Cameco swings to $62M loss on write-downs as uranium market drags

Click to play video: 'Cameco CEO ‘cautiously optimistic’ that better days will come in 2017'
Cameco CEO ‘cautiously optimistic’ that better days will come in 2017
WATCH ABOVE: Saskatchewan's uranium industry saw layoffs and production cut backs in 2016 as prices trended at historic lows. Joel Senick reports – Feb 10, 2017

Uranium producer Cameco (TSX:CCO) reported a net loss of $62 million for 2016 after the depressed market for its main product had it taking $362 million in impairment charges.

The Saskatoon-based miner took a $124-million hit after deciding to shut down its Rabbit Lake milling facility in the second quarter last year, and wrote off the full $238-million value of its Kintyre development project in Australia this past quarter.

READ MORE: Cameco shares tumble after uranium giant warns analyst estimates are too high

The impairments came as uranium spot prices hit a 12-year low, brought on from continued oversupply after Japan shut down its reactors following the Fukushima Daiichi nuclear disaster in 2011.

Last month, Japanese utility Tokyo Electric Power Co. said it was terminating a contract worth about $1.3 billion now through to 2028 because government regulations were preventing it from operating its nuclear plants.

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READ MORE: Cameco risks losing $1.3B in revenue as Tokyo Electric moves to terminate contract

Cameco chief executive Tim Gitzel said in a release that the company’s performance is solid and in line with its outlook, despite low prices.

The company’s adjusted net earnings came in at $143 million for 2016, down from $344 million from a year before, as revenue dropped $323 million in 2016 to $2.43 billion.

The net loss for the fourth quarter was $144 million, compared to a net loss of $10 million for the same quarter in 2015.

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