Cameco Corp (CCO:TSX) provided an update on its Cigar Lake project located in northern Saskatchewan.  Cigar Lake is owned by Cameco (50% operator), AREVA (37.1%), Idemitsu Canada Resources (7.875%) and TEPCO Resources (5%).  Construction of the mine is currently at 97% however, while commissioning underground facilities, Cameco found more work that will delay jet boring in ore.  Cameco expects to begin producing ore in Q1/2014, however, AREVA notified Cameco that they require further mill modifications which are expected to take until the end of Q2/2014.

Cameco President and CEO, Tim Gitzel

Cameco President and CEO, Tim Gitzel

"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 in today's release. "Cameco and AREVA are fully committed to bring this exceptional orebody into production in a safe and sustainable way."

Cameco had planned to produce 300,000lbs U308 in 2013, but these delays will push production guidance out by almost a year.  Based on preliminary information, Cameco does not anticipate any material increases in capital costs as a result of these modifications and delays.

Cameco plans to revise its 5-year forecast which currently sits at approximately 2 million lbs U308 in 2014, 5.6 million lbs by 2016 and 9 million lbs by 2018 (Cameco’s share).

As this isn’t the first delay in a bumping development timeline for the Cigar Lake project, some analysts have recommended diversifying out of Cameco and into stories with less development risk.

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Cameco Corp (CCO:TSX) 3-year chart

Cameco Corp (CCO:TSX) 3-year chart

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