Canada-based uranium producer Cameco is set to suspend production at its Rabbit Lake operation in northern Saskatchewan, cutting 500 jobs.

The company is also reducing production at its US operations, and the move is expected to cut about 85 jobs.

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As part of its decision, Cameco will place the Rabbit Lake operation in care and maintenance state, with production restarting once market conditions improve.

Cameco will retain a workforce of around 150 people to maintain the facilities and sustain environmental monitoring and reclamation activities at Rabbit Lake.

Work to transition the operation to care and maintenance is set to begin with immediate effect and is expected to be complete by the end of August.

"Continued depressed market conditions do not support the operating and capital costs needed to sustain production at Rabbit Lake and the US operations."

The company plans to make workforce adjustments over the next four months.

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Cameco’s US operations will continue to employ around 170 people to operate existing facilities and restore depleted wellfields, but operations will be halted at new wellfield developments.

Workforce adjustments for these operations will be completed by the end of May.

Cameco president and CEO Tim Gitzel said: "Unfortunately, continued depressed market conditions do not support the operating and capital costs needed to sustain production at Rabbit Lake and the US operations.

"These measures will allow us to continue delivering value to Cameco’s many stakeholders and support the long-term health of our company. We will provide assistance to those affected by these decisions."

Final production at Rabbit Lake will be one million pounds and 1.1 million pounds at US operations in 2016 as a result of this decision.

US production cannot cease immediately and will decrease over time due to the nature of in-situ recovery mining and wellfield restoration requirements.

Cameco has also decided to reduce its production target for 2016 at the McArthur River/Key Lake operation to 18 million pounds from the existing 20 million.

The company will continue to increase production at Cigar Lake and plans to produce 16 million pounds in 2016.