Cameco publishes strong results

Friday, 2 November 2007 The world's biggest uranium company published very strong third quarter results buoyed by high uranium prices and deliveries. Progress on engineering problems has also been made.

Cameco said that its revenue for the nine months to 30 September was C$ 1816 million ($1939 million), some 38% higher than the same period in 2006. The increase was due to a significantly higher realised selling price due to heightened prices of uranium in recent months. Over the year as a whole Cameco expects revenue from uranium to increase by 65% relative to 2006. A significant factor in this would be new contracts the company has made since uranium prices began to climb in 2004.

In notes on the company's business areas, Cameco said that remediation work at Cigar Lake had progressed and within six weeks it should have completed a 1000 cubic metre concrete plug to enable dewatering. The 60% complete facility, which would be the largest uranium mine in the world, was dramatically flooded in October 2006 after a rockfall. A target date for dewatering should be known at some time in December. The problem has delayed commissioning the huge mine back by a year to 2011 "at the earliest." Cigar Lake should then produce 8200 tonnes of U3O8 per year.

At the Port Hope conversion facility, operation has been suspended since the discovery of contamination in July. A root cause analysis presented to regulators said, in essence, "corrosive chemicals and other liquids contacted the floor structures such as pits and trenches that were not well designed for holding liquids over extended periods." The result was that uranium and process chemicals were detected in the soil beneath the plant during construction work.

It has now been found that very low concentrations of signature chemicals may have passed under a municipal road that runs through the Port Hope site. Cameco has begun installation of a control system to block the flow of groundwater in the immediate area.

At Inkai block 1 in Kazakhstan, Cameco continued to construct a processing facility, which it intends to bring into service this year, subject to availability of sulfuric acid which is currently in short supply. At Inkai block 2, a test mine has produced 100,000 lb U3O8 during the third quarter of 2008. Cameco plans to apply for a mining licence this year ahead of commercial operation in 2008.

In addition, a recently signed non-binding memorandum of understanding (MoU) between Cameco and KazAtomProm provided for Inkai's output to be doubled to 10.4 million lb U3O8, although no timeframe has yet been set. The MoU would also see a feasilbility study carried out concerning a uranium conversion facility in Kazakhstan.

Further information

Cameco
KazAtomProm

WNA's Canada's Uranium Production and Nuclear Power information paper

WNN: Acid shortage delays Kazakh expansion
WNN: Cameco surprised by Port Hope chemicals
WNN: Cameco details Cigar Lake remediation