Mining has resumed about a month earlier than expected at Cameco‘s (CCO-T) McArthur River uranium mine in Saskatchewan.
The mine was forced to shut down on April 6 after flooding began when a 10-metre-long portion of the roof caved during drifting on the 510 level, in the uppermost portion of the mine. There were no injuries, but the flooding totally submerged a semi-autogenous grinding (SAG) mill on the 640 level.
Cameco has plugged the development tunnel with concrete and is pumping the excess water into an inactive part of the mine before sending it to the surface. The company says water inflow at McArthur River has stabilized, and it hopes to have the affected area permanently sealed off by mid-August. The world’s largest uranium producer had originally predicted that repairs would take 4-6 months.
The company managed to stave off declaring force majeure at the mine by covering all sales contracts with existing inventory and other supply sources. Layoffs among the 275 workers at the mine and mill were avoided as the company performed additional maintenance, training and by using vacation time.
Cameco cranked up 2 raise bore machines underground at McArthur at the end of June; the company expects to soon have a third running, bringing mining operations back up to full capacity. The Key Lake mill, 80 km to the southwest, has also resumed milling ore from the mine.
The resumption of operations was accompanied by increased monitoring, among other regulatory requirements.
Cameco expects the operation to produce about 12-13 million lbs. (8-9 million lbs. toward its own account) of U3O8 in 2003. At full steam, the mine’s capacity is 18.7 million lbs. The mine’s reserves stand at 473 million lbs. U3O8 contained in 930,000 tonnes grading 23% U3O8 — a grade more than 100 times that of most uranium mines.
The Saskatoon-based company figures the shutdown will take a $4-$5-million bite out of its second-quarter earnings for each month of lost production. The actual capital costs of repairs have yet to be fully calculated.
Situated 620 km north of Saskatoon, McArthur River is the richest uranium mine in the world. It is held 70% by operator Cameco and 30% by France’s Cogema Resources.
Cameco shares closed 94 higher at $43.90 in Toronto following the news on July 3.
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