Cameco has entered into an agreement with Areva Resources Canada to purchase Areva’s 27.94% interest in the Millennium project in the Athabasca Basin of northern Saskatchewan, Canada, for $150 million. The project is a proposed uranium mine.
Exploration on the project area has identified indicated resources of 50.9 million lb of U3O8 (507,800 mt at an average grade of 4.55%) and inferred resources of 16.7 million lb of U3O8 (297,800 mt at an average grade of 2.54%). If production from the Millennium deposit exceeds 63 million lb of packaged uranium concentrate, the agreement provides Areva with a 4% royalty on revenue from 27.94% of any production that exceeds 63 million lb.
The Millenium project area is one of 12 mineral claims held by the Cree Lake Extension Joint Venture exploration project, which is currently owned by Cameco (41.96%), JCU (Canada) Exploration Co. (30.1%), and Areva Resources Canada (27.94%). Cameco is the operator. Under the agreement, the Millennium mineral claim, consisting of 590 ha of land, will be designated as a separate project area under the Cree Lake Extension Joint Venture.
The sale to Cameco of the full amount of Areva’s interest is subject to JCU’s rights of refusal on transfers under the terms of the Cree Lake Extension Joint Venture agreement. If JCU does not exercise its rights, Cameco will acquire the entire 27.94% interest from AREVA, increasing its ownership interest in the Millennium project to 69.9%. If JCU elects to exercise its rights, it will acquire an additional 11.67% interest and Cameco will acquire an additional 16.27% interest, resulting in Cameco owning 58.23% in the Millennium project.
The transaction is expected to close no later than June 6, 2012, depending on the timing of JCU either exercising or waiving its rights under the Cree Lake Extension Joint Venture agreement.