Uranium heavyweight Cameco Corp. will restart a suspended Canadian mine and mill in response to improving market conditions and growing interest from utilities for long-term contracts, President and CEO Tim Gitzel announced during a Feb. 9 earnings call.

The company plans to reach an annual output of 15 million pounds at its majority-owned McArthur River mine and Key Lake mill beginning in 2024, bringing the operations to about 60% of their licensed capacity. McArthur River and Key Lake are the world's largest high-grade uranium mine and mill, according to the company. Uranium is typically used as a fuel for nuclear reactors.

Prices for yellowcake, a mixed uranium oxide, cratered after the Fukushima Daiichi reactor accident in Japan in 2011. In total, Cameco has cut about 190 million pounds of uranium production since 2016 as demand dried up and prices weakened. But the tide is turning in the uranium producer's favor, with governments looking to nuclear energy as an attractive, low-carbon power source, company executives said.

"Lots of good tailwinds for nuclear," Gitzel said. "We see demand growing. We don't just feel it, we can see it."

Cameco has five suspended uranium sites in North America under care and maintenance, which were taken offline due to deflated uranium prices. The operations include the McArthur River, Key Lake and Rabbit Lake facilities in Saskatchewan as well as the Smith Ranch-Highland mine in Wyoming and the Crow Butte mine in Nebraska.

Uranium prices have been heating up, climbing to the mid-$40s level per pound in 2021, over double the lows of around $20 per pound in 2017 and 2018. Buying activity from the Canadian Sprott Physical Uranium Trust Fund and political instability in Kazakhstan have pushed up prices, bringing some uranium customers to seek out additional supply. Cameco has added 70 million pounds of additional long-term contracts to its portfolio since the start of 2021.

"After more than 10 years in a trough and through the deliberate and disciplined execution of our strategy, aligning our productive capacity with market opportunities, we are seeing the cycle form," Gitzel said.

As Cameco transitions the McArthur River and Key Lake operation back online, the company will pull back production at its Cigar Lake mine to 13.5 million pounds per year, saying it still needs to maintain "supply discipline" amid an uncertain market.

The company's tier-two assets will remain on care and maintenance. It said activity at its 40%-owned Inkai mine in Kazakhstan will "follow the 20% reduction until the end of 2023," unless joint venture partner NAC Kazatomprom JSC changes plans.

Despite optimism for future uranium market conditions, supply chain constraints and the COVID-19 pandemic continued to weigh on the uranium producer during the fourth quarter of 2021.

Cameco's attributable earnings fell to C$11 million in the final quarter of 2021, from C$80 million year over year. The company reported an attributable loss of C$103 million for the full year, compared to a loss of C$53 million in 2020.

"We expect that our operational decisions at McArthur River [and] Key Lake will have a significant and positive impact on our financial performance," Gitzel said.