Cameco to take majority of Millennium project

After being trumped last year in a bidding war with Rio Tinto (RIO-N, RIO-L) for Hathor Exploration and its juicy Roughrider deposit, Cameco Corp. (CCO-T, CCJ-N) is back on the acquisition trail, announcing before markets opened on Mar. 2 that it plans to buy Areva’s 27.94% stake in the Millennium project in northern Saskatchewan for $150 million.

The proposed uranium mine in the Athabasca Basin has indicated resources of 507,800 tonnes grading 4.55% U3O8 for 50.9 million pounds of contained U308 and inferred resources of 297,800 tonnes grading 2.54% for 16.7 million pounds of U3O8.

The project area is one of twelve mineral claims held by the Cree Lake Extension joint-venture exploration project, in which Cameco currently holds 41.96%, JCU (Canada) Exploration Company 30.1%, and AREVA Resources Canada 27.94%. Cameco is the operator.

If JCU does not exercise its rights of refusal, Cameco will acquire the entire 27.94% interest from AREVA, increasing its ownership interest in the project to 69.9%.

If JCU elects to exercise its rights, it will acquire an additional 11.67% interest and Cameco will acquire an additional 16.27% interest, increasing Cameco’s ownership in the project to 58.23%.

Under the agreement, the 590-hectare Millennium mineral claim will be designated as a separate project area under the Cree Lake Extension joint venture.

Under the agreement, AREVA will receive a 4% royalty on revenue from 27.94% of any production that exceeds 63 million pounds of packaged uranium concentrate.

The transaction is expected to close by June 6.

In Toronto shares of Cameco closed at $23.80, off 61¢ or 2.5%. Over the last year Canada’s largest uranium miner has traded within a range of $17.25-$40.18.

In New York Cameco’s shares closed down 56¢ or 2.26% at US$24.19 within a 52-week trading range of US$16.59-US$41.43.