A general improvement in world uranium markets enabled Cameco (CCO-T) to report record earnings of $138 million last year — a 35% increase from earnings of $102 million reported in 1995.
Revenues doubled to $591 million from $395 million during the year, with uranium products and services accounting for 95% of earnings.
Cameco sold a record volume of uranium concentrates last year, up by 39% from 1995 and at prices some 14% higher. In conversion services, sales volumes increased by roughly 28% at relatively stable prices.
Uranium spot prices climbed from US$12.20 per lb. U3O8 in early 1996 to a high of US$16.50, before ending the year at US$14.70 per lb. This rapid increase in prices prompted many buyers to shift from the spot to the long-term market. As a result, Cameco’s volume of new, long-term contracts by utilities was increased by more than 50% last year. The company secured more than 30 million lb. U3O8 for delivery over the next decade.
Cameco has now increased its market share to about 15% of the Western World’s uranium consumption and about 20% of the West’s conversion services.
On the financial front, the company’s long-term debt increased to $200 million last year from $196 million in 1995. About two-thirds of this debt represents the company’s share of loans to the 33%-owned Kumtor gold project in Kyrgyzstan. The new mine poured its first gold late last year.
At full production, Kumtor is expected to turn out 500,000 oz. gold annually at a cash cost of US$200 per oz.
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