Canada’s Cameco posts $62 million loss hurt by sinking uranium prices

The Saskatoon, Saskatchewan-based miner took a $124-million hit after shutting down the milling facility at its Rabbit Lake mine (pictured) in April last year (Image courtesy of Cameco)

Canada’s Cameco (TSX:CCO; NYSE:CCJ), the country’s No. 1 producer of the radioactive metal, has logged a net loss of $62 million for 2016 and $362 million in impairment charges as a continuing slump in uranium prices keep hurting the company’s bottom line.

Uranium prices have fallen more than 50% since the Fukushima disaster in 2011.

The Saskatoon, Saskatchewan-based miner took a $124-million hit after deciding to shut down its Rabbit Lake milling facility in April last year, and wrote off the full $238-million value of its Kintyre development project in Australia this past quarter.

“The past year proved to be another difficult period for the uranium market,” Cameco president and CEO Tim Gitzel said in the statement released after market close Thursday. “However, despite the uranium spot price hitting a 12-year low, the performance of our core business … was solid.”

Uranium prices have fallen more than 50% since the Fukushima disaster in 2011 and have since remained weak, mainly due to oversupply and excess inventory in the industry.

On top of the slump in prices for the commodity it mines, Cameco was hit last week by a contract cancellation. Japanese utility Tokyo Electric Power Co. (Tepco), the operator of the Fukushima nuclear plant, decided to cancel a contract worth about $1.3 billion now through to 2028 because government regulations were preventing it from operating its nuclear plants.

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