BHP Billiton sells Yeelirrie uranium project to Cameco

28 August 2012

BHP Billiton has signed an agreement to sell its Yeelirrie uranium deposit in Western Australia to Cameco Corporation for US$430 million.

Yeelirrie is one of Australia's largest undeveloped uranium deposits, and amenable to open-pit mining techniques, Cameco said in a statement.

A June 2012 study prepared for BHP Billiton estimates Yeelirrie hosts indicated resources of 139 million pounds U3O8 (average grade 0.13% U3O8), and inferred resource of approximately 5 million pounds (0.10%).

Cameco said that it “considers the historic estimate relevant as an indication of the potential of the Yeelirrie property,” but said that it “believes that the total uranium content of the historic estimate may be overstated by approximately 10%.”

The company plans to replace the historic estimate for Yeelirrie with a mineral resource estimate that is compliant with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101).

Cameco will review the gamma logs and the grade-radiometry relationship, consider remodeling at a lower cut-off grade without including significant below cut-off material and revisit the criteria used to classify the historic estimate.

“Additional drilling for geochemical sampling will be required in order to improve the characterization of the deleterious components that will have an impact on any proposed production plan,” it said.

Cameco expects the transaction to close by the end of 2012, subject to the receipt of approvals from the government of Western Australia and the Australian Foreign Investment Review Board. Upon closing, stamp tax duty of about US$22 million will be payable by Cameco to the government of Western Australia.

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