Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada’s Cameco (TSX:CCO) (NYSE:CCJ), the world’s largest publicly traded uranium miner, swung to a loss in the first three months of the year despite seeing growing support for nuclear energy.
The Saskatoon, Saskatchewan-based company logged a C$18.3 million net loss in the first quarter of 2019, compared with a profit of C$57.8 million a year ago. That is equivalent to a decrease of five cents per share, versus a profit of 14 cents per share in the same quarter last year.
“There is still a long way to go before we decide to restart McArthur River and Key Lake” — President and CEO, Tim Gitzel
“We see growing support for nuclear, and with more than 50 reactors under construction, demand is certain and predictable,” the company’s president and CEO, Tim Gitzel, said in the statement. “However, supply is uncertain and declining.”
Gitzel noted the current supply/demand imbalance was benefitting the company, as it has started off-market talks with some of its best and largest customers about what it takes to support the operation of its main assets — McArthur River and Key Lake — longer term.
Last year Cameco indefinitely shut its flagship McArthur River mine — the world’s biggest — and also the Key Lake mill, which has helped the market.
“While we are encouraged by the contracting activity, make no mistake, there is still a long way to go before we decide to restart [them],” Gitzel said.
Cameco highlighted its win in the Canada Revenue Agency (CRA) case, in which the country’s Tax Court ruled in favour of the miner for the 2003, 2005 and 2006 years. The company was awarded on Monday C$10.25 million corresponding to legal fees incurred, plus an amount for disbursements, which is yet to be determined.
