CCO Restarting Cigar Lake Mine in April Cameco (TSX: CCO; NYSE: CCJ) announced today that it plans to restart production in April at its Cigar Lake uranium mine located in northern Saskatchewan.
Production at Cigar Lake was temporarily suspended in December 2020 due to increasing risks posed by the Coronavirus (COVID-19) pandemic. At that time, the availability of workers in critical areas was shrinking due to the pandemic, with more individuals screening out or residing in communities with pandemic-related travel restrictions.
“The safety of our workers, their families and communities is always our top priority,” said Cameco president and CEO Tim Gitzel. “In recent months we have implemented several enhanced safety protocols for Cigar Lake, including increased distancing between passengers on flights, mandatory medical-grade masks for all workers and increased sanitization and physical barriers in our eating areas. We also worked with the Saskatchewan Health Authority and have established a licensed COVID-19 testing facility at the mine site.
“These further safety measures, along with the provincial vaccine rollout program and increased confidence around our ability to manage our critical workforce, have given us greater certainty that Cigar Lake will be able to operate safely and sustainably.”
As the restart process begins, Cameco will closely monitor the COVID-19 case counts and the ongoing success of the vaccine rollout, and will continue to have regular dialogue with public health authorities and northern Saskatchewan leaders.
The timing of production restart and the production rate at Cigar Lake will be dependent on how quickly we are able to remobilize the workforce. Cameco will not be in a position to provide updates to our outlook for 2021 until production has resumed and we understand the rate at which we will be able to sustainably operate the mine.
“Having Cigar Lake running is part of our strategy and it was always our intention to resume production,” Gitzel said. “There are significant costs associated with having the mine in temporary care and maintenance, and we have a home in our contract portfolio for these low-cost pounds. We will also continue to purchase material, as needed, to meet our committed deliveries.
“Having said that, worker health and safety is our top priority, and we will not hesitate to take further action if we feel our ability to operate safely is compromised due to the pandemic.”
Cameco continues to deliver into its contract portfolio and its strong balance sheet has provided the company with the financial capacity to successfully manage the production disruption at Cigar Lake. As of December 31, 2020, Cameco had $943 million in cash and short-term investments and a $1 billion undrawn credit facility.
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.