McArthur River/Key Lake

  • McArthur River/Key Lake, located in northern Saskatchewan, Canada, are the world's largest high-grade uranium mine and mill.
  • In service since 1999 and 1983 respectively, Cameco operates the ISO 14001 certified locations, which have collectively produced 535 million lbs using a variety of mining methods.
  • After being held in safe care and maintenance since 2018, on February 9, 2022 Cameco announced plans for the operation’s gradual return to production.
Operation(As of December 31, 2021)
McArthur River Reserves(As of December 31, 2021)

2022 Q2 Update

Transition to planned production

McArthur River/Key Lake Production

Cameco's Share (million lbs)

Six months
ended June 30
   
2022 2021 Change 2022 Plan
-- -- -- up to 1.41

1 Over the course of 2022 and 2023, we will undertake all the activities necessary to ramp up to the 2024 planned production of 15 million pounds per year (100% basis) at McArthur River/Key Lake. We are moving into early-stage commissioning of our critical automation, digitization and other projects. However, we have seen some delays to our work schedule at the Key Lake mill and anticipate first production will be deferred to later in the fourth quarter. As a result, we are expecting up to 2 million pounds of production (100% basis) this year (previously up to 5 million pounds).

In February, we announced plans to transition McArthur River and Key Lake from care and maintenance to planned production of 15 million pounds per year (100% basis) by 2024. In the second quarter of 2022, there was no production as we continue to advance recruitment, training, infrastructure upgrades and operational readiness activities in preparation for commissioning and restart. There are now approximately 670 employees and long-term contractors employed at the mine and mill. When we resume operations later this year, we expect to have approximately 850 employees and long-term contractors.

Our operational readiness activities are transitioning from construction to early-stage commissioning of our mining and milling circuits at McArthur River and Key Lake. Critical automation and digitization projects are being tied into existing infrastructure. In addition, asset condition assessments and subsequent repair and reassembly of all equipment is winding down. However, we have seen some delays to our work schedule at the Key Lake mill. We have encountered some challenges with respect to the availability of critical materials, equipment and skills. In addition, after four years on care and maintenance, we have experienced some normal commissioning issues as we work to safely and systematically integrate the existing and new assets with updated operating systems. We have adjusted our schedule to accommodate these delays and anticipate first production will be deferred to later in the fourth quarter. As a result, we are expecting up to 2 million pounds production (100% basis) this year.

Over the course of 2022 and 2023, we will undertake all the activities necessary to ramp up to the planned annual production of 15 million pounds (100% basis) by 2024. This plan will significantly improve our financial performance by allowing us to source more of our committed sales from lower-cost produced pounds and we will no longer be required to expense care and maintenance costs directly to cost of sales. However, until we achieve a reasonable production rate, we expect to incur between $15 million to $17 million per month in operational readiness costs, which will be expensed directly to cost of sales. There is a potential for the COVID-19 pandemic and related supply chain challenges to impact the availability of materials, reagents and labour, which could not only impact 2022 production but could also introduce risk to production in 2023.

Collective agreement

The collective agreement with the United Steelworkers Local 8914 expires in December 2022. There is a risk to the production plan if we are unable to reach an agreement and there is a labour dispute.

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Environment & Safety

Worker safety, environmental monitoring and proper decommissioning, after mining is completed, are of the utmost importance to Cameco.

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Reserves & Resources

Our mineral reserves and resources are the foundation of our company and fundamental to our success.

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Caution about forward-looking information

This page may contain forward-looking information that is based upon the assumptions and subject to the material risks discussed on page 2 of Cameco's most recent Quarterly MD&A.