Cameco Adds New Uranium Supply from FinlandSASKATOON, SASKATCHEWAN--(Marketwire - 02/07/11) - ALL AMOUNTS ARE STATED IN CDN $ (UNLESS NOTED)
Cameco (TSX:CCO - News) (NYSE:CCJ - News)has signed two agreements to buy uranium produced at the Sotkamonickel-zinc mine in eastern Finland owned by the Talvivaara MiningCompany Plc. (LSE:TALV - News)
"Camecois already a supplier of uranium fuel to generate clean electricity forFinnish utilities and their customers," said Cameco CEO Jerry Grandey."Cameco`s strategic goal is to double uranium production from ourexisting assets by 2018. Our deal with Talvivaara will provide Camecowith an additional source of uranium supply over and above what weexpect to produce from our properties."
Talvivaara expectsproduction of uranium at the Sotkamo mine to be approximately 900,000pounds (U3O8 equivalent) or 350 tU per year once the mine ramps up tofull production. The production capacity for uranium extraction at theSotkamo mine could be increased if Talvivaara proceeds with its statedintention to increase production of nickel and zinc concentrate at themine through use of its unique bioheapleaching process.
Cameco hasand will continue to provide technical assistance to Talvivaara in thedesign, construction, commissioning and operation of the uraniumextraction circuit to be constructed at the Sotkamo operation.Talvivaara plans to start construction of the uranium extraction circuitin the coming months and complete it in 2012. Proceeding withconstruction and operation of the uranium circuit requires a number ofpermits that Talvivaara is seeking from Finnish regulators.
Underthe first agreement with Talvivaara, Cameco will provide an up-frontinvestment, to a maximum of $60 million (US), to cover the constructioncost of the uranium extraction circuit. Cameco's capital contributionwill be repaid through the initial deliveries of uranium concentratesunder the first agreement.
Once the capital is repaid, Cameco willpurchase the uranium concentrates produced at Sotkamo through a secondagreement that ends on December 31, 2027. The second agreement willprovide Talvivaara payments for the uranium, based on a formula thatreferences market prices at the time of delivery.
Cameco will take ownership of the uranium at the Sotkamo site and has the sole right to market the product to its customers.
Underthe Euratom Treaty, the agreements with Talvivaara are subject to theconcurrence of the Euratom Supply Agency and final approval by theEuropean Commission.
Finland produces about a third of itsdomestic electricity each year through nuclear power production at fourexisting reactors operated by two Finnish utility companies. A fifthreactor is under construction and two others are planned.
"Thefact that uranium will be produced in Finland for the first time in 50years meshes well with Finland's plan to produce an increasingpercentage of its domestic electricity from clean nuclear power in theyears ahead," Grandey commented.
About Talvivaara
TalvivaaraMining Company Plc is an internationally significant base metalsproducer with its primary focus on nickel and zinc using a technologyknown as bioheapleaching to extract metals out of ore. Bioheapleachingmakes extraction of metals from low grade ore economically viable. TheTalvivaara deposits comprise one of the largest known sulphide nickelresources in Europe. The ore body is sufficient to support anticipatedproduction for at least 46 years. Talvivaara has secured a 10-yearoff-take agreement for 100 per cent of its main output of nickel andcobalt to Norilsk Nickel and entered into a long-term zinc streamingagreement with Nyrstar NV. Talvivaara is listed on the London StockExchange Main Market and NASDAQ OMX Helsinki and is included in the FTSE250 Index. Further information can be found at https://www.talvivaara.com/
About Cameco
Cameco,with its head office in Saskatoon, Saskatchewan, is one of the world'slargest uranium producers. The company's uranium products are used togenerate electricity in nuclear energy plants around the world,providing one of the cleanest sources of energy available today.Cameco's shares trade on the Toronto and New York stock exchanges.
Asused in this news release, "Cameco" or the "company" means CamecoCorporation, a Canadian corporation and its subsidiaries and affiliatesunless stated otherwise.
Caution Regarding Forward-Looking Information and Statements
Ourstrategic goal to double uranium production by 2018 is considered to beforward-looking information and statements under Canadian and USsecurities laws. This goal is based upon a number of materialassumptions, and its achievement is subject to a number of materialrisks, which are discussed in our annual management's discussion &analysis (MD&A), including under the headings "Our strategy" and"About forward-looking information". We will not necessarily update thisinformation unless we are required to by securities law.
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