Note Regarding Reserves and Resources
Reserves and resources reported herein have been estimated as at December 31, 2005 in accordance with definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum and incorporated into National Instrument 43-101 (see definitions below). Estimates of uranium reserves and resources were prepared by or under the supervision of the qualified persons identified at “Uranium Reserves and Resources.” Estimates of gold reserves and resources were prepared by or under supervision of the qualified person identified at “Gold Reserves and Resources.” The amount of reported resources does not include those amounts identified as reserves.
Cameco reports its reserves and resources in accordance with National Instrument 43-101, as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7 under the Securities Exchange Act of 1934 (as interpreted by the staff of the US Securities and Exchange Commission) applies different standards in order to classify mineralization as a reserve. Accordingly, for US reporting purposes, as at December 31, 2005, the mineralization at the Ruth uranium in situ leach project in Wyoming is classified as mineralized material. In addition, for US reporting purposes, all mineral resources must be considered as mineralized material.
For the purpose of estimating uranium reserves in accordance with National Instrument 43-101 of the Canadian securities regulatory authorities, a uranium price of $22.70 (US) was used. For the purpose of estimating reserves in accordance with United States Securities and Exchange Commission’s Industry Guide 7 for US reporting purposes, a uranium price of $19.60 (US) was used. Estimated uranium reserves are the same using either uranium price, except for the Ruth uranium in situ leach project in Wyoming which, for US reporting purposes, is classified as mineralized material.
For the purpose of estimating gold reserves in accordance with National Instrument 43-101 of the Canadian securities regulatory authorities and in accordance with United States Securities and Exchange Commission’s Industry Guide 7 for US reporting purposes, reserves were calculated with cut-off grades based on a gold price of $400 (US) per ounce.
Mineral resources are not mineral reserves and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction. Measured and indicated mineral resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resources. Inferred resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred resources are too speculative geologically to have economic considerations applied to enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be upgraded to mineral reserves through continued exploration.
Although the company has carefully prepared and verified the mineral reserve figures presented in this annual report, such figures are estimates, which are, in part, based on forward-looking information, and no assurance can be given that the indicated levels of uranium and gold will be produced. See “Risk Factors” and “Note Regarding Forward-Looking Statements” in Cameco’s annual information form available at cameco.com and sedar.com.
Definitions
A mineral resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade including base and precious metals, coal and industrial materials, or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral resources are subdivided, in order of increasing geological confidence, into inferred, indicated and measured categories.
An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
A mineral reserve is the economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined. Mineral reserves are subdivided in order of increasing confidence into probable mineral reserves and proven mineral reserves.
A probable mineral reserve is the economically mineable part of an indicated and, in some circumstances, a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
A proven mineral reserve is the economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
Uranium Reserves and Resources
The disclosure in this annual report of scientific and technical information regarding Cameco’s uranium properties, including reserve and resource estimates and the description of the geology, were prepared by or under the supervision of the following qualified persons:
| Qualified Persons | Properties |
|---|---|
| Alain Gaston Mainville, geologist and professional geoscientist, manager, mining resources and methods at Cameco | McArthur River, Rabbit Lake, Key Lake, Dawn Lake, and Millennium |
| Raymond Jean-François Chauvet, geological engineer and professional geoscientist, former director, mining resources and methods at Cameco. | Cigar Lake and Inkai |
| Steve Lunsford, registered professional geologist Wyoming, chief geologist at Power Resources, Inc. | Crow Butte, Gas Hills-Peach, Highland, North Butte/Brown Ranch, Northwest Unit, Reynolds Ranch, Ruby Ranch, Ruth, Shirley Basin and Smith Ranch |
|
The qualified persons as a group, beneficially own, directly or indirectly, less than 1% of the issued and outstanding common shares of Cameco. Canadian Securities Administrators’ National Instrument 43-101 requires mining companies to disclose reserves and resources using the subcategories of proven reserves, probable reserves, measured resources, indicated resources and inferred resources. Cameco reports reserves and resources separately. (See “Note Regarding Reserves and Resources”). Cameco reports all its mineral reserves as quantity of contained ore supporting the mining plans and includes an estimate of the metallurgical recovery for each of its properties. Metallurgical recovery is a term used in the mining industry to indicate the proportion of valuable material physically recovered by the metallurgical extraction process. The estimated recoverable amount of a commodity is obtained by multiplying the reserves “Content” by the “Estimated Metallurgical Recovery Percentage.” |
|
Uranium Reserves
The following table shows the estimated uranium reserves as at December 31, 2005 on a property basis and Cameco’s share.
| RESERVES1, 5 | PROVEN (100% basis) |
PROBABLE (100% basis) |
||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes | % Grade U3O8 | Content lbs U3O8 | Tonnes | Grade % U3O8 | Content lbs U3O8 |
| Cigar Lake | 497.0 | 20.67 | 226.3 | 54.0 | 4.41 | 5.2 |
| Crow Butte | 816.4 | 0.39 | 6.8 | 195.6 | 0.24 | 1.0 |
| Gas Hills - Peach | – | – | – | 6,851.0 | 0.14 | 19.7 |
| Highland | 672.8 | 0.12 | 1.8 | 1,016.6 | 0.12 | 2.7 |
| Inkai | 22,700.0 | 0.07 | 35.4 | 63,700.0 | 0.06 | 79.0 |
| Key Lake | 61.9 | 0.52 | 0.7 | – | – | – |
| McArthur River | 363.4 | 24.38 | 195.3 | 363.6 | 24.17 | 193.8 |
| North Butte/ | ||||||
| Brown Ranch | – | – | – | 3,874.6 | 0.10 | 8.5 |
| Rabbit Lake | 176.7 | 0.80 | 3.1 | 206.4 | 1.73 | 7.9 |
| Ruby Ranch | – | – | – | 2,832.2 | 0.09 | 5.5 |
| Ruth3 | – | – | – | 853.7 | 0.10 | 1.7 |
| Smith Ranch | 1,368.8 | 0.09 | 2.8 | 3,143.1 | 0.12 | 8.3 |
| Total4 | 26,657.0 | – | 472.2 | 83,090.8 | – | 333.3 |
| RESERVES1, 5 - CONTINUED | TOTAL RESERVES (100% basis) |
|||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes | Grade % U3O8 | Content lbs U3O8 | Cameco’s Share lbs U3O8 | Estimated Metallurgical Recovery % | Mining Method 2 |
| Cigar Lake | 551.0 | 19.06 | 231.5 | 115.8 | 99 | UG |
| Crow Butte | 1,012.0 | 0.35 | 7.8 | 7.8 | 85 | ISL |
| Gas Hills - Peach | 6,851.0 | 0.14 | 19.7 | 19.7 | 65 | ISL |
| Highland | 1,689.3 | 0.12 | 4.5 | 4.5 | 80 | ISL |
| Inkai | 86,400.0 | 0.06 | 114.4 | 68.6 | 80 | ISL |
| Key Lake | 61.9 | 0.52 | 0.7 | 0.6 | 99 | OP |
| McArthur River | 727.0 | 24.28 | 389.1 | 271.6 | 99 | UG |
| North Butte/ | ||||||
| Brown Ranch | 3,874.6 | 0.10 | 8.5 | 8.5 | 80 | ISL |
| Rabbit Lake | 383.1 | 1.30 | 11.0 | 11.0 | 97 | UG |
| Ruby Ranch | 2,832.2 | 0.09 | 5.5 | 5.5 | 80 | ISL |
| Ruth3 | 853.7 | 0.10 | 1.7 | 1.7 | 80 | ISL |
| Smith Ranch | 4,512.0 | 0.11 | 11.1 | 11.1 | 80 | ISL |
| Total4 | 109,747.8 | – | 805.5 | 526.4 | – | – |
| *tonnes in thousands; pounds in millions | ||||||
| Notes: | |
| 1 Cameco reports reserves and resources separately. | |
| 2 Mining Method: OP – Open Pit; UG – Underground; ISL – In Situ Leaching. | |
| 3 For United States reporting purposes, Industry Guide 7 under the Securities and Exchange Act of 1934, as interpreted by the staff of the U.S. Securities and Exchange Commission, applies different standards to classify mineralization as a reserve. Accordingly, for US reporting purposes as of December 31, 2005, the mineralization at the Ruth uranium in situ leach project in Wyoming is classified as mineralized material. | |
| 4 Totals may not add, due to rounding. | |
| 5 For the purpose of estimating reserves in accordance with National Instrument 43-101, a uranium price of $22.70 (US) per pound U3O8 was used. For the purpose of estimating reserves in accordance with US Securities Commission Industry Guide 7 for US reporting purposes, a uranium price of $19.60 (US) was used. Estimated uranium reserves are the same using either uranium price except for the Ruth uranium in situ leach project in Wyoming, which is classified for US reporting purposes as mineralized material. | |
| In addition to the above reserves, Cameco has contractual committed supplies, including supplies under the HEU Commercial Agreement, of approximately 59 million pounds of uranium from January 1, 2006 until the end of 2013. | |
Uranium Measured and Indicated Resources
Cautionary note to investors concerning estimates of measured and indicated resources:
This section uses the terms “measured resources” and “indicated resources”. US investors are advised that while those terms are recognized and required by Canadian securities regulatory authorities, the US Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposit in these categories will ever be converted into proven or probable reserves.
The following table shows the estimated uranium measured and indicated resources as at December 31, 2005 on a property basis and Cameco’s share.
| RESOURCES1 | MEASURED (100% basis) |
INDICATED (100% basis) |
||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes | Grade % U3O8 | Content lbs U3O8 | Tonnes | Grade % U3O8 | Content lbs U3O8 |
| Crow Butte | – | – | – | 1,475.8 | 0.25 | 8.1 |
| Dawn Lake | – | – | – | 347.0 | 1.69 | 12.9 |
| Gas Hills – Peach | 2,013.0 | 0.09 | 3.3 | 1,153.0 | 0.08 | 2.3 |
| Highland | 782.3 | 0.10 | 1.7 | 47.0 | 0.09 | 0.1 |
| Inkai | – | – | – | 11,033.0 | 0.06 | 14.2 |
| McArthur River | 40.9 | 10.21 | 9.2 | 39.8 | 8.39 | 7.4 |
| Millennium | – | – | – | 449.0 | 4.63 | 45.8 |
| North Butte/Brown Ranch | 1,008.8 | 0.08 | 1.9 | 3,923.6 | 0.07 | 6.3 |
| Northwest Unit | – | – | – | 4,000.7 | 0.04 | 2.3 |
| Rabbit Lake | – | – | – | 456.3 | 0.74 | 7.5 |
| Reynolds Ranch | 3,073.5 | 0.07 | 4.5 | 5,245.3 | 0.06 | 7.0 |
| Ruby Ranch | 156.0 | 0.18 | 0.6 | 108.0 | 0.06 | 0.1 |
| Ruth | 99.8 | 0.10 | 0.2 | 125.2 | 0.07 | 0.2 |
| Shirley Basin | 89.1 | 0.15 | 0.3 | 1,635.9 | 0.11 | 4.1 |
| Smith Ranch | 30.8 | 0.20 | 0.1 | 2,406.4 | 0.09 | 5.0 |
| Total3 | 7,294.3 | – | 21.8 | 32,445.9 | – | 123.3 |
| RESOURCES1 - CONTINUED | MEASURED AND INDICATED (100% basis) |
|||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes | Grade % U3O8 | Content lbs U3O8 | Cameco’s Share lbs U3O8 | Mining Method 2 | |
| Crow Butte | 1,475.8 | 0.25 | 8.1 | 8.1 | ISL | |
| Dawn Lake | 347.0 | 1.69 | 12.9 | 7.4 | OP&UG | |
| Gas Hills – Peach | 3,166.1 | 0.08 | 5.6 | 5.6 | ISL | |
| Highland | 829.3 | 0.10 | 1.8 | 1.8 | ISL | |
| Inkai | 11,033.0 | 0.06 | 14.2 | 8.5 | ISL | |
| McArthur River | 80.7 | 9.33 | 16.6 | 11.6 | UG | |
| Millennium | 449.0 | 4.63 | 45.8 | 19.2 | UG | |
| North Butte/Brown Ranch | 4,932.3 | 0.07 | 8.2 | 8.2 | ISL | |
| Northwest Unit | 4,000.7 | 0.04 | 2.3 | 2.3 | ISL | |
| Rabbit Lake | 456.3 | 0.74 | 7.5 | 7.5 | UG | |
| Reynolds Ranch | 8,318.8 | 0.06 | 11.5 | 11.5 | ISL | |
| Ruby Ranch | 264.0 | 0.12 | 0.7 | 0.7 | ISL | |
| Ruth | 225.0 | 0.07 | 0.4 | 0.4 | ISL | |
| Shirley Basin | 1,725.0 | 0.12 | 4.4 | 4.4 | ISL | |
| Smith Ranch | 2,437.2 | 0.09 | 5.1 | 5.1 | ISL | |
| Total3 | 39,740.2 | – | 145.1 | 102.2 | – | |
| *tonnes in thousands; pounds in millions | ||||||
| Notes: | ||||||
| 1 Cameco reports reserves and resources separately. The amount of reported resources does not include those amounts identified as reserves. | ||||||
| 2 Mining Method: OP – Open Pit; UG – Underground; ISL – In Situ Leaching. | ||||||
| 3 Totals may not add, due to rounding. | ||||||
Uranium Inferred Resources
Cautionary note to investors concerning estimates of inferred resources:
This section uses the term “inferred resources”. US investors are advised that while this term is recognized and required by Canadian securities regulatory authorities, the US Securities and Exchange Commission does not recognize it. “Inferred resources” have a great amount of uncertainty as to their existence and great amount of uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian securities regulations, estimates of inferred resources may not form the basis of feasibility or prefeasibility studies. Investors are cautioned not to assume that part or all of an inferred resource exists or is economically or legally mineable.
The following table shows the estimated uranium inferred resources as at December 31, 2005 on a property basis and Cameco’s share.
| INFERRED RESOURCES1 | ||||||
|---|---|---|---|---|---|---|
| (100% basis) | ||||||
| PROPERTY* | Tonnes | Grade % U3O8 | Content lbs U3O8 | Cameco’s Share lbs U3O8 | Mining Method 2 | |
| Cigar Lake | 317.0 | 16.92 | 118.2 | 59.1 | UG | |
| Crow Butte | 2,802.1 | 0.16 | 10.1 | 10.1 | ISL | |
| Gas Hills-Peach | 656.8 | 0.07 | 0.8 | 0.8 | ISL | |
| Highland | 587.6 | 0.15 | 2.0 | 2.0 | ISL | |
| Inkai | 253,918.0 | 0.05 | 268.0 | 160.8 | ISL | |
| McArthur River | 584.6 | 7.35 | 94.8 | 66.2 | UG | |
| Millennium | 280.0 | 1.81 | 11.2 | 4.7 | UG | |
| North Butte/Brown Ranch | 618.5 | 0.07 | 1.0 | 1.0 | ISL | |
| Northwest Unit | 627.8 | 0.04 | 0.5 | 0.5 | ISL | |
| Rabbit Lake | 104.7 | 1.60 | 3.7 | 3.7 | UG | |
| Reynolds Ranch | 5,333.3 | 0.04 | 4.9 | 4.9 | ISL | |
| Ruby Ranch | 60.8 | 0.15 | 0.2 | 0.2 | ISL | |
| Ruth | 210.5 | 0.07 | 0.4 | 0.4 | ISL | |
| Shirley Basin | 506.8 | 0.10 | 1.1 | 1.1 | ISL | |
| Smith Ranch | 595.7 | 0.07 | 0.9 | 0.9 | ISL | |
| Total3 | 267,204.1 | – | 517.8 | 316.4 | – | |
| *tonnes in thousands; pounds in millions | ||||||
| Notes: | ||||||
| 1 Cameco reports reserves and resources separately. The amount of reported resources does not include those amounts identified as reserves. | ||||||
| 2 Mining Method: OP – Open Pit; UG – Underground; ISL – In Situ Leaching. | ||||||
| 3 Totals may not add, due to rounding. | ||||||
Uranium Reserves Reconciliation
The following reconciliation of Cameco’s share of uranium reserves reflects the changes in reserves during 2005. The 2005 additions and deletions result from additional information provided by mining and milling, analysis of drilling results, change in mining plans, re-estimation and reclassification.
Cameco’s share of proven and probable uranium reserves has decreased by 26.9 million pounds, from 553.4 million pounds at the end of 2004 to 526.5 million pounds at the end of 2005. The majority of the decrease was attributable to mine production during 2005.
Another change in 2005 was the reclassification of a significant portion of McArthur River reserves from proven to probable. Currently, McArthur River mine uses only raise boring to extract ore. As expected from the start of mining, other mining methods may be used to maintain or expand production. In 2005, Cameco determined that the boxhole boring method would be better suited for the upper zone #4 at McArthur River, because it would allow for development from a preferred location.
Until Cameco has fully developed and tested the boxhole boring method, there is uncertainty in the estimated productivity. As a result, Cameco has reclassified 108.2 million pounds from proven to probable reserves in upper zone #4 at McArthur River (Cameco’s share is 75 million pounds). Cameco does not expect this change to significantly impact its long-term production plans. Production from this zone is scheduled to begin in 2012.
In addition, the revisions to the proposed mining plan for the upper zone #4 and re-interpretation of a small portion of zone #2 have resulted in a decrease in proven reserves at McArthur River of 12.9 million pounds (Cameco’s share is 9 million pounds).
| Reconciliation of Cameco's Share of Uranium Reserves | |||||
|---|---|---|---|---|---|
| (in thousands of pounds U3O8) | |||||
| 2005 | 2005 | ||||
| December 31, 2004 | Throughput1 | Addition (Deletion) | December 31, 2005 | ||
| Reserves – Proven | |||||
| Cigar Lake | 113,222 | – | – | 113,222 | |
| Crow Butte | 7,794 | (979) | – | 6,815 | |
| Highland | 1,162 | (894) | 1,539 | 2 | 1,807 |
| Inkai | 21,211 | – | – | 21,211 | |
| Key Lake | 590 | – | – | 590 | |
| McArthur River | 233,087 | (12,620) | (84,144) | 2 | 136,323 |
| Rabbit Lake | 8,096 | (5,337) | 368 | 2 | 3,127 |
| Smith Ranch | 896 | (763) | 2,712 | 2 | 2,845 |
| Total Proven Reserves | 386,058 | (20,593) | (79,525) | 285,940 | |
| Reserves – Probable | |||||
| Cigar Lake | 2,625 | – | – | 2,625 | |
| Crow Butte | 1,013 | – | – | 1,013 | |
| Gas Hills – Peach | 22,056 | – | (2,372) | 2 | 19,684 |
| Highland | 2,855 | – | (192) | 2 | 2,663 |
| Inkai | 47,412 | – | – | 47,412 | |
| McArthur River | 59,722 | – | 75,536 | 2 | 135,258 |
| North Butte/Brown Ranch | 7,939 | – | 585 | 2 | 8,524 |
| Rabbit Lake | 6,132 | (740) | 2,471 | 2 | 7,863 |
| Ruby Ranch | 5,082 | – | 380 | 2 | 5,462 |
| Ruth 3 | 1,470 | – | 219 | 2 | 1,689 |
| Smith Ranch | 11,057 | – | (2,740) | 2 | 8,317 |
| Total Probable Reserves | 167,363 | (740) | 73,887 | 240,510 | |
| Total Reserves | 553,421 | (21,333) | (5,638) | 526,450 | |
| Notes: | |||||
| 1 Corresponds to mill feed. The discrepancy between the 2005 mill feed and Cameco's share of 2005 pounds U3O8 produced is due to mill recovery, mill inventory and the processing of low-grade material. | |||||
| 2 Changes in reserves or resources, as applicable, include reassessment of geological data, results of information provided by mining and milling, change in mining plan and subsequent reestimation and reclassification of reserves or resources, as applicable. | |||||
| 3 For United States reporting purposes, Industry Guide 7 under the Securities and Exchange Act of 1934, as interpreted by the staff of the US Securities and Exchange Commission, applies different standards to classify mineralization as a reserve. Accordingly, for US reporting purposes, the mineralization at the Ruth in situ leach project in Wyoming is classified as mineralized material. | |||||
Uranium Resources Reconciliation
The following reconciliation of Cameco’s share of uranium resources reflects the changes in resources during 2005. The 2005 additions and deletions result from additional information provided by mining and milling, analysis of drilling results, property acquisitions, change in mining plans, re-estimation and reclassification.
There were only modest changes in resources in 2005 as outlined in the table below. The more noteworthy of these changes are:
- at Rabbit Lake, indicated resources increased by 3.5 million pounds and inferred resources increased by 3.7 million pounds due to drilling and reclassification.
- at McArthur River, inferred resources decreased by 7.5 million pounds due to drilling.
- at Millennium, indicated resources increased by 4.7 million pounds and inferred resources decreased by 1.9 million pounds due to additional surface drilling during 2005.
- at Crow Butte, indicated resources increased by 1.3 million pounds and inferred resources increased by 3.1 million pounds due to re-estimation and re-acquisition of the Marsland property.
- at Inkai, indicated resources increased by 6.8 million pounds due to re-estimation.
| RECONCILIATION OF CAMECOS SHARE OF URANIUM RESOURCES | ||||||
|---|---|---|---|---|---|---|
| (in thousands of pounds U3O8) | ||||||
| 2005 | ||||||
| December 31, 2004 | Addition (Deletion)1 | December 31, 2005 | ||||
| Resources – Measured | ||||||
| Gas Hills – Peach | 4,662 | (1,316) | 3,346 | |||
| Highland | 1,663 | - | 1,663 | |||
| McArthur River | 6,879 | (452) | 6,427 | |||
| North Butte/Brown Ranch | - | 1,857 | 1,857 | |||
| Reynolds Ranch | 2,654 | 1,839 | 4,493 | |||
| Ruby Ranch | 862 | (277) | 585 | |||
| Ruth | - | 216 | 216 | |||
| Shirley Basin | 304 | - | 304 | |||
| Smith Ranch | 138 | - | 138 | |||
| Total Measured Resources | 17,162 | 1,867 | 19,029 | |||
| Resources – Indicated | ||||||
| Crow Butte | 6,849 | 1,251 | 8,100 | |||
| Dawn Lake | 7,436 | - | 7,436 | |||
| Gas Hills – Peach | 3,845 | (1,535) | 2,310 | |||
| Highland | 92 | - | 92 | |||
| Inkai | 1,740 | 6,781 | 8,521 | |||
| McArthur River | 5,136 | - | 5,136 | |||
| Millennium | 14,520 | 4,700 | 19,220 | |||
| North Butte/Brown Ranch | 6,788 | (485) | 6,303 | |||
| Northwest Unit | 2,361 | (20) | 2,341 | |||
| Rabbit Lake | 4,009 | 3,477 | 7,486 | |||
| Reynolds Ranch | 7,791 | (831) | 6,960 | |||
| Ruby Ranch | 581 | (438) | 143 | |||
| Ruth | 609 | (417) | 192 | |||
| Shirley Basin | 4,085 | - | 4,085 | |||
| Smith Ranch | 4,951 | 33 | 4,984 | |||
| Total Indicated Resources | 70,793 | 12,516 | 83,309 | |||
| Total Measured & Indicated | 87,955 | 14,383 | 102,338 | |||
| Resources – Inferred | ||||||
| Cigar Lake | 59,105 | - | 59,105 | |||
| Crow Butte | 6,979 | 3,104 | 10,083 | |||
| Gas Hills – Peach | - | 845 | 845 | |||
| Highland | 1,977 | - | 1,977 | |||
| Inkai | 160,793 | - | 160,793 | |||
| McArthur River | 73,675 | (7,524) | 66,151 | |||
| Millennium | 6,630 | (1,930) | 4,700 | |||
| North Butte/Brown Ranch | 734 | 232 | 966 | |||
| Northwest Unit | 1,093 | (585) | 508 | |||
| Rabbit Lake | - | 3,701 | 3,701 | |||
| Reynolds Ranch | 7,099 | (2,187) | 4,912 | |||
| Ruby Ranch | - | 184 | 184 | |||
| Ruth | - | 365 | 365 | |||
| Shirley Basin | 1,132 | - | 1,132 | |||
| Smith Ranch | 1,010 | (114) | 896 | |||
| Total Inferred Resources | 320,227 | (3,909) | 316,318 | |||
| Notes: | ||||||
| 1 Changes in reserves or resources, as applicable, include reassessment of geological data, results of information provided by mining and milling, change in mining plan, and subsequent re-estimation and reclassification of reserves or resources, as applicable. | ||||||
Gold Reserves and Resources
Reserve and resource estimates, the scientific and technical information, and description of the geology relating to Centerra’s gold properties, as presented in this Annual Information Form, were reviewed by Alain Gaston Mainville, Geologist and Professional Geoscientist, who is Manager, Mining Resources and Methods at Cameco, and were prepared by or under the supervision of the following qualified person:
| Qualified Person | Properties |
|---|---|
| Rob Chapman, geologist and professional geoscientist, director, mergers and acquisitions, Centerra. | Kumtor Boroo REN Gatsuurt |
To the knowledge of Cameco, the qualified person, beneficially owns, directly or indirectly, less than 1% of the issued and outstanding common shares of Cameco.
Cameco’s gold reserves and resources are located in the Kyrgyz Republic, Mongolia and the United States of America.
The following table shows the estimated gold reserves and resources as at December 31, 2005 on a property basis and Cameco’s share. Cameco’s share amounts to 52.7% of Centerra’s share of the reserves and resources of the properties. The amount of reported resources does not include those amounts identified as reserves.
This section uses the terms “measured resources” and “indicated resources”. US investors are advised that while those terms are recognized and required by Canadian securities regulatory authorities, the US Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposit in these categories will ever be converted into proven and probable reserves.
This section uses the term “inferred resources”. US investors are advised that while this term is recognized and required by Canadian securities regulatory authorities, the US Securities and Exchange Commission does not recognize it. “Inferred resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian securities regulations, estimates of inferred resources may not form the basis of feasibility or prefeasibility studies. Investors are cautioned not to assume that part or all of an inferred resource exists or is economically or legally mineable.
| RESERVES1,3 | PROVEN (100% basis) |
PROBABLE (100% basis) |
||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au |
| Boroo | 8,810 | 2.8 | 774 | 4,580 | 3.0 | 444 |
| Kumtor | 17,600 | 3.7 | 2,099 | 22,562 | 3.9 | 2,854 |
| Total | 26,410 | 3.4 | 2,873 | 27,142 | 3.8 | 3,298 |
| RESERVES1,3 - CONTINUED | TOTAL RESERVES (100% basis) |
|||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au | Cameco’s Share 1000 oz Au | Estimated Metallurgical Recovery % | Mining Method 2 |
| Boroo | 13,390 | 2.8 | 1,218 | 609 | 89% | OP |
| Kumtor | 40,162 | 3.8 | 4,953 | 2,609 | 83% | OP |
| Total | 53,552 | 3.6 | 6,171 | 3,218 | – | – |
| *tonnes and ounces in thousands | ||||||
| RESOURCES1 | MEASURED (100% basis) |
INDICATED (100% basis) |
||||
|---|---|---|---|---|---|---|
| PROPERTY* | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au |
| Boroo 4, 5 | 1,870 | 2.4 | 147 | 782 | 2.2 | 54 |
| Gatsuurt 6 | – | – | – | 18,597 | 3.1 | 1,854 |
| Kumtor 4,7 | 13,406 | 3.8 | 1,634 | 10,601 | 4.1 | 1,387 |
| REN | – | – | – | 2,753 | 13.6 | 1,201 |
| Total | 15,276 | 3.6 | 1,781 | 32,733 | 4.3 | 4,496 |
| RESOURCES1 - CONTINUED | MEASURED AND INDICATED RESOURCES (100% basis) |
||||
|---|---|---|---|---|---|
| PROPERTY* | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au | Cameco’s Share 1000 oz Au | Mining Method 2 |
| Boroo 4, 5 | 2,652 | 2.4 | 201 | 101 | OP |
| Gatsuurt 6 | 18,597 | 3.1 | 1,854 | 977 | OP |
| Kumtor 4,7 | 24,007 | 3.9 | 3,021 | 1,591 | OP/UG |
| REN | 2,753 | 13.6 | 1,201 | 393 | UG |
| Total | 48,009 | 4.1 | 6,277 | 3,062 | – |
| *tonnes and ounces in thousands | |||||
| INFERRED RESOURCES1 | |||||
|---|---|---|---|---|---|
| (100% basis) | |||||
| PROPERTY* | Tonnes (thousands) | Grade g/t Au | Content 1000 oz Au | Cameco’s Share 1000 oz Au | Mining Method 2 |
| Boroo 4, 5 | 2,563 | 2.0 | 167 | 84 | OP |
| Gatsuurt 6 | 3,980 | 3.0 | 378 | 199 | OP |
| Kumtor 4, 7 | 5,475 | 4.6 | 803 | 423 | OP/UG |
| REN 8 | 301 | 13.2 | 128 | 42 | UG |
| Total | 12,319 | 3.7 | 1,476 | 748 | – |
| *tonnes and ounces in thousands | |||||
| Notes: | |||||
| 1 Cameco reports reserves and resources separately. The amount of reported resources does not include those amounts identified as reserves. | |||||
| 2 Mining Method: OP – Open Pit; UG – Underground. | |||||
| 3 For the purpose of estimating reserves in accordance with National Instrument 43-101 of the Canadian securities regulatory authorities and in accordance with US Securities and Exchange Commission's Industry Guide 7 for US reporting purposes, reserves were estimated with cut-off grades based on a gold price of $400 (US) per ounce. | |||||
| 4 Open pit resources occur beneath the current ultimate pit designs using a gold price of $400 per ounce. | |||||
| 5 The resources at Boroo are estimated based on a variable cut-off grade depending on the type of material and the associated mill recovery. The cut-off grades vary from 0.9 grams per tonne to 1.1 grams per tonne. | |||||
| 6 The resources at Gatsuurt are estimated based on a cut-off grade of 1.6 grams per tonne. | |||||
| 7 The open pit resources at the Kumtor mine are estimated based on a cut-off grade 1.3 grams per tonne. Underground resources occur below the main Kumtor pit shell and are estimated based on a cut-off grade of 5.0 grams per tonne. | |||||
| 8 The resources at REN are estimated based on a cut-off grade of 8.0 grams per tonne. | |||||
Gold Reserves and Resources Reconciliation
The following reconciliation of Cameco’s share of gold reserves and resources reflects the changes in gold reserves and resources during 2005. Part of the 2005 additions and deletions at Kumtor and Boroo results from mining and milling, additional information provided by mining experience, drilling results analysis, reclassifications and a change in gold price.
| RECONCILIATION OF CAMECO'S SHARE OF GOLD RESERVES AND RESOURCES1 | ||||
|---|---|---|---|---|
| (in troy ounces) | ||||
| December 31, 2004 | 2005 Throughput 2 |
2005 Addition (Deletion)3 |
December 31, 2005 | |
| Reserves – Proven | ||||
| Boroo | 34,000 | (152,000) | 505,000 | 387,000 |
| Kumtor 4 | 1,106,000 | (323,000) | 323,000 | 1,106,000 |
| Total Proven Reserves | 1,140,000 | (475,000) | 828,000 | 1,493,000 |
| Reserves – Probable | ||||
| Boroo | 552,000 | – | (330,000) | 222,000 |
| Kumtor 4 | 06,000 | – | 897,000 | 1,503,000 |
| Total Probable Reserves | 1,158,000 | – | 567,000 | 1,725,000 |
| Total Reserves | 2,298,000 | (475,000) | 1,395,000 | 3,218,000 |
| Resources – Measured | ||||
| Boroo | – | – | 74,000 | 74,000 |
| Kumtor 5 | 525,000 | – | 336,000 | 861,000 |
| Total Measured Resources | 525,000 | – | 410,000 | 935,000 |
| Resources – Indicated | ||||
| Boroo | 97,000 | – | (70,000) | 27,000 |
| Gatsuurt 6 | 469,000 | – | 508,000 | 977,000 |
| Kumtor 5 | 483,000 | – | 247,000 | 730,000 |
| REN | 259,000 | – | 134,000 | 393,000 |
| Total Indicated Resources | 1,308,000 | – | 819,000 | 2,127,000 |
| Total Measured and Indicated Resources | 1,833,000 | – | 1,229,000 | 3,062,000 |
| Resources – Inferred | ||||
| Boroo | 97,000 | – | (13,000) | 84,000 |
| Gatsuurt 6 | 80,000 | – | 119,000 | 199,000 |
| Kumtor Gold 5 | 763,000 | – | (340,000) | 423,000 |
| REN | 169,000 | – | (127,000) | 42,000 |
| Total Inferred Resources | 1,109,000 | – | (361,000) | 748,000 |
| Notes: | ||||
| 1 Cameco reports reserves and resources separately. The amount of reported resources does not include those amounts identified as reserves. | ||||
| 2 Corresponds to mill feed. The discrepancy between the 2005 mill feed and Cameco's share of 2005 ounces produced is due to mill recovery. | ||||
| 3 Changes in reserves or resources, as applicable, are attributed to information provided by drilling and subsequent reclassification of reserves or resources, an increase in the gold price, changes in pit designs, reconciliation between the mill and the resource model, and changes to operating costs. | ||||
| 4 Kumtor reserves include the main pit and the Southwest Zone satellite deposit. | ||||
| 5 Kumtor resources include the main pit, the Southwest Zone and Sarytor satellite deposits. | ||||
| 6 Gatsuurt resources include the Central Zone and Main Zone deposits. | ||||