Cameco Corp. is still profiting from long-term contracts despite the low level of uranium prices. But with 66 nuclear reactors under construction around the world, the long-term outlook for this major uranium miner is positive.

CAMECO CORP. (Toronto symbol CCO; www.cameco.com) is the world’s biggest uranium producer. It has large, high-grade reserves spread across several mining sites; it also has low-cost operations and significant market share.

Uranium prices are at their lowest levels in over a decade. However, the company’s long-term contracts have let it report higher sales and earnings.

In the three months ended September 30, 2016, Cameco’s sales rose 3.2%, to $670.0 million, from $649.0 million. Earnings per share jumped 25.0%, to $0.25 from $0.20, mostly due to lower costs.

Mining Stocks: Full capacity on Cigar Lake mine due in 2017

In 2017, Cameco expects to ramp up to full capacity of 18 million pounds per year on its 50%-owned Cigar Lake mine in northern Saskatchewan. The mine, which began production in 2015, is the world’s highest grade uranium mine.

Uranium’s long-term outlook is positive, with 66 nuclear reactors under construction worldwide. However, low oil and natural gas prices make that energy less appealing in the near term. That will likely slow plans for new reactors. Meantime, the global suppy of uranium remains considerably higher than demand.

Recommendation in Stock Pickers Digest: HOLD 

For our recent report on a stock that has increased its gold and silver production, read Gold output boosts Hecla cash flow.

For our view on avoiding common pitfalls when you wish to invest in gold, read Two ways to kill your gold returns and cut your gold investing profits.