Cameco is reporting a quarterly loss of $5 million and an adjusted net loss of $29 million.
President and CEO Tim Gitzel says these results were as expected, adding Cameco has been very deliberate in shoring up their balance sheet. He explains at the end of the first quarter Cameco had negative net debt, with $1 billion in cash and $1 billion undrawn credit facility. Gitzel says Cameco has the financial capacity to self manage risk and maintain their strategic resolve.
Gitzel says due to unplanned disruptions during the COVID-19 pandemic, Cameco is not at the regular tier-one run rate of their business. However he says during the quarter they were able to successfully add 9 million pounds of Uranium to their long-term contract portfolio.
Cameco reports this past quarter was also impacted by additional care and maintenance costs of $33 million from the suspension of production at the Cigar Lake mine, due to the COVID-19 pandemic. While production was suspended Cameco continued to pay all employees and report these costs were partially offset by the receipt of $12 million from the Canadian Employment Wage Subsidy.
Gitzel says the company is taking the steps today and incurring the costs they expect they expect will allow them restart their tier one assets with more flexibility in the production rate, eliminate the care an maintenance costs while tier-one production is suspended and to benefit from the favorable life of mine economics they provide. He says Cameco is confident in its ability to transition through this period, and capture demand that will provide leverage to higher prizes. Gitzel concludes they have the right vision, strategy and values to deliver long-term sustainable value.