Uranium Energy Corp (UEC) will reduce output at its Palangana mine in Texas while it focuses efforts on developing its nearby Goliad and Burke Hollow projects. The move is in response to low uranium prices.
|The Palangana project (Image: UEC)
The company said that it is taking measures to "adapt to current low prices while advancing its assets towards greater production when the sector recovers." UEC said that it will be prioritizing capital expenditures to advance its two larger near-term production projects in South Texas - the Goliad and Burke Hollow in-situ leach (ISL) projects - while slowing production and development at its smaller Palangana project.
UEC said that mining operations at production areas 1, 2 and 3 at Palangana would be maintained at a slower pace "so that the majority of operating costs of the project are covered, core personnel and contractors are maintained and the mine remains in a stage of operational readiness to ramp-up output when prices recover." Meanwhile, permitting activities for areas 4, 5 and 6 are to continue.
Development of the nearby Goliad and Burke Hollow projects is to continue, mainly thanks to a $20 million credit facility secured by UEC in late July. The company said that as a result of the loan, it is "well-funded to continue to advance its Goliad project while having greater financial flexibility to make progress at its Burke Hollow project."
The Goliad site has now been cleared and all the necessary permits for the mine have been obtained. It expects the project to be ready to start production by July 2014. Meanwhile, UEC anticipates applying for production permits for Burke Hollow - its "highest priority pre-construction project" in South Texas - by early 2014.
UEC also owns the fully licensed and permitted Hobson processing plant, which is central to all of its ISL operations in South Texas. The company will use the Hobson plant as a central processing site, eliminating the need to construct a new processing plant on site at each project.
The company noted that its "portfolio optimization" may also include possible acquisitions and the sale of non-core assets.
UEC president and CEO Amir Adnani: "As part of the optimization and cost-cutting process, we are assessing the planned exploration expenditures on the company's entire pipeline of uranium projects - in Texas, Arizona, Colorado, New Mexico and Wyoming."
He added, "With the unprecedented level of construction of nuclear plants that's occurring globally, we are preparing for major long-term low-cost growth, while maintaining near-term financial flexibility through the commodity cycle."
Researched and written
by World Nuclear News