Cameco taps nickel-zinc mine in Finland for more uranium

Cameco announced on Wednesday that it had reached an agreement with the Talvivaara Mining Company Plc. to help process uranium at the Sotkamo nickel-zinc mine in eastern Finland.

Cameco will invest up to $60 million to design and construct the uranium extraction circuit at the Sotkamo operation. Uranium production is expected to be up 900,000 pounds or 350tU per year. Construction will be completed in 2012.

According to Cameco, capital contribution will be repaid through the initial deliveries of uranium concentrates.

"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," said the company in a news release.

"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," said Cameco CEO Jerry Grandey in a news release.

Talvivaara Mining Company Plc is base metals producer focusing on nickel and zinc. It uses bioheapleaching to extract metals out of ore, a process to make extraction of metals from low grade ore economically viable. The Talvivaara deposits comprise one of the largest known sulphide nickel resources in Europe.

According to the news release, Talvivaara has secured a 10-year off-take agreement for 100 per cent of its main output of nickel and cobalt to Norilsk Nickel and entered into a long-term zinc streaming agreement with Nyrstar NV.

Michael McCrae wrote this story. You can contact him at [email protected].