Uranerz Energy Corporation Letter to Shareholders

It is exciting to reflect on the corporate events that have unfolded over the past year and the first quarter of 2011. Uranerz Energy Corporation had a very successful 2010 during which several key milestones were achieved, and we are looking forward to continuing that success through 2011 to allow us to initiate construction on our first in-situ recovery ("ISR") uranium mine.

The highlights for 2010 and early 2011 included:

• Acquiring extensive drill data including drill logs, drill hole maps and geologic cross sections and commencing a detailed assessment of these data on over 15,000 uranium exploration holes in the Powder River Basin area of Wyoming;
• Significantly increasing our Powder River Basin uranium resource base by over 45% to 19.1 million pounds (in all categories), as U3O8;
• Initiating the permit application process on our third in-situ recovery ("ISR") mining unit;
• The adoption of a Shareholder Rights Plan designed to ensure that all of the Company's shareholders receive fair and equal treatment in situations where an unsolicited offer to acquire the Company is made;
• Strengthening the Company's treasury to over $47 million through the completion of an ATM financing and the exercise of warrants; and
• Achieving major advancements for the Nichols Ranch ISR Uranium Project with:
• Receipt of the Permit to Mine from the Wyoming Department of Environmental Quality ("WDEQ");
• Contracting for long lead time well-field installation equipment, processing plant equipment and project power;
• Issuing requests-for-quotation for well-field development, plant construction, and equipment;
• Receipt of the final Supplemental Environmental Impact Statement ("SEIS") by the Nuclear Regulatory Commission ("NRC"); and
• Receipt of the draft Materials License from the NRC.

Last summer we acquired and commenced a detailed assessment of a large data library which includes over 15,000 drill logs, drill hole maps and geologic cross sections for nearly all of the Pumpkin Buttes Mining District in the Powder River Basin of Wyoming. These drill holes cover over 340 square miles and are expected to be very helpful in identifying prospective uranium targets while saving the Company a substantial amount of time and exploration expense. The library may also be used to target potential acquisitions within the Powder River Basin and to generate data for permitting and eventual production operations in favorably identified areas.

During 2010, Uranerz focused efforts on expanding its resource base and completed technical reports on three new project areas. With the addition of Reno Creek, Uranerz has reported uranium resources on seven of its projects under the guidelines of NI 43-101, and increased its uranium resource base by over 45% (in all categories). The Company currently has over 30 uranium projects at various stages of exploration and development in the Powder River Basin area of Wyoming.

The Company also commenced preparation of the environmental permit and license applications for its planned third ISR uranium mining unit in the central Powder River Basin of Wyoming. This unit, named Jane Dough, includes the Doughstick, South Doughstick and North Jane uranium properties. The Jane Dough permit area is adjacent to and immediately south of the Nichols Ranch permit area, and the Company intends to add the Jane Dough Unit as an amendment to the Nichols Ranch ISR Uranium Project license.

During 2010, the Company implemented a Shareholder Rights Plan to safeguard our shareholders' interests by discouraging undervalued or unfair takeovers of the Company. The Company wants to ensure that the future benefits of its ongoing initiatives are not denied to its shareholders by an opportunistic, undervalued acquisition of the Company. This Plan is designed to protect against such acquisitions so that shareholders can share in the full benefit of Uranerz' long-term potential.

Late in December 2010, the Company completed a $20 million financing, and caused the accelerated exercise of an outstanding series of warrants in February of 2011. These funds significantly bolstered the Company's treasury which stood at over $47 million by the end of Q1 2011. The funds will be used primarily for the development of commercial mining facilities at the Nichols Ranch ISR Uranium Project, further exploration on Powder River Basin properties, and working capital to hire new staff for construction, production and ongoing overhead.

Several imperative permitting milestones have been achieved during the past several months. In late December the State of Wyoming, Department of Environmental Quality ("WDEQ"), issued the commercial Permit to Mine (Permit Number 778) for the Company's Nichols Ranch ISR Uranium Project located in Johnson and Campbell counties in the Central Powder River Basin of Wyoming, U.S.A. In January of 2011, the final Supplemental Environmental Impact Statement ('SEIS") for the Nichols Ranch ISR Uranium Project was posted on the Nuclear Regulatory Commission ("NRC") website and published in the Federal Register. In the SEIS, the NRC reported its conclusion that there were no major environmental impacts that would preclude licensing of the Nichols Ranch ISR Uranium Project.

The last authorization needed before on-site construction can commence is the final Materials License from the NRC. The NRC issued to the Company in draft form the Materials License Number SUA-1597 in late November 2010. Once the final Materials License is issued, the Company plans to commence development of its first ISR uranium mine in Wyoming. The Nichols Ranch project will serve as a platform to develop the Company's other Powder River Basin projects through the permit amendment provisions of the regulatory process.

The Company believes that, notwithstanding the effects of the March 2011 tsunami in Japan, the long term fundamentals for nuclear energy remain strong. The demand for uranium far exceeds mined supply, as climate change and environmental concerns continue garnering increased world attention, and nuclear is regarded as a safe, clean and sustainable energy source.

In closing, I would like to thank all our shareholders, financiers, and employees for their continued support and contribution towards building a successful uranium company. I particularly want to thank our field employees for performing their jobs in a safe and environmentally friendly manner. With this continued support I am confident that Uranerz will meet its objective of becoming an economic producer of uranium to be used for fuel utilized in nuclear power plants.

Sincerely,



Glenn Catchpole, M.S., P.Eng.
President and Chief Executive Officer

You are invited to attend the 2011 Annual Meeting of Stockholders of Uranerz Energy Corporation to be held in Casper, Wyoming on Wednesday, June 15, 2011. The Annual Report and Proxy Statement can be viewed at: http://www.uranerz.com/i/pdf/Uranerz_AR_2011_and_Proxy_Document.pdf . Alternatively please visit our web site at: www.uranerz.com.