Uranium & Fuel

Cameco / Earnings Soar As Company Warns Of ‘Too Much Focus’ On Intermittent Renewables

By David Dalton
29 July 2022

Nuclear provides ‘security and independence’, says CEO Tim Gitzel
Earnings Soar As Company Warns Of ‘Too Much Focus’ On Intermittent Renewables
A tunnel at Cameco’s Cigar Lake uranium mine in Saskatchewan. Courtesy Cameco.
The president and chief executive officer of Canadian uranium company Cameco – which this week announced higher-than-expected core profit amid increases in uranium prices – has warned of “too much focus” on intermittent renewables and dependence on energy supplies from Russia.

Tim Gitzel said the move to intermittent, weather dependent, renewable energy, has left some jurisdictions struggling with power shortages and spiking energy prices, or dependence on Russia.

“We are benefiting from higher average realised prices in both our uranium sales and our fuel services sales as the market continues to transition and geopolitics continue to highlight concentration of supply concerns,” Mr Gitzel said.

“The good news for us is that many are turning to nuclear – which provides safe, reliable, affordable, carbon-free baseload electricity while also offering energy security and independence.”

The Saskatoon-based company recorded gross profit of CAD93m (€71m, $72m) for the first three months of the year, an increase from CAD12m for the same period last year.

Revenue for the three months ended June increased 55% year-on-year to CAD558m. Cameco said uranium revenues this quarter were up 75% compared to 2021 due to an increase of 41% in the Canadian dollar average realised price and a 25% increase in sales volume due to the timing of sales.

Overall, Cameco reported net earnings of CAD84m for the quarter, up from a CAD37m loss over the same quarter last year.

Delays At McArthur River And Cigar Lake

Cameco’s improved results come amid global instability and efforts to curb climate change that have driven gains in the company’s uranium mining and nuclear fuel processing operations.

Cameco also said it has delayed first production at its McArthur River mine and Key Lake mill in Saskatchewan because of “challenges” and “normal commissioning issues”.

At Key Lake mill, it has encountered “some challenges with respect to the availability of critical materials, equipment and skills for some of our critical automation, digitisation and other projects”.

In addition, after four years on care and maintenance, it has experienced some “normal commissioning issues as we work to safely and systematically integrate the existing and new assets with updated operating systems at the mill”.

“We have adjusted our schedule to accommodate these delays and anticipate first production will be deferred to later in the fourth quarter,” a statement said. “As a result, we are expecting up to two million pounds production (100% basis) this year.”

McArthur River is expected to produce 18 million pounds of uranium in 2022, with Cameco owning about 9.5 million of those pounds after increasing its ownership stake in the mine earlier this year.

In February the company announced plans to restart production at McArthur River and Key Lake. Production at the sites halted in 2018 due to a prolonged slump in the global uranium market.

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