Cameco Corp. [CCO-TSX; CCJ-NYSE], the Canadian uranium giant, released its third quarter results Wednesday November 4 and said it is well positioned to deal with uncertainty after posting an adjusted net loss of $78 million or 20 cents a share.
However, its forecasts remain withdrawn and results in Q3 were weaker than expected, which likely explains why the shares fell 6% or 78 cents to $12.01 on volume of 739,578. The shares are trading in a 52-week range of $16.71 and $7.69.
The company said it safely restarted its Cigar Lake mine in northern Saskatchewan where production was temporarily suspended as a safety precaution that stemmed from the threat posed by the COVID-19 pandemic.
“Our share of production in the quarter was 200,000 pounds of uranium. We continue to target our share of production for 2020 to be up to 5.3 million pounds in total,” Cameco said in a press release.
Cigar Lake is the world’s largest operating uranium mine and represents 100% of Cameco’s current output of 9.0 million pounds. Cigar Lake also accounts for 13% of the world’s mine supply and 10% of total supply, including secondary material.
The suspension at Cigar Lake in March, 2020, was viewed by analysts Bas a potential turning point for the uranium sector, which has been locked in a bear market since a 2011 earthquake and tsunami in Japan disabled three reactors at the Fukushima nuclear plant, causing their cores to melt down, forcing Japan to shut down 50 nuclear reactors that remained intact.
Spot uranium is trading at US$29.50/lb, down from US$72.63 just prior to the Fukushima disaster, which prompted major producers like Cameco and Kazakh state-owned KazAtomProm, to shut down production and announce indefinite layoffs.
In November 2017 Cameco suspended production at the McArthur River and Key Lake in Saskatchewan. It attributed the move to the continued state of oversupply in the uranium market and the expectation of little change in the immediate future. McArthur River remains on care and maintenance.
Cigar Lake ore is processed at Orano Canada’s McClean Lake mill, also in northern Saskatchewan. The decision to suspend production at Cigar Lake mine was made in conjunction with Orano to suspend production at their McClean Lake mill.