Cameco Reports Higher Second Quarter Revenue and Cash Flow.Business Editors SASKATOON Saskatoon (săskət  n`), city (1991 pop. 186,058), S central Sask., Canada, on the South Saskatchewan River. , Saskatchewan--(BUSINESS WIRE)--Aug. 1, 2002Cameco Cameco Corp. TSX: CCO NYSE: CCJ is the world's largest publicly traded uranium company, based in Saskatoon, Saskatchewan. It was formed in 1988 by the merger and privatization of two crown corporations: the federal owned Eldorado Mining and Refining Limited (known better Corporation (NYSE NYSE See: New York Stock Exchange :CCJ See citizen journalism. ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CCO (Chief or Corporate Compliance Officer) The executive person in charge of compliance issues, regulatory requirements, internal controls and managing audits within an enterprise or organization. ) today reported its financial results for the quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. periods ended June June: see month. 30, 2002. HIGHLIGHTS OF THE QUARTER
-- the market price for U3O8,
-- sales volumes for nuclear products,
-- foreign exchange rates between the Canadian and US dollars,
-- the market price for gold,
-- the unit costs of production, and
-- the quantity and profitability of electricity generated by Bruce Power.
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3 months 3 months 6 months 6 months
ended ended ended ended %
June 30 June 30 June 30 June 30 Change
Financial Highlights 2002 2001 2002 2001
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Revenue ($ millions) 195 138 319 209 53
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Earnings from operations
($ millions) 26 19 37 23 61
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Cash provided by operations
($ millions) 80 12 214 40 439
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Net earnings attributable
to common shares
($ millions) 12 12 17 13 33
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Earnings per share ($) 0.22 0.22 0.31 0.23 33
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Average uranium spot
price for the period
($US/lb U3O8) 9.88 8.79 9.83 8.26 19
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Cameco's average realized
gold price for the period
(US$/ounce) 307 287 295 287 3
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Average spot market gold
price for the period
(US$/ounce) 312 268 301 266 13
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Note: All dollar amounts are expressed in Canadian dollars unless
otherwise indicated.
This report is organized under the following major headings: 1. Consolidated financial results 2. Updates on markets, operations and strategy, and 3. Outlook. 1. CONSOLIDATED FINANCIAL RESULTS Second Quarter. For the three months ended June 30, 2002, net earnings attributable to common shares were unchanged at $12 million ($0.22 per share) compared to the second quarter in 2001. Improved results in the uranium uranium (y rā`nēəm), radioactive metallic chemical element; symbol U; at. no. 92; at. wt. 238.0289; m.p. 1,132°C;; b.p. 3,818°C;; sp. gr. 19. business, where profits rose due to increased
volumes for concentrates, were offset by lower earnings from the gold
business which were the result of lower production. Compared to the
second quarter last year, the effective rate for income taxes increased
to 41% from 26% due to a higher proportion of pre-tax pre-tax adj → anterior al impuestopre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income being earned in the uranium and conversion businesses. Earnings from operations were $26 million in the second quarter of 2002 compared to $19 million in 2001. The aggregate gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. declined to 21% from 23% in 2001. Year-to-Date. For the first six months of 2002, net earnings attributable to common shares were $17 million ($0.31 per share) compared to $13 million ($0.23 per share) in 2001. This improvement was attributable to the nuclear business where profits rose due to a higher realized selling price and increased volumes for concentrates. These improvements were partially offset by lower earnings from the gold business which were caused by lower production. Compared to last year, the effective rate for income taxes increased to 35% from 24%. Earnings from operations were $37 million for the first half of 2002 compared to $23 million in 2001. The aggregate gross profit margin declined to 20% from 22% in 2001. Cash flow from operating activities of $214 million was $174 million higher than in 2001 due to the normal collection of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and a reduction in uranium inventories. SEGMENTED FINANCIAL RESULTS
Uranium Business
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3 months 3 months 6 months 6 months
ended ended ended ended
HIGHLIGHTS June 30/02 June 30/01 June 30/02 June 30/01
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Revenue ($ millions) 134 79 206 107
Gross profit ($ millions) 26 15 37 15
Gross profit % 19% 19% 18% 14%
EBT (A) ($ millions) 23 12 32 11
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(A) Earnings before tax
Second Quarter. Revenue from the uranium business increased by 70% to $134 million from $79 million in the second quarter of 2001 due to a 68% increase in sales volume. As the timing of deliveries of uranium within a calendar year is at the discretion of customers, Cameco's quarterly delivery patterns can vary significantly. The total cost of products and services sold, including depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. (DDR (Double Data Rate) Refers to an SDRAM memory chip that increases performance by doubling the effective data rate of the frontside bus. For more details, see SDRAM. DDR - Double Data Rate Random Access Memory ) was $108 million in the second quarter of 2002 compared to $64 million in 2001. This increase was attributable to the higher sales volume and higher costs for care and maintenance at Rabbit Lake Rabbit Lake can refer to:
Earnings before taxes (EBT EBT See: Earnings Before Taxes ) from the uranium business increased by $12 million in the second quarter of 2002 while the profit margin remained unchanged at 19%. Year-to-Date. Revenue from the uranium business increased by 93% to $206 million from $107 million in 2001 due mainly to an 84% increase in sales volume. A 5% increase in the average realized selling price for uranium concentrates compared with 2001 also contributed to the higher revenue. The higher realized price was attributable to an increase in the uranium spot price which averaged $9.83 (US) compared to $8.26 (US) in 2001. During the first half of 2002, the total cost of products and services sold, including DDR was $169 million compared to $92 million in 2001 reflecting the increased sales volumes. The average unit cost for uranium was 2% lower due to a reduction in the unit cost of McArthur McArthur may refer to: Places:
EBT from the nuclear business increased by $21 million in the first six months of 2002 and the profit margin improved to 18% from 14% in 2001.
Conversion Business
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3 months 3 months 6 months 6 months
ended ended ended ended
HIGHLIGHTS June 30/02 June 30/01 June 30/02 June 30/01
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Revenue ($ millions) 36 27 62 45
Gross profit ($ millions) 11 7 16 15
Gross profit % 31% 26% 26% 33%
EBT ($ millions) 10 6 15 13
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Second Quarter. Revenue from the conversion business increased by 33% to $36 million from $27 million in the second quarter of 2001 due to a 15% increase in the realized selling price and a 16% increase in sales volume. As with uranium, quarterly delivery patterns can vary significantly. The total cost of products and services sold, including DDR was $25 million in the second quarter of 2002 compared to $20 million in 2001. This increase was primarily attributable to the higher sales volume for the quarter. The unit cost of products and services sold rose by about 3% over the previous year. During the quarter, the lawsuit lawsuit: see procedure; tort. involving members of the Eldorado Pension Plan was settled. Cameco's share of the settlement amounted to approximately $2 million and those costs have been charged to conversion services. EBT from the conversion business increased by $4 million in the second quarter of 2002 and the profit margin rose to 31% from 26% a year earlier. Year-to-Date. Revenue from the conversion business increased by 38% to $62 million from $45 million in the second quarter of 2001 due to a 40% increase in sales volume. This was partially offset by a 2% decline in the realized selling price. The total cost of products and services sold, including DDR, was $46 million in the first six months of 2002 compared to $30 million in 2001. This increase was primarily attributable to the higher sales volume for the quarter. The unit cost of products and services sold rose by about 7% due to the pension settlement and higher deliveries of acquired material. EBT from the conversion business increased by $2 million in 2002 and the profit margin declined to 26% from 33% in 2001.
Electricity Business
Bruce Power
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3 months 6 months
ended ended
Highlights June 30/02 June 30/02
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Output (terawatt hours) 5.1 10.1
Capacity factor (%) 74 74
($ million)
Revenue 203 402
Operating cost 192 387
Earnings before interest & taxes 11 15
Interest 18 33
Loss before taxes (7) (18)
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Cameco's share of loss before taxes (1) (4)
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Note: Capacity factor for a given period represents the amount of
electricity actually produced for sale as a percentage of the amount
of electricity the plants are capable of producing for sale.
Second Quarter. In the quarter, 5.1 terawatt hours of electricity was generated by the Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. "B" reactors at a capacity factor of 74%. Planned maintenance work on one reactor Reactor (electricity) A device for introducing an inductive reactance into a circuit. Inductive reactance x is a function of the product of frequency f and inductance L; thus, x = 2πfL. , which began in the first quarter, will continue into the third quarter when it is expected to return to service. Cameco's share of the loss before taxes for the quarter was $1 million. (There is no comparative data from 2001 as Cameco's initial report on Bruce operations was made in the 2001 third quarter report.) Year-to-Date. To date, power generation of 10.1 terawatt hours has been achieved by the Bruce "B" units and this also reflects a capacity factor of 74%. As a result, Cameco recorded a loss before taxes of $4 million.
Gold Business
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3 months 3 months 6 months 6 months
ended ended ended ended
HIGHLIGHTS June 30/02 June 30/01 June 30/02 June 30/01
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Revenue ($ millions) 25 32 51 57
Gross profit ($ millions) 5 11 11 18
Gross profit % 20% 34% 22% 32%
EBT ($ millions) 2 9 6 15
Selling price ($US) 307 287 295 287
Unit cash cost ($US) 202 141 183 134
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Second Quarter. Revenue from the gold business decreased by $7 million or 22% compared to the second quarter of last year due to a 31% decrease in volume sold. Cameco's realized price for gold increased to $307 (US) in 2002 from $287 (US) per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. last year. Gold production at Kumtor was 41% less than in the second quarter of 2001 due to a lower ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly which averaged 3.7 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. compared to 5.2 grams in 2001. With the lower grade of ore mined, the recovery rate also decreased to 78% from 84% in 2001. As a result, Kumtor's cash cost per ounce increased to $202 (US) compared to $141 (US) in 2001. For the quarter, the gross profit margin for gold was 20% compared to 34% in 2001 due to the higher unit cash cost. Year-to-Date. Revenue from the gold business declined by $6 million compared to the same period last year, reflecting a 16% decrease in sales volume which more than offset an increase in the average realized selling price. Cameco's realized price for gold has increased to $295 (US) in 2002 compared to $287 (US) per ounce in the first six months of 2001. Gold production at Kumtor was 31% lower than in the first half of 2001 due mainly to lower grade ore which averaged 4.0 grams per tonne compared to 5.1 grams last year. Production was also influenced by a lower recovery rate which decreased to 80% from 84% in the prior year. Kumtor's cash cost per ounce was $183 (US) in the first six months of 2002 compared to $134 (US) in 2001. The gross profit margin for gold was 20% in the first six months compared to 31% in 2001. Corporate Expenses During the first six months of 2002, costs for administration increased by $1 million compared to 2001. Exploration costs increased by $2 million due to greater activity in both uranium and gold. CASH FLOW In the first six months of 2002, Cameco generated cash from operations of $214 million ($3.85 per share) compared to $40 million ($0.72 per share) in 2001. This increase of $174 million largely reflects a reduction of accounts receivable balances and a reduction in uranium inventories. Cash from operations, excluding the changes in other operating items such as accounts receivable and payable, was $85 million compared to $55 million in 2001. This improvement was due to the higher sales in the uranium and conversion businesses. Cash used in investing activities decreased to $23 million this year from $110 million last year due to the initial investment in Bruce Power Bruce Power Limited Partnership is a Canadian corporation. It exists as a partnership between Cameco Corporation (31.6%), TransCanada Corporation (31.6%), BPC Generation Infrastructure Trust (31.6%), the Power Workers Union (4%) and The Society of Energy Professionals (1. in 2001. BALANCE SHEET At June 30, 2002, total long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. decreased by $61 million to $293 million from $354 million at December December: see month. 31, 2001. At June 30, 2002, Cameco's net debt to capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. ratio was 7%, down from 15% at the end of 2001. At June 30, 2002, the current portion of long-term debt Current Portion Of Long-Term Debt A portion of the balance sheet that represents the total amount of long-term debt that must be paid within the next year. The balance sheet has a liability section, which is broken down into long-term and current debt. was $113 million compared to $26 million at December 31, 2001. Cameco's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility matures in February February: see month. 2003 and until a new facility is put in place, any amounts supported by the revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to are reflected as current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. on the balance sheet. At June 30, 2002, the current portion of long-term debt included $95 million supported by the revolving credit facility. Compared to the end of 2001, accounts receivable has declined significantly. Receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , which reflect sales revenue, are typically higher in December than at any other time of the year. Gold Business Update During the second quarter, Kumtor Gold Company's (KGC KGC Knights of the Golden Circle KGC Kids get Care KGC Kingscote, South Australia, Australia (Airport Code) KGC Known Good Cable ) senior debt was restructured and resulted in an extension to the term of repayment to June 1, 2006 and the replacement of the non-commercial A non-commercial enterprise is work that values other considerations above and beyond that of making a profit. It differs from a non-profit enterprise in that seeking a profit is a part of their business, just not the main part. agencies as senior lenders. On June 1, 2002, KGC made an $18 million (US) principal payment on this debt. Cameco continues to guarantee the senior debt which has a current balance of $77 million (US). On June 6, 2002, Cameco received a $13.7 million (US) payment of principal and interest on its subordinated loan In the field of finance, a subordinated loan is a type of loan which ranks after other debts should a company fall into receivership or be closed. It is also known as subordinated debt, or as junior debt. to KGC bringing the outstanding balance to $65 million (US). KGC's hedge position at the end of June was 1,125,900 ounces, one-third being Cameco's share. It is expected that these hedges will yield average prices of approximately $300 (US) per ounce. The mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. loss on Cameco's share of the hedge position was $6 million (US) at June 30, 2002 based on a spot market gold price of $319 (US) per ounce. During the second quarter of 2002, the average spot market gold price was $312 (US) per ounce compared to $290 (US) in the first quarter. Prices ended the quarter at $319 (US). Foreign Exchange Most of the company's revenue is in US dollars. At June 30, 2002, Cameco had a foreign currency hedge Currency hedge Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks). portfolio of $526 million (US) with an average spot exchange rate of $1.5588. Timing differences between the maturity and final usage of hedge contracts may result in deferred revenue or deferred charges. This impact will be recognized in earnings as hedge contracts are closed against their underlying exposure. At the end of the second quarter, deferred charges will have the effect of reducing the reported exchange rate by $0.04 over the five-year hedge designation period. During the quarter, the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents strengthened significantly against the US dollar from $1.5935 at the end of March to $1.5187 as of June 30, 2002. Cameco's mark-to-market position on its foreign currency hedge portfolio was a gain of $19 million. 2. UPDATES ON MARKETS, OPERATIONS AND STRATEGY The most significant factors impacting the financial performance of Cameco are: -- the market price for U3O8, -- sales volumes for nuclear products, -- foreign exchange rates between the Canadian and US dollars, -- the market price for gold, -- the unit costs of production, and -- the quantity and profitability of electricity generated by Bruce Power. Uranium Market The uranium market, like all commodity markets, has a history of volatility, moving not only with the standard forces of supply and demand, but also to whims of geopolitics. It has also evolved particularities of its own in response to the unique nature and use of this material. Update Uranium Spot Market The industry average spot price on June 30, 2002 was $9.90 (US) per pound U3O8, compared to $9.85 (US) at March 31, 2002. The spot price was $8.83 (US) at the end of the second quarter of 2001. The spot market volume in the quarter ended June 30, 2002 was approximately 4 million pounds U3O8, bringing the year-to-date total to about 11 million pounds, compared to 5 million and 9 million pounds respectively in the corresponding periods in 2001. While spot demand has been stronger over the half-year, spot supply has been sufficient to meet each successive new demand. Sellers have been reluctant to increase price, and consequently the spot price has been flat over the quarter. Uranium Long-term Market The long-term market has been slow during the first half of the year, with long-term contracting reported by market analysts being about 14 million pounds U3O8. Long-term contracting activity is expected to increase significantly in the second half of the year. The long-term price indicator at June 30, 2002, as published by TradeTech TradeTech is a portfolio of conferences, exhibitions and summits focussed on providing high quality content to the entire trading community. TradeTech’s conferences combine high quality content with unrivalled networking. , remains at $10.40 (US) per pound U3O8, unchanged during the quarter. UF6 Conversion Spot Market The industry average spot market price for uranium conversion services decreased marginally to $5.08 (US) per kgU from $5.13 (US) at March 31, 2002. This compares to $4.95 (US) per kgU at the end of the second quarter of 2001. Update on Uranium Market Trends and Developments US Congress Approves Siting of Spent Fuel Repository (1) A database of information about applications software that includes author, data elements, inputs, processes, outputs and interrelationships. A repository is used in a CASE or application development system in order to identify objects and business rules for reuse. In the US, the House of Representatives and Senate enacted a law to override An arrangement whereby commissions are made by sales managers based upon the sales made by their subordinate sales representatives. A term found in an agreement between a real estate agent and a property owner whereby the agent keeps the right to receive a commission for the sale of Nevada's veto veto [Lat.,=I forbid], power of one functionary (e.g., the president) of a government, or of one member of a group or coalition, to block the operation of laws or agreements passed or entered into by the other functionaries or members. In the U.S. of the Yucca Mountain Yucca Mountain, mountain in the SW Nevada desert about 100 mi (161 km) northwest of Las Vegas. It is the proposed site of a Dept. of Energy (DOE) repository for up to 77,000 metric tons of nuclear waste (including commercial and defense spent fuel and high-level waste repository. This paves the way for the US Department of Energy to apply to the US Nuclear Regulatory Commission Nuclear Regulatory Commission (NRC), an independent U.S. government commission, created by the Energy Reorganization Act of 1974 and charged with licensing and regulating civilian use of nuclear energy to protect the public and the environment. for a license for the repository. The license application is expected in 2004. Assuming all approvals are granted, Yucca Mountain could begin accepting waste by 2010. Brown's Ferry Reactor to be Restarted Tennessee Valley Authority Tennessee Valley Authority (TVA), independent U.S. government corporate agency, created in 1933 by act of Congress; it is responsible for the integrated development of the Tennessee River basin. , the US utility, has received approval from its board of directors for the restart To resume computer operation after a planned or unplanned termination. See boot, warm boot and checkpoint/restart. of Browns Ferry 1. Its current capacity is 1,065 MW and this is expected to be uprated during the refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur program. The unit is expected to start operating in May 2007. Finland Finland, Finnish Suomi (swô`mē), officially Republic of Finland, republic (2005 est. pop. 5,223,000), 130,119 sq mi (337,009 sq km), N Europe. Approves New Reactor On May 24, 2002, Finland's parliament approved plans for the construction of the country's fifth nuclear power reactor. TVO TVO tractor vaporizing oil. , the Finnish utility that applied to build the unit, plans to launch a tender in the fall of 2002 and select a bidder by the end of 2003, after which they will apply for a construction permit. The planned reactor will have a capacity in excess of 1,000 MW and begin operation before 2010. Little Market Impact Expected from International Agreements Two global initiatives to reduce weapons of mass destruction Weapons that are capable of a high order of destruction and/or of being used in such a manner as to destroy large numbers of people. Weapons of mass destruction can be high explosives or nuclear, biological, chemical, and radiological weapons, but exclude the means of transporting or were undertaken in the quarter. In May, US President Bush and Russian Russian associated in some way with Russia. Russian blue a breed of cats with short, dense, silver-tipped blue-colored coat and vivid green eyes. President Putin signed a nuclear arms reduction treaty which will lead to the removal in each country of about 4,000 of the remaining nuclear warheads from their delivery vehicles. Previously, similar agreements also included a second step, that of dismantling dis·man·tle tr.v. dis·man·tled, dis·man·tling, dis·man·tles 1. a. To take apart; disassemble; tear down. b. the warheads, but this accord did not go that far. The US has indicated that it will stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. its dismantled dis·man·tle tr.v. dis·man·tled, dis·man·tling, dis·man·tles 1. a. To take apart; disassemble; tear down. b. warheads, and in response, Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). has indicated that it will do the same. Consequently, it is believed that there will be no impact on the uranium market until late in this decade. In June, at the G8 summit held in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , it was generally agreed to finance the construction of a mixed-oxide fuel fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. plant which would enable Russia to down blend a portion of its excess military plutonium plutonium (pl tō`nēəm), radioactive chemical element; symbol Pu; at. no. 94; mass no. of most stable isotope 244; m.p. 641°C;; b.p. 3,232°C;; sp. gr. 19. into reactor fuel. The exact timing and financing commitments
related to this initiative were not well defined. It is expected that
such a facility would not be in operation before 2008 and that annual
production could displace dis·place tr.v. dis·placed, dis·plac·ing, dis·plac·es 1. To move or shift from the usual place or position, especially to force to leave a homeland: the equivalent of only about 1-2 million pounds U3O8. The fuel produced could be used in Russian or western world reactors or some combination of the two. It is expected that the market impact of this initiative will not be felt until the end of this decade. Operations Update Uranium Mining Uranium mining is the process of extraction of uranium ore from the ground. As uranium ore is mostly present at relatively low concentrations, most uranium mining is very volume-intensive, and thus tends to be undertaken as open-pit mining. Mining resumed at Rabbit Lake in late June after activities to rehabilitate re·ha·bil·i·tate v. 1. To restore to good health or useful life, as through therapy and education. 2. To restore to good condition, operation, or capacity. the mine took longer than planned. Milling is expected to resume in late August. Uranium production of 2.5 million pounds U3O8 is projected in 2002. It is anticipated that remaining reserves will feed the mill for at least three years. At McArthur River mine The McArthur River Uranium Mine is the world's largest high-grade uranium deposit. Since it began operating in 1999, it has also become the world's most productive uranium mine, contributing approximately 20% of total global uranium mining production. The mine produced 18. , underground operations Underground Operations is a Toronto-based independent punk rock record label. Operated by Mark Spicoluk, former Closet Monster member, this label is one of the most cutting edge independent labels in Canada. were suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. in late June for a few days as forest fires This is a list of notorious forest fires: North America Year Size Name Area Notes 1825 3,000,000 acres (12,000 km²) Miramichi Fire New Brunswick Killed 160 people. in the vicinity of the mine resulted in heavy smoke. Both year-to-date and annual ore production at the mine remain on schedule. In June, the company purchased the Smith Ranch ranch, large farm devoted chiefly to raising and breeding cattle, horses, sheep, and goats. The cattle ranch was introduced from Latin America to Texas and the plains of the W United States and Canada. uranium in situ In place. When something is "in situ," it is in its original location. leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. (ISL ISL - Interface Specification Language. Xerox PARC. Interface description language used by the ILU (Inter-Language Unification) system. Includes descriptions of multiple inheritance, exceptions and garbage collection. E-mail: Bill Janssen <janssen@parc.xerox.com>. ) mine located in Wyoming Wyoming, city, United States Wyoming, city (1990 pop. 63,891), Kent co., W Mich., in the greater Grand Rapids metropolitan area, on the Grand River; settled 1832, inc. 1959. near Cameco's Highland ISL mine. In exchange for a modern mill and about 27 million pounds in proven and probable reserves, the company agreed to assume decommissioning Decommissioning is a general term for a formal process to remove something from operational status. Some specific instances include:
At the Inkai uranium test mine in Kazakhstan Kazakhstan or Kazakstan (kä'zäkstän`), officially Republic of Kazakhstan, republic (2005 est. pop. 15,186,000), c.1,050,000 sq mi (2,719,500 sq km), central Asia. , four of the seven test wells have performed satisfactorily to date and uranium recovery is expected to begin in the third quarter. Uranium Exploration UEX Corporation, in which Cameco has a 35% interest, completed a public offering of common shares and flow-through common shares for gross proceeds of approximately $4.3 million. UEX began trading on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. on July July: see month. 17, 2002. Cameco has transferred to UEX its Hidden Bay advanced exploration properties which are located in Saskatchewan. UEX's operations will evaluate promising properties in the Athabasca Basin The Athabasca Basin is a region of Northern Saskatchewan and Alberta Canada that is best known as the world's leading source of uranium. It currently supplies about 30% of the world's uranium. The basin is located just to the south of Lake Athabasca. in northern Saskatchewan. AGR AGR advanced gas-cooled reactor During the first quarter, the company acquired a 52% interest in AGR, an Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. gold company which owns the Boroo gold deposit in Mongolia. This mine is currently under construction with production expected to begin in late 2003 at an estimated annual production rate of 175,000 ounces. AGR's hedge position at the end of June was 200,000 ounces (Cameco's share is 52%) which are expected to yield an average price of approximately $315 (US) per ounce. The mark-to-market loss on Cameco's share of this position was $1 million (US) based on the June 30 gold price of $319 (US) per ounce. Fuel Services At Blind River, the plant was shut down in mid-June for maintenance and an extended summer vacation Summer vacation (also called summer holidays or summer break) is a vacation in the summertime between school years in which students are off for 3 months, depending on the country and district. period. Restart is slated for late August. Similarly at Port Hope, the UF6 and UO2 plants were shut down in late June. Staff will return in late July to complete maintenance activities and then restart production. Corporate Strategy Update Despite the revised production plan at Kumtor, which is discussed below, Cameco continues to focus on its gold strategy of creating a mid-tier gold production company with the ultimate goal of a merger or complete divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of its gold interests. 3. OUTLOOK FOR YEAR Uranium Business Cameco's uranium revenue in 2002 is expected to be about 5% greater than in 2001 due to higher sales volumes. Although market prices have risen over the past 18 months, the average realized price in 2002 is expected to be relatively unchanged from 2001. This is due to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of more favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. priced base-escalated contracts. The gross profit margin is expected to be similar to 2001. For the balance of 2002 deliveries, a $1.00 (US) change in the U3O8 spot price from current levels would change revenue by about $10 million (Cdn), net earnings by about $5 million (Cdn) and cash flow by about $7 million (Cdn). Conversion Business Cameco's conversion revenue in 2002 is expected to increase by about 10% compared to 2001 due primarily to higher sales volumes. The gross profit margin is expected to rise moderately. Gold Business Kumtor's operating plan has been significantly revised after the pit wall failure on July 8, 2002. The failure involved approximately 7.5 million tonnes of rock which is expected to be removed over the next 12 months at an estimated cost of $1.00 (US) per tonne. No gold reserves or significant assets have been lost as a result of the incident. However, the timing of access to some high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. ore has been altered and, accordingly, production and earnings for 2002 will be lower than previously anticipated. For 2002, the production plan has been revised to approximately 500,000 ounces (Cameco's share is one-third) at an average grade of 3.5 grams per tonne and a recovery rate of 77%. The cash cost is now projected to be about $210 (US) per ounce. This revised cash cost reflects the lower grade of the mill feed and the costs for removing the rock slide material. It includes no allowance for any possible insurance recovery. Prior to the pit wall incident, production was forecasted to be 700,000 ounces at 4.9 grams per tonne, a recovery rate of 81% and a cash cost of $147 (US) per ounce. Mill feed remains unchanged at 5.5 million tonnes. Prior to the incident, approximately 300,000 ounces had been poured in 2002. The mining plan had anticipated that work in the high-grade zone of the mine would begin in July 2002 and continue into 2003. As this zone is now partly under, and exposed to, the rock slide, the mill is expected to process lower grade material averaging 3.1 g/t for the remainder of 2002. During this period, mill feed will be supplied from the stockpile and from mine production which resumed on July 15, 2002 in an area of the pit which has not been affected by the rock slide. The company's preliminary estimate is that normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of will resume in mid- mid- pref. Middle: midbrain. 2003 with the mining of the high-grade zone. As a result of the reduced production, Cameco's net earnings for 2002 are expected to be approximately $35 million lower than previously forecasted. For years beyond 2002, when the high-grade ore becomes accessible, earnings are expected to be greater than previously anticipated. It is not expected that the pit wall failure will have a material financial impact over the remaining life of the mine. Electricity Business With the return to service of one of the four Bruce "B" reactors in the third quarter, following its planned maintenance outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. , power generation is expected to increase. Another of the four Bruce "B" reactors is scheduled for a maintenance outage before year-end. For 2002, an average capacity factor of 78% is expected. Cameco estimates the 2002 earnings contribution from Bruce Power to be approximately similar to the $12 million before tax achieved last year. Very good progress is being made toward the restart of two Bruce "A" reactors, unit 3 and unit 4. The Canadian Nuclear Safety Commission The Canadian Nuclear Safety Commission (CNSC), previously known as the "Atomic Energy Control Board" (AECB), is best described as the nuclear energy and materials watchdog in Canada. has now confirmed that hearings to consider Bruce Power's restart case for these units can be achieved in December 2002 and February 2003. This should facilitate a restart of unit 4 as early as April 2003 and of unit 3 shortly thereafter, ahead of the previously announced mid-2003 timing. This will enable the sale of additional power during the summer months, the strongest period of seasonal demand. In July 2002, Ontario's electricity demand peaked at 25,330 MW, an all-time Ontario record. Bruce Power has reviewed its original cost estimates of the Bruce "A" restarts. As a result of security enhancements following the events of September 11, 2001 and of additional work to improve the reliability of the units once they restart, projects costs are likely to be in the $400 million range compared to the initial $340 million estimate. Approximately $195 million of the total project costs have been spent to date. Following completion of the reactor refurbishment and restart programs, the long-term sustainable capacity factor for the Bruce reactors is expected to be about 90%. Beginning in 2003, Bruce Power is expected to contribute significantly to Cameco's earnings and cash flow. Third Quarter of 2002 Consolidated revenue in the third quarter of 2002 is expected to be about 18% less than in the second quarter reflecting the decline in gold production at Kumtor. Revenue from the uranium and conversion businesses are expected to be about 15% lower due primarily to decreased volumes. Accordingly, earnings from each of these segments are projected to decline compared to the second quarter. The gold segment is now projected to show a small loss in the third quarter under the revised production plan. Earnings from Bruce Power are forecasted to be similar to the earnings reported in the third quarter of 2001. All four of the Bruce "B" units will be operating for most of the quarter during the peak summer months. Consolidated earnings for the third quarter are expected to be approximately one-third of those recorded in the same quarter of 2001. DIVIDEND ANNOUNCEMENT Cameco announced today that the company's board of directors declared its regular quarterly dividend of $0.125 per common share payable on October 15, 2002 to shareholders of record at the close of business on September 30, 2002. CONFERENCE CALL Cameco invites you to join an investor relations Investor relations The process by which the corporation communicates with its investors. conference call on Friday, August 2, 2002 from 10:00 a.m. to 11:00 a.m. Eastern time (8:00 a.m. to 9:00 a.m. Saskatoon time). The call will be open to all members of the investment community. Members of the media will be invited to listen but not ask questions. In order to join the conference call on Friday, August 2, please dial (416) 695-5261 or (877) 888-4210 (Canada and US). An operator will put your call through. Alternatively an audio feed of the conference call will be available on the web site at www.cameco.com by using Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. or Real Player software. See the link on the home page on the day of the call. PROFILE Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest producer of uranium and the largest supplier of combined uranium and conversion services. The company's competitive position is based upon its controlling ownership of the world's largest, high-grade reserves and low-cost operations. Cameco's uranium products are used to generate clean electricity in nuclear power plants around the world including Ontario where the company has an interest in a partnership which generates nuclear electricity. The company also mines gold and explores for uranium and gold in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Australia and Asia. Cameco's shares trade on the Toronto and New York stock exchanges New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . CAUTION REGARDING FORWARD-LOOKING INFORMATION Statements contained in this news release which are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences, without limiting the generality gen·er·al·i·ty n. pl. gen·er·al·i·ties 1. The state or quality of being general. 2. An observation or principle having general application; a generalization. 3. of the following, include: volatility and sensitivity to market prices for uranium, electricity in Ontario and gold; the impact of the sales volume of uranium, conversion services, electricity generated and gold; competition; the impact of change in foreign currency exchange rates and interest rates; imprecision im·pre·cise adj. Not precise. im  pre·cise ly adv. in reserve
estimates; environmental and safety risks including increased regulatory
burdens; unexpected geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. or hydrological hy·drol·o·gy n. The scientific study of the properties, distribution, and effects of water on the earth's surface, in the soil and underlying rocks, and in the atmosphere. conditions; political risks arising from operating in certain developing countries; a possible deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in political support for nuclear energy; changes in government regulations and policies, including trade laws and policies; demand for nuclear power; replacement of production and failure to obtain necessary permits and approvals from government authorities; legislative and regulatory initiatives regarding deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. , regulation or restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the electric utility industry in Ontario; Ontario electricity rate regulations; weather and other natural phenomena; ability to maintain and further improve positive labour relations labour relations (US), labor relations npl → relations fpl dans l'entreprise labour relations labour npl → Beziehungen pl ; operating performance of the facilities; success of planned development projects; and other development and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. .
INVESTOR INFORMATION
Common Shares Investor Inquiries Transfer Agent
CCO Cameco Corporation CIBC Mellon Trust Company
2121 - 11th Street West 320 Bay Street, P.O. Box 1
The Toronto Stock Saskatoon, Saskatchewan Toronto, Ontario
Exchange S7M 1J3 M5H 4A6
CCJ Phone: 306-956-6400 Phone: 800-387-0825
Fax: 306-956-6318 (North America)
New York Stock Web: www.cameco.com Phone: 416-643-5500
Exchange (outside North America)
Preferred Securities
CCJPR
New York Stock Exchange
Cameco Corporation
Highlights
(Unaudited)
Three Months Ended Six Months Ended
June June June June
30/02 30/01 30/02 30/01
---------------------------------------------------------------------
Financial (in millions)
Revenue $195 $138 $319 $209
Earnings from operations 26 19 37 23
Net earnings attributable to
common shares 12 12 17 13
Cash provided by operations 80 12 214 40
Working capital (end of period) 429 475
Net debt to capitalization 7% 16%
Per common share
Earnings $0.22 $0.22 $0.31 $0.23
Cash provided by operations 1.44 0.22 3.85 0.72
Dividend 0.125 0.125 0.250 0.250
Weighted average number of paid
common shares outstanding
(in thousands) 55,818 55,374 55,711 55,336
Average uranium spot price for
the period (US$/lb) $9.88 $8.79 $9.83 $8.26
Note: Currency amounts are expressed in Canadian dollars unless
stated otherwise.
----------------------------------------------------------------------
Cameco's Three Months Ended Six Months Ended
Cameco Production Share June June June June
30/02 30/01 30/02 30/01
---------------------------------------------------------------------
Uranium production (in
thousands lbs U3O8)
McArthur River 69.8% 3,627 2,860 6,842 6,001
Rabbit Lake 100.0% - 2,283 - 4,563
Key Lake 83.3% 37 201 113 286
Crow Butte 100.0% 196 209 379 414
Highland 100.0% 115 175 237 356
------------------------------------------------
Total 3,975 5,728 7,571 11,620
------------------------------------------------
Uranium conversion
(tU) 100.0% 3,096 2,858 6,607 6,538
Gold (troy ounces)
Kumtor 33.3% 45,577 64,375 97,143 127,279
Cameco Corporation
Consolidated Balance Sheets
(Unaudited)
(In Thousands)
As at
---------------------------------------
June 30/02 December 31/01 June 30/01
---------------------------------------------------------------------
Assets
Current assets
Cash $ 156,102 $ 33,737 $ 28,178
Accounts receivable 139,057 255,963 117,945
Inventories 336,262 354,384 423,605
Supplies and prepaid
expenses 37,964 44,574 43,999
Current portion of
long-term receivables,
investments and other 17,436 30,304 -
---------------------------------------
686,821 718,962 613,727
Property, plant and equipment 2,000,285 1,994,424 2,012,072
Long-term receivables,
investments and other 235,223 233,961 228,755
---------------------------------------
2,235,508 2,228,385 2,240,827
---------------------------------------
Total assets $2,922,329 $2,947,347 $2,854,554
---------------------------------------
---------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and
accrued liabilities $ 113,540 $ 108,096 $ 71,254
Dividends payable 6,997 6,959 6,954
Current portion of
long-term debt 112,863 26,189 24,958
Current portion of
other liabilities 3,628 4,182 3,990
Future income taxes 21,025 21,311 31,110
---------------------------------------
258,053 166,737 138,266
Long-term debt 179,835 327,773 352,487
Provision for reclamation 138,176 139,583 136,320
Other liabilities 8,741 9,787 11,209
Future income taxes 488,455 480,520 432,797
Minority interest 23,210 - -
---------------------------------------
1,096,470 1,124,400 1,071,079
Shareholders' equity
Preferred securities 186,071 195,229 185,787
Share capital 681,018 670,031 669,620
Contributed surplus 472,488 472,488 472,488
Retained earnings 468,642 465,420 436,288
Cumulative translation
account 17,640 19,779 19,292
---------------------------------------
1,825,859 1,822,947 1,783,475
---------------------------------------
Total liabilities and
shareholders' equity $2,922,329 $2,947,347 $2,854,554
---------------------------------------
---------------------------------------
See accompanying notes to consolidated financial statements
Cameco Corporation
Consolidated Statements of Earnings
(Unaudited)
(In Thousands)
Three Months Ended Six Months Ended
June 30/02 June 30/01 June 30/02 June 30/01
---------------------------------------------------------------------
Revenue from
Products and services $194,969 $138,422 $318,963 $208,716
--------------------------------------------
Expenses
Products and
services sold 125,267 84,098 202,757 122,087
Depreciation,
depletion and
reclamation 28,617 22,505 52,258 39,494
Administration 9,921 8,530 18,504 17,147
Exploration 5,386 3,669 9,683 7,649
Research and
development 634 598 1,202 1,112
Interest and other (646) (369) (2,176) (1,430)
--------------------------------------------
169,179 119,031 282,228 186,059
--------------------------------------------
Earnings from
operations 25,790 19,391 36,735 22,657
Earnings from Bruce
Power (1,371) - (3,615) -
Other income - - 205 297
--------------------------------------------
Earnings before
income taxes 24,419 19,391 33,325 22,954
Income tax expense
- current 1,535 1,468 2,673 2,762
- future 8,460 3,665 8,888 2,809
--------------------------------------------
Net earnings 14,424 14,258 21,764 17,383
Preferred securities
charges, net of tax 2,256 2,171 4,652 4,528
--------------------------------------------
Net earnings attributable
to common shares $ 12,168 $ 12,087 $ 17,112 $ 12,855
--------------------------------------------
Basic earnings per
common share $ 0.22 $ 0.22 $ 0.31 $ 0.23
--------------------------------------------
Diluted earnings per
common share $ 0.22 $ 0.22 $ 0.31 $ 0.23
--------------------------------------------
Cameco Corporation
Consolidated Statements of Retained Earnings
(Unaudited)
(In Thousands)
Three Months Ended Six Months Ended
June 30/02 June 30/01 June 30/02 June 30/01
---------------------------------------------------------------------
Retained earnings at
beginning of period $463,470 $431,155 $465,420 $437,328
Net earnings 14,424 14,258 21,764 17,383
Dividends on common
shares (6,996) (6,954) (13,890) (13,895)
Preferred securities
charges, net of tax (2,256) (2,171) (4,652) (4,528)
--------------------------------------------
Retained earnings at
end of period $468,642 $436,288 $468,642 $436,288
--------------------------------------------
--------------------------------------------
See accompanying notes to consolidated financial statements
Cameco Corporation
Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
Three Months Ended Six Months Ended
June 30/02 June 30/01 June 30/02 June 30/01
---------------------------------------------------------------------
Operating activities
Net earnings $ 14,424 $ 14,258 $ 21,764 $ 17,383
Items not requiring
(providing) cash:
Depreciation,
depletion and
reclamation 28,617 22,505 52,258 39,494
Provision for
future taxes 8,460 3,665 8,888 2,809
Earnings from
Bruce Power 1,371 - 3,615 -
Deferred charge
(revenue) recognized 735 (2,699) (594) (4,759)
Other operating
items 26,537 (25,535) 128,510 (15,117)
--------------------------------------------
Cash provided by
operations 80,144 12,194 214,441 39,810
--------------------------------------------
Investing activities
Additions to property,
plant and equipment (10,968) (13,730) (22,744) (25,518)
Increase in long-term
receivables, investments
and other (4,229) (95,832) (11,515) (95,832)
Decrease in long-term
receivables, investments
and other 10,830 10,852 10,830 10,852
--------------------------------------------
Cash used in investing (4,367) (98,710) (23,429) (110,498)
--------------------------------------------
Financing activities
Decrease in debt (12,476) (12,479) (58,469) (12,479)
Increase in debt 1,379 84,110 1,379 96,555
Issue of shares, net
of issue costs 1,616 3,207 10,987 4,009
Preferred securities
charges (4,198) (4,188) (8,595) (8,541)
Dividends (6,990) (6,941) (13,949) (13,809)
--------------------------------------------
Cash provided by
(used in) financing (20,669) 63,709 (68,647) 65,735
--------------------------------------------
Increase (decrease) in
cash during the period 55,108 (22,807) 122,365 (4,953)
Cash at beginning of
period 100,994 50,985 33,737 33,131
--------------------------------------------
Cash at end of period $156,102 $ 28,178 $156,102 $ 28,178
--------------------------------------------
Supplemental cash flow disclosure
Interest paid $ 5,130 $ 6,383 $ 9,323 $ 11,516
Income taxes paid $ 891 $ 1,173 $ 2,066 $ 2,507
--------------------------------------------
See accompanying notes to consolidated financial statements
Cameco Corporation Notes to Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (Unaudited) 1. Accounting Policies These consolidated financial statements have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and follow the same accounting principles and methods of application as the most recent annual consolidated financial statements, except as noted below. The financial statements should be read in conjunction with Cameco's annual consolidated financial statements included in the 2001 annual report. Stock-Based Compensation Effective January 1, 2002, Cameco adopted the new CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) Handbook
This article is about reference works. For the subnotebook computer, see .
The phrase pro forma information. Cameco has applied the pro forma disclosure provisions of the new standard to awards granted on or after January 1, 2002. The pro forma effect of awards granted prior to January 1, 2002 has not been included. The standard requires the disclosure of pro forma net earnings and earnings per share information as if the entity had accounted for employee stock options under the fair value method. The fair value of the options issued in the quarter was determined using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on with the following assumptions: risk-free rate Risk-free rate The rate earned on a riskless asset. of 5.0%; dividend yield of 1.2%; a volatility factor of the expected market price of Cameco's shares of 20.0%; and a weighted-average expected option life of 5 years. On February 26, 2002, Cameco granted 477,900 options at a strike price of $43.84. The fair value of these options was determined to be $10.83 per share. For purposes of pro forma disclosures, the estimated fair value of the options is being amortized to income over the vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: period. The total charge has been adjusted for an expected forfeiture The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or Nonfeasance. rate of 17%. For the three months ended June 30, 2002, Cameco's pro forma net earnings attributable to common shares was $11.8 million, basic earnings per share was $0.21 and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of was $0.21. For the six months ended June 30, 2002, Cameco's pro forma net earnings attributable to common shares was $16.6 million, basic earnings per share was $0.30 and diluted earnings per share was $0.30. 2. Property and Business Acquisitions On March 5, 2002, Cameco's wholly-owned subsidiary, Cameco Gold Inc. (CGI CGI in full Common Gateway Interface. Specification by which a Web server passes data between itself and an application program. Typically, a Web user will make a request of the Web server, which in turn passes the request to a CGI application program. ), acquired a 52% interest in AGR Limited (AGR). AGR is an Australia-based exploration company whose principal asset is a 95% interest in the Boroo gold deposit located in Mongolia. The Boroo project is currently in the development stage. The total purchase price of $16.8 million (US) was financed with $12.0 million (US) in cash and a promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. in the amount of $4.8 million (US). In exchange, AGR issued 240 million shares to CGI. The promissory note matures on February 26, 2003 and is expected to be settled by the transfer to AGR of a 60% interest in CGI's Gatsuurt gold exploration property which neighbors Boroo. CGI has also committed to provide an additional $3 million (US) for further exploration near the Boroo and Gatsuurt properties in return for an incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. 4% interest in AGR.
The fair values of the net assets acquired are as follows:
(Millions (Cdn))
Cash $16.9
Other working capital 4.4
Property, plant and equipment 28.9
Minority interest (23.2)
-------
Net assets acquired $27.0
-------
Financed by:
Cash $19.3
Promissory note 7.7
-------
$27.0
-------
3. Long-Term Debt Cameco's long-term revolving credit facility matures in February 2003. Accordingly, all amounts supported by this facility have been classified as current liabilities. At June 30, 2002, such amounts totalled $94.6 million. Cameco's contingent obligation under guarantees of the repayment of Kumtor senior debt exceeds the amount included in Cameco's long-term debt at June 30, 2002 by $78.0 million. 4. Share Capital a) At June 30, 2002, there were 55,974,223 common shares outstanding. b) Options in respect of 2,287,750 shares are outstanding under the stock option plan and are exercisable up to 2010. Upon exercise of certain existing options, additional options in respect of 285,550 shares would be granted. 5. Interest and Other At June 30, 2002, a foreign exchange gain of $1.1 million is included in income (2001 - $1.0 million). 6. Segmented Information
For the three months ended June 30, 2002
Uranium Conversion Gold Total
---------------------------------------------------------------------
Revenue $134,193 $ 35,931 $ 24,845 $194,969
Expenses
Products and services
sold 87,631 22,432 15,204 125,267
Depreciation, depletion
and reclamation 20,881 2,749 4,987 28,617
Exploration 2,760 - 2,626 5,386
Research & development - 634 - 634
Earnings from Bruce Power 1,371
Non-segmented expenses 9,275
------------------------------------------
Earnings before income
taxes 22,921 10,116 2,028 24,419
Income taxes 9,995
------------------------------------------
Net earnings 14,424
Preferred securities
charges, net of tax 2,256
------------------------------------------
Net earnings attributable
to common shares $ 12,168
------------------------------------------
------------------------------------------
For the three months ended June 30, 2001
Uranium Conversion Gold Total
---------------------------------------------------------------------
Revenue $ 79,252 $ 26,921 $ 32,249 $138,422
Expenses
Products and services
sold 53,831 16,027 14,240 84,098
Depreciation, depletion
and reclamation 11,311 3,798 7,396 22,505
Exploration 2,394 - 1,275 3,669
Research & development - 598 - 598
Earnings from Bruce Power -
Non-segmented expenses 8,161
------------------------------------------
Earnings before income
taxes 11,716 6,498 9,338 19,391
Income taxes 5,133
------------------------------------------
Net earnings 14,258
Preferred securities
charges, net of tax 2,171
------------------------------------------
Net earnings attributable
to common shares $ 12,087
------------------------------------------
------------------------------------------
For the six months ended June 30, 2002
Uranium Conversion Gold Total
---------------------------------------------------------------------
Revenue $206,306 $ 62,004 $ 50,653 $318,963
Expenses
Products and services
sold 134,498 39,817 28,442 202,757
Depreciation, depletion
and reclamation 34,517 5,829 11,912 52,258
Exploration 5,312 - 4,371 9,683
Research & development - 1,202 - 1,202
Other income (205) - - (205)
Earnings from Bruce Power 3,615
Non-segmented expenses 16,328
------------------------------------------
Earnings before income
taxes 32,184 15,156 5,928 33,325
Income taxes 11,561
------------------------------------------
Net earnings 21,764
Preferred securities
charges, net of tax 4,652
------------------------------------------
Net earnings attributable
to common shares $ 17,112
------------------------------------------
------------------------------------------
For the six months ended June 30, 2001
Uranium Conversion Gold Total
---------------------------------------------------------------------
Revenue $106,737 $ 45,095 $ 56,884 $208,716
Expenses
Products and services
sold 72,482 24,615 24,990 122,087
Depreciation, depletion
and reclamation 19,535 5,944 14,015 39,494
Exploration 4,406 - 3,243 7,649
Research & development - 1,112 - 1,112
Other income (297) - - (297)
Earnings from Bruce Power -
Non-segmented expenses 15,717
------------------------------------------
Earnings before income
taxes 10,611 13,424 14,636 22,954
Income taxes 5,571
------------------------------------------
Net earnings 17,383
Preferred securities
charges, net of tax 4,528
------------------------------------------
Net earnings attributable
to common shares $ 12,855
------------------------------------------
------------------------------------------
7. Comparative Figures Certain comparative figures for the prior period have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current period's presentation. 8. Subsequent Events (a) Kumtor Gold Mine Kumtor Gold Mine is an open-pit gold mining site in Issyk Kul Province of Kyrgyzstan located about 350 km (220 mi) southeast of the capital Bishkek and 80 km (50 mi) south of Lake Issyk-Kul near the border with China. On July 8, 2002 there was a pit wall failure at the Kumtor minesite in Kyrgyzstan. This involved approximately 7.5 million tonnes of rock which is expected to be removed over the next year at a projected cost of about $1 (US) per tonne. No gold reserves or significant assets have been lost but the timing of access to some high-grade ore has been altered. (b) Purchase of Smith Ranch Effective July 22, 2002, Cameco, through a wholly-owned subsidiary, purchased the assets comprising the Smith Ranch in-situ leach In-situ leaching (ISL), also called in-situ recovery (ISR) or solution mining, is a process of recovering minerals such as copper and uranium through boreholes drilled into the deposit. The process initially involves drilling of holes into the ore deposit. (ISL) operation, and various other ISL properties located in Wyoming from Rio Algom Mining LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . The purchase price of $11.0 million (US) will be satisfied through Cameco assuming the decommissioning liabilities associated with the mine. In addition, Cameco has agreed to purchase approximately $6.0 million (US) of Rio Algom's uranium concentrate inventory. The acquisition will be accounted for using the purchase method of accounting and the results of operations will be included in Cameco's consolidated financial statements from the effective date of the purchase. (c) Uranium Enrichment enrichment Food industry The addition of vitamins or minerals to a food–eg, wheat, which may have been lost during processing. See White flour; Cf Whole grains. Business On July 22, 2002, Cameco signed a memorandum of agreement A memorandum of agreement (MOA) or cooperative agreement is a document written between parties to cooperatively work together on an agreed upon project or meet an agreed upon objective. The purpose of an MOA is to have a written understanding of the agreement between parties. (MOA moa (mō`ə) [Maori], common name for an extinct flightless bird of New Zealand related to the kiwi, the emu, the cassowary, and the ostrich. The various species ranged in size from that of a turkey to the 10-ft (3-m) Dinornis giganteus. ) as an initial step toward entering a formal partnership to build a $1.1 billion (US) enrichment facility in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Under the terms of the MOA, Cameco will obtain, upon entering the partnership, an initial 20% interest in the project. Following receipt of the NRC NRC abbr. 1. National Research Council 2. Nuclear Regulatory Commission Noun 1. NRC - an independent federal agency created in 1974 to license and regulate nuclear power plants licence and a final restructuring of the partnership, Cameco's interest will increase to 25%. Cameco's commitment during the licensing phase is expected to be approximately $8.5 million (US). This phase is expected to last approximately three years. |
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