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Cameco Asks Customers For 'Support', Wins Tax Dispute

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Cameco (TSX:CCO) reported an adjusted loss of US$24.8 million today in its Q1 released today.

Decreases in sales volume and prices led to the loss. Compared to the quarter a year ago, sales volume decreased 27% and average realized price was down 25%.

Year-to-date, Cameco is mostly unchanged at CAN$14.82 (US$11.04) a share on the TSX.

Cameco is laboring under low uranium prices. In 2018 Cameco says the average spot price was $24.59/lb.

Cameco's CEO and president, Tim Gitzel, said it is asking its buyers to support its operations.

"As a result of the uncertainty created by declining primary supply and all the other moving pieces, we are starting to have off-market conversations with some of our best and largest customers about what it takes to support the operation of our tier-one assets longer term," said Gitzel.

"These customers are recognizing the risk overreliance on finite sources of supply poses to security of supply longer term and want first mover advantage."

Cameco shuttered its McArthur River/Key Lake last year to reduce costs and over-supply in the uranium market.

In other news Cameco reported yesterday that it won a tax dispute with the Canadian Revenue Agency. The company was awarded US$7.64 million in legal fees incurred. Cameco says it is "optimistic" it will recover a total of $13.3 million for all of its losses resulting from the case.

In 2009 the CRA accused Cameco of using a Swiss subsidiary to avoid taxes.

Creative Commons image of yellow cake courtesy of Nuclear Regulatory Commission
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