UPDATE 2-Cameco to update Cigar Lake details early 2010

* Expects to update costs, production start in Q1 or Q2

* World’s richest uranium deposit flooded in 2006 (Adds analyst’s comment, details)

TORONTO, Dec 7 (Reuters) - Cameco Corp CCO.TO expects to release updated cost estimates and a production timetable for its Cigar Lake uranium deposit in northern Saskatchewan early next year, suggesting repairs to the mine are running smoothly.

The project, owned 50 percent by Cameco and 37 percent by France's Areva CEPFi.PA, flooded in 2006 while under construction and again in 2008, prompting the company to suspend forecasts for when it might come to production.

Cameco said in October it had sealed the source of the 2008 flood and had resumed draining the mine, which should take six to 12 months. It said at the time that it would provide further estimates once the water is removed.

In an email on Monday, Cameco spokesman Lyle Krahn said it should have those estimates early next year.

“We anticipate completing a Cigar Lake technical report next year at the end of the first quarter or in the second quarter,” he said.

However, Krahn said the company was still sticking to the 6-12 month timetable for pumping out the mine.

The world’s richest unmined uranium deposit, Cigar Lake had been expected to produce 18 million pounds of uranium a year, or about 15 percent of global mined supply.

Providing a firm date on the mine’s expected production start would provide some certainty to Cameco’s plans to double uranium output over the next decade, but could also weigh on uranium prices, which have been helped by the uncertainty over the mine’s future.

“That’s something... that could impact the uranium market,” said Simon Tonkin, an analyst at Thomas Weisel Partners.

Spot uranium prices soared a record high of $136 a pound in 2007 due to supply concerns, but have since come down, and were at $45.50 on Monday.

Shares of Cameco closed 6 Canadian cents higher at C$32.71 on the Toronto Stock Exchange on Monday.

$1=$1.05 Canadian Reporting by Cameron French; editing by Peter Galloway