June 30, 2011 / 6:05 AM / 8 years ago

Cameco shops for uranium, eyes Africa

TORONTO (Reuters) - Canadian uranium producer Cameco Corp is shopping for development-stage uranium projects and will consider opportunities in Africa, the company’s incoming chief executive told Reuters on Wednesday.

Cameco is “scouring the world” for mines that could be in production within 10 years, said Tim Gitzel, who will take over the top job at the company on Friday.

That global search could take the Saskatoon, Saskatchewan-based miner to Africa, the only major uranium-producing region in the world where it does not have operations. Cameco produced about 22.8 million pounds of uranium in 2010 from projects in North America and Kazakhstan.

“We wouldn’t hesitate to go to Africa if we could find a project that made sense to Cameco,” said Gitzel, who worked for French nuclear giant Areva before joining Cameco as chief operating officer in 2007.

“In my previous life, I looked after uranium mines in Niger and some Gabon properties,” he said. “Now Namibia is a big country (for uranium mining).”

Namibia and Niger together produce some 15 percent of the world’s uranium.

Saskatchewan-born Gitzel, who took his first mining job at the tender age of 17, is taking over the top job at Cameco from retiring Chief Executive Jerry Grandey at a time when public sentiment is against nuclear power.

Shares of the uranium producer have tumbled more than 30 percent since a devastating earthquake and tsunami hit Japan in March, leading to the Fukushima debacle, the worst nuclear accident since Chernobyl.

While Gitzel remains confident that the industry will recover, he said the drop in company valuations has created a buying opportunity for Cameco.

“We’ll watch now around the world as valuations of other companies and other projects come off,” Gitzel said. “If there’s something that makes sense, we have the ability to move very quickly on that.”

Gitzel did not say how much Cameco would be willing to pay for acquisitions, but he made it clear that the company already has plenty of exploration plays and is looking for assets that are well into the development process.

“We’d be interested if we could find something that could come into production in the next 10 years,” he said. “For the uranium business that’s near-term production.”


Over his first summer as CEO, Gitzel plans to indulge in one of his favorite activities — visiting Cameco’s mine sites.

The company has major projects underway in Canada, the United States, Kazakhstan and Australia, and plans to double uranium production to 40 million pounds a year by 2018.

With development projects underway and his eye on M&A targets, Gitzel sees plenty of opportunity for Cameco even though countries such as Germany and Switzerland have backed away from nuclear power in the aftermath of Fukushima.

“We’re watching the world and the market very closely,” he said. “We see growth in the market over the next 10 years.”

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