CAMECO CORP. (Toronto symbol CCO; www.cameco.com) is the world’s largest uranium producer. It supplies 14% of global mine production and has large, high-grade reserves, low-cost operations, significant market share and many mines.
Cameco also owns 31.6% of Ontario’s Bruce Power partnership, which operates four of the eight reactors at the Bruce plant, North America’s largest nuclear complex. As well, it owns NUKEM, a trader and broker of nuclear fuel products and services.
In the three months ended September 30, 2013, Cameco’s revenue jumped 101.7%, to $597 million from $296 million a year earlier. It sold more uranium in the latest quarter, and its selling prices also rose. Earnings per share climbed to $0.53 from $0.12.
Cameco aims to nearly double its uranium output, to 40 million pounds, by 2018. Its Cigar Lake mine, which starts up next year, will contribute much of that increase.
Mining stocks: End of uranium supply from converted Russian nuclear weapons a plus for Cameco
There are currently 72 nuclear reactors under construction globally, mostly in China and India, with plans to build another 162.
Another plus is that the supply of uranium converted from Russian nuclear weapons ended with the recent conclusion of the 20-year Megatons to Megawatts program.
Cameco’s exploration efforts are now focused in Canada, Australia, Kazakhstan and the U.S. However, it may now consider Greenland for potential uranium exploration projects.
Greenland’s parliament has agreed to remove a 25-year-old ban on uranium mining. Greenland wants to promote the mining of rare earths. The country has the potential for some very large rare-earth mines. But rare earth deposits often hold uranium as well, so the ban on uranium mining effectively blocked exploration for rare earths.
In the latest edition of Stock Pickers Digest, we look at both the near-term and long-term outlook for uranium prices. We also consider the potential for further development of nuclear reactors with hundreds of millions around the globe still living without electricity. We conclude with our clear buy-hold-sell advice on the stock.
If you’re a member of Pat’s Inner Circle and you’d like to ask a question about today’s article, please go to the question page reserved for you (be sure you’re logged in first). Click here to ask your question.
COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members
Do you believe that demand for nuclear power will grow in the future, or that the fear of nuclear accidents will cause governments to turn away from it? Do you think companies that contribute to nuclear power are a good long-term investment?
Comments
Philip
Yes, Uranium is still the nuclear fuel of choice. but another very different type of reactor is being developed. Dubbed the LFTR, It uses Thorium, element 90, dissolved in molten lithium fluoride, runs at atmospheric pressure, and high temperature. It will be safe, fuel-efficient…
Cheaper to produce and run than a coal fired utility, the largest cause of climate change. so rapidly replace them, and all the Uranium type reactors. Thus rendering uranium valueless.
So anyone holding Cameco should be ready to dump their shares as soon as they hear that the LFTR is being produced. likely first in China. To find out more, use Google, with LFTR as the keyword.
The fundamentals for the nuclear energy argument seem like a no brainer. However with beholden political animals like Obama who can’t admit that we also need pipelines across democratic neighbors borders, the future is dark for expansion of the nuclear industry. There is no compelling political movement that indicates uranium investing is a safe bet. We might be several decades away from profitable mining. As a speculator there might be blips along the way….but ‘investing’….another thing altogether.
When looking at the pollution existing in China I don’t think there is a viable alternative for the production of needed electricity. The production can fluctuate with demand as opposed to windmills and solar power.
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Yes, Uranium is still the nuclear fuel of choice. but another very different type of reactor is being developed. Dubbed the LFTR, It uses Thorium, element 90, dissolved in molten lithium fluoride, runs at atmospheric pressure, and high temperature. It will be safe, fuel-efficient…
Cheaper to produce and run than a coal fired utility, the largest cause of climate change. so rapidly replace them, and all the Uranium type reactors. Thus rendering uranium valueless.
So anyone holding Cameco should be ready to dump their shares as soon as they hear that the LFTR is being produced. likely first in China. To find out more, use Google, with LFTR as the keyword.
The fundamentals for the nuclear energy argument seem like a no brainer. However with beholden political animals like Obama who can’t admit that we also need pipelines across democratic neighbors borders, the future is dark for expansion of the nuclear industry. There is no compelling political movement that indicates uranium investing is a safe bet. We might be several decades away from profitable mining. As a speculator there might be blips along the way….but ‘investing’….another thing altogether.
When looking at the pollution existing in China I don’t think there is a viable alternative for the production of needed electricity. The production can fluctuate with demand as opposed to windmills and solar power.