Cameco loses roughly $61 million in Q3

·2 min read

Uranium miner Cameco lost about $61 million in its third quarter, the company reported in a financial statement on Wednesday.

In a prepared statement, Cameco partly attributed the losses to changes in its contract deliveries and the closure of its Cigar Lake facility over COVID-19 precautions.

“We believe that the actions we have taken to slow the spread of the COVID-19 virus are prudent and reflect our values," CEO Tim Gitzel said in a statement.

"However, our decisions do come with near-term costs."

The losses come after Cameco's September reopening of its Cigar Lake facility, about 600 kilometres north of Saskatoon. At the time, some residents in the region were raising concerns over a COVID-19 case at Orano Canada Inc.'s McClean Lake mill, which processes uranium for Cameco.

In a September statement, Cameco said there was a very low chance the case would affect production.

On Wednesday Cameco noted continued operation at Cigar Lake would depend on "safe and stable" protocols, McClean Lake's continued operation, and the health of the region and workforce.

Gitzel also struck a positive note, saying the company's "conservative financial management" would help it face economic uncertainties. The statement pointed to $793 million in cash and short-term investments and $1 billion in long-term debt.

The company also announced the annual dividend of a common share is $0.08.

In the long-term, Gitzel noted demand for nuclear will continue to grow as focus increases on meeting climate change goals.

University of Saskatchewan economics Professor Joel Bruneau said the long view remains bullish for Cameco.

"There's an underlying demand for electricity that nuclear can (benefit from)," he said. "Second is it's non-carbon. To the extant that people are going to be aggressive about non-carbon forms of electricity, uranium is going to be a viable alternative."

He said improvements on safety and waste disposal concerns could also reduce resistance to nuclear energy. However, meeting long-term contracts could require the company to dip into the inventory it holds in case of mine shutdowns, he said.

There's a possibility that would lead Cameco to rebuild its inventory in the event of a future shutdown, Bruneau said, noting here could be more activity, but that doesn't necessarily mean more profits.

In the short term, economic uncertainties from COVID-19 are still in play, which may result in future closures "either because (the company is) just being prudent, or the provincial government basically forces them to shut down," he said.

Nick Pearce, Local Journalism Initiative Reporter, The StarPhoenix