Economic downturn means uranium companies face huge challenge
Strathmore Minerals says the "need to regenerate a viable uranium mining industry in this country as part of a comprehensive energy plan remains intact."
Posted: Wednesday , 04 Feb 2009
RENO, NV -
While the current financial credit crisis and market correction "are of great concern to management," Strathmore Minerals maintains "our core business strategy of focusing on bringing production on-stream in the coming years for our key projects is still the right one."
In a news release, Strathmore CEO David Miller said, "The current downturn has created a greater challenge for uranium companies than any time during the past ten years. "
"Strathmore enters 2009 having made the necessary adjustments required to adapt to the new environment," Miller said. Discretionary expenditures at Strathmore have been eliminated or reduced while senior management has taken a 20% pay cut. Additional broader pay cuts have been implemented. Secondary projects have been deferred, while working capital stands at Cdn$7.8 million.
"We remain optimistic that the long-term demand/supply imbalance for uranium in the United States and the need to regenerate a viable uranium mining industry in this country as part of a comprehensive energy plan remains intact," Miller said. "Looking ahead this fundamental trend should benefit uranium prices and emerging uranium producers like Strathmore Minerals Corp."
The company also noted that the long-term uranium price "has remained relatively firm at US$70/lb. The spot price has bounced off a low of US$43/lb and is currently US$48/lb."
Last year, the company's primary focus has been to advance its three core uranium projects-the Gas Hills and Pine Tree-Reno Creek properties in Wyoming, and New Mexico's Roca Honda--towards production.
At the Gas Hills Uranium District in Wyoming, Strathmore's primary focus has been on permitting the George Ver deposit, which is expected to be the first in a series of sequentially planned open pit deposits.
Strathmore believes that "Roca Honda may be one of the best undeveloped uranium deposits in the southwest United States." An ongoing feasibility study is underway while the mine permit application remains on schedule for submittal this fall.