Cameco said it posted an adjusted net loss of $78 million for the third quarter of 2020.
The uranium producer said this “quarter was also impacted by ongoing purchase activity and additional care and maintenance costs of $18 million resulting from the proactive decision to suspend production at the Cigar Lake mine in response to the COVID-19 pandemic.”
Cigar Lake and the Orano Mill suspended operations in March affecting hundreds of employees.
Cameco decided it was not going to layoff employees, rather reduce salaries and keep benefits.
Both the mine and the mill restarted production in September.
The quarter saw production of 200,000 pounds, with the expectation of 5.3 million pounds of production for this year.
Yet the continued production at Cigar Lake is dependent on whether the mine can remain open.
The province is seeing a spike in COVID-19 cases, and Cameco President and CEO Tim Gitzel said the company is taking precautions to help stop the spread of the virus.
“I was absolutely shocked at how many safety measures have been put into place. You can’t get on an airplane without your temperature being taken, without masks, there is spacing on the plane and you get checked when you arrive. The cafeteria looks like a call center there’s so much plexiglass put up in there. And so those are the measures we’ve taken we will do everything we need to protect our employees. We certainly hope we don’t have an outbreak at our sites or at the McLean site where the Cigar Lake ore is milled. They’re doing a great job over there as well. But we’ll watch it every day,” Gitzel said Wednesday in an investors call.
Gitzel explained a new trade policy, an amendment to the Russian Suspension Agreement in the US, which he believes it will open new opportunities for global uranium supply.
“We believe these fundamentals will lead to security of supply concerns and will allow us to layer in the long-term contracts necessary to support the restart of our McArthur River/Key Lake operations and solidify our role as a low-cost, safe, reliable, commercial supplier of the uranium fuel needed for carbon-free nuclear electricity generation,” Gitzel explained.
As of September 30, 2020, Cameco had $793 million in cash and short-term investments and $1.0 billion in long-term debt. In addition, it has a $1 billion undrawn credit facility. It does not anticipate drawing on our credit facility this year.