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SASKATOON, Saskatchewan — Cameco (TSX: CCO; NYSE: CCJ) supplied a market replace at present relating to challenges on the Cigar Lake mine and Key Lake mill which might be anticipated to impression our 2023 manufacturing forecast.
On the Cigar Lake mine, we now anticipate to provide as much as 16.3 million kilos of uranium focus (U3O8) (100% foundation) this yr, a discount from the earlier forecast of 18 million kilos U3O8 (100% foundation). Manufacturing from the McArthur River/Key Lake operations for 2023 is anticipated to be 14 million kilos U3O8 (100% foundation), down from the earlier forecast of 15 million kilos U3O8 (100% foundation).
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As beforehand reported, mining actions on the Cigar Lake operation had been initiated from a brand new zone within the orebody (west pod) within the second quarter of this yr, which impacted productiveness. As mining actions continued within the west pod through the third quarter, tools reliability points emerged which additional affected efficiency. The mine is scheduled to enter its deliberate annual upkeep shutdown that can run by most of September.
On the Key Lake mill, ramp up actions stay ongoing. Nevertheless, as famous in our second quarter MD&A, there’s continued uncertainty relating to deliberate manufacturing in 2023 at Key Lake because of the size of time the ability was in care and upkeep, the operational modifications that had been applied, availability of personnel with the mandatory abilities and expertise, and the impression of provide chain challenges on the supply of supplies and reagents. These elements have mixed to impression manufacturing at Key Lake, resulting in the decreased forecast. The McArthur River mine continues to function nicely and is anticipated to attain its deliberate manufacturing for the yr. Any ore from McArthur River that isn’t instantly processed at Key Lake might be saved in stock for future milling.
Cameco’s technique of full-cycle worth seize positions us to successfully handle the anticipated manufacturing shortfall and meet our supply commitments to our prospects. We preserve the flexibleness to supply materials by varied means past manufacturing if required, together with growing our market purchases, pulling ahead long-term purchases, utilizing stock or borrowing product. Any kilos we don’t produce this yr will stay out there to us and, with growing provide pressures, probably change into extra precious when delivered sooner or later. Now we have publicity to larger costs below the market-related contracts in our long-term portfolio and a pipeline of contracting discussions underway, which we anticipate will even profit from the elevated give attention to securing entry to scarce provides and generate long-term worth for Cameco. And we’ve got a powerful stability sheet to assist us self-manage threat.
This anticipated manufacturing shortfall additional highlights the rising safety of provide threat at a time after we consider the demand outlook is stronger and extra sturdy than ever and the place the danger has shifted from producers to utilities. Uncertainty about the place nuclear gas provides will come from to fulfill rising demand continues to drive long-term contracting, with clear proof that the broader uranium market is transferring towards substitute fee contracting for the primary time in over a decade. That is the kind of contracting crucial to advertise the value discovery already seen within the enrichment and conversion markets and that’s anticipated to incentivize investments within the provide wanted to fulfill the rising long-term necessities.
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This unplanned occasion could result in variability within the different outlook supplied in our second quarter MD&A for 2023; nevertheless, it’s too quickly to quantify what the impression may be. We’ll present an replace after we higher perceive the implications these manufacturing challenges could have on market dynamics.
The Cigar Lake operation is owned 54.547% by Cameco, 40.453% by Orano Canada Inc. (Orano) and 5% by TEPCO Sources Inc.
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.
The technical and scientific info mentioned on this doc for Cigar Lake and McArthur River/Key Lake was accepted by the next people who’re certified individuals for the needs of NI 43-101: Lloyd Rowson, basic supervisor, Cigar Lake, Cameco; Greg Murdock, basic supervisor, McArthur River, Cameco; Daley McIntyre, basic supervisor, Key Lake, Cameco.
Cameco is likely one of the largest international suppliers of the uranium gas wanted to energise a clean-air world. Our aggressive place relies on our controlling possession of the world’s largest high-grade reserves and low-cost operations. Utilities all over the world depend on our nuclear gas merchandise to generate secure, dependable, carbon-free nuclear energy. Our shares commerce on the Toronto and New York inventory exchanges. Our head workplace is in Saskatoon, Saskatchewan.
Warning Concerning Ahead-Wanting Data and Statements
This information launch contains statements and details about expectations for the longer term, that are known as forward-looking info. This forward-looking info relies on present views, which may change considerably, and precise outcomes and occasions could also be considerably totally different from what’s presently anticipated. Examples of forward-looking info on this information launch embrace our expectation of modifications to our 2023 manufacturing forecast, because of decrease anticipated manufacturing on the Cigar Lake mine and the McArthur River/Key Lake operations; the scheduled annual upkeep shutdown on the Cigar Lake mine; uncertainty relating to deliberate 2023 manufacturing at Key Lake as a result of varied elements; our expectation that the McArthur River mine will obtain its deliberate manufacturing for the yr, and the longer term milling of any ore not instantly processed; that our technique positions us to handle the anticipated manufacturing shortfall successfully; our anticipated flexibility to supply materials by means apart from manufacturing; our view that any kilos we don’t produce this yr might be produced sooner or later, probably at larger worth; our publicity to larger costs below sure contracts, our pipeline of contracting discussions, and our expectation of benefitting from an elevated give attention to securing entry to scarce provides; our views relating to the rising safety of provide threat and our potential to self-manage threat; our perception that demand outlook is stronger and extra sturdy than ever, and has shifted threat from producers to utilities; our perception that uncertainty relating to sourcing nuclear gas provides continues to drive long-term contracting, and the transfer towards substitute fee contracting; the potential for different modifications to the outlook we’ve got beforehand supplied, and our intention to supply an extra replace sooner or later. Materials dangers that might result in totally different outcomes embrace the danger that manufacturing ranges on the Cigar Lake mine and the McArthur River/Key Lake operations might be decrease than we presently anticipate, because of the elements we’ve got described as adversely affecting productiveness, or for different causes; there could also be delays in commencing or finishing scheduled upkeep at Cigar Lake; the danger that the McArthur River mine could not obtain deliberate manufacturing for the yr, or that there might be impediments to storage and future milling of ore that isn’t instantly processed; we could also be unable to handle the anticipated manufacturing shortfall successfully if we’re unable to supply materials by different means; different circumstances could come up which delay or stop the longer term manufacturing of any kilos not produced this yr, or these kilos could also be change into much less precious; the danger that the result of our contracting discussions won’t be as beneficial to us as we anticipate; the danger that our views relating to provide threat, demand outlook, drivers of long-term contracting, the motion towards substitute fee contracting and incentives to spend money on provide could show to be incorrect, or we could also be unable to self-manage threat as successfully as we anticipate; and the danger that these or different elements could end in additional modifications to our beforehand supplied outlook, or that we’re not capable of present a well timed replace relating to these modifications. Cameco has made materials assumptions which can show incorrect, together with assumptions relating to the extent of the impression that the challenges on the Cigar Lake mine and Key Lake mill may have on manufacturing ranges; the flexibility to begin and full scheduled upkeep at Cigar Lake inside anticipated timeframes; the flexibility of the McArthur River mine to attain its manufacturing degree, and for the storage and future milling of ore; our potential to supply materials by means apart from manufacturing; our potential to attain future manufacturing of kilos not produced this yr; our potential to conclude contracting discussions on beneficial phrases; assumptions relating to future developments and traits within the uranium market; our potential to self-manage threat; and our potential to determine and supply updates relating to additional modifications to our outlook. Different materials dangers and assumptions related to Cameco’s enterprise are described in higher element in Cameco’s present annual info type and its most up-to-date annual and subsequent quarterly MD&A. Ahead-looking info is designed that can assist you perceive administration’s present views of our near-term and longer-term prospects, and it might not be acceptable for different functions. Cameco won’t essentially replace this info except required by securities legal guidelines.