Shares of uranium producers came under pressure today; the URNU.DE ETF loses more than 5%, and Uranium Energy Corp (UEC.US) shares retreat nearly 3% to $7; Canada's largest 'western' uranium miner, Cameco (CCJ.US), loses more than 3.5%.
- Uranium production operations at Block 1 of the Inkai uranium deposit in Kazakhstan, which Cameco operates jointly with Kazatomprom (KAP.UK), a joint venture, have been temporarily suspended. The state-owned Kazakh giant holds a 60% stake in the project. Cameco conveyed that it was surprised By December 30, 2024, the Inkai JV had not obtained the necessary approvals from the relevant state authorities due to delays in submitting the required documentation.
- As a result, JV Inkai decided to temporarily suspend production. The project's documentation is currently being updated and a positive outcome is expected. Data received by Cameco as recently as December 26, 2024, did not mention the risk of production suspension due to the process cited by Kazakh authorities. JV Inkai expects to submit documentation to the ministry in the coming weeks, and the situation is expected to be clarified shortly thereafter according to a January 2 statement from Kazatomprom.
- The Canadian company says it will seek further clarification on how the situation occurred, as well as the potential impact on the company's production and financial position in 2025 and 2026; also on future dividends. Kazatomprom stated that under the current circumstances it does not anticipate a significant impact on its production plans for 2025, The company has sufficient inventory levels to manage supplies throughout the year.
Cameco (H1 interval chart)
Cameco's Q4 results indicated $528 million in revenue, with just $5.45 million in net income and $0.01 in earnings per share. A valuation of around 250 price/earnings remains very challenging, especially for minign company, given potential downtime at the company's key production JV Inkai project.
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Source: xStation5
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