Read this closely:
On an adjusted basis, our earnings this quarter were $61 million ($0.15 per share diluted) compared to $31 million ($0.08 per share diluted) (see non-IFRS measure) in the second quarter of 2012, mainly due to:
•higher earnings from our uranium business based on higher realized prices and increased sales volumes
…(other reasons listed)
This may be all I needed to see. The uranium market, being a low volume, old school brokerage operation, is an insane place. Opague as concrete, and getting quotes isn’t much different than trying to swim through said material.
I have been a little concerned, since uranium prices in the main broker-dealer I follow have just been collapsing.
But URA seems to have bottomed, and indicated prices as increasing. So what’s real?
Well, I can assure you, I don’t care what “uranium prices” are “really” doing. Because Cameco is living in CCJ land, where prices are higher. Lower uranium bids seem to be predominantly an phenomenon effecting small, POS miners.
Sure, you can buy long term uranium contracts really cheap from a URRE, a UEC, or a USU. You can also take on the very real counterparty risk that they won’t be around in another two years to make good on those contracts.
But if you don’t feel like taking long gambles on companies scrambling into deadend, horrible supply deals to stave off bankruptcy, you’re going to pay real rates to CCJ.
I still need to look through their filing closely – there were a few things that stuck out to me briefly as mild concerns, when I did a once over. They still have a ton of currency hedges in place, that probably expose them to all sorts of potential losses, and I’m curious about how the NUKEM deal is working out.
Also, the company has promised to cut expenses by 10%. This is just one of many elements that bares scrutiny and inspection.
But the fact that Cameco could sell uranium for higher prices in this market is astounding.Comments »