These financial statements have been prepared
by management in accordance with Canadian generally accepted accounting
principles and include all of the assets, liabilities and expenses of the
Company and its wholly-owned subsidiaries Ur-Energy USA Inc., NFU Wyoming, LLC,
Lost Creek ISR, LLC, NFUR Bootheel, LLC, Hauber Project LLC, NFUR Hauber, LLC,
ISL Resources Corporation, ISL Wyoming, Inc. and CBM-Energy Inc.  All
inter-company balances and transactions have been eliminated upon
consolidation.  Ur-Energy Inc. and its wholly-owned subsidiaries are
collectively referred to herein as the “Company”.  The significant
measurement differences between Canadian generally accepted accounting
principles and those that would be applied under United States generally
accepted accounting principles (“US GAAP”) as they affect the Company are
disclosed in Note 15.





Certain
comparative figures have been reclassified to conform to the presentation
adopted for the current period.





Use
of estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. The
most significant estimates management makes in the preparation of these
financial statements relate to potential impairment in the carrying value of the
Company’s mineral properties and the fair value of stock based
compensation.  Actual results could differ from those
estimates.





Cash
and cash equivalents





Cash
equivalents are investments in guaranteed investment certificates, certificates
of deposit and money market accounts which have a term to maturity at the time
of purchase of ninety days or less and which are readily convertible into
cash.





Short-term
investments





Short-term
investments are comprised of guaranteed investment certificates and certificates
of deposit which have a term to maturity at the time of purchase in excess of
ninety days and less than one year.  These investments are readily
convertible into cash.





Bonding
deposits





Bonding
deposits are provided to support reclamation obligations on United States
properties.  Deposit amounts are invested in certificates of deposit
held at United States financial institutions.





Page
79
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)




Mineral
properties





Acquisition
costs of mineral properties are capitalized. When production is attained, these
costs will be amortized on the unit-of-production method based upon estimated
recoverable resource of the mineral property.  If properties are
abandoned or sold, they are written off. If properties are considered to be
impaired in value, the costs of the properties are written down to their
estimated fair value at that time.





Exploration
costs





Exploration,
evaluation and development expenditures, including annual exploration lease and
maintenance fees, are charged to earnings as incurred until a mineral property
becomes commercially mineable.





Management
considers that a mineral property is commercially mineable when it can be
legally mined, as indicated by the receipt of key
permits.  Development expenditures incurred subsequent to the receipt
of key permits are capitalized and amortized on the unit-of-production method
based upon the estimated recoverable resource of the mineral
property.





The
Company capitalizes the direct costs associated with the acquisition of mineral
properties and capital assets.





Capital
assets





Capital
assets are initially recorded at cost and are then amortized using the declining
balance method at the following annual rates:  computers at 30%,
software at 50%, office furniture at 20%, field vehicles at 30%, and field
equipment at 30%.  Capitalized pre-construction costs consist of
design and engineering costs for the construction of the processing facility as
well as deposits on equipment with long lead times.  The costs will
not be amortized until the facility is complete and production has begun at
which time it will be amortized over the life of the facility.





Equity
Investments





Investments
in which the Company has a significant influence or owns between 20% and 50% are
accounted for using the equity method, whereby the Company records its
proportionate share of the investee’s income or loss.





Financing
costs





Financing
costs, including interest, are capitalized when they arise from indebtedness
incurred, directly or indirectly, to finance mineral property acquisitions or
construction activities on properties that are not yet subject to depreciation
or depletion. Once commercial production is achieved, financing costs are
charged against earnings.





Impairment
of long-lived assets





The
Company assesses the possibility of impairment in the net carrying value of its
long-lived assets when events or circumstances indicate that the carrying
amounts of the asset or asset group may not be recoverable. Management
calculates the estimated undiscounted future net cash flows relating to the
asset or asset group using estimated future prices, recoverable indicated
resources and other mineral resources, and operating, capital and reclamation
costs. When the carrying value of an asset exceeds the related undiscounted cash
flows, the asset is written down to its estimated fair value, which is
determined using discounted future cash flows or other measures of fair value.
Management’s estimates of mineral prices, mineral resources, foreign exchange,
production levels and operating capital and reclamation costs are subject to
risk and uncertainties that may affect the determination of the recoverability
of the long-lived asset. It is possible that material changes could occur that
may adversely affect management’s estimates.





Asset
retirement obligation





An asset
retirement obligation is a legal obligation associated with the retirement of
tangible long-lived assets that the Company is required to
settle.  The Company recognizes the fair value of a liability for an
asset retirement obligation in the period in which it is incurred when a
reasonable estimate of fair value can be made.  Accretion charges to
the asset retirement obligation are charged to the related exploration or
development project.  The retirement obligations recorded relate
entirely to exploration and development drill holes, related monitor wells and
site disturbance on the Company's Wyoming properties and are being expensed
currently as a cost of exploration and development.





Page
80
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)





Stock-based
compensation





All
stock-based compensation payments made to employees and non-employees are
accounted for in the financial statements. Stock-based compensation cost is
measured at the grant date based on the fair value of the reward and is
recognized over the related service period.  Stock-based compensation
cost is charged to general and administrative expense, or exploration,
evaluation and development projects on the same bases as other compensation
costs.





Flow-through
shares





The
Company has financed a portion of its Canadian exploration and development
activities through the issuance of flow-through shares.  Under the
terms of the flow-through share agreements, the tax benefits of the related
expenditures are renounced to subscribers.  To recognize the foregone
tax benefits to the Company, the carrying value of the shares issued is reduced
by the tax effect of the tax benefits renounced to
subscribers.  Recognition of the foregone tax benefit is recorded at
the time of the renouncement provided there is reasonable assurance that the
expenditures will be incurred.





Foreign
currency translation





The
functional currency of the Company is the Canadian dollar.  Monetary
assets and liabilities denominated in currencies other than the Canadian dollar
are translated using the exchange rate in effect at the balance sheet
date.  Non-monetary assets and liabilities denominated in foreign
currencies are translated at the average rates of exchange in effect for the
month the assets were acquired or obligations incurred.  Expenses are
translated at the average exchange rates in effect for the month the transaction
is entered into.  Translation gains or losses are included in the
determination of income or loss in the statement of operations in the period in
which they arise.





Income
taxes





The
Company accounts for income taxes under the asset and liability method which
requires the recognition of future income tax assets and liabilities for the
expected future tax consequences of temporary differences between the carrying
amounts and tax bases of assets and liabilities.  The Company provides
a valuation allowance on net future tax assets unless it is more likely than not
that such assets will be realized.





Loss
per common share





Basic
loss per common share is calculated based upon the weighted average number of
common shares outstanding during the period.  The diluted loss per
common share, which is calculated using the treasury stock method, is equal to
the basic loss per common share due to the anti-dilutive effect of stock options
and share purchase warrants outstanding.





Classification
of financial instruments





The
Company’s financial instruments consist of cash and cash equivalents, short-term
investments, marketable securities, amounts receivable, bonding and other
deposits and accounts payable and accrued liabilities.  The Company
has made the following classifications for these financial
instruments:





·
            Cash
      and cash equivalents are classified as “held for trading” and are measured
      at fair value at the end of each period with any resulting gains and
      losses recognized in operations.


·
            Short
      term investments are classified as “held-to-maturity” and carried at cost
      plus accrued interest using the effective interest rate method, with
      interest income and exchange gains and losses included in
      operations.


·
            Marketable
      securities are classified as “held for trading” and are measured at fair
      value at the end of each period with any resulting gains and losses
      recognized in operations.


·
            Amounts
      receivable, bonding and other deposits are classified as “Loans and
      receivables” and are recorded at amortized cost.  Interest
      income is recorded using the effective interest rate method and is
      included in income for the period.


·
            Accounts
      payable and accrued liabilities are classified as “Other financial
      liabilities” and are measured at amortized
cost.





Page
81
 Table of Contents





Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)





Adoption
of new accounting pronouncement





Sections
3064 – Goodwill and Intangible Assets





Effective
January 1, 2009, the Company adopted CICA Handbook Section 3064, “Goodwill and
Intangible Assets”, which replaces Section 3062, “Goodwill and Intangible
Assets”. The new standard establishes revised standards for the recognition,
measurement, presentation and disclosure of goodwill and intangible assets. The
new standard also provides guidance for the treatment of preproduction and
start-up costs and requires that these costs be expensed as
incurred.  The adoption of this standard did not have a material
impact on the consolidated financial statements.





EIC
173 – Financial Instruments





In
January 2009, the Emerging Issues Committee issued EIC-173 clarifying CICA
Handbook Section 3855 “Financial Instruments – Recognition and Measurement”. The
EIC determined that an entity’s own credit risk and the credit risk of the
counterparty should be taken into account in determining the fair value of
financial assets and financial liabilities, including derivative
instruments.The Company
adopted EIC-173 effective January 1, 2009.  Adoption of EIC-173 did
not have a material effect on the consolidated financial
statements.





3.
            Cash
      and cash equivalents and short-term
investments





The
Company’s cash and cash equivalents are composed of:





As
      at
              December 31,
              2009
            
            
            As
      at
              December 31,
              2008$
            
            
            $Cash
      on deposit at banks
            
            
            308,918
            
            
            
            392,170Guaranteed
      investment certificates
            
            
            287,500
            
            
            
            9,087,500Money
      market funds
            
            
            25,564,505
            
            
            
            1,031,882Certificates
      of deposit
            
            
            6,296,400
            
            
            
            15,288,18332,457,323
            
            
            
            25,799,735





The
Company’s cash and cash equivalents of $32.5 million and short-term investments
of $10.9 million consist of Canadian dollar and US dollar denominated deposit
accounts, guaranteed investment certificates, money market funds and
certificates of deposits.  They bear interest at annual rates ranging
from 0.25% to 2.25% and mature at various dates up to December 15,
2010.  The instruments with initial maturity over ninety days have
been classified as short-term investments.





These
instruments are maintained at financial institutions in Canada and the United
States.  Of the amount held on deposit, approximately $7.2 million is
covered by either the Canada Deposit Insurance Corporation or the Federal
Deposit Insurance Corporation.  Another $1.3 million is guaranteed by
a Canadian provincial government leaving approximately $34.9 million at risk
should the financial institutions with which these amounts are invested be
rendered insolvent.  As at December 31, 2009, the Company does not
consider any of its financial assets to be impaired.





4.
            Bonding
      and other deposits





Bonding
and other deposits include $2,920,835 (December 31, 2008 – $2,578,825) of
reclamation bonds deposited with United States financial institutions as
collateral to cover potential costs of reclamation related to properties.
Bonding deposits are refundable, once the reclamation is complete.





Page
82
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)





5.
            Mineral
      properties





Canada
            
            
            USA
            
            
            TotalCanadian
              Properties
            
            
            Lost
      Creek/
              Lost
      Soldier
            
            
            Other
      US
              Properties$
            
            
            $
            
            
            $
            
            
            $Balance,
      January 1, 2007
            
            
            535,570
            
            
            
            24,235,967
            
            
            
            6,460,835
            
            
            
            31,232,372Acquisition
      costs
            
            
            -
            
            
            
            3,593
            
            
            
            (11,341
            )
            
            
            (7,748
            )Staking,
      claim and other costs
            
            
            81,590
            
            
            
            77,156
            
            
            
            711,264
            
            
            
            870,010Property
      write-offs
            
            
            -
            
            
            
            -
            
            
            
            (285,813
            )
            
            
            (285,813
            )Balance,
      December 31, 2008
            
            
            617,160
            
            
            
            24,316,716
            
            
            
            6,874,945
            
            
            
            31,808,821Acquisition
      costs
            
            
            -
            
            
            
            -
            
            
            
            402,134
            
            
            
            402,134Staking
      and claim costs
            
            
            (29,932
            )
            
            
            7,940
            
            
            
            419,322
            
            
            
            397,330Property
      write-offs
            
            
            (63,561
            )
            
            
            -
            
            
            
            (38,936
            )
            
            
            (102,497
            )Assets
      sold
            
            
            -
            
            
            
            -
            
            
            
            (3,375
            )
            
            
            (3,375
            )Property
      reclassified as investment (note 7)
            
            
            -
            
            
            
            -
            
            
            
            (2,769,117
            )
            
            
            (2,769,117
            )Balance,
      December 31, 2009
            
            
            523,667
            
            
            
            24,324,656
            
            
            
            4,884,973
            
            
            
            29,733,296





Canada





The
Company's Canadian properties include Screech Lake and Gravel Hill, which are
located in the Thelon Basin, Northwest Territories and Bugs, which is located in
the Kivalliq region of the Baker Lake Basin, Nunavut.  During the year
ended December 31, 2009, the Company wrote off mineral property costs associated
with the Eyeberry claims.





United
States





Lost
Creek and Lost Soldier





The
Company acquired certain of its Wyoming properties when Ur-Energy USA entered
into the Membership Interest Purchase Agreement (“MIPA”) with New Frontiers
Uranium, LLC effective June 30, 2005.  Under the terms of the MIPA,
the Company purchased 100% of the issued and outstanding membership interests in
NFU Wyoming, LLC.  Assets acquired in this transaction include the
Lost Creek and Lost Soldier projects, and a development database.  The
100% interest in NFU Wyoming was purchased for an aggregate consideration of
$24,515,832 (US$20,000,000) plus capitalized interest.





A royalty
on future production of 1.67% is in place with respect to 20 claims comprising a
small portion of the Lost Creek project claims.





Other
US Properties





The
Company’s other US properties include EN, LC North and LC South, and RS, which
are located in Wyoming, as well as other exploration properties.





In
January 2009, the Company entered into certain agreements for the transfer of
certain mineral claims, royalties and other property rights for an aggregate
consideration of 650,000 common shares and US$64,000.





During
the second quarter of 2009, the Company wrote-off its Muggins Mountain claims in
Arizona.





In the
third quarter of 2009, the other member of The Bootheel Project, LLC (the
“Project”) completed its earn-in requirement resulting in a reduction in the
Company’s interest to 25%. As a result, the Company’s interest in the Project is
now reflected as an Investment (See Note 7).





Page
83
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)





On August
25, 2009, the Company sold its database of geologic information related to its
Moorcroft project in Wyoming for US$1.0 million and a 1% royalty on future
production from a broad-ranging project area in the Eastern Powder River Basin
of Wyoming.  As the project is still in exploration and evaluation,
management of the Company does not have enough information to determine if any
royalties will ever be paid and therefore is not attributing any value to those
royalties. The gain of $1,079,475 on this sale is reported in Other Income in
the Statement of Operations.





On August
26, 2009, the Company entered into an agreement to acquire 141 mining claims
that have become part of the LC South Project.  The Company paid the
annual claim maintenance fees in August 2009 and the agreement closed on
September 2, 2009 with the issuance of 45,000 common shares and the transfer of
title.





Impairment
testing





As a part
of their annual mineral property analysis, management reviewed all of its
significant mineral properties for potential impairment as at December 31,
2009.





For the
Company’s Lost Creek property, management reviewed the calculations done as of
December 31, 2008 and determined that despite a slight decline in the future
prices of uranium, the underlying costs, assumptions and time lines had not
changed significantly and therefore no impairment existed as of December 31,
2009.  Management calculated the future net cash flows using estimated
future prices, indicated resources, and estimated operating, capital and
reclamation costs.





Other
than for those properties written off during the year, management did not
identify impairment indicators for any of its mineral properties.





6.
            Capital
      assets





December 31, 2009
            
            
            December 31, 2008Cost
            
            
            Accumulated
      Amortization
            
            
            Net
      Book Value
            
            
            Cost
            
            
            Accumulated
      Amortization
            
            
            Net
      Book Value$
            
            
            $
            
            
            $
            
            
            $
            
            
            $
            
            
            $Light
      vehicles
            
            
            661,743
            
            
            
            345,993
            
            
            
            315,750
            
            
            
            656,184
            
            
            
            215,238
            
            
            
            440,946Heavy
      mobile equipment
            
            
            473,336
            
            
            
            209,197
            
            
            
            264,139
            
            
            
            424,559
            
            
            
            103,903
            
            
            
            320,656Machinery
      and equipment
            
            
            791,252
            
            
            
            398,435
            
            
            
            392,817
            
            
            
            780,085
            
            
            
            232,390
            
            
            
            547,695Furniture
      and fixtures
            
            
            221,867
            
            
            
            78,561
            
            
            
            143,306
            
            
            
            189,987
            
            
            
            48,829
            
            
            
            141,158Computer
      equipment
            
            
            202,117
            
            
            
            93,504
            
            
            
            108,613
            
            
            
            178,633
            
            
            
            66,672
            
            
            
            111,961Software
            
            
            170,528
            
            
            
            102,438
            
            
            
            68,090
            
            
            
            125,411
            
            
            
            56,523
            
            
            
            68,888Pre-construction
      costs
            
            
            1,446,406
            
            
            
            -
            
            
            
            1,446,406
            
            
            
            323,093
            
            
            
            -
            
            
            
            323,0933,967,249
            
            
            
            1,228,128
            
            
            
            2,739,121
            
            
            
            2,677,952
            
            
            
            723,555
            
            
            
            1,954,397





7.
            Equity
      investments





In the
third quarter of 2009, the other member of The Bootheel Project, LLC (the
“Project”) completed its earn-in requirement by spending US$3.0 million and now
has a 75% interest in the Project with the Company retaining the other
25%.  From the date of the earn-in, the other member is now required
to fund 75% of the Project’s expenditures and the Company the remaining 25 %. As
the Company is no longer the controlling member of the Project, the Project is
now accounted for using the equity accounting method with the Company’s
proportionate share of the Project’s loss included in the Statement of
Operations from the date of earn-in and the Company’s net investment reflected
on the Balance Sheet.





8.
            Asset
      retirement obligation





The
Company has recorded $503,712 for asset retirement obligations (December 31,
2008 – $513,576) which represents an estimate of costs that would be incurred to
remediate the exploration and development properties.  The retirement
obligations recorded relate entirely to exploration and development drill holes,
related monitor wells and site disturbance on the Company's Wyoming
properties.





Page
84
 Table of Contents




Ur-Energy
Inc.


(a
Development Stage Company)


Notes
to Audited Consolidated Financial Statements


December
31, 2009





(expressed
in Canadian dollars)





9.
            Shareholders’
      equity and capital stock





Authorized





The
Company is authorized to issue an unlimited number of no-par common shares and
an unlimited number of Class A preference shares with the rights, privileges and
restrictions as determined by the Board of Directors at the time of
issuance.





No class
A preference shares have been issued





Capital
      StockShares
            
            
            Amount
            
            
            Contributed
      Surplus
            
            
            Accumulated
      Deficit
            
            
            Shareholders’
      Equity#
            
            
            $
            
            
            $
            
            
            $
            
            
            $Balance,
      January 1, 2007
            
            
            73,475,052
            
            
            
            61,412,906
            
            
            
            2,678,341
            
            
            
            (20,466,780
            )
            
            
            43,624,467Common
      shares issued for cash, net of issue costs
            
            
            17,431,000
            
            
            
            77,503,307
            
            
            
            -
            
            
            
            -
            
            
            
            77,503,307Exercise
      of warrants
            
            
            156,209
            
            
            
            229,154
            
            
            
            (72,341
            )
            
            
            -
            
            
            
            156,813Exercise
      of compensation options
            
            
            110,346
            
            
            
            212,139
            
            
            
            -
            
            
            
            -
            
            
            
            212,139Exercise
      of stock options
            
            
            774,000
            
            
            
            1,553,528
            
            
            
            (542,327
            )
            
            
            -
            
            
            
            1,011,201Non-cash
      stock compensation
            
            
            -
            
            
            
            -
            
            
            
            6,138,922
            
            
            
            -
            
            
            
            6,138,922Common
      shares issued for properties
            
            
            225,000
            
            
            
            712,500
            
            
            
            -
            
            
            
            -
            
            
            
            712,500Net
      loss and comprehensive loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (20,520,323
            )
            
            
            (20,520,323
            )Balance,
      December 31, 2007
            
            
            92,171,607
            
            
            
            141,623,534
            
            
            
            8,202,595
            
            
            
            (40,987,103
            )
            
            
            108,839,026Common
      shares issued for cash, net of issue costs
            
            
            1,000,000
            
            
            
            2,634,686
            
            
            
            -
            
            
            
            -
            
            
            
            2,634,686Exercise
      of stock options
            
            
            72,000
            
            
            
            138,240
            
            
            
            (48,240
            )
            
            
            -
            
            
            
            90,000Non-cash
      stock compensation
            
            
            -
            
            
            
            -
            
            
            
            4,567,204
            
            
            
            -
            
            
            
            4,567,204Net
      loss and comprehensive loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (17,853,585
            )
            
            
            (17,853,585
            )Balance,
      December 31, 2008
            
            
            93,243,607
            
            
            
            144,396,460
            
            
            
            12,721,559
            
            
            
            (58,840,688
            )
            
            
            98,277,331Common
      shares issued for properties
            
            
            695,000
            
            
            
            452,250
            
            
            
            -
            
            
            
            -
            
            
            
            452,250Exercise
      of stock options
            
            
            1,961
            
            
            
            2,127
            
            
            
            (734
            )
            
            
            
            
            
            
            1,393Tax
      effect of renunciation of flow-through shares
            
            
            -
            
            
            
            (797,500
            )
            
            
            -
            
            
            
            -
            
            
            
            (797,500
            )Non-cash
      stock compensation
            
            
            -
            
            
            
            -
            
            
            
            950,874
            
            
            
            -
            
            
            
            950,874Net
      loss and comprehensive loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (18,732,818
            )
            
            
            (18,732,818
            )Balance,
      December 31, 2009
            
            
            93,940,568
            
            
            
            144,053,337
            
            
            
            13,671,699
            
            
            
            (77,573,506
            )
            
            
            80,151,530





Issuances





2007
issuances





On May
10, 2007, the Company completed a bought deal financing for the issuance of
17,431,000 common shares at a price of $4.75 per share for gross proceeds of
$82,797,250.  Total direct share issue costs, including the
underwriters' commissions were $5,293,943.





During
September 2007, the Company issued 25,000 common shares with respect to the
option agreement to acquire the Bugs property.  These common shares
were valued at $71,500.  During December 2007, the Company issued the
final installment of 50,000 common shares to complete its acquisition of a 100%
interest in the Bugs property.  These common shares were valued at
$171,500.





Page
85
 Table of Contents




Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 In
September 2007, the Company issued 150,000 common shares pursuant to the terms
of the Dalco Agreement to complete its 100% earn-in with respect to the
Company's RS Project in Wyoming.  These common shares were valued at
$469,500.
 
 2008
issuances
 
 On March
25, 2008, the Company completed a non-brokered private placement of 1,000,000
flow-through common shares at $2.75 per share raising gross proceeds of
$2,750,000.  Total direct share issues costs were
$115,314.
 
 2009
issuances
 
 In
January 2009, the Company entered into certain agreements for the transfer of
certain mineral claims, royalties and other property rights for an aggregate
consideration of 650,000 common shares and US$64,000.
 
 On August
26, 2009, the Company entered into an agreement to acquire 141 mining claims
that have become part of the LC South Project.  The Company paid the
annual claim maintenance fees in August 2009 and the agreement closed on
September 2, 2009 with the issuance of 45,000 common shares and transfer of
title.
 
 During
2009, 1,961 common shares were issued pursuant to the exercise of stock
options.
 
 Stock options
 
 On
November 17, 2005, the Company’s Board of Directors approved the adoption of the
Company's stock option plan (the “Plan”).  Eligible participants under
the Plan include directors, officers and employees of the Company and
consultants to the Company.  Under the terms of the Plan, options
generally vest with Plan participants as follows: 10% at the date of grant; 22%
four and one-half months after grant; 22% nine months after grant; 22% thirteen
and one-half months after grant; and, the balance of 24% eighteen months after
the date of grant.
 
 Activity
with respect to stock options is summarized as follows:
 
 Options
              
              
              Weighted-
      average exercise price#
              
              
              $Outstanding,
      January 1, 2007
              
              
              5,406,000
              
              
              
              1.69Granted
              
              
              3,667,500
              
              
              
              4.44Exercised
              
              
              (774,000
              )
              
              
              1.31Forfeit
              
              
              (288,800
              )
              
              
              2.88Outstanding,
      December 31, 2007
              
              
              8,010,700
              
              
              
              2.89Granted
              
              
              1,075,000
              
              
              
              1.66Exercised
              
              
              (72,000
              )
              
              
              1.25Forfeit
              
              
              (295,000
              )
              
              
              2.50Voluntarily
      returned
              
              
              (2,490,000
              )
              
              
              4.85Outstanding,
      December 31, 2008
              
              
              6,228,700
              
              
              
              1.46Granted
              
              
              2,204,264
              
              
              
              0.80Exercised
              
              
              (1,961
              )
              
              
              0.71Forfeit
              
              
              (58,351
              )
              
              
              2.07Expired
              
              
              (11,200
              )
              
              
              1.65Outstanding,
      December 31, 2009
              
              
              8,361,452
              
              
              
              1.28
  Page
86
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 As at
December 31, 2009, outstanding stock options are as follows:
 
 Exercise
      price
                $
              
              
              Number
      of options
              
              
              Weighted-
      average remaining contractual life (years)
              
              
              Number
      of options
              
              
              Weighted-
      average remaining contractual life (years)
              
              Expiry1.25
              
              
              
              2,440,800
              
              
              
              0.9
              
              
              
              2,440,800
              
              
              0.9
              
              November
      17, 20102.01
              
              
              
              75,000
              
              
              
              1.2
              
              
              
              75,000
              
              
              1.2
              
              March
      25, 20112.35
              
              
              
              1,450,000
              
              
              
              1.3
              
              
              
              1,450,000
              
              
              1.3
              
              April
      21, 20112.75
              
              
              
              379,200
              
              
              
              1.7
              
              
              
              379,200
              
              
              1.7
              
              September
      26, 20114.75
              
              
              
              45,000
              
              
              
              2.4
              
              
              
              45,000
              
              
              2.4
              
              May
      15, 20123.67
              
              
              
              200,000
              
              
              
              2.5
              
              
              
              200,000
              
              
              2.5
              
              July
      15, 20123.00
              
              
              
              437,500
              
              
              
              2.6
              
              
              
              437,500
              
              
              2.6
              
              August
      9, 20123.16
              
              
              
              50,000
              
              
              
              2.7
              
              
              
              50,000
              
              
              2.7
              
              September
      17, 20122.98
              
              
              
              50,000
              
              
              
              2.8
              
              
              
              50,000
              
              
              2.8
              
              October
      5, 20124.07
              
              
              
              30,000
              
              
              
              2.9
              
              
              
              30,000
              
              
              2.9
              
              November
      7, 20122.11
              
              
              
              25,000
              
              
              
              3.2
              
              
              
              25,000
              
              
              3.2
              
              March
      19, 20131.65
              
              
              
              978,800
              
              
              
              3.4
              
              
              
              978,800
              
              
              3.4
              
              May
      8, 20131.72
              
              
              
              25,000
              
              
              
              3.6
              
              
              
              19,000
              
              
              3.6
              
              August
      6, 20130.71
              
              
              
              983,507
              
              
              
              4.1
              
              
              
              534,162
              
              
              4.1
              
              February
      9, 20140.64
              
              
              
              75,000
              
              
              
              4.2
              
              
              
              40,500
              
              
              4.2
              
              March
      11, 20140.90
              
              
              
              1,116,645
              
              
              
              4.7
              
              
              
              112,881
              
              
              4.7
              
              September
      2, 20141.65
              
              
              
              8,361,452
              
              
              
              2.4
              
              
              
              6,867,843
              
              
              1.9
 
 During
the year ended December 31, 2009, the Company recorded a total of $950,874
related to stock option compensation (2008 – $4,567,204).  This amount
is included in shareholders’ equity as contributed surplus and is recorded as an
expense.  The fair value of options granted during the years ended
December 31, 2009 and 2008 was determined using the Black-Scholes option pricing
model with the following assumptions:
 
 2009
              
              
              2008
              
              
              2007Expected
      option life (years)
              
              
              2.85
      - 3.01
              
              
              
              4.0
              
              
              
              4.0Expected
      volatility
              
              
              82
      - 83
              %
              
              
              65
              %
              
              
              63%
      - 67
              %Risk-free
      interest rate
              
              
              1.4
      - 1.9
              %
              
              
              3.0%
      - 3.4
              %
              
              
              3.9%
      - 4.6
              %Forfeiture
      rate
              
              
              4.4
      - 4.6
              %
              
              
              -
              
              
              
              -Expected
      dividend rate
              
              
              0
              %
              
              
              0
              %
              
              
              0
              %
  Page
87
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 10.
              Income
      taxes
 
 Significant
components of the Company’s future income tax assets and liabilities are as
follows:
 
 Year
                ended
                December 31,
                2009
              
              
              Year
                ended
                December 31,
                2008
              
              
              Year
                ended
                December 31,
                2007$
              
              
              $
              
              
              $Future
      income tax assetsDeferred
      tax assets
              
              
              12,406,000
              
              
              
              18,104,000
              
              
              
              8,494,000Net
      operating loss carry forwards
              
              
              12,521,000
              
              
              
              2,389,000
              
              
              
              3,403,000Less:  valuation
      allowance
              
              
              (24,927,000
              )
              
              
              (20,493,000
              )
              
              
              (11,897,000
              )-
              
              
              
              -
              
              
              
              -Future
      income tax liabilitiesAsset
      basis differences
              
              
              -
              
              
              
              (478,000
              )
              
              
              (478,000
              )Net
      deferred tax asset (future income tax liability)
              
              
              -
              
              
              
              (478,000
              )
              
              
              (478,000
              )Income
      tax loss carry forwardsCanadian
      Federal (expiring 2009 - 2029)
              
              
              12,871,000United
      States Federal (expiring 2015 - 2029)
              
              
              26,643,000
 
 A
reconciliation of the combined Canadian federal and provincial income tax rate
with the Company’s effective tax rate is as follows:
 
 Year
                ended
                December 31,
                2009
              
              
              Year
                ended
                December 31,
                2008
              
              
              Year
                ended
                December 31,
                2007$
              
              
              $
              
              
              $Loss
      before income taxes
              
              
              (19,101,263
              )
              
              
              (17,853,585
              )
              
              
              (20,949,378
              )Statutory
      rate
              
              
              33.0
              %
              
              
              33.5
              %
              
              
              36.0
              %Expected
      recovery of income tax
              
              
              (6,303,349
              )
              
              
              (5,980,951
              )
              
              
              (7,541,776
              )Effect
      of foreign tax rate differences
              
              
              (604,323
              )
              
              
              (731,366
              )
              
              
              (400,099
              )Non-deductable
      amounts
              
              
              1,222,519
              
              
              
              1,530,012
              
              
              
              1,367,320Effect
      of changes in future tax rates
              
              
              766,407
              
              
              
              (43,662
              )
              
              
              390,200Effect
      of change in foreign exchange rates
              
              
              2,672,559
              
              
              
              (3,370,258
              )
              
              
              1,620,332ISL
      change in basis
              
              
              429,055
              
              
              
              -
              
              
              
              (430,119
              )Effect
      of  renouncement of flow through shares
              
              
              (797,500
              )
              
              
              -
              
              
              
              -Effect
      of non-deductible exploration expenditures
              
              
              280,040Change
      in valuation allowance
              
              
              1,966,147
              
              
              
              8,596,225
              
              
              
              4,565,087Recovery
      of future income taxes
              
              
              (368,445
              )
              
              
              -
              
              
              
              (429,055
              )
 
 11.
              Financial
      instruments
 
 The
Company’s financial instruments consist of cash and cash equivalents, short-term
investments, amounts receivable, bonding and other deposits and accounts
payable.  The Company is exposed to risks related to changes in
foreign currency exchange rates, interest rates and management of cash and cash
equivalents and short term investments.  See the table in Note 3 for
the composition of the Company’s cash and cash equivalents.
  Page
88
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 Credit
risk
 
 Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash and cash equivalents, short term investments and bonding
deposits.  The Company’s cash equivalents and short-term investments
consist of Canadian dollar and US dollar denominated guaranteed investment
certificates and certificates of deposits.  They bear interest at
annual rates ranging from 0.25% to 2.50% and mature at various dates up to
December 15, 2010.  These instruments are maintained at financial
institutions in Canada and the United States.  Of the amount held on
deposit, approximately $7.2 million is covered by either the Canada Deposit
Insurance Corporation or the Federal Deposit Insurance
Corporation.  Another $1.3 million is guaranteed by a Canadian
provincial government leaving approximately $34.9 million at risk should the
financial institutions with which these amounts are invested cease
trading.  As at December 31, 2009, the Company does not consider any
of its financial assets to be impaired.
 
 Liquidity
risk
 
 Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due.
 
 The
Company manages liquidity risk through regular cash flow forecasting of cash
requirements to fund exploration and development projects and operating
costs.
 
 As at
December 31, 2009 the Company’s liabilities consisted of trade accounts payable
of $1,046,963, all of which are due within normal trade terms of generally 30 to
60 days.
 
 Market
risk
 
 Market
risk is the risk to the Company of adverse financial impact due to changes in
the fair value or future cash flows of financial instruments as a result of
fluctuations in interest rates and foreign currency exchange
rates.  Market risk arises as a result of the Company incurring a
significant portion of its expenditures and a significant portion of its cash
equivalents and short-term investments in United States dollars, and holding
cash equivalents and short term investments which earn interest.
 
 Interest
rate risk
 
 Financial
instruments that expose the Company to interest rate risk are its cash
equivalents and short term investments. The Company’s objectives for managing
its cash and cash equivalents are to maintain sufficient funds on hand at all
times to meet day to day requirements and to place any amounts which are
considered in excess of day to day requirements on short-term deposit with the
Company's financial institutions so that they earn interest. When placing
amounts of cash and cash equivalents on short-term deposit, the Company only
uses financial institutions studied by the Company for financial stability
(measured by independent rating services and reviews of the entity’s financial
statements, where appropriate) and approved by the Investment committee of the
Board of Directors.
 
 Currency
risk
 
 The
Company incurs expenses and expenditures in Canada and the United States and is
exposed to risk from changes in foreign currency rates. In addition, the Company
holds financial assets and liabilities in Canadian and US dollars. The Company
does not utilize any financial instruments or cash management policies to
mitigate the risks arising from changes in foreign currency rates.
 
 At
December 31, 2009 the Company had cash and cash equivalents, short term
investments and bonding deposits of approximately US$38.1 million (US$26.5
million as at December 31, 2008) and had accounts payable of US$0.8 million
(US$1.7 million as at December 31, 2008) which were denominated in  US
dollars.
 
 Sensitivity
analysis
 
 The
Company has completed a sensitivity analysis to estimate the impact that a
change in foreign exchange rates would have on the net loss of the Company,
based on the Company’s net US$ denominated assets and liabilities at year end.
This sensitivity analysis assumes that changes in market interest rates do not
cause a change in foreign exchange rates.  This sensitivity analysis
shows that a change of +/- 10% in US$ foreign exchange rate would have a +/-
$3.9 million impact on net loss for the year ended December 31,
2009.  This impact is primarily as a result of the Company having year
end cash and investment balances denominated in US dollars and US dollar
denominated trade accounts payables.  The financial position of the
Company may vary at the time that a change in exchange rates occurs causing the
impact on the Company’s results to differ from that shown
above.
  Page
89
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 The
Company has also completed a sensitivity analysis to estimate the impact that a
change in interest rates would have on the net loss of the Company. This
sensitivity analysis assumes that changes in market foreign exchange rates do
not cause a change in interest rates.  This sensitivity analysis shows
that a change of +/- 100 basis points in interest rate would have a +/- $0.6
million impact on net loss for the year ended December 31, 2009.  This
impact is primarily as a result of the Company having cash and short-term
investments invested in interest bearing accounts.  The financial
position of the Company may vary at the time that a change in interest rates
occurs causing the impact on the Company’s results to differ from that shown
above.
 
 12.
              Segmented
      information
 
 The
Company’s operations comprise one reportable segment being the exploration and
development of uranium resource properties.  The Company operates in
Canada and the United States.  Capital assets segmented by geographic
area are as follows:
 
 December 31,
      2009Canada
              
              
              United
      States
              
              
              Total$
              
              
              $
              
              
              $Bonding
      and other deposits
              
              
              -
              
              
              
              2,920,835
              
              
              
              2,920,835Mineral
      properties
              
              
              523,667
              
              
              
              29,209,629
              
              
              
              29,733,296Capital
      assets
              
              
              2,181
              
              
              
              2,736,940
              
              
              
              2,739,121Investments
              
              
              -
              
              
              
              2,769,117
              
              
              
              2,769,117
 
 
 December 31,
      2008Canada
              
              
              United
      States
              
              
              Total$
              
              
              $
              
              
              $Bonding
      and other deposits
              
              
              -
              
              
              
              2,578,825
              
              
              
              2,578,825Mineral
      exploration properties
              
              
              617,160
              
              
              
              31,191,661
              
              
              
              31,808,821Capital
      assets
              
              
              7,847
              
              
              
              1,946,550
              
              
              
              1,954,397
 
 13.
              Commitments
 
 Under the
terms of operating leases for office premises in Littleton, Colorado and in
Casper, Wyoming the Company is committed to minimum annual lease payments as
follows:
 
 Lease
      Commitments:Year
      ended December 31,
              
              Amount$2010
              
              
              288,0822011
              
              
              156,6072012
              
              
              96,4092013
              
              
              -2014
      and thereafter
              
              
              -541,098
  Page
90
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 Although
construction of the Lost Creek plant will not begin until receipt of the
necessary permits, requests for quotations for all major process equipment at
the Lost Creek project were prepared and solicited from vendors and
contractors.  Bids are currently being evaluated and procurement will
be ongoing throughout 2010.
 
 Purchase
orders for long lead time equipment for the Lost Creek plant have been
issued.  The following table summarizes those commitments at the
current exchange rate.
 
 US$
              
              
              Cdn$Purchase
      orders issued
              
              
              1,643,191
              
              
              
              1,724,365Less
      payments made
              
              
              (861,370
              )
              
              
              (903,922
              )Balance
      of purchase order commitments
              
              
              781,821
              
              
              
              820,443
 
 14.
              Capital
      structure
 
 The
Company’s capital structure is comprised of Shareholders’
Equity.  When managing its capital structure, the Company’s objectives
are to i) preserve the Company’s access to capital markets and its ability to
meet its financial obligations, and ii) finance its exploration and development
activities.
 
 The
Company monitors its capital structure using future forecasts of cash flows,
particularly those related to its exploration and development
programs.
 
 The
Company manages its capital structure and makes adjustments to it to maintain
flexibility while achieving the objectives stated above.  To manage
the capital structure, the Company may adjust its exploration and development
programs, operating expenditure plans, or issue new shares.  The
Company’s capital management objectives have remained unchanged over the periods
presented.
 
 The
Company is not subject to any externally imposed capital
requirements.
  Page
91
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 15.
              Differences
      between Canadian and United States generally accepted accounting
      principles
 
 The
consolidated financial statements have been prepared in accordance with Canadian
generally accepted accounting principles (“Canadian GAAP”), which differ in
certain material respects from those principles that the Company would have
followed had its consolidated financial statements been prepared in accordance
with United States generally accepted accounting principles (“US
GAAP”).  Had the Company followed US GAAP, certain items on the
consolidated balance sheets, consolidated statements of operations and deficit,
and consolidated statements of cash flow would have been reported as
follows:
 
 Consolidated
      balance sheets
              
              As
      at
                December 31,
                2009
              
              
              As
      at
                December 31,
                2008$
              
              
              $Total
      assetsTotal
      assets under Canadian GAAP
              
              
              81,702,205
              
              
              
              101,533,965Adjustments
      made under US GAAP:Adjustment
      for New Frontiers settlement (a)
              
              
              2,016,156
              
              
              
              2,016,156Total
      assets under  US GAAP
              
              
              83,718,361
              
              
              
              103,550,121Total
      liabilities and shareholders' equityTotal
      liabilities under Canadian GAAP
              
              
              1,550,675
              
              
              
              3,256,634Adjustments
      made under US GAAP:Deferred
      tax adjustment ( c)
              
              
              -
              
              
              
              (478,000
              )Flow-through
      share premium liability (b)
              
              
              -
              
              
              
              830,000Total
      liabilities under US GAAP
              
              
              1,550,675
              
              
              
              3,608,634Total
      shareholders’ equity under Canadian GAAP
              
              
              80,151,530
              
              
              
              98,277,331Adjustments
      made under US GAAP:Prior
      year income adjustmentsGain
      on settlement of New Frontiers obligation (a)
              
              
              2,016,156
              
              
              
              2,016,156Deferred
      tax adjustment ( c)
              
              
              -
              
              
              
              478,000Flow-through
      share premium liability (b)
              
              
              -
              
              
              
              (830,000
              )Total
      shareholders’ equity under US GAAP
              
              
              82,167,686
              
              
              
              99,941,487Total
      liabilities and shareholders' equity under US GAAP
              
              
              83,718,361
              
              
              
              103,550,121
  Page
92
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 Consolidated
      statements of operations and comprehensive loss
              
              Year
                ended
                December 31,
                2009
              
              
              Year
                ended
                December 31,
                2008
              
              
              Year
                ended
                December 31,
                2007
              
              
              Cumulative
                from
                March 22, 2004
                Through
                December 31,
                2009$
              
              
              $
              
              
              $
              
              
              $Net
      lossNet
      loss under Canadian GAAP
              
              
              (18,732,818
              )
              
              
              (17,853,585
              )
              
              
              (20,520,323
              )
              
              
              (77,573,506
              )Adjustments
      made under US GAAP:Gain
      on settlement of New Frontiers obligation (a)
              
              
              -
              
              
              
              -
              
              
              
              2,016,156
              
              
              
              2,016,156Deferred
      tax adjustment ( c)
              
              
              (478,000
              )
              
              
              -
              
              
              
              (429,500
              )
              
              
              -Income
      tax adjustment on renouncement of flow through shares (b)
              
              
              32,500
              
              
              
              -
              
              
              
              -
              
              
              
              (1,093,040
              )Net
      loss under US GAAP, being comprehensive loss
              
              
              (19,178,318
              )
              
              
              (17,853,585
              )
              
              
              (18,933,667
              )
              
              
              (76,650,390
              )Basic
      and diluted loss per share under US GAAP
              
              
              (0.20
              )
              
              
              (0.19
              )
              
              
              (0.22
              )
 
 
 Consolidated
      statements of cash flow
              
              Year
                ended
                December 31,
                2009
              
              
              Year
                ended
                December 31,
                2008
              
              
              Year
                ended
                December 31,
                2007
              
              
              Cumulative
                from
                March 22, 2004 Through
                December 31,
                2009$
              
              
              $
              
              
              $
              
              
              $Operating
      activitiesCash
      flows used in operating activities under Canadian & US
      GAAP
              
              
              (16,963,300
              )
              
              
              (16,537,329
              )
              
              
              (13,783,552
              )
              
              
              (61,123,244
              )Investing
      activitiesCash
      flows provided by (used in ) investing activities under Canadian
      GAAP
              
              
              26,299,819
              
              
              
              9,892,468
              
              
              
              (53,526,543
              )
              
              
              (25,863,428
              )Adjustments
      made under US GAAP:Flow-through
      cash categorized as restricted cash (b)
              
              
              848,607
              
              
              
              (848,607
              )
              
              
              2,653,315
              
              
              
              -Cash
      flows used in investing activities under US GAAP
              
              
              27,148,426
              
              
              
              9,043,861
              
              
              
              (50,873,228
              )
              
              
              (25,863,428
              )Financing
      activitiesCash
      flows used in operating activities under Canadian & US
      GAAP
              
              
              1,393
              
              
              
              2,724,686
              
              
              
              66,877,788
              
              
              
              121,103,227Ending
      cash and cash equivalents under US GAAP
              
              
              32,457,323
              
              
              
              24,951,128
              
              
              
              26,312,757
              
              
              
              32,457,323
  Page
93
 Table of Contents
  Ur-Energy
Inc.
 (a
Development Stage Company)
 Notes
to Audited Consolidated Financial Statements
 December
31, 2009
 
 (expressed
in Canadian dollars)
 
 (a)
Settlement of New Frontiers obligation
 
 The early
extinguishment by the Company of its debt obligation to New Frontiers resulted
in the Company not having to pay interest that had previously be accrued and
recorded as an increase in the cost of the Company’s Lost Creek and Lost Soldier
properties.  Under Canadian GAAP, the interest adjustment was recorded
as a reduction in the carrying value of the mineral properties.  Under
US GAAP, the accrued but unpaid interest was recorded as a gain and included in
income.  Consequently, the carrying value of the properties under US
GAAP is higher than that recorded under Canadian GAAP.
 
 (b)
Flow-through shares
 
 Under
Canadian income tax legislation, a company is permitted to issue shares whereby
the company agrees to incur qualifying expenditures and renounce the related
income tax deductions to the investors. Under Canadian GAAP, the Company has
recorded the full amount of the proceeds received on issuance as capital
stock.  Upon renouncing the income tax deductions, capital stock is
reduced by the amount of the future income tax benefits recognized.
 
 For US
GAAP, the proceeds on issuance of the flow-through shares are allocated between
the offering of the shares and the sale of the tax benefit when the shares are
issued.  The premium paid by the investor in excess of the fair value
of non flow-through shares is recognized as a liability at the time the shares
are issued and the fair value of non flow-through shares is recorded as capital
stock.  Upon renouncing the income tax deductions, the premium
liability is re-characterized as deferred income taxes and the difference
between the full deferred income tax liability related to the renounced tax
deductions and the premium previously recognized is recorded as an income tax
expense or benefit.
 
 Also,
notwithstanding whether there is a specific requirement to segregate the funds,
the flow-through funds which were unexpended at the consolidated balance sheet
dates are considered to be restricted and are not considered to be cash and cash
equivalents under US GAAP.  As at December 31, 2009, there were no
unexpended flow-through cash funds (December 31, 2008 - $848,607).
 
 (c)
Deferred tax adjustment
 
 Under
Canadian GAAP, the Company reported a difference in accounting and Canadian tax
basis related to an asset acquired in 2004 and therefore a deferred tax
liability was recognized under Canadian GAAP.  Under U.S. GAAP, there
was no difference between the book and tax basis so there is was no
corresponding deferred tax liability.  The carrying value of the asset
under Canadian GAAP was subsequently written off, so there is no longer any
difference between Canadian and US GAAP for this item.
 
 (d)
Impact of recent United States accounting pronouncements
 
 In June
2009, the Financial Accounting Standards Board, or FASB, released The FASB Accounting Standards
Codification. The FASB Accounting Standards Codification (or
Codification) will become the source of authoritative U.S. generally accepted
accounting principles recognized by the FASB to be applied to nongovernmental
entities. The Codification will supersede all then-existing non-SEC accounting
and reporting standards. SFAS No. 168 is effective for financial statements
issued for interim and annual periods ending after September 15, 2009. Adoption
is not expected to result in any material changes to our consolidated financial
statements.
 
 In
January 2010, the Financial Accounting Standards Board, or FASB, issued
Accounting Standards Update 2010-02 Accounting and Reporting for
Decreases in Ownership of a Subsidiary; a Scope Clarification. The Update
addresses the scope of the existing guidance in Section 810.10 and expands the
disclosure guidelines related to a deconsolidation or derecognition as a result
of a decrease in ownership. The Update is effective retrospectively to January
1, 2009 which is when the Company adopted SFAS 160.
 
 In
September 2006, the FASB issued FAS No. 157, “Fair Value Measurements” (“FAS
157”).  FAS 157 defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurements. It
does not require new fair value measurements where fair value is already the
relevant measurement attribute. In November 2007, FASB agreed to a one-year
deferral associated with the effective date for nonfinancial assets and
liabilities that are recognized or disclosed at fair value on a nonrecurring
basis.  The Company adopted the applicable portions of FAS 157
effective January 1, 2008 and adopted the requirements of FAS 157 for fair value
measurements of financial and nonfinancial assets and liabilities not valued on
a recurring basis effective from 1 January 2009. The adoption did not result in
any impact on the financial statements.
  Page
94
 Table of Contents
  
 In
December 2007, FASB issued FAS No. 141(R), “Business Combinations” (“FAS
141(R)”), which applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date.  FAS 141(R) establishes principles and requirements
for how the acquirer: i) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed and any noncontrolling
interest in the acquiree; ii) recognizes and measures the goodwill acquired in
the business combination or a gain from a bargain purchase; and iii) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. The
Company adopted FAS 141(R) effective from 1 January 2009. The adoption did not
have any impact on the consolidated financial statements.
 
 B.SignificantChanges.
 
 None.
 
 Item 18. FinancialStatements.
 
 Not
applicable.
 
 Item 19. Exhibits.
 
 The list
of exhibits is included following the signature page hereto.
  Page
95
 Table of Contents
  SIGNATURES
 
 The
Registrant hereby certifies that it meets all of the requirements for filing on
this Annual Report on Form 20-F (Annual Information Form) and that it has duly
caused and authorized the undersigned to sign this annual report on its
behalf.
 
 
 UR-ENERGY
      INC.Per:
      /s/ W. William
      BobergW.
      William BobergPresident
      and Chief Executive OfficerDate:
      March 11, 2010
  Page
96
 Table of Contents
  ANNUAL REPORT ON FORM 20-F (ANNUAL INFORMATION FORM)
 for
the year ended December 31, 2009
 
 EXHIBIT
INDEX
 
 ExhibitNo.
      Item
              Description
      of Exhibit1.1
              Articles
      of Continuance of the Corporation (incorporated by reference to Exhibit
      1.1 to the Corporation’s Form 20-F filed March 27,
  2009).1.2
              Amended
      Bylaws of the Corporation (incorporated by reference to Exhibit 1.2 to the
      Corporation’s Form 20-F filed March 27, 2009).8.1
              List
      of Subsidiaries of the Corporation12.1
              Section
      302 Certification by W. William Boberg, Chief Executive Officer dated
      March 11, 2010.12.2
              Section 302 Certification by
      Roger Smith, Chief Financial Officer, dated March 11,
      2010.13.1
              Section
      906 Certification by W. William Boberg, Chief Executive Officer dated
      March 11, 2010.13.2
              Section 906 Certification by
      Roger Smith, Chief Financial Officer dated March 11,
      2010.99.1
              Amended
      and Restated Audit Committee Charter of the Corporation (incorporated by
      reference to Exhibit 99.1 to the Corporation’s Form 20-F filed March 27,
      2009).99.2
              Consent
      of PricewaterhouseCoopers LLP99.3
              Consent
      of Douglas K. Maxwell99.4
              Consent
      of John I. Kyle99.5
              Consent
      of C. Stewart Wallis
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