There's a very bullish development at Cameco mining you should know about…
Cameco (NYSE: CCJ) is a Canadian uranium miner. The company delivered 34 million pounds of uranium globally in 2024. Its Cigar Lake mine in Saskatchewan alone produced 10 million pounds of uranium last year – and that number is expected to rise to 18 million pounds in 2025, which means that one mine will account for 10% of the world’s annual demand of 180 million pounds of uranium.
Cigar Lake is also the highest-grade uranium mine in the world.
Cameco’s tier-one assets have 457 million pounds of proven and probable reserves. It has 5 more tier-two uranium assets that are 100% owned.
Cameco has 120 million pounds of uranium supply under contract right now. That’s actually lower than the 180 million pounds it had under supply contracts in 2023.
With the excitement about nuclear power being used to help provide the massive electricity demands coming from AI data centers, you’d think that Cameco would have more uranium supply deals, not less…
After all, Southern Company just brought its new Vogtle reactors 3 and 4 online last year – the first new nuclear reactors in decades. Constellation is reportedly ahead of schedule in restoring Three Mile Island and Holtec is working to bring Michigan’s Palisades nuclear plant back online.
So you also might think that uranium prices would be moving higher, not lower:
Two things about that price chart. One, years of low uranium prices curtailed exploration which put the market in a bit of supply crunch, hence the big ramp in price during 2023. Two, Cameco’s average sale price is around $56, which looked really good in 2023, but not so good last year…
Earlier I told you that Cigar Lake produced only 10 million pounds of uranium in 2024. That was because Cameco cut back on production due to falling prices. The fact that production at Cigar Lake is expected to increase to 18 million pounds this year tells you everything you need to know about Cameco’s expectations for uranium prices…
So why is Cameco bullish on uranium prices?
Vogtle Reactor Units 3 and 4
Southern Company brought Vogtle Reactor Units 3 and 4 online in July 2023 and April 2024, respectively. These reactors are AP1000 reactors designed by Westinghouse. They are Pressurized Water Reactors. The design was approved by the Nuclear Regulatory Commission in 2005. There are 12 AP1000s operating or under construction in the U.S. and China, with 19 more planned in India, Ukraine, Poland, and Bulgaria.
Westinghouse also has a smaller version of the AP1000, the AP 300 small modular reactor that is being assessed in the UK, Europe, and the U.S.
In addition to the design and engineering services, Westinghouse also provides maintenance and fueling services for Pressurized Water Reactors.
After it teamed up with Brookfield Business Partners (BBU) last year, Cameco now owns a 49% stake in Westinghouse ..
Are you thinking what I’m thinking? That a uranium miner that also owns a nuclear power plant company might be in a prime spot to sell more uranium?
Most investors do not realize that Cameco became a vertically integrated nuclear company last year. This smells like opportunity…
Tariff Risk
Now, Cameco is a Canadian company. I expect there is some investor concern that it could be impacted by US tariffs on Canadian energy exports. Except that the U.S. has 94 operating nuclear reactors and supplies just 1% of the uranium they need. Canada supplies 27%.
Cutting off Canadian uranium would be a bad move. And besides that, Cameco has included tariff risks in all new contracts and says that covers roughly half of its total contracts. Even if tariffs are imposed on Canadian uranium, the cost will be picked up by Cameco’s customers.
We first wrote up Cameco for you last June, when the share price was around $52. It ran as high as $62 in 2024 and has fallen all the way back to $44.
The stock is absolutely worth a look here.
Cheers,
Briton Ryle
Chief Investment Strategist
Outsider Club
X/Twitter: https://twitter.com/BritonRyle
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About the Recent Selling…
