CAMECO Corporation has restructured Joint Venture Inkai LLP which operates the Inkai Uranium Project in Kazakhstan. The restructure will result in increased annual production of 10.4 million pounds of uranium from 5.2 million pounds.
Cameco’s share of annual production is now 4.2 million pounds, up from 3 million before the restructure.
JV Inkai now has the right to produce from blocks 1, 2 and 3 until 2045 whereas the previous agreement was to 2024 from block 1 and to 2030 from blocks 2 and 3.
The boundaries of blocks 1, 2 and 3 have also been adjusted to match the agreed production profile for JV Inkai to 2045.
Under the implementation agreement, Cameco’s ownership interest in JV Inkai has been adjusted to 40% from 60% and Kazatomprom’s ownership interest has been adjusted to 60% from 40% as of January 1, 2018. As a result, Cameco will account for JV Inkai on an equity basis from that date.
Also on January 1, a new governance framework for JV Inkai protecting the rights of Cameco as a minority owner took effect.
The loan previously funded by a Cameco subsidiary to JV Inkai to fund exploration and evaluation of block 3 was restructured to provide for priority repayment. Such priority repayment commenced in 2017 and the balance of the loan was US$124 million at the end of the September quarter of 2017.
“This agreement is positive for Cameco as it secures our access to a large, low-cost production source through 2045,” said Cameco’s president and CEO Tim Gitzel. “Production decisions will depend on market conditions and the terms of our resource use contract.”
Cameco and Kazatomprom have also completed a feasibility study to evaluate the design, construction and operation of a uranium refinery in Kazakhstan with the capacity to produce 6000 tonnes annually as uranium trioxide.
A formal joint decision has not yet been made as to whether the refinery will be built. In the event of a joint decision to construct the refinery, further adjustments to Cameco and Kazatomprom’s ownership interests in JV Inkai will be made.
Cameco is one of the world’s largest uranium producers. Its uranium products are used to generate clean electricity in nuclear power plants around the world.