Cameco pollutants may be seeping into Lake Ontario

Wed May 21, 2008 5:02pm EDT
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By Cameron French

TORONTO (Reuters) - Contaminants such as arsenic and uranium that shut down Cameco Corp's Port Hope, Ontario, nuclear conversion facility last year may be seeping into nearby Lake Ontario, the company said on Wednesday.

The news sent shares of the company down about 4 percent as investors worried about higher costs, a larger-than-expected cleanup, and potential litigation.

The plant's operations were suspended last July after contaminants were found in nearby soil.

"Based on the data points we have, and the modeling that we do, it does appear that some contaminants are reaching the water," company spokesman Doug Prendergast told Reuters.

He said the data was taken from studies of wells dug on the property, but that recent samples of lake water have not suggested any noticeable change.

The discovery of the contaminated soil last year was one of a series of setbacks for Cameco, the world's top uranium producer. The company has also faced delays in overhauling its flooded Cigar Lake mine, and dealt with a water inflow at its Rabbit Lake mine. Both mines are in Saskatchewan.

The stock, which was down slightly before the news came out, ended the session down C$2.32 at C$40.52 on the Toronto Stock Exchange.

Analyst Ray Goldie of Salman Partners said the stock sell-off was likely overdone given that the vast majority of Cameco's revenue comes from its uranium mines rather than its conversion business.   Continued...