McClean Lake Mill on standby for lack of ore
Just before Christmas 140 workers at Areva's McLean Lake uranium mill in Saskatchewan got a holiday greeting they'd been dreading for some time. The firm announced plans to lay off 140 workers in 2010 because of a lack of ore from Cameco's Cigar Lake mine which has flooding problems. Areva employs 270 workers at McClean Lake. Operations at Cigar Lake ceased due to flooding in late 2008.
Alun Richards, a spokesman for Areva, said the mill will wind down its operations by July 2010 processing stockpiled ore with production estimated to be 1.86 million pounds. The mill produced 3.2 million pounds U3O8 in 2008.
Richards said the McClean lake mill is the only facility in Canada that can process high grade ore up to 30% U3O8. He said the same quality of ore will come from Cameco’s Cigar Lake mine assuming it re-starts underground mining operations. He added that market conditions will also be a factor in when the mine and the mill get back in business.
Typically, putting a mill into “care and maintenance” means everyone goes home except a night watchman. In this case, the company is retaining a third of the workforce and processing ore for the next six months. This looks a lot more like a cost saving measure because the price of uranium is stuck in the $43 range. According to Ux Consulting, the price published on its web site for Jan 18, 2010, was $43.50 on the spot market. The same chart shows the price was $54/lb in Nov 2008.
For the same reasons, Areva will take its time pursuing permits for the Midwest and Caribou projects. Richards said Areva is in no hurry to bring these properties into production due to the low price of uranium. "We're not in a rush for them," he said.
Areva has a 37% stake in the Cigar Lake mine and a 70% stake in the mill. Denison Mining owns another 22.5% of the mill. The Cigar Lake mine is expected to take up to a year to be ready to re-start production.
Strateco sets production date for 2013 at Matoush mine in Quebec
Strateco Resources (RCS:TO), which has spent C$55 million so far on its Matousch uranium project in Quebec's Otish Mountains, said it expects to begin production at the underground mine in 2013. Guy Hebert, CEO, said a 2009 NI 43-101 report, the third in a series, indicates the company can expect to product 2 million pounds of uranium a year for at least ten years.
He added that the ore is 18% U3O8 and that achieving a long term objective of producing 60 million pounds is within the company's plans. Herbert said the mine has "one of the highest grades outside of the Athabasca basin."
An environmental impact statement, and license application for the mine were filed with regulatory agencies, including the Canadian Nuclear Safety Commission (CNSC), in November 2009. Herbert said the firm will spend another $27 million in 2010 related to development of the mine and clearing regulatory milestones.
The property was first explored by a German firm in 1984 which drilled 20 holes. No production ever took place due to low prices for uranium. Strateco acquired the property in 2006.
The Matoush mine is the only new mine nearing a production date in Quebec. Other new uranium mines in Canada under review at the CNSC include Cameco's Millenium and Areva's Shea Creek mines in Saskatchewan; Arerva's Kiggavik mine in Nunavut; and, Pele Mountain Resources in Labrador.
Key issues for all of these mines are environmental assessments and consultation with aboriginal groups. The major barrier to success will be to overcome political protests to uranium mining.
Abitex advances Otish Mountains mine exploration at two sites
Abitex (ABE:V) CEO Yves Rougeire is a busy guy. He said next month his firm expects to publish an NI 43-101 report on its Lavoie property in the Otish Mountains of Quebec. The company is also completing assay work on its Epsilon property 15 miles away. Both properties are about 50 miles east of Strateco's Matoush mine.
Drillings results in 2009 from the Lavoie property show high grade intercepts at 4.9% U3O8 over 600 meters. The firm is preparing to drill holes over another 1,000 meters to verify historical exploration from 1983. A predecessor to Cogema, now Areva, explored the area, but did not develop it.
Rougeire also said that as much as 20% of the value of the mine may come from other minerals including gold, silver, and lead.
# # #