Cameco Corp. has announced that the restructuring of joint venture Inkai LLP (JV Inkai) outlined in the implementation agreement dated 27 May 2016 with Joint Stock Company National Atomic Company Kazatomprom (Kazatomprom) and JV Inkai has closed and will take effect on 1 January 2018.
This restructuring was subject to obtaining all required government approvals including an amendment to JV Inkai’s existing Resource Use Contract with the Republic of Kazakhstan, which have been obtained.
“This agreement is positive for Cameco as it secures our access to a large, low-cost production source through 2045,” said Tim Gitzel, President and CEO of Cameco. “Production decisions will depend on market conditions and the terms of our Resource Use Contract.”
The amendment to the Resource Use Contract provides as follows:
- JV Inkai has the right to increase production to 10.4 million pounds of U3O8 per year (Cameco’s share 4.2 million pounds), an increase from the current licensed production of 5.2 million pounds (Cameco’s share 3.0 million pounds).
- JV Inkai has 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).
- The current boundaries of blocks 1, 2 and 3 have been adjusted to match the agreed production profile for JV Inkai to 2045.
Under the implementation agreement, 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% on 1 January 2018. As a result, Cameco will account for JV Inkai on an equity basis commencing on 1 January. Also from this date, a new governance framework for JV Inkai protecting the rights of Cameco as a minority owner will take effect.