* Q1 EPS C$0.36 vs C$0.22 a year earlier
* Adjusted EPS C$0.28 vs C$0.27
* Plans to boost production to 40 mln pounds
* Shares up 1 percent at C$25.03
(Adds quotes, details, background, share price)
By Cameron French
TORONTO, May 4 Cameco Corp's (CCO.TO)
first-quarter profit jumped 73 percent thanks to a one-time
gain and higher earnings from its nuclear fuel services and
power-generation businesses, the company said on Tuesday.
The top Canadian uranium producer also said it aimed to
boost uranium production as countries turn increasingly to
nuclear power as a source of low-emissions electricity
Cameco said it plans to nearly double uranium production to
40 million pounds annually over the next eight years to satisfy
rising demand for nuclear fuel as nuclear power generation
"The nuclear renaissance is unfolding in Asia, getting
traction in the developed world and emerging in many other
countries," Cameco Chief Executive Jerry Grandey said on a
"At last count there were 53 plants under construction with
many more planned," he added.
While China is expected to be active in securing uranium
for new reactors, Cameco officials said China had yet to lock
in significant volumes in long-term contracts.
"I would expect ... that should change here over the near
term," said George Assie, vice-president of marketing.
He said China has probably bought about 2 million pounds of
uranium on the spot market so far in 2010. He predicted Chinese
purchases will total 5 million to 6 million pounds this year.
Uranium spot prices were at $41.75 a pound this week.
Cameco earned C$142 million, or 36 Canadian cents a share,
in the quarter ended March 31. That compared with a profit of
C$82 million, or 22 Canadian cents a share, in the year-before
Excluding a gain of C$31 million for unrealized
mark-to-market gains on financial instruments, Cameco earned 28
Canadian cents a share.
That exceeded expectations of a profit of 24 Canadian cents
a share, according to analysts polled by Thomson Reuters
Overall, quarterly revenue fell 2 percent to C$485
Uranium revenue slid 9 percent, as sales volumes weakened
and realized prices fell 2 percent in Canadian dollar terms.
The drop in sales came despite a 27 percent rise in
Grandey noted that Cameco expects uranium deliveries to be
more heavily weighted in the second and fourth quarters.
Revenue from the nuclear fuel services and electricity
generation divisions -- Cameco owns 31.6 percent of Ontario's
Bruce Power LP -- each jumped 11 percent.
Cameco's expansion plans rely heavily on production from
its 50 percent owned Cigar Lake project in Saskatchewan, which
was on track to produce 18 million pounds a year before it
flooded in 2006. France's Areva CEPFi.PA owns a minority
The company has been struggling to overhaul the project
over the past four years, and now expects output in 2013.
Grandey said he had been down the recently pumped-out mine
in the past five weeks.
"Things surprisingly look very well," he said.
Cameco also plans to raise production at its flagship
McArthur River mine in Saskatchewan, its Inkai mine in
Kazakhstan, and its smaller U.S. operations.
Beyond that, the company also owns the Kintyre project in
Australia and the Millennium project in Saskatchewan.
At mid-afternoon, the company's shares were up 25 Canadian
cents, or 1 percent at C$25.03 on a day when most of Toronto's
mining stocks were weaker.
(Additional reporting by Euan Rocha; editing by Rob Wilson)