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May 07, 2011

Cameco expects a net gain of 91 nuclear reactors by 2020, ten fewer because of Fukushima

Cameco produced 2350 tons of uranium in the first quarter of 2011 but still expects to produce 10,800 tons (21.9 million pounds)

Production volumes this quarter were 23% lower compared to the first quarter of 2010 primarily due to lower production at McArthur River/Key Lake. The removal of abandoned freezepipes from the new production chamber at McArthur River resulted in lower ore deliveries to the Key Lake mill. To optimize production for the year, we rescheduled the maintenance outage at the Key Lake mill from the second quarter to the first quarter. Our production guidance for the year is unchanged



Cameco is currently incorporating 2010 developments into their Cigar Lake mine plan, including their decision to proceed with the surface freeze strategy. Once they have completed this work, they will review and update our estimates including our capital cost estimate, production rampup schedule, operating cost estimate and mineral reserve and resource estimates. They plan to provide revised estimates and file an updated technical report in the third quarter. They continue to target initial production in mid-2013.

Cigar Lake is a key part of a plan to double annual uranium production to 40 million pounds by 2018, and Cameco is committed to bringing this valuable asset safely into production.

Cameco expects to see 10 fewer nuclear reactors built by 2020 than would have been the case before the twin disasters devastated Japan's eastern coast and badly damaged the Fukushima Daiichi nuclear power complex.

Accounting for reactors that will have reached the end of their lives by 2020, Cameco sees the net gain for the world's reactor fleet being 91 in 2020. Prior to Fukushima, the company forecast a net gain of around 100.

"From a fuel supplier's perspective, we expect this change in outlook will reduce the cumulative demand for uranium over the next 10 years by just four per cent.

Thus, our reading of the Fukushima-adjusted fundamentals of the uranium business leads to one conclusion for Cameco: very little has changed in the way we see the world. Our strategy of doubling uranium production by 2018 continues to make sense."

Grandey said he doesn't see the Fukushima crisis as having the same effect on public attitudes toward nuclear power that the Three Mile Island and Chornobyl incidents had decades ago.

Back then, other fuel sources like coal and oil were easier fall-back options than they are today now that climate change is a consideration.

"Energy requirements are growing dramatically and governments, which are building and planning new nuclear power installations, have for the most part refrained from engaging in knee-jerk reactions," he said.

"Yes, they are calmly talking about a pause to assess both existing and planned nuclear generation facilities so lessons learned from Fukushima can be understood and applied. But for the most part they are talking of this period merely being a pause."

Audio and other information about Cameco's first quarter conference call

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