Investors Should Be Aware Of Cameco's Dispute With The Taxman
- The Canada Revenue Agency is speeding up the frequency of reassessments of Cameco's tax returns in what may be an attempt to pressure Cameco to settle out of court.
- Cameco's cash is being tied up as they are required to remit 50% of each disputed bill.
- Cameco could ultimately be on the hook for over $1 billion in taxes and penalties.
Update: Cameco Earnings - Strong EPS, But It's Mainly A Japanese Story Right Now
- Cameco reports strong Q2 earnings ($0.20 EPS vs. $0.18 expected). The lowered production target is not a major surprise following the Cigar Lake delay.
- As highlighted in our June 11 article, its low-cost model enables Cameco to weather a tough uranium price environment.
- We continue to believe that Cameco's business model strength suggests the group is in an ideal position to benefit from the expected uranium demand and pricing recovery.
- We reiterate our positive view on the stock following the recent Japanese developments that point to an accelerating nuclear restart program.
- Newsflow from Japan is finally improving: two Kyushu Electric reactors got the NRA safety clearance and could restart in coming months.
- Strong appetite for Japanese Utilities’ bonds suggests a pretty high confidence in the restart of reactors… at least from Japanese investors, who know Japan politics better than us.
- Another key positive is that the Japanese government is making the necessary moves to speed up the inspection and restart process of nuclear reactors.
- The pro-nuclear Tanaka will soon join the five-member panel of the NRA, in replacement of the hawkish Shimazaki.
- The gradual restart of reactors will be positive for sentiment and send uranium names such as Cameco higher.
- The nuclear restart process in Japan is taking longer than expected, putting pressure on the price of uranium.
- Notably, a Fukui prefecture court ordered a Japanese utility not to restart two idled nuclear reactors.
- This is a bump in the road: the precedents set by the Osaka Court of Appeal suggest that this ruling may not remain in force for long.
- We believe that sentiment could improve soon, when Japan gives the go-ahead to several of its reactors, while the long-term supply-demand dynamics are highly attractive.
- Cameco could take the opportunity of a low price environment to buy assets at low valuations.
Uranium Demand Uncertain: Is Cameco Corp. The Right Long-Term Play?
- The decrease in the annual uranium supply caused by the end of the HEU agreement will be offset by countries like Japan and Germany no longer using their nuclear reactors.
- Public distrust will likely keep most of Japans nuclear reactors off for the foreseeable future.
- New reactors under construction will provide little demand for Uranium in the near to midterm because of the time required to build these reactors.
- However, companies like Cameco Corporation (CCJ) are positioned to withstand the uncertainty in the near-term and reap the gains of a long-term recovery in the uranium market.
Thu, Mar. 13, 9:44 AM
- Cameco (CCJ +2.6%) says ore production has begun at its Cigar Lake uranium mining operation in Saskatchewan.
- The mining system and underground processing circuits are operational and ore is being transported to the McClean Lake mill, which is expected to begin processing the ore to uranium concentrate by the end of Q2.
- CCJ expects to produce 2M-3M lbs. of uranium concentrate in 2014 and ramp up to its full production rate of 18M lbs. by 2018.
- The uranium market is over-supplied right now, but CCJ believes Cigar Lake will be needed in the future as China and other countries build more nuclear reactors.
- ETFs: URA, NLR, NUCL
Wed, Feb. 26, 2:50 PM
- Top uranium miners rise for a second straight day after the Japanese government reversed plans to shift away from atomic energy, designating nuclear as an integral part in meeting the country’s long-term electricity needs.
- PM Abe's plan, which is expected to receive cabinet approval in weeks, could open the door to restarting some of Japan's 48 idled reactors as soon as this year; the plan also hints at possible new reactors.
- Japan’s turnaround on atomic energy has as much to do with finances as anything else; Japan's utilities have been making up the shortfall caused by the absence of nuclear energy by buying liquefied natural gas on the international market at record high prices.
- Denison Mines (DNN +8.6%), which today announced high grade uranium intersections at its Phoenix deposit, and Cameco (CCJ +4.2%), Canada's largest uranium producer, continue to move higher; smaller miners are fading after posting strong gains yesterday: USU +3.3%, URRE -0.9%, UEC -1.1%, URG -3.4%.
- ETFs: URA, NLR, NUCL.
Mon, Feb. 24, 11:42 AM
- Uranium takeovers are on the verge of a comeback that could put companies such as Denison Mines (DNN +5.2%), Ur-Energy (URG +4.9%) and Fission Uranium (FCUUF) in play, according to a Bloomberg report.
- Uranium prices are forecast to rise more than 40% by year's end as Japanese power plants restart nuclear reactors that have been shut down since the March 2011 Fukushima disaster, and analysts say the rebound in uranium demand may fuel takeovers as buyers try to get ahead of rising prices.
- DNN would make an attractive target for someone looking to gain access to Canada’s Athabasca Basin, home to the world’s richest high-grade uranium; a Raymond James analyst thinks Rio Tinto may be particularly interested.
- Cantor Fitgerald thinks DNN and Fission could be targets of Cameco (CCJ +0.8%), which has been building up cash and last month sold a stake in a power plant for C$450M.
- Also: URRE +5.5%, URZ +4.6%, UEC +0.9%, USU +0.4%.
- ETFs: NLR, NUCL.
Wed, Feb. 19, 3:59 PM
- Investors in uranium companies are not excited by the U.S. government's plans for $8.3B in nuclear loan guarantees, as the amount is viewed as insufficient and the overall loan program is seen as fizzling, according to a NY Times report.
- Funds are coming far later than anticipated and may effectively end a program that Congress established in 2005 to jump-start a new generation of nuclear plants, NYT writes; at one point, the program was expected to support more than $50B in loans for nuclear projects.
- USEC (USU -10.8%) is slammed despite reporting another $16.7M in government obligated funds toward development of the American Centrifuge project.
- Other uranium providers are lower too: URG -4.1%, DNN -3.7%, URRE -3.7%, UEC -3.5%, URZ -3.2%, CCJ -1%.
- ETFs: NLR, NUCL.
Mon, Feb. 10, 2:39 PM
- Cameco (CCJ -3.9%) slumps as Q4 sales volumes slipped 12% despite producing a record amount of uranium in the quarter, 15% higher than the same period last year.
- CCJ also says it is moving away from its production target of 36M lbd. by 2018, citing uncertainty in the uranium market which has lasted longer than the company expected; despite an extensive portfolio of assets that could boost production in the future, CCJ says it won't push its production growth as aggressively as before.
- Expects 2014 revenue to rise 5% due to increased realized prices for uranium; sees 35%-40% lower exploration expenses, citing decreased activities in Australia and a reorganized global exploration portfolio which will focus on core projects in Saskatchewan.
- ETFs: NLR, NUCL.
Fri, Feb. 7, 10:59 PM
Fri, Feb. 7, 2:54 PM
- Cameco (CCJ +3.2%) shares post solid gains as Barron's says the uranium market finally may be ready to heat up, with increased demand benefiting CCJ as China and Russia build nuclear plants.
- Mining companies will need to meet global demand expected to climb from ~170M lbs. currently to 220M lbs. over the next decade, the report says, and CCJ's production costs are half the industry average; because CCJ's cost of production is so low, it can earn a nice return even at today's weak uranium price of ~$36/lb.
- "The uranium price went below the marginal cost of production, [which is] a good time to get involved in any commodity," says James Hunt of Tocqueville International Value Fund.
Fri, Feb. 7, 12:10 AM
Thu, Feb. 6, 5:35 PM
Fri, Jan. 31, 7:48 AM
- Cameco (CCJ) agrees to sell its 31.6% limited partnership interest in Bruce Power to BPC Generation Infrastructure Trust for $450M, citing a need to reinvest in its core uranium business.
- Bruce Power operates four of the eight reactors at the world's largest nuclear generating facility in Tiverton, Ontario.
Dec. 16, 2013, 12:58 PM
- Cameco (CCJ +1.6%) says jet boring in ore is underway at its Cigar Lake uranium project in Saskatchewan, and is on track to begin ore production at Cigar Lake in Q1 2014.
- Cigar Lake, which originally was scheduled to begin production this year, has suffered various delays due to flooding and a series of technical challenges.
Dec. 11, 2013, 2:59 PM
- Cameco (CCJ -1%) is initiated with a Market Perform rating and $24 target price at FBR Capital, driven by CCJ's leading position in the nuclear energy industry, solid production growth profile, high-quality asset base and a strong long-term contracting book.
- FBR has a favorable longer-term outlook for the uranium industry, given the 71 nuclear reactors under construction, which alone reflect ~23% of the current annual demand.
- In the near term, however, the industry remains plagued by an oversupply situation, idled nuclear reactors in Japan reducing demand and building up utility stockpiles, all of which could keep pricing below economic return levels and lead to industry-wide production cuts.
- ETFs: NLR, NUCL
Dec. 5, 2013, 4:49 PM| Comment!
Dec. 5, 2013, 2:02 PM
Oct. 30, 2013, 9:48 AM
- Cameco (CCJ +8.4%): Q3 EPS of C$0.53 beats by C$0.34.
- Revenue of C$597M (+101.7% Y/Y) beats by $50M.
- Says Q3 benefited from “the strength of [its] contracting strategy," which provided higher average realized prices that are above the current uranium spot price.
- Raises guidance for FY 2013 revenue to +30%-35% to ~C$3.02B-C$3.13B, from +25%-30%. (PR)
Oct. 25, 2013, 5:42 PM
- Greenland's parliament has removed a 25-year-old ban on uranium mining, paving the way for an industrial boom the Arctic island hopes will help it gain independence from Denmark.
- Greenland wants to boost its mining of rare earths, but uranium often is found mixed into rare earths, so the ban was blocking key mining activity.
- One rare earth deposit being explored by Greenland Minerals (GDLNF) could be the largest outside China; the company thinks it could extract up to 40K tons/year of rare earth metals.
- Rare earths: REMX, REE, MCP, SHZ, AVL, GSM.
- Uranium: URA, NLR, BWC, SHAW, URS, FLR, LTBR, URG, UEC, URRE, USU, DNN, CCJ.
CCJ vs. ETF Alternatives
Cameco Corp is engaged in the exploration for and the development, mining, refining, conversion, fabrication and trading of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries.
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