Short Term Debt Saddling Cameco Corp. - Blackmont Capital Analyst

Debt has become a nasty four-letter word in recent months and those companies who have it are getting the cold shoulder from investors.

On Wednesday, Blackmont Capital analyst George Topping sounded a dull alarm about the short term debt saddling Cameco Corp.'s (CCJ) balance sheet.

The uranium miner financed the C$347-million Kintyre uranium deposit acquisition made in August mainly with short term debt due in mid 2009. As a result, Mr. Topping told clients in a note that Cameco now has C$550-million in short-term debt and C$750-million of long term debt. Meanwhile, the bulk of its cash, the analyst added, is held by Cameco subsidiary, Centerra Gold Inc. (CAGDF.PK).

He wrote:

The agreement of lenders is required to roll the debt over. We are concerned that this debt may constrain capital spending if credit markets remain closed, as Cameco is not strongly free cash flow positive.

The additional risk Mr. Topping equates Cameco's debt load with didn't, however, result in changes to his recommendations.  He maintained his "buy" rating and left his C$25.70 price target unchanged.  Cameco stock, down by more than half since the end of June,  was up 4% to C$18.99 Wednesday morning.