Friday, February 11, 2011

Finland-based Talvivaara and Saskatoon-based Cameco sign uranium off-take agreeement

The agreement between Cameco and Talvivaara will certainly broaden the already significant relationship Cameco has with Finnish utilities, the Finnish government and regulators and private Finnish mining companies and electricty generators.

According to a February 8, 2011 Press Release Cameco is to provide an upfront investment of up to $60 million USD to cover the construction costs of a uranium extraction circuit in Finland. Talvivaara will repay the investment through deliveries of uranium concentrate during the initial years of the agreement. Once the capital sum has been repaid all uranium concentrate produced thereafter until December 31, 2027 will be bought by Cameco at a price based on market prices at the time of delivery. The annual uranium production is estimated at 350tU (ca. 770,000 pounds), corresponding to approximately 410t (900,000 pounds) of yellow cake (UO4).

Cameco is already very active in Finland and has been for a number of years. Cameco currently supplies uranium fuel to generate clean electricity for Finnish utilities and their customers. Finland produces approximately one-third of its domestic electricity through nuclear power. Finland has four existing reactors operated by two Finnish companies. A fifth reactor is currently under construction in Finland and two more are planned for the future.

Cameco will provide technical assistance to Talvivaara in the design, construction, commissioning and operation of the uranium extraction circuit to be constructed at the Sotkamo mine. Talvivaara plans to start construction of the uranium extraction circuit in the coming months and complete it in 2012.

Talvivaara is a Finland-based miner producing base metals with its primary focus on nickel and zinc deposits in Finland using a technology known as bioheapleaching to extract metals out of ore. Talvivaara is listed on the London Stock Exchange Main Market and NASDAQ OMX Helsinki and is included in the FTSE 250 Index.

Cameco Corporation is one of the world's largest suppliers of uranium and trades on the TSX and New York Stock Exchange.

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