Cameco's Cigar Lake Uranium Project Update

Cameco says Cigar Lake uranium project ready for development as early as April 2010





Cameco Corp. (TSX:CCO) says it expects to have enough water pumped out of its flooded Cigar Lake uranium mine to resume development on the project by as early as April.

CFO Kim Goheen said Friday that the company has already pumped most of the water out of the northern Saskatchewan mine, which has been flooded for three years.

Goheen said refurbishment of shaft one, the main shaft, is three-quarters complete and the water level is down to the 475-to 480-metre level.

"De-watering, and work to secure the underground developments, is expected to be complete between April and October of this year," he told investors in Whistler, B.C.

"Crews have safely re-entered shaft one and are working to restore the ladder way, mechanical and electrical systems, including additional pumping to provide further assurance."

The Saskatchewan-based uranium miner will complete an updated report on the progress by the end of its first quarter.

Goheen said the key element to preparing the mine for development is not removing the water but refurbishing the main shaft.

"We're very cautious but very optimistic things are working out," he said.

Once up and running, Cigar Lake is expected to produce 18 million pounds of uranium annually, half of it belonging to Cameco, which owns 50 per cent of the project. The company aims to double its uranium production by 2018.

The other half is held by a number of investors, the largest being French nuclear giant Areva.

Cameco said last month that it plans to use proceeds from the $872-million sale of its stake in Centerra Gold Inc. (TSX:CG) to finish Cigar Lake.

In November, Cameco said it had stopped the inflow of water and expected the process of pumping out the mine to take six to 12 months.

Goheen said uranium miners need to increase production and exploration to meet demand over the coming decade, but added there has been little development because uranium prices have been below the production costs of most suppliers.

While there is still volatility in the price of uranium, which is trading at 43.50 a pound, it is up from last April's low of $40 a pound, he said.

Cameco has several other projects in various stages of development, including the Kintyre project in Australia and Inkai in Kazakhstan.

Shares in the company were down just over one per cent at $30.13 with about 500,000 changing hands in midday trading Friday on the Toronto Stock Exchange.