SASKATOON -- Shares in Cameco Corp. shot higher Thursday after the company said the Tax Court has ruled in its favour in a dispute with the Canada Revenue Agency where billions of dollars are at stake.
The case centres around Cameco's use of a subsidiary in Switzerland to sell and trade its uranium. The CRA contends it was established to avoid Canadian taxes, while Cameco has maintained it was for legal and sound business practices.
Cameco chief executive Tim Gitzel called the judgement issued Wednesday a clear victory.
"It was a clear and decisive ruling in our favour. Our company has been through a lot over the last several years, so this is a great day for Cameco," he told a conference call with financial analysts.
The company's shares were up $1.45 or about 15 per cent at $11.27 in midday trading on the Toronto Stock Exchange after spiking to as high as $15.62 in the morning.
The ruling only covers the company's 2003, 2005 and 2006 tax years where about $11 million in taxes is at stake, but will have implications for subsequent years where some $2 billion in taxes plus interest and penalties are in question, Gitzel said.
"We believe the thorough and meticulous analysis of the facts in the judgement will make it difficult to overturn, and furthermore will be relevant in determining the outcome for subsequent years."
The CRA, which did not immediately reply to a request for comment, has 60 days to appeal the decision.
The uranium miner said the tax court has referred the matter back to the Minister of National Revenue in order to issue new reassessments for the years in accordance with the court's decision.
Cameco will be making an application to the court to recover the costs incurred over the course of this case that total about $57 million, Gitzel said.
