Uranium Resources, Inc. (NASDAQ: URRE) has been battered by the lower commodity prices coupled with soft demand for uranium. The slow pace of restarting Japan’s nuclear reactors is a key reason uranium companies are battling weak demand. But URRE is in the process of raising funds to ensure that it is ready to ride the wave of strong demand that is being anticipated.
The company entered into an equity arrangement with Aspire Capital Fund. The deal would see Uranium Resources, Inc. (NASDAQ: URRE) receive up to $12 million in fresh capital injection. URRE and Aspire have already settled on their terms of the equity fundraiser, but URRE shareholders were required to approve the deal.
Uranium Resources, Inc. (NASDAQ: URRE) has recently been involved in a series of fundraisers to try and keep its operations running amid challenging business and capital environment. For example, the company transferred the ownership of some of its Mexican properties and it expects to receive $12.5 million from the transaction.
Navigating difficult environment
According to URRE’s CEO, Christopher M. Jones, the management remains committed to steering the company through the difficult period. Lower commodity prices and the weak demand for commodities have made things tough for companies such as URRE. But through cost reduction, the management is expressing confidence that they will outlive the difficulties.
Toward coping with the lower demand and prices of uranium, URRE is shifting its production to low-cost mines.
The Fukushima fallout
Since the Fukushima nuclear disaster several years ago, demand for uranium has remained depressed. Japan accounts for a significant amount of uranium demand and comments about the company reducing its exposure to nuclear energy appear to hurt the uranium market. Additionally, Japan was been slow to restart its nuclear reactors after the Fukushima fallout, a situation that was diluted demand for uranium.
Hope at the end of the tunnel for Uranium Resources, Inc. (NASDAQ: URRE)
However, industry observers believe that demand for uranium will improve, especially fueled utilities in the Middle East and Asia, thus benefiting Uranium Resources, Inc. (NASDAQ: URRE) and its peers.