Cameco (CCO.TO) was at last look Thursday up near 1% in Canada -- having been up by more than 2% a short time ago -- despite saying it was informed by its partner Kazatomprom on December 31, 2024 of a suspension in uranium production activity at joint venture Inkai as of January 1, 2025.

According to a National Bank note, this came as a surprise to Cameco and was due to the lack of receipt of an extension to submit necessary regulatory documents to the Ministry of Energy which was expected prior to year-end 2024.

National, which has an Outperform rating and C$87 target on the stock, said JV Inkai represents 7% of its total equity value of C$51.26 per share, 44% of its uranium purchased of 7.9 million lbs U3O8 and 12% of its total uranium sales of 33 million lbs U3O8 in 2025. National's target price is based on a weighted multiple of 1.8x NAV (50%) and 18.0x 2025E EV/EBITDA (50%).

In looking at what could be the impact to Cameco in 2025, National said a material reduction of its estimated production at JV Inkai in 2025 could negatively impact cost of sales with a bigger portion of purchases needed to come from elsewhere, though it noted CCO does have options through inventory, spot purchases, or other commitments to mitigate this impact. Additionally, with JV Inkai representing about 4% of 2025 estiamted world production of 169 million lbs per National's model, the positive impact to uranium spot prices from a tightening of supply would be another mitigating factor.

National noted the suspension length is uncertain at this time but also noted Kazatomprom expects a resolution in the coming weeks: According to National, CCO will work with its majority owner and controlling partner to seek further clarification on how this transpired, assess the operational and financial impact to 2025 and 2026 and what it can do to help restart the mine. Kazatomprom in its press release has noted that it does not expect any significant impact on the 2025 production plans and that the JV Inkai is expected to submit the required documentation to the Ministry within the next couple of weeks after which the situation should be resolved.

Cameco's share price was up $0.60 at last look to $74.46 on the TSX.