More trouble for Cameco at Cigar Lake

Cameco‘s (CCO-T) remediation program at Cigar Lake has been thwarted again.

The company reported that work on shaft one has been suspended as water is flowing in quicker than it can be pumped out.

In Toronto on Aug.13, the company’s shares fell roughly 4% or $1.21 to $32.84 on 2.7 million shares traded.

Cameco had managed to pump down to 430 metre level of one of the world’s largest undeveloped uranium deposits before the water inflows accelerated.

The mine has a total depth of 500 metres and the company says it will now have to let the water level rise to the100 metre level so that it can monitor groundwater conditions.

The source of the inflow is, as yet, unknown, but Cameco says once found it will have a better idea of what the implications will be on its remediation plan and production target date.

While Cigar Lake was originally slated to go into production in 2007, an initial flood in 2006 pushed that date back. Before this most recent flood, the company estimated that 2011 would be the time it reached production.

Cameco said it will release more information on Thursday when it posts second-quarter earnings. Cameco has a 50% stake in the mine while French nuclear giant Areva has a 37% stake.

Cigar Lake hasn’t been the only headache for Cameco. It has suspended operations at its Port Hope nuclear fuel conversion plant because of soil contamination.