Analyst Note| Kristoffer Inton |
As we expected in our second-quarter earnings update, COVID-19 continued to weigh on Cameco during the third quarter. Production from Cigar Lake was meaningfully reduced as the mine only restarted in September, filling more sales volume with spot market purchases. Spot prices have remained in the $30 per pound range as global supply wrestled with pandemic-related shutdowns, meaning a shift to purchases rather than production led to a sharp rise in costs per ton. So, while average realized prices per metric ton were up 9%, costs were up 17%. Combined with a 10% increase in sales volumes, gross losses widened to $34 million, up from a $3 million loss in the year ago quarter.