After the dark days of the early 1990s, Saskatoon-based miner Cameco (CCO-T) is basking in the glow of a greatly improved market for its principal product.
The company reported net earnings of $106 million (or $2 per share) for the first nine months of 1996. The comparable figure in 1995 was $71 million ($1.36 per share), rendering this year’s performance 49% better than last year’s.
Revenues for the first three quarters were up by more than 70% from the previous year, to $457 million from $268 million. Sales of uranium concentrate were up by 60%, at the same time as the average selling price rose 17%.
Crediting “a strengthening uranium market” for a large part of the increase, Bernard Michel, Cameco’s chairman, noted that even though the spot price has weakened over the last month, “long-term uranium market fundamentals remain favorable, with excess inventories being drawn down as uranium demand continues to outpace production.”
The uranium price, which rose from just over $9 per lb. U3O8 in late 1994 to a high of more than $16 this summer, has eased in recent weeks because demand in the spot market has been unusually low. Cameco received an average US$11.79 for U3O8 on the spot market in the third quarter of 1996, down from US$16.34 in the previous quarter.
Investment at the Kumtor gold project in Kyrghyzstan has increased Cameco’s long-term debt to $199 million from $166 million since Sept. 30 of last year.
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