A statement today from Texas-based Uranium Resources said the company had cut its annual costs by $2.2 million, in part by cutting jobs and salaries.
Three 'executive officer' positions were eliminated, while those remaining in senior roles had their cash compensation cut by 30% to 40%, saving $800,000 per year in total. Personnel affected by those salary cuts will receive restricted shares in the firm.
The moves were made as URI scaled back its operation after deciding to defer activities on new projects in Texas. "As a result," the statement reads, "the company does not plan to have any significant capital expenditure in 2009, unless there is a significant improvement in the uranium market."
|The truck stops here: Vasquez (Image: URI)
In the third quarter of 2008, URI produced 62,700 pounds of uranium oxide from three in-situ leaching operations in Texas.
Oxygen injection started at the Rosita property but only 7700 pounds of uranium oxide was recovered from it, leading URI to close operations. The company said it could produce economically, but only in a market of higher prices. Production at the Vasquez and Kingsville Dome properties is to continue.
According to Ux Consulting, uranium currently trades on the spot market at around $53 per pound, significantly down on the figures of around $90 per pound a year ago and the all-time high of $137 per pound reached in July 2007. During the many months when the price had been climbing, many small firms began examining the prospect of bringing old uranium mines back into operaiton, as well as prospecting for new uranium deposits.
The sudden drop in uranium prices is related at least in part to the current global economic downturn. Among the causes of the rise in prices were the purchases of speculators, who later suddenly decided to sell their uranium in search of cash as the liquidity crisis hit. This sent the uranium spot price down to around $45 per pound.
URI's president and CEO, Dave Clark, said its primary objective has been to slash costs and secure enough liquidity to continue operations "through at least the end of 2010." In the meantime, he intends the company to have enough cash to take advantage of any opportunities that may arise.
Clark concluded URI's statement: "Our strategic objectives are to improve our position in Texas where we own two fully-licensed in-situ processing facilities while advancing our considerable assets in New Mexico toward production. We believe the recent permit awarded to us for exploratory drilling in New Mexico is a good indication of the progress being made in that state. URI has over 100 million pounds of in-place mineralized uranium material in New Mexico, an NRC license to mine at Churchrock, and the opportunity to build its uranium assets during difficult economic times for the industry."