- Prolonged weakness in market conditions required the suspension of production at our Rabbit Lake operation in the second quarter of 2016 and the facility has transitioned into care and maintenance.
Rabbit Lake produced more than 203 million pounds of uranium concentrates since beginning production in 1975.
Given current market conditions, and our belief they will continue to be depressed in the near term, we suspended production at Rabbit Lake during the second quarter of 2016.
Prior to the decision to suspend production, the operation produced 1.1 million pounds in 2016.
Rabbit Lake Production
Cameco's Share (millions lbs)
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Care and maintenance
The transition to care and maintenance was completed in August, 2016. Care and maintenance costs for the year totaled $55.4 million and related severance totaled $10.6 million, both of which are included in our cost of sales.
A workforce of 120 (down from 650) continues to maintain the facilities, manage ongoing treatment and release of site water effluent, and sustain environmental monitoring and reclamation activities.
We are continually weighing the value of maintaining the operation in standby, against the cost of doing so. However, as long as production is suspended, we expect care and maintenance costs to range between $35 million and $40 million annually for the first few years. The estimated decommissioning cost for the Rabbit Lake mine site is $203 million, based on the preliminary decommissioning cost estimate that has been accepted by the Province of Saskatchewan and the CNSC.
Production was suspended at our Rabbit Lake operation during the second quarter, requiring us to determine the excess carrying value of the mine and mill over the fair value less costs to sell. As a result, we have recognized an impairment charge for the full carrying value of $124 million.
Environment & Safety
Worker safety, environmental monitoring and proper decommissioning after project completion are of the utmost importance to Cameco.
Reserves & Resources
Our mineral reserves and resources are the foundation of our company and fundamental to our success.
Caution about Forward-Looking Information
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