Cameco/Mitsubishi JV Buys Interest in Kintyre Uranium


Cameco Corp. announced on July 8, 2008, that it signed an agreement to acquire a 70% interest in the Kintyre uranium exploration project in Western Australia for $346.5 million.

A joint venture comprising Cameco (70%) and Mitsubishi Development Pty. Ltd. (30%) purchased the Kintyre project from Rio Tinto for $495 million through a bidding process. Cameco will operate the project and is funding its share of the purchase price through existing credit facilities. The transaction is expected to close in August subject to ministerial approval in Western Australia and execution of certain agreements with the Martu people who are the traditional owners of the land.

Kintyre is an advanced exploration project located in Western Australia about 1,250 km northeast of Perth.

Cameco said that based on its due diligence, the Kintyre project may host estimated potential mineral deposits ranging from 62 to 80 million lb U3O8 in total, with an average grade between 0.3% and 0.4% U3O8. These estimates are conceptual in nature. The basis for these conceptual estimates includes 355 historical diamond drill holes totaling 70,279 m. Cameco noted that there has been insufficient exploration, however, to define a resource at the Kintyre project in compliance with Canadian mineral resource reporting standards.

Uranium was first discovered in the area in 1985 and followed up with extensive exploration that identified eight deposits. The project was placed in care and maintenance in 1988 when uranium prices declined below $12/lb. The sale process was initiated by Rio Tinto in 2007.

Development of the Kintyre deposits is subject to state government approval. The current Labor government in Western Australia permits uranium exploration, but continues to oppose new uranium mine development.


As featured in Womp 08 Vol 6 - www.womp-int.com