Citing the length of time that the uranium market has been uncertain, Cameco says it has “moved away from our production target of 36 million pounds by 2018.”
“Although we still have an extensive portfolio of assets from which we can increase our production, the market incentive must be there,” said Cameco CEO Tim Gitzel. “We’re confident that this change will ensure we have the flexibility to remain competitive, create value for shareholders, and benefit when certainty and growth return to the market over the long term.”
“2013 was a challenging year, but also a year in which Cameco was, again, able to demonstrate resilience and strength,” said Gitzel. “We were able to achieve record production and a number of record financial results, despite the continued uncertainty in the uranium market.”
Production volumes in 2013 increased by 8% to 23.6 million pounds of uranium compared to 21.9 million pounds in 2012. Last year’s guidance called for 23.2 million pounds of uranium production.
Total production from Cameco’s McArthur River/Key Lake facility was 20.1 million pounds last year, “which is the highest annual output from a uranium facility anywhere in the world,” the Saskatchewan based-miner claimed.
Fourth-quarter 2013 production increased 15% to 7.5 million pounds, compared to 6.5 million pounds in the fourth-quarter 2012 “mainly due to higher production at McArthur River/Key Lake, Rabbit Lake, Inkai, and Smith-Ranch Highland with the ramp up of the Northern Butte satellite operation,” said the company.
However, Cameco noted that uranium revenues dropped 12% in the 4Q13 “due to a 12% decrease in sales volumes.’
Meanwhile, Cameco projects it will produce from 23.8 million-24.3 million pounds of uranium this year and has commitments under long-term contract to purchase an additional 2 million pounds. “Based on the contract we have in place, we expect to deliver between 31 million and 33 million pounds of U3O8 in 2014.”
“Based on current spot prices, revenue should be up 5% higher than it was in 2013 as a result of an expected increase in the realized price,” Cameco advised.
The company plans to bring its Cigar Lake operation into production during the first quarter.
Cameco reported 2013 net earnings of $318 million or 81-cents per share, up 27% over the $253 million or 64-cents per share reported in 2012. In 2013, however, the company recorded a $70 million write-down on its Talvivaara asset “due to their weakened financial position and pending corporate restructuring.”
On February 7, 2011, Cameco signed two agreements with Talvivaara Mining Company Plc. to buy uranium produced at the Sotkamo nickel-zinc mine in Finland. Finnish nickel/zinc producer Talvivaara is currently undergoing corporate restructuring.
Cameco’s adjusted net earnings for 2013 were $445 million or $1.12 per share, up 3% from adjusted net earnings of $434 million or $1.10 share for 2012.
For the fourth-quarter 2013 Cameco reported net earnings of $64 million or 16-cents per share, up 55% from $41 million or 10-cents for the fourth-quarter of 2012. Adjusted net earnings for the fourth-quarter 2013 were $150 million or 38-cents per share, down 36% from adjusted net earnings of $233 million or 59-cents for the same period of 2012.
During the fourth-quarter of 2013 Cameco took a $70 million impairment charge related to the agreement with Talvivaara.