Cameco Increases Ownership Stake in Cigar Lake Mine
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Cameco Increases Ownership Stake in Cigar Lake Mine
Saskatoon, Saskatchewan, Canada, May 10, 2022 . . . . . . . . . . . . .
Cameco (TSX: CCO; NYSE: CCJ) and Orano Canada Inc. (Orano) have reached agreement
with Idemitsu Canada Resources Ltd. (Idemitsu) to acquire Idemitsu’s 7.875% participating
interest in the Cigar Lake Joint Venture. Upon closing, Cameco’s ownership stake in the Cigar
Lake uranium mine in northern Saskatchewan will increase by 4.522 percentage points to
54.547%, while Orano’s share will rise by 3.353 percentage points to 40.453%. TEPCO
Resources Inc. retains the remaining 5% interest in the property.
“As the world’s largest high-grade uranium mine, Cigar Lake is quite simply one of the best and
most prolific uranium producing assets on the planet,” said Cameco president and CEO Tim
Gitzel. “Cameco is very pleased to increase our ownership stake in this outstanding tier-one
operation. As the operator of Cigar Lake since 2002, it’s an asset we know incredibly well. It’s a
proven, permitted and fully licenced mine in a safe and stable jurisdiction that operates with the
tremendous participation and support of our neighbouring Indigenous partner communities.”
Cameco’s purchase cost to acquire its respective share of Idemitsu’s interest in Cigar Lake is
approximately $107 million CDN, subject to customary closing adjustments. The acquisition is
subject to certain regulatory approvals and other standard closing conditions. The transaction is
expected to close in the second quarter of 2022.
The 2022 production outlook for the Cigar Lake mine is 15 million pounds of uranium
concentrate (U3O8) on a 100% basis, which would make it the largest uranium producing
operation in the world this year. The Cigar Lake reserve and resource base includes proven and
probable reserves estimated at 152.4 million pounds of U3O8, measured and indicated resources
of approximately 103.7 million pounds, and inferred resources of 22.9 million pounds. Cameco’s
increased share in the operation will therefore provide the company with access to an additional
6.9 million pounds of proven and probable reserves, 4.7 million pounds of measured and
indicated resources, and 1 million pounds of inferred resources.
Our present plan is to reduce annual production at Cigar Lake to 13.5 million pounds of U3O8
(100% basis), 25% below licenced capacity, starting in 2024. Extending the mine life at Cigar
Lake by aligning production with market opportunities and our contract portfolio is consistent
with Cameco’s tier-one strategy, and is expected to allow more time to evaluate the feasibility of
extending the mine life beyond its current reserve base while continuing to supply ore to Orano’s
McClean Lake mill. This will remain our production plan until we see further improvement in
the uranium market and contracting progress, demonstrating Cameco’s ongoing commitment to
be a responsible supplier of uranium fuel.
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Cigar Lake Proven and Probable Mineral Reserves
As of December 31, 2021 (100% basis; tonnes in thousands; pounds in millions)
Proven Probable
Tonnes Grade
(% U3O8)
Content
(lbs. U3O8)
Tonnes Grade
(% U3O8)
Content
(lbs. U3O8)
271 15.90 95.0 177.5 14.67 57.4
Cigar Lake Measured, Indicated and Inferred Resources
As of December 31, 2021 (100% basis; tonnes in thousands; pounds in millions)
Measured Indicated Inferred
Tonnes Grade
(% U3O8)
Content
(lbs. U3O8)
Tonnes Grade
(% U3O8)
Content
(lbs. U3O8)
Tonnes Grade
(% U3O8)
Content
(lbs. U3O8)
26.8 7.55 4.5 313.3 14.37 99.3 186.4 5.58 22.9
Note: Totals may not add up due to rounding
Please see pages 79 and 80 of Cameco’s March 22, 2022 annual information form for the key
assumptions, parameters and methods used to estimate the Cigar Lake mineral reserves and
resources.
Qualified Person
The technical and scientific information discussed in this document for Cigar Lake was approved
by the following individual who is a qualified person for the purposes of NI 43-101: Lloyd
Rowson, general manager, Cigar Lake, Cameco.
Profile
Cameco is one of the largest global providers of the uranium fuel needed to energize a clean-air
world. Our competitive position is based on our controlling ownership of the world’s largest
high-grade reserves and low-cost operations. Utilities around the world rely on our nuclear fuel
products to generate power in safe, reliable, carbon-free nuclear reactors. Our shares trade on the
Toronto and New York stock exchanges. Our head office is in Saskatoon, Saskatchewan.
Caution Regarding Forward-Looking Information and Statements
This news release includes statements and information about our expectations for the future,
which we refer to as forward-looking information. Forward-looking information is based on our
current views, which can change significantly, and actual results and events may be significantly
different from what we currently expect.
Examples of forward-looking information in this news release include: our views regarding
Cigar Lake as a uranium producing asset; our expectations regarding closing adjustments to
Cameco’s purchase price; whether regulatory approvals will be granted and closing conditions
will be met within the expected timeframes; our expectations as to the closing date; the 2022
production outlook for the Cigar Lake mine; the present estimate of proven and probable
reserves and measured, indicated and inferred resources remaining at Cigar Lake; our plan to
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reduce annual production at Cigar Lake to 13.5 million pounds of U3O8 starting in 2024; and the
possibility of extending the mine life at Cigar Lake.
Material risks that could lead to different results include: failure to obtain regulatory approvals or
meet closing conditions within the expected timeframes; unexpected changes in uranium supply,
demand, long-term contracting, and prices; changes in consumer demand for nuclear power and
uranium as a result of changing societal views and objectives regarding nuclear power,
electrification and decarbonization; the risk that we may not continue with our supply discipline
strategy; the risk that we may not be able to implement changes to future operating and
production levels for Cigar Lake to the planned levels within the expected timeframes, or that the
costs involved in doing so, or the costs associated with care and maintenance activities, exceed
our expectations; the risks to our business associated with the ongoing COVID-19 pandemic,
related global supply chain disruptions, global economic uncertainty and volatility; the risk that
we may not be able to implement our business objectives in a manner consistent with our
environmental, social, governance and other values; the risk of disruption to operations at Cigar
Lake or the McClean Lake mill for technical, regulatory or labour reasons; and the risk that the
strategy we are pursuing may prove unsuccessful, or that we may not be able to execute it
successfully.
In presenting the forward-looking information, we have made material assumptions which may
prove incorrect about: timeframes to obtain regulatory approvals and meet closing conditions;
uranium demand, supply, consumption, long-term contracting, growth in the demand for and
global public acceptance of nuclear energy, and prices; the market conditions and other factors
upon which we have based our future plans and forecasts; the success of our plans and strategies,
including planned operating and production changes; the absence of new and adverse
government regulations, policies or decisions; that there will not be any significant unanticipated
adverse consequences to our business from the ongoing COVID-19 pandemic, supply
disruptions, or economic or political uncertainty and volatility; and that there will not be any
disruption to operations at Cigar Lake or the McClean Lake mill for technical, regulatory or
labour reasons.
Please also review the discussion in our 2021 annual MD&A and most recent annual information
form for other material risks that could cause actual results to differ significantly from our
current expectations, and other material assumptions we have made. Forward-looking
information is designed to help you understand management’s current views of our near-term
and longer-term prospects, and it may not be appropriate for other purposes. We will not
necessarily update this information unless we are required to by securities laws.
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Investor inquiries:
Rachelle Girard
306-956-6403
Media inquiries:
Jeff Hryhoriw
306-385-5221