Cameco Acquires Yeelirrie Uranium Project

Cameco has reached an agreement with BHP Billiton to acquire the Yeelirrie urani-um project in Western Australia for $430 million. Yeelirrie is one of Australia’s largest undeveloped uranium deposits and is located about 650 km northeast of Perth and about 750 km south of Cameco’s Kintyre exploration project. Uranium was discovered at Yeelirrie in 1972 by Western Mining Corp., which was acquired by BHP Billiton in 2005.

Cameco expects the transaction to close by the end of 2012, subject to the receipt of approvals from the government of Western Australia and the Australian Foreign Investment Review Board. Upon closing, stamp tax duty of about $22 million will be payable by Cameco to the gov-ernment of Western Australia.

An historic estimate indicates that Yeelirrie hosts measured and indicated mineral resources of approximately 139 million lb of U3O8, at an average grade of approximately 0.13% U3O8and an inferred resource of approximately 5 million lb at 0.10% U3O8. Cameco is not treating this estimate as current mineral resources.

The historic estimate was based on 10,250 surface holes, of which nearly 4,000 diamond drill holes had assay val-ues and the rest had uranium grade meas-ured by downhole radiometric probing. Cameco considers the historic estimate rel-evant as an indication of the potential of the Yeelirrie property but believes that the total uranium content may be overstated by approximately 10%.

To replace the historic estimate with a mineral resource estimate that is NI 43-101 compliant, Cameco will review the gamma logs and the grade-radiometry relationship, consider remodeling at a lower cut-off grade without including significant below cut-off material, and revisit the criteria used to clas-sify the historic estimate. Additional drilling for geochemical sampling will be required to improve the characterization of the deleteri-ous components that will have an impact on any proposed production plan.

As featured in Womp 2012 Vol 10 -