Year-end results from
Cameco, which closed out 2001 with earnings of $56 million on revenues of $701 million, also saw earnings decline, year over year, for the three months ended Dec. 31. The fourth-quarter profit was $22 million, down from $28 million in the comparable period of 2001, while revenue fell to $322 million from $271 million.
The lower earnings are largely attributable to the pit wall failure at the Kumtor gold mine in Kyrgyzstan, where Cameco owns a one-third interest. Last July, a pit wall collapsed, killing one worker and forcing miners to switch to a lower-grade area of the pit. Kumtor produced 528,600 oz. gold in 2002, about 30% below planned levels.
The company estimated the effect on 2002 earnings at $27 million. Not only was production lower, but Kumtor’s cash production cost rose to US$216 per oz., compared with US$142 per oz. in 2001.
Cameco also announced it had reached an agreement with the Kyrgyzstani government, which owns the majority interest in Kumtor. Under the agreement, Cameco will eventually assume full ownership of the mine while the government’s interest converts to royalties. Cameco might also divide off its gold assets into a new public company.
The company’s mainstay uranium business produced just over 7,200 tonnes of U3O8 in 2002, against 8,500 tonnes in 2001. But sales volumes increased by 11% and average realized prices increased fractionally, giving the company revenue of $524 million in 2002, versus $471 million in 2001.
Meanwhile, Cameco increased revenue from its uranium-conversion business and booked $16 million in earnings from its minority share in Ontario electricity generator Bruce Power.
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