Littleton, Colo.-based Ur-Energy Inc., which is developing a uranium mine in Wyoming, will supply 200,000-300,000 pounds of uranium to a U.S.-based "nuclear operating company," the company announced Wednesday.
The company with which Ur-Energy is entering the agreement was not identified. The Casper Star-Tribune left a message with the company but it was not returned.
Ur-Energy’s first uranium project, Lost Creek, is under construction in Sweetwater County. The company said it will eventually produce up to 2 million pounds a year. Production is expected to begin in the second half of 2013, according to Wednesday’s statement.
Ur-Energy will begin producing uranium for the newly contracted company in 2017. The average delivery price was not disclosed, but the company said Wednesday it is consistent with current long-term prices for U308, the statement said. U308 is a mixture of uranium oxides commonly shipped between mills and refineries.
The company plans to have a portion of the uranium it produces under long-term contract with North American nuclear utilities, the statement said.
“The value of holding supply agreements with fixed pricing structures has been clearly recognized during this ongoing period of softness in the uranium spot market,” said Wayne Heili, CEO of Ur-Energy, in the company’s statement.
The Uranium average spot price is currently hovering at about $40 a pound, down from a recent high of about $73 per pound in early 2011.
“This supply arrangement is an important component of our overall growth strategy as it contributes to the future financial viability of our U.S.-based uranium mining operations," he said.