Despite financial losses, Cameco pleased with reopening of Cigar Lake mine

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Cameco reopened its Cigar Lake mine in April. (CBC - image credit)
Cameco reopened its Cigar Lake mine in April. (CBC - image credit)

Even with a rocky start to the year, uranium mining company Cameco is happy with the recent reopening of its largest mine.

On Friday, the company reported a net loss of $5 million in the first quarter of the year. The company blamed the loss in part on additional costs resulting from the closure of the Cigar Lake mine for roughly four months, starting in December 2020.

"Our first quarter results were as expected," said Tim Gitzel, Cameco's president and CEO in a news release.

"With the continued execution of our strategy and the unplanned disruptions due to the COVID-19 pandemic, we are not at the regular tier-one run rate of our business."

The company closed the Cigar Lake mine after concerns about COVID-19, but reopened it in April.

At the time, the company said it had brought in extra safety measures, including mandatory medical-grade masks for all workers, increased distancing on flights, and increased cleaning and barriers in eating areas.

Cameco noted all employees were still paid during the shutdown, with the help of the Canadian Employment Wage Subsidy.

Due to the uncertainty surrounding COVID-19, the company said it would not be able to provide a financial outlook for 2021 until it better understood what capacity it would be able to operate the mine at.

So far, the company said it has added nine million pounds of U308 or yellowcake uranium to its portfolio.

As well, the Supreme Court of Canada earlier this year dismissed an appeal request in a tax dispute the company was having with the Canada Revenue Agency for 2003, 2005 and 2006.

The company said it remained confident that nuclear power would become a key element in driving down greenhouse gases.

"We are excited about the future of nuclear power generation, about the fundamentals of uranium supply and demand and about the prospects for our company," wrote Gitzel.

"Our vision to energize a clean-air world recognizes that we have an important role to play in enabling the vast reductions in greenhouse gas emissions required to accomplish the targets being set by countries and companies around the world."

Cameco said it ended the quarter with $1 billion in cash and the ability to draw on an additional $1 billion in credit.