Cameco revenue slump tied to Rabbit Lake mine suspension, says company
The Canadian mining company posted net losses of $59 million in the first six months of 2016
Cameco's second quarter financial results, posted on Thursday, show the company was hit hard by the suspension of its mine in Rabbit Lake, Sask. in April.
The Canadian mining company posted net losses of $59 million in the first six months of 2016, compared to earnings of $79 million at the same time last year.
Taking into account offsets, such as higher gross profits from its fuel services segment, the company put its adjusted losses for the same period at $64 million, compared to earnings of $115 million in 2015.
Cameco's stock has fallen by close to 18 per cent since the end of April, when it was at $16.97. On Wednesday, the stock closed at just over $14.
Cameco said lower uranium prices and the suspension of the Rabbit Lake mine were among the reasons for the slump in earnings.
"Market conditions have become increasingly challenging over the past five years," said president Tim Gitzel.
"Primary supply has simply not responded to decreased demand, and coupled with an abundance of secondary material available today, the uranium market continues to be oversupplied."
About 500 people lost their jobs when operations came to a halt at the mine, which was Saskatchewan's longest-running uranium mine.
Production at Cameco Resources' U.S. operations was also scaled back in April.
Despite the losses, Gitzel said the company remained confident nuclear power would remain an important player in the long-term global energy market.
"Based on the reactor construction that is underway around the world today, we continue to expect uranium demand to increase in the long-term."