Cameco scraps its plans to increase uranium production

Weak Uranium Outlook Causes Cameco Corporation to Scrap Its Aggressive Guidance Continued weakness in the uranium market has Cameco Corporation seeing lower sales and scrapping its 2018 production target…..http://www.fool.com/investing/general/2014/02/10/weak-uranium-outlook-causes-cameco-corporation-to.aspx

Cameco (T.CCO) says 2018 uranium production goals no longer likely Stockhouse, 10 Feb 14 Cameco (TSX:T.CCO, Stock Forum) chief executive Tim Gitzel says it no longer makes sense for the company to keep to its goal of producing 36 million pounds of uranium a year by 2018……”There has been little to no improvement on the issues needed to help clear the oversupply and uncertainty the industry continues to face,” Gitzel told a conference call with financial analysts Monday.

“We don’t believe the answer is to sit idle and wait for improvement, which is why you see us moving away from our target.”

………The company had been optimistic about the restart of the industry, but Gitzel conceded Monday that it has been wrong about how quickly it expected the Japanese reactors to restart.

“We’ve quit predicting on that because we just don’t know,” he said.

The uranium market has also seen unexpected reactor shutdowns in the U.S. and utilities have been well covered under long-term contracts.

The new production guidance by Cameco came as the company reported the average spot price for uranium was US$35.03 per pound in the fourth quarter, down from US$42.46 a year ago……

Scotiabank analyst Ben Isaacson said Cameco’s earnings were lower than expected, due mostly to the higher costs.”While shareholders should be pleased to hear management is showing capital discipline and not empire building, the decision reconfirms that uranium supply-demand tightness will likely occur later, and not sooner,” Isaacson wrote in a report to clients.
Read more at http://www.stockhouse.com/news/natural-resources/2014/02/10/cameco-t-cco-says-2018-uranium-production-goals-no-longer-likely#pA7Lgw4k2co9YYxU.99