Cameco(US:CCJ)2024-03-22 21:27Location and Infrastructure - The Cigar Lake mine site is located approximately 660 kilometers north of Saskatoon, covering a total contiguous area of 95,601 hectares[55]. - The Cigar Lake mine site has a total area of 715 hectares of Crown land, covering portions of mineral lease ML 5521 and claims S-106556 to S-106560[57]. - The mine site is accessible via an all-weather road and air, with ore being shipped year-round to McClean Lake by truck[59]. - The mine site contains essential infrastructure, including two underground shafts, an airstrip, and various facilities for personnel accommodation and operations[66]. - The Cigar Lake operation is in close proximity to two uranium milling operations: McClean Lake (69 kilometers northeast) and Rabbit Lake (87 kilometers east)[55]. Mining Operations and Techniques - Cameco has been the mine operator for the Cigar Lake lands since 2002, while Orano operates the Waterbury Lake lands[55]. - The Cigar Lake operation has seen progress since the 2016 Technical Report, with updates on mineral resources and reserves as of December 31, 2023[50]. - The Cigar Lake operation is linked to other uranium milling operations, including Orano's McClean Lake and Cameco's Rabbit Lake, enhancing operational synergies[63]. - The Cigar Lake project utilizes the jet boring mining method combined with bulk freezing of the orebody for uranium recovery[139]. - The mining methods include drill and blast with conventional ground support and NATM, with a focus on minimizing groundwater interaction[172]. Mineral Resources and Reserves - The mineral resource estimates for CL Main and CLEXT were updated in late 2023, with no material issues raised during the independent audit of the estimation process[120]. - The Cigar Lake mineral resources, as of December 31, 2023, include 229.9 million tonnes with an average grade of 5.32% U3O8, totaling 27.0 million pounds U3O8[135]. - The estimated mineral reserves as of December 31, 2023, total 555.6 million tonnes with an average grade of 17.03% U3O8, containing approximately 208.6 million pounds U3O8[145]. - The mining recovery rate is estimated at 86%, with mill recovery factors of 98.8% for CL Main and 98.5% for CLEXT[145]. - The estimated pre-tax NPV for Cameco's share of the Cigar Lake mineral reserves is $2.5 billion, based on a discount rate of 8%[238]. Financial Information - The estimated capital costs for the Cigar Lake project are approximately $1.2 billion, with Cameco's share being $680 million[233]. - Operating costs for the Cigar Lake operation are estimated at $20.58 per pound U3O8, an increase from the previous estimate of $18.75 per pound U3O8[236]. - Total operating costs forecasted from 2024 to 2036 amount to $4.2366 billion[237]. - Expected sales revenue for Cameco is projected to reach $8,278.8 million by 2035, with a steady increase from $628.4 million in 2024[239]. - Cameco pays a basic royalty of 5% on gross uranium sales and a profit royalty of 10% on profits up to $28.182 per kilogram U3O8[244]. Environmental and Regulatory Compliance - The Cigar Lake project holds a "Uranium Mine Licence" valid until June 30, 2031, allowing an average annual production rate of up to 18 million pounds U3O8[215]. - The most recent Environmental Risk Assessment for Cigar Lake was completed in 2021, confirming protection of human health and the environment[225]. - Cameco's environmental monitoring programs indicate that environmental effects are generally in line with predictions from previous assessments[224]. - The water treatment plant at Cigar Lake is designed to treat water up to 550 m3/h, with average flows currently at approximately 40 m3/h[222]. - The JEB Toll Milling Agreement allows for processing of Cigar Lake ore at the McClean Lake mill, with a maximum capacity dedicated to 18 million pounds per annum[209]. Production and Future Plans - Cigar Lake mine production for 2023 was 48.8 million tonnes with a grade of 14.09% U3O8, resulting in 15.2 million pounds U3O8 produced[73]. - The company plans to maintain production at 18 million pounds U3O8 per year starting in 2024[73]. - The remaining mine life for Cigar Lake is approximately 13 years, with an expected production of 205.9 million pounds U3O8[243]. - Future drilling in the eastern portion of the CLEXT zone may lead to changes in mineral resource estimates due to sparse drilling density and geological continuity[136]. - Cameco plans to submit information for Ministerial Approval in 2025 to change the planned annual production rate of 18 million pounds U3O8 for CLEXT[215]. Challenges and Risks - The Cigar Lake project faces significant risks from water inflows, which could lead to production delays and increased costs[149]. - Jet boring mining activities in CLEXT may encounter unexpected geological conditions, potentially affecting recovery rates and production[150]. - Water inflows present a significant risk to development and production, potentially leading to delays and increased costs[249]. - Geotechnical challenges, including ground support and groundwater control, are critical factors in the mining operation's success[155]. - The mine's water management system has been revised following significant inflow events in 2006 and 2008, leading to improved design and practices[161].