• Project Summary
  • Royalty Description
  • Recent Updates
  • Project History

The McArthur River project includes the fully developed McArthur River mine operation, being a currently In Production underground mine operation, located in northern Saskatchewan, Canada approximately 620 km north of Saskatoon. Cameco has disclosed that the project is currently owned by a joint venture between Cameco (69.805%) and Orano (30.195%).

Cameco's MD&A for the year ended December 31, 2023 states updated NI 43-101 ore reserves for the McArthur River operation, with proven reserves of 316.8 Mlbs of U3O8 (2,047.3 thousand tonnes at an average grade of 7.02% U3O8) and probable reserves of 63.8 Mlbs of U3O8 (520.7 thousand tonnes at an average grade of 5.55% U3O8). The updated ore reserve was estimated by Cameco using a metal price assumption of US$54/lb U3O8 and are based on an exchange rate of US$1.00 to $1.26. Ore reserves are reported on a 100% ownership basis.

Cameco also states an updated mineral resource estimate for the McArthur River operation with measured resources of 3.9 Mlbs of U3O8 (78.7 thousand tonnes at an average grade of 2.27% U3O8) and indicated resources of 3.1 Mlbs of U3O8 (60.6 thousand tonnes at an average grade of 2.30% U3O8). The measured and indicated U3O8 mineral resources do not include those mineral resources modified to produce the ore reserves (as reported above) and are reported on a 100% ownership basis.

Cameco has stated that total packaged production at McArthur River from 2000 to the end of 2023 was 340.0 Mlbs U3O8. Totaling historical production and all current reserves and resources, it has an attributable endowment of 729.9 Mlbs of U3O8, making the McArthur River uranium mine the world’s largest known high-grade uranium deposit.

Cameco disclosed in its MD&A for the year ended December 31, 2023, total packaged production from McArthur River and Key Lake in 2023 was 13.5 Mlbs, slightly less than the forecast of 14 Mlbs announced on September 3, 2023. Cameco also disclosed that it plans to produce 18 Mlbs from the McArthur River operation (100% basis) in 2024.

The deposit is a high-grade, unconformity-related uranium deposit with an average stated grade of 7.02% U3O8 for remaining reserves disclosed by Cameco as of December 31, 2023. Mineralization occurs between 500 to 640 metres below surface with a strike length of approximately 1,800 m.

Mining at McArthur River utilizes unique ground freezing to mitigate risks of high-pressure ground water and a blend of blasthole stoping and raise-bore mining. The ore is ground, thickened and blended into a slurry which is then shipped 80 km south to the Key Lake mill for processing and production of calcined uranium ore concentrate. 

Mineral Reserves – As of December 31, 2023 (100% Basis)
Proven Probable  
Tonnes
(‘000’s)
Grade
(% U3O8)
Content
(MLbs. U3O8)
Tonnes
(‘000’s)
Grade
(% U3O8)
Content
(MLbs. U3O8)
Metallurgical
Recovery (%)
2,047.3 7.02 316.8 520.7 5.55 63.8 99

Note that the estimates in the above table:

  • use a constant dollar average uranium price of approximately $54 (US) per pound U3O8
  • are based on exchange rates of $1.00 US=$1.26 Cdn
 
Mineral Resources – As of December 31, 2023 (100% Basis)
Measured Indicated Inferred
Tonnes
(‘000’s)
Grade
(% U3O8)
Content
(MLbs. U3O8)
Tonnes
(‘000’s)
Grade
(% U3O8)
Content
(MLbs. U3O8)
Tonnes
(‘000’s)
Grade
(% U3O8)
Content
(MLbs. U3O8)
78.7 2.27 3.9 60.6 2.30 3.1 37.2 2.90 2.4

Note that mineral resources:

  • do not include amounts that have been identified as mineral reserves
  • totals may not add due to rounding

Note on Technical Disclosure

Unless otherwise stated, all information regarding the McArthur River Project has been derived from Cameco's MD&A for the quarter ended December 31, 2023, and its other publicly filed documents, copies of which are available under its profile at www.sedarplus.ca or Cameco’s website.

The McArthur River Royalty is a 1% GORR on a 9.063% share of uranium production from the McArthur River project derived from Orano’s current 30.195% production interest in the project. The royalty payor is Orano. The McArthur River Royalty includes an option for the holder to receive physical uranium as payment. Included in the royalty is the option to take physical uranium “in kind” with notice.

The Company believes that the royalty covers the majority of the current project, with the exception of portions of claims S-105655 and S-105656 and certain other immaterial areas. The McArthur River Royalty includes most of the area known as the McArthur River mine and the Company believes that the royalty applies to the reported reserves at the mine other than portions that are covered by the adjacent Read Lake project area which represents a nominal portion of the reported reserves and resources at the project.

Cameco disclosed in its MD&A for the year ended December 31, 2023, total packaged production from McArthur River and Key Lake in 2023 was 13.5 Mlbs, slightly less than the announced September 3, 2023, forecast of 14 Mlbs. Cameco also disclosed that the McArthur River mine continues to operate well and is expected to achieve its planned production for the year. Any ore from McArthur River that is not immediately processed at Key Lake mill will be stored in inventory for future milling. At the Key Lake mill, the extended period of time the mill was on care and maintenance, the operational changes made, aging infrastructure, the availability of personnel with the necessary skills and experience, and the impact of supply chain challenges on the availability of materials and reagents combined to impact production in 2023. Cameco also disclosed that it plans to produce 18 Mlbs (100% basis) in 2024.

In October 2023, the Canadian Nuclear Safety Commission (CNSC) granted 20-year renewals to the licences for both McArthur River and Key Lake. The renewed licences are expected to allow McArthur River and Key Lake to operate until October 2043.

In addition, Cameco disclosed that its collective agreement with the United Steelworkers local 8914 expired in December 2022. There is a risk to the production plan if Cameco is unable to reach an agreement on a timely basis or at all and there is a labour dispute.

The original joint venture established over the McArthur River area in 1976 was the Keefe-Henday joint venture between Canadian Kelvin Resources Ltd. and Asamera Oil Corporation Ltd. The Keefe Lake Joint Venture was later divided into three separate project areas, the Dawn Lake, McArthur River, and Waterbury Lake project areas. Cameco began construction and development of the McArthur River mine in 1997. Federal authorities issued the operating licence and mining began at the project in December 1999 and commercial production was achieved on November 1, 2000.

Cameco has disclosed two notable water inflow incidents at the McArthur River mine. The first occurred in April of 2003, as increased water inflow due to a rock fall in a new development area (Bay 12 located just above the 530-metre level) began to flood the lower portions of the mine, including the underground grinding circuit area. Cameco further disclosed that additional dewatering capacity was installed, and the flooded areas were dewatered and repaired, with mining resumed in July 2003, with the excess water inflow sealed off in July 2004. A second inflow occurred in November 2008, when there was a small water inflow in the lower Zone 4 development area on the 590-metre level, which did not impact production, but did delay local development for approximately one year. Cameco further disclosed that, in January 2010, the inflow was sealed off and local development was resumed. In 2013, federal authorities granted a 10-year renewal of the licenses for McArthur River and the Cameco operated Key Lake mill.

Cameco disclosed that in 2018, a decision was made to suspend production at the mine and mill for an indeterminate duration. It further disclosed that a restart of the mine and mill is a commercial decision that will be based upon Cameco’s ability to commit its share of production from the operation under acceptable long-term contracts and to benefit from the favourable life of mine economics it provides.

In Cameco’s MD&A for the year ended December 31, 2022, Cameco disclosed The McArthur River and Key Lake operations were in a state of safe care and maintenance from 2018 through 2021 due to weak market conditions. Cameco further stated that through most of 2022, it undertook the necessary operational readiness activities prior to restarting production. In November 2022, Cameco announced that the first pounds of uranium ore from the McArthur River mine had been milled and packaged at the Key Lake mill, marking the achievement of initial production as the facilities transitioned back into normal operations. In Cameco's MD&A for the year ended December 31, 2022, Cameco stated total packaged production from McArthur River and Key Lake in 2022 was 1.1 million pounds (of which 0.8 million pounds was Cameco’s share) as the mine and mill resumed production.

In 2018, a decision was made by Cameco to suspend production at the mine and mill for an indeterminate duration. In February 2022, Cameco announced plans to transition from care and maintenance to planned production of 15 Mlbs per year (100% basis) by 2024.

In addition to the resources outlined at the McArthur River Mine, several historical uranium deposits and showings have been discovered on the project. These include the P2 Main, BJ Lake, and Harrigan Zone deposits. These historical deposits do not have current resources attributed to them.