Cameco Corp (CCO)

[Fishin' Canuck]

Cameco dealing with soft uranium market
Submitted on November 2, 2012 - 6:57am


By Andrew de Souza
paNOW Staff
Saskatchewan-based uranium mining giant Cameco is preparing for a tightening global uranium market by reprioritizing its capital projects.

On Thursday, company executives held their third-quarter conference call with investors and the media to talk about the year so far.

In Q3, the company managed to turn around $82 million in net earnings. That was higher than the $39 million earned for last year, but over all the company recorded lower revenues of about $408 million, compared to $527 million in 2011.

President and CEO Tim Gitzel said global markets and a slow down of nuclear power plant projects meant the company was reevaluating its forecasts and switching up its capital expenditures.

Gitzel said that the company would refocus efforts on developing brownfield holdings, which are areas near existing mines over greenfield, or new location development.

“Our uranium sector was the primary driver behind these results because of lower uranium sales volumes and realized prices,” he said.

“This is not a reflection on the strength of our underlying business but rather a demonstration of the variability that’s common for us from quarter to quarter.”

Cameco has been operating under a program called Double U, which anticipates a doubling of uranium output from the company. Gitzel said that was still the case but that it wasn’t all the company was focused on.

“We remain very optimistic about the future of the nuclear industry and the future demand for the industry,” he said. “That being said we can’t ignore the market signals we’re seeing and must adjust accordingly.”

Gitzel said the company would still keep projects that were deprioritized on the radar and work towards them when uranium prices once again made it the right choice economically.

Highway to help link assets

Gitzel also talked about Hwy. 914 which the Wall government recently announce would be investing half the cost to complete.

Gitzel said it would link up all the companies assets and clear up logistical problems.

“We’ve been with province and several industry partners for some time now and we’re happy to see it coming to fruition now,” he said. “This connector road is critical to expanding access to infrastructure and enhancing transportation efficiency in the north.”

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