Cameco increases 2023 revenue outlook

01 November 2023

Substantial uranium spot price improvements have contributed to higher average realised prices, CEO Tim Gitzel said in the company's third-quarter results announcement which also includes updates on the progress of the first shipment of its share of 2023 production from Inkai in Kazakhstan and news of a new senior appointment to head its UK subsidiary.

In-situ leach operations at Inkai in Kazakshtan (Image: Cameco)

"Our third quarter financial performance continues to demonstrate the benefits of our strategic decisions and the significant, positive momentum we are experiencing in the nuclear energy industry," Gitzel said.

"We have again increased our consolidated revenue outlook for 2023, which is driven by higher average realised prices as a result of substantial uranium spot price improvements. Gross profits have also improved as our uranium average unit cost of sales decreased from last year as we continue the transition back to our tier-one production cost structure."

A global increase in support for nuclear as a source of clean, secure and low-cost energy, coupled with the geopolitical uncertainty from Russia's invasion of Ukraine and the coup in Niger, has intensified supply concerns, he said, while in the short term, supply chain issues and inflation risks are causing production challenges for current operators. "Compared to previous price cycles, the market does not have the inventory or secondary supplies to absorb market shocks," he added.

The company's production of 3.0 million pounds U3O8 (1154 tU) was 50% higher than the same quarter last year. Production for the nine months to 30 September, at 11.9 million pounds U3O8, was 80% higher year-on-year.

"With improving market fundamentals," the company said, it has now increased its consolidated revenue outlook for 2023 to between CAD2.43 billion and CAD2.58 billion (previously CAD2.38 billion and CAD2.53 billion).

Uranium in transit

Cameco also provided an update on shipments of uranium from its Inkai joint venture in Kazakhstan. The first shipment of 2023 - containing around two thirds of the Canadian company's share of Inkai's 2023 production - is expected to arrive before the end of 2023. A second shipment with the remaining volume of Cameco's 2023 production is expected to depart before the end of the year and arrive in early 2024.
The uranium is being shipped via the Trans-Caspian International Transport Route, which was developed by Cameco's joint venture partner Kazatomprom in 2018 and does not rely on Russian railway lines or ports. The company said it has inventory, long-term purchase agreements and loan arrangements in place that it can draw on to mitigate the risk of delays to transportation.

UK appointment

The company has also announced the appointment of Dominic Kieran as Global Managing Director of its wholly owned subsidiary Cameco UK Ltd. Kieran, a former CEO of Babcock International subsidiary Babcock Nuclear, said: "I am looking forward to working with an excellent team to advance Cameco’s vision of energising a clean-air world. The transition to a clean and secure energy world is our imperative and I look forward to helping this transition with Cameco."

According to Companies House, an executive agency of the British government responsible for registering company information, Cameco UK Ltd was incorporated in April.

Researched and written by World Nuclear News