Cameco to build mine in Kazakstan

Saskatoon-based Cameco (CCO-T) and the National Atomic Co. of Kazakstan plan to spend some US$38 million to bring the Inkai uranium deposit in that country into commercial production in 2007.

Cameco has agreed to lend the 60%-owned joint venture US$40 million, with US$19.5 million already handed over by the end of 2003. The loan will be repaid through production from Inkai. Kazakstan’s National Atomic Co. holds the remaining 40% of the joint venture.

The in situ leach (ISL) project, which will be Cameco’s first uranium mine outside North America, is expected to produce up to 2.6 million lbs. U3O8 by 2009. With proven and probable reserves totalling 86.4 million tonnes grading 0.05% U3O8, the operation is expected to run for at least 30 years. Extra life could be squeezed out of an additional 3.6 million tonnes of indicated resources running 0.04% U3O8. There is also an inferred resource of 253.9 million tonnes grading 0.05% U3O8.

In 2003, test mining at Inkai contributed 169,000 lbs. of U3O8 to the company’s overall production of 18.5 million lbs. That overall number was about 11% below target, owing to a flood that swamped the McArthur River operation in Saskatchewan in April. In 2004, Inkai is expected to produce another 240,000 lbs. of uranium for Cameco’s account.

Mining at Inkai involves pumping oxidant-enriched groundwater into the deposit to liberate and transport the uranium to the surface, where it is recovered in a processing plant. Cameco already operates two such operations in Wyoming and Nebraska, which combined account for all primary uranium production in the U.S.

The National Atomic Co. operates three ISL mines in Kazakstan.

The pair plan to submit an environmental assessment and design plan to Kazakstani regulators by year-end, with construction slated to start in early 2005. Some 200 workers will be employed during construction; 230 will staff the operation at full steam.

Cameco is no stranger to operating in the region, as it has a 67% stake in the Kumtor gold mine in the neighbouring Kyrgyz Republic. In the fourth quarter of 2003, Kumtor produced 69,226 oz. gold, up 46% from the corresponding period of 2002; cash costs between the two periods fell US$40 to US$180 per oz. Production at Kumtor is expected to slip by about 10% to around 610,000 oz. during 2004, as low-grade stockpiled ore is mixed with higher-grade mined ore.

Cameco recently began commercial production at its 53.2%-owned Boroo gold mine in Mongolia. The mine is expected to pour 210,000 oz. gold at a cash cost of US$170 per oz. in 2004, and it should run until at least 2009 (T.N.M., March 22-28/04).