LITTLETON, Colo., June 8, 2016 /PRNewswire/ -- Ur-Energy
Inc. (NYSE MKT:URG TSX:URE) ("Ur-Energy" or the
"Company") announces cost savings measures through a reduction in
workforce.
Due to continuing depressed uranium market conditions, the
Company has implemented cost savings measures including workforce
reductions at all three of its locations: Littleton, Colorado, Casper, Wyoming and the Lost Creek Mine Site.
The reductions include twelve employees, with several remaining
employees asked to change job responsibilities or carry additional
duties. These measures represent an expected annual savings of
approximately $1.5 million, beginning
in 2017. The reorganization and workforce reductions are
necessitated by the persistent downturn in the uranium market and
pricing which affects the Company's ability to sell into the spot
market and conduct exploration activities in 2016 and 2017.
At this time, there is no plan for any exploration activities at
the Lost Creek Property or among the Company's other uranium
projects in Wyoming.
The affected employees have been offered severance arrangements
in order to assist with their transition to other employment
opportunities. Implementation of the adjustments necessitated by
the reorganization has begun and should be complete in coming
weeks. The few operational modifications required at Lost Creek
will be overseen closely to assure continued safe operations.
Jeff Klenda, Company Chair and
Executive Director, noted that "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. This could only be
accomplished through a reduction in workforce. Difficult times
require difficult decisions. Sadly, in this case, it meant saying
good-bye to some very high quality people whom we truly hate to
lose. In making these very difficult decisions, we identified
positions to be eliminated or reorganized in order to cut costs
while still maintaining the Company's operational capability
including, must importantly, the operations at Lost
Creek."
Lost Creek is now projected to produce between 600,000 and
700,000 pounds U3O8 in 2016, which will be
more than sufficient to deliver into our remaining long-term sales
commitments for the year. Production in excess of our contractual
commitments will be used to build inventory or make spot sales, if
and as warranted. The Company has term contracts committing
approximately 3.1 million pounds U3O8 between
2016 – 2021 and averaging $49.81 per
pound. This average pricing currently stands at more than
$20 per pound above spot pricing.
The thirteenth, and final, originally-planned header house in
the first mine unit at Lost Creek became operational at the end of
May. The header house and its patterns of production wells include
certain refinements in design and well completion techniques that
are expected to increase injectivity for even greater well
performance. 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 commenced on a
limited basis.
About Ur-Energy
Ur-Energy is a junior uranium mining
company operating the Lost Creek in-situ recovery uranium facility
in south-central Wyoming. The Lost
Creek processing facility has a two million pounds per year
nameplate capacity. The Company has begun to submit
applications for permits and licenses to operate Shirley Basin. Ur-Energy is engaged in
uranium mining, recovery and processing activities, including the
acquisition, exploration, development and operation of uranium
mineral properties in the United
States. Shares of Ur-Energy trade on the NYSE MKT under the
symbol "URG" and on the Toronto Stock Exchange under the symbol
"URE." All currency figures in this announcement are in US dollars
unless otherwise stated. Ur-Energy's corporate office is
located in Littleton, Colorado;
its registered office is in Ottawa,
Ontario. Ur-Energy's website is www.ur-energy.com.
FOR FURTHER INFORMATION, PLEASE
CONTACT
Jeffrey T.
Klenda, Chair, Executive Director
866-981-4588
jeff.klenda@ur-energy.com
Cautionary Note Regarding Forward-Looking
Information
This release may contain "forward-looking
statements" within the meaning of applicable securities laws
regarding events or conditions that may occur in the future
(e.g., ability to meet production targets and to timely
deliver into existing contractual obligations; whether the
Company's long term contracts adequately protect against market
volatility; whether continuing refinements in construction and
completion of wells at Lost Creek permits increased injectivity)
and are based on current expectations that, while considered
reasonable by management at this time, inherently involve a number
of significant business, economic and competitive risks,
uncertainties and contingencies. Factors that could cause actual
results to differ materially from any forward-looking statements
include, but are not limited to, capital and other costs varying
significantly from estimates; failure to establish estimated
resources and reserves; the grade and recovery of ore which is
mined varying from estimates; production rates, methods and amounts
varying from estimates; delays in obtaining or failures to obtain
required governmental, environmental or other project approvals;
inflation; changes in exchange rates; fluctuations in commodity
prices; delays in development and other factors described in the
public filings made by the Company at www.sedar.com and
www.sec.gov. Readers should not place undue reliance on
forward-looking statements. The forward-looking statements
contained herein are based on the beliefs, expectations and
opinions of management as of the date hereof and Ur-Energy
disclaims any intent or obligation to update them or revise them to
reflect any change in circumstances or in management's beliefs,
expectations or opinions that occur in the future.
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SOURCE Ur-Energy Inc.