Cameco Corporation: Cigar Lake Re-visited!
Friday, February 6, 2009 at 5:57PM
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Friday, February 13, 2009 is a date for your diary, as ominous as it may be, as that is when Cameco will publish its next quarterly news release containing a summary of the progress being made at Cigar Lake. As a reminder this it what Cameco said in its last quarterly news release in 2008.

On August 12, 2008, Cameco suspended remediation work in shaft 1 at Cigar Lake after an increase in the rate of water inflow to the mine.

We are continuing to investigate the source of the inflow. Based on the information collected to date, we have identified a potential source at the 420 metre level of the shaft. This area was developed many years ago to assess the practicality of developing a working level above the orebody. This proved to not be feasible due to poor ground conditions. A concrete bulkhead was put in place and the remainder of the level was subsequently used for minor mine infrastructure and storage. Our investigation is currently focused on this area. However, we continue to review the area in and around the plug that was poured subsequent to the October 2006 inflow, as well as the two areas where it was previously determined additional precautionary measures were not necessary. Information collected to date does not suggest any problem in these areas.

Submersible remotely operated vehicles (ROV) are being deployed in the mine to explore the potential sources, provide visual and sonar imaging of the mine workings and measure parameters like water flow and temperature. At the same time, we are pumping water from the mine to create water flow to assist in identification of the inflow source. While the work is time consuming (some items like doors and pipes have to be cut away to allow the ROVs access), it is progressing steadily and providing good information to the investigation team.

Once the source of the inflow is identified, we will develop a remediation plan.

Progress on the remediation of shaft 2 continues. The inflow sources have been sealed and the effectiveness of the seal has been demonstrated. The shaft is now ready for dewatering and will be scheduled as part of the overall remediation plan for Cigar Lake.

In order to keep our stakeholders informed on the progress of remediation activities, we will provide updates with each quarterly MD&A or more frequently if there are significant developments.

Hopefully Cameco will have determined the source of water ingress in shaft 1 and have compiled at least an outline plan of action for its containment. On shaft 2 its fingers crossed that the seals are still holding, however it is not clear to us just when the dewatering will commence, hopefully this next update will contain a little more detail of the engineering problems, the alternative solutions available and an outline schedule for the works to completion. The provision of a doable schedule and an achievable end date would give investors a well deserved boost. Its now a case of watch this space!

Over the last month or so Cameco's stock price has deteriorated from around the $24.00 level to close yesterday at $20.00 so we are looking for some good news in order to reverse this downward trend.

Cameco Corporation has a market capitalization of $7.31 billion, a 52 week high of C$44.38 and a 52 week low of C$14.33, turnover yesterday was 3.67 million shares and trades as CCO on the Toronto Stock Exchange and as CCJ on the New York Stock Exchange.

For disclosure purposes we do not own this uranium stock.

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