Cameco, Orano up stake in Cigar Lake uranium mine

Cameco, the world’s third-largest uranium producer, will see its ownership in the mine rise by just over 4.5% to almost 54.5%, while Orano’s will increase to slightly over 40.45%.

TEPCO Resources retains the remaining 5% interest in Cigar Lake, the world’s largest high-grade uranium mine.

“As the operator of Cigar Lake since 2002, it’s an asset we know incredibly well, Cameco president and CEO Tim Gitzel said in the statement. “It’s quite simply one of the best and most prolific uranium producing assets on the planet.”

Production guidance for the mine this year is pegged at 15 million pounds of uranium concentrate (U3O8) on a 100% basis, which would make it the world’s largest uranium producing operation this year.

“Canada is an essential asset in our strategy to diversify our production which is even more important today to guarantee our customers a security of supply in the long term,” Orano Mining president Nicolas Maes, said in a separate statement.

Cigar Lake’s reserve and resource base includes proven and probable reserves estimated at 152.4 million pounds of U3O8, one of the more popular forms of yellowcake, which actually presents as an olive green to black odorless solid.

Measured and indicated resources for the mine stand at about 103.7 million pounds, and inferred resources at 22.9 million pounds.

Cameco said its increased share in the operation will give it access to an additional 6.9 million pounds of proven and probable reserves, 4.7-million pounds of measured and indicated resources, and one million pounds of inferred resources.

Matching production with market
The Canadian miner’s plan is to cut production at Cigar Lake to 13.5 million pounds of U3O8 a year (100% basis), 25% below licenced capacity, starting in 2024.

“Extending the mine life at Cigar Lake by aligning production with market opportunities and our contract portfolio is consistent with Cameco’s tier-one strategy,” it said.

As part of these plans, the company is restarting its McArthur River mine and Key Lake mill in Saskatchewan this year, which have been in care and maintenance since mid-2018.

In 2021 Cameco operated at only 25% of its productive capacity, which Gitzel said came at a significant cost to the business. In 2024, production will increase to 60% of capacity.

Gitzel has said Cameco’s plans do not represent an end to the company’s supply discipline strategy. The miner has removed 190 million pounds of uranium from the market since 2016 through planned and unplanned cuts, inventory reduction and market purchases, which have contributed to security of supply concerns in the industry.

For years, Canada was the world’s largest uranium producer, accounting for about 22% of world output, but in 2009, was overtaken by Kazakhstan.