Water problems worsen at McArthur River

Cameco (CCO-T) has found that the water-infiltration problems first experienced on April 6 at its flagship McArthur River uranium mine in Saskatchewan are much worse than first thought, and production will be halted there for at least 4-6 months until repairs are completed.

The Saskatoon-based uranium producer estimates that the production shutdown will slice about $4-5 million per month off the company’s bottom line.

The company says that the situation “continues to be serious and fluctuates frequently” as personnel monitor water levels as well as pumping- and water-treatment equipment.

The critical area of the mine is said to be still unaffected but water is being stored close to this area and there is only minimal storage left in the mine.

Cameco says it has improved the method of measuring water inflow and that more pumping capacity has been added. As well, water-treatment capacity at surface has been substantially increased and is currently capable of matching the pumping capacity.

While most of the pumping capacity is located on the 530-metre level, the critical area of the mine is on the 640-metre level, where there are ore-processing equipment and large pumps that will be lost if total mine pumping capacity does not keep up with the water inflow.

The company says it is having “slow progress” buildng a concrete barrier located in the development tunnel just above the 530-metre level, and that it will likely take about two weeks before the concrete barrier can begin to control the water inflow and another two to three months to permanently seal off the area.

Cameco shares plunged on the latest news on April 14, dropping as low as C$29 before closing at $31.15, off $2.25 for the day. On April 9, just before the water problems were announced publicly, Cameco closed at $37.95.