Uranium Production Overview

Uranium Production

  Three Months Ended
December 31		 Year Ended
December 31		  
Cameco Share (million lbs) 2012 2011 2012 2011 2012 Plan
  1. 1 We updated our initial 2012 plan for McArthur River/Key Lake (to 13.5 million pounds from 13.1 million pounds) and Smith Ranch-Highland (to 1.3 million pounds from 1.6 million pounds) in our Q3 MD&A.
McArthur River/Key Lake 3.5 3.9 13.6 13.9 13.51
Rabbit Lake 1.7 1.6 3.8 3.8 3.7
Smith Ranch-Highland 0.3 0.2 1.1 1.4 1.31
Crow Butte 0.2 0.2 0.8 0.8 0.7
Inkai 0.8 0.7 2.6 2.5 2.5
Total 6.5 6.6 21.9 22.4 21.71

Outlook

We have geographically diverse sources of production. Subject to market conditions, our plan is to focus primarily on advancing our brownfield projects and the process to extract uranium from the Talvivaara mine to achieve annual supply of 36 million pounds by 2018. We expect to purchase about 900,000 pounds of supply under our agreement with Talvivaara when all regulatory approvals are received, work on the extraction process is complete, and once they ramp up to full production. We expect production to start in the first half of 2014.

Cameco’s share of production — annual forecast to 2017

Current Forecast (million lbs) 2013 2014 2015 2016 2017
  1. 1 In 2011, we signed a memorandum of agreement (2011 MOA) with Kazatomprom to increase annual production to 5.2 million pounds (100% basis). Under the 2011 MOA, we will have the right to purchase 2.9 million pounds of Inkai’s annual production and receive profits on 3.0 million pounds.
  2. 2 We have adjusted the production table to reflect the share of Inkai’s production we will use to calculate our profits under the 2011 MOA, as described in the note above.
McArthur River/Key Lake 13.2 13.1 13.1 13.1 13.1
Rabbit Lake 4.2 4.2 4.2 4.2 4.2
US ISR 2.6 2.9 2.9 3.0 3.0
Inkai1 2.9 2.9 2.9 2.9 2.9
Cigar Lake 0.3 1.8 5.5 7.9 8.2
Total share of production 23.2 24.9 28.6 31.1 31.4
Cameco’s share of Inkai’s production on which
profits are generated2
Inkai1 3.0 3.0 3.0 3.0 3.0
Total2 23.3 25.0 28.7 31.2 31.5

Our 2013 and future annual production targets for Inkai assume, and we expect, that Inkai will obtain the necessary government permits and approvals to produce at an annual rate of 5.2 million pounds (100% basis), including an amendment to the resource use contract.

There is no certainty Inkai will receive these permits or approvals. If Inkai does not, or if the permits and approvals are delayed, Inkai may be unable to achieve its 2013 and future annual production targets and we may have to re-categorize some of Inkai’s mineral reserves as resources.

This forecast is forward-looking information. It is based on the assumptions and subject to the material risks discussed here, and specifically on the assumptions and risks noted above and listed here. Actual production may be significantly different from this forecast.

Assumptions

  • we achieve our forecast production for each operation, which requires, among other things, that our mining plans succeed, processing plants and equipment are available and function as designed, we have sufficient tailings capacity and our mineral reserve estimates are reliable
  • we obtain or maintain the necessary permits and approvals from government authorities
  • our production is not disrupted or reduced as a result of natural phenomena, labour disputes, political risks, blockades or other acts of social or political activism, shortage or lack of supplies critical to production, equipment failures or other development and operation risks

Material risks that could cause actual results to differ materially

  • we do not achieve forecast production levels for each operation because of a change in our mining plans, processing plants or equipment are not available or do not function as designed, lack of tailings capacity or for other reasons
  • we cannot obtain or maintain necessary permits or approvals from government authorities
  • natural phenomena, labour disputes (including an inability to renew agreements with unionized employees at McArthur River and Key Lake), political risks, blockades or other acts of social or political activism, shortage or lack of supplies critical to production, equipment failures or other development and operation risks disrupt or reduce our production