Uranium – Cameco Guidance Hanging by a Thread, Implications for Market Purchases

Cameco’s flagship McArthur River mine and Key Lake mill are cut off. The Smoothstone River Bridge — their primary supply route — has collapsed. The firm has so far not changed guidance. But notes of possible risks. We think guidance is holding by the thread, and the spot market implications could be significant. We evaluate them here.

The bridge suffered extensive damage from recent flooding.

Bridge collapse shows extensive damage

Source: CBC

Traffic from the other flagship operation, Cigar Lake, remains unaffected for now. While McArthur River and Cigar Lake are only c50km apart by air, they use completely different road routes. But they are both in the same flood prone region. We would not overlook the risk of knock-on effects at Cigar Lake if poor weather conditions persisted. There are other bridges on that route too, and their condition is uncertain.