Ur-Energy Announces Cost-Saving Measures
LITTLETON, Colo., Aug. 6, 2019 /CNW/ -- Ur-Energy Inc. (NYSE American:URG)(TSX:URE) (the "Company" or "Ur-Energy") announces it has implemented an additional reduction in force, primarily affecting employees at its Lost Creek facility.
On July 12, 2019, the President responded to our Section 232 Trade Action with a Memorandum establishing the United States Nuclear Fuel Working Group (the "Working Group") to develop recommendations for reviving and expanding domestic uranium production. The Memorandum did not, however, offer any current relief in response to the Trade Action, such as the domestic quotas suggested by our Petition. As a result of the White House decision to not take action at this time, we were compelled to respond and initiate significant cost-saving measures which, unfortunately, included a reduction in force affecting ten of our Wyoming employees. Other, additional, measures will be taken to streamline our expenditures even further while we await the outcome of the Working Group's efforts and pursue other avenues of relief.
Ur-Energy Chairman and CEO, Jeff Klenda, said, "We are determined to succeed in our work alongside the Trump Administration and with our customers to find solutions to correct this dysfunctional uranium market, and we remain optimistic that a positive outcome will be reached through these efforts. We must, however, at the same time take aggressive proactive measures to further control costs. We are taking these measures to maximize the amount of time, or 'runway,' available to the Company to avoid dilution of our shareholders or other needs for financing. During this time, we will avail ourselves of any and all remedies to ensure the continued viability of our Company. Sadly, these measures include the difficult decision to lay off ten of our Wyoming staff."
Several remaining employees have been asked to change job responsibilities and/or carry additional duties. 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 will be complete in coming weeks. The nominal operational modifications required at Lost Creek will be overseen closely to assure continued safe and compliant operations. Together with other measures slated to be implemented, including lower production rates and no development activities, these measures represent an expected annual savings of approximately $4 million, beginning in 2020.
We provided further guidance for 2019 in our Form 10-Q and Earnings Release, August 2, 2019, confirming that production estimates for Lost Creek have been lowered to between 50,000 and 75,000 pounds U3O8 during 2019. We can no longer justify the added cost of maintaining full operational readiness as it relates to labor, and have accordingly reduced staffing to the minimum levels necessary to maintain operations. We have retained core operational personnel who possess the critical knowledge necessary for the Company to ramp up when conditions warrant. This enables the Company to preserve our ability to react swiftly and efficiently to changing market conditions when incentivized, while simultaneously minimizing the need for additional funding during this continuing period of uncertainty.
Ur-Energy is a uranium mining company operating the Lost Creek in-situ recovery uranium facility in south-central Wyoming. We have produced, packaged and shipped approximately 2.5 million pounds from Lost Creek since the commencement of operations. Applications are under review by various agencies to incorporate our LC East project area into the Lost Creek permits, and to construct and operate at our Shirley Basin Project. 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 NYSE American under the symbol "URG" and on the Toronto Stock Exchange under the symbol "URE." Ur-Energy's corporate office is 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 Klenda, Chair and CEO
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., continuing results of Lost Creek operations; the impact of the President's announcement to not take any action to adjust trade to preserve the domestic uranium mining industry; what recommendations will be made by the Working Group for the revival and expansion of domestic nuclear fuel production and the impact of those recommendations, if any; what relief the Company is successful in obtaining through other means; whether the cost-savings measures to be taken will be sufficient and will permit the Company to avoid dilution to shareholders or other additional financing needs; and the ability and timing to ramp up when market conditions warrant) 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, fluctuations in commodity prices; capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of uranium 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; 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.