Ur-Energy streamlines US operations
09 June 2016
US uranium producer Ur-Energy has announced cost-saving measures with workforce reductions across all of its locations including the Lost Creek site in Wyoming, citing uranium spot market conditions. The company currently has no plans for further exploration at its Wyoming sites.
It expects cutting head count by 12, along with changes in the responsibilities of some other employees, will enable it to save about $1.5 million per year from 2017.
"Although we maintain a solid base of long-term contracts at average pricing near $50 per pound, spot pricing in 2016 has weakened considerably, and, in response, we determined that we needed to proactively undertake to further cut costs and streamline our overall corporate and operating efficiencies," Ur-Energy CEO Jeff Klenda said.
Ur-Energy began in-situ leach (ISL) production at Lost Creek in 2013. The thirteenth and final one of the originally-planned header houses in Lost Creek's first mine unit became operational in May. Lost Creek is now projected to produce between 600,000 and 700,000 pounds U3O8 (231 and 269 tU) in 2016, which the company said will be "more than sufficient" to deliver on its remaining long-term sales contracts for the year. Development work in the second mine unit has been limited as unit 1 has met all production needs to date.
Production in excess of contractual commitments will be used to build inventory or make spot sales "if and as warranted", Ur-Energy said. The company currently has term contracts committing about 3.1 million pounds U3O8 (1192 tU) in the period 2016-2021 averaging $49.81 per pound. "This average pricing currently stands at more than $20 per pound above spot pricing," the company said.
During the first quarter of 2016, the Lost Creek plant produced 173,844 pounds U3O8 (67 tU) of packaged uranium.
In April, uranium producer Cameco announced a reduction of about 85 employees at its US operations and 500 at its Canadian operations as it scaled back production in response to market conditions.
Researched and written
by World Nuclear News