Cameco to purchase AREVA’s 27.94% interest in the Millennium project

Cameco (NYSE: CCJ) announced today that it has entered into an agreement with AREVA Resources Canada Inc. to purchase AREVA’s 27.94% interest in the Millennium project for $150 million.

The Millennium project is a proposed uranium mine located in the Athabasca Basin of northern Saskatchewan, Canada. The project area is one of 12 mineral claims held by the Cree Lake Extension Joint Venture exploration project, which is currently owned by Cameco (41.96%), JCU (Canada) Exploration Company Ltd. (30.1%), and AREVA Resources Canada Inc. (27.94%). Cameco is the operator.

Under the agreement, the Millennium mineral claim, consisting of 590 hectares of land, will be designated as a separate project area under the Cree Lake Extension Joint Venture.

The sale to Cameco of the full amount of AREVA’s interest of 27.94% is subject to JCU (Canada) Exploration Co.’s rights of refusal on transfers under the terms of the Cree Lake Extension Joint Venture agreement.

If JCU does not exercise its rights, Cameco will acquire the entire 27.94% interest from AREVA, increasing its ownership interest in the Millennium project to 69.9%. If JCU elects to exercise its rights, it will acquire an additional 11.67% interest and Cameco will acquire an additional 16.27% interest, resulting in Cameco owning 58.23% in the Millennium project.

“This agreement gives Cameco majority ownership of Millennium and further strengthens our base of uranium assets in the Athabasca Basin consistent with our growth strategy,” said Cameco president and CEO Tim Gitzel.

Exploration on the Millennium project area to date has identified indicated resources of 50.9 million pounds of U₃O₈ (507,800 tonnes with an average grade of 4.55%) and inferred resources of 16.7 million pounds of U₃O₈ (297,800 tonnes with an average grade of 2.54%).

If production from the Millennium deposit exceeds 63 million pounds of packaged uranium concentrate, the agreement provides AREVA with a 4% royalty on revenue from 27.94% of any production that exceeds 63 million pounds.

The transaction is expected to close no later than June 6, 2012 and may close as early as March 15, 2012 depending on the timing of JCU either exercising or waiving its rights under the Cree Lake Extension Joint Venture agreement.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.