A NEW agreement between Cameco Corporation, Joint Stock Company National Atomic Company Kazatomprom and Joint Venture Inkai LLP will result in a restructure of JV Inkai, which operates a uranium mine in south Kazakhstan. It will result in a doubling of annual uranium production to 4000 tonnes, or 10.4 million pounds of U3O8 as well as possible construction of a uranium refinery.

JV Inkai is 60% owned by Cameco and 40% by Kazatomprom and Cameco’s interest in production is 57.5%.

The new agreement, which replaces the memorandum of agreement signed by Cameco and Kazatomprom in September 2012, was signed during the annual foreign investors meeting with the president and government officials in Astana, Kazakhstan.

“This agreement strengthens our partnership with another global leader in uranium mining and moves both Cameco and Kazatomprom closer to realizing the full potential of their investment in JV Inkai,” said Cameco president and CEO Tim Gitzel.

“For Cameco, the agreement advances our strategy of building on our low-cost production assets that helps mitigate the risk of today’s uncertain uranium market and positions us to maximize returns when the market recovers.”

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

The new agreement provides for JV Inkai to produce from blocks 1, 2 and 3 until 2045, while the previous agreement involved lease terms to 2024 for block 1 and to 2030 for blocks 2 and 3. The boundaries of blocks 1, 2 and 3 will be adjusted to match the agreed production profile for JV Inkai to 2045.

Cameco and Kazatomprom will complete a feasibility study to evaluate the design, construction and operation of a refinery in Kazakhstan with the capacity to produce 6000 tonnes of uranium trioxide annually.

Subject to further adjustments tied to the refinery, Cameco’s ownership interest in JV Inkai will be adjusted to 40% and Kazatomprom’s to 60% while the governance framework will be altered to provide protection for Cameco as a minority owner.

The new agreement also provides for the loan made by a Cameco subsidiary to JV Inkai to fund exploration and evaluation of block 3 to be restructured to provide for priority repayment.

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