Cameco - Friday the 13th
Friday, February 13, 2009 is a date for your diary,as ominous as it may be, as that is when Cameco will publish its nextquarterly news release containing a summary of the progress being madeat Cigar Lake. As a reminder this it what Cameco said in its lastquarterly news release in 2008.
On August 12, 2008, Cameco suspended remediation work in shaft 1 atCigar 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 theinformation collected to date, we have identified a potential source atthe 420 metre level of the shaft. This area was developed many yearsago to assess the practicality of developing a working level above theorebody. This proved to not be feasible due to poor ground conditions.A concrete bulkhead was put in place and the remainder of the level wassubsequently used for minor mine infrastructure and storage. Ourinvestigation is currently focused on this area. However, we continueto review the area in and around the plug that was poured subsequent tothe October 2006 inflow, as well as the two areas where it waspreviously determined additional precautionary measures were notnecessary. Information collected to date does not suggest any problemin these areas.
Submersible remotely operated vehicles (ROV) are being deployedin the mine to explore the potential sources, provide visual and sonarimaging of the mine workings and measure parameters like water flow andtemperature. At the same time, we are pumping water from the mine tocreate water flow to assist in identification of the inflow source.While the work is time consuming (some items like doors and pipes haveto be cut away to allow the ROVs access), it is progressing steadilyand 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 inflowsources have been sealed and the effectiveness of the seal has beendemonstrated. The shaft is now ready for dewatering and will bescheduled as part of the overall remediation plan for Cigar Lake.
In order to keep our stakeholders informed on the progress ofremediation activities, we will provide updates with each quarterlyMD&A or more frequently if there are significant developments.
Hopefully Cameco will have determined the source of water ingress inshaft 1 and have compiled at least an outline plan of action for itscontainment. On shaft 2 its fingers crossed that the seals are stillholding, however it is not clear to us just when the dewatering willcommence, hopefully this next update will contain a little more detailof the engineering problems, the alternative solutions available and anoutline schedule for the works to completion. The provision of a doableschedule and an achievable end date would give investors a welldeserved boost. Its now a case of watch this space!
Over the last month or so Cameco’s stock price has deteriorated fromaround the $24.00 level to close yesterday at $20.00 so we are lookingfor some good news in order to reverse this downward trend.
Cameco Corporation has a market capitalization of $7.31 billion, a52 week high of C$44.38 and a 52 week low of C$14.33, turnoveryesterday was 3.67 million shares and trades as CCO on the TorontoStock Exchange and as CCJ on the New York Stock Exchange.
For disclosure purposes we do not own this uranium stock.