* Tentative agreement at McArthur River, Key Lake sites.
* Workers could have gone on strike on Friday
* Cameco shares weaken, deal could hurt uranium prices (In U.S. dollars, unless noted)
TORONTO, Oct 21 (Reuters) - Cameco Corp (CCO.TO) has reached a deal with unionized workers at its McArthur River mine and Key Lake mill in Saskatchewan one day ahead of the expiration of their labor contract, averting the possibility of a strike that could have boosted uranium prices.
Workers at the operations -- which account for more than 10 percent of global uranium production --- voted earlier this month to give their union, the United Steelworkers, a strike mandate, raising the possibility of a work stoppage that could have started as early as Friday.
In a statement, the union said the two sides had reached a tentative agreement and that ratification votes will be held over the next two weeks.
News of the deal could weigh on spot uranium prices, which trend to be prone to even modest shifts in supply and demand.
The price, which is calculated weekly, has been rising since early August, with an extra spurt in October, likely driven in part by anticipation of a labor stoppage.
Spot uranium was priced at $49.25 a pound on Thursday.
Shares of Cameco, which trades closely with the uranium price, were down 45 Canadian cents at C$30.26 on the Toronto Stock Exchange.
The stock rose more than 3 percent when the threat of a strike arose on Oct. 8, as the potential for a higher price on uranium mined from other operations outweighed the negative impact of a production interruption.
McArthur River is the world's largest high-grade uranium mine, with annual production capacity of 18.7 million pounds of uranium. Ore from the mine is processed at Key Lake.
$1=$1.03 Canadian Reporting by Cameron French; editing by Peter Galloway