135 Cigar Lake JV The Cigar Lake joint venturers are the same as those involved in the Waterbury JV: Cigar Lake is part of that prospect area in northern Saskatchewan. They are: Cogema (of Canada) 37.375%, SMDC (Canada) 50.75%, and Idemitsu Uranium Explorations Canada Ltd 11.875%. Cogema has been the project operator since 1980.
As of the end of 1984, Cigar Lake's reserves were estimated at 88,000 tons of uranium stretching over nearly 2000metres and grading averaging 8.49%; significant mineralisation has also been discovered at Tibia Lake, 800metres north of Cogar.
The JV partners estimate that between C$250million and C$350million is needed to bring the project into production - intended to start by 1993 and to rival that of Key Lake (which at the end of 1984 was the largest producing uranium deposit).
Difficulties are acknowledged, however, including radiation dangers because of the high grade of ore, and, although the second stage of the Cluff project is being monitored by the JV, there has never before been an underground uranium mine so high in potential radioactivity (grades are more than 10 times higher than at Cluff Lake) (1).
In 1987, the Cigar Lake Mining Corp received approval from the Saskatchewan Ministry of the Environment to proceed with a US$40 million underground test mine, construction starting immediately: a 500metre deep shaft being sunk in 1988, and the orebody itself located the following year (2).
(The two-year test period will include site development and a feasibility study: up to 5500 tonnes of ore will be mined during the study period. Nuexco predicts that commercial production will start from the deposit in the mid-1990s) (4).
In December 1986, the Canadian federal government announced new sets of rules on foreign ownership in uranium mines, which insist that new projects must have at least a 51 % Canadian ownership, though this may be reduced if the project is Canadian-controlled (3). The first transaction concluded under the new rules was the sale of a 2% non-voting interest in Cigar Lake to Kepco, by SMDC in August 1987. As part of this sale, Kepco will secure a US$150 million contract, for supply of 170 tons a year from 1993 to 2002 (and possibly until 2012). The money brought to Cigar Lake as a result of this sale represents "a significant commitment towards future production" (3).
In 1989 Eldorado Nuclear and SMDC united their uranium interests to form Cameco which is now almost certainly the world's single largest uranium producer, and certainly the holder of the world's richest grade reserves (5).
Ownership of Cigar Lake changed with the result that in 1990:
- Cameco owns 48.75% of CLMC (Cigar Lake Mining Corp), Cogema Canada owns 32.67%, Idemitsu Uranium Exploration owns 12.87%, Corona Grande (wholly owned by Cogema) owns 3.75%.
- Kepco has secured 2% in return for forward contracts of around C$ 150 million (6, 7).
With an estimated 175,000 tonnes of uranium oxide, grading at an average of 11.5% uranium, Cigar Lake has confirmed its status as the wonder of the yellowcake world (7,8). However the richness of the ore continues to pose safety and environmental problems, and the partners were in 1989 still trying to establish a "safe mining method" (sic) (9). Development towards a test mine continued through 1990, with the drilling of what is to become a 1600-foot shaft (8, 10). Production is not expected before 1993, despite some more optimistic predictions (11) and feasibility studies may not be completed before 1991 (7).
Contact: Survival Office Saskatchewan (SOS) Box 9395, Saskatoon, Saskatchewan, Canada S7K 7E9
SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.
Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.
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Page last updated December 30, 1997.
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