Cameco suspends production at Cigar Lake

Cameco’s Cigar Lake uranium mine in northern Saskatchewan. Credit: Cameco.Cameco’s Cigar Lake uranium mine in northern Saskatchewan. Credit: Cameco.

Cameco (TSX: CCO; NYSE: CCJ) announced today that it will temporarily suspend production at its Cigar Lake uranium mine in northern Saskatchewan over the coming weeks due to the increasing risks posed by the Covid-19 pandemic.

“The safety of our workers, their families and communities is our top priority,” Tim Gitzel, Cameco’s president and CEO, stated in a news release.  “We have had six positive tests at our northern operations in recent weeks, including three at Cigar Lake. While the protocols we have put in place have to date allowed us to effectively manage these cases, there are broader risks we don’t control.”

Cigar Lake was put on care and maintenance during the first wave of the pandemic in March, and restarted operations in September.

At the peak of production this fall, there were about 300 workers at the Cigar Lake site.

A truck ships ore from the Cigar Lake mine to Areva’s McClean Lake mill. Credit: Cameco

Gitzel said that Cameco plans to increase its purchases of uranium in the market “to secure uranium we need to meet our sales commitments.” 

“Our deliveries to date have not been materially impacted by Covid-19, nor do we expect there will be a material impact on our remaining 2020 deliveries,” he added.

Cameco withdrew its production guidance for this year on April 13. Cigar Lake was previously expected to generate nine million lb. of U3O8 for the company in 2020.  At Sept. 30, Cigar Lake had produced 2.3 million pounds of uranium concentrates.

While Cigar Lake is on care and maintenance, Cameco expects to incur costs of between US$8 million and US$10 million per month, which will be expensed directly to cost of sales.

The Cigar Lake operation is owned by Cameco (50.025%), Orano Canada Inc. (37.1%), Idemitsu Canada Resources Ltd. (7.875%) and TEPCO Resources Inc. (5.0%).

This article first appeared in, part of Glacier Resource Innovation Group.



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