29 May (NucNet): Canada’s Cameco Corporation has signed a memorandum of understanding (MOU) with Kazakhstan to cooperate on the development of uranium conversion capacity and to pursue additional uranium production.
Cameco announced yesterday that it had signed the non-binding MOU with state-owned utility KazAtomProm.
Under the terms of the MOU, the two companies will study the feasibility of building a uranium conversion facility “in Kazakhstan and elsewhere”. Cameco would provide the technology and potentially hold a shareholding interest of up to 40 percent.
The MOU also provides for doubling future production from the Inkai uranium deposit in Kazakhstan, raising total annual production to 10.4 million pounds over a period yet to be confirmed.
Kazakhstan has one fifth of the world’s known reserves of uranium and remains the third biggest producer of uranium in the world, after Australia and Canada. The Inkai project is owned and operated by Joint Venture Inkai (JVI), in which Cameco has a 60 percent interest and KazAtomProm 40 percent.
JVI has regulatory approval to build a full-scale in situ recovery mine and mill that is expected to achieve commercial production in 2008, increasing to 5.2 million pounds of annual production in 2010 – of which Cameco's share is 3.1 million pounds.
Cameco president and chief executive officer Jerry Grandey said the MOU would further long-standing business relations with KazAtomProm and provide “significant growth opportunities” for both companies.
While the existing ownership structure of JVI would not change, Cameco’s interest in additional capacity under the MOU would be 50 percent with the remainder held by KazAtomProm. Cameco's share of 10.4 million pounds of annual production would be 5.7 million pounds.
Binding agreements are expected to be signed during 2007 and various government approvals will be required as the agreements are implemented, Cameco said.
