By Allison Martell
Jan 31 (Reuters) - Canadian uranium miner Cameco Corp said on Friday it has agreed to sell its interest in Bruce Power, a partnership that operates one of the world's largest nuclear generating facilities in Ontario, for C$450 million ($403 million).
But with uranium prices languishing, Cameco Chief Executive Tim Gitzel is in no rush to spend the proceeds of the deal.
He would rather set it aside to develop assets the company has already acquired - the Millennium project in northern Saskatchewan and the Yeelirrie project in Western Australia, for example - but not until time is right.
"We've got significant uranium pounds under our control, and we're just waiting for the market to improve," Gitzel told Reuters. "As the uranium market improves, as we believe it will over the next period of time - years, I would say - we want to be ready."
About the price Cameco would look for before developing those projects, Gitzel said something north of $70 a pound "would be a starting point."
In the third quarter, the Saskatoon, Saskatchewan-based miner's average realized uranium price was $50.73 a pound, and it has contracts with customers at prices above the spot market.
Prices have been weak since the earthquake and tsunami that struck Japan in March 2011, badly damaging the Fukushima Daiichi atomic power plant and leading Japan - then a heavy user of nuclear power - to shut down nearly all of its reactors.
SALE NO SURPRISE
Under the deal announced on Friday, BPC Generation Infrastructure Trust, already a partner in Bruce Power, would buy Cameco's 31.6 percent limited partnership interest. BPC, also known as Borealis, is a division of the Ontario Municipal Employees Retirement System.
Bruce Power's facility on the shore of Lake Huron provides nearly one third of Ontario's electricity. A pricey refurbishment is in the works and Cameco's sale is not a surprise, given the looming capital bill, said RBC Dominion Securities analyst Fraser Phillips said in a note to clients.
The deal is subject to three other partners in Bruce Power - TransCanada Corp, the Power Workers' Union and the Society of Energy Professionals - exercising or waiving right of first offer, and regulatory approvals.