uranium operations

Chemical technician Lori Burnouf analyses the purity of uranium concentrates from the Rabbit Lake mill which produced 12 million pounds in 1997 - the most in its 23-year history

Profile

Cameco operates and owns two-thirds of the world's two largest, high-grade uranium mines at Key Lake and Rabbit Lake in northern Saskatchewan. The corporation also obtains all of the production from the Highland uranium operation in Wyoming and almost one-third of the uranium production from the Crow Butte operation in Nebraska.

Cameco's share of uranium from these facilities accounts for nearly 20% of the world's total output.

Cameco is an integrated, value-added uranium producer that owns and operates refining and conversion plants in Ontario.

The corporation's future is secured by a controlling interest in both McArthur River and Cigar Lake, the two largest uranium projects in the world, located in northern Saskatchewan. Cameco's share of reserves and resources from these deposits is more than 400 million pounds U₃O₈ with an average grade of about 15%.

KEY LAKE  Key Lake maintained its status as the largest uranium operation in the world, with a total output of 14.1 million pounds U₃O₈ in 1997. Cameco's share was 9.4 million pounds.

Athabasca Basin
The Athabasca Basin in northern Saskatchewan is the focus of exploration for high-grade uranium deposits.

With the completion of mining activity in May, the mining crew and equipment were deployed to McArthur River to excavate the site for the second shaft. Following that they focused on assisting with the Key Lake revegetation program and construction of the drainage system in the mill tailings management facility.

RABBIT LAKE  Record output of 12.0 million pounds of U₃O₈ was achieved at the Rabbit Lake operation in 1997, up 16% from 1996. Cameco's share was 8.0 million pounds.

Collins Bay A-zone open pit was mined in 1996 and 1997 and recovered more than 17.3 million pounds of U₃O₈, exceeding the forecast by 2.2 million pounds due to the recovery of 40,000 more tonnes of ore than expected.

POWER RESOURCES, INC. AND GEOMEX MINERALS INC.  All current and future in situ leach (ISL) activities are and will be developed by these wholly owned subsidiaries. ISL is an extraction process with minimum environmental impact suitable for certain low-grade uranium ore deposits.

Cameco completed its acquisition of Power Resources, Inc. including 74.25% of the Highland ISL operation, in 1997. The remaining interest in Highland was subsequently purchased by Geomex Minerals Inc.

In 1997, the Highland operation in Wyoming achieved record annual production of 1.6 million pounds U₃O₈. The operation also reached a 10-year, 10 million pound U₃O₈ production milestone by year end. Highland is the largest uranium operation in the United States.

	At Key Lake, mine maintenance foreman Fred Misiwich ensures a variety of equipment is repaired and maintained.

Licensing and development work continues at PRI's Gas Hills project near Riverton, Wyoming with production planned to begin in 2000.

McARTHUR RIVER  Cameco is proceeding with the construction of the McArthur River project. Cameco received government approval in May 1997 and construction licences by August 1997.

Underground development on the 530 and 640 metre levels below the surface is under way and freeze-hole drilling is scheduled to begin early in 1998. Some 100 freeze holes are planned and will take about a year to complete.

Midwestern US
Cameco's US uranium activities provide the company with expertise in the in situ leach extraction technology and geographic diversification.

Because the average ore grade at McArthur is 15% U₃O₈, Cameco plans to mine the orebody using non-entry mining methods. The ore will be transported 80 kilometres to the existing Key Lake uranium operation for milling. The new road from McArthur River to Key Lake, which is now in use, will be completed in the spring of 1998.

Sinking the primary exhaust ventilation shaft to the 530 metre level began in 1997. The contract was awarded to a joint venture between Mudjatik Enterprises Inc. and Thyssen Mining Construction of Canada and represents the first time that an aboriginal joint venture has been awarded a contract for the sinking of a mine shaft in Canada.

Development activity at McArthur River is on schedule and on budget with uranium production targeted to begin late in 1999 after obtaining all necessary operating licenses. The mine is expected to produce 18 million pounds U₃O₈ annually at full production. Cameco's share of annual production will be more than 10 million pounds.

CIGAR LAKE  The joint federal-provincial panel recommended in November 1997 that the Cigar Lake project be approved once a disposal location for mine waste rock is identified and changes are made to the tailings management facility. Subject to regulatory approvals and operating licences, it is anticipated that production will begin at Cigar Lake in 2001. Cameco's share of the 18 million pounds U₃O₈ a year at full production will be almost 9 million pounds.

	Grades (% U3O8)
	McArthur River and Cigar Lake have grades almost 100 times the world average.

Cameco owns and operates refining and conversion plants in Ontario. At Blind River, Cameco operates the world's largest uranium refinery which produces high-purity uranium trioxide (UO₃). With the Port Hope conversion plants, Cameco is one of four western world commercial suppliers of uranium hexafluoride (UF₆), which, after further processing, becomes the fuel used in most nuclear reactors. In addition, Cameco is the only commercial converter of natural uranium dioxide (UO₂), the fuel used in Candu reactors.

In 1997, the Blind River refinery established a UO₃ production record of 12,195 tonnes uranium. Port Hope achieved the highest level, in Cameco's history, of combined UF₆ and UO₂ production of 12,594 tonnes uranium.

A multi-year effort to synchronize Cameco's emergency response procedures with major industry and the town of Port Hope culminated in 1997 with the creation of a community awareness and emergency response organization. This strategic group links the emergency response capabilities of industry with the town of Port Hope.

	Geologist Sandra Foster looks for indications of uranium in core samples taken from the Rabbit Lake area.

TECHNOLOGY DEVELOPMENT AND SPECIAL PROJECTS Cameco's technology development division, which was restructured in 1996, made solid progress improving the operating capacities of the refinery and conversion plants. In addition, they advanced on projects dealing with new technology, including a contribution to the atomic vapor laser isotope separation (AVLIS) project.

AVLIS is a new uranium enrichment process being developed by the United States Enrichment Corporation (USEC). Enrichment is an essential step in the process of making nuclear fuel out of natural uranium for light-water reactors. Cameco and USEC have formed a partnership to develop the technology necessary to convert natural uranium into feed for this AVLIS project.

In 1997, the AVLIS feedstock development work progressed sufficiently to allow the technical demonstration phase to take place in 1998. Following the completion of that phase, the technical and commercial evaluation of an AVLIS feed plant will begin, as will site selection for that plant.

This partnership with the world's largest enrichment company ensures that Cameco will remain a vital part of any advancements made in enrichment technology and consolidates our position in the conversion market.

Cameco's international exploration projects are managed from head office in Saskatoon, Saskatchewan. In 1997, exploration activities concentrated on developing projects in Saskatchewan and Australia to support the corporation's long-term objective of maintaining its status as a leading supplier of uranium.

Total Cameco-controlled and Cameco-partnered land holdings as of December 31, 1997 were approximately 2.6 million hectares, a modest increase from 1996. Cameco's share of the 1997 uranium exploration program cost $15 million, a 36% increase over 1996 reflecting the company's objective to expand its reserve base.

	Well-field sampler Robert Pollo, takes a water sample from a monitoring well at the Highland uranium operation which produced a record 1.6 million pounds in 1997.

SASKATCHEWAN  The Athabasca Basin of northern Saskatchewan remains the area with the highest potential for the discovery of high-grade uranium deposits. In 1997, Cameco continued to consolidate and maintain its land position, arguably the most favorable in Saskatchewan, and also increased its land holdings in the deeper and largely unexplored portion of the basin.

The 1997 drilling program intersected potentially significant unconformity-type uranium mineralization with assays up to 3.2% U₃O₈ over 8.8 metres in the best drill hole in the Thorburn Lake area of the Dawn Lake project. Drilling results were also encouraging on two partner-operated projects in the Key Lake and McArthur River areas. The mineralized intersections found on these properties in 1997 will be followed up by more extensive drill programs in 1998.

NORTHWEST TERRITORIES  In 1997, Cameco focused on developing drill targets in the Thelon Basin. Although no drilling took place, the corporation made a number of land acquisitions on its own and through a junior mining company. Geophysical and geochemical evaluations of these properties have developed a number of interesting drill targets for 1998.

Australia
Cameco has established a favorable land position in Australia, conducting exploration activity from its office in Darwin, Northern Territory.

AUSTRALIA  Cameco's exploration activity in Australia is conducted from its office in Darwin, Northern Territory. Cameco continued exploration through two partner-operated joint ventures in Arnhem Land, Northern Territory and on 100% owned projects in both Arnhem Land and Western Australia. Cameco has established a favorable land position totalling 1.7 million hectares in these two regions and has concluded several access agreements with the traditional owners.

At Deaf Adder, a 100% owned Cameco property in Arnhem Land, an airborne radiometric and magnetic survey was followed up by ground prospecting. A more intensive exploration program including drilling is planned for 1998.

Negotiations to purchase a 50% interest of the exploration licences of Queensland Mines Pty. Limited were finalized with the completion of an agreement on February 6, 1998. Prospect evaluation, ground geophysics and drilling were conducted on this highly prospective property, as well as on the adjacent partner-operated project.