Canadian mill to be idled in mid-2010

16 December 2009

The McClean Lake uranium mill in Saskatchewan, Canada, is to be put on stand-by in mid-2010 until market conditions improve, the partners in the project have announced.


McClean Lake mill (Denison)
The McClean Lake uranium mill (Image: Denison)
McClean Lake is operated and 70% owned by Areva Resources Canada, with Denison Mines holding 22.5% and OURD Canada holding the remaining 7.5%. The partners have said that the mill will continue to operate until July 2010, processing stockpiled ore. It will then be placed in care and maintenance mode, during which time some staff will be retained for maintenance so that it can be restarted at a later date.


McClean Lake has been mining and milling uranium since 1999. It is the only uranium mill in the world designed to process ore grades of up to 30% uranium, according to Areva. Until late 2008 uranium ore came directly from several open pit mines at the site, but after these wound up operations the mill continued to work on stockpiled ore. The Midwest and Caribou mining projects have been postponed due to market conditions, but are proceeding through the regulatory process, to be ready when market conditions improve. An underground mine at McClean is in the planning stages.


In addition to these potential new ore sources, the main future feed will be from the high-grade Cigar Lake project, operated by Cameco and 37% owned by Areva, which has been delayed by flooding in the main shaft. Areva said, "Once operational, Cigar Lake, in addition to other sources of ore, will supply the McClean Lake mill for several decades." The company noted, "The mill re-start date will depend on market conditions and the Cigar Lake mine schedule."


Production in 2010 is estimated to be 1.86 million pounds U3O8 (844 tonnes U3O8). The mill produced 3.2 million pounds U3O8 (1450 tonnes U3O8) in 2008, compared with 1.9 million pounds U3O8 (860 tonnes U3O8) in 2007. This production increase was driven by increased throughput at the McClean Lake mill combined with slightly higher grade ore available from the Sue E deposit. Mining of Sue E began in 2005, continued throughout 2007, and was completed in March 2008. Mining of the Sue B deposit was started and completed in 2008. The stockpile from the Sue E and Sue B deposits continues to provide ore for the mill.


Denison said, "At the time of the mill shutdown there will be approximately 114,900 tonnes of low grade ore on the stockpile available for processing when economically viable."


Areva Resources CEO Vincent Martin commented: "Unfortunately, this situation will result in the reduction of about 140 positions from both McClean Lake and our Saskatoon office in the summer of 2010." Some 270 Areva employees are currently employed at McClean Lake and about 200 at the Saskatoon office.