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« Doug Casey Uncovers the Real Price of Peak Oil | Main | SK Option Trader Closes Short VIX trade for a 19.16% Annualized Return »

Cameco Corporation Acquires Yeelirre Uranium Project


Cameco Corporation has a market capitalization of $8.87 billion, a 52 week low of $16.59 and a high of $26.45, a P/E ratio of 19.83, with 395.34 shares outstanding Average volume of shares traded is 1.9 million, and being the world’s largest uranium company, liquidity is of no concern. The stock closed yesterday at $22.43.

Cameco Corporation (TSX:CCO) (NYSE:CCJ) announced on the 26th August 2012, that it has reached an agreement with BHP Billiton to acquire the Yeelirrie uranium project in Western Australia for $430 million (US). Yeelirrie is a near-surface calcrete-style deposit, amenable to open pit mining techniques.

Yeelirrie is one of Australia's largest undeveloped uranium deposits and is located about 650 kilometres northeast of Perth and about 750 kilometres south of Cameco's Kintyre exploration project.

"Yeelirrie represents an attractive deposit that fits well with Cameco's vision and corporate strategy," said Cameco's president and CEO Tim Gitzel. "We are pleased to add this promising deposit to our suite of uranium assets and look forward to advancing this property through our process for assessing development projects."

Cameco expects the transaction to close by the end of 2012, subject to the receipt of approvals from the government of Western Australia and the Australian Foreign Investment Review Board. Upon closing, stamp tax duty of about $22 million (US) will be payable by Cameco to the government of Western Australia.

A historic estimate of the mineral content of Yeelirrie was prepared for BHP Billiton in June 2012 by an international mining consulting firm. The historic estimate indicates that Yeelirrie hosts measured and indicated mineral resources of approximately 139 million pounds of U3O8, with an average grade of approximately 0.13% U3O8 and inferred resource of approximately 5 million pounds at 0.10% U3O8. This historic estimate employs resource categories from the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (the JORC Code). The due diligence review schedule did not allow sufficient time for a qualified person to classify the historic estimate as current mineral resources for purposes of National Instrument 43-101 - Standards of Disclosure for Mineral Projec ts (NI 43-101) and Cameco is not treating the historic estimate as current mineral resources.

Summary of Historic Estimate for the Yeelirrie Project 
(Non-compliant with NI 43-101)

Measured Resource

Indicated Resource

Inferred Resource




























Note: Cut-off grade = 0.05% U3O8

The above historic estimate was based on 10,250 surface holes, of which nearly 4,000 diamond drill holes had assay values and the rest had uranium grade measured by downhole radiometric probing. The interpretation of the mineralization envelopes at a cut-off of 0.05% U3O8 focused less on strict application of a grade cut-off, and more on the assumption of significant continuity of the mineralized zones. The uranium grade was estimated for blocks of 25m by 25m by 0.5m.

Cameco considers the historic estimate relevant as an indication of the potential of the Yeelirrie property and believes that the total uranium content of the historic estimate may be overstated by approximately 10%. The historic estimate should not be relied upon as a quantification of mineral resources, given that approximately 50 million pounds of U3O8 reported as indicated resources would have to be re-categorized, as they are not supported by sufficient drilling density and geochemical assays characterizing the uranium grade and the deleterious components of the mineralized material.

In order to replace the historic estimate for Yeelirrie with a mineral resource estimate that is compliant with NI 43-101, Cameco will review the gamma logs and the grade-radiometry relationship, consider remodeling at a lower cut-off grade without including significant below cut-off material and revisit the criteria used to classify the historic estimate. Additional drilling for geochemical sampling will be required in order to improve the characterization of the deleterious components that will have an impact on any proposed production plan.

Have a good one!

Regarding Yesterday we closed another profitable trade, a play that was a tad more sophisticated then our usual trading methodology as it was predicated on the reduction of volatility. Although the profit was small, 6.46%, we had allocated 15% of our funds to this trade which was three times higher than our more normal 5% allocation. The statistics and charts have now been updated.

Our trading success rate is 91.00%

92 profitable trades out of 101.

Our model portfolio is up 459.99% since inception

An annualized return of 76.75%

An average return of 35.10% per trade


Our annual performance figures are as follows:

2009 We made a profit of 23.89%

2010 We made a profit of 158.66%

2011 We made a profit of 40.95%

In 2011 we outperformed:

S&P by 42%

HUI by 53%

Gold by 31%

Silver by 41%

The 2011 Annual Report by be accessed via this link.

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August 30, 2012 | Unregistered Commenterunknown

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