Cameco and Kazatomprom Sign Agreement to Restrict JV Inkai

Cameco Corporation (TSX:CCO) have signed an agreement with joint stock company National Atomic Company Kazatomprom and joint venture Inkai LLP to restrict and enhance JV Inkai.
As quoted in the press release:

The Inkai operation is an in situ recovery uranium mine in south Kazakhstan that is owned and operated by JV Inkai which, in turn, is currently owned by Cameco (60%) and Kazatomprom (40%). Cameco’s current interest in production from JV Inkai is 57.5% based on previous agreements with Kazatomprom.
The new agreement replaces the memorandum of agreement signed by Cameco and Kazatomprom in September 2012 and, subject to closing, provides as follows:

• JV Inkai will have the right to produce 4,000 tonnes of uranium (tU) (10.4 million pounds of U₃O₈) per year (Cameco’s share 4.2 million pounds), an increase from the current 5.2 million pounds (Cameco’s share 3.0 million pounds).

• JV Inkai will have the right to produce from blocks 1, 2 and 3 until 2045 (currently, the lease terms are to 2024 for block 1 and to 2030 for blocks 2 and 3)

• subject to further adjustments tied to the refinery as described below, Cameco’s ownership interest in JV Inkai will be adjusted to 40%, and Kazatomprom’s ownership interest in JV Inkai will be adjusted to 60%

• a governance framework that provides protection for Cameco as a minority owner

• the current boundaries of blocks 1, 2 and 3 will be adjusted to match the agreed production profile for JV Inkai to 2045

• the loan made by a Cameco subsidiary to JV Inkai to fund exploration and evaluation of block 3 (currently US $160 million) will be restructured to provide for priority repayment.

Tim Gitzel, president and CEO, said:

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

Click here to read the full press release.