CanAlaska Uranium, Cameco begin drilling at West McArthur
Canadian junior miner CanAlaska Uranium (TSX-V:CVV) reached a milestone this week as partner Cameco Corporation (TSX: CCO; NYSE: CCJ), the world’s top listed uranium producer, kick started summer drilling at the West McArthur uranium project.
Work at the asset, located immediately next to Cameco’s Fox Lake uranium discovery, will be carried out by a helicopter-supported team based at Cameco’s nearby majority-owned McArthur River, the world’s largest high-grade uranium mine.
The company hopes West McArthur turns to be as promising as the neighbouring Fox Lake, which has reported inferred resources of around 68.1 million pounds based on 387,000 tonnes at 7.99% uranium.
“The detailed geophysical survey carried out in June by Cameco’s team has now given us well defined targets in two highly prospective areas of the West McArthur property,” Peter Dasler, CanaAlaska president, said in a statement.
Cameco is carrying out the current work as part of an option to earn a 60% interest in West McArthur.
“It is encouraging to see the priority that Cameco’s team has given this project during challenging times,” Dasler said.
Hard times indeed, as top producers including Cameco itself have closed several mines in the wake of falling prices.
The situation briefly improved early this year, when the world’s largest uranium producer, Kazakhstan-based Kazatomprom, announced it was cutting output by 5.2 million pounds, equal to 3% of global production. The price rallied, hitting $26.75 a pound by mid-February.
But shortly after, Japanese utility TEPCO declared force majeure on a key uranium delivery contract from Cameco, dampening enthusiasm.
Russian state nuclear corporation Rosatom did little to buoy sentiment and early this month suspended its Mkuju River uranium project in Tanzania for at least three years due to depressed uranium market
While the commodity remains technically in a bear market, trading down more than 20% from its February peak to slightly over $20 a pound, most forecasts for uranium price are pointing up.
The positive outlooks are based partly on the fact that there are 60 new reactors currently under construction in the world, and about 170 new ones on backorder.
Additionally, Japan plans to restart at least seven of its dormant reactors this year alone. The figure may grow as high as 14 depending on inspection results.