Water inflows halt Cameco's Cigar Lake uranium project yet again

The water inflow woes at the world’s largest undeveloped high-grade uranium project at Cigar Lake in Saskatchewan are still challenging Cameco’s best and brightest engineers.

RENO, NV - 

The problems which have plagued Cameco's Cigar Lake uranium project are not quite finished as the company temporarily suspended remediation work again to water inflow concerns.

Flooding at the world's largest undeveloped high-grade uranium project began in October 2006. Cameco has been dewatering, assessed underground conditions and incorporated them into new mine development and production plans.

Earlier this year, Cameco CEO Gerard Grandey told analysts that the company still anticipated no production underground at Cigar Lake until 2011 at the earliest. The company estimates proven and probable reserves of more than 226.3 million pounds U3O8 at an average grade of 20.7% at Cigar Lake with Cameco's share estimated at 113.2 million pounds.

In a news release issued Tuesday, Cameco COO Tim Gitzel said the increase in the rate of water inflow into the mine "is disappointing but our remediation plan, as approved by our joint venture partners, recognized the risk and included specific actions to be taken at various levels of inflow."

The No. 1 Shaft had been pumped down to 430 meters below surface when the increase was reported early Tuesday morning. During the day, the inflow rate increased steadily to 600 cubic meters per hour, which is beyond the range that can be managed while sustaining work in the shaft. Mine underground workings are at the 480-meter level, and work in the shaft has been suspended.

Cameco currently plans to allow the water level in the shaft to rise to 100 meters below surface to allow additional data to be gathered from instruments monitoring groundwater conditions. The information will be analyzed to determine a further course of action. After this is complete, the water will be allowed to return to the natural equilibrium level.

Cameco said it will provide an update on the situation during its second-quarter financial results conference call Thursday.

The world's largest uranium producer, Cameco, operates and owns just over 50% of the Cigar Lake project. The other ownership is by Areva Resources Canada (37.1%) and Idemitsu Uranium Exploration Canada Ltd (7.875%).

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