Cameco Corp Encounters Delays at Cigar Lake; Output Expected to Start in 2015

Uranium miner Cameo Corporation (TSX:CCO) announced orebodies at its Cigar Lake project in Saskatchewan would not be milled until early 2015 due to freezing problems.

The Canadian company said ground freezing, which is used to freeze the ore and ground around the mine site, had not advanced as quickly as expected. Cameo said it would provide an update to its 2014 production target in its secondary quarter results on July 31 when the assessment is completed.

"Based on early indications from our assessment we expect the production schedule could shift by a couple of months. Although a minor change to the schedule, it means ore that was expected to be milled at the end of the year, will shift into early 2015 thereby affecting our 2014 production target," the company said.

Cameo maintained its long-term goal of mining 18 million pounds annually from Cigar Lake by 2018.

The McClean Lake mill, which had not yet started processing Cigar Lake ore, will temporarily disable jet-boring at the site to allow the orebody to freeze more thoroughly in the area.

"We have determined that freezing has not advanced as quickly as expected in some localized areas of the mine. Given that the McClean Lake mill has not yet started processing Cigar Lake ore, we have decided to temporarily stop jet-boring at Cigar Lake to allow the ore body to freeze more thoroughly in these areas,” Cameco said.

“The additional freezing will allow more continuous production at the mine once the mill is operational.”

Uranium deposits at Cigar Lake occur at depths ranging from 410 m to 450 m below the surface which is where the water-saturated Athabasca sandstone meets the underlying basement rock. To prevent water from entering the production areas of the mine, the ore zone and surrounding ground is being frozen by circulating a brine solution through cased holes drilled from both surface and underground.

Cameco is the majority owner and operator of Cigar Lake with a 50.025 percent stake. Additional partners on the project include Areva Resources Canada Inc. (37.1 percent), Idemitsu Canada Resources Ltd (7.875 percent) and Tepco Resources Inc. (5 percent).