Cameco and Kazatomprom Sign Agreement to Restructure JV Inkai Uranium Project, Kazakhstan

Published: June 1, 2016 |

[Click image to enlarge]

Cameco Corporation has signed an agreement with National Atomic Company Kazatomprom (Kazatomprom) and joint venture Inkai LLP (JV Inkai) to restructure and enhance JV Inkai. The agreement was signed during the annual foreign investors meeting with the president and government officials in Astana, Kazakhstan at a ceremony attended by Bakytzhan Sagintayev, First Deputy Prime Minister of the Republic of Kazakhstan.

“This agreement strengthens our partnership with another global leader in uranium mining and moves both Cameco and Kazatomprom closer to realizing the full potential of their investment in JV Inkai. For Cameco, the agreement advances our strategy of building on our low-cost production assets that helps to mitigate the risk of today’s uncertain uranium market and positions us to maximize returns when the market recovers,” said Cameco President and CEO Tim Gitzel.

“Kazatomprom and Cameco have, for many years now, been engaged in a highly co-operative and mutually beneficial relationship where commitments have always been upheld. Therefore, we intend to further expand our partnership, balancing the economic interests,” said Askar Zhumagaliev, chairman of the board of Kazatomprom.

The Inkai operation is an in situ recovery uranium mine in south Kazakhstan that is owned and operated by JV Inkai which, in turn, is currently owned by Cameco (60 percent) and Kazatomprom (40 percent). Cameco’s current interest in production from JV Inkai is 57.5 percent based on previous agreements with Kazatomprom.

The new agreement replaces the memorandum of agreement signed by Cameco and Kazatomprom in September 2012 and, subject to closing, provides as follows:

• JV Inkai will have the right to produce 4,000 tonnes of uranium (tU) (10.4 million pounds of U3O8) per year (Cameco’s share 4.2 million pounds), an increase from the current 5.2 million pounds (Cameco’s share 3.0 million pounds).

• JV Inkai will have the right to produce from blocks 1, 2 and 3 until 2045 (currently, the lease terms are to 2024 for block 1 and to 2030 for blocks 2 and 3)

• Subject to further adjustments tied to the refinery, Cameco’s ownership interest in JV Inkai will be adjusted to 40 percent, and Kazatomprom’s ownership interest in JV Inkai will be adjusted to 60 percent

• A governance framework that provides protection for Cameco as a minority owner

• The current boundaries of blocks 1, 2 and 3 will be adjusted to match the agreed production profile for JV Inkai to 2045

• The loan made by a Cameco subsidiary to JV Inkai to fund exploration and evaluation of block 3 (currently US$160 million) will be restructured to provide for priority repayment

This agreement is subject to obtaining all required government approvals, including certain amendments to JV Inkai’s existing resource use contract, which is expected to take 18 to 24 months. The government approvals are conditional upon submission of certain technical reports and other documents. The agreement provides for annual production at the Inkai operation to be ramped up to 10.4 million pounds U3O8 over three years following receipt of required approvals.

Cameco and Kazatomprom will complete a feasibility study for the purpose of evaluating the design, construction and operation of a uranium refinery in Kazakhstan with the capacity to produce 6,000 tU annually as uranium trioxide (UO3). The agreement includes provisions that would make Cameco’s proprietary uranium refining technology available to Kazatomprom on a royalty-free basis, and grants Kazatomprom a five-year option to license Cameco’s proprietary uranium conversion technology for purposes of constructing and operating a UF6 conversion facility in Kazakhstan.

If Cameco and Kazatomprom decide to build the refinery, the agreement also provides that:

• Cameco’s and Kazatomprom’s respective ownership interests in the limited liability partnership that will own the refinery, will be 71.67 percent for Kazatomprom and 28.33 percent for Cameco

• Kazatomprom will have the option to obtain UF6 conversion services at Cameco’s Port Hope facility for a period of 10 years and receive other commercial support

• Cameco’s ownership interest in JV Inkai is increased to 42.5 percent upon commissioning of the refinery

• Depending on the level of commercial support Cameco provides, Cameco’s interest in JV Inkai may be increased to 44 percent and its ownership stake in the refinery would also be adjusted from 28.33 percent to 29.33 percent

About Cameco
Cameco is one of the world’s largest uranium producers, a significant supplier of conversion services and one of two CANDU fuel manufacturers in Canada. its competitive position is based on interests in the world’s largest high-grade reserves and low-cost operations. Its uranium products are used to generate clean electricity in nuclear power plants around the world. Cameco also explores for uranium in the Americas, Australia and Asia. Its head office is in Saskatoon, Saskatchewan.

To stop by Cameco’s website, CLICK HERE

About Kazatomprom
The joint stock company National Atomic Company Kazatomprom is the national operator of the Republic of Kazakhstan for import and export of uranium, rare metals, nuclear fuel for power plants, special equipment and dual-purpose materials. 100 percent of Kazatomprom’s stock is held by the government under the National Welfare Fund Samruk-Kazyna. Kazatomprom presently employs more than 25,000 workers and is one of the world’s leading uranium mining companies.

To stop by Kazatomprom’s website, CLICK HERE

Be in-the-know when you’re on-the-go!

FREE eNews delivery service to your email twice-weekly. With a focus on lead-driven news, our news service will help you develop new business contacts on an on-going basis.
CLICK HERE to register your email address.

For licensing permission, .(JavaScript must be enabled to view this email address)