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After 3 decades, U3O8 production finally begins at Cigar Lake

One of the most technically challenging mining projects in the world, Cigar Lake is finally operational and ore is being transported to AREVA’s McClean Lake mill.

Thirty-three years after its discovery and after eight years of delays, Cameco announced Thursday that ore production had begun at the Cigar Lake uranium mining joint venture in northern Saskatchewan.

“Cigar Lake is among the most technically challenging mining projects in the world,” said Cameco CEO Tim Gitzel. “The start of ore production is a tremendous achievement and I want to thank the many hundreds of people who helped bring this exceptional orebody into production.”

Areva’s McClean Lake mill is expected to begin processing the ore to uranium concentrate by the second quarter of this year with the mill expected to produce between 2 million and 3 million pounds of uranium concentrates in 2014 and ramp up to its full production rate of 18 million pounds by 2018.

Cameco, the operator of Cigar Lake, owns 50% of the mining operation, along with Areva which holds a 37% stake. The remaining stake is held by Asian energy and utility companies.

The second-biggest, high-grade uranium deposit in the world, the total capital cost of Cigar Lake was estimated at C$2.6 billion, which was originally estimated at $450 million. The mine will employ more than 600 workers, the majority of whom are residents of Saskatchewan’s north.

Cameco had originally expected Cigar Lake’s production to commence in 2007. However, the mine was flooded in 2006 and again in 2008. The sources of the inflows were sealed with the mine fully dewatered and remediated in 2011 which allowed mine construction to resume.

The company utilized a water management strategy which included installation of sufficient water pumping, treatment and surface storage capacity, which Cameco believes will handle the maximum groundwater inflow to the mine.

Production was eventually delayed to 2013 when Cameco identified problems with underground storage tanks at the operation.

Production was finally achieved in the first quarter of this year. Cameco noted that a “number of innovative methods and techniques are being applied” to mine the Cigar Lake including bulk freezing and jet boring.

Cigar Lake has total proven and probable reserves of 114.9 million pounds of uranium, as well as measured and indicated resources totaling 1.5 million pounds.

Cameco’s announcement came the day after Chinese officials said the country could build 20 or more new nuclear plants in the next six years. China now gets less than 2% of its electricity from 17 nuclear reactors with 31 more units now under construction.

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