Good that the come out with an update & confirm certain things such as there are not in violation of any debt covenants.
It is clear that investors have serious confidence issues with the company & company has made an attempt to addressed them.
Company may be fine till some time. How long depends on the burn rate of the company & its ability to raise more which will be extremely difficult under the present circumstances & U308 spot prices. So far they have money to burn for at least a few quarters & maybe maximum couple of years if you really stretch it. They have arranged funds to pay maturing debt in March 2013.
I was expecting one statement which I did not find that they were suspending production that is above the spot price. Management is not fully adapting & is pushing increase in production & hoping that the Spot price will pop soon. There is no way that they can predict that U308 have bottomed & will rise soon.
The entire industry has been totally wrong for a year or so. What if spot prices stagnate or even become weaker for another year or two. Is the management willing to put the survival of this company on stake on something that cannot be accurately predicted.
Management has to be prudent & has to take all precautionary measure to ensure that this company survives this downturn in spot price what ever the time line of recovery in spot prices. Cost saving is good but for this company it is not good enough.
I donot think that the management gets it. At this time focus should be on profitable production only & not the growth in production at all cost. They are still pushing production growth & compromising the future of the company.