Cameco Suspending Production at Cigar Lake Mine
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Cameco Suspending Production at Cigar Lake Mine
Saskatoon, Saskatchewan, Canada, March 23, 2020 . . . . . . . . . . . . .
Cameco (TSX: CCO; NYSE: CCJ) announced today that it is temporarily suspending production
at its Cigar Lake uranium mine in northern Saskatchewan and placing the facility in safe care and
maintenance mode due to the threat posed by the Coronavirus (COVID-19) pandemic. There are
no confirmed cases of COVID-19 among Cameco’s workforce at the present time.
The operation will be ramped down over the coming days and placed into care and maintenance
for four weeks. During this time, Cameco will assess the status of the situation and determine
whether to restart the mine or extend the care and maintenance period.
Cigar Lake ore is processed at Orano Canada Inc.’s McClean Lake mill, also located in northern
Saskatchewan. The decision to suspend production at Cameco’s Cigar Lake mine was made in
conjunction with Orano to suspend production at their McClean Lake mill. As of March 21,
2020, total packaged production from these operations for 2020 was about 4 million pounds
U3O8 (100% basis, Cameco’s share 50%).
“We are in unprecedented and challenging times,” said Cameco President and CEO Tim Gitzel.
“In the face of great uncertainty, our first priority is to protect the health and well-being of our
employees, their families and their communities. Our leadership team took a measured approach
and weighed many factors in assessing the situation both globally and locally to make this
decision, which takes into account the specific and unique circumstances at Cigar Lake, a
remote, isolated fly-in/fly-out northern Saskatchewan operation.”
“We are all in this together,” said Orano Canada Inc. President and CEO Jim Corman. “Our
operations work in tandem, and our communities are all interconnected. This is a difficult time
for many, and we understand the concerns we are hearing. McClean Lake will safely be put into
care and maintenance within the next few days and we will continue to assess the situation,
always keeping health and safety at the forefront.”
The precautions and restrictions enacted by the federal and provincial governments, the
significant degree of concern among leaders in remote isolated communities of northern
Saskatchewan, and the increased challenges of maintaining the recommended physical
distancing at fly-in/fly-out sites were critical factors Cameco considered in reaching this
decision. As with other remote northern operations that are currently in care and maintenance,
having a substantially reduced workforce on site will enable improved physical distancing and
enhanced safety precautions.
At full production, there are typically around 300 highly skilled people working across the Cigar
Lake operation at any given time, the majority being residents of Saskatchewan’s north. When
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the production suspension is fully implemented, a workforce of about 35 people at a time will
remain on site to keep the facility in safe care and maintenance.
Cameco will be in full consultation with public health authorities to help develop the logistical
plan to safely move workers at Cigar Lake off site and back to their home communities.
We are also closely monitoring the operations in Cameco’s Fuel Services Division in Ontario,
and will continue to operate them for as long as it remains safe to do so in order to continue a
reliable supply of fuel.
“We have the tools we need to deal with the current uncertain environment,” Gitzel said. “We
have a deliberate strategy to build long-term value and have been executing it in a disciplined
fashion on three fronts – operational, marketing and financial. As a result, our balance sheet is
strong, and we are well-positioned to self-manage risk. We will work with our customers to help
meet their delivery needs and enable them to continue to provide the 24-hour nuclear power their
governments and communities will need to rely on to run hospitals, care facilities, clinics and
communities during this time of extraordinary uncertainty.”
This unplanned event may lead to variability in the 2020 outlook we provided in our Annual
MD&A, however, it is too soon to quantify what that impact might be. We will continue to
assess the rapidly evolving situation, and we will provide an update when we can better
understand what the implications for this year’s outlook might be.
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%) and is operated by 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 expectation that the
Cigar Lake operation will be ramped down over the coming days and placed into care and
maintenance for an initial minimum four week period, the expectation that the McClean Lake
mill will safely be put into care and maintenance within the next few days, our intention to
continue the operations of Cameco’s Fuel Services Division in Ontario for as long as it remains
safe to do so, our assessment that Cameco is equipped to deal with the current uncertain
environment and is well positioned to self-manage risk, our intention to work with our customers
to meet their delivery needs for the continued provision of nuclear power, our expectation that
the workforce reduction at Cigar Lake will enable improved physical distancing and enhanced
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safety precautions, our ability to move workers off site safely and in consultation with public
health authorities, the potential for variability in our 2020 outlook and our expectations regarding
updating our 2020 outlook.
Material risks that could lead to different results include: the possibility that the ramp down of
the Cigar Lake operation or McClean Lake mill may take longer than expected or that the
operations may need to remain in care and maintenance for an extended period for any reason,
including regulatory compliance or delays in the resumption of Cigar Lake production or
processing operations at the McClean Lake mill; the possibility that we may not be able to
continue operating Cameco’s Fuel Services Division in Ontario due to safety, regulatory or other
concerns arising as a result of COVID-19; the possibility that we may be unable to manage the
current uncertain environment resulting from COVID-19 and its related risks successfully,
including the risk of significant disruption to our workforce, required supplies or services, ability
to transport uranium, or our delivery schedule; the risk of safety incidents that may occur during
the transition process; the risk that the impact of COVID-19, including the suspension of
production at Cigar Lake and any suspension of the operations of Cameco’s Fuel Services
Division in Ontario that may be required, will have a materially adverse impact on our 2020
outlook and the possibility that we may face significant delays in restarting the mine, or that
there may be significant delays in restarting operations at the McClean Lake mill, or that we may
be unable to assess and report on the full extent of the impact of those developments in a timely
manner.
In presenting this forward-looking information, we have made assumptions which may prove
incorrect, including assumptions regarding our ability to resume production at Cigar Lake and
Orano’s ability to resume processing at their McClean Lake mill after the period of suspension;
our assumptions about regulatory approvals and compliance; our assumption that we will
manage the impact of COVID-19 on our operations, including Cameco’s Fuel Services Division
in Ontario, successfully and without significant disruption to our workforce, required supplies or
services, ability to transport uranium or delivery schedule; our assumptions regarding our ability
and Orano’s ability to complete the transition process safely; and our assumption that we will be
able to assess, quantify and provide an update regarding any implications of those developments
on our 2020 outlook in a timely manner.
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.
Qualified Person
The above scientific and technical information relating to the Cigar Lake uranium mining
operation was approved by Lloyd Rowson, general manager, Cigar Lake, Cameco.
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Investor inquiries: Rachelle Girard 306-956-6403
Media inquiries: Jeff Hryhoriw 306-385-5221