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Cameco to buy Areva's stake in Saskatchewan project

Men work about 600m (1,969 feet) below the surface at the Cameco McArthur River uranium mine site in northern Saskatchewan in this 2007 file photo.

© STRINGER Canada / Reuters/REUTERS

Cameco Corp., Canada's largest uranium miner, said it agreed to buy Areva Resources Canada's entire 27.94-per-cent stake in the northern Saskatchewan-based Millennium project for $150 million.

The agreement could give Cameco majority ownership of the project and boost its assets in the uranium-rich Athabasca region of Saskatchewan in Western Canada.

The Millennium project, a proposed uranium mine in the Athabasca basin, has indicated resources -- an initial estimate of the size of a natural resource deposit -- of 50.9 million pounds of uranium. Inferred resources are 16.7 million pounds.

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Cameco expects to produce 21.7 million pounds of uranium this year.

Cameco, which already holds 41.96 per cent, is the operator of the project -- one of the 12 mineral claims held by Cree Lake Extension Joint Venture.

JCU (Canada) Exploration Co owns 30.1 per cent and has rights of refusal on transfers. If JCU does not exercise its rights, Cameco will acquire Areva's entire stake, which would take its ownership in the project to 69.9 per cent.

However, if JCU exercises its rights, Cameco will get only 16.27 per cent, giving it 58.23 per cent ownership. JCU will acquire 11.67 per cent.

The agreement provides Areva with a 4 per cent royalty on revenue from the stake it is selling of any production that exceeds 63 million pounds of packaged uranium concentrate, Cameco said in a statement.

The transaction is expected to close no later than June 6.

Shares of Saskatoon, Saskatchewan-based Cameco closed at $24.41 on Thursday on the Toronto Stock Exchange.

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