A weak uranium market continues to take its toll on miners. Canada’s Cameco announced it will extend the suspension of production at McArthur River and Key Lake for an indeterminate duration. The company said it has not seen the improvement needed in the market to restart production.

“Our [second quarter] results reflect the impact of a weak uranium market and the deliberate actions we have taken driven by the goal of increasing long-term shareholder value,” said Tim Gitzel, Cameco’s president and CEO. “We continue to expect to generate strong cash flow this year as we draw down inventory and focus on operating efficiently.”

Approximately 550 McArthur River and Key Lake miners, including those currently on temporary layoff since January, will be laid off permanently. A reduced workforce of approximately 200 employees will remain at the sites to keep the facilities in a state of safe care and maintenance. The workforce at Cameco’s corporate office will be reduced by approximately 150 positions.

“It was a difficult decision to make, because of the impact it will have on our employees, their families, and other stakeholders, but we must take this action to ensure the long-term sustainability of the company,” Gitzel said. “We will not produce from our tier-one assets to deliver into an oversupplied spot market. Until we are able to commit our production under long-term contracts that provide an acceptable rate of return for our owners, we do not plan to restart.

The company said it will continue to evaluate the market.

For 2018 the company expects to deliver as much as 35 million lb or uranium, revenue between $1.55 billion and $1.64 billion with an average realized price of $46.10/lb, and average unit cost of sales between $40/lb and $42/lb. In addition to its committed purchases, Cameco expects to purchase an additional 2 million to 4 million lb of uranium to meet its delivery commitments and maintain its target inventory. In 2019, Cameco expects to produce 9 million lb, and it has commitments to purchase between 5 million and 6 million lb and deliver between 25 million and 27 million lb.