Peter Koven, Financial Post � Wednesday, Feb. 9, 2011
A new uranium supply deal in Finland between Cameco Corp. and Talvivaara Mining Co. speaks volumes about where Cameco thinks prices are going, Versant Partners analyst Rob Chang says. Cameco agreed to buy the uranium produced by Talvivaara's Sotkamo nickel-zinc mine in Finland until 2027, and will also provide an upfront payment of up to US$60-million to build the uranium circuit at the project. Cameco typically prices sales contracts using a 40:60 ratio of fixed prices and spot prices. Given that the uranium spot price is currently a robust US$73 a pound, Mr. Chang wrote that this deal suggests Cameco is "very bullish" on long-term prices. By comparison, its cash costs in the first nine months of 2010 were only US$22.45 a pound. BMO Capital Markets analysts David Cotterell and Edward Sterck said the agreement is a positive move for Talvivaara.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)