Uranium miner Cameco Corp. says the flooding at its proposed Cigar Lake property in northern Saskatchewan will delay production startup by two years. But the stock rose as the company was finally able to provide firm guidance about its troubled project.
Saskatoon-based Cameco said late Sunday the mine won't begin production until at least 2010. It also said its capital costs will likely bemuch higher —$508 million —versus its last estimate of $330 million.Cameco said its share of flood remediation costsis $46 million.
Cameco —which owns 50 per cent of the Cigar Lake operation — said itsshare of the estimated proven mineral reserves is unchanged.
The company's CEO, Jerry Grandey, said the project remains viable, despite the setbacks posed by the flooding. "While this extraordinary deposit presents its challenges, Cigar Lake will be developed and will enable Cameco to significantly increase its uranium production for many years to come.
"Although construction costs have increased, Cigar Lake's value as the world's second-largest high-grade uranium deposit ensures that Cameco and its partners will reap significant financial benefits from developing this project," he said.
Cameco shares got a boost from the announcement. Cameco stock was up $1.97 to close at $45.18on the TSX.
The Cigar Lake project flooded on Oct. 23 last yearwhen a bulkhead door failed to shut properly.