McArthur River back in production

3 August 2003

Cameco has announced that the McArthur River mine is back in production one month earlier than previously anticipated. Production had been suspended since 6 April 2003 due to flooding (see NEI May 2003, p3).

McArthur River personnel began mining underground with two raise-bore machines on 30 June, and had a third unit functioning in early July, bringing mining operations up to full capacity. McArthur River ore is processed at the Key Lake mill, which restarted on 1 July. The restart of mining operations was conditional on a number of regulatory items, including increased monitoring and providing more information about returning to normal operations.

The additional water inflow at the McArthur River mine is stable and being drained through a series of pipes from the affected area to an inactive part of the mine before being pumped to surface. The water continues to be treated and monitored. The area where the water entered the mine has been filled with concrete and work is continuing to permanently seal it off by mid-August.

Cameco expects the McArthur River/Key Lake operations will produce approximately 12-13 million pounds of uranium in 2003, compared to the annual licensed capacity of 18.7 million pounds. While mining was suspended, the company met all sales contracts with existing inventory and other supply sources.

Cameco avoided layoffs of McArthur River and Key Lake employees by scheduling additional maintenance, training and by using vacation time. Cameco confirmed that the 2003 net earnings have declined by about C$4-5 million ($2.9-3.6 million) for every month that McArthur River was unable to produce.

Cameco owns 70% of the McArthur River mine located in northern Saskatchewan about 620km north of Saskatoon.



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