Cameco Gives 2024 Guidance, Billionaire-backed KoBold Touts Big Copper Find
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It was a quiet week for gold after last week’s US Federal Reserve excitement. The yellow metal largely stayed the course, moving in a relatively narrow range to end the period just under US$2,025 per ounce.
Elsewhere in precious metals, the palladium price fell below the platinum price for the first time since April 2018, slipping as low as US$876.60 per ounce on Thursday (February 8). Palladium hit an all-time high in 2022, but substitution from automakers, which use both platinum and palladium in catalytic converters, is now weighing on its price.
Cameco shares 2023 results and sets 2024 guidance
Looking over to uranium, this week all eyes were on Cameco (TSX:CCO,NYSE:CCJ) as the major producer released its financial and operating results for 2023. After Kazatomprom (LSE:59OT,OTC Pink:NATKY) cut its 2024 production guidance last week, market watchers were keen to get insight from the world’s second top miner.
Cameco said it produced 17.6 million pounds of uranium last year, and has set its guidance at 22.4 million pounds for 2024. It’s worth noting that 2023’s 17.6 million pounds was lower than the company’s revised September guidance of 18.7 million pounds. The company originally planned to produce 20.3 million pounds for the year.
“We set a production target of 20.3 million pounds (our share) at the beginning of 2023. In September, we revised this to up to 18.7 million pounds (our share), and we achieved 17.6 million pounds (our share), consisting of 9.4 million pounds (our share) of production at McArthur River/Key Lake and 8.2 million pounds of production (our share) at Cigar Lake, both slightly below our forecast” — Cameco
The results came with extensive uranium market commentary from President and CEO Tim Gitzel, who expressed continued optimism about the outlook for industry. He also shed light on Cameco’s contracting strategy, and discussed its acquisition of a 49 percent interest in Westinghouse Electric Company, which closed this past November.
Uranium has a strong online community on social media platform X, formerly Twitter, and after Cameco’s results came out many had questions about the numbers, particularly the company’s 2023 average realized uranium sale price of US$49.76 per pound — that’s compared to the current uranium spot price of over US$100.
The company’s share price took a hit as market participants took in its results, but experts have pointed to Cameco’s comments that its long-term contract commitments only represent about 20 percent of its current reserve and resource base. In other words, it still has room to sign supply deals at prices that better reflect today’s elevated levels.
I’ll be speaking next week with Justin Huhn of Uranium Insider about Cameco’s results and other uranium sector developments. If you have a question you’d like me to ask him, you can reach me at cmcleod@investingnews.com.
KoBold calls Zambia copper find “extraordinary”
Copper is another commodity that’s attracting attention for its energy transition applications, and this week privately held KoBold Metals, whose backers include Bill Gates and Jeff Bezos, said it’s found a massive copper deposit in Zambia.
KoBold has over 60 projects across three continents, and is using artificial intelligence to gain an edge in exploration. In simple terms, the company’s goal is to quantify and reduce exploration uncertainty to produce better results.
KoBold has reportedly been drilling at its Zambian project for just over a year, and according to a Bloomberg article, President Josh Goldman believes it’s shaping up to be “extraordinary.” He compared the asset’s potential size and grade to those of Kamoa-Kakula, a copper complex in the Democratic Republic of Congo that’s being developed by a joint venture that includes Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) and China’s Zijin Mining Group (OTC Pink:ZIJMF,HKEX:2899).
“The story with Mingomba is that it’s like Kakula in both the size and the grade. It’s going to be one of the highest grade, large underground mines” — Josh Goldman, KoBold Metals
While the copper price trended down in 2023, some experts believe the market is heading toward a uranium-like supply crunch as demand increases and miners face slow development timelines. It will be interesting to see if KoBold’s famous backers can help bring the company’s Zambian project to market any quicker than usual.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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