What happened

2017 was a year investors in Cameco Corp. (NYSE:CCJ) would want to forget, but they shouldn't, really. While shares of the uranium miner slumped 11.8% on the back of a challenging year, something happened during the tail end of 2017 that helped the stock gain some ground and could further help it sustain momentum.

So what

Low uranium prices and a lost contract proved to be Cameco's biggest challenges in 2017. Even as Cameco's losses widened, the ghosts of the Fukushima Daiichi nuclear disaster of 2011 that stalled the nuclear energy market came back to haunt the company when Tokyo Electric Power Company abruptly terminated a uranium supply contract with Cameco that was to run through 2028.

Not surprisingly, Cameco shares trended lower for the better part of 2017 as investors, who had patiently waited for a turnaround in the uranium market, started losing what little hopes they had. Their fears were confirmed in October when Cameco reported a huge loss for its third quarter and slashed its full-year production outlook, sending the stock tumbling to its 52-week low.

And then, the unexpected happened.

A worried man with a falling stock graph in the background.

Image source: Getty Images.

In November, Cameco made two major announcements: a temporary suspension of operations at key mines and an 80% cut in its annual dividend. You'd expect the stock to have tanked after the news. Instead, November turned out to be the second-best month for Cameco in 2017, with shares jumping 15.5% as investors hoped a production cut would help rebalance the demand and supply in the industry, while a dividend cut would help Cameco prevent cash burn.

In December, the uranium industry got yet another boost when Kazakhstan, the world's largest uranium supplier, announced plans to cut production by 20% over the next three years.

Between November and December, Cameco shares gained nearly 9.8%, ending the year on a less somber note than expected.

Now what

Production cuts from the world's largest uranium company and supplying nation should provide uranium prices a much-needed floor. In fact, uranium prices already appear to be stabilizing -- spot prices edged roughly 10% higher to around $22.32 per pound between October and December.

Cameco, for its part, is doing a lot of things right, including cutting costs, focusing on long-term contracts, and maintaining cash flows and dividends at sustainable levels. Cameco should be an interesting stock to watch in 2018 as the production cuts play out and hopefully help the industry revive.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.