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Gold/Mining/Energy : Strathmore Resources - SMR - A uranium play -- Ignore unavailable to you. Want to Upgrade?

To: Rob who wrote (114)	11/24/1998 2:30:00 PM
From: Rob	Read Replies (1) \| Respond to of 162

Cameco is decreasing uranium production Cameco Corporation CCO Shares issued 57,618,142 1998-11-23 close $30 Tuesday Nov 24 1998 Ms. Alice Wong reports Cameco is decreasing uranium production to reduce spending in response to continuing low uranium prices and to ensure a smooth transition to its future McArthur River and Cigar Lake mines. Total uranium production from Cameco's two existing Saskatchewan operations will decline to approximately 16 million pounds U3O8 in 1999 from 26 million pounds U3O8 in 1998. Total uranium conversion services from its Ontario operations will be reduced to 10 per cent below 1998 levels. These actions will contribute significantly to improved cash flows for the company. In Saskatchewan, the Key Lake mill will undergo an extended summer shutdown after most (7.5 million pounds U3O8) of the remaining Key Lake ore stockpile is depleted on June 30, 1999. Milling is planned to resume at Key Lake in the last quarter of 1999 with the delivery of the first ore from the McArthur River mine 80 kilometres away. The extended shutdown at Key Lake will result in the temporary layoff of about 200 out of 300 employees. During the extended shutdown, modifications will be completed to the Key Lake mill to accommodate McArthur River ore. McArthur River is now at peak construction and is on budget and on schedule to produce ore before the end of 1999. Also in Saskatchewan, the Rabbit Lake operation was originally scheduled to close permanently early in the next decade following the depletion of ore. However, the owners of the Cigar Lake project have agreed to process the majority of Cigar Lake ore in the Rabbit Lake mill, subject to regulatory approval. As a result, the life of Rabbit Lake will be extended an additional 15 years. A slowdown in Rabbit Lake production is now necessary to maintain continuity of production until ore from the Cigar Lake mine is received, likely in 2001 or 2002. The transition can be best achieved by operating the Rabbit Lake mill at half capacity (6 million pounds per year beginning in 1999 compared with 12 million pounds in 1998) and suspending mining activities. The changes will protect the jobs of approximately 150 Cameco employees. However about 140 Cameco positions will be eliminated in the coming months. In addition, about 130 contractor positions will be affected. At the Ontario fuel services division, summer shutdowns will be extended to 10 weeks from four at the Blind River refinery and to 13 weeks from four at the Port Hope conversion plants. About 315 employees from a total of about 380 will be temporarily laid off during this time. In addition, five positions at each of the two plants will be eliminated. The production slowdown has been prompted by the necessity to ensure a smooth transition to the new mines as well as by the falling spot market price for uranium and conversion services. In the past year, the spot market price for U3O8 has declined more than 25 per cent to $9.00 (U.S.) per pound, its lowest level in four years. At the same time, the spot market price for conversion has declined more than 30 per cent to $3.50 (U.S.) per kilogram uranium, its lowest level in six years. Today's announcement follows recent reductions to the Saskatoon-based uranium exploration programs and the closing of Cameco Gold's exploration offices in Santiago, Chile and Lima, Peru. The successful implementation of these measures will improve the company's cash flow by about $200-million in the next three years, including about $75-million in savings attributable to the new milling option for Cigar Lake ore. (c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com