Cameco sus­pends op­er­a­tions

“We can’t con­trol the mar­ket so our fo­cus is on po­si­tion­ing the com­pany to weather the con­tin­ued low ura­nium prices and have un­com­mit­ted, low-cost sup­ply to de­liver into a strength­en­ing mar­ket.”

The Australian Mining Review - - NEWS: INTERNATIONAL - CAMERON DRUM­MOND

URA­NIUM miner Cameco has sus­pended pro­duc­tion at its flag­ship McArthur River mine and Key Lake milling op­er­a­tions in Canada’s Saskatchewan prov­ince due to “un­sus­tain­ably low” ura­nium prices.

The op­er­a­tions will be sus­pended for 10 months, lead­ing to the tem­po­rary loss of 845 jobs, and the com­pany’s an­nual div­i­dend would be re­duced 32 cents down to 8 cents per share in 2018.

The Cana­dian miner said ura­nium prices had fallen 70 per cent since the Fukushima dis­as­ter in 2011.

“Cameco has been par­tially shel­tered from the full im­pact of weak prices by its port­fo­lio of long-term con­tracts, but those con­tracts are run­ning out and it is nec­es­sary to po­si­tion the com­pany to­day to gen­er­ate cash flow if prices do not im­prove,” the com­pany stated.

“To date, we have made good progress in re­duc­ing costs but un­for­tu­nately given the con­tin­ued mar­ket weak­ness, more needs to be done,” Cameco chief executive Tim Gitzel said.

“We can’t con­trol the mar­ket so our fo­cus is on po­si­tion­ing the com­pany to weather the con­tin­ued low ura­nium prices and have un­com­mit­ted, low-cost sup­ply to de­liver into a strength­en­ing mar­ket.”

The an­nounce­ment caused a pos­i­tive re­ac­tion from other min­ers in the be­lea­guered ura­nium sec­tor, as the mine clo­sure should re­duce 2018 sup­ply lev­els by about 15 mil­lion pounds and drive an in­crease in ura­nium spot prices.

Image: Cameco.

Un­der­ground at Cameco’s McArthur River ura­nium mine.

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