Cameco under fire on two fronts
Published by MAC on 2008-08-19Cameco suffers a new setback; other uranium stocks rally
ANDY HOFFMAN, Toronto Globe and Mail
14th August 2008
Cameco Corp. suffered another significant setback when its troubled Cigar Lake mine flooded again, raising serious questions about the future of the world's largest untapped uranium deposit and sparking a major market rally by other miners of the radioactive metal.
Cameco said late Tuesday that heavy water inflow into one of the Cigar Lake mineshafts in northern Saskatchewan forced it to suspend efforts to remove water from the mine, which originally flooded in October, 2006.
The Saskatoon-based company said it doesn't know where the water is coming from or whether it is from the same location of the original inflow, which it said it had plugged in February.
Cameco plans to use remote control cameras and sonar equipment to try and identify the source of the water. "We won't have answers for a few weeks," spokesman Gord Struthers said.
The alarming development marks yet another stumbling block for Cigar Lake, which was originally expected to begin production last year. Believed to contain more than 226 million pounds of uranium, the proposed mine could be the world's second largest uranium operation behind Cameco's nearby flagship McArthur River mine.
However, the mine's location in the Athabasca Basin creates some of the most challenging mining conditions in the world.
Cameco, which owns 50 per cent of Cigar Lake and is the project's operator, said it doesn't know whether the latest flooding will delay its current production start target of 2011 at the earliest.
Before the most recent flood, TD Newcrest analyst Greg Barnes was already expecting the mine's start-up to be delayed until 2013. "We believe that another flood at the Cigar Lake mine is likely to raise more questions about the viability of the operation over the longer term and this could be the catalyst that the uranium market had been looking for to jolt it out of the doldrums," he said in a note to clients.
At full production capacity, Cigar Lake could produce about 18 million pounds of uranium oxide concentrate, or "yellowcake," a year.
The possibility of further delays for the mine, which would keep roughly 10 per cent of the world's uranium supply buried in the northern Saskatchewan ground instead of on the open market, sent shares of other uranium companies soaring.
Toronto's Denison Mines Inc., which like many other uranium companies had seen its stock price pummelled in recent months, saw its shares surge nearly 17 per cent yesterday. Paladin Energy Ltd. saw its stock rise 15.5 per cent, while Uranium One Inc. shares rose 13 per cent. Junior uranium miners also gained.
Analysts said the new flooding represents a considerable blow to Cameco, which has also been hit with ground contamination issues at a processing plant in Port Hope, Ont.
"We would not be surprised to see a delay in the remediation plan and anticipated start-up by at least six months. While clearly negative for Cameco, this event should provide a much-needed boost to uranium market sentiment," Canaccord Adams Inc. analyst Orest Wowkodaw said in a note to clients.
CAMECO CORP. (CCO)
Close: $32.89 down $1.16
CIGAR LAKE MINE
WHAT'S UNDERGROUND?
Cameco believes it has the world's largest uranium deposit, with 226.3 million pounds of proven and probable resources.
WHY IS IT UNDERWATER?
Human error. A report said Cameco "failed to fully appreciate the degree of risk" of working in less-than-ideal conditions at the site. It determined that the wrong kind of drill was used in 2006, which created a bigger-than-expected hole. An effort was made to plug it up, but rocks shifted and groundwater flooded the shaft.
WHAT IS BEING DONE?
The weakened section of the mine was plugged in February, and workers had nearly managed to pump down to the bottom of the shaft before water started rushing in again. Now, the company must let the water rise to 100 metres below the surface, before it can plan its next move.
WHAT IS THE PROJECT'S COST?
Cameco said in 2007 that its share of capital costs was expected to hit $508-million.
Cleaning up your act - EPA summit uranium cleanup
Gallup Independent
14 August 2008
Uranium exploration companies starting to withdraw
Mining Companies pulling money from province after ban
Matt McCann, Telegraph-Journal
13th August 2008
SAINT JOHN - Claiming the government bowed to pressure from various local lobby groups in declaring a ban on all uranium exploration, Sparton Resources Inc. (TSX VENTURE: SRI) a Toronto-based company with $9 million in assets last year, announced Monday it would be suspending its New Brunswick uranium program.
"We can't do uranium now," said Sparton chairman Edward Thompson. "It's going to be suspended until the government changes its regulations."
Though Sparton will instead focus on copper exploration - preliminary grab and chip sampling results have returned significant values of copper in their claim area in central New Brunswick - Harmen Keyser, vice-president of project development for British Columbia-based Ucore Uranium (TSX VENTURE: UCU), said his company will shut everything down.
"We spent about $150,000 in the province over the last year, and most of that went to New Brunswick contractors and suppliers," he said, adding that they had planned to spend almost another $300,000 this year. "We're not doing anything else until we have a chance to review how this is going to affect our rights and titles and obligations."
Last month, the Liberal government, in response to widespread protests by residents concerned with prospecting on and near their land, announced new rules temporarily halting uranium exploration, and blocking it on designated watersheds, well fields, villages, towns and cities.
No uranium exploration or development can occur within 300 metres of homes or institutions, and all claim staking suspended until an electronic mapstaking system can be set up to track uranium exploration.
"We won't spend any more money in New Brunswick until we have a chance to assess the full impact of the proposal and waiting to see what the new regulations are going to say," Keyser said.
In 2006 mineral production in the province surged to $1.7 billion from $875 million in 2004, an increase that David Plante, manager of the New Brunswick Mining Association, calls meteoric.
Plante said it's not surprising that mining and exploration companies are starting to withdraw their money from the province.
"Access to land is a fundamental requirement for exploration investment, and most certainly the withdrawal of land from exploration for uranium sent a negative message," Plante said.
But not all companies are reluctant to continue operating in the province.
Peter Gummer, president of First Narrows Resources Corporation (TSX VENTURE: UNO) said they already have a sizeable amount of land around their target area, near Bathurst, and the moratorium doesn't affect them as much.
But Gummer said another problem will come if and when the moratorium is lifted.
If a deposit is found that crosses onto land not already owned, no company will be able to claim it.
"There may be a rush to stake ground where normally they would be able to stake without that competition," he said.
"Information is very valuable for us, and information that we generate ourselves we tend to keep exclusively to ourselves, but everyone is doing work right now."
"This is almost, at times, an opportunity to sit back, relax and do your research work to identify new target areas. There are some pluses and negatives with this. It's not all negative."
FOR IMMEDIATE RELEASE:
12th August 2008
Port Hope Ward: Two residents demand Cameco Corporation stop dumping uranium into lake
http://www.activistmagazine.com/index.php?option=com_content&task=view&id=917&Itemid=143
PORT HOPE -- Cameco Corporation must be made to stop dumping treated water still contaminated with uranium and arsenic into Lake Ontario from the Welcome Waste Management Facility, says a group of Ward Two residents.
The residents wrote Michael Binder, Ph.D, President and CEO of the Canadian Nuclear Safety Commission after receiving laboratory tests of water it found pouring out of a broken pipe on a public beach where Brand Creek empties into Lake Ontario.
The tests, done by Caduceon Environmental Laboratories in Peterborough, showed the water was contaminated with uranium and arsenic well above both the Interim Provincial Water Quality Objectives and the Canadian Drinking Water Guidelines "but within the limits allowable by the Canadian Nuclear Safety Committee (CNSC)".
The pipe carries treated water from the Welcome facility maintained by Cameco under licence number WNSL-W1-2339.0/indf., which was renewed for an indefinite period in 2002 by the CNSC. The license contains "no limits" for the release of uranium into Lake Ontario, and it sets arsenic levels that are 100 times higher than Ontario's water quality objectives.
The Welcome site contains old soil with elevated levels of uranium, arsenic and radium. The pipe dates from 1957, but since 1978 there has been a system in place that is supposed to treat the collected groundwater prior to its discharge into the lake and whether they are illegal given the "... current Ontario Water Quality Objectives".
The broken pipe was noticed by a pilot flying low over Lake Ontario and he chose to contact a Lake Shore Road resident. The resident has reported the break to Cameco and the Ontario Ministry of the Environment and asked those agencies to investigate the questionable discharges.
Results of the tests paid for by local residents closely resemble Cameco's own 2007 monitoring results from the Welcome pumping station, which are provided to the CNSC and the Municipality of Port Hope on a quarterly basis.
"Something has gone wrong here," said Sanford Haskill, who owns waterfront property west of the broken pipe. "We are concerned that any toxic contamination is being allowed into the lake, but certainly it should not be happening just a few kilometers from Port Hope's municipal water intake."
He said the broken pipe provided the first opportunity for outsiders to test the effluent from Welcome. The pipe was built in 1956. "We hope the contamination indicates a very recent breakdown in the treatment system, and that Cameco quickly repairs it," Haskill said. "God help the lake if it's been going on for 40 or 50 years."
Haskill said he is also concerned about Cameco's lax scrutiny of its pipeline. "Winter ice is the only force that could have uprooted that pipe and sliced it open, and that means it has been spewing uranium and arsenic onto the beach for four months.
"It shouldn't be left up to an individual to detect leaks from Cameco, or to uncover the inadequacies of the CNSC's licenses. In light of what's happened in the last year, this company simply has to do a better job of eliminating its pollution of Lake Ontario. Canadians and Americans who take their water from the lake should be outraged. This has got to stop."
He said, he is also concerned that Cameco is not being forced to clean up the thousands of kilograms of uranium, arsenic and fluorides that have leaked into the ground underneath its UF6 plant. Some of it has reached the Lake, but the company says it doesn't yet know how much.
This month marks the first anniversary of the discovery of that leak, and the plant has been closed ever since.
Contact: Sanford Haskill 905-885-8743.
URANIUM THREAT - NEW BRUNSWICKERS SAY OUR PROVINCE WILL NOT BE THE NEXT RABBIT LAKE!
By Yvonne Devine, CCAMU Newsletter
12th August 2008
Buoyed by high uranium prices and courted by international uranium mining companies, the New Brunswick Government is trying to take this province down a path to an industry that leaves behind a radioactive cocktail for the citizens to deal with. The waste products from uranium mining contain over a dozen radioactive, toxic materials that would threaten the Province's water sources, food chain and citizens' health for thousands of years. The Southeast Chapter of the Conservation Council of New Brunswick (CCNB Southeast) and other groups around the Province are working hard to get the facts on the table.
The Government is studying the potential impacts of tidal and wind energies and engaging the public in consultations throughout the Province. While these true "clean" energy sources are being carefully evaluated before proceeding, many wonder why the public has never been consulted on uranium mining nor has the Government conducted any studies on the impact. The Provincial Government is also promoting a second nuclear reactor part of its plan to be an "energy hub", again with no consultations with its citizens. Both the uranium and nuclear power will be exported, but not the waste that's left behind that's a gift for the people of New Brunswick to handle.
CCNB Southeast has so far reached over 1,800 people, through nine public information sessions, to tell them about uranium mining and its effects on the environment, health and food chain. People at these presentations are shocked and worried about uranium mining and very angry that their voices are not being heard by the Provincial Government. We will continue with these presentations to make sure that as many people as possible understand the situation and how the total cost to the Province will far outweigh the short term economic gains.
The Provincial Government's recently held its public information sessions, in Fredericton on June 4th and in Moncton on the 5th. They heard loud and clear from capacity crowds totalling close to 1,000 people, that a uranium mine is not welcome in New Brunswick. Nothing from the panel, including Health Canada's representative telling us that we are exposed to uranium all the time anyway so it's nothing to worry about to the Canadian Nuclear Safety Commission representative touting all the safety features in place to protect everybody. The panel also included a representative from the provincial Departments of Environment and Natural Resources. The Minister of Natural Resources was in attendance in Fredericton, but did not address the crowd despite many requests.
With the devastating effects from uranium mining waste on the front end of the nuclear chain, and the even greater threat from the nuclear waste at the end of the chain, it is inconceivable that the New Brunswick government would choose this direction. The people of New Brunswick are speaking out in greater and greater numbers against uranium mining the Provincial Government is unwise not to listen.