Cameco is temporarily shutting down production at two of its Saskatchewan uranium sites, potentially putting 845 people out of work for almost an entire year, the company said Wednesday.
"This is temporary and very unfortunate. We regret it because of the impact on people and we will do our best to soften the blow," said Tim Gitzel, the president and CEO of the Saskatoon-based company.
Weak uranium prices are prompting Cameco to suspend operations at both its McArthur River mining and Key Lake milling operations and place them under what's called "care and maintenance," requiring the work of 210 people.
To retain the Cameco direct employees who constitute more than half of the 845 people who are being sent home, the company will top up their benefits, Gitzel said.
"We need our people. We need them to stay with us and stay ready for when we're ready to restart," he said.
Gitzel said he doesn't know exactly when that will be.
"It won't be years. We're talking months. We're planning for about a 10-month period."
Cameco also announced that its annual dividend will be reduced to $0.08 per common share in 2018.
The cost to maintain both operations during the suspension is expected to be between $6.5 and $7.5 million per month.
The company is also looking into temporary workforce reductions at corporate office.
According to Cameco, uranium prices have fallen by more than 70 per cent since the Fukushima accident in March 2011 and have remained at "unsustainably low levels."
"To date, we have made good progress in reducing costs but unfortunately given the continued market weakness, more needs to be done," said Gitzel. "We can't control the market so our focus is on positioning the company to weather the continued low uranium prices and have uncommitted, low-cost supply to deliver into a strengthening market."
Together the McArthur River mine and the Key Lake mill process all of the ore from McArthur River to uranium concentrate. Cameco owns 70 per cent of McArthur River and 83 per cent of Key Lake. AREVA Resources Canada Inc. owns the remainder.