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PROFILE Cameco owns two-thirds of the world's largest, high-grade uranium mines at Key Lake and Rabbit Lake in Saskatchewan and 100% of Canada's only uranium processing facilities at Blind River and Port Hope, Ontario. In addition, Cameco has the controlling interest in the largest, high-grade future uranium mines at McArthur River and Cigar Lake in Saskatchewan. Through its wholly owned American subsidiaries, Cameco obtains one-third of the production from the Crow Butte operation in Nebraska and effective in 1997, full production from the Highland uranium operation in Wyoming. KEY LAKE Production
Waste Management The tailings management facility constructed in the deeper portion of the Deilmann pit was successfully commissioned early in 1996. By year end, its performance exceeded modelling predictions. In-pit tailings disposal will be used to manage waste from milling the remainder of Key Lake ore during the next few years and waste from milling ore from the proposed McArthur River mine after that. Employee Relations Key Lake is a unionized operation represented by the United Steelworkers of America (USWA) Local 8914. During the year, Cameco and the USWA concluded a new three-year collective agreement which will expire in December 1998. Nickel-Cobalt Extraction A pilot project to test the feasibility of extracting nickel and cobalt from tailings in the surface waste management facility at Key Lake was concluded in 1996. Although extraction proved to be technically possible, it would require a complex process and this, combined with our current outlook for the nickel and cobalt markets, led to our decision not to pursue the development of a commercial plant at this time. RABBIT LAKE Production Production increased in 1996 by almost 2 million pounds U3O8 to a record 10.3 million pounds. This was achieved while the mill operated only half the time - seven days up and seven days down. Cameco's share was 6.9 million pounds. Production in 1997 is expected to increase further to 12 million pounds. Mining Three orebodies were mined or developed at the Rabbit Lake operation in 1996. Eagle Point underground mine provided millfeed for the operation for most of the year. Mining will continue there until reserves are depleted early in the next century. Mining of the Collins Bay D-zone open pit began in late 1995, was completed within six months and by year end, decommissioning was much advanced. Development of the Collins Bay A-zone open pit started in mid-1996. Mining began before year end and is expected to be completed in the first half of 1997. Decommissioning will follow immediately. Ore from the three deposits is being stockpiled and blended as feedstock for the mill. US PRODUCTION
FUTURE MINES Subject to regulatory approval, Cameco plans to begin production from McArthur River and from Cigar Lake in 1999 and 2000 respectively. With full annual production from the two sites projected at 36 million pounds, Cameco's share would be about 19 million pounds each year. This will more than replace production from the Key Lake and Rabbit Lake orebodies, which will be depleted at the turn of the century, or shortly thereafter. FUEL SERVICES Production In 1996, combined production of UF6 and UO2 at Port Hope reached 10,100 tonnes while production of UO3 feed from the Blind River refinery was 10,200 tonnes. Strategic Alliance During the year, an agreement was concluded with the United States Enrichment Corporation (USEC) which is developing a new uranium enrichment process known as atomic vapor laser isotope separation (AVLIS). Cameco is to develop the technology necessary to convert natural uranium into feed for the AVLIS process. Once the pilot project - now under way in Port Hope - is concluded in 1998, and if USEC decides to proceed with commercial development of AVLIS, Cameco and USEC will evaluate the feasibility of joint construction of an AVLIS feed plant which would use Cameco-supplied UO3 from Blind River. Such a plant would consolidate Cameco's position in the conversion sector of the nuclear industry of the 21st century through an alliance with the largest enrichment company in the world. URANIUM EXPLORATION Cameco conducts an aggressive uranium exploration program in Canada, the United States and Australia to support the corporation's long-term objective of maintaining its status as a leading uranium supplier. Cameco's share of uranium exploration expenditures in 1996 was almost $11 million, up considerably from about $6 million in 1995. The program involved 20 projects, most operated by Cameco. Saskatchewan The focus continued in the Athabasca Basin where Cameco and partners have more than 800,000 hectares of prospective exploration lands. The 1996 program included some 30,000 metres of core drilling by Cameco. Although no new discoveries were made, encouraging results were obtained in several areas. These and other priority targets will be evaluated by the 1997 program which will include about 35,000 metres of drilling. Northwest Territories Early-stage exploration continued in the Thelon Basin during the year. The program included prospecting, ground geophysics and limited core drilling. United States Exploration continued in Wyoming for additional in situ leach resources. Drilling revealed mineralization in the Red Desert and East Shirley Basin areas. New properties containing uranium resources were acquired at Box Creek in the Powder River Basin. Australia
Cameco also made progress in negotiating agreements to access properties in Arnhem Land in which Cameco holds 100% interest. It is expected that field programs will be initiated in 1997. During 1996, Cameco entered into an agreement to purchase a 50% interest in exploration licences of about 120,000 hectares owned by Queensland Mines Pty Limited, also in the Arnhem Land area, where an airborne geophysics and drilling program has been carried out. Negotiations continued in early 1997. In light of increased exploration activity in Arnhem Land, Cameco's Australian exploration office moved to Darwin, Northern Territory early in 1997. |
