More water woes for Cameco (December 10, 2007)

Vancouver — Water problems are again affecting underground operations at a Cameco (CCO-T, CCJ-N) uranium project in northern Saskatchewan’s Athabasca basin.

Increased water flow into the Eagle Point mine at the wholly owned Rabbit Lake uranium operation recently prompted the company to reduce underground activity as a precaution.

The mine uses ramp access to reach depths of 420 metres below surface, with mining carried out using open-stope methods.

The boost in water flow, beginning Nov. 27, coincided with an equipment upgrade of the mine’s surface water-handling system — causing a temporary drop in containment capacity. As of Dec. 4, the company estimates increased water inflow at 110 cubic metres per hour, within the operation’s pumping ability, which was just expanded 25%.

The flow occurred in an underground area of the mine only 90 metres below surface. Cameco points out that the orebodies and underground infrastructure at the Eagle Point mine are all within stable basement rocks, and its geotechnical engineers have found no evidence of structural weakness in the rock.

The plan is to permanently seal off the leaky area by building concrete bulkheads. Cameco anticipates this work could be completed during the first quarter of 2008.

So far this year, the Rabbit Lake operations have produced 3.7 million lbs. U3O8. Cameco now expects to finish 2007 at the operations by processing stockpiled ore to produce a total of 3.8 to 4 million lbs. U3O8 for the year.

Cameco is reassessing its 2008 production forecast for Rabbit Lake, but will only provide an update once a revised mining and milling plan is in hand.

Cameco doesn’t expect it will have to lay off any of its 270 employees at Rabbit Lake, many of whom will be reassigned tasks. Another 220 contractor employees on site may also see changes.

In late 2006, a significant water inflow incident at the company’s Cigar Lake project in the Athabasca basin caused major flooding of the underground development workings. The event delayed the planned start of commercial production by at least two years — until late 2010 or 2011.

Cameco plans to give an update on Cigar Lake on Dec. 19.

In yet another Cameco uranium project in Saskatchewan with a watery name, McArthur River, mining was brought to a halt in April 2003 by major flooding triggered by a roof cave-in at the 510-level. A semi-autogenous grinding (SAG) mill on the 640-level was totally submerged.