Saturday 22nd October 2016

Resource Clips

Athabasca Basin and beyond

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Cigar Lake delay erases 300,000 pounds from Cameco’s 2013 guidance

By no means its first postponement, Cameco’s Cigar Lake mine has had production deferred from Q4 this year to Q1 next. Modifications to the McClean Lake mill, meanwhile, will stall Cigar Lake processing until the second quarter.

Although the eastside Basin project is 97% complete and in commissioning, Cameco president/CEO Tim Gitzel told a September 9 conference call that leaking run-of-mine tanks caused the delay. Two underground caverns, each five metres wide, 20 metres long and 12 metres deep, will separate a mixture of water and ore produced by the mine’s jet-boring system. “While the volume of [leaking] water is small, once we start production it would be radon-bearing because of contact with the ore,” Gitzel explained.

Uranium news from Saskatchewan and elsewhere for September 7 to 13, 2013

Another delay has hit Cameco’s Cigar Lake mine,
home to the world’s second-largest high-grade uranium deposit.

The company is now sealing both tanks with welded steel liners.

Milling has been postponed a bit further. Jim Corman, VP of operations and projects for AREVA Resources Canada, told the conference that recent metallurgical results differ from previous tests, calling for modifications to the mill’s leaching circuit. As a result, McClean Lake won’t be ready for Cigar Lake ore until the end of Q2 2014. Nevertheless the mill remains on track to double capacity to 24 million pounds of concentrate a year by 2015, he said.

Gitzel emphasized that neither mine nor mill modifications will materially affect capital costs. But the mine will not meet its 2013 target of 300,000 pounds U3O8.

“While we’re not happy with these delays, we need to keep in mind Cigar Lake is a long-term project that we expect to last for many, many years,” he said. “It is an important source of what will be low-cost production for Cameco and a key component of our strategy to increase annual production to 36 million pounds by 2018.”

Cigar Lake construction began in 2005 but flooding in 2006 and 2008 delayed its start-up. The project’s current reserves give it a 15-year lifespan. Gitzel described it as “one of the technically most sophisticated mines in the world.”

Mine operator Cameco holds 50.025% of Cigar Lake in a joint venture with AREVA (37.1%), Idemitsu Canada Resources (7.875%) and TEPCO Resources (5%). Mill operator AREVA holds 70% of McClean Lake in a JV with Denison Mines TSX:DML (22.5%) and OURD Canada (7.5%).

Read more about Cigar Lake.

Declan Resources moves into Basin uranium exploration

On September 11 Declan Resources TSXV:LAN announced an option to pick up the Patterson Lake Northeast property, approximately 9,000 hectares about 50 kilometres from PLS. Declan may earn a 100% interest by paying a total of $250,000 within one year of TSXV approval, spending $650,000 by August 31, 2016 and issuing the vendors a total of 4 million shares. A finder’s fee comes to another 987,500 shares.

In Sierra Leone, the company plans to follow up a surface sampling program on its Nimini Hills gold prospect in October, after the rainy season ends. “Declan staff are reviewing potential additional property acquisitions and are committed to the exploration for uranium in Saskatchewan,” the company stated. Declan also announced that Lesia Burianyk has succeeded John Parker as CFO.

International Enexco updates its Cameco/AREVA JV at Mann Lake

On September 9 International Enexco updated the Mann Lake project, a JV in which the junior holds 30%, Cameco 52.5% and AREVA Resources Canada 17.5%. As project operator, Cameco sunk 21 holes totalling 15,721 metres this year. Exploration focused on the C conductor, a six-kilometre-long section of a regional trend extending from Cameco’s McArthur River mine to Denison’s Wheeler River deposit. The C conductor consists of three geophysical conductors, on which drilling showed anomalous basal sandstone uranium and boron levels.

The three partners are discussing a winter drill program.

Pele Mountain releases “sensitivity analysis” on Eco Ridge PEA

Calling it “a sensitivity analysis” on the 2012 preliminary economic assessment for its Eco Ridge rare earth-uranium project, Pele Mountain Resources TSXV:GEM released results of an economic review on September 12. The report evaluates last June’s resource increase “along with reduced rare earth price assumptions, while maintaining all unit operating costs and process recoveries unchanged from the PEA,” the company stated.

According to the analysis, the project in Ontario’s Elliot Lake mining camp has a pre-tax net present value remaining at $1.02 billion but the pre-tax internal rate of return drops from 50% to 43%. The review sees rare earth oxide production increasing 46% during the mine’s life to 141.6 million pounds while U3O8 production would climb 55% to 42.7 million pounds. The mine life estimate increased by three years to 14 years, calling for an extra $33 million in sustaining capital.

The company added, “The forecast U3O8 price used in both the economic review and the PEA is $70 per pound and is based on an assessment of long-term expectations by a group of independent analysts.”

Lions Gate announces Whitford Lake geophysics interpretation

Lions Gate Metals TSXV:LGM released a summarized interpretation of DC-resistivity and induced polarization surveys over its Whitford Lake project on September 13. The data showed “a moderate low-resistivity feature located at 200 metres’ depth, increasing to 340 metres’ depth towards the east,” the company stated. The report recommended the feature be drilled to 300 metres to determine if the area has undergone alteration.

Lions Gate optioned the 67-hectare eastern Basin property last March.

In brief…

On September 9 Star Uranium TSXV:SUV announced the election of former federal cabinet minister William McKnight as director, replacing Kulvinder Matharu who has resigned. The company also appointed Karen Frisky CFO and corporate secretary.

European Uranium Resources TSXV:EUU announced the retirement of director and audit committee chairperson Rex McLennan on September 9. With seven remaining directors, one of whom will chair the audit committee, the company doesn’t intend to recruit a replacement.

Also on September 9, Majescor Resources TSXV:MJX announced the closing of the second and final tranche of a $150,000 private placement allowed under TSXV temporary relief measures. Proceeds go to accounts payable, including late filing fees with securities commissions, and working capital. Effective August 29 the Quebec regulator l’Autorité des marchés financiers rescinded the company’s management cease trade order.

On September 10 Forum Uranium TSXV:FDC announced it raised $2.59 million through a previously announced private placement. Proceeds will fund a ground geophysics and winter drill program on the company’s Clearwater project. Two days later Forum reported the appointment of James Hutton, a specialist in resource company finance, to its advisory board. The company also announced insiders have been granted options for up to 600,000 shares at $0.37 exercisable for five years.

On September 10 and 12 Rockgate Capital TSX:RGT stated that proxy advisory firms Institutional Shareholder Services Inc and Glass Lewis & Co recommend the company’s shareholders approve its proposed acquisition by Mega Uranium TSX:MGA. Voting closes on September 23.

See previous uranium news updates:

Read analyst David Talbot’s insights about uranium and the Athabasca Basin in a global context.

Read about uranium supply, demand and prices.

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