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Canadian uranium major Cameco has reduced its production forecast for 2023, citing challenges at its Cigar Lake mine and the Key Lake mill, which was brought out of care and maintenance at the end of last year.

At Cigar Lake, Cameco expects to produce up to 16.3-million pounds of uranium concentrate (U3O8) this year, a reduction from the previous forecast of 18-million pounds. Production from the McArthur River/Key Lake operations are anticipated to be 14-million pounds, down from the previous forecast of 15-million pounds.

Cameco explains that mining activities at Cigar Lake were initiated from a new zone in the orebody – west pod – in the second quarter and that this has impacted productivity. As mining activities continued in the west pod during the third quarter, equipment reliability issues emerged, which further affected performance. The miner notes that the mine is scheduled to enter its planned maintenance shutdown in September.

At Key Lake, ramp-up activities remain ongoing. However, Cameco says there is continued uncertainty about planned production this year, owing to the length of time the facility was on care and maintenance, the operational changes that were implemented, the availability of skilled personnel and experience, and the impact of supply chain challenges on the availability of materials and reagents.

The McArthur River mine continues to operate well.

β€œThe expected production shortfall further highlights the growing security of supply risk at a time when we believe the demand outlook is stronger and more durable than ever and where the risk has shifted from producers to utilities. Uncertainty about where nuclear fuel supplies will come from to satisfy growing demand continues to drive long-term contracting, with clear evidence that the broader uranium market is moving toward replacement rate contracting for the first time in the decade. This is the type of contracting necessary to promote the price discovery already seen in the enrichment and conversion markets and that is expected to incentivise investments in the supply needed to satisfy the growing long-term requirements,” the firm says.

The Cigar Lake operation is owned 54.547% by Cameco, 40.453% by Orano Canada Inc. (Orano) and 5% by TEPCO Resources. The McArthur River mine is owned 69.805% by Cameco and 30.195% by Orano. The Key Lake mill is owned 83.333% by Cameco and 16.667% by Orano.