CEO of Saskatchewan-based Cameco Corp. wants to make clear that the US government is not interfering with its core uranium mining business as part of the massive nuclear reactor deal announced last week.
The agreement calls for the US government to arrange financing and facilitate permitting and approvals for the construction of new nuclear reactors south of the border at a cost of at least US$80 billion.
The reactors will use technology owned by Westinghouse, which is jointly owned by Cameco and Brookfield Asset Management.
“We need to directly respond to some of the misinformation we have seen published in the last few days. The U.S. government's partnership interest does not extend to Cameco's core business, although our uranium products and fuel services are certainly well positioned to support the buildout and long-term operation of the global fleet as it grows,” CEO Tim Gitzel told analysts on a conference call Wednesday to discuss third-quarter results.
“The partnership strengthens our presence and creates meaningful value for our stakeholders, but the U.S. government's interest in participating is focused only on the Westinghouse business.”
3066:57Saskatoon-based Cameco is part of a strategic partnership with the United States to build nuclear reactors
Joel Bruno, assistant professor of economics at the University of Saskatchewan, joins The 306 to talk about Saskatoon firm Cameco's strategic partnership with the U.S. government to help build nuclear reactors.
Chief Operating Officer Grant Isaac said the US government is essentially acting as an “enabler” for energy development on the scale needed to achieve domestic energy security.
“The US government steps in and says, 'It's time. It’s time to act,” Isaac said.
The US role could change in different ways, he said.
The government could finance plants built, owned and operated by others, initiate its own projects entirely, or go halfway by building a plant and turning it over to a utility.
“All options are on the table because the driving force here is to bring 24-hour baseload carbon-free electrons to market as quickly as possible to meet onshore demand and satisfy [artificial intelligence data centre] demand,” Isaac said.
Westinghouse calls its AP1000 pressurized water reactor the most advanced nuclear power plant commercially available today. The installations are capable of supplying more than one gigawatt of electricity to centralized power grids, which is exactly the model the companies plan to build as part of the deal.
According to Isaac, the option of spinning off Westinghouse into an independent company with the United States as the main shareholder is under consideration.
“There's definitely a unique interest in investing in Westinghouse alone, and Cameco is a fun example of that. Brookfield is probably an even more fun investment just in Westinghouse,” he said.
“So we always keep in mind that the last thing we want is to preserve value in this family of assets that we've assembled.”
Earlier on Wednesday, Cameco raised its annual dividend to 24 cents from 16 cents.
The company also reported a net loss of $158,000, or zero cents per diluted share, for the quarter ended Sept. 30, compared with a profit of $7.4 million, or two cents per diluted share, a year earlier.
Products and services revenue was $614.6 million, compared to $720.6 million in the same quarter last year.
Adjusted Earnings Cameco said it earned seven cents per diluted share for the most recent quarter, compared with adjusted earnings of six cents per diluted share a year earlier.
