Cameco, the biggest publicly traded uranium company in the world, recently announced its plans to resume operations at its McArthur River mine. The mine, which is located in northern Saskatchewan, halted production in 2018. The mine was placed in care and maintenance mode soon after.
Cameco CEO and president Tim Gitzel stated last week that production at the Key Lake mill and McArthur River mine was expected to be 15 million pounds annually from 2024. In his statement, Gitzel explained that Cameco would take some time to transition the mine from care and maintenance mode to its planned production capacity as the company concluded digitization and automation, as well as other projects.
The company’s other operation, Cigar Lake, will see its volume ramp up to at least 13 million pounds annually in 2024. Gitzel stated that this would leave the company operating at 40% below its productive capacity in 2024, which is an improvement from last year, when it was operating 75% below productive capacity.
He also explained that until the company makes more progress in securing long-term contracts for its in-ground inventory and more improvements were observed in the global uranium market, this would be its production plan. Cameco’s partner in the McArthur River mine and Key Lake mill, Orano Canada, supports this plan.
Orano Canada CEO Nicola Maes explained that restarting operations at the mine had been met with enthusiasm, noting that the company was confident in Cameco’s ability to effectively bring these assets into production within the stipulated timeframe. Maes added that the restart of the mine also gave Orano an opportunity to decrease production at the Cigar Lake operation, which would delay the need for other projects in the north region of Saskatchewan and extend the life of the Cigar Lake asset.
In his statement, Gitzel also announced that Cameco was increasing its yearly dividend from 8 cents per share to 12 cents per share. While reporting the company’s fourth-quarter financial results, he noted that Cameco was focused on significantly improving it’s future financial performance.
Gitzel explained that the company’s strong balance sheet positioned it well to manage risk, including any global economic volatility or macro-economic uncertainty that arose. The increased dividends came as the company reported $11 million in profit for the last quarter of 2021. The uranium company expects capital expenditures for 2022 to be between $150–$175 million while its revenue estimates for the year are between $1.5 and $1.6 billion.
Now that the largest extraction company in the world is resuming operations at one of its mothballed uranium mines, it is likely that other operators such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) may see increased demand, which will result in greater interest in their stocks over the coming years.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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