Cameco’s profit up 324%, Cigar Lake mine to begin production in Q1 2014

Shares of Cameco (TSX: CCO), (NYSE: CCJ) were up close to 6% in Canada and the US as the uranium miner’s third quarter earnings came in far ahead of expectations, thanks to strong uranium sales volumes and prices, and decreasing production costs.

The Saskatoon, Saskatchewan-based company earned $211 million or 53 cents per share in the three months ended Sept. 30, up from $79 million or 20 cents per share a year earlier, Cameco said Wednesday.

Uranium production in the quarter totalled 5.8 million pounds, up from 5.3 million pounds a year ago, while sales amounted to 8.5 million pounds, up from 5.2 million in the same quarter last year.

Cameco’s profit up 324%, Cigar Lake mine to begin production in Q1 2014Cameco's average realized price increased to $52.59 per pound, up from $45.77 a year ago, while its average cost slipped to $26.19 per pound compared with $28.85 a year ago.

Despite uranium prices being 30% lower in the quarter, at $37.45 a pound, the giant producer of the yellow commodity said was able to lock in a higher price under previous orders with its customers.

The company also reiterated that its Cigar Lake project in Saskatchewan, a joint venture with France’s Areva SA and two other partners, should definitively begin production in the first quarter of 2014, with mill starting to process ore from the mine by the end of the second quarter.

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