Cameco (TSX: CCO; NYSE: CCJ) announced today that it is temporarily suspending production at its Cigar Lake uranium mine in northern Saskatchewan and placing the facility in safe care and maintenance mode due to the threat posed by the Coronavirus (COVID-19) pandemic. There are no confirmed cases of COVID-19 among Cameco’s workforce at the present time.
The operation will be ramped down over the coming days and placed into care and maintenance for four weeks. During this time, Cameco will assess the status of the situation and determine whether to restart the mine or extend the care and maintenance period.
Cigar Lake ore is processed at Orano Canada Inc.’s McClean Lake mill, also located in northern Saskatchewan. The decision to suspend production at Cameco’s Cigar Lake mine was made in conjunction with Orano to suspend production at their McClean Lake mill. As of March 21, 2020, total packaged production from these operations for 2020 was about 4 million pounds U3O8 (100% basis, Cameco’s share 50%).
“We are in unprecedented and challenging times,” said Cameco President and CEO Tim Gitzel. “In the face of great uncertainty, our first priority is to protect the health and well-being of our employees, their families and their communities. Our leadership team took a measured approach and weighed many factors in assessing the situation both globally and locally to make this decision, which takes into account the specific and unique circumstances at Cigar Lake, a remote, isolated fly-in/fly-out northern Saskatchewan operation.”
“We are all in this together,” said Orano Canada Inc. President and CEO Jim Corman. “Our operations work in tandem, and our communities are all interconnected. This is a difficult time for many, and we understand the concerns we are hearing. McClean Lake will safely be put into care and maintenance within the next few days and we will continue to assess the situation, always keeping health and safety at the forefront.”
The precautions and restrictions enacted by the federal and provincial governments, the significant degree of concern among leaders in remote isolated communities of northern Saskatchewan, and the increased challenges of maintaining the recommended physical distancing at fly-in/fly-out sites were critical factors Cameco considered in reaching this decision. As with other remote northern operations that are currently in care and maintenance, having a substantially reduced workforce on site will enable improved physical distancing and enhanced safety precautions.
At full production, there are typically around 300 highly skilled people working across the Cigar Lake operation at any given time, the majority being residents of Saskatchewan’s north. When the production suspension is fully implemented, a workforce of about 35 people at a time will remain on site to keep the facility in safe care and maintenance.
Cameco will be in full consultation with public health authorities to help develop the logistical plan to safely move workers at Cigar Lake off site and back to their home communities.
We are also closely monitoring the operations in Cameco’s Fuel Services Division in Ontario, and will continue to operate them for as long as it remains safe to do so in order to continue a reliable supply of fuel.
“We have the tools we need to deal with the current uncertain environment,” Gitzel said. “We have a deliberate strategy to build long-term value and have been executing it in a disciplined fashion on three fronts – operational, marketing and financial. As a result, our balance sheet is strong, and we are well-positioned to self-manage risk. We will work with our customers to help meet their delivery needs and enable them to continue to provide the 24-hour nuclear power their governments and communities will need to rely on to run hospitals, care facilities, clinics and communities during this time of extraordinary uncertainty.”
This unplanned event may lead to variability in the 2020 outlook we provided in our Annual MD&A, however, it is too soon to quantify what that impact might be. We will continue to assess the rapidly evolving situation, and we will provide an update when we can better understand what the implications for this year’s outlook might be.
The Cigar Lake operation is owned by Cameco (50.025%), Orano Canada Inc. (37.1%), Idemitsu Canada Resources Ltd. (7.875%) and TEPCO Resources Inc. (5.0%) and is operated by Cameco.
Profile
Cameco is one of the largest global providers of the uranium fuel needed to energize a clean-air world. Our competitive position is based on our controlling ownership of the world’s largest high-grade reserves and low-cost operations. Utilities around the world rely on our nuclear fuel products to generate power in safe, reliable, carbon-free nuclear reactors. Our shares trade on the Toronto and New York stock exchanges. Our head office is in Saskatoon, Saskatchewan.
Source: Cameco