In response to current market conditions, Uranium Energy Corp. (NYSEMKT:UEC) will be prioritizing capital expenditures to advance the Goliad and Burke Hollow ISR Projects, two larger near-term production projects in South Texas, and is slowing the pace of capital expenditures and mining operations at its smaller Palangana ISR uranium mine while maintaining core personnel and contractors.
As quoted in the press release:
Palangana Mine Update
As a consequence of the current uranium market, the Company is slowing the pace of mining operations at its Palangana ISR uranium mine so that the majority of operating costs of the project are covered, core personnel and contractors are maintained and the mine remains in a state of operational readiness to ramp-up output when prices recover. Permitting of Production Areas 4, 5 and newly developed PA-6 is continuing on schedule, with PA-4 targeted to be fully permitted and available to come online this fiscal year.
Goliad and Burke Hollow ISR Projects Update
Subsequent to the July 2013 closing of the $20 million credit facility, the Company is well-funded to continue to advance its Goliad ISR project while having greater financial flexibility to make progress at its Burke Hollow ISR project despite challenging market conditions.
The Goliad site has been cleared and all necessary permits are in hand and the major ion exchange vessels have been ordered for delivery in late November 2013. The disposal drilling site has been installed and the electrical sub-station is in place for distribution to the entire project. The Company has also begun work design on Production Area 2 at Goliad. The project is on budget and production is set to be available to come online in the current fiscal year.
Burke Hollow is the Company’s highest priority pre-construction project in South Texas. The team is compiling the information to submit the mine permit and radioactive material license applications to the Texas Commission on Environmental Quality by early 2014.
Uranium Energy Corp President and CEO Amir Adnani said:
UEC has made a significant investment in our South Texas hub-and-spoke production infrastructure, and our focus now is to improve the overall cost structures at Palangana and to ramp-up the project’s Production Areas 4, 5 and 6 once the uranium price recovers. In the meanwhile, we are completing key advances toward increasing low-cost ISR production at Goliad and Burke Hollow. These projects, with the largest resource base within our hub-and-spoke project pipeline, merit the highest priority.