Uranerz to Adjust Accounting Treatment of Certain Construction Costs
Casper, Wyoming, February 15, 2013 -- Uranerz Energy Corporation ("Uranerz" or the "Company") (NYSE MKT and TSX: URZ; Frankfurt: U9E) has determined that certain costs incurred in constructing its Nichols Ranch In-Situ Recovery ("ISR") Uranium Project should have been accounted for as exploration expenses, rather than capitalized as construction in progress.
Uranerz is an exploration stage uranium mining company currently constructing its first mine, its Nichols Ranch ISR Uranium Project, in the Powder River Basin of Wyoming. After receiving the State permit needed to begin construction and operation of the mine, Uranerz began to capitalize various costs associated with mine construction. However, to comply with the U.S. Securities and Exchange Commission's Industry Guide 7, as an exploration stage company, certain costs should have continued to be expensed as exploration costs, rather than capitalized. All previous exploration activities had been so expensed by the Company.
To make the adjustment, the Company will restate its financial statements for the year ended December 31, 2011 and for the first three fiscal quarters of 2012. These costs will be expensed in the 2012 year end financial statements which will be filed in March of 2013. Accordingly, investors should rely on the Company's forthcoming restated financial statements and the forthcoming financial statements for the year ended 2012, rather than the previously filed statements for such periods.
Mr. Benjamin Leboe, B.Com., C.A., the Company's Senior Vice President, Finance and Chief Financial Officer, advised: "The restatement of our financial statements is to adjust for an accounting reclassification of project costs and will not change the Company's reported cash in treasury, its cash flow, or its business plan."
Construction of the Nichols Ranch ISR Uranium Project is continuing. Production wells at the first wellfield have been substantially completed and the remaining wells are expected to be completed during the first quarter of 2013. The processing facility is approximately 80% completed with tanks, pumps, ion exchange columns, sand filters and ancillary equipment fully installed. Installation of the process piping, electrical controls and the control room is ongoing. Drilling pads have been constructed and the Company has commenced the selection process for a drilling contractor to install two deep disposal wells. The Nichols Ranch ISR Uranium Project is expected to be operational later this year.
Uranerz is a U.S. mining company focused on near-term commercial ISR uranium production. The Nichols Ranch ISR Uranium Project will be the Company's first mine. ISR is a mining process that uses a leaching solution to extract uranium from sandstone-hosted uranium deposits; it is the generally accepted extraction technology used in the Powder River Basin area of Wyoming. Uranerz controls a strategic land position in the central Powder River Basin. The Company's management team has specialized expertise in the ISR uranium mining method and a record of licensing, constructing, and operating ISR uranium projects.
For further information, please contact Derek Iwanaka, Manager of Investor Relations at 1-800-689-1659 or by email at [email protected].