Cameco green-lights Cigar Lake mine

Vancouver — With a construction licence in hand, the Cameco joint venture is starting to develop the long-awaited Cigar Lake uranium project in Saskatchewan’s Athabasca Basin.

The joint venture is operated by Cameco (CCO-T), which has a half-interest. The remainder is held by Cogema Resources, with 37%, Idemitsu Uranium Exploration, with 8%, and Tepco Resources, with 5%.

Discovered in 1981, the project is 660 km north of Saskatoon and 75 km from Cogema’s McLean Lake mine.

The cost of the project is now estimated to be $450 million, up nearly 30% from the 2001 projection. On the bright side, uranium prices have risen dramatically over the past year to just over US$20 per lb. — a level not seen since the mid-1980s.

Cigar Lake has high-grade reserves of 232 million lbs. grading, on average, 19% U3O8 — enough to sustain a mine life of somewhere between 30 and 40 years. Worldwide, the project is second in size only to Cameco’s high-grade McArthur River mine, which contains 436.5 million lbs. and averages 24.72% U3O8.

Construction of the open pit and underground project will take about 27 months to complete, with startup envisaged for 2007.

Ore from Cigar Lake will be trucked to the McLean Lake operation for initial processing and to Cameco’s Rabbit Lake operation for final processing.

Waste rock resulting from excavation of the underground portion of the Cigar Lake mine will be disposed of at McLean Lake’s Sue-C pit.