This week, shares of Canadian uranium mining company Cameco Corporation (TSX:CCO)(NYSE:CCJ) jumped after the Canadian Revenue Agency (CRA) probe into whether the company's use of a subsidiary in Switzerland to buy and sell Uranium constituted tax avoidance was dropped.
This ongoing tax related battle has cost Cameco shareholders dearly, amid increased government scrutiny with respect to taxation jurisdictions and the lengths to which many corporations will go to save on corporate taxes, hurting Canadian taxpayers.
The ruling was "clear and decisive" according to Cameco's CEO Tim Gitzel, allowing Cameco to focus less on pending legal matters and more on increasing the company's production efficiency amid pesky commodity prices which have lingered near multi-year lows for some time now.
Cameco's share price jumped more than 15% on the news, as investors who were previously on the sidelines have bought back into the long-term uranium play which is Cameco.
Cameco, and other major uranium players, have been plagued by increased supply and a relatively stable demand, for years; investors who have avoided commodities have largely viewed uranium as a toxic space to play in, with little in the way of tailwinds from a demand perspective for investors to lay their hats on.
While I believe many of the aforementioned headwinds are likely to persist, this ruling which would have impacted Cameco in a nine-figure manner appear to have been resolved, with financial markets accurately reflecting the news.
Invest wisely, my friends.
