Post by Catdaddy on Oct 31, 2007 11:04:18 GMT -5
Cameco Says Sales to Fall; Cigar Lake Faces New Delay (Update3)
www.bloomberg.com:80/apps/news?pid=20601082&sid=ajoRgjgvWFVM&refer=canada
By Yuriy Humber and Christopher Donville
Oct. 31 (Bloomberg) -- Cameco Corp., the world's largest uranium supplier, said fourth-quarter revenue will be squeezed by lower prices and production at its Cigar Lake mine will be delayed until at least 2011.
Sales will decline about 10 percent from the third quarter, Saskatoon, Saskatchewan-based Cameco said today in a statement. Uranium spot prices have declined 39 percent since June as some nuclear utilities suspended purchases.
Cigar Lake, which was originally scheduled to begin operations this year and supply about a 10th of global consumption, or 18 million pounds of uranium, flooded a year ago after a rock fall. Draining and repairs to the mine, the world's biggest untapped source of uranium, are taking longer than forecast because of the need to dig a second shaft, Cameco said.
The delay at Cigar Lake is ``a slight negative for Cameco and a slight positive for the price of uranium,'' Kenneth van der Vlugt, a senior vice president with Raymond James Financial Inc., which brokers uranium, said by phone from Dusseldorf, Germany.
Cameco fell C$1.08, or 2.2 percent, to C$47.10 at 11:20 a.m. in Toronto Stock Exchange trading. Before today, the shares rose 22 percent in the past year.
Cameco's third-quarter profit rose to C$91 million ($95.6 million), or 25 cents a share, from C$73 million, or 20 cents, a year earlier, the company said in the statement. Sales rose 89 percent to C$681 million.
Earnings Estimates
Excluding one-time items, Cameco said it earned 74 cents a share. On that basis, 10 analysts surveyed by Bloomberg expected 48 cents, on average.
Cameco's latest announcement on Cigar Lake came a day after Uranium One Inc., owner of South Africa's biggest uranium deposit, cut its 2008 production target by 38 percent because of a shortage of sulfuric acid needed to recover the metal from mines in Kazakhstan.
In June, delays to production at Cigar Lake helped push uranium prices as high as $138 a pound, increasing costs for utilities that run nuclear reactors. In July, Cameco said it expected to start production ``from late 2010 to 2011.''
The company said it sold uranium for an average $52.76 a pound in the quarter, compared with $20.12 a year earlier, as hedge funds and other speculators competed with nuclear power companies for supplies of the radioactive metal.
Cameco's average selling price was higher than the $39.66 expected by Greg Barnes, an analyst at TD Newcrest Securities in Toronto.
Higher Prices
``The company indicated that the high realized uranium price was the result of higher spot prices and favorable pricing under its fixed contracts,'' Barnes said today in a note to clients.
The average price of uranium for immediate delivery in the period was $96.33, almost double what it was a year earlier, Cameco said in the statement.
Cigar Lake is half-owned by Cameco, with 37 percent held by a unit of Paris-based Areva SA, the world's biggest reactor maker, 8 percent by Idemitsu Canada Resources Ltd. and 5 percent by Tepco Resources Inc. To contact the reporters on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net ; Christopher Donville in Vancouver at cjdonville@bloomberg.net .
www.bloomberg.com:80/apps/news?pid=20601082&sid=ajoRgjgvWFVM&refer=canada
By Yuriy Humber and Christopher Donville
Oct. 31 (Bloomberg) -- Cameco Corp., the world's largest uranium supplier, said fourth-quarter revenue will be squeezed by lower prices and production at its Cigar Lake mine will be delayed until at least 2011.
Sales will decline about 10 percent from the third quarter, Saskatoon, Saskatchewan-based Cameco said today in a statement. Uranium spot prices have declined 39 percent since June as some nuclear utilities suspended purchases.
Cigar Lake, which was originally scheduled to begin operations this year and supply about a 10th of global consumption, or 18 million pounds of uranium, flooded a year ago after a rock fall. Draining and repairs to the mine, the world's biggest untapped source of uranium, are taking longer than forecast because of the need to dig a second shaft, Cameco said.
The delay at Cigar Lake is ``a slight negative for Cameco and a slight positive for the price of uranium,'' Kenneth van der Vlugt, a senior vice president with Raymond James Financial Inc., which brokers uranium, said by phone from Dusseldorf, Germany.
Cameco fell C$1.08, or 2.2 percent, to C$47.10 at 11:20 a.m. in Toronto Stock Exchange trading. Before today, the shares rose 22 percent in the past year.
Cameco's third-quarter profit rose to C$91 million ($95.6 million), or 25 cents a share, from C$73 million, or 20 cents, a year earlier, the company said in the statement. Sales rose 89 percent to C$681 million.
Earnings Estimates
Excluding one-time items, Cameco said it earned 74 cents a share. On that basis, 10 analysts surveyed by Bloomberg expected 48 cents, on average.
Cameco's latest announcement on Cigar Lake came a day after Uranium One Inc., owner of South Africa's biggest uranium deposit, cut its 2008 production target by 38 percent because of a shortage of sulfuric acid needed to recover the metal from mines in Kazakhstan.
In June, delays to production at Cigar Lake helped push uranium prices as high as $138 a pound, increasing costs for utilities that run nuclear reactors. In July, Cameco said it expected to start production ``from late 2010 to 2011.''
The company said it sold uranium for an average $52.76 a pound in the quarter, compared with $20.12 a year earlier, as hedge funds and other speculators competed with nuclear power companies for supplies of the radioactive metal.
Cameco's average selling price was higher than the $39.66 expected by Greg Barnes, an analyst at TD Newcrest Securities in Toronto.
Higher Prices
``The company indicated that the high realized uranium price was the result of higher spot prices and favorable pricing under its fixed contracts,'' Barnes said today in a note to clients.
The average price of uranium for immediate delivery in the period was $96.33, almost double what it was a year earlier, Cameco said in the statement.
Cigar Lake is half-owned by Cameco, with 37 percent held by a unit of Paris-based Areva SA, the world's biggest reactor maker, 8 percent by Idemitsu Canada Resources Ltd. and 5 percent by Tepco Resources Inc. To contact the reporters on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net ; Christopher Donville in Vancouver at cjdonville@bloomberg.net .
