Cameco to reopen Cigar Lake mine in September

A major Saskatchewan uranium mine is expected to reopen at the beginning of September.

On Wednesday, Cameco announced it would be reopening its Cigar Lake mine after temporarily closing it in March over COVID-19 concerns.

"We are very pleased to be able to make this announcement," said CEO Tim Gitzel during an investor's call.

"It's good for Cameco from a financial perspective, from a risk management perspective and it's good for northern Saskatchewan."

At the beginning of the closure, the uranium mining company said it made the decision after realizing it's difficult to maintain physical distance at a fly-in mine.

Gitzel stressed the company would be cautious about ensuring the health and safety of its workers, as well as communities in northern Saskatchewan.

"We will obviously continue to actively monitor the public health situation and we'll take a measured approach with all of our restart activities," he said.

"The health and safety of our employees their families and their communities continue to be the priority focus of all of our plans and we will align these plans with the guidance of the relevant health authorities where we operate."

The company expects it will take two weeks to get the mine back into production, and will only reopen the mine if it is safe to do so.

Normally, 300 workers are employed at the site.

The Key Lake/McArthur River mine site will remain closed. The site was temporarily shut down in 2018 due to a production curtailment.

The company's Port Hope conversion plant and theBlind River refinery in Ontario were reopened in May after a brief closure.

Price rebound

While the company posted a second-quarter loss of $38.2 million, Gitzel said the company is in good financial shape.

Gitzel said uranium spot prices are up by 35 per cent since production was disrupted by the pandemic in March.

Cameco expects to produce 5.3 million pounds of uranium by the end of the year.

However, the CEO said there are risks to the target.

"The restart and continued operation will be dependent on our ability to establish and maintain safe and stable operating protocols along with a number of other factors including the availability of the necessary workforce and how the COVID-19 pandemic is impacting northern Saskatchewan," he said.

Gitzel also mentioned the company's recent victory at the Federal Court of Appeal. Cameco has been locked in a lengthy legal battle with the Canada Revenue Agency over taxes.

The recent decision now means the 2003, 2005 and 2006 tax years will have to be reassessed, potentially saving the company millions of dollars.

The Canada Revenue Agency can still appeal the decision to the Supreme Court of Canada.

"The Court of Appeal ruling further confirms that we followed the letter and intent of Canadian laws and it upholds the cost the award received from the Tax Court of Canada."

Cameco shares have climbed 35% since the beginning of the year. The stock has increased 31% in the last 12 months.