The first pounds of uranium ore from the McArthur River mine have been milled and packed at the Key Lake mill, marking the return of production at these operations after they were idled four years ago owing to persistent weakness in the global uranium market.

The company announced in February that it would restart production at both operations, having witnessed a notable market improvement and an increase in long-term contracting activity.

“McArthur River and Key Lake are among the best and most prolific uranium assets on the planet, and after building homes for these pounds in our long-term contract portfolio, we are delighted to have them back in production,” said Cameco president and CEO Tim Gitzel.

“Market conditions have continued to strengthen since we announced their planned restart, with growing geopolitical uncertainty adding to energy security concerns worldwide, and the ongoing global emphasis on decarbonization and electrification only gaining momentum.”

McArthur River/Key Lake are expected to produce up to two-million pounds (100% basis) of uranium concentrate (U₃O₈) in 2022. Starting in 2024, Cameco plans to produce 15-million pounds a year of U₃O₈ from these operations, 40% below their yearly licensed capacity, as part of an ongoing strategy to align production decisions with customers’ procurement needs.

Cameco expects the return to production at McArthur River/Key Lake will lead to a significant improvement in its future financial performance.

“We anticipate it will be positive for cash flow and will allow us to source more of our committed sales from lower-cost produced pounds. In addition, we will no longer be required to expense care-and-maintenance costs directly to cost of sales. Until we achieve a reasonable production rate, however, we expect to incur between $15-million and $17-million per month in operational readiness costs, which will be expensed directly to cost of sales,” the company stated.

Cameco said there were about 730 employees and long-term contractors working at the mine and mill – more than half being of Indigenous heritage – with additional hiring planned going forward.