Annual Information Form
REPORTING CURRENCY AND FINANCIAL INFORMATION | 2 | |||
CAUTION REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS | 2 | |||
NOTE REGARDING RESERVES AND RESOURCES | 3 | |||
INCORPORATION AND SUBSIDIARIES | 4 | |||
GENERAL DEVELOPMENT OF THE BUSINESS | 5 | |||
Three-Year Highlights | 6 | |||
2009 Expected Material Developments | 7 | |||
THE NUCLEAR BUSINESS | 8 | |||
Overview | 8 | |||
Uranium Concentrates Business | 8 | |||
Market Background | 8 | |||
Marketing | 12 | |||
Mining Properties | 13 | |||
McArthur River | 13 | |||
Rabbit Lake | 25 | |||
Crow Butte | 26 | |||
Smith Ranch-Highland | 26 | |||
Development Projects | 26 | |||
Cigar Lake | 26 | |||
Inkai | 39 | |||
Exploration | 44 | |||
Reserves and Resources | 45 | |||
Uranium Reserves | 46 | |||
Uranium Measured and Indicated Resources | 47 | |||
Uranium Inferred Resources | 48 | |||
Uranium Reserves Reconciliation | 49 | |||
Uranium Resources Reconciliation | 50 | |||
Uranium Fuel Conversion Services | 51 | |||
Market Background | 51 | |||
Marketing of Conversion Services | 52 | |||
Operations | 53 | |||
Environmental Matters | 55 | |||
Overview of Impacts | 55 | |||
Cameco Policies | 57 | |||
Cameco Programs | 58 | |||
Regulatory Compliance | 58 | |||
US Regulatory Compliance | 59 | |||
Fuel Services Waste Management | 61 | |||
Government Regulation | 62 | |||
Treaty on the Non-Proliferation of Nuclear Weapons (the “NPT”) | 62 | |||
Canadian Uranium Industry Regulation | 62 | |||
US Uranium Industry Regulation | 64 | |||
Land Tenure | 64 | |||
Canadian Royalties and Certain Taxes | 66 | |||
Canadian Income Taxes | 66 | |||
US Taxes | 67 | |||
Kazakhstan Taxes | 67 | |||
Employees | 67 | |||
BRUCE POWER LP – NUCLEAR ELECTRICAL GENERATION | 67 | |||
Overview | 67 | |||
The Generating Facilities | 70 | |||
Cameco Fuel Management | 72 | |||
OPG Services to Bruce Power | 72 | |||
Nuclear Waste Management and Decommissioning | 72 | |||
Federal Regulation | 73 | |||
Ontario’s Electricity Regulation | 74 | |||
CENTERRA GOLD INC. | 75 | |||
Centerra | 75 | |||
Kumtor Mine | 75 | |||
Boroo Mine | 96 | |||
Gatsuurt Development Property | 100 | |||
Reserves and Resources | 100 | |||
Centerra Legal Proceedings | 102 | |||
Centerra Material Contracts | 105 | |||
Additional Information on Centerra | 107 | |||
RISK FACTORS | 107 | |||
Risks Relating to Cameco and Centerra Generally | 107 | |||
Risks Relating to Nuclear Business | 117 | |||
Risks Relating to Nuclear Electrical Generation | 121 | |||
Risks Relating to Centerra | 124 | |||
DESCRIPTION OF SECURITIES | 127 | |||
Description of Share Capital | 127 | |||
Restrictions on Ownership and Voting | 128 | |||
Ratings of Securities | 131 | |||
Dividend Policy | 131 | |||
LEGAL PROCEEDINGS | 132 | |||
2008 FINANCIAL STATEMENTS | 132 | |||
MANAGEMENTS’S DISCUSSION AND ANALYSIS | 132 | |||
MARKET FOR SECURITIES | 132 | |||
Price Range and Trading Volume of Common Shares | 133 | |||
DIRECTORS AND OFFICERS | 133 | |||
Directors | 133 | |||
Officers | 135 | |||
Cease Trade Orders, Bankruptcies, Penalties or Sanctions | 135 | |||
Interest of Management and Others in Material Transactions | 136 | |||
AUDIT COMMITTEE | 136 | |||
Audit Committee Charter | 136 | |||
Composition of the Audit Committee | 136 | |||
Relevant Education and Experience | 136 | |||
Fees Paid to External Auditors | 137 | |||
External Audit Pre-Approval Practices | 137 | |||
MATERIAL CONTRACTS | 138 | |||
INTEREST OF EXPERTS | 138 | |||
ADDITIONAL INFORMATION | 139 | |||
Appendix “A” | 140 |
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Note: | ||
1 | In this Annual Information Form when the term “western world” is used, it includes Argentina, Australia, Belgium, Brazil, Canada, Czech Republic, Finland, France, Gabon, Germany, Hungary, India, Indonesia, Japan, Lithuania, Mexico, Namibia, Netherlands, Niger, Pakistan, Philippines, Portugal, Romania, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom and United States. |
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• | In January 2006, Cameco announced that the Kumtor mine life has been extended by almost three years and the Boroo mine life has been extended by more than one year. |
• | In January 2006, Cameco’s board of directors approved a two-for-one stock split of its outstanding common shares and an increase in the annual dividend from $0.12 to $0.16 beginning in 2006 (both annual dividend amounts adjusted for the stock split). |
• | In February 2006, Cameco paid $109 million to acquire Zircatec Precision Industries, Inc., a Canadian supplier of fuel fabrication services for CANDU reactors. Ziractec’s new name is Cameco Fuel Manufacturing Inc. |
• | In April 2006, a significant water inflow occurred at the second Cigar Lake shaft. The inflow had no impact on other parts of the mine because the second shaft was not connected to the mine. |
• | In July 2006, a pit wall ground movement occurred at Kumtor, involving a significant portion of the northeast wall. The ground movement did not reduce the amount of reserves; however, it did significantly reduce 2006 Kumtor production. |
• | In October 2006, a second water inflow occurred at Cigar Lake, filling the underground development areas of the mine with water. Production start up was previously planned for early 2008. Remediation has commenced. |
• | In November 2006, unionized employees at Cameco’s McArthur River and Key Lake uranium operations accepted a new contract, which will expire December 31, 2009. |
• | In December 2006, Centerra and Kumtor unionized employees agreed on the material terms of a labour agreement. This agreement expired December 31, 2008. A new agreement has been entered into. |
• | In December 2006, Cameco’s board of directors approved an increase in the annual dividend from $0.16 to $0.20 beginning in 2007. |
• | In March 2007, Cameco provided an update on the Cigar Lake project including that: (i) production start-up was targeted for 2010 (no target is now provided due to the August 2008 Cigar Lake water inflow); (ii) Cameco’s share of capital costs to bring Cigar Lake into production was estimated at $508 million including $234 million spent on construction as of March 2007, leaving $274 million remaining; and (iii) Cameco’s share of flood remediation expenses was estimated at $46 million. These March 2007 estimates are no longer accurate. |
• | In July 2007, Zircatec unionized employees accepted a new contract, expiring June 2009, and Cameco Port Hope unionized employees accepted a new contract, expiring June 2010. |
• | In July 2007, Centerra’s 2007 forecast of Kumtor gold production was reduced from 450,000 ounces of gold to 300,000 ounces. |
• | In July 2007, Cameco discovered contamination of the soil under its UF6 conversion plant in Port Hope and suspended operations to conduct an investigation. |
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• | In August 2007, Cameco and Centerra signed agreements with the government of the Kyrgyz Republic, which were aimed at providing additional business certainty for Kumtor’s mining operations. The agreements were subject to a number of conditions, including approval by the parliament of the Kyrgyz Republic. In June 2008, these agreements expired as they had not been ratified by parliament within the timeframe agreed to by the parties. |
• | In September 2007, Cameco proceeded with a normal course issuer bid to purchase for cancellation up to 17.7 million (5%) of its common shares. 9,575,300 common shares were purchased (none in 2008) at a cost of $429,327,000. The program expired in September 2008. |
• | In November 2007, Cameco reduced underground activities at Rabbit Lake due to an increase of water inflow. In late December, Cameco resumed normal mining activities after sealing off the source of the water inflow. |
• | In June 2008, Cameco entered an agreement with General Electric (GE) and Hitachi Ltd. subsidiaries, whereby it provided $124 million (US) in cash and issued a $73 million (US) promissory note to acquire a 24% interest in Global Laser Enrichment LLC (GLE), a uranium enrichment development company. The remainder of GLE is owned indirectly by GE (51%) and Hitachi Ltd. (25%). |
• | In June 2008, Cameco and its partners agreed with Tenex to a new pricing structure under the HEU Commercial Agreement for the period 2011 to 2013, affecting approximately 7 million pounds during that time frame. The Russian and US governments have approved the new pricing structure. |
• | In August 2008, a joint venture of a Cameco subsidiary (70%) and Mitsubishi Development Pty Ltd (30%) acquired the Kintyre uranium exploration project, located in Western Australia, from Rio Tinto for $495.0 million (US) (Cameco’s share $346.5 million (US)). |
• | In August 2008, Cameco gave notice of its intention to redeem the 5% $230 million unsecured convertible debentures on October 1, 2008. 21,201,495 common shares were issued to holders who chose to exercise their conversion rights and 3,090 common shares were issued upon redemption of the remaining convertible debentures. |
• | In 2008 Cigar Lake rehabilitation continued. The October 2006 water inflow area was sealed and dewatering of the mine began in the summer of 2008. However, in August a new inflow occurred, causing dewatering to be suspended. The main source of this inflow is from a fissure located in the top of a tunnel on the 420 metre level. A remediation plan has been developed to seal the tunnel. Cameco estimates sealing of the August 2008 inflow will take most of 2009. |
• | In September 2008, the Port Hope UF6 plant was restarted upon completion of a year-long rehabilitation program. However, in November operations were suspended because Cameco was unable to resolve a contract dispute with its sole supplier of hydrofluoric acid. Because of contract negotiations and logistical issues, Cameco does not expect acid supply arrangements to be established before mid-2009, with production resuming thereafter. |
• | in February 2009, Cameco agreed with the lenders of its $470 million credit facility to increase the limit to $500 million and to extend the maturity date to June 16, 2010; |
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• | in February 2009, Cameco added $100 million in short-term bank credit, maturing in February 2010, on terms similar to the increased $500 million facility; |
• | in March 2009, Cameco issued 26,666,400 common shares for gross proceeds of $460 million in closing a bought deal of its common shares; |
• | the expected sealing of the August 2008 Cigar Lake water inflow; and |
• | the expected resumption of Port Hope UF6 production. |
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2006(1) | 2007(1) | 2008(1) | ||||||||||
McArthur River(2) (3) | 13,100,000 | 13,100,000 | 11,600,000 | |||||||||
Rabbit Lake | 5,100,000 | 4,000,000 | 3,600,000 | |||||||||
Smith Ranch-Highland | 2,000,000 | 2,000,000 | 1,200,000 | |||||||||
Crow Butte | 700,000 | 700,000 | 600,000 | |||||||||
Total | 20,900,000 | 19,800,000 | 17,000,000 | |||||||||
Notes: | ||
(1) | This does not include production from Inkai, which is not considered commercial. In 2008, Cameco’s share of Inkai production was 300,000 pounds. Inkai is expected to reach commercial production in 2009. | |
(2) | Milled at Key Lake. | |
(3) | McArthur River’s CNSC license limits annual production to 18.7 million pounds (Cameco’s share being 13.1 million pounds). |
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1. | Key Assumptions |
(a) | Uranium mineralization is continuous in quality and quantity between sampled areas. | ||
(b) | Water control measures are effective at preventing water inflow. | ||
(c) | The reported mineral reserves include appropriate provisions for dilution or mining recovery. Mineral reserves have been estimated with an average allowance of 20% dilution and a 95% mining recovery. The reported mineral resources do not include allowances for dilution and mining recovery. | ||
(d) | Mineral reserves are recoverable by the current raise bore mining method and the planned mining methods of boxhole boring, and blasthole stoping. | ||
(e) | Diamond drilling, ground support systems, and mining plans mitigates the risks associated with potentially adverse ground conditions. | ||
(f) | Radiation protection measures in place continue to be effective. | ||
(g) | For the purpose of estimating mineral reserves in accordance with NI 43-101, an average uranium price of $47 (US) per pound U3O8 was used. For the purpose of estimating mineral reserves in accordance with the SEC’s Industry Guide 7 for US reporting purposes, an average uranium price of $70 (US) per pound U3O8 was used. Estimated mineral reserves at McArthur River are the same using either uranium price. |
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(h) | Environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other issues are not expected to materially affect the mineral resource and mineral reserve estimates. |
2. | Key Parameters |
(a) | The geological model employed for McArthur River involves geological interpretations on section and plan derived from surface and underground drill hole information. | ||
(b) | For mineral resources estimated from surface drill holes, the uranium grade is determined from assay sample. For mineral resources and mineral reserves estimated from underground drill holes, grades were obtained from radiometric probing converted to percentage U3O8 on the basis of a correlation between radiometric counts and assay values. | ||
(c) | Densities were determined from regression formulas based on density measurements of drill core and chemical assay grades. | ||
(d) | Limits and continuity of the mineralization are structurally controlled. | ||
(e) | Mineral reserves have been estimated at a cut-off grade of 0.8% U3O8. | ||
(f) | Mineral resources have been estimated at a minimum mineralized thickness of 1.0 metre and at cutoff grade of 0.1% to 0.5% U3O8. | ||
(g) | Mineral reserves at McArthur River were estimated based on the use of the raisebore, boxhole and blasthole stoping methods combined with freeze curtains. All material extracted by mining is radiometrically scanned for grade and that which is greater than 0.8% U3O8 is treated as ore and is fed to an initial processing circuit located underground consisting of grinding to produce an ore slurry which is hoisted hydraulically by pumps to surface. On surface the ore slurry is transported to the Key Lake mill for final processing and production of uranium. The mining rate is planned to vary between 110 and 130 tonnes per day at a full mill production rate of 18.7 million pounds U3O8 per year based on 98.4% mill recovery. | ||
(h) | The key economic parameters underlying the mineral reserves include a conversion from US$ dollars to Cdn$ dollars using a fixed exchange rate of US$1.00 = Cdn$1.22 (reflecting the exchange rate at December 31, 2008). |
3. | Key Methods |
(a) | Mineral resources, based on pre-1993 surface drilling, were estimated using the two-dimensional cross-sectional method on vertical sections at 50 metre or 100 metre spacing using Autodesk Generic CADD software. | ||
(b) | Mineral resources for Zones A and B, where additional holes were drilled from the surface since 2004, were estimated using 3-dimensional block models. Three-dimensional wire frame models were created from the geological interpretation of mineralization outlines using lithology, structure and uranium grade information interpreted on 25 or 50 metre spacing vertical cross-sections and plan views. Estimates of the grade and density of blocks of 5 metre x 10 metre x 2 metre were obtained from inverse squared distance method. | ||
(c) | Mineral resources and mineral reserves delineated by underground drill holes were estimated using 3-dimensional block models. Three-dimensional wire frame models were created from digitized mineralization boundaries interpreted on 10 metre spacing vertical cross-sections and plan views. Estimates of the grade and density of blocks of 1 metre x 5 metre x 1 metre were obtained from ordinary kriging or inverse squared distance method. |
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(d) | Mineral reserves are defined as the economically mineable part of the indicated and measured mineral resources. Only mineral reserves have demonstrated economic viability. The amount of reported mineral resources does not include amounts identified as mineral reserves. | ||
(e) | Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred mineral resources will ever be upgraded to a higher category. |
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1. | Key Assumptions |
(a) | Mineral resources have been estimated at a minimum mineralized thickness of 2.5 metres. A cut-off grade of 5% U3O8 has been applied to the Phase 1 measured mineral resource. A cut-off grade of 1.2% U3O8 has been applied to the Phase 1 indicated mineral resource. The inferred mineral resources have been estimated by applying a cut-off grade of 5.9% U3O8 to the Phase 2 resource block model. | ||
(b) | Mineral resources have been estimated with an allowance of 0.5 metres of dilution material above and below the deposit at 0% U3O8. No allowance for mining loss is included. | ||
(c) | Mineral reserves have been estimated at a cut-off grade of 5.9% U3O8 applied to the Phase 1 mineral resource block model. | ||
(d) | Mineral reserves have been estimated with an allowance of 0.5 metres of dilution material above and below the deposit, plus 5% external dilution and 5% backfill dilution at 0% U3O8. Mineral reserves have been estimated based on 90% mining recovery. | ||
(e) | For the purpose of estimating mineral reserves in accordance with NI 43-101, an average uranium price of $47.00 (US) per pound U3O8was used. For the purpose of estimating mineral reserves in accordance with the SEC’s Industry Guide 7 for US reporting purposes, an average uranium price of $70.00 (US) per pound U3O8 was used. Estimated mineral reserves at Cigar Lake are the same at either price. | ||
(f) | Environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other issues are not expected to materially affect the mineral resource and mineral reserve estimates. |
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2. | Key Parameters |
(a) | Grades (percentage U3O8) were obtained from assaying of drill core and checked against radiometric results. In areas of lost core or poor recovery, reliance was placed on radiometric grade determined from the gamma probing. The grade of a sample was estimated from radiometric results if the core recovery was less than 75%. | ||
(b) | Where density was not directly measured for each sample, a correlation between uranium grade and density was applied. | ||
(c) | Mineral reserves at Cigar Lake are based on estimated quantities of uranium recoverable by a tested mining method. | ||
(d) | The key economic parameters underlying the mineral reserves include a conversion from US$ dollars to Cdn$ dollars using a fixed exchange rate of US $1.00 = Cdn $1.22 (reflecting the exchange rate at December 31, 2008). |
3. | Key Methods |
(a) | Mineral reserves were estimated based on the use of the jet boring mining method combined with bulk freezing of the ore body. Jet boring produces an ore slurry with initial processing consisting of crushing and grinding underground, leaching at the McClean Lake JEB mill and yellowcake production split between the McClean Lake JEB mill and Rabbit Lake mill. | ||
(b) | Mining rates are assumed to vary between 80 and 140 tonnes per day and a full mill production rate of 18 million pounds of U3O8 per year based on 98.5% mill recovery. | ||
(c) | The geological interpretation of the ore body outline was done on section and plan views derived from core drill hole information. Mineral resources and mineral reserves were estimated using 2-dimension horizontal block models. Except in the case of the inferred mineral resources, the block size of 15 metres x 6 metres was used. For inferred mineral resources, the block size was increased to 40 metres x 10 metres. | ||
(d) | The geological model does not incorporate the results of the underground freeze holes since the conversion of radioactivity measurements to uranium grade has not yet been confirmed by chemical assays. | ||
(e) | Ordinary kriging served to estimate the grade, thickness and density of the blocks. | ||
(f) | Mineral reserves are defined as the economically mineable part of the indicated and measured resources. Only mineral reserves have demonstrated economic viability. Reported mineral resources do not include those amounts identified as mineral reserves. | ||
(g) | Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred mineral resources will ever be upgraded to a higher category. |
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Phase 2 | This phase involves dewatering the underground mine openings, conducting inspections of the underground workings, providing temporary services and initiating the installation of surface freezing infrastructure if required. | |
Phase 3 | This phase involves securing areas to prevent a ground fall or water inflow including construction of an engineered bulkhead in the vicinity of the water inflow(s) and completing any additional remedial work identified in Phase 2, such as determining if additional reinforcement is required in higher risk areas. This phase may overlap with all or portions of Phases 2 and 4. | |
Phase 4 | This phase involves completing underground rehabilitation which includes re-establishing mine ventilation, power and communication systems, installing pumping capacity, repairing the rock handling facilities and re-establishing the ground freezing program. | |
Phase 5 | This phase involves resuming underground development and construction activities in order to meet the scheduled mine completion and production commencement target dates. (No new target dates have been forecast.) |
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• | Total mill production of 222.9 million pounds of U3O8 based on an overall milling recovery of 98.5%; | |
• | Total mine production of 497 thousand tonnes of ore; | |
• | Average mill feed grade of 20.7 % U3O8; | |
• | Mining rate is variable to achieve a constant production level of U3O8. The average mine production is 100 tonnes per day, but varies annually from 80 to 140 tonnes per day depending on the grade of ore being mined; | |
• | Two year ramp up to full production of 18 million pounds of U3O8 per year (recovered after milling); and | |
• | Mine operating life of 14.8 years. |
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• | The abolition of the stabilization of tax regimes provided by subsoil use contracts. The Resource Use Contract contains a tax stabilization provision. | |
• | The rate of the corporate income tax on aggregate income is 20% during the period January 1, 2009 to January 1, 2010; 17.5% during the period January 1, 2010 to January 1, 2011; and 15% commencing January 1, 2011. Under the Resource Use Contract the income tax rate is 30%. In 2007, Joint Venture Inkai became subject to income tax. | |
• | The Tax Code has replaced the royalty regime with a new kind of tax – the Tax on Production of Useful Minerals (“TPUM”). TPUM must be paid on each type of mineral and certain other substances extracted. Under the prior law, Joint Venture Inkai would pay royalties, calculated on a graduated scale, based on the sales price of production in each year | |
• | Under the Resource Use Contract, a one-time payment of a commercial discovery bonus is payable when confirmation is received of Kazakh-defined recoverable reserves located in a particular licensed area. The bonus is calculated as 0.05% of the value of Kazakh-defined recoverable reserves. Joint Venture Inkai paid a bonus of $14 million (US) in 2008 in relation to reserves at Block 2. The Tax Code establishes the rate of the commercial discovery bonus at 0.1% of the taxable base. | |
• | The Tax Code changes the calculation of excess profits tax from that contained in the Resource Use Contract. |
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Qualified Persons | Properties | ||||
*Alain G. Mainville, Director, Mineral Resources Management, Cameco | Key Lake | ||||
Chuck Edwards, Director Metallurgy, AMEC | |||||
Les Yesnik, General Manager, Key Lake, Cameco | |||||
*Alain G. Mainville, Director, Mineral Resources Management, Cameco | McArthur River | ||||
David Bronkhorst, General Manager, McArthur River, Cameco | |||||
Chuck Edwards, Director Metallurgy, AMEC | |||||
Greg Murdock, Technical Superintendent, McArthur River, Cameco | |||||
*Alain G. Mainville, Director, Mineral Resources Management, Cameco | Cigar Lake | ||||
C. Scott Bishop, Chief Mine Engineer, Cigar Lake, Cameco | |||||
Chuck Edwards, Director Metallurgy, AMEC | |||||
Grant J.H. Goddard, General Manager, Cigar Lake, Cameco | |||||
Doug McIlveen, Chief Geologist, Cigar Lake, Cameco | |||||
* | As director, mineral resources management at Cameco, Mr. Mainville oversees and coordinates the work performed by Cameco qualified persons on the estimation of mineral reserves and resources and reports to management and Cameco’s reserve oversight committee of the board on matters relating thereto. |
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PROVEN | PROBABLE | TOTAL RESERVES | ||||||||||||||||||||||||||||||||||||||||||||||
(100% basis) | (100% basis) | (100% basis) | Cameco’s | Estimated | ||||||||||||||||||||||||||||||||||||||||||||
Grade | Content | Grade | Content | Grade | Content | Share | Metallurgical | Mining | ||||||||||||||||||||||||||||||||||||||||
RESERVES | Tonnes | %U3O8 | (lbs U3O8) | Tonnes | %U3O8 | (lbs U3O8) | Tonnes | %U3O8 | (lbs U3O8) | (lbs U3O8) | Recovery % | Method | ||||||||||||||||||||||||||||||||||||
(tonnes in thousands; pounds in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY | ||||||||||||||||||||||||||||||||||||||||||||||||
Cigar Lake | 497.0 | 20.67 | 226.3 | — | — | — | 497.0 | 20.67 | 226.3 | 113.2 | 98.5 | UG | ||||||||||||||||||||||||||||||||||||
Crow Butte | 780.2 | 0.13 | 2.2 | 703.2 | 0.18 | 2.8 | 1,483.4 | 0.15 | 5.0 | 5.0 | 85.0 | ISR | ||||||||||||||||||||||||||||||||||||
Gas Hills – Peach | — | — | — | 6,859.0 | 0.13 | 19.7 | 6,859.0 | 0.13 | 19.7 | 19.7 | 65.0 | ISR | ||||||||||||||||||||||||||||||||||||
Highland | 246.6 | 0.14 | 0.7 | 410.1 | 0.11 | 1.0 | 656.7 | 0.12 | 1.7 | 1.7 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Inkai | 7,415.0 | 0.08 | 13.7 | 86,080.0 | 0.07 | 128.1 | 93,495.0 | 0.07 | 141.8 | 85.1 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Key Lake | 61.9 | 0.52 | 0.7 | — | — | — | 61.9 | 0.52 | 0.7 | 0.6 | 98.7 | OP | ||||||||||||||||||||||||||||||||||||
McArthur River | 449.2 | 17.18 | 170.1 | 280.0 | 26.33 | 162.5 | 729.2 | 20.69 | 332.6 | 232.2 | 98.7 | UG | ||||||||||||||||||||||||||||||||||||
North Butte/ Brown Ranch | — | — | — | 3,879.1 | 0.10 | 8.5 | 3,879.1 | 0.10 | 8.5 | 8.5 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Rabbit Lake | 35.8 | 0.99 | 0.8 | 776.8 | 0.98 | 16.7 | 812.6 | 0.98 | 17.5 | 17.5 | 96.7 | UG | ||||||||||||||||||||||||||||||||||||
Reynolds Ranch | — | — | — | 757.9 | 0.08 | 1.3 | 757.9 | 0.08 | 1.3 | 1.3 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Ruby Ranch | — | — | — | 2,066.5 | 0.08 | 3.8 | 2,066.5 | 0.08 | 3.8 | 3.8 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Ruth | — | — | — | 855.1 | 0.09 | 1.7 | 855.1 | 0.09 | 1.7 | 1.7 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Smith Ranch | 908.5 | 0.11 | 2.3 | 1,006.6 | 0.11 | 2.4 | 1,915.1 | 0.11 | 4.7 | 4.7 | 80.0 | ISR | ||||||||||||||||||||||||||||||||||||
Total | 10,394.2 | — | 416.8 | 103,674.3 | — | 348.5 | 114,068.5 | — | 765.3 | 495.0 | — | — | ||||||||||||||||||||||||||||||||||||
Notes: | ||
1. | Cameco reports mineral reserves and mineral resources separately. | |
2. | Estimated metallurgical recovery factors must be applied in order to obtain the expected amounts of recovered pounds U3O8. Cameco’s share of U3O8 content is not adjusted for the estimated metallurgical recovery. | |
3. | Mineral reserves incorporate allowances for dilution and mining losses. | |
4. | Mining method: OP – Open Pit; UG — Underground; ISR – In situ recovery. | |
5. | Mineral reserves are estimated using current geological models and current and/or projected operating costs and mine plans. Cameco’s data verification procedures have been employed in connection with the mineral reserve estimations for each property. | |
6. | For the purpose of estimating mineral reserves in accordance with NI 43-101, an average uranium price of $47 (US)/lb U3O8 was used. For the purpose of estimating mineral reserves in accordance with the SEC’s Industry Guide 7, an average uranium price of $70 (US)/lb U3O8 was used. Estimated mineral reserves are identical at either price. | |
7. | The key economic parameters underlying the mineral reserves include an exchange rate of $1.00 US=$1.22 Cdn (reflecting the exchange rate at December 31, 2008). | |
8. | Inkai mineral reserves assume production at an annual rate of 5.2 million pounds of U3O8. Joint Venture Inkai currently has regulatory approval to produce at an annual rate of 2.6 million pounds and an application for regulatory approval to increase annual production to 5.2 million pounds was made in 2005. Cameco is familiar with the statutory, regulatory and procedural framework governing new mining projects in Kazakhstan and, based upon its experience to date, Cameco believes that it is reasonably likely that all permits and approvals required for the construction and operation of its ISR mine at Inkai – including approvals for increased annual production to 5.2 million pounds — will be obtained. However, there can be no certainty that permits or approvals will be forthcoming. Failure to obtain approval for increased annual production at Inkai will require Cameco to re-categorize half of the mineral reserves at Inkai as mineral resources. | |
9. | Environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other issues are not expected to materially affect the above estimates of mineral reserves. | |
10. | Totals may not add up due to rounding. |
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MEASURED | INDICATED | MEASURED AND INDICATED | ||||||||||||||||||||||||||||||||||||||||||
(100% basis) | (100% basis) | (100% basis) | Cameco’s | |||||||||||||||||||||||||||||||||||||||||
Grade | Content | Grade | Content | Grade | Content | Share | Mining | |||||||||||||||||||||||||||||||||||||
RESOURCES | Tonnes | % U3O8 | (lbsU3O8) | Tonnes | % U3O8 | (lbs U3O8) | Tonnes | % U3O8 | (lbs U3O8) | (lbs U3O8) | Method | |||||||||||||||||||||||||||||||||
(tonnes in thousands; pounds in millions) | ||||||||||||||||||||||||||||||||||||||||||||
PROPERTY | ||||||||||||||||||||||||||||||||||||||||||||
Cigar Lake | — | — | — | 61.2 | 4.86 | 6.6 | 61.2 | 4.86 | 6.6 | 3.3 | UG | |||||||||||||||||||||||||||||||||
Crow Butte | 64.4 | 0.23 | 0.3 | 1,316.6 | 0.23 | 6.6 | 1,381.0 | 0.23 | 6.9 | 6.9 | ISR | |||||||||||||||||||||||||||||||||
Dawn Lake | — | — | — | 347.0 | 1.69 | 12.9 | 347.0 | 1.69 | 12.9 | 7.4 | OP&UG | |||||||||||||||||||||||||||||||||
Gas Hills — Peach | 2,015.3 | 0.08 | 3.3 | 1,550.5 | 0.07 | 2.3 | 3,565.8 | 0.07 | 5.6 | 5.6 | ISR | |||||||||||||||||||||||||||||||||
Highland | 866.3 | 0.10 | 1.8 | 47.1 | 0.09 | 0.1 | 913.4 | 0.09 | 1.9 | 1.9 | ISR | |||||||||||||||||||||||||||||||||
Inkai | — | — | — | 10,904.0 | 0.07 | 17.8 | 10,904.0 | 0.07 | 17.8 | 10.7 | ISR | |||||||||||||||||||||||||||||||||
McArthur River | 209.0 | 9.20 | 42.4 | 39.8 | 8.37 | 7.4 | 248.8 | 9.08 | 49.8 | 34.7 | UG | |||||||||||||||||||||||||||||||||
Millennium | — | — | — | 468.9 | 4.53 | 46.8 | 468.9 | 4.53 | 46.8 | 19.6 | UG | |||||||||||||||||||||||||||||||||
North Butte/ Brown Ranch | 995.2 | 0.09 | 1.9 | 4,138.2 | 0.07 | 6.3 | 5,133.4 | 0.07 | 8.2 | 8.2 | ISR | |||||||||||||||||||||||||||||||||
Northwest Unit | — | — | — | 3,952.7 | 0.03 | 2.3 | 3,952.7 | 0.03 | 2.3 | 2.3 | ISR | |||||||||||||||||||||||||||||||||
Rabbit Lake | — | — | — | 276.2 | 0.68 | 4.1 | 276.2 | 0.68 | 4.1 | 4.1 | UG | |||||||||||||||||||||||||||||||||
Reynolds Ranch | 45.7 | 0.13 | 0.1 | 6,395.0 | 0.06 | 8.3 | 6,440.7 | 0.06 | 8.4 | 8.4 | ISR | |||||||||||||||||||||||||||||||||
Ruby Ranch | 40.0 | 0.15 | 0.1 | 108.8 | 0.06 | 0.1 | 148.8 | 0.06 | 0.2 | 0.2 | ISR | |||||||||||||||||||||||||||||||||
Ruth | 100.0 | 0.10 | 0.2 | 125.5 | 0.07 | 0.2 | 225.5 | 0.08 | 0.4 | 0.4 | ISR | |||||||||||||||||||||||||||||||||
Shirley Basin | 89.2 | 0.16 | 0.3 | 1,638.2 | 0.11 | 4.1 | 1,727.4 | 0.12 | 4.4 | 4.4 | ISR | |||||||||||||||||||||||||||||||||
Smith Ranch | 1,615.6 | 0.09 | 3.3 | 2,776.2 | 0.10 | 6.2 | 4,391.8 | 0.10 | 9.5 | 9.5 | ISR | |||||||||||||||||||||||||||||||||
Total | 6,040.7 | — | 53.7 | 34,145.9 | — | 132.1 | 40,186.6 | — | 185.8 | 127.6 | — | |||||||||||||||||||||||||||||||||
Notes: | ||
1. | Cameco reports mineral reserves and mineral resources separately. The amount of reported mineral resources does not include those amounts identified as mineral reserves. | |
2. | Mining method: OP – Open Pit; UG – Underground; ISR – In situ recovery. | |
3. | Mineral resources are estimated using current geological models. Cameco’s normal data verification procedures have been employed in connection with the mineral resource estimations for each property. | |
4. | Totals may not add up due to rounding. | |
5. | Mineral resources that are not mineral reserves do not have demonstrated economic viability. |
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INFERRED RESOURCES | ||||||||||||||||||||
(100% basis) | ||||||||||||||||||||
Grade | Content | Cameco’s Share | Mining | |||||||||||||||||
Tonnes | % U3O8 | (lbs U3O8) | (lbs U3O8) | Method | ||||||||||||||||
(tonnes in thousands; pounds in millions) | ||||||||||||||||||||
PROPERTY | ||||||||||||||||||||
Cigar Lake | 317.0 | 16.92 | 118.2 | 59.1 | UG | |||||||||||||||
Crow Butte | 2,539.3 | 0.11 | 6.3 | 6.3 | ISR | |||||||||||||||
Dawn Lake | — | — | — | — | — | |||||||||||||||
Gas Hills-Peach | 812.9 | 0.06 | 1.1 | 1.1 | ISR | |||||||||||||||
Highland | 108.4 | 0.20 | 0.5 | 0.5 | ISR | |||||||||||||||
Inkai | 254,696.0 | 0.05 | 255.1 | 153.0 | ISR | |||||||||||||||
McArthur River | 642.6 | 9.81 | 139.0 | 97.0 | UG | |||||||||||||||
Millennium | 214.3 | 2.06 | 9.7 | 4.1 | UG | |||||||||||||||
North Butte/ Brown Ranch | 665.1 | 0.07 | 1.0 | 1.0 | ISR | |||||||||||||||
Northwest Unit | 627.0 | 0.04 | 0.5 | 0.5 | ISR | |||||||||||||||
Rabbit Lake | 289.4 | 0.90 | 5.7 | 5.7 | UG | |||||||||||||||
Reynolds Ranch | 5,036.3 | 0.04 | 4.7 | 4.7 | ISR | |||||||||||||||
Ruby Ranch | 55.9 | 0.14 | 0.2 | 0.2 | ISR | |||||||||||||||
Ruth | 210.9 | 0.08 | 0.4 | 0.4 | ISR | |||||||||||||||
Shirley Basin | 508.0 | 0.10 | 1.1 | 1.1 | ISR | |||||||||||||||
Smith Ranch | 598.4 | 0.07 | 0.9 | 0.9 | ISR | |||||||||||||||
Total | 267,321.5 | — | 544.4 | 335.6 | — | |||||||||||||||
Notes: | ||
1. | Cameco reports mineral reserves and mineral resources separately. The amount of reported mineral resources does not include those amounts identified as mineral reserves. | |
2. | Mining method: OP – Open Pit; UG – Underground; ISR – In situ recovery. | |
3. | Mineral resources are estimated using current geological models. Cameco’s normal data verification procedures have been employed in connection with the mineral resource estimations for each property. | |
4. | Totals may not add up due to rounding. | |
5. | Mineral resources that are not mineral reserves do not have demonstrated economic viability | |
6. | Inferred resources have a great amount of uncertainty as to their existence and their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. |
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(in thousands of pounds U3O8)
2008 | 2008 | |||||||||||||||
December 31 2007 | Throughput1 | Addition (Deletion)2 | December 31 2008 | |||||||||||||
Reserves — Proven | ||||||||||||||||
Cigar Lake | 113,222 | 0 | — | 113,222 | ||||||||||||
Crow Butte | 5,910 | (697 | ) | (3,011 | ) | 2,202 | ||||||||||
Highland | 1,082 | (879 | ) | 531 | 734 | |||||||||||
Inkai | 8,245 | (52 | ) | — | 8,193 | |||||||||||
Key Lake | 590 | 0 | — | 590 | ||||||||||||
McArthur River | 130,230 | (11,539 | ) | 61 | 118,752 | |||||||||||
Rabbit Lake | 515 | 0 | 265 | 780 | ||||||||||||
Smith Ranch | 1,372 | (530 | ) | 1,448 | 2,290 | |||||||||||
Total Proven Reserves | 261,166 | (13,697 | ) | (706 | ) | 246,763 | ||||||||||
Reserves – Probable | ||||||||||||||||
Crow Butte | 0 | 0 | 2,837 | 2,837 | ||||||||||||
Gas Hills – Peach | 19,684 | 0 | — | 19,684 | ||||||||||||
Highland | 1,399 | 0 | (400 | ) | 999 | |||||||||||
Inkai | 77,260 | (386 | ) | — | 76,874 | |||||||||||
McArthur River | 113,442 | 0 | — | 113,442 | ||||||||||||
North Butte/Brown Ranch | 8,524 | 0 | — | 8,524 | ||||||||||||
Rabbit Lake | 15,697 | (3,656 | ) | 4,704 | 16,745 | |||||||||||
Reynolds Ranch | 0 | 0 | 1,303 | 1,303 | ||||||||||||
Ruby Ranch | 5,462 | 0 | (1,655 | ) | 3,807 | |||||||||||
Ruth | 1,689 | 0 | — | 1,689 | ||||||||||||
Smith Ranch | 8,099 | (112 | ) | (5,588 | ) | 2,399 | ||||||||||
Total Probable Reserves | 251,256 | (4,154 | ) | 1,201 | 248,303 | |||||||||||
Total Reserves | 512,422 | (17,851 | ) | 495 | 495,066 | |||||||||||
Notes: | ||
1 | Corresponds to millfeed. The discrepancy between the 2008 millfeed and Cameco’s share of 2008 pounds U3O8 produced is due to mill recovery, mill inventory and the processing of low-grade material. | |
2 | Changes in reserves or resources, as applicable, include reassessment of geological data, results of information provided by mining and milling, and subsequent re-classification of reserves or resources, as applicable. |
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• | At McArthur River, 19.8 million pounds of U3O8 were added to the measured resources due to re-interpretation of zone 4 south. Inferred resources increased by 30.9 million pounds due to the remodelling of zones A and B. | |
• | At Rabbit Lake, following underground development, 4.1 million pounds of measured and indicated resources were converted to mineral reserves. | |
• | At Smith Ranch and Highland, measured and indicated resources increased by 4.6 million pounds due to re-evaluation of mine unit 10 and reclassification from mineral reserves to resources where production patterns are not yet designed. |
(in thousands of pounds U3O8)
2008 | ||||||||||||
December 31, 2007 | Addition (Deletion)1 | December 31, 2008 | ||||||||||
Resources – Measured | ||||||||||||
Crow Butte | 322 | — | 322 | |||||||||
Gas Hills – Peach | 3,346 | — | 3,346 | |||||||||
Highland | 1,663 | 163 | 1,826 | |||||||||
McArthur River | 9,827 | 19,751 | 29,578 | |||||||||
North Butte/Brown Ranch | 1,857 | — | 1,857 | |||||||||
Rabbit Lake | 2,224 | (2,224 | ) | 0 | ||||||||
Reynolds Ranch | 4,493 | (4,365 | ) | 128 | ||||||||
Ruby Ranch | 585 | (457 | ) | 128 | ||||||||
Ruth | 216 | — | 216 | |||||||||
Shirley Basin | 304 | — | 304 | |||||||||
Smith Ranch | 138 | 3,200 | 3,338 | |||||||||
Total Measured Resources | 24,975 | 16,068 | 41,043 | |||||||||
Resources-Indicated | ||||||||||||
Cigar Lake | 3,282 | — | 3,282 | |||||||||
Crow Butte | 8,244 | (1,689 | ) | 6,555 | ||||||||
Dawn Lake | 7,436 | — | 7,436 | |||||||||
Gas Hills – Peach | 2,310 | — | 2,310 | |||||||||
Highland | 92 | — | 92 | |||||||||
Inkai | 10,698 | — | 10,698 | |||||||||
McArthur River | 5,136 | — | 5,136 | |||||||||
Millennium | 19,643 | — | 19,643 | |||||||||
North Butte/Brown Ranch | 6,303 | — | 6,303 | |||||||||
Northwest Unit | 2,341 | — | 2,341 | |||||||||
Rabbit Lake | 6,050 | (1,918 | ) | 4,132 | ||||||||
Reynolds Ranch | 6,960 | 1,388 | 8,348 | |||||||||
Ruby Ranch | 143 | — | 143 | |||||||||
Ruth | 192 | — | 192 | |||||||||
Shirley Basin | 4,085 | — | 4,085 | |||||||||
Smith Ranch | 4,984 | 1,197 | 6,181 | |||||||||
Total Indicated Resources | 87,899 | (1,022 | ) | 86,877 | ||||||||
Total Measured & Indicated | 112,874 | 15,046 | 127,920 | |||||||||
Note: | ||
1 | Changes in reserves or resources, as applicable, include reassessment of geological data, results of information provided by mining and milling, and subsequent re-classification of reserves or resources, as applicable. |
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(in thousands of pounds U3O8) (Continued)
2008 | ||||||||||||
December 31, 2007 | Addition (Deletion)1 | December 31, 2008 | ||||||||||
Resources – Inferred | ||||||||||||
Cigar Lake | 59,105 | — | 59,105 | |||||||||
Crow Butte | 8,654 | (2,307 | ) | 6,347 | ||||||||
Gas Hills – Peach | 845 | 245 | 1,090 | |||||||||
Highland | 1,977 | (1,497 | ) | 480 | ||||||||
Inkai | 153,049 | — | 153,049 | |||||||||
McArthur River | 66,151 | 30,887 | 97,038 | |||||||||
Millennium | 4,089 | — | 4,089 | |||||||||
North Butte/Brown Ranch | 966 | — | 966 | |||||||||
Northwest Unit | 508 | — | 508 | |||||||||
Rabbit Lake | 6,139 | (422 | ) | 5,717 | ||||||||
Reynolds Ranch | 4,912 | (239 | ) | 4,673 | ||||||||
Ruby Ranch | 184 | (17 | ) | 167 | ||||||||
Ruth | 365 | — | 365 | |||||||||
Shirley Basin | 1,132 | — | 1,132 | |||||||||
Smith Ranch | 896 | 3 | 899 | |||||||||
Total Inferred Resources | 308,972 | 26,653 | 335,625 | |||||||||
Note: | ||
1 | Changes in reserves or resources, as applicable, include reassessment of geological data, results of information provided by mining and milling, and subsequent re-classification of reserves or resources, as applicable. |
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Canadian Dollar | ||||||||
Royalty Rate | Sales Price in Excess of: | |||||||
6 | % | $ | 17.16 | |||||
Plus | 4 | % | $ | 25.74 | ||||
Plus | 5 | % | $ | 34.33 |
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• | used nuclear fuel bundles (“high-level radioactive waste”); |
• | other material that has come in close contact with reactors but is less radioactive than used nuclear fuel bundles, such as ion exchange resins and other structural material and reactor equipment, including pressure tubes (“intermediate-level radioactive waste”); and |
• | material used in connection with station operation that is not highly radioactive (“low-level radioactive waste”). |
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• | Two parallel zones of alteration and gold mineralization strike north-easterly and dip to the southeast at 45° to 60°, separated by 30 to 50 metres of barren or poorly mineralized rock. The South Zone, with a length of 700 to 1,000 metres and a horizontal width of 40 to 80 metres, is reasonably well mineralized throughout its entire length, with an average gold grade of 3 to 4 grams of gold per tonne. The North Zone, somewhat more extensive along strike but with a similar width, has lesser gold grade continuity and splits into a number of individual lenses that have average gold grades in the range of 2 to 3.5 grams of gold per tonne. |
• | At their north-eastern end, the North and South Zones coalesce into the Stockwork Zone, which has higher gold grades and good grade continuity. Its dimensions in plan are 400 to 500 metres long by 50 to 200 metres wide, with an average gold grade of 5 to 6 grams of gold per tonne, depending on the cut-off grade. The Stockwork Zone plunges north-easterly at 40° to 50°, and diminishes in size below elevation 3,900 metres. Its down-plunge continuation below elevation 3,900 is known as the NB Zone. Geographically, the Stockwork Zone is located closest to the pit highwall and thus has a larger effect on the overall strip ratio of the pit. |
• | In the south-western part of the deposit, the SB Zone (structurally a part of the South Zone) tops out at an elevation of 3,900 metres. Drilling to date has defined the SB Zone along strike for 700 metres, for a vertical extent of 650 metres, and a width that ranges from 6 to 75 metres, overall somewhat smaller than the Stockwork Zone, but of excellent grade, in the range of 5 grams of gold per tonne. The SB Zone gave rise to a large increase in the mineral reserves and resources (including inferred resources) of the Kumtor deposit in 2005 and 2006. |
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Cutoff Grade | Tonnes | Gold Grade | Contained Gold | |||||||||||||
(thousands) | (g/t) | (thousands of ounces) | ||||||||||||||
Proven | Stockpiles | Greater than 1.0 g/t | 3,412 | 1.4 | 150 | |||||||||||
Probable (Central Pit) | In situ | Greater than 1.0 g/t | 29,173 | 3.8 | 3,564 | |||||||||||
Probable (Sarytor Pit) | In situ | Greater than 1.0 g/t | 2,835 | 3.4 | 311 | |||||||||||
Total Probable Mineral Reserves | 32,008 | 3.8 | 3,875 | |||||||||||||
Total Proven and Probable Mineral Reserves | 35,420 | 3.5 | 4,025 | |||||||||||||
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Cutoff Grade | Tonnes | Gold Grade | Contained Gold | |||||||||||||
(thousands) | (g/t) | (thousands of ounces) | ||||||||||||||
Measured (Kumtor Central Deposit) | Open Pit (> 1.0 g/t) | 18,966 | 2.8 | 1,689 | ||||||||||||
Indicated (Kumtor Central Deposit) | Open Pit (> 1.0 g/t) | 6,468 | 2.8 | 578 | ||||||||||||
Indicated (Kumtor Sarytor Deposit) | Open Pit (> 1.0 g/t) | 5,846 | 2.1 | 386 | ||||||||||||
Indicated (Kumtor Southwest Deposit) | Open Pit (> 1.0 g/t) | 2,675 | 2.5 | 212 | ||||||||||||
Total Measured and Indicated Mineral Resources | 33,955 | 2.6 | 2,865 | |||||||||||||
Inferred (Central Deposit) | Open Pit (> 1.0 g/t) | 80 | 2.0 | 5 | ||||||||||||
Inferred Stock Work Zone Underground | Underground (> 7.0 g/t) | 2,089 | 11.3 | 757 | ||||||||||||
Inferred SB Zone Underground | Underground (> 7.0 g/t) | 2,671 | 18.6 | 1,593 | ||||||||||||
Inferred (Kumtor Sarytor Zone) | Open Pit (> 1.0 g/t) | 520 | 1.7 | 29 | ||||||||||||
Total Inferred Mineral Resources | 5,360 | 13.8 | 2,384 | |||||||||||||
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• | grades and recoveries at Kumtor will increase through the fourth quarter of 2009 in accordance with the Kumtor mine plan and the block model; | ||
• | the planned 2-week shutdown of the Kumtor mill in the third quarter of 2009 to change the ball mill ring gear and SAG mill liner is successfully completed on time; | ||
• | the dewatering and depressurization programs at Kumtor continues to function properly and the water management system works as planned; | ||
• | prices for reagents and other consumables will remain consistent with Centerra’s estimates; | ||
• | that the Sarytor mining license is reinstated in 2009; | ||
• | that Centerra receives all necessary permits and authorizations, including environmental permits and authorizations from governmental authorities of the Kyrgyz Republic, in a timely fashion and on acceptable terms to maintain scheduled production; and | ||
• | the Kumtor mine’s remaining six year mine life does not take into account any underground development or mining of the SB Zone, which lies below the current pit design. A decision to commence mining SB Zone resources will be considered as further resource delineation drilling results become available in 2010. SeeCenterra – Kumtor Mine – Kumtor Reserve and Resource Estimates – SB Zone Underground. |
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• | Effluent treatment plant. | ||
• | Tailings management facility. | ||
• | Mill site and mine waste dumps runoff effluents. | ||
• | Acid generation potential testing and recommendations. | ||
• | Dust control. | ||
• | Hazardous materials handling. | ||
• | Environment impact monitoring. | ||
• | Planning for site decommissioning and rehabilitation. | ||
• | Potable water treatment system. | ||
• | Sewage operation. | ||
• | Landfill operation and inventory. |
• | An EMS audit was conducted by the Quality Management Centre (QMC)/Pragma/USAID (Almaty, Kazakhstan) in November 2004 to confirm conformity with ISO 14001:1996. Based on the audit of the five elements selected, it was demonstrated that the EMS had been implemented and maintained. | ||
• | An assessment of the tailings management system was undertaken by an independent consultant in 2005 using Mining Association of Canada (“MAC”) guidelines. The results of the audit showed that KOC conformed to the MAC guidelines and that the KOC tailings management facility is being managed comprehensively and effectively, but the audit identified a few items where improvements are possible. | ||
• | In November 2006, KOC underwent a systems assessment by independent auditors that covered environmental as well as health and safety issues. The assessment found that the general condition of the mine and health, safety and environmental awareness of the site personnel were excellent, and that the site and buildings were |
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neat, with materials and wastes well organized. No evidence of spills or environmental damage was observed during the assessment. The assessment outlined areas of particular strength as well as opportunities for improvement. | |||
• | In September 2008, independent audits were conducted of the camp’s kitchen/food handling, and of the site’s storage, transportation and usage of explosives. The assessments outlined areas of strength and provided recommendations for improvement, the majority of which have been incorporated. |
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(as of December 31, 2008)
(Tonnes and ounces in thousands)(11)(12) | ||||||||||||||||||||||||||||||||||||||||||||
Reserves(1) | Proven (100% Basis) | Probable (100% Basis) | Total Proven and Probable Mineral Reserves | |||||||||||||||||||||||||||||||||||||||||
Cameco’s | ||||||||||||||||||||||||||||||||||||||||||||
Grade | Contained | Grade | Contained | Grade | Contained | Equity | Mining | |||||||||||||||||||||||||||||||||||||
Property | Tonnes | (g/t) | Gold (oz) | Tonnes | (g/t) | Gold (oz) | Tonnes | (g/t) | Gold (oz) | (oz)(3) | Method(4) | |||||||||||||||||||||||||||||||||
Kumtor(1)(6)(13) | 3,412 | 1.4 | 150 | 32,008 | 3.8 | 3,875 | 35,420 | 3.5 | 4,025 | 2,120 | OP | |||||||||||||||||||||||||||||||||
Boroo(8) | 9,015 | 0.8 | 232 | 9,440 | 1.8 | 546 | 18,455 | 1.3 | 778 | 410 | OP | |||||||||||||||||||||||||||||||||
Gatsuurt(1) | — | — | — | 9,101 | 3.4 | 1,005 | 9,101 | 3.4 | 1,005 | 529 | OP | |||||||||||||||||||||||||||||||||
Total | 12,427 | 382 | 50,549 | 5,426 | 62,976 | 5,808 | 3,059 |
(Tonnes and ounces in thousands)(11)(12) | ||||||||||||||||||||||||||||||||||||||||||||
Measured and Indicated Resources(2) | Measured | Indicated | Total Measured and Indicated Mineral Resources | |||||||||||||||||||||||||||||||||||||||||
Cameco’s | ||||||||||||||||||||||||||||||||||||||||||||
Grade | Contained | Grade | Contained | Grade | Contained | Equity | Mining | |||||||||||||||||||||||||||||||||||||
Property | Tonnes | (g/t) | Gold (oz) | Tonnes | (g/t) | Gold (oz) | Tonnes | (g/t) | Gold (oz) | (oz)(3) | Method(4) | |||||||||||||||||||||||||||||||||
Kumtor(5)(6)(13) | 18,966 | 2.8 | 1,689 | 14,989 | 2.4 | 1,176 | 33,955 | 2.6 | 2,865 | 1,509 | OP | |||||||||||||||||||||||||||||||||
Boroo(5)(8) | 452 | 2.2 | 32 | 4,464 | 1.5 | 210 | 4,916 | 1.5 | 242 | 127 | OP | |||||||||||||||||||||||||||||||||
Gatsuurt(9) | — | — | — | 6,238 | 3.0 | 607 | 6,238 | 3.0 | 607 | 320 | OP | |||||||||||||||||||||||||||||||||
REN(10) | — | — | — | 2,991 | 12.7 | 1,220 | 2,991 | 12.7 | 1,220 | 408 | UG | |||||||||||||||||||||||||||||||||
Total | 19,418 | 1,721 | 28,682 | 3,213 | 48,100 | 4,934 | 2,364 |
(Tonnes and ounces in thousands)(11)(12)(14) | ||||||||||||||||||||
Inferred Mineral Resources(2) | Inferred | |||||||||||||||||||
Grade | Contained | Cameco’s | Mining | |||||||||||||||||
Property | Tonnes | (g/t) | Gold (oz) | Equity (oz)(3) | Method(4) | |||||||||||||||
Kumtor(5)(6)(13) | 600 | 1.8 | 34 | 17 | OP | |||||||||||||||
Kumtor Stockwork Underground(7) | 2,089 | 11.3 | 757 | 399 | UG | |||||||||||||||
Kumtor SB Underground(7) | 2,671 | 18.6 | 1,593 | 839 | UG | |||||||||||||||
Boroo(5)(8) | 7,323 | 1.0 | 233 | 123 | OP | |||||||||||||||
Gatsuurt(9) | 2,437 | 3.3 | 256 | 135 | OP | |||||||||||||||
REN(10) | 835 | 16.1 | 432 | 144 | UG | |||||||||||||||
Total | 15,995 | 3,305 | 1,657 |
Notes: | ||
(1) | The mineral reserves have been estimated based on a gold price of $675 (US) per ounce. | |
(2) | Mineral resources are in addition to reserves. Mineral resources do not have demonstrated economic viability. | |
(3) | Cameco’s equity interest amounts to 52.7% of Centerra’s equity interest of reserves and resources for the properties. Centerra’s equity interests for the properties are: Kumtor 100%, Gatsuurt 100%, Boroo 100% and REN 63%. | |
(4) | “OP” means open pit and “UG” means underground. | |
(5) | Open pit mineral resources occur outside the current ultimate pits which have been designed using a gold price of $675 (US) per ounce. | |
(6) | The open pit mineral reserves and resources at Kumtor are estimated based on a cutoff grade of 1.0 gram of gold per tonne and includes the Central Pit and the Southwest and Sarytor deposits. | |
(7) | Underground mineral resources occur below the Central pit and are estimated based on a cutoff grade of 7.0 grams of gold per tonne. | |
(8) | The mineral reserves and resources at Boroo are estimated based on 0.5 gram of gold per tonne cutoff grade. | |
(9) | The mineral reserves and resources at Gatsuurt are estimated using either a 1.2 or 1.8 grams of gold per tonne cutoff grade depending on process method and including the Main Zone and the Central Zone deposits. | |
(10) | The mineral resources at REN are estimated based on a cutoff grade of 8.0 grams of gold per tonne. | |
(11) | A conversion factor of 31.10348 grams per ounce of gold is used in the mineral reserve and resource estimates. | |
(12) | Numbers may not add up due to rounding. | |
(13) | Kumtor mineral reserves and resources include Sarytor reserves of 2.8 million tonnes grading 3.4 g/t for 311,000 contained ounces, Sarytor and Southwest indicated resources of 8.5 million tonnes grading 2.2 g/t for 598,000 contained ounces and Sarytor inferred resources of 0.52 million tonnes grading 1.7 g/t for 29,000 contained ounces. The mining licenses for these deposits were invalidated by the Bishkek Inter District Court on June 17, 2008. That order is under appeal by Centerra. Cameco believes that Centerra’s current negotiations with the Kyrgyz Republic are reasonably likely to lead to the resolution of outstanding issues, and to the reinstatement of the Sarytor and Southwest licenses. Cameco therefore continues to include the Sarytor and Southwest reserves and resources in this statement. SeeCenterra Legal Proceedings. | |
(14) | Inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or part of the inferred mineral resources will ever be upgraded to a higher category. |
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(in troy ounces of contained gold)
2008 Addition | ||||||||||||||||
December 31, 2007 | 2008 Throughput2 | (Deletion)3 | December 31, 2008 | |||||||||||||
Reserves — Proven | ||||||||||||||||
Boroo | 153,000 | (160,000 | ) | 129,000 | 122,000 | |||||||||||
Kumtor4 | 643,000 | (367,000 | ) | (197,000 | ) | 79,000 | ||||||||||
Total Proven Reserves | 796,000 | (527,000 | ) | (68,000 | ) | 201,000 | ||||||||||
Reserves — Probable | ||||||||||||||||
Boroo | 399,000 | (111,000 | ) | 288,000 | ||||||||||||
Gatsuurt | 529,000 | — | 529,000 | |||||||||||||
Kumtor4 | 1,939,000 | 102,000 | 2,041,000 | |||||||||||||
Total Probable Reserves | 2,867,000 | (9,000 | ) | 2,858,000 | ||||||||||||
Total Proven and Probable Reserves | 3,663,000 | (527,000 | ) | (77,000 | ) | 3,059,000 | ||||||||||
Resources — Measured | ||||||||||||||||
Boroo | 15,000 | 2,000 | 17,000 | |||||||||||||
Kumtor5 | 1,017,000 | (128,000 | ) | 889,000 | ||||||||||||
Total Measured Resources | 1,032,000 | (126,000 | ) | 906,000 | ||||||||||||
Resources — Indicated | ||||||||||||||||
Boroo | 118,000 | (7,000 | ) | 111,000 | ||||||||||||
Gatsuurt6 | 320,000 | — | 320,000 | |||||||||||||
Kumtor5 | 917,000 | (298,000 | ) | 619,000 | ||||||||||||
REN | 404,000 | 4,000 | 408,000 | |||||||||||||
Total Indicated Resources | 1,759,000 | (301,000 | ) | 1,458,000 | ||||||||||||
Total Measured and Indicated Resources | 2,791,000 | (427,000 | ) | 2,364,000 | ||||||||||||
Resources — Inferred | ||||||||||||||||
Boroo | 126,000 | (3,000 | ) | 123,000 | ||||||||||||
Gatsuurt6 | 135,000 | — | 135,000 | |||||||||||||
Kumtor5 | 971,000 | 284,000 | 1,255,000 | |||||||||||||
REN | 143,000 | 1,000 | 144,000 | |||||||||||||
Total Inferred Resources | 1,375,000 | 282,000 | 1,657,000 | |||||||||||||
Notes: | ||
1 | Cameco reports mineral reserves and mineral resources separately. The amount of reported mineral resources does not include those amounts identified as mineral reserves. Mineral resources have no demonstrated economic viability. | |
2 | Corresponds to mill feed and heap leach pad feed. The discrepancy between the 2008 throughput and Cameco’s share of 2008 ounces produced is due to gold recovery in the mill and heap leach pad. | |
3 | Changes in mineral reserves or resources, as applicable, are attributed to information provided by drilling and subsequent reclassification of mineral reserves or resources, an increase in the gold price, changes in pit designs, reconciliation between the mill and the resource model, and changes to operating costs. | |
4 | Kumtor mineral reserves include the Central pit and the Southwest and Sarytor satellite deposits. | |
5 | Kumtor mineral resources include the Central pit, the SB underground, and the Southwest and Sarytor satellite deposits. | |
6 | Gatsuurt mineral reserves and resources include the Central Zone and Main Zone deposits. | |
7 | Numbers may not add up due to rounding. |
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• | each holder of Centerra common shares will be entitled to exchange its shares for Centerra Class A non-voting shares; | ||
• | Kyrgyzaltyn has irrevocably elected to exchange all of its common shares for Class A non-voting shares and it is expected that no other shareholders would elect to do this; | ||
• | the holders of Centerra common shares (but not Class A non-voting shares) will be entitled to acquire additional common shares for $0.01(US) per share, with the aggregate number of common shares available to be determined by a formula designed to provide for the holders of Class A non-voting shares to be diluted by an amount that approximates the proceeds received under the political risk insurance; and | ||
• | following the exercise of the rights to acquire additional shares by Centerra common shareholders, the Class A non-voting shares will convert back into Centerra common shares. |
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1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||
Spot | ||||||||||||||||||||||||||||||||||||||||
High | 10.90 | 9.40 | 9.50 | 10.20 | 14.40 | 20.50 | 36.50 | 72.00 | 135.00 | 75.00 | ||||||||||||||||||||||||||||||
Low | 9.60 | 7.10 | 7.20 | 9.70 | 10.10 | 15.60 | 21.20 | 37.50 | 75.00 | 46.00 |
(1) | Source: The Nuexco Exchange Value, published by TradeTech. Spot prices reflect the spot price for all uranium other than of CIS origin. |
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1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||
Spot | ||||||||||||||||||||||||||||||||||||||||
High | 3.85 | 3.25 | 5.25 | 5.25 | 6.50 | 9.00 | 12.00 | 11.75 | 11.75 | 9.00 | ||||||||||||||||||||||||||||||
Low | 2.55 | 2.35 | 3.65 | 5.05 | 4.90 | 6.80 | 11.00 | 11.00 | 8.00 | 8.00 |
(1) | Source: The Nuexco Conversion Value, published by TradeTech. The conversion value over this period of time is for the provision of conversion services delivered in North America. |
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• | the cash flows generated by operations, investment activities and financing activities; |
• | the level of taxation, particularly corporate profits and withholding taxes, in the jurisdiction in which they operate; and |
• | the introduction of exchange controls and repatriation restrictions or the availability of hard currency to be repatriated. |
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(i) | an individual, other than a Canadian citizen, who is not ordinarily resident in Canada; | |
(ii) | a corporation incorporated, formed or otherwise organized outside Canada; | |
(iii) | a foreign government or an agency thereof; | |
(iv) | a corporation that is controlled by non-residents, directly or indirectly, as defined in any of (i) to (iii) above; | |
(v) | a trust: |
(A) | established by a non-resident as defined in any of (ii) to (iv) above, other than a trust for the administration of a pension fund for the benefit of individuals a majority of whom are residents; or | ||
(B) | in which non-residents as defined in any of (i) to (iv) above have more than fifty percent of the beneficial interest; or |
(vi) | a corporation that is controlled by a trust described in (v) above; |
(i) | a security currently convertible into such a share or other security; and | |
(ii) | currently exercisable options and rights to acquire such a share or other security or such convertible share or other security; |
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(i) | one is a corporation of which the other is an officer or director; | |
(ii) | one is a corporation that is controlled by the other or by a group of persons of which the other is a member; | |
(iii) | one is a partnership of which the other is a partner; | |
(iv) | one is a trust of which the other is a trustee; | |
(v) | both are corporations controlled by the same person; | |
(vi) | both are members of a voting trust or parties to an arrangement that relates to voting securities of Cameco; or | |
(vii) | both are at the same time associates, within the meaning of any of (i) to (vi) above, of the same person; provided that: |
(A) | if a resident who, but for this paragraph, would be an associate of a non-resident submits to Cameco a statutory declaration stating that no voting securities are held, directly or indirectly, for a non-resident, that resident and non-resident are not associates of each other, provided the statutory declaration is not false; | ||
(B) | two corporations are not associates pursuant to (vii) above by reason only that each is an associate of the same person pursuant to (i) above; | ||
(C) | if any person appears to Cameco to hold voting securities to which are attached not more than the lesser of four one-hundredths of one percent of the votes that may ordinarily be cast to elect directors of Cameco and 10,000 such votes, that person is not an associate of any other person and no other person is an associate of that person in relation to those voting securities; |
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Security | DBRS(1) | S&P(2) | ||
Commercial Paper | R-1 (low) | A-1 (low)(3) | ||
Senior Unsecured Debentures | A (low) | BBB+ |
(1) | Published as of June 26, 2008 | |
(2) | Published as of October 31, 2008 | |
(3) | A-1 (low) is the Canadian National Scale Rating while the Global Scale Rating is A-2. |
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2008 | 2007 | 2006 | ||||||||||
Cash dividends declared per common share | $ | 0.24 | $ | 0.20 | $ | 0.16 |
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TSX | ||||||||||||
2008 | High ($) | Low ($) | Volume | |||||||||
January | 41.69 | 32.00 | 51,627,442 | |||||||||
February | 39.63 | 31.39 | 45,733,118 | |||||||||
March | 40.13 | 32.28 | 37,277,827 | |||||||||
April | 39.26 | 33.39 | 31,924,792 | |||||||||
May | 43.74 | 34.36 | 35,587,465 | |||||||||
June | 44.38 | 37.07 | 33,532,707 | |||||||||
July | 44.20 | 35.30 | 33,706,764 | |||||||||
August | 37.15 | 29.25 | 28,250,435 | |||||||||
September | 31.54 | 21.21 | 53,417,388 | |||||||||
October | 23.96 | 14.33 | 57,049,737 | |||||||||
November | 22.46 | 15.15 | 30,957,976 | |||||||||
December | 22.95 | 17.55 | 43,641,376 |
Name, Office held in Corporation and | ||||||
Municipality of Residence | Principal Occupation or Employment | Director Since(1) | ||||
JOHN S. AUSTON(2, 6) | Geologist; Corporate Director, 2000 to present; prior: | 1999 | ||||
West Vancouver, British Columbia, Canada | President, Director and Chief Executive Officer, Ashton Mining of Canada Inc. 1996-2000. | |||||
JOHN H. CLAPPISON(2, 3, 4) Toronto, Ontario, Canada | Corporate Director, commencing in 2006; prior: 1990 to December 2005, managing partner of the Toronto office of PricewaterhouseCoopers LLP. | 2006 | ||||
JOE F. COLVIN(4, 6) Kiawah Island, South Carolina, U.S.A. | Corporate Director and President Emeritus of Nuclear Energy Institute, February 16, 2005 to present; prior: President and Chief Executive Officer, Nuclear Energy Institute 1996 to February 15, 2005. | 1999 | ||||
HARRY D. COOK(2, 4, 6) La Ronge, Saskatchewan, Canada | Corporate Director, March 31, 2005 to present; prior: Chief, Lac La Ronge Indian Band from 1987 until March 31, 2005. | 1992 | ||||
JAMES R. CURTISS(4, 5) Brookeville, Maryland, U.S.A. | Corporate Director, April 1, 2008 to present; prior: Lawyer, Partner, Winston & Strawn, 1993 to March 31, 2008 | 1994 | ||||
GEORGE S. DEMBROSKI(5, 6) Toronto, Ontario, Canada | Corporate Director, 1998 to present; prior: Vice-Chairman and Director, RBC Dominion Securities Limited (investment dealer) 1981-1998. | 1996 |
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Name, Office held in Corporation and | ||||||
Municipality of Residence | Principal Occupation or Employment | Director Since(1) | ||||
GERALD W. GRANDEY President and Chief Executive Officer Saskatoon, Saskatchewan, Canada | Assumed current position 2003; prior: President 2000-2002; Executive Vice-President 1997-2000. | 2000 | ||||
NANCY E. HOPKINS, Q.C.(3, 6) Saskatoon, Saskatchewan, Canada | Lawyer, Partner, McDougall Gauley, 1984 to present. Effective January 2001 Gauley & Company merged with McDougall Ready to form McDougall Gauley. | 1992 | ||||
OYVIND HUSHOVD(2, 3, 5) Kristiansand S, Norway | Corporate Director, June 1, 2005 to present; prior: Chairman and Chief Executive Officer of Gabriel Resources Ltd., May 2003 to May 31, 2005; and President and Chief Executive Officer of Falconbridge Ltd. 1996 to 2002. | 2003 | ||||
J.W. GEORGE IVANY(3, 5, 6) Kelowna, British Columbia, Canada | Corporate Director, 1999 to present; prior: President and Vice-Chancellor, University of Saskatchewan 1989-1999. | 1999 | ||||
A. ANNE McLELLAN(4, 5, 6) Edmonton, Alberta, Canada | Lawyer, Counsel, Bennett Jones LLP June, 2006 to present; prior: 1993 to 2006, served as a cabinet minister in various portfolios with the Canadian government, most recently as Deputy Prime Minister of Canada from 2003 to 2006. | 2006 | ||||
A. NEIL McMILLAN(2, 3, 4) Saskatoon, Saskatchewan, Canada | President and Chief Executive Officer, Claude Resources Inc. March 1, 2004 to present; prior: 1996 to March 1, 2004 President of Claude Resources Inc. | 2001 | ||||
ROBERT W. PETERSON(3, 4, 5) Regina, Saskatchewan, Canada | Member of the Senate of Canada 2005 to present and President and Chief Operating Officer Denro Holdings Ltd. 1994 to present. | 1994 | ||||
VICTOR J. ZALESCHUK(2, 5, 6) Calgary, Alberta, Canada | Corporate Director, November 2001 to present; prior: President and Chief Executive Officer, Nexen Inc. (formerly Canadian Occidental Petroleum Ltd.) from June 1, 1997 to June 1, 2001. | 2001 |
Notes: | ||
(1) | Each director will hold office until the next annual meeting unless such director’s office is earlier vacated in accordance with the corporate law requirements applicable to the Company from time to time. | |
(2) | Member of the reserves oversight committee. | |
(3) | Member of the audit committee. | |
(4) | Member of the safety, health and environment committee. | |
(5) | Member of the human resources and compensation committee. | |
(6) | Member of the nominating, corporate governance and risk committee. |
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Name, Office held in Corporation and Municipality | Principal Occupation or Employment for Past Five | |
of Residence | Years | |
VICTOR J. ZALESCHUK Chair Calgary, Alberta, Canada | Corporate Director, November 2001 to present; prior: President and Chief Executive Officer, Nexen Inc. (formerly Canadian Occidental Petroleum Ltd.) from June 1997 to June 2001. | |
GERALD W. GRANDEY President and Chief Executive Officer Saskatoon, Saskatchewan, Canada | Assumed current position January 2003; prior: President, 2000-2002; Executive Vice-President 1997-2000. | |
TIMOTHY S. GITZEL Senior Vice-President and Chief Operating Officer Saskatoon, Saskatchewan, Canada | Assumed current position January 2007; prior: Executive Vice-President, mining business unit, AREVA June 2004 to January 2007; President and Chief Executive Officer, Cogema Resources Inc. September 2001 to June 2004. | |
GEORGE B. ASSIE Senior Vice-President, Marketing and Business Development Saskatoon, Saskatchewan, Canada | Assumed current position January 2003; prior: President Cameco Inc., Eden Prairie, Minnesota 1999 - 2002. | |
O. KIM GOHEEN Senior Vice-President and Chief Financial Officer Saskatoon, Saskatchewan, Canada | Assumed current position August 2004; prior Vice-President & Treasurer May 1999 to August 2004. | |
RITA M. MIRWALD Senior Vice-President, Corporate Services Saskatoon, Saskatchewan, Canada | Assumed current position April 1997. | |
GARY M.S. CHAD, Q.C. Senior Vice-President, Governance, Law and Corporate Secretary Saskatoon, Saskatchewan, Canada | Assumed current position January 2000; prior: Senior General Counsel and Secretary 1990-1999. |
(a) | was the subject of a cease trade or similar order or an order that denied that company access to any statutory exemptions for a period exceeding 30 consecutive days; |
(b) | was subject to an event that resulted, after the director or executive officer ceased to be a director or executive officer, in the company being the subject of a cease trade or similar order or an order that denied that issuer access to any statutory exemptions for a period exceeding 30 consecutive days; or |
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(c) | within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that issuer. |
(a) | any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or |
(b) | any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision. |
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% of | % of | |||||||||||||||
Total | Total | |||||||||||||||
2008 | Fees | 2007 | Fees | |||||||||||||
Audit Fees: | ||||||||||||||||
Cameco | $ | 1,062,500 | 34.1 | % | $ | 890,000 | 44.9 | % | ||||||||
Centerra and other subsidiaries | 1,197,276 | 38.5 | % | 661,400 | 33.4 | % | ||||||||||
Total Audit Fees | $ | 2,259,776 | 72.6 | % | $ | 1,551,400 | 78.3 | % | ||||||||
Audit-Related Fees: | ||||||||||||||||
Sarbanes-Oxley 404 scoping project | — | — | $ | 41,500 | 2.1 | % | ||||||||||
Translation services | $ | 170,000 | 5.5 | % | — | — | ||||||||||
Cameco consulting | 98,200 | 3.1 | % | 31,500 | 1.5 | % | ||||||||||
Centerra consulting | — | — | 153,900 | 7.8 | % | |||||||||||
Pensions | 15,000 | 0.5 | % | 13,000 | 0.7 | % | ||||||||||
Potential financing & convertible debentures | 326,260 | 10.5 | % | — | — | |||||||||||
Total Audit-Related Fees | $ | 609,460 | 19.6 | % | $ | 239,900 | 12.1 | % | ||||||||
Tax Fees: | ||||||||||||||||
Compliance | $ | 121,500 | 3.9 | % | $ | 130,400 | 6.6 | % | ||||||||
Planning and advice | 122,300 | 3.9 | % | 58,800 | 3.0 | % | ||||||||||
Total Tax Fees | $ | 243,800 | 7.8 | % | $ | 189,200 | 9.6 | % | ||||||||
All Other Fees: | — | — | — | — | ||||||||||||
Total Fees: | $ | 3,113,036 | 100.0 | % | $ | 1,980,500 | 100.0 | % | ||||||||
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(a) | On September 1, 2005, Cameco entered into an underwriting agreement with RBC Dominion Securities Inc. and Scotia Capital Inc. in connection with the issuance on September 15, 2005 of $300 million principal amount of 4.7% unsecured debentures due in 2015. For more details on these debentures, seeDescription of Securities-Rating of Securities. |
(b) | On September 16, 2005, Cameco entered into the Third Supplemental Indenture with CIBC Mellon Trust Company in connection with the issuance on September 15, 2005 of $300 million principal amount of 4.7% unsecured debentures due in 2015. This Third Supplemental Indenture, together with the July 12, 1999 original indenture, sets out the terms and conditions pertaining to the $300 million principal amount of 4.7% unsecured debentures due in 2015. For more details on these debentures, seeDescription of Securities-Rating of Securities. |
(c) | On December 2, 2005, Cameco entered into an agreement to acquire a 100% interest in Ziractec (now Cameco Fuel Manufacturing Inc.), a Canadian manufacturer of nuclear fuel bundles. The purchase was completed on February 1, 2006 at a purchase price of $109 million. For more details on this purchase, seeUranium Fuel Conversion Services-Operations. |
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OF THE BOARD OF DIRECTORS
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1. | Review with management and the external auditors any items of concern, any proposed changes in the selection or application of major accounting policies and the reasons for the change, any identified risks and uncertainties, and any issues requiring management judgement, to the extent that the foregoing may be material to financial reporting. |
2. | Consider any matter required to be communicated to the committee by the external auditors under applicable generally accepted auditing standards, applicable law and listing standards, including the external auditors’ report to the committee (and management’s response thereto) on: (a) all critical accounting policies and practices used by the corporation; (b) all material alternative accounting treatments of financial information within generally accepted accounting principles that have been discussed with management, including the ramifications of the use of such alternative treatments and disclosures and the treatment preferred by the external auditors; and (c) any other material written communications between the external auditors and management. |
3. | Require the external auditors to present and discuss with the committee their views about the quality, not just the acceptability, of the implementation of generally accepted accounting principles with particular focus on accounting estimates and judgements made by management and their selection of accounting principles. |
4. | Discuss with management and the external auditors (a) any accounting adjustments that were noted or proposed (i.e. immaterial or otherwise) by the external auditors but were not reflected in the financial statements, (b) any material correcting adjustments that were identified by the external auditors in accordance with generally accepted accounting principles or applicable law, (c) any communication reflecting a difference of opinion between the audit team and the external auditors’ national office on material auditing or accounting issues raised by the engagement, and (d) any “management” or “internal control” letter issued, or proposed to be issued, by the external auditors to the corporation. |
5. | Discuss with management and the external auditors any significant financial reporting issues considered during the fiscal period and the method of resolution. Resolve disagreements between management and the external auditors regarding financial reporting. |
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6. | Review with management and the external auditors (a) any off-balance sheet financing mechanisms being used by the corporation and their effect on the corporation’s financial statements and (b) the effect of regulatory and accounting initiatives on the corporation’s financial statements, including the potential impact of proposed initiatives. |
7. | Review with management and the external auditors and legal counsel, if necessary, any litigation, claim or other contingency, including tax assessments, that could have a material effect on the financial position or operating results of the corporation, and the manner in which these matters have been disclosed or reflected in the financial statements. |
8. | Review with the external auditors any audit problems or difficulties experienced by the external auditors in performing the audit, including any restrictions or limitations imposed by management, and management’s response. Resolve any disagreements between management and the external auditors regarding these matters. |
9. | Review the results of the external auditors’ audit work including findings and recommendations, management’s response, and any resulting changes in accounting practices or policies and the impact such changes may have on the financial statements. |
10. | Review and discuss with management and the external auditors the audited annual financial statements and related management discussion and analysis, make recommendations to the board with respect to approval thereof, before being released to the public, and obtain an explanation from management of all significant variances between comparable reporting periods. Obtain confirmation from management and the external auditors that the reconciliation of the audited financial statements to U.S. GAAP complies with the requirements of U.S. securities laws. |
11. | Review and discuss with management and the external auditors all interim unaudited financial statements and quarterly reports and related interim management discussion and analysis and make recommendations to the board with respect to the approval thereof, before being released to the public. |
12. | Obtain confirmation from the chief executive officer and the chief financial officer (and considering the external auditors’ comments, if any, thereon) to their knowledge: |
(a) | that the audited financial statements, together with any financial information included in the annual MD&A and annual information form, fairly represent in all material respects the corporation’s financial condition, cash flow and results of operation, as of the date and for the periods presented in such filings; and | ||
(b) | that the interim financial statements, together with any financial information included in the interim MD&A, fairly represent in all material respects the corporation’s financial condition, cash flow and results of operation, as of the date and for the periods presented in such filings. |
13. | Review earnings press releases, before being released to the public. Discuss the type and presentation of information to be included in earnings press releases (paying particular attention to any use of “pro-forma” or “adjusted” Non-GAAP, information). |
14. | Review any news release, before being released to the public, containing earnings guidance or financial information based upon the corporation’s financial statements prior to the release of such statements. |
15. | Review the appointment of the chief financial officer and have the chief financial officer report to the committee on the qualifications of new key financial executives involved in the financial reporting process. |
16. | Consult with the human resources and compensation committee on the succession plan for the chief financial officer and controller. Review the succession plans in respect of the chief financial officer and controller. |
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1. | Receive from management a statement of the corporation’s system of internal controls over accounting and financial reporting. |
2. | Consider and review with management, the internal auditor and the external auditors, the adequacy and effectiveness of internal controls over accounting and financial reporting within the corporation and any proposed significant changes in them. |
3. | Consider and discuss the scope of the internal auditors and external auditors review of the corporation’s internal controls, and obtain reports on significant findings and recommendations, together with management responses. |
4. | Discuss, as appropriate, with management, the external auditors and the internal auditor, any major issues as to the adequacy of the corporation’s internal controls and any special audit steps in light of material internal control deficiencies. |
5. | Review annually the disclosure controls and procedures, including (a) the certification timetable and related process and (b) the procedures that are in place for the review of corporation’s disclosure of financial information extracted from corporation’s financial statements and the adequacy of such procedures. Receive confirmation from the chief executive officer and the chief financial officer of the effectiveness of disclosure controls and procedures, and whether there are any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the corporation’s ability to record, process, summarize and report financial information or any fraud, whether or not material, that involves management or other employees who have a significant role in the corporation’s internal control over financial reporting. In addition, receive confirmation from the chief executive officer and the chief financial officer that they are prepared to sign the annual and quarterly certificates required by applicable securities law. |
6. | Review management’s annual report and the external auditors’ report on the assessment of the effectiveness of the corporation’s internal control over financial reporting. |
7. | Receive a report, at least annually, from the reserves oversight committee of the board on the corporation’s mineral reserves. |
1. | Subject to the requirements of applicable law, be solely responsible to select, retain, compensate, oversee, evaluate and, where appropriate, replace the external auditors, who must be registered with agencies mandated by applicable law. The committee shall be entitled to adequate funding from the corporation for the purpose of compensating the external auditors for completing an audit and audit report. |
2. | Instruct the external auditors that: |
(a) | they are ultimately accountable to the board and the committee, as representatives of shareholders; and | ||
(b) | they must report directly to the committee. |
3. | Ensure that the external auditors have direct and open communication with the committee and that the external auditors meet regularly with the committee without the presence of management to discuss any matters that the committee or the external auditors believe should be discussed privately. |
4. | Evaluate the external auditors’ qualifications, performance, and independence. As part of that evaluation: |
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(a) | at least annually, request and review a formal report by the external auditors describing: the firm’s internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (to assess the auditors’ independence) all relationships between the external auditors and the corporation, including the amount of fees received by the external auditors for the audit services and for various types of non-audit services for the periods prescribed by applicable law; and | ||
(b) | annually review and confirm with management and the external auditors the independence of the external auditors, including the extent of non-audit services and fees, the extent to which the compensation of the audit partners of the external auditors is based upon selling non-audit services, the timing and process for implementing the rotation of the lead audit partner, reviewing partner and other partners providing audit services for the corporation, whether there should be a regular rotation of the audit firm itself, and whether there has been a “cooling off” period of one year for any former employees of the external auditors who are now employees with a financial oversight role, in order to assure compliance with applicable law on such matters; and | ||
(c) | annually review and evaluate senior members of the external audit team, including their expertise and qualifications. In making this evaluation, the audit committee should consider the opinions of management and the internal auditor. |
5. | Review and approve the corporation’s policies for the corporation’s hiring of employees and former employees of the external auditors. Such policies shall include, at minimum, a one-year hiring “cooling off” period. |
6. | Meet with the external auditors to review and approve the annual audit plan of the corporation’s financial statements prior to the annual audit being undertaken by the external auditors, including reviewing the year-to-year co-ordination of the audit plan and the planning, staffing and extent of the scope of the annual audit. This review should include an explanation from the external auditors of the factors considered by the external auditors in determining their audit scope, including major risk factors. The external auditors shall report to the committee all significant changes to the approved audit plan. |
7. | Review and approve the basis and amount of the external auditors’ fees with respect to the annual audit in light of all relevant matters. |
8. | Review and pre-approve all audit and non-audit service engagement fees and terms in accordance with applicable law, including those provided to the subsidiaries of the corporation by the external auditors or any other person in its capacity as external auditors of such subsidiary. Between scheduled committee meetings, the chair of the committee, on behalf of the committee, is authorised to pre-approve any audit or non-audit service engagement fees and terms. At the next committee meeting, the chair shall report to the committee any such pre-approval given. Establish and adopt procedures for such matters. |
1. | Review and approve the appointment or removal of the internal auditor. |
2. | Review and discuss with the external auditors, management, and internal auditor the responsibilities, budget and staffing of the corporation’s internal audit function. |
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3. | Review and approve the mandate for the internal auditor and the scope of annual work planned by the internal auditor, to receive summary reports of internal audit findings, management’s response thereto, and reports on any subsequent follow-up to any identified weakness. |
4. | Ensure that the internal auditor has direct and open communication with the committee and that the internal auditor meets regularly with the committee without the presence of management to discuss any matters that the committee or the internal auditor believe should be discussed privately, such as problems or difficulties which were encountered in the course of internal audit work, including restrictions on the scope of activities or access to required information, and any disagreements with management. |
5. | Review and discuss with the internal auditor and management the internal auditor’s ongoing assessments of the corporation’s business processes and system of internal controls. |
6. | Review the effectiveness of the internal audit function, including staffing, organizational structure and qualifications of the internal auditor and staff. |
1. | Monitor compliance by the corporation with all payments and remittances required to be made in accordance with applicable law, where the failure to make such payments could render the directors of the corporation personally liable. |
2. | The receipt of regular updates from management regarding compliance with laws and regulations and the process in place to monitor such compliance, excluding, however, legal compliance matters subject to the oversight of the safety, health and environmental committee of the board. Review the findings of any examination by regulatory authorities and any external auditors’ observations relating to such matters. |
3. | Establish and oversee the procedures in the code of conduct and ethics policy to address: |
(a) | the receipt, retention and treatment of complaints received by the corporation regarding accounting, internal accounting or auditing matters; and | ||
(b) | confidential, anonymous submissions by employees of concerns regarding questionable accounting and auditing matters. |
(a) | any investigations of fraudulent activity; | |
(b) | monitoring activities in relation to fraud risks and controls; and | |
(c) | assessments of fraud risk. |
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4. | Approve the expenses submitted for reimbursement by the chief executive officer. |
1. | The procedures governing the committee shall, except as otherwise provided for herein, be those applicable to the board as set forth in Part 7 of the General Bylaws of the corporation. |
2. | The members and the chair of the committee shall be entitled to receive remuneration for acting in such capacity as the board may from time to time determine. |
3. | The committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to: |
(a) | to select, retain, terminate, set and approve the fees and other retention terms of special or independent counsel, accountants or other experts, as it deems appropriate; and | ||
(b) | to obtain appropriate funding to pay, or approve the payment of, such approved fees; |
without seeking approval of the board or management |
4. | Any member of the committee may be removed or replaced at any time by the board and shall cease to be a member of the committee upon ceasing to be a director. The board may fill vacancies on the committee by appointment from among its members. If and whenever a vacancy shall exist on the committee, the remaining members may exercise all its powers so long as a quorum remains in office. Subject to the foregoing, each member of the committee shall remain as such until the next annual meeting of shareholders after that member’s election. |
5. | The committee shall annually review and assess the adequacy of its mandate and recommend any proposed changes to the nominating, corporate governance and risk committee for recommendation to the board for approval. |
6. | The committee shall participate in an annual performance evaluation by the nominating, corporate governance and risk committee, the results of which will be reviewed by the board. |
7. | The committee shall perform any other activities consistent with this mandate, the corporation’s governing laws and the regulations of stock exchanges, as the committee or the board deems necessary or appropriate. |
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