Ur-Energy said Wednesday that it would cut its workforce at three locations in Wyoming and re-assign staff as a response to depressed uranium market conditions.
The company said it would reduce its labor force by 12 workers and change job responsibilities for several others. The measures is expected to save approximately $1.5 million per year beginning in 2017.
“The reorganization and workforce reductions are necessitated by the persistent downturn in the uranium market and pricing,” the company said.
Although on a smaller scale, the move is similar to the cost-saving strategy announced by uranium producer Cameco in April. Cameco said it would cut 85 workers in the United States and about 500 in Canada.
Ur-Energy said that depressed market conditions also affected exploration activities. Currently, the company has no exploration planned for their Lost Creek Property or among any of its other uranium projects in Wyoming.
Lost Creek is projected to produce between 600,000 and 700,000 pounds of U308 in 2016, which the company said was more than enough to fulfill its commitments through the end of the year. Any surplus production will be used for inventory build up or spot sales. The company has term contracts committing approximately 3.1 million pounds of U308 between 2016 – 2021 and averaging $49.81 per pound. The average pricing currently stands at more than $20 per pound higher than spot pricing.
Ur-Energy operates in-situ leach production in south-central Wyoming. The process involves pumping a dissolving solution into bore holes and then pumping the uranium-laden solution back to the surface.
Ur-Energy said the thirteenth and final originally-planned header house in the first mine at Lost Creek became operational at the end of May. Development work in the second mine unit continues to be limited as Mine Unit 1 has met production needs to date. However, wells have been installed in the first three header houses of the second mine unit and installation of production support systems, such as power lines and pipelines have begun “on a limited basis,” the company said.