The Cigar Lake uranium project in northern Saskatchewan is now officially in commercial operation, Cameco has announced.
Mining at Cigar Lake began in March 2014, and the first processed product packaged in October 2014. The operation is expected to produce 6 million to 8 million pounds of uranium oxide (2308 to 3077 tU) this year, ramping up to full annual production rate of 18 million pounds per year (6920 tU) by 2018.
Cigar Lake is owned by Cameco (50.025%), Areva Resources Canada Inc (37.1%), Idemitsu Canada Resources (7.875%) and TEPCO Resources Inc (5.0%) and is operated by Cameco. Ore from Cigar Lake is processed at the McClean Lake mill, 70 km northeast of the mine site and operated by Areva Resources Canada.
Morningstar analyst David Wang has a positive uranium report. The global nuclear reactor fleet should grow 37 percent by 2025, which will drive 40 percent growth in uranium demand over the same time frame.
Because power plants buy several years’ worth of supply in advance, uranium prices could start to move significantly higher as soon as 2017. He thinks the spot price of uranium could hit $75 a pound in 2019 in real terms (adjusted for inflation), for a 100 percent-plus gain from recent levels of $36. "We expect new reactor capacity to drive the strongest uranium demand growth in decades," he says.
Read more »
