* World's largest unmined uranium deposit flooded in 2006
* Could produce more than 10 pct of global supply
* Expects to take 6-12 months to pump out mine
By Cameron French
TORONTO, Oct 23 Cameco Corp (CCO.TO) (CCJ.N)
has resumed draining its flooded Cigar Lake project and expects
to have the mine pumped out sometime next year, the big
Canadian uranium producer said on Friday.
Cigar Lake, the world's richest unmined uranium deposit,
flooded during construction in 2006 and flooded again during
repairs in 2008, prompting the company to suspend predictions
of when it may come to production.
Cameco is the majority owner of the deposit, which lies
beneath waterlogged sandstone in northern Saskatchewan's
Athabasca Basin. France's Areva CEPFi.PA owns 37 percent.
The mine should one day produce more than 10 percent of
global mined output, and is key to Cameco's plans to roughly
double its annual uranium production over the next decade.
In a statement, Cameco said the source of the 2008 water
inflow on the 420-metre (1,378-foot) level has been sealed, and
noted that level was not part of future mine plans.
"It is currently expected to take six to 12 months to
dewater and secure the mine, depending on what conditions are
found in the shaft and the underground workings," the company
Once the mine is pumped out, Cameco will be able to see how
much damage has been done over the past three years, and at
will provide a estimated production start at that time.
Ray Goldie, an analyst at Salman Partners, said the
progress update was in line with what the company had suggested
and with what he had expected.
"They're on track, is the way we'd put it," he said, adding
that he expects production by early 2013.
Goldie said any additional postponement could be viewed as
much a positive as a negative for Cameco, as an extended delay
would create shortages of uranium that would boost prices and
benefit the company's other operations.
The risk of a further delay would include the possibility
additional costs, he said.
Spot uranium UX-U308-SPT was at $47.75 a pound this
It hit a record of $136 a pound in mid-2007, driven in part
by worries of pinched supply following the initial Cigar Lake
flooding, as well as by expectations of rising demand as
several nations have planned new nuclear generating stations.
Cameco stock was down 11 Canadian cents at C$32.55 on the
Toronto Stock Exchange.
Shares of uranium producers jumped earlier this week on
reports that the huge Olympic Dam copper-uranium mine in
Australia would be shut for an extended period following damage
to its main shaft. Olympic Dam is owned by BHP Billiton
(Additional reporting by Ashutosh Joshi in Bangalore; editing
by Rob Wilson)