Uranium miner Cameco has suspended its operations at Cigar Lake after finding six positive COVID-19 cases in its North Saskatchewan operations.
The moves comes as a "significant negative trend" in Saskatchewan case numbers led to uncertainty over the mine's operations and its access to staff, a Monday news release said. It also noted the shrinking number of available workers resulting from self-isolation, absenteeism, and pandemic-related pauses on transportation.
Cameco said three of the confirmed cases were at Cigar Lake, which is about 600 kilometres north of Saskatoon.
In a prepared statement, Cameco CEO Tim Gitzel said the move is to protect workers' safety.
"While the protocols we have put in place have to date allowed us to effectively manage these cases, there are broader risks we don’t control," he said.
"Therefore, we believe it is prudent to do our part to continue to protect our people and our operations from the increasing threats that are outside our influence."
The mine, which had about 300 workers working on-site this fall, is entering care and maintenance. Cameco spokesman Jeff Hryhoriw said the total active workforce will drop from approximately 600 employees and contractors to roughly 110, with 55 on-site at a time.
He said employees will be on a combination of paid leaves of absence and vacation days during the suspension. He said none will be laid off.
The suspension will hit the company's bottom line, costing it between $8 million and $10 million per month, the news release said. The company will not meet its share of producing 5.3 million pounds of uranium concentrates by the end of the year.
The last time the mine closed for safety reasons, Cameco saw a roughly $61 million loss in Q3.
In a prepared statement, Gitzel said the company plans to meet its sales targets by buying uranium on the market. The release noted those purchases come at a higher price than production, meaning the company may take on more costs.
Those impacts will likely appear in the company's costs in the first quarter of 2021, the news release said.
“COVID-19 has taught us many lessons, including that the pandemic is a greater risk to uranium supply than to uranium demand," Gitzel said in a statement.
As of Sept. 30, Cameco had $793 million in cash and short-term investments and $1 billion in long-term debt. In a news release, the miner said it expects its cash balances and operation flows should meet its capital requirements for 2020. It has $1 billion in available credit, which it doesn't expect to draw on in 2020.
Hryhoriw said the company is unable to predict if it would have to dip into its credit reserves in 2021.
Its decision to suspend operations came as result of Cameco keeping its "finger on the pulse" of how COVID-19 is affecting its workforce and northern Saskatchewan, he said, adding that Cameco can't predict how long the suspension will last.
"The fact that we've already been through it once will hopefully make it a smooth transition."
