URANIUM: Cameco suspends McArthur River, Key Lake indefinitely

Work is suspended indefinitely at the McArthur River uranium mine in Saskatchewan. (Image: Cameco Corp.)

SASKATCHEWAN - Hit by falling uranium prices and large quarterly losses, Cameco Corp. says the suspension of mining at McArthur River and mineral processing at Key Lake will continue for the foreseeable future. Mining and milling were originally suspended last January in a move that was seen as temporary.

Cameco will permanently layoff about 550 site employees. A workforce of 200 employees will remain at McArthur River and Key Lake to maintain the facilities on care and maintenance. Maintaining the two sites will cost between $5 million and $6 million per month.

To further reduce costs the workforce at the Cameco corporate office will be reduced by 150 positions, a number that includes both job vacancies and current employees. The company is bracing for a cost between $40 million and $45 million in severance costs in the third quarter of this year.

The McArthur River mine is a joint venture of Cameco (70%) and Orano Group (formerly Areva Resources) (30%). Ownership of the Key Lake mill is also joint - 83% Cameco and 17% Orano. Orano has approved of the continuing suspension, and Cameco has extended the deadline for Orano to repay up to 5.4 million lb. of uranium concentrates.

Cameco will buy uranium to fulfil its contracts, thereby reducing some of the excess supply overhanging the market. The company expects to deliver between 34 million and 35 million lb. of concentrates this year.

Further developments will be posted at www.Cameco.com.