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http://www.reuters.com/article/marketsNews/idUSN1225728520080813

UPDATE 1-Cameco halts repair work at Cigar Lake uranium operation.

Tue Aug 12, 2008 10:09pm EDT

NEW YORK, Aug 12 (Reuters) - Canada's Cameco Corp (CCO.TO: Quote, Profile, Research, Stock Buzz), the world's largest uranium producer, said on Tuesday it suspended remediation work at the No. 1 shaft at its key Cigar Lake uranium project after too much water was noticed flowing into the mine.

The company said it is now working to determine the source of the inflow at the mine in northern Saskatchewan, and to determine if there will be an impact on its planned production date.

Cameco has said it expects to begin production at Cigar Lake by 2011 at the earliest. It has been working to repair the mine since a flood in 2006.

Before the flood, the mine had been expected to eventually produce 18 million pounds of uranium annually, or more than 10 percent of world output.

The company said the water flowing in on Tuesday increased to a rate "beyond the range that can be managed while sustaining work in the shaft."

"An inflow at this rate is disappointing but our remediation plan ... recognized the risk and included specific actions to be taken at various levels of inflow," Tim Gitzel, Cameco's chief operating officer, said in a statement.

Cameco said it is gathering additional data, and will provide a another update on the suspension on Aug. 14, when it posts second-quarter results. (Reporting by Jonathan Spicer; Editing by Gary Hill)
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