Cameco suspends uranium mine due to COVID-19

Cameco Corp. [CCO-TSX; CCJ-NYSE] said Monday December 14 that it is temporarily suspending production at its Cigar Lake uranium mine in northern Saskatchewan over the coming weeks due to the increasing risks posed by the coronavirus pandemic.

This will mark the second time this year that production has been suspended as a safety precaution that stemmed from the threat posed by the Coronavirus [COVID-19] pandemic.

Cameco is one of the world’s leading uranium producers. The Cigar Lake operation is owned 50.025% by Cameco, 37.1% by Orano Canada Inc., 7.875% by Idemitsu Canada Resources Ltd. and 5.0% by TEPCO Resources Inc.

Cigar Lake is the globe’s largest operating uranium mine, accounting for 13% of the world’s mine supply and 10% of total supply, including secondary material. Cameco is the mine operator.

“Saskatchewan is experiencing a significant negative trend in the pandemic, which is leading to increased uncertainty for the continuous operation of Cigar Lake, due in part to access to qualified operational personnel,” the company said.

“We will continue to carefully monitor the provincial COVID-19 situation, especially in northern Saskatchewan, as well as the impacts on our communities and the availability of employees and contractors to travel to Cigar Lake.”

On Monday, Cameco shares rose 2.7% or 46 cents to $17.47 on volume of 1.82 million. The shares are trading in a 52-week range of $17.26 and $7.69.

“The safety of our workers, their families and communities is our top priority,” said Cameco President and CEO Tim Gitzel. He said Cameco has had six positive tests at its northern operations in recent weeks, including three at Cigar Lake.

“One of the most challenging trends we’ve had to navigate is the shrinking availability of workers in critical roles at Cigar Lake due to self-isolations, absenteeism and communities being on temporary pause for transporting workers due to the pandemic,” Gitzel said.

At peak production this fall, there were about 300 workers at Cigar Lake. The mine will be put in a state of care and maintenance resulting in a significant reduction in personnel.

“The timing of the restart and the production rate will depend on how the COVID-19 pandemic is impacting the availability of the required workforce at Cigar Lake, how cases are trending in Saskatchewan, in particular northern communities, and the views of public health authorities,” Gitzel said.