Cameco has posted a $5-million loss for the first quarter of 2021.
President and CEO Tim Gitzel said in a media release that the results “were as expected,” due in part to unplanned disruptions brought about by the COVID-19 pandemic — including the temporary shutdown of its Cigar Lake mine in northern Saskatchewan.
“We are not at the regular tier-one run rate of our business,” Gitzel said.
Yet on Cameco’s first-quarter conference call, he emphasized positives for the company.
These include increasing global demand for nuclear power as more countries aim to produce electricity without greenhouse gas emissions and the fact that demand for uranium is rising at a time when supply is becoming less certain because of long-term mines coming to the end of their reserves.
“Statistically, the current uranium price has a much greater likelihood of going up than down,” Gitzel said on the call.
“We believe our strategic decisions and strategic patience provides us with resiliency in the face of unprecedented challenges that will result in the rewards that will come from having low-cost supply to deliver into a strengthening market.”
He also pointed to the company’s strong balance sheet, which includes $1 billion in cash and short-term investments, $1 billion in long-term debt and a $1 billion undrawn credit facility.
“We have the financial capacity to self-manage risks and maintain our strategic results,” he said.
Cameco reported $53 million in year-end losses in its 2020 year-end financial statements.
CIGAR LAKE MINE CLOSURE HURT BOTTOM LINE
Since the pandemic began, production at Cameco’s Cigar Lake mine has been suspended twice.
It shuttered in March 2020, shortly after the first COVID-19 case was reported in the province, and the on-site workforce was cut to 35 from around 300.
The mine restarted in the fall, but closed again in December. It reopened last month with what Gitzel described at the time as “enhanced safety protocols,” including distancing on flights to the remote site, medical-grade masks and on-site testing.
The first-quarter financial statement says its bottom line was affected by $33 million in additional care and maintenance costs from suspending the Cigar Lake mine’s production from December to April. All employees were paid during the suspension, a cost that was offset by $12 million from the Canadian Employment Wage Subsidy.
Cameco’s two other mines in northern Saskatchewan are in safe care and maintenance mode. Rabbit Lake mine closed in early 2016 while the McArthur River mine and Key Lake mill were put into care and maintenance mode in 2018.
Cameco posts $53M in year-end losses, eyes low-carbon recovery
Cameco restarting Cigar Lake uranium mine this month
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