Cigar Lake: 2011 at the earliest!

Cameco issued an upbeat report today covering the third quarter earnings etc, however as pointed out by one of our readers the delays continue.

We draw your attention to this quote in the report:

“As previously announced, completing the second shaft as a priority item and the delay in some remediation activities would set back the planned production start-up date from 2010 to 2011. We have now made the decision to complete this shaft prior to completion of some of the underground mine development program and some of the remediation activities are taking longer than anticipated. As a result, the production start-up date is now expected to be 2011, at the earliest. We will be able to provide a firmer production start-up date after the mine has been dewatered and the condition of the underground development has been assessed”.

As this problem has yet to be assessed after dewatering it is rather difficult to compile a detailed plan of what is required. Once the plan has been compiled then in can be set to a timeframe, which is called the schedule. The schedule requires an in-depth study and application of the resources required such labour, mechanical plant, power, finance, permits, etc. Then and only then are you in a position to give a start up date. Achieving that start-up date is another story as we stated in our article entitled: Flooded Mines: The Critical Factor for Uranium.

As investors in uranium stocks we cannot take our eye off Cameco however it could be some time, if ever, before we feel the effect of their production.

As we write Cameco’s stock is trading down 2.64% at $46.91 so the market is not too pleased with this news release. However, this is good news for the rest of the sector as most of them are trading in positive territory and some are experiencing double digit gains.

Food for thought!

Have a good one.

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Comments

[Uranium Stocks]

Cameco shares dropped nearly 8% yesterday on news that one of its Russian uranium suppliers, Techsnabexport, is requesting higher prices for the uranium is sells Cameco from 12,000 dismantled nuclear weapons. CCO closed at $42.90.

[Chase Watts]

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