TORONTO (miningweekly.com) – Jerry Grandey, CEO of uranium giant Cameco, came out in defence on Tuesday of the company's delayed Cigar Lake project, in Canada's Saskatchewan province.
The project has flooded twice since 2006 and Cameco has only this year dewatered the mine and been able to send teams underground for a look at the damage.
Cameco is the operator of the Cigar Lake project, and owns 50%, while Paris-based Areva holds 37%, Idemitsu Canada Resources owns 8% and Tepco Resources owns the remaining 5%.
In the first quarter, Cameco filed a new technical report for the project, which included updated, increased capital and operating cost estimates, as well as lower reserves compared with previous reports.
“While there has been an understandable focus on the increased development and operating costs projected for this deposit, let me be clear: Cigar Lake remains a robust project,” Grandey asserted on Tuesday.
“It has an attractive net present value to Cameco and its partners, not to mention the significant upside potential.
“If we didn't own it, we'd be trying to acquire it,” he added.
“Given the grade and size of the deposit, it remains an enviable asset among uranium projects in the global development pipeline.”
Production at Cigar Lake is now expected to begin in 2013, and Cameco has estimated its own share of the total capital to build Cigar Lake to be between $920-million and $1-billion, including $470-million that had been spent by the end of 2009.
The deposit contains proven and probable reserves of 209-million pounds of uranium.
Cameco, which has forecast uranium output of 21,5-million pounds for this year, plans to grow production to at least 40-million pounds a year of uranium by 2018.
About nine-million tons a year of the production growth will come from the company's share of output from Cigar Lake, and the balance will come from expansions and projects in Kazakhstan, Canada, Australia and the US, Grandey said.
“Cameco wants to be ready to supply the growing market for nuclear fuel,” he said.
At last count, there were 53 nuclear plants under construction around the world, and Cameco expects that 90 new reactors will be operating worldwide within a decade.
Shares in Cameco rose 0,89% on Tuesday, to C$25,00 apiece by 15:24 in Toronto.
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