July 16, 2014 / 4:14 PM / 4 years ago

UPDATE 1-Uranium output at Cameco Cigar Lake mine delayed by freezing problem

(Adds details on Cigar Lake’s output target, mine and mill ownership)

By Rod Nickel

July 16 (Reuters) - Canadian uranium miner Cameco Corp said on Wednesday that some ore from its Cigar Lake, Saskatchewan, mine would not be milled until early 2015, instead of before the end of 2014, due to problems with a mining process that involves freezing the ore and the ground around it.

As a result, Cameco said it will lower its 2014 uranium target for milling Cigar Lake ore, which is currently 2 million to 3 million pounds.

Cameco, the world’s third-biggest uranium producer, first expected to open Cigar Lake in 2007, but two floods pushed the launch of the mine well behind schedule. The mine finally began production in March 2014.

Cameco freezes the ore zone at Cigar Lake and the surrounding ground to prevent water from flooding production areas, but the process has not advanced as quickly as expected, the Saskatoon, Saskatchewan-based company said. As a result, it has temporarily stopped jet-boring, a system of using water under high pressure to carve out cavities in the ore body.

Cameco said it would revise this year’s output target when it announces second-quarter results on July 31, but it maintained its longer-term goal of mining 18 million pounds annually from Cigar Lake by 2018.

Some initial output from Cigar Lake is currently in storage until the nearby McClean Lake, Saskatchewan, mill, which is being modified, can begin processing it.

Cameco owns just over half of the Cigar Lake mine, with smaller stakes held by France’s Areva SA and by Japan’s Tokyo Electric Power Co Inc and Idemitsu Kosan Co Ltd. Areva is the majority owner of the McClean Lake mill.

Uranium prices have been weak since an earthquake and tsunami struck Japan in March 2011, crippling the Fukushima-Daiichi nuclear power plant, and leading the government to shut down nearly all of Japan’s reactors. One nuclear plant in southern Japan cleared an initial safety hurdle on Wednesday, which could make it the first nuclear facility to restart under tough new safety regulations.

Cameco shares rose 1.4 percent in Toronto and 1.5 percent in New York on Wednesday morning. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe; and Peter Galloway)

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