Poor markets force Cameco to put Millennium uranium mine on hold

Poor markets force Cameco to put Millennium uranium mine on hold

Exploration camp at the highly prospective Millennium deposit is located on the shores of Slush Lake. Courtesy of Cameco.

Cameco Corporation (TSX:CCO) has withdrawn its application to build and operate a new underground uranium mine in the northern part of Canada’s Saskatchewan, citing poor world market conditions as main reason to shelve project.

In a brief statement, Cameco said it has also asked the Canadian Nuclear Safety Commission (CNSC) to postpone a hearing scheduled next month into a licence application for the Millennium Mine project, estimated to hold more than 50 million pounds of uranium.

According to the federal nuclear regulator, Cameco said it was hesitating to go through with licensing for the mine, located about 600 kilometres north of Saskatoon.

Cameco acquired its initial 70% stake in the Millennium Mine project from Areva two years ago for $150 million. The company had received provincial approval for the development back in December.

Uranium prices have recently continued their slide to new record lows. Although there’s no spot price for the metal, UX Consulting’s most recent indicator, published May 12, came to $29 a pound.

For years, Canada was the world’s largest uranium producer, accounting for about 22% of world output, but in 2009, was overtaken by Kazakhstan. Currently the country’s production comes mainly from the McArthur River mine, in northern Saskatchewan, the largest in the world.