Name and Location
Cigar Lake uranium mine project, Saskatchewan, Canada.

Client
The Cigar Lake mine is owned by Cameco (50.025%), Areva Resources Canada (37.1%), Idemitsu Canada Resources (7.875%) and Tepco Resources Inc. (5.0%). The mine is operated by Cameco. Ore from Cigar Lake will be processed at the McClean Lake mill, which is majority owned and operated by Areva.

Project Description
Cigar Lake is the second-biggest high-grade uranium deposit in the world. Itke has total compliant proven and probable reserves of 537.1-million tonnes grading 18.3% uranium oxide (U₃O₈), containing 216.7-milion pounds of U₃O₈.

The Cigar Lake uranium deposit occurs at depths ranging from 410 m to 450 m below the surface, where the water-saturated Athabasca sandstone meets the underlying basement rocks. To prevent water from entering the production areas of the mine and to stabilise weak rock formations, the ore zone and surrounding ground will be frozen by circulating a brine solution through cased holes, drilled from surface and underground.

The jet-boring mining method was selected for the Cigar Lake deposit after extensive testing. Operated from tunnels in the basement rock below the orebody, the method entails using high-pressure water jets to mine out cavities in the orebody. Ore and water will be piped away from the cavities to underground processing circuits, where it will be ground, thickened and pumped to the surface for transportation to Areva Resources Canada’s McClean Lake mill for processing to uranium concentrate.

Value
The total costs for the project as at December 2013 had increased to C$2.6-billion, a far cry from the expected $450-million when construction was first approved in 2004.

Duration
Production is scheduled to begin in the first quarter of 2014.

Latest Developments
As part of the ongoing commissioning process, Cameco has been assessing the current state of ground freezing at Cigar Lake.

The company has determined that freezing has not advanced as quickly as expected in some localised areas of the mine. Given that the McClean Lake mill has not yet started processing Cigar Lake ore, it has decided to temporarily stop jet-boring at Cigar Lake to allow for the orebody to freeze more thoroughly in these areas. The additional freezing will allow for more continuous production at the mine once the mill is operational.

Based on early indications from Cameco’s assessment it expects that the production schedule could shift by a few months. Although a minor change to the schedule, it means ore that was expected to be milled at the end of the year will shift into early 2015, thereby affecting the company’s  2014 production target.

The company's long-term yearly production target of 18-million pounds U₃O₈ by 2018 will not be impacted.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Cameco expected first production by 2007. However, a series of setbacks added to rising costs and a lengthening timeline, including a rock fall causing an underground flood in October 2006, delaying construction.

Cameco delayed the startup date even further, eventually aiming for a startup at the end of last year; however, during commissioning activities of the underground ore-handling facilities in the mine last September, Cameco identified additional work that would delay jet boring in ore to the first quarter of this year.

Project partner Areva Resources Canada had also at that point realised that further mill modifications were required at its McClean Lake mill, and that the mill was expected to start processing Cigar Lake ore only by the end of the second quarter.

Contact Details for Project Information
Cameco director of investor relations Rachelle Girard, tel +1 306 956 6403.
Areva, tel +331 34 96 12 15, fax +331 34 96 16 54 or email press@areva.com.