September 9, 2013 8:34 am
Updated: September 9, 2013 8:38 am

Startup delays forces Cameco to miss 2013 production target for Cigar Lake

Latest setback for Cigar Lake as Cameco announces it won’t meet 2013 production target due to startup delays.

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SASKATOON – Cameco Corp. (TSX:CCO) says it won’t be able to meet its 2013 production target for the Cigar Lake uranium mining project in Saskatchewan, due to delays in starting up ore production and mill processing.

It’s the latest setback for Cigar Lake, which is operated by Cameco on behalf of several partner companies.

The major new mine has been delayed several times in past years due to flooding and other technical issues.

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The Saskatoon-based company owns about half of Cigar Lake and had previously forecast the mine would produce 300,000 pounds of U3O8 this year but now expects production won’t begin until 2014.

Cameco says construction of the mine is 97 per cent complete but it has identified additional work that will be required in the underground ore handling facilities.

In addition, French uranium company Areva – which owns 37.1 per cent of the Cigar Lake project – has advised Cameco that additional modifications will be required at the McLean Lake mill that will process Cigar Lake’s ore.

As a result of the additional work, Cameco expects ore production to begin at Cigar Lake in the first quarter of 2014 and processing of the work will begin by the end of the second quarter.

Cigar Lake, which has the potential for being a major source of uranium, was repeatedly beset by flooding beginning in 2006. Crews safely re-entered its main working level 480 metres underground after it was pumped out in early 2010.

At the time, the revised target for production was mid-2013.

“Cigar Lake is among the most technically challenging mining projects in the world and we continue to make solid progress,” said Tim Gitzel, Cameco’s president and CEO.

“Cameco and Areva are fully committed to bring this exceptional orebody into production in a safe and sustainable way.”

The capital cost of the Cigar Lake project will not be materially impacted by the additional work required at the mine. Based on preliminary information, the capital cost of the mill modifications is not expected to be material. Cameco will provide updates as further information becomes available.

Besides Cameco and Areva, the Cigar Lake project owners include Idemitsu Resources Canada Inc. with eight per cent and Tepco Resources Inc. with five per cent.

The McClean Lake joint venture is 70 per cent owned and operated by Areva Resources, a unit of French nuclear energy giant Areva. The other McClean Lake joint venture partners are Denison Mines Corp. (TSX:DML), 22.5 per cent and OURD (Canada) Co. Ltd., 7.5 per cent.

© 2013 The Canadian Press

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