Cameco Corporation says it posted a profit for the first quarter of 2018.
In financials released Friday, the uranium producer reported net earnings of $55 million to the end of March 31. This is compared to an $18 million loss a year ago.
Cameco says lower costs, and higher commodity prices help drive revenues to $439 million up from $393 million.
“In the first quarter we generated significant cash flow, which is due to our portfolio optimization activities, the benefits of our cost saving measures, and by pulling back on our production lever and drawing down inventory. While our average unit cost of sales was higher than a year ago, this was expected due to the care and maintenance costs incurred while production is suspended at the McArthur River and Key Lake operation,” said Tim Gitzel, President and CEO in a press release.
The McArthur River mine and Key Lake mill have been closed for approximately three months, as Cameco downsized its workforce by roughly 850 employees, citing low uranium prices.
Given Cameco’s 2018 plans for deceased production, market buying uranium and offloading its inventory to meet contract obligations, the restart could be longer than anticipated. “We have some time here to decide, I think that sometime probably before the fall, we’ll have to take a decision as to what we are doing,” Gitzel said. “We’re watching the market to see what happens. Obviously not much of a response I would say.”
Gitzel says Cameco can purchase uranium for $20 less than it costs to produce it.