Cameco increases ownership stake in Cigar Lake Uranium Mine

The Cigar Lake mine in northern Saskatchewan. -- Photo from Cameco website.

Cameco announced Tuesday that they and Orano Canada Inc. have reached agreement with Idemitsu Canada Resources Ltd. to acquire Idemitsu’s 7.875 per cent participating interest in the Cigar Lake Joint Venture.

Cameco’s ownership stake in the Cigar Lake uranium mine in northern Saskatchewan will increase by 4.522 percentage points to 54.54 per cent, while Orano’s share will rise by 3.353 percentage points to 40.453 per cent. TEPCO Resources Inc. retains the remaining 5% interest in the property.

“As the world’s largest high-grade uranium mine, Cigar Lake is quite simply one of the best and most prolific uranium producing assets on the planet,” Cameco president and CEO Tim Gitzel said in a release.

“Cameco is very pleased to increase our ownership stake in this outstanding tier-one operation. As the operator of Cigar Lake since 2002, it’s an asset we know incredibly well. It’s a proven, permitted and fully licenced mine in a safe and stable jurisdiction that operates with the tremendous participation and support of our neighbouring Indigenous partner communities.”

Cameco paid roughly $107 million CDN to acquire Idemitsu’s interest in Cigar Lake. The number is subject to customary closing adjustments. The acquisition is also subject to regulatory approvals and other standard closing conditions. The transaction is expected to close in the second quarter of 2022.

Cigar Lake is expected to produce 15 million pounds of uranium concentrate as long as it operates at full capacity for the rest of 2022. That would make it the largest uranium producing operation in the world this year.

Cameco’s increased share in the operation will provide the company with access to an additional 6.9 million pounds of proven and probable reserves, 4.7 million pounds of measured and indicated resources, and 1 million pounds of inferred resources.

Cameco plans reduce annual production at Cigar Lake to 13.5 million pounds of uranium concentrate in 2024. That would be 25 per cent below the licenced capacity. The company says extending the life of the mine is part of their tier-one strategy, but they need more time to evaluate the feasibility of extending the mine life beyond its current reserve base.

This will remain their production plan until they see further improvement in the uranium market and contracting progress. Cameco said they are committed to being an ongoing, responsible supplier of uranium fuel.