UPDATE 2-Cameco gets extension for Cigar Lake overhaul

(Adds details on Cigar Lake, Rabbit Lake operations from company announcement, stock close)

TORONTO, Dec 3 (Reuters) - Cameco Corp. (CCO.TO: Quote, Profile, Research, Stock Buzz) has been granted a two-year license extension to continue overhauling its flooded Cigar Lake uranium mine in Saskatchewan, the Canadian Nuclear Safety Commission said on Monday.

In a decision released on its Web site, the CNSC said the license will be valid until Dec. 31, 2009. The mine flooded last year.

Cigar Lake is expected to eventually produce 18 million pounds of uranium annually, or more than 10 percent of global production. Cameco, the world's biggest uranium miner, has said it could reach production as early as 2011.

In a statement issued on Monday evening, Cameco confirmed the license and said it plans to provide an update on Cigar Lake operations on Dec. 19.

The delay in reaching production -- Cigar Lake had originally been expected to begin producing this year -- has contributed to uranium prices soaring to a record high earlier this year.

"The amended license will authorize Cameco Corporation to carry out limited remediation activities at the Cigar Lake mine site," CNSC said in its decision.

A CNSC tribunal heard Cameco's application for a license extension early last month.

The regulator's staff at the time advised approving a plan that would feature more oversight of the overhaul.