Uranium Production overview
Our production was 2% lower in 2011 than it was in 2010, but 3% higher than the guidance we provided in our third quarter MD&A. We had a number of successes at our mining operations in 2011.
At McArthur River/Key Lake:
- realized benefits of production flexibility provisions in our McArthur River/Key Lake licences, matching our 2010 production record and exceeding our production target by 5%
- realized benefits of improved efficiency and reliability of equipment at Key Lake
- received government approval allowing us to increase production to 3.9 million pounds (100% basis)
- signed an MOA to increase production to 5.2 million pounds (100% basis)
|Three months ended
|McArthur River/Key Lake||3.9||4.0||13.9||13.9||13.3|
We have geographically diverse sources of production. Our strategy is to increase our annual production to 40 million pounds by 2018, which we expect will come from our operating properties, development projects and projects under evaluation.Cameco's share of production — annual forecast to 2016
|McArthur River/Key Lake||13.1||13.1||13.1||13.1||13.1|
|Total share of production||21.7||23.0||24.7||28.9||31.1|
|Cameco's share of Inkai's production on which profits are generated2|
In 2013, production at McArthur River may be lower as we transition to mining upper zone 4.
Our 2012 and future annual production targets for Inkai assume, and we expect:
- Inkai will obtain the necessary government permits and approvals to produce at an annual rate of 5.2 million pounds (100% basis), including an amendment to the resource use contract
- we reach a binding agreement with Kazatomprom to finalize the terms of the MOA
- Inkai will ramp up production to an annual rate of 5.2 million pounds (100% basis)
There is no certainty Inkai will receive these permits or approvals or we will reach a binding agreement with Kazatomprom or that Inkai will be able to ramp up production. If Inkai does not, or if the permits and approvals are delayed, Inkai may be unable to achieve its 2012 and future annual production targets and we may have to recatagorize some of Inkai's mineral reserves as resources.
This forecast is forward-looking information. It is based on the assumptions and subject to the material risks discussed here, and specifically on the assumptions and risks noted above and listed here. Actual production may be significantly different from this forecast.
- we achieve our forecast production for each operation, which requires, among other things, that our mining plans succeed, processing plants and equipment are available and function as designed, we have sufficient tailings capacity and our mineral reserve estimates are reliable
- we obtain or maintain the necessary permits and approvals from government authorities
- our production is not disrupted or reduced as a result of natural phenomena, labour disputes, political risks, blockades or other acts of social or political activism, shortage or lack of supplies critical to production, equipment failures or other development and operation risks
Material risks that could cause actual results to differ materially
- we do not achieve forecast production levels for each operation because of a change in our mining plans, processing plants or equipment are not available or do not function as designed, lack of tailings capacity or for other reasons
- we cannot obtain or maintain necessary permits or approvals from government authorities
- natural phenomena, labour disputes, political risks, blockades or other acts of social or political activism, shortage or lack of supplies critical to production, equipment failures or other development and operation risks disrupt or reduce our production