Cameco makes profit as company finds cost savings

A rebounding uranium market is helping uranium mining company Cameco.

In its first quarter, the Saskatoon-based miner posted net earnings of $55 million. Meanwhile, the company said it will keep looking for savings.

"We continue to focus on what we can control," said president and CEO Tim Gitzel in a news release.

In November, Cameco announced a 10-month layoff at its Key Lake mill and McArthur River mine. The temporary layoffs affected 845 positions, representing 20 per cent of the company's workforce.

In 2016, the company also suspended production at its Rabbit Lake mine.

Cameco has been in difficult financial straits for some time. In 2017, the company lost $205 million; in 2016, it posted losses of $62 million.

Demand for uranium continues to be soft. Reactors in Japan are still in the process of restarting after the 2011 Fukushima Daiichi nuclear disaster while Belgium recently announced its intention to phase out nuclear power.

"There are a lot of moving pieces, and utilities continue to evaluate the implications of what is perhaps best described as unprecedented noise in the political economy," wrote Gitzel.

"Things like the possible trade action under section 232 of the Trade Expansion Act, the suspension of U.S. Department of Energy's excess uranium sales for the remainder of 2018, review of the Russian Suspension Agreement, and a potential Russian ban on all trade with US nuclear power companies."

The company's earnings were higher in its first quarter compared to 2017, thanks to a restructuring of its JV Inkai mine in Kazakhstan, as well as higher prices.

The company is also waiting for the results of two major legal actions.

A dispute with the Canadian Revenue Agency over a potential $2.2-billion tax bill wrapped up in court in September. A ruling is expected within the next year.

As well, Cameco is seeking $1.3 billion from the Japanese power company TEPCO after the Japanese company told Cameco it would be withdrawing from a uranium-sale agreement.

That case is expected to be heard by arbitrators in 2019.