By 2024, McArthur River and Key Lake are deliberate to achieve 60% of capability, producing 15 million lb. uranium yearly. On the similar time, manufacturing from Cameco’s 50%-owned Cigar Lake mine in Saskatchewan will probably be decreased to 13.5 million lb. per 12 months, which is 25% under capability.
“Extending the mine life at Cigar Lake by aligning manufacturing with the market alternatives and our contract portfolio is in keeping with our tier-one technique and is predicted to permit extra time to guage the feasibility of extending the mine life past the present reserve base whereas persevering with to produce ore to Orano’s McClean Lake mill,” the corporate mentioned in its fourth-quarter filings.
“This may stay our manufacturing plan till we see additional enhancements within the uranium market and contracting progress, as soon as once more demonstrating that we’re a accountable provider of uranium gas.”
Cameco will start ramping up McArthur River and Key Lake this 12 months, producing as much as 5 million lb. uranium. Important funding in automation, digitalization and different tasks are deliberate, and the corporate expects the operation to incur operational readiness prices at a charge of about C$15 million to C$17 million per thirty days.
In 2021, the corporate operated at solely 25% of its productive capability, which Tim Gitzel, Cameco’s president and CEO, famous got here at a big value to the enterprise. In 2024, manufacturing will improve to 60% of capability.
Gitzel mentioned Cameco’s plans don’t symbolize an finish to the corporate’s provide self-discipline technique. The corporate has eliminated 190 million lb. of uranium from the market since 2016 via deliberate and unplanned cuts, stock discount and market purchases, which have contributed to safety of provide issues within the trade.
Cameco plans to maintain its tier-two belongings on care and upkeep, and manufacturing at its 40%-owned Inkai mine in Kazakhstan will proceed at a 20% discount till the top of 2023 (until majority proprietor Kazatomprom extends its provide reductions).
Nevertheless, the corporate is optimistic in regards to the future and has elevated its dividend payouts by 50% to C$0.12 per share, reflecting an enchancment available in the market and the addition of 70 million lb. in long-term contracts for the reason that starting of 2021.
“We’re laying declare to our tier-one incumbency benefit as we additional place the corporate to seize the worth we count on to come back from the rising demand for nuclear vitality pushed by the more and more simple conclusion that it should be an important a part of the clear vitality transition,” Gitzel mentioned.
Gitzel says regardless of the addition of the contracts, the corporate nonetheless has leverage to increased costs underneath its market-related contracts and thru its unencumbered productive capability. The typical realized value for Cameco’s product in 2021 was $34.53 per lb., and within the fourth quarter, it was $39.65 per lb.
Cameco has additionally signed offers to produce uranium for small modular nuclear reactors and has a 49% stake in International Laser Enrichment, which has developed promising uranium enrichment know-how.
For 2021, the corporate recorded a internet lack of C$103 million (C$98 million adjusted) on revenues of C$1.5 billion in comparison with a internet lack of C$53 million in 2020 on revenues of C$1.8 billion. Manufacturing at Cameco’s Cigar Lake mine in Saskatchewan was suspended for 4 months final 12 months as a result of covid-19 issues.
This 12 months, Cameco expects to supply 15 million lb. uranium at Cigar Lake.
(This text first appeared within the Canadian Mining Journal)