555 SMDC (Saskatchewan Mining Development Corporation) SMDC and Eldorado Nuclear Ltd merged in 1988 to form Canadian Mining and Energy Corporation (CAMECO) (30).
By the mid-eighties the President of SMDC and his fellow directors were laughing all the way to the bank (1). By law, their company has had a 50% (minimum) stake in every major uranium project in the province of Saskatchewan started after March 1975 (2). Saskatchewan uranium is unequivocally the hottest property on the world yellowcake market. With its interests in Key Lake and Cigar Lake, its 20% holding in Cluff Mining Co (Amok 80%) and many current exploration projects in the province (3), the SMDC provides relatively cheap, long-term, reliable supplies of uranium from reserves which, according to a 1985 report, could load "all the West's existing nuclear reactors with fuel for the next 15 years" (3). Thanks to Saskatchewan supplies (primarily Key Lake), Canada in 1985 leaped to the forefront of world uranium producers (29 million pounds of U3O8 out of a total of nearly 90 million) (4).
The SMDC was formed on June 4th 1974, by an Order-in-Council issued under the authority of the Canadian Crown Corporations Act. Just over three years later it was formalised through the proclamation of the Saskatchewan Mining Development Act 1977 (5). Funding for the SMDC was provided by the Heritage Fund and Crown Investments Corporation - advances which can be recalled by the provincial government,-but are not charged with interest (6). In addition, C$183.4 million in long-term loans was taken out by the Corporation, which was unconditionally guaranteed by the provincial government (7).
The corporation was empowered to search for minerals in the province, except oil, gas, potash and sodium sulphate. Although the Act gave the SMDC wide powers of prospecting mining, trading and franchise (5), its major emphasis until the creation of CAMECO was on entering Joint Ventures with private companies. It also has corporate links with the United Steelworkers of America union (2).
However, the Act did enable the Corporation to form its own subsidiary, SMD Mining, which could cross borders, especially in pursuit of uranium - as indeed it did when prospecting for uranium in Manitoba at Lynn Lake and near Flin Flon (6), and in Alberta (8).
In the first effective year of its life, the SMDC was already participating in six active JVs, all but one for uranium.
It partnered Uranen and Inexco during explorations at Key Lake, until buying out Inexco's interests in 1978, when the Canadian government blocked a deal with Denison. Exploration also took place in Alberta (9). This JV later became the Key Lake Mining Corporation, with the addition of Eldorado's participation. It participated in a JV in 1976 with Eldorado and Amok at Fond du Lac, which was managed by Eldorado (5). Together with Aquarius Resources, Eldorado, Goldak, Highwest Developments, Mountain Minerals, Radiometric Surveys, Seru and Taurus Oil, it headed up the Lake Athabasca Joint Venture Project in 1976 (S).
By 1981, the SMDC was involved in no fewer than 250 uranium Joint Ventures, including ones with Wyoming Minerals, the CEA and Union Carbide among non-Canadian companies (10). These had increased to 300 within a year or so (2) and were worth well over US$600 million (11).
Other important JVs with domestic companies included ones with Asamera, Eldorado Nuclear at Geckie West and Geckie East (12), Norbaska and Consolidated Reactor. By the early 1980s, the SMDC had effectively "mapped out" uranium anomalies in Maurice Bay, Michael Lake, an area south of Rabbit Lake, Collins Bay, Midwest Lake, and other areas, as well as the Lake Athabasca region (2). It was also exploring in La Ronge, Southend, Hanson Lake and La Loche (6).
Its interests in the Dawn Lake property, managed by Asamera, which showed such encouraging results in the late 1970s and early 1980s (13), were partly sold to Kepco in January 1983 (14).
By then the SMDC had also purchased 20% of the Cluff Lake mine, operated by Amok, at a cost of US$24.7 million (15) to cover its capital costs and share of the related development (16) . It was also partnered with Eldor Resources and Noranda Exploration at Wollaston Lake, where estimated reserves at the Eagle North uranium project were raised in early 1986 from around 18,000 to nearly 24,000 tons U3O8 (17).
Although the SMDC was reportedly "toning" down its avid uranium activities at the turn of the decade (in fact the provincial government was introducing supposedly new environmental and health rules, in an effort to meet widespread opposition) (18), the last six years had seen unprecedented involvement by the corporation in the production and contracting of nuclear fuel. Apart from Key Lake, the most spectacular discovery (not only in Saskatchewan, but probably the world) was at Cigar Lake, made by the Waterbury JV in 1983. Led by the SMDC, the JV includes Cogema and Idemitsu Kosan (which bought out Asamera's interest in 1982) (19). Initial probes at the prospect revealed uranium grades of more than 25% (20), and conservative estimates of some 48,260 tonnes of uranium (21).
As work proceeded on the prospect in 1984 and 1985, the main seam alone was judged to contain around 130,000 tons of uranium at an average grade of 14% U3O8 (22). Additional reserves of around 40,000 tons were located in the western extension area of the prospect (23).
The Cigar Lake Mining Company - formed with SDMC holding 50.75%, Cogema Canada (previously known as Seru Nucleaire) 32.625%, and its own subsidiary Corona Grande 3.75%, with Idemitsu holding 12.875% (23) - estimated that a final development and feasibility plan for Cigar Lake could be drawn up by 1987 (24) and a start-up date was provisionally fixed for 1993, with production of 12 million pounds a year of uranium oxide - about the same as for Key Lake (25). "Project development [was to be] timed to take advantage of the anticipated strengthening of the uranium market by late 1989 to early 1990" commented the Engineering and Mining Journal in early 1986 (26). However, there are numerous technical problems involved in raising the ore (not the least being the high clay content) and active consideration has been given to using new mining techniques because of the high ore grade and ground instability (22). A 500 m shaft was sunk in 1990 (31).
In 1985, Imperial Metals Corp discovered very high (12%) uranium mineralistion at its property close to Waterbury Lake: its partners in the JV at Close Lake being Uranerz, Geomex, and SMDC (27).
In 1984, SMDC's earnings from Key Lake and its share of Cluff Lake leaped sevenfold to C$ 15.2 million, with uranium concentrate sales rising from C$13.5 million in 1983, to C$133.3 million that year - a tenfold increase (28).
Apart from its controversial uranium sales to South Korea (see Key Lake), the SMDC concentrated on increasing sales to western Europe, Japan and the United States. In 1981 it sealed a contract with two Swedish utilities which between them operate nine of the country's 12 electricity generating reactors (7). But its biggest hopes were set on tidying up the US market which, as Thomas Neff points out "... finds such purchases a cheaper way to meet delivery commitments than through domestic production". Adds Neff: "With the United States as their major customer, Canadian producers also minimise the risk that proliferation concerns will escalate as a public issue threatening future exports". This is a neat acknowledgment of the fact that, although the world's biggest proliferator of nuclear weaponry, the USA is protected from mildly stringent Canadian bans on certain nuclear exports, imposed in the mid-seventies (5), simply by already having more than enough atomic bombs to blow the world up several times over. Among its non- uranium ventures, SMDC was developing a platinum project in Saskatchewan, together with Lacana, Murphy Oil, Conventures Ltd, and Silver Lake Resources in 1986 (29).
In 1988, together with Esso Minerals and Tri Gold Industries Inc, it discovered the Hanson Lake coper-zinc-silver lode near Flin Flon, Manitoba (32).
Further reading: Time to Stop and Think: Saskatchewan People Must Decide, published by Saskatoon Environment Society, Box 1372 Saskatoon, Saskatchewan S7K 3N9, Canada.
Contact : See references under Key Lake.
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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