Cameco shares slip as water rises in flooded Saskatchewan mine
Cameco three-month chart
The world's biggest uranium producer saw its share price dip Wednesday after it stopped work to dry out its flooded Cigar Lake mine in northern Saskatchewan.
Saskatoon-based Cameco Corp. said it called a halt to assess the situation after the flow of water into the mine outpaced its ability to pump it out while keeping the work going.
Its share price fell as low as $31.55, down $2.50, before climbing back above $33 in afternoon trading on the Toronto Stock Exchange.
Other uranium miners saw their shares rise, perhaps because they stand to benefit from Cameco's troubles.
Cameco says the world's largest undeveloped high-grade uranium deposit is at Cigar Lake in northern Saskatchewan, where the mine has been plagued with flooding.(Cameco)Denison Mines was up as much as $1.37 at $6.67 on the TSX after reporting a $13.7-million second-quarter loss earlier in the day. Uranium One, which announced a quarterly production record, was up as much as 53 cents at $3.83.
Cameco has said the world's largest undeveloped high-grade uranium deposit is at Cigar Lake. The mine flooded during construction in 2006 when bulkhead doors failed to hold back water after a rock slide.
Management has said it may not open until 2011, but gave no new date in a statement issued Wednesday saying work had stopped.
"Remediation and dewatering of the No. 1 Shaft had been progressing smoothly up to this point," Cameco chief operating officer Tim Gitzel said in the statement. "An inflow at this rate is disappointing but our remediation plan, as approved by our joint venture partners, recognized the risk and included specific actions to be taken at various levels of inflow."
The statement added these details:
The shaft had been pumped down to 430 metres below surface when the increase was reported early Tuesday morning. Work in the shaft was suspended a few hours later.During the day, the inflow rate increased steadily to about 600 cubic metres an hour, which is beyond the range that can be managed while sustaining work in the shaft. The mine has a total depth of 500 metres and the mine underground workings are at the 480-metre level.Work in the shaft has been suspended while the situation is assessed to determine the source and characteristics of the inflow, implications for planned remediation work and the impact, if any, on our planned production date.The current plan is to allow the water level in the shaft to rise to approximately 100 metres below surface. The mine is 500 metres deep.
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