Panel Report

2.1 Proposal

The McArthur River project is located within the Athabasca region of northern Saskatchewan, about halfway between the Key Lake and Rabbit Lake mines, 620 air kilometres north of Saskatoon. The site is accessible by aircraft or, during winter, by the Fox Lake winter road from Highway 914. See Figure 1.

The ore body was first surveyed in 1984. Subsequent diamond drilling in 1985 and 1988 intersected sandstonehosted mineralization. Between 1993 and 1995, Cameco completed an underground exploration program to delineate the size and location of the ore body more clearly. The detailed information from that exploration program was used to design suitable mine facilities, select appropriate mining technologies, and prepare the Environmental Impact Statement, which was submitted in December, 1995.

The ore body which Cameco proposes to develop is approximately 550 metres below surface, and is comprised of ore reserves estimated at 416 million pounds of U₃O₈. The average grade of the ore is 15% U₃O₈, The ore would be mined using a variety of methods, depending on the configuration of the ore body and on the ground and water conditions existing locally.

The three primary mining methods proposed are boxhole boring, remote boxhole stoping and raise boring. The use of any of the methods would be preceded by ground freezing and/or grouting to control the flow of ground water. With all methods, mining equipment would be operated by remote control, enabling workers to be located a safe distance from the highly radioactive ore body.

In preparation for mining, chambers would be developed above and below the ore zone. In boxhole boring, a reaming head would be driven up from one of the lower chambers, with the broken ore falling into an ore containment chute leading to a mobile crusher on a lower level. Remote boxhole stoping would be similar, except additional ore would be broken by conventional blasting, achieved by drilling blast holes from an upper chamber. The broken ore would fall down the reaming path, as in boxhole boring. In raise boring, a pilot hole would be drilled from an upper chamber through the ore body to a lower chamber. A reaming head would then be pulled up through the pilot hole with the broken ore again falling down the reaming path through an ore containment chute to the crusher system.

Cameco plans to crush and grind the McArthur River ore underground, before pumping it to the surface as a slurry. To reduce the potential for radiation exposure, ore would be contained at all times in the crushing and grinding circuit, and pumped to surface in vertical piping dedicated exclusively to that purpose. On surface, the ore slurry would be thickened to a paste, before being trucked in special vessels to the Key Lake site.

The waste rock produced in mining would be classified according to its U₃O₈ content and acid-generating potential. Uranium-bearing waste would be trucked to Key Lake, for blending with ore, or for deposition in the Deilmann Tailings Management Facility (DTMF). Acidgenerating waste would be returned underground as backfill, or trucked to the DTMF. Barren waste would be used as underground backfill or stockpiled on surface.

Transportation of the ore and waste rock would be along an 80-km all-weather gravel road. The route, chosen to be as direct as possible, given the terrain, would follow the existing Key Lake powerline corridor as closely as possible. The ore-containing vessels would be similar in design to those used by Cameco’s uranium refining and conversion operations in Ontario. The design would be required to meet government standards for transporting uranium ore.

Cameco proposes to process McArthur River ore in the Key Lake mill, which would be expanded from its current capacity of 14 million pounds U₃O₈ per year to handle an additional 4 million pounds. The McArthur River ore would be blended with special waste from the Key Lake ore bodies to produce an average mill feed grade of 4% U₃O₈. Milling of this blended ore would require only minor modifications to the existing mill at Key Lake.

The most significant change required at Key Lake to accommodate the McArthur River ore would be the construction of a new plant to receive and unload the ore vessels. The plant would provide for remote-control handling of the vessels, washing of the vehicles and emptied vessels, storage of the ore slurry, and pumping of the ore slurry to the ore-blending areas of the mill.

When the ore processing is completed, the proponent would pipe the resultant tailings to the Deilmann Tailings Management Facility which is located in an open pit that was mined out as part of the Key Lake project. It was approved for construction in May, 1995, and is designed to contain the remainder of the Key Lake tailings. The Key Lake tailings are being deposited in the pit using pervious surround technology. The tailings resulting from the processing of the blended McArthur River ore would be deposited under a water cover, but without the benefit of a pervious surround, on top of the Key Lake tailings. The subaqueous method proposed for the McArthur River tailings is intended to reduce radon emissions, eliminate airborne radioactive dust, and prevent the build-up of ice lenses in the tailings.

The project proposal includes the building of surface facilities, the excavation of a second and third shaft, and the development of an underground mine at the McArthur River site, and the building of an 80-kilometre road to the Key Lake mill. Temporary facilities, erected to support the underground exploration program, would be replaced, improved or expanded, to ensure their adequacy for the proposed 20-year life of the mine. See Figure 2.

Decommissioning of the McArthur River site would include the return of all remaining special waste underground and the sealing of shafts and other openings. All structures would be removed and the water treatment ponds filled. The site would be contoured and revegetated to return the landscape to a condition as close as possible to its predevelopment state. It is proposed that monitoring would continue for at least three years to ensure that the site is left in a stable, non-polluting state.

Decommissioning of the Key Lake site will be a much more complex process because of the existence of two tailings management facilities. Plans for achieving acceptable closure for this site will evolve over the next 20 years. Cameco has indicated that interested stakeholders will be invited to participate in the discussions of future decommissioning plans. Financial assurances to cover decommissioning costs will be provided in accordance with regulatory requirements.

The McArthur River project would maintain employment levels near those which exist for the Key Lake work force. The jobs lost at Key Lake by the cessation of open-pit mining would be offset by new jobs at McArthur River. There would also be some new employment opportunities during the two-year construction phase at McArthur River.² Overall, however, the project would result in only a slight increase in the combined McArthur River/Key Lake work forces over the long-term.³

The production phase of the new mine would result in business opportunities associated with the provision of goods and services, and direct and indirect revenues in the form of royalties and taxes. Cameco anticipates purchases of $1.2-billion of goods and services during the production phase. It also predicts that the Government of Saskatchewan could receive net revenues of approximately $1.5-billion, and the Government of Canada, of approximately $950-million, over 15 years of production.

2.2 Ownership

Cameco Corporation is the proponent for the McArthur River Project, and owns 53.991%; the other owners are Uranerz Exploration and Mining Limited (29.775%) and Cogema Resources Inc. (16.234%). At production, 2.444% will transfer from Uranerz to Cameco Corporation.

Figure 1: Location of the Proposed McArthur River Project

Figure 2: Mine Site Layout and Surface Facilities

² McArthur River Project Environmental Impact Statement, Main Volume, Cameco Corporation, 1995, p. 2.9.1.

³ Ibid, p. 2.9.2.