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Cameco shares rise as ore production begins at Cigar Lake plant

Cameco’s Cigar Lake plant in Saskatchewan has started ore production.

Cameco

Cameco (TSX:CCO) says ore production has begun at Cigar Lake, in northern Saskatchewan, after years of delays in the long-awaited process.

The company says the mining system and underground processing circuits are operational and ore is now being transported to the McClean Lake mill, operated by French nuclear giant Areva.

McClean Lake is expected to begin processing the ore to uranium concentrate by the end of the second quarter, and producing between two million and three million pounds of uranium concentrate this year. It expects to ramp up to its full production rate of 18 million pounds by 2018.

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Cameco chief executive Tim Gitzel said Cigar Lake one of the "most technically challenging mining projects in the world," calling the start of production "a tremendous achievement."

The company had said in September the uranium mine wouldn't begin producing until early this year because of some glitches it encountered during the startup process, even though it had initially hoped to produce 300,000 pounds of milled uranium in 2013.

Cigar Lake was repeatedly beset by flooding beginning in 2006, but crews safely re-entered its main working level 480 metres underground after it was pumped out in early 2010.

The McClean Lake joint venture is 70 per cent owned and operated by Areva. The other McClean Lake joint venture partners are Denison Mines Corp. (TSX:DML), 22.5 per cent and OURD (Canada) Co. Ltd., 7.5 per cent.

About three quarters of McClean Lake's capacity will be used to process Cigar Lake ore.

Shares in Cameco were trading up nearly four per cent at $27.88 on the Toronto Stock Exchange Thursday.

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