Uranium companies Cameco and Orano Canada have announced that they are increasing their interest in the Cigar Lake – the world’s highest-grade uranium mine – by acquiring Idemitsu Canada Resources’ 7.875% participating interest in the joint venture for a combined C$187-million.
Upon closing, Cameco’s ownership stake in the Cigar Lake uranium mine in northern Saskatchewan will increase by 4.522 percentage points to 54.547%, while Orano’s share will rise by 3.353 percentage points to 40.453%.
TEPCO Resources retains the remaining 5% interest in the property.
Cameco's purchase cost to acquire its respective share of Idemitsu's interest is C$107-million and Orano's purchase cost is C$80-million.
“As the world’s largest high-grade uranium mine, Cigar Lake is quite simply one of the best and most prolific uranium producing assets on the planet,” said Cameco president and CEO Tim Gitzel.
“Cameco is very pleased to increase our ownership stake in this outstanding tier-one operation. As the operator of Cigar Lake since 2002, it’s an asset we know incredibly well. It’s a proven, permitted and fully licenced mine in a safe and stable jurisdiction that operates with the tremendous participation and support of our neighbouring Indigenous partner communities.”
The 2022 production outlook for the Cigar Lake mine is 15-million pounds of uranium concentrate (U3O8) on a 100% basis, which would make it the largest uranium producing operation in the world this year. The Cigar Lake reserve and resource base includes proven and probable reserves estimated at 152.4-million pounds of U3O8, measured and indicated resources of approximately 103.7-million pounds, and inferred resources of 22.9-million pounds. Cameco’s increased share in the operation will therefore provide the company with access to an additional 6.9-million pounds of proven and probable reserves, 4.7-million pounds of measured and indicated resources, and one-million pounds of inferred resources.
Cameco’s current plan is to reduce production at Cigar Lake to 13.5-million pounds of U3O8 a year (100% basis), 25% below licenced capacity, starting in 2024.
“Extending the mine life at Cigar Lake by aligning production with market opportunities and our contract portfolio is consistent with Cameco’s tier-one strategy, and is expected to allow more time to evaluate the feasibility of extending the mine life beyond its current reserve base while continuing to supply ore to Orano’s McClean Lake mill. This will remain our production plan until we see further improvement in the uranium market and contracting progress, demonstrating Cameco’s ongoing commitment to be a responsible supplier of uranium fuel.”