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[cdn-nucl-l] Cameco Announces Purchase of Smith Ranch in Wyoming
Posted by Cameco Corporate News on Northernlight.com on June 19, 2002
Cameco Announces Purchase of Smith Ranch
Story Filed: Wednesday, June 19, 2002 7:13 AM EST
SASKATOON, SASKATCHEWAN, Jun 19, 2002 (CCNMatthews via COMTEX) -- Cameco
Corporation announced today that it has agreed, through its
subsidiaries, to purchase the Smith Ranch uranium in situ leach (ISL)
mine and various other ISL properties located in Wyoming from BHP
Billiton's subsidiary Rio Algom Mining LLC (Rio Algom).
The mine includes a 2-million-pound U3O8 annual capacity mill that began
operation in 1997, together with proven and probable uranium reserves of
27 million pounds U3O8 as of December 31, 2001. In exchange for Smith
Ranch and other Wyoming ISL properties, Cameco has agreed to assume the
decommissioning liabilities associated with the mine, estimated at
approximately $11 million (US), and to purchase approximately $6 million
(US) of Rio Algom's uranium inventory.
"These are the right assets, in the right place at the right price,"
said Bernard Michel, chair and chief executive officer of Cameco
Corporation. "ISL reserves are the most economic after our large,
high-grade reserves in Saskatchewan and Smith Ranch is right next to our
existing US operations. We are obtaining these assets at a time when the
uranium price is low, but on a rising trend."
Cameco has already secured forward sales commitments for more than
900,000 pounds U3O8 of Smith Ranch production at prices substantially
above the current long-term price indicators. Cameco expects this deal
will be accretive to earnings in 2002 and to cash flow beginning next
Smith Ranch will be operated by Power Resources, Inc. (PRI), a wholly
owned subsidiary of Cameco. PRI currently operates the Highland ISL
mine. The mill at Smith Ranch is less than five kilometres from the
nearest Highland facility and the properties share a common border.
Cameco expects to achieve a number of efficiencies due to the close
proximity of the two operations.
The agreement is subject to regulatory approval and is expected to close
within 45 days.
As of December 31, 2001, the Smith Ranch uranium reserves were:
* proven reserves of 8.9 million pounds U3O8
* probable reserves of 18.0 million pounds U3O8
These reserve categories are consistent with the categories recommended
in Canadian National Instrument 43-101.
Cameco, with its head office in Saskatoon, Saskatchewan, is the world's
largest uranium supplier. The company's uranium products are used to
generate electricity in nuclear energy plants around the world,
providing one of the cleanest sources of energy available today.
Cameco's shares trade on the Toronto and New York stock exchanges.
Statements contained in this news release which are not historical facts
are forward-looking statements that involve risks, uncertainties and
other factors that could cause actual results to differ materially from
those expressed or implied by such forward-looking statements. Factors
that could cause such differences, without limiting the generality of
the following, include: volatility and sensitivity to market prices for
uranium, electricity in Ontario and gold; the impact of the sales volume
of uranium, conversion services, electricity generated and gold;
competition; the impact of change in foreign currency exchange rates and
interest rates; imprecision in reserve estimates; environmental and
safety risks including increased regulatory burdens; unexpected
geological or hydrological conditions; political risks arising from
operating in certain developing countries; a possible deterioration in
political support for nuclear energy; changes in government regulations
and policies, including trade laws and policies; demand for nuclear
power; replacement of production and failure to obtain necessary permits
and approvals from government authorities; legislative and regulatory
initiatives regarding deregulation, regulation or restructuring of the
electric utility industry in Ontario; Ontario electricity rate
regulations; weather and other natural phenomena; ability to maintain
and further improve positive labour relations; operating performance of
the facilities; success of planned development projects; and other
development and operating risks.
CONTACT: Cameco Corporation
(306) 956-6318 (FAX)
(306) 956-6318 (FAX)
Copyright (C) 2002, Canadian Corporate News. All rights reserved.
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Copyright C 2002, Canadian Corporate News, all rights reserved