Uranium miners rally as Cameco rises sharply on Cigar Lake ore production
11:49 am by Deborah Bacal
Cameco shares rose 3.6% Thursday on the news, to C$27.87, while Denison Mines (TSE:DML) added 0.56% to C$1.79. Energy Fuels (TSE:EFR), which currently supplies about 25% of the uranium produced in the U.S., surged 9.8% to C$11.49, and Paladin Energy (TSE:PDN) climbed 5.8% to 55 Canadian cents. Cameco shares rose 3.6% Thursday on the news, to C$27.87, while Denison Mines (TSE:DML) added 0.56% to C$1.79. Energy Fuels (TSE:EFR), which currently supplies about 25% of the uranium produced in the U.S., surged 9.8% to C$11.49, and Paladin Energy (TSE:PDN) climbed 5.8% to 55 Canadian cents.
Uranium producers and explorers were flying high on Thursday after Canadian uranium company Cameco (TSE:CCO) said it has begun producing ore at its Cigar Lake mine in northern Saskatchewan, where output has been delayed several times previously.
Cigar Lake, the world's second largest uranium deposit, had an original production start date of 2007, but the date has been a moving target due to lengthy setbacks, including severe flooding. Production was last pushed back in September 2013 due to some minor delays, with the target set for the first quarter of this year.
Cameco, which owns just over a 50% stake in the mine, said Thursday that the mining system and underground processing circuits are now operational, and ore is being transported to the McClean Lake mill, operated by France's Areva, 70 km northeast of the minesite.
"Cigar Lake is among the most technically challenging mining projects in the world," said president and CEO, Tim Gitzel.
"The start of ore production is a tremendous achievement and I want to thank the many hundreds of people who helped to bring this exceptional orebody into production."
Investors have found favour in the uranium sector lately, starting last month when Japan's draft energy plan and the Japanese government's continued promotion of nuclear power boosted sentiment.
Cameco's news today, and comments from the chairman of China's top nuclear firm that China is set to beat its 2020 targets for nuclear power, further ignited optimism in the space, which took a huge hit following the earthquake and tsunami that struck Japan in March 2011.
Uranium prices have been depressed ever since, with many producers cutting back on new projects and suspending existing ones until prices recover.
Cameco shares rose 3.6% Thursday on the news, to C$27.87, while Denison Mines (TSE:DML) added 0.56% to C$1.79. Energy Fuels (TSE:EFR), which currently supplies about 25% of the uranium produced in the U.S., surged 9.8% to C$11.49, and Paladin Energy (TSE:PDN) climbed 5.8% to 55 Canadian cents.
Cameco's Toronto-listed stock earlier touched C$28.57, its highest level since May 2011.
In the junior exploration sector, Nexgen Energy (CVE:NXE) rallied 5.8% to 55 Canadian cents.
The McLean Lake mill is expected to begin processing the ore to uranium concentrate by the end of the second quarter, and is anticipated to produce between two and three million pounds of uranium concentrate this year, ramping up to the full production rate of 18 million pounds by 2018.
The total capital cost of the Cigar Lake project, in which Areva owns a minority stake, was estimated at $2.6 billion at year-end 2013. The site is expected to employ more than 600 workers during its operation.
http://www.proactiveinvestors.com/companies/news/52734/uranium-miners-rally-as-cameco-rises-sharply-on-cigar-lake-ore-production-52734.html
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