NXE can replace CCOToday, NXE's plan to produce 20% of global uranium supply as a lowest cost producer has received a vote of confidence in that NXE can easily replace Cameco's high cost production from deep, unconformity style deposits.
Comments from Gitzel during the last conference call
Our strategy to curtail higher cost production and focus on our best margin assets, restructure various aspects of our business and generally reduce costs is driven by these market conditions. We have consistently acknowledged the near to medium term challenges on both the demand and supply side.
However, we're a bit frustrated by the reliance on supply side forecast that failed to account for the economic factor that distinguishes the uranium reserve from our uranium resource. For example, we have seen forecasts that show McArthur River mine where cash operating costs are among the world lowest, increasing production in 2019 at uranium price of $25 per pound.
While we can't speak for the behavior of other producers in the $25 market, I can tell you this is not a rational assumption.
At $25 we won't be investing a dime to increase production at McArthur River in fact expect there could be further variability in existing production beyond what we announced for 2017 if these conditions continue. And
we certainly won't be undertaking the work required to extend the 18 million per year mine life at Cigar Lake which we should be starting tomorrow if we want to extend production beyond 2027. At
today's prices or the prices used in those reports apart from making sure we have uranium to fulfill our contract commitments
our supply is better left in the ground.