The agreement entered with the nuclear operator is a long term one with deliveries over a five year period. The pricing would contain market referenced prices, with combined spot and long term indicators, to set the final sales price.
The agreement’s pricing structure contains floor prices to provide the company with downside protection and ceiling prices which protect the buyer from unlimited upside price risk.
Previously, the company has announced a similar contract in July 2009, that was also regarding the sale of uranium to a US utility, which was its first contract.
Uranerz Energy has applied for permits to develop two of its properties in the Powder River Basin area of Wyoming into commercial in-situ recovery (ISR) uranium mines. The company requires these permits to produce uranium yellowcake concentrate which can be sold directly to utilities to manufacture fuel used in nuclear power plants.
The company collectively owns or controls (including through its interest in the Arkose Mining Venture) approximately 124,600 acres in the Pumpkin Buttes Uranium Mining District of the central Powder River Basin of Wyoming, US.
The mine plan for the Nichols Ranch Uranium ISR Project includes construction of a central processing facility at the Nichols Ranch property and a satellite ion exchange facility at the Hank property. The ultimate production level from these two properties is planned to be approximately 600,000 to 800,000 pounds per year (as U3O8).
