Cameco supports development of Finnish mine

10 February 2011

Canadian uranium supplier Cameco has agreed to advance Talvivaara up to US$60 million to construct a uranium extraction circuit at its Sotkamo nickel-zinc mine in eastern Finland. The capital would be repaid by initial deliveries of uranium concentrates.

Talvivaara expects production of uranium at the Sotkamo mine to be approximately 900,000 pounds (U3O8 equivalent) or 350 tU per year once the mine ramps up to full production. The production capacity for uranium extraction at the Sotkamo mine could be increased if Talvivaara proceeds with its stated intention to increase production of nickel and zinc concentrate at the mine through use of its unique bioheapleaching process.

Once the capital is repaid, Cameco will purchase the uranium concentrates produced at Sotkamo through a second agreement that ends on December 31, 2027. The second agreement will provide Talvivaara payments for the uranium, based on a formula that references market prices at the time of delivery.

Cameco will take ownership of the uranium at the Sotkamo site and has the sole right to market the product to its customers.

Under the Euratom Treaty, the agreements with Talvivaara are subject to the concurrence of the Euratom Supply Agency and final approval by the European Commission.

"Cameco is already a supplier of uranium fuel to generate clean electricity for Finnish utilities and their customers," said Cameco CEO Jerry Grandey. "Cameco’s strategic goal is to double uranium production from our existing assets by 2018. Our deal with Talvivaara will provide Cameco with an additional source of uranium supply over and above what we expect to produce from our properties."



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