Raymond Larson, president of the Dallas-based uranium mining company, said production would be reduced “until such time as more favorable long-term contracts can be obtained.”
Larson said the company’s strong cash flow position allows it to purchase uranium on the spot market at about $10(US) per lb, which is less than its production costs.
“This interim measure will allow us to continue to fulfill our delivery commitments in a highly profitable manner while conserving our valuable reserves,” he said. “Earnings and cash flow from operations are not expected to be adversely affected by this decision.”
The decision also means delays in additional wellfield development at Kingsville Dome, and plant construction and initial wellfield development at Rosita. The company’s producing properties are located in South Texas where low cost in situ mining techniques are employed. The uranium ore is tapped with drill holes, leaching solution pumped down and the uranium pumped to the surface in solution.
Uranium Resources also has advanced projects in New Mexico.
Proven and probable reserves are reported at 63 million lb of uranium. The company said long-term contracts of 6.5 million lb represent $145 million of future revenues through to 1997.
The company’s net income for the 1989 first quarter jumped 258% to $2.33 million(US), while revenues increased 132% to $9.64 million. Larson projects that 1989 earnings will be at least double the results of 1988.
Uranium Resources recently announced that it is holding discussions with several groups regarding the acquisition of all or part of the company. The discussions are described as preliminary and no offers have yet been received.
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