Cameco (TSX:CCO) (NYSE:CCJ) today reported its consolidated
financial and operating results for the first quarter ended March
31, 2012 in accordance with International Financial Reporting
Standards (IFRS).
"Our uranium business continues to drive our strong financial
performance," said Tim Gitzel, president and CEO. "This quarter,
our sales volumes were up 33%, and although spot and long-term
uranium prices were lower relative to a year ago, our average
realized price increased.
"We continue to make good progress with mine construction at
Cigar Lake and with securing regulatory approvals required to
expand production in the US and in Kazakhstan.
"We will sustain our focus on our growth strategy, growth that
we believe will be needed to fuel the world's increasing appetite
for safe, clean, reliable and affordable energy."
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Three months
Highlights ended March 31
------------------------------
($ millions except where
indicated) 2012 2011 change
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Revenue 563 461 22%
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Gross profit 178 136 31%
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Net earnings 132 91 45%
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$ per common share (diluted) 0.33 0.23 43%
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Adjusted net earnings (non-
IFRS, see Adjusted net
earnings) 124 85 46%
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$ per common share (adjusted
and diluted) 0.31 0.21 48%
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Cash provided by operations
(after working capital
changes) 409 266 54%
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First quarter
Net earnings attributable to our shareholders (net earnings)
this quarter were $132 million ($0.33 per share diluted) compared
to $91 million ($0.23 per share diluted) in the first quarter of
2011. On an adjusted basis, our earnings this quarter were $124
million ($0.31 per share diluted) compared to $85 million ($0.21
per share diluted) (non-IFRS measure, see Adjusted net earnings) in
the first quarter of 2011. Higher earnings in 2012 were mainly due
to:
-- higher earnings from our uranium business based on higher sales volumes
and realized prices
-- lower income taxes
-- partially offset by higher expenditures for exploration and
administration
See Financial results by segment for more detailed
discussion.
Of note:
As part of our ongoing work with our customers following the
March 2011 events, we expect to terminate a sales contract with one
of our customers during the second quarter at a cost of about $30
million (US), which would be recorded in our financial statements
for the period ended June 30, 2012. We expect to be able to place
the full quantity at higher prices and do not anticipate a
significant impact on our financial results for 2012. The contract
includes base-escalated pricing terms at rates well below current
market prices, and provides for deliveries of 3.4 million pounds
covering the years 2012 through 2016, of which 0.8 million pounds
is scheduled for 2012. We do not anticipate terminating any other
sales arrangements, unless it is expected to be financially
beneficial to us.
Uranium market update
Uncertainty remains in the market in the near to medium term as
a result of the events in Japan that occurred one year ago in
March. Nevertheless, we continue to see a strong and promising
growth profile for the nuclear industry in the long term.
Today, Japan continues work to rebuild its economy and the areas
affected by the natural disasters. The world is watching while
Japan decides what level of nuclear power it will depend on in the
future. Currently, only one of Japan's nuclear reactors is
operating, with this unit scheduled to be shut down for maintenance
in May. Efforts remain underway to address safety concerns and gain
the necessary political support to begin re-starting reactors.
Much of the uranium market continues to be in a wait and see
mode with limited long-term contracting occurring. Concerns about
possible excess German and Japanese inventories and US Department
of Energy materials being introduced into the market continue to
cause uncertainty. We believe that utilities will continue to work
with producers to manage these materials and minimize the impact on
the market. Since utilities are well covered under existing
contracts, we expect the market demand to remain somewhat
discretionary and prices relatively stable until more certainty
around these inventories is gained.
Despite this near- to medium-term uncertainty, we continue to
see a very strong and promising growth profile for the nuclear
industry in the long term. Countries around the world, with very
few exceptions, have reconfirmed their commitment to nuclear
energy. China, India, France, Russia, South Korea, the United
Kingdom, Canada, the United States, and almost every other country
with a nuclear program are maintaining nuclear as a part of their
energy mix.
At the beginning of 2012, we expected 96 net new reactors to be
built over the next decade, 63 of which were under construction.
This translates into an expected average annual growth rate of
about 3% for global uranium consumption. Of those under
construction, two South Korean reactors were brought online in the
first quarter of the year.
In an industry reliant on finite secondary supplies to fulfil
about 15% of 2012 consumption requirements, and where a major
source of this supply - the Russian Highly Enriched Uranium (HEU)
commercial agreement - ends after 2013, it is clear that new
production will be needed. The end of the Russian HEU commercial
agreement represents the equivalent of removing a mine producing 24
million pounds of uranium per year from the market at a time when a
number of new projects have been put on hold - projects previously
expected to help fill the HEU gap.
We are well positioned to meet the growing demand for uranium,
given our extensive base of mineral reserves and resources located
near existing infrastructure, diversified sources of supply, global
exploration program and portfolio of long-term sales contracts. We
are preparing our assets and will continue to look for
opportunities to make sure we are among the first to respond to
changing market conditions with a continued focus on
profitability.
Outlook for 2012
Over the next several years, we expect to invest significantly
in expanding production at existing mines and advancing projects as
we pursue our growth strategy. The projects are at various stages
of development, from exploration and evaluation to
construction.
We expect our existing cash balances and operating cash flows
will meet our anticipated capital requirements without the need for
significant additional funding. Cash balances will decline as we
use the funds in our business and pursue our growth plans.
Our outlook for 2012 reflects the growth expenditures necessary
to help us achieve our strategy. We do not provide an outlook for
the items in the table that are marked with a dash.
See Financial results by segment for details.
2012 Financial outlook
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Consolidated Uranium Fuel services Electricity
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Production - 21.7 million 13 to 14 -
lbs million kgU
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Sales volume - 31 to 33 Decrease -
million lbs 10% to 15%
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Capacity factor - - - 95%
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Revenue Decrease Decrease Decrease Increase
compared to 2011 0% to 5% 0% to 5%(1) 10% to 15% 5% to 10%
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Average unit cost - Increase Increase Decrease
of sales 0% to 5%(2) 10% to 15% 5% to 10%
(including D&A)
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Direct Increase - - -
administration 10% to 15%
costs compared
to 2011(3)
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Exploration costs - Increase - -
compared to 2011 15% to 20%
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Tax rate Recovery of - - -
0% to 5%
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Capital $620 - - $70 million
expenditures million(4)
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(1) Based on a uranium spot price of $51.75 (US) per pound (the Ux spot
price as of April 30, 2012), a long-term price indicator of $60.00 (US)
per pound (the Ux long-term indicator on April 30, 2012) and an exchange
rate of $1.00 (US) for $1.00 (Cdn).
(2) This increase is based on the unit cost of sale for produced material
and committed long-term purchases. If we decide to make discretionary
purchases in 2012 then we expect the average unit cost of sales to
increase further.
(3) Direct administration costs do not include stock-based compensation
expenses.
(4) Does not include our share of capital expenditures at BPLP.
Our customers choose when in the year to receive deliveries of
uranium and fuel services products, so our quarterly delivery
patterns, and therefore our sales volumes and revenue, can vary
significantly. Based on current projections, we expect deliveries
to be lowest in the second quarter while deliveries in the fourth
quarter are expected to account for about one-third of our 2012
sales volumes. However, not all delivery notices have been received
to date, which could alter the delivery patterns.
Sensitivity analysis
For the rest of 2012:
-- a change of $5 (US) per pound in both the Ux spot price ($51.75 (US) per
pound on April 30, 2012) and the Ux long-term price indicator ($60.00
(US) per pound on April 30, 2012) would change revenue by $46 million
and net earnings by $27 million
-- a change of $5/MWh in the electricity spot price would change our 2012
net earnings by $3 million based on the assumption that the spot price
will remain below the floor price of $51.62/MWh provided for under Bruce
Power Limited Partnership's (BPLP) agreement with the Ontario Power
Authority (OPA)
-- a one-cent change in the value of the Canadian dollar versus the US
dollar would change revenue by $7 million and adjusted net earnings by
$3 million. This sensitivity is based on an exchange rate of $1.00 (US)
for $1.00 (Cdn).
Adjusted net earnings (non-IFRS measure)
Adjusted net earnings is a measure that does not have a
standardized meaning or a consistent basis of calculation under
IFRS (non-IFRS measure). We use this measure as a more meaningful
way to compare our financial performance from period to period. We
believe that, in addition to conventional measures prepared in
accordance with IFRS, certain investors use this information to
evaluate our performance. Adjusted net earnings is our net earnings
attributable to equity holders, adjusted to better reflect the
underlying financial performance for the reporting period. The
adjusted earnings measure reflects the matching of the net benefits
of our hedging program with the inflows of foreign currencies in
the applicable reporting period.
Adjusted net earnings is non-standard supplemental information
and should not be considered in isolation or as a substitute for
financial information prepared according to accounting standards.
Other companies may calculate this measure differently so you may
not be able to make a direct comparison to similar measures
presented by other companies.
The table below reconciles adjusted net earnings with our net
earnings.
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Three months
ended March 31
------------------------------
($ millions) 2012 2011
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Net earnings 132 91
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Adjustments
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Adjustments on derivatives(1) (pre-tax) (11) (9)
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Income taxes on adjustments to derivatives 3 3
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Adjusted net earnings 124 85
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(1) In 2008, we opted to discontinue hedge accounting for our portfolio of
foreign currency forward sales contracts. Since then, we have adjusted
our gains or losses on derivatives to reflect what our earnings would
have been had hedge accounting been applied.
Financial results by segment
Uranium
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Three months
ended March 31
------------------------------
Highlights 2012 2011 change
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Production volume (million lbs) 4.8 4.7 2%
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Sales volume (million lbs) 8.1 6.1 33%
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Average spot price ($US/lb) 51.73 67.58 (23)%
Average long-term price
($US/lb) 60.33 71.00 (15)%
Average realized price
($US/lb) 48.77 48.06 1%
($Cdn/lb) 49.40 48.60 2%
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Average unit cost of sales
($Cdn/lb) (including D&A) 31.97 32.21 (1)%
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Revenue ($ millions) 401 297 35%
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Gross profit ($ millions) 141 100 41%
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Gross profit (%) 35 34 3%
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First quarter
Production volumes this quarter were 2% higher compared to the
first quarter of 2011 primarily due to higher production from
McArthur River/Key Lake, partially offset by lower production at
Inkai and Smith Ranch-Highland. See Operations and development
project updates for more information.
Uranium revenues this quarter were up 35% compared to 2011, due
to a 33% increase in sales volumes and a 2% increase in the $Cdn
realized selling price.
Our realized prices this quarter were higher than the first
quarter of 2011 mainly due to higher $US prices under fixed-price
contracts. In the first quarter of 2012, our realized foreign
exchange rate was $1.01, unchanged compared to the prior year.
Total cost of sales (including D&A) increased by 32% ($260
million compared to $197 million in 2011). This was mainly the
result of the following:
-- the 33% increase in sales volumes
-- royalty charges in 2012 were $11 million higher due to increased
deliveries of produced material and higher realized prices
-- average unit costs for produced uranium were 1% higher due to increased
non-cash production costs at our ISR locations
The net effect was a $41 million increase in gross profit for
the quarter.
The following table shows the costs of produced and purchased
uranium incurred in the reporting periods (non-IFRS measures see
below). These costs do not include selling costs such as royalties,
transportation and commissions, nor do they reflect the impact of
opening inventories on our reported cost of sales.
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Three months
ended March 31
------------------------------
($Cdn/lb) 2012 2011 change
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Produced
Cash cost 22.39 22.38 -
Non-cash cost 7.51 7.17 5%
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Total production cost 29.90 29.55 1%
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Quantity produced (million
lbs) 4.8 4.7 2%
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Purchased
Cash cost 34.64 52.78 (34)%
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Quantity purchased (million
lbs) 1.4 1.5 (7)%
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Totals
Produced and purchased costs 30.97 35.17 (12)%
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Quantities produced and
purchased (million lbs) 6.2 6.2 -
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Cash cost per pound, non-cash cost per pound and total cost per
pound for produced and purchased uranium presented in the above
table are non-IFRS measures. These measures do not have a
standardized meaning or a consistent basis of calculation under
IFRS. We use these measures in our assessment of the performance of
our uranium business. We believe that, in addition to conventional
measures prepared in accordance with IFRS, certain investors use
this information to evaluate our performance and ability to
generate cash flow.
These measures are non-standard supplemental information and
should not be considered in isolation or as a substitute for
measures of performance prepared according to accounting standards.
These measures are not necessarily indicative of operating profit
or cash flow from operations as determined under IFRS. Other
companies may calculate these measures differently so you may not
be able to make a direct comparison to similar measures presented
by other companies.
To facilitate a better understanding of these measures, the
table below presents a reconciliation of these measures to our unit
cost of sales for the first quarters of 2012 and 2011.
Cash and total cost per pound reconciliation
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Three months
ended March 31
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($ millions) 2012 2011 change
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Cost of product sold 228.1 174.7 31%
Add / (subtract)
Royalties (33.4) (22.5) 48%
Standby charges (7.1) (5.3) 34%
Other selling costs (1.9) (4.5) (58)%
Change in inventories (29.7) 42.0 (171)%
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Cash operating costs (a) 156.0 184.4 (15)%
Add / (subtract)
Depreciation and amortization 31.4 22.4 40%
Change in inventories 4.6 11.3 (59)%
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Total operating costs (b) 192.0 218.1 (12)%
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Uranium produced & purchased
(millions lbs) (c) 6.2 6.2 -
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Cash costs per pound (a / c) 25.16 29.74 (15)%
Total costs per pound (b / c) 30.97 35.18 (12)%
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Please see our first quarter MD&A for updates to our uranium price
sensitivity analysis.
Fuel services
(includes results for UF6, UO2 and fuel fabrication)
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Three months
ended March 31
Highlights 2012 2011 change
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Production volume (million kgU) 4.5 4.3 5%
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Sales volume (million kgU) 2.8 2.4 17%
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Realized price ($Cdn/kgU) 19.98 20.60 (3)%
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Average unit cost of sales
($Cdn/kgU) (including D&A) 16.09 17.77 (9)%
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Revenue ($ millions) 56 49 14%
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Gross profit ($ millions) 11 7 57%
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Gross profit (%) 20 14 43%
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First quarter
Production volumes were 5% higher than in 2011 due to
operational issues at our UF6 conversion facility that resulted in
a two week shutdown in 2011.
Total revenue was $7 million higher than in 2011 due to a 17%
increase in sales volumes, partially offset by a 3% decline in the
average realized price for our fuel services products.
Our $Cdn realized price for fuel services was affected by the
mix of products delivered in the quarter. In 2012, a higher
proportion of fuel services sales were for UF6, which typically
yields a lower price than the other fuel services products.
The total cost of sales (including D&A) increased by 7% ($45
million compared to $42 million in the first quarter of 2011) due
to the increase in sales volumes along with the mix of products
delivered in the quarter. As a result of the product mix, the
average unit cost of sales was 9% lower for the quarter.
The net effect was a $4 million increase in gross profit.
Electricity results
First quarter
Total electricity revenue decreased slightly this quarter
compared to the first quarter of 2011 due to lower output which was
almost completely offset by higher realized prices. Realized prices
reflect spot sales, revenue recognized under BPLP's agreement with
the OPA and financial contract revenue. BPLP recognized revenue of
$185 million this quarter under its agreement with the OPA,
compared to $109 million in the first quarter of 2011. About 62% of
BPLP's output was sold under financial contracts this quarter,
compared to 36% in the first quarter of 2011. Pricing under these
contracts was slightly higher than in 2011. From time to time BPLP
enters the market to lock in the gains under these contracts.
The capacity factor was 85% this quarter, down from 91% in the
first quarter of 2011 due to a higher volume of planned outage days
when compared to last year. Operating costs were slightly higher at
$241 million compared to $233 million in 2011.
The result was a 7% decrease in our share of earnings before
taxes.
BPLP distributed $30 million to the partners in the first
quarter. Our share was $9 million. Also, BPLP made capital calls of
$16 million to the partners in the first quarter. Our share was $5
million. The partners have agreed that BPLP will distribute excess
cash monthly, and will make separate cash calls for major capital
projects.
Operations and development project updates
Uranium - production overview
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Three months
Cameco's share ended March 31
------------------------------
(million lbs) 2012 2011 change
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McArthur River/Key Lake 2.9 2.4 21%
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Rabbit Lake 1.0 1.0 -
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Smith Ranch-Highland 0.2 0.4 (50)%
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Crow Butte 0.2 0.2 -
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Inkai 0.5 0.7 (29)%
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Total 4.8 4.7 2%
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McArthur River/Key Lake
At McArthur River/Key Lake production was 21% higher in the
first quarter compared to the same period last year. In the first
quarter of 2011, we decided to remove abandoned freezepipes from a
production area, which disrupted production for the quarter. We
have not experienced any production disruptions in 2012.
At McArthur River, drilling to install the freezewall in the
upper mining area of zone 4 is progressing as planned. We expect to
start freezing upper zone 4 in 2013 and begin production from this
area in 2014.
We are continuing to advance work on the environmental
assessment for the Key Lake extension project. We have submitted
the draft environmental impact statement to the regulators.
Comments on the draft are expected before the end of the year.
Smith Ranch-Highland and Crow Butte
Production this quarter was 33% lower compared to the same
period last year due to lower production from Smith Ranch-Highland.
The review process to obtain regulatory approvals has lengthened at
Smith Ranch-Highland, which has increased the timeline to bring new
wellfields into production. However, regulatory approval for a new
wellfield has been received and production rates were starting to
increase near the end of the first quarter.
We continue to seek regulatory approvals to proceed with
expansions at our various satellite operations in Wyoming and
Nebraska. The regulators are working through a large volume of
permit requests and we have started to receive approvals. We
continue to communicate with them to ensure we understand and meet
their information needs in a timely manner.
We are commencing development of our North Butte satellite
facility in Wyoming.
Inkai
Production for the quarter was 29% lower compared to the same
period last year. As our existing wellfields mature, the grades
decrease. Average grades at in situ recovery operations typically
stabilize at levels lower than initial years as uranium is
recovered from a mix of wellfields of varying maturities. We
continue to bring on additional wellfields to maintain some new,
typically higher grade, wellfields in the production mix. We are
also ramping up flow capacity at the Inkai operation in order to
compensate for lower grades.
As announced on August 31, 2011, we signed an memorandum of
agreement (MOA) with our partner, Kazatomprom, to increase
production from blocks 1 and 2 to 5.2 million pounds of U3O8 (100%
basis). Under the MOA, our share of Inkai's annual production will
be 2.9 million pounds with the processing plant at full capacity.
We will also be entitled to receive profits on 3.0 million
pounds.
We continue to await government approval and an amendment to the
resource use contract in order to implement the production
increase.
We continue to proceed with delineation drilling and the
engineering of infrastructure for the test leach facility at block
3.
Cigar Lake
We continued to make solid progress at Cigar Lake this quarter.
We continued development of the Seru Bay pipeline, which we expect
to be complete by mid-2012. We have resumed development in the
north end of the mine, and construction of the underground
processing facilities is underway.
The first components of the jet boring system are now on site.
As the components arrive, we are lowering them underground where
the unit will be fully assembled in preparation for further
testing.
We continue to advance shaft 2 and expect to reach the final
depth of 500 metres by mid-2012.
We continued drilling freezeholes from surface and initiating
the freezing process in the holes as they are ready to come on
line.
For the remainder of the year, we will focus on carrying out our
plans and implementing the strategies we outlined in our annual
MD&A.
We continue to expect first commissioning in ore in mid-2013 and
the first packaged pounds in the fourth quarter of 2013.
Cigar Lake is a key part of our plan to increase annual uranium
production to 40 million pounds by 2018, and we are committed to
bringing this valuable asset safely into production.
Millennium
As announced on March 2, 2012, we have entered into an agreement
with AREVA Resources Canada Inc. to purchase AREVA's 27.94%
interest in the Millennium project for $150 million.
The sale of the full amount of AREVA's interest is subject to
JCU (Canada) Exploration Co.'s (JCU) rights of refusal on transfers
under the terms of the Cree Extension Joint Venture agreement. If
JCU does not exercise its rights, we will acquire the entire 27.94%
interest from AREVA and increase our ownership interest in the
Millennium project to 69.9%. If JCU elects to exercise its rights,
it will acquire an additional 11.67% interest and we will acquire
an additional 16.27% interest, resulting in our ownership interest
in the Millennium project increasing to 58.23%.
Our ownership interest is dependent on JCU either exercising or
waiving its rights under the Cree Extension Joint Venture
agreement. We expect the transaction to close no later than June 6,
2012.
We continue to advance the project toward a development decision
using our stage gate process. See our annual MD&A for more
information regarding this project.
Fuel services
Fuel services production totalled 4.5 million kgU this quarter,
compared to 4.3 million kgU in the first quarter of 2011.
On February 29, 2012, the Canadian Nuclear Safety Commission
approved new operating licences for the Blind River refinery, the
Port Hope conversion facility, and Cameco Fuel Manufacturing. A
five-year operating licence was granted for the Port Hope
conversion facility, while Cameco Fuel Manufacturing and the Blind
River refinery were granted 10-year operating licences. In addition
to the new operating licence at the Bind River refinery, the annual
licensed production capacity was increased from 18,000 tU as UO3 to
24,000 tU as UO3.
The collective agreement covering unionized employees at Cameco
Fuel Manufacturing Inc. expires on June 1, 2012. Negotiations are
in progress with the goal of reaching a new collective
agreement.
Qualified persons
The technical and scientific information discussed in this
document for our material properties (McArthur River/Key Lake,
Inkai and Cigar Lake) was approved by the following individuals who
are qualified persons for the purposes of
NI 43-101:
McArthur River/Key Lake
-- David Bronkhorst, vice-president, Saskatchewan mining south, Cameco
-- Les Yesnik, general manager, Key Lake, Cameco
Inkai
-- Dave Neuburger, vice-president, international mining, Cameco
Cigar Lake
-- Grant Goddard, vice-president, Saskatchewan mining north, Cameco
Caution about forward-looking information
This document includes statements and information about our
expectations for the future. When we discuss our strategy, plans
and future financial and operating performance, or other things
that have not yet taken place, we are making statements considered
to be forward-looking information or forward-looking statements
under Canadian and United States securities laws. We refer to them
in this document as forward-looking information.
Key things to understand about the forward-looking information in this
document:
-- It typically includes words and phrases about the future, such as:
anticipate, estimate, expect, plan, intend, predict, goal, target,
project, potential, strategy and outlook (see examples below).
-- It represents our current views, and can change significantly.
-- It is based on a number of material assumptions, including those we have
listed below, which may prove to be incorrect.
-- Actual results and events may be significantly different from what we
currently expect, due to the risks associated with our business. We list
a number of these material risks below. We recommend you also review our
annual information form and our annual and first quarter MD&A, which
include a discussion of other material risks that could cause actual
results to differ significantly from our current expectations.
-- Forward-looking information is designed to help you understand
management's current views of our near and longer term prospects, and it
may not be appropriate for other purposes. We will not necessarily
update this information unless we are required to by securities laws.
Examples of forward-looking information in this MD&A
-- our forecasts relating to termination of uranium sales contracts with
our customers
-- our expectations about 2012 and future global uranium supply,
consumption, demand and number of operable reactors, including the
discussion on the expected impact resulting from the March 2011 nuclear
incident in Japan
-- our expectations for uranium prices in 2012
-- the outlook for each of our operating segments for 2012, and our
consolidated outlook for the year
-- our expectation that we will invest significantly in expanding
production at our existing mines and advancing projects as we pursue our
growth strategy
-- our expectation that existing cash balances and operating cash flows
will meet anticipated capital requirements without the need for any
significant additional financing
-- our expectation that cash balances will decline as we use the funds in
our business and pursue our growth plans
-- our expectations regarding 2012 quarterly delivery patterns for our
uranium and fuel service products
-- our future plans for each of our uranium operating properties,
development projects and projects under evaluation, and fuel services
operating sites
Material risks
-- actual sales volumes or market prices for any of our products or
services are lower than we expect for any reason, including changes in
market prices or loss of market share to a competitor
-- we are adversely affected by changes in foreign currency exchange rates,
interest rates or tax rates
-- our production costs are higher than planned, or necessary supplies are
not available, or not available on commercially reasonable terms
-- our estimates of production, purchases, costs, decommissioning or
reclamation expenses, or our tax expense estimates, prove to be
inaccurate
-- our forecasts relating to termination of uranium sales contracts with
our customers prove to be inaccurate
-- we are unable to enforce our legal rights under our existing agreements,
permits or licences, or are subject to litigation or arbitration that
has an adverse outcome
-- there are defects in, or challenges to, title to our properties
-- our mineral reserve and resource estimates are not reliable, or we face
unexpected or challenging geological, hydrological or mining conditions
-- we are affected by environmental, safety and regulatory risks, including
increased regulatory burdens or delays
-- we cannot obtain or maintain necessary permits or approvals from
government authorities
-- we are affected by political risks in a developing country where we
operate
-- we are affected by terrorism, sabotage, blockades, civil unrest,
accident or a deterioration in political support for, or demand for,
nuclear energy
-- we are impacted by changes in the regulation or public perception of the
safety of nuclear power plants, which adversely affect the construction
of new plants, the relicensing of existing plants and the demand for
uranium
-- there are changes to government regulations or policies that adversely
affect us, including tax and trade laws and policies
-- our uranium and conversion suppliers fail to fulfil delivery commitments
-- our Cigar Lake development, mining or production plans are delayed or do
not succeed, including as a result of any difficulties encountered with
the jet boring mining method or our inability to acquire any of the
required jet boring equipment
-- we are affected by natural phenomena, including inclement weather, fire,
flood and earthquakes
-- our operations are disrupted due to problems with our own or our
customers' facilities, the unavailability of reagents, equipment,
operating parts and supplies critical to production, equipment failure,
lack of tailings capacity, labour shortages, labour relations issues,
strikes or lockouts, underground floods, cave ins, ground movements,
tailings dam failures, transportation disruptions or accidents, or other
development and operating risks
Material assumptions
-- our expectations regarding sales and purchase volumes and prices for
uranium, fuel services and electricity
-- our expectations regarding the demand for uranium, the construction of
new nuclear power plants and the relicensing of existing nuclear power
plants not being adversely affected by changes in regulation or in the
public perception of the safety of nuclear power plants
-- our expected production level and production costs
-- our expectations regarding spot prices and realized prices for uranium,
and other factors discussed in our first quarter MD&A
-- our expectations regarding uranium sales contract terminations, tax
rates, foreign currency exchange rates and interest rates
-- our decommissioning and reclamation expenses
-- our mineral reserve and resource estimates, and the assumptions upon
which they are based, are reliable
-- the geological, hydrological and other conditions at our mines
-- our Cigar Lake development, mining and production plans succeed,
including the success of the jet boring mining method at Cigar Lake and
that we will be able to obtain the additional jet boring system units we
require on schedule
-- our ability to continue to supply our products and services in the
expected quantities and at the expected times
-- our ability to comply with current and future environmental, safety and
other regulatory requirements, and to obtain and maintain required
regulatory approvals
-- our operations are not significantly disrupted as a result of political
instability, nationalization, terrorism, sabotage, blockades, civil
unrest, breakdown, natural disasters, governmental or political actions,
litigation or arbitration proceedings, the unavailability of reagents,
equipment, operating parts and supplies critical to production, labour
shortages, labour relations issues, strikes or lockouts, underground
floods, cave ins, ground movements, tailings dam failure, lack of
tailings capacity, transportation disruptions or accidents or other
development or operating risks
Quarterly dividend notice
We announced today that our board of directors approved a
quarterly dividend of $0.10 per share on the outstanding common
shares of the corporation that is payable on July 13, 2012, to
shareholders of record at the close of business on June 29,
2012.
Conference call
We invite you to join our first quarter conference call on
Tuesday, May 1, 2012 at 1:00 p.m. Eastern.
The call will be open to all investors and the media. To join
the call, please dial (866) 223-7781 (Canada and US) or (416)
340-8018. An operator will put your call through. A live audio feed
of the conference call will be available from a link at cameco.com.
See the link on our home page on the day of the call.
A recorded version of the proceedings will be available:
-- on our website, cameco.com, shortly after the call
-- on post view until midnight, Eastern, June 1, 2012
by calling (800) 408-3053 or (905) 694-9451 (Passcode 7348055#)
Additional information
You can find a copy of our first quarter MD&A and interim
financial statements on our website at cameco.com, on SEDAR at
sedar.com and on EDGAR at sec.gov/edgar.shtml.
Additional information, including our 2011 annual management's
discussion and analysis, annual audited financial statements and
annual information form, is available on SEDAR at sedar.com, on
EDGAR at sec.gov/edgar.shtml and on our website at cameco.com.
Profile
We are one of the world's largest uranium producers, a
significant supplier of conversion services and one of two Candu
fuel manufacturers in Canada. Our competitive position is based on
our controlling ownership of the world's largest high-grade
reserves and low-cost operations. Our uranium products are used to
generate clean electricity in nuclear power plants around the
world, including Ontario where we are a limited partner in North
America's largest nuclear electricity generating facility. We also
explore for uranium in the Americas, Australia and Asia. Our shares
trade on the Toronto and New York stock exchanges. Our head office
is in Saskatoon, Saskatchewan.
As used in this news release, the terms we, us, our and Cameco
mean Cameco Corporation and its subsidiaries and affiliates unless
stated otherwise.
Contacts: Cameco Investor inquiries: Rachelle Girard (306)
956-6403 Media inquiries: Gord Struthers (306) 956-6593
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