Cameco has issued updates on progress at their Cigar Lake property.  For basic information on the mine and its flooding take a look at the Cameco site itself.  (I particularly recommend the diagram of the underground mine workings.)   The most informative information I found regarding current conditions is at this site.  The share price increased on issue of the news release.  I may be a pessimist, or worse a cynic, but I see little in the report to justify an increase in the share price.  There are more cautionary statements and there is more wriggle room in the reports I read than there is solid technical information justifying paying more for a future promise.  Let us examine some technical uncertainties. 

First, here are the main points from recent news releases: 

1. Cameco plans to freeze more underground areas such as the access tunnels to the production level.
2. Cameco plans to increase dewatering capacity.
3. 13 of 14 drill holes for “reinforcing and sealing off the water flow area” are complete. 
4. Cameco has applied to the regulators to drill an additional four, larger-diameter holes that will be used to dewater the mine.  (Does this imply that none of the 13 holes drilled so far is to be used for dewatering; maybe these holes are indeed only for pumping concrete in.  In this case, may we conclude that they have not yet gotten into full swing with concrete pumping and have not even got permission to start dewatering?)
5. More than 1,000 cubic meters of concrete have been poured through drill holes into the “reinforcement area”  (I am not entirely clear what the reinforcement area is, unless it is the area where concrete is being pumped into tunnels to hold the roof up and/or the water out.  No indication of how much more concrete is likely to be needed.) 

The work just noted above seems to constitute phase 1.  The following phases of work remain to be undertaken:   

Phase 2:  Dewater the underground development. Verify that the water inflow has been sufficiently sealed.  Start installation of surface freezing infrastructure.  This is all  expected to be completed by the end  of the third quarter 2007.
Phase 3: Complete any additional remedial work identified in Phase 2.  This may, for example, include determining if additional reinforcement is required in higher risk areas.  This is expected to be completed by the end of 2007.
Phase 4:  Complete underground rehabilitation.  This includes securing areas to prevent ground fall or water inflow, re-establishing mine ventilation, installing pumping capacity and re-establishing the  ore freezing program.  This is expected to be completed by the summer of  2008.
Phase 5:  Resuming construction activities that will lead to scheduled completion of the mine targeted for 2010.
 

My empathy is with Messrs. Alain G Mainville and Barry W. Schmitke who are the “qualified people” for the purposes of National Instrument 43-101 reporting.  They are respectively a geologists and a professional engineer, both employed by Cameco.  I wonder if the following statement is posted as a result of their professional status and instincts: 

Cigar Lake is a challenging deposit to develop and mine. These challenges include control of groundwater, weak ground formations, and radiation protection. The sandstone overlying the basement rocks contains significant water at hydrostatic pressure. Freezing the ground is expected to result in several enhancements to the ground conditions, including: (1) minimizing the risk of water inflows from saturated rock above the unconformity; (2) reducing radiation exposure from radon dissolved in the ground water; and (3) increasing rock stability. However, freezing will only reduce, not eliminate, these challenges. There is also the possibility of a water inflow during the drilling of holes to freeze the ground. Therefore, the risk of water inflows at Cigar Lake remains. The consequences of another water inflow will depend upon the magnitude, location and timing of any such event, but could include a significant delay in Cigar Lake’s remediation, development or production, a material increase in costs, a loss of mineral reserves or require Cameco to give notice to many of its customers that it is declaring an interruption in planned uranium supply. Such consequences could have a material adverse impact on Cameco. Water inflows are generally not insurable.

Cigar Lake’s remediation and production schedules are based upon certain assumptions regarding the condition of the underground infrastructure at the mine. The condition of this underground infrastructure, however, will not be known until the mine is dewatered. If the underground infrastructure has been impaired, this could adversely impact our schedules and cost estimates.

The outcome of each phase of remediation will impact the schedule of each subsequent phase of remediation and the planned commencement of production in 2010. For example, if the plug is not successful in securing the inflow area, then ground freezing, already incorporated in the remediation plan, will be utilized to secure the inflow area. If this situation occurs, there could be a delay in the remediation schedule and the commencement of production.

Remediation and production schedules will be impacted by regulatory approvals. We have not yet received regulatory approval to drill four drill holes for dewatering the mine during the first phase of the remediation plan. This approval is required to move forward with our planned dewatering strategy. Working with the regulatory authorities to receive approvals for additional corrective actions which may result from current inflow investigations may impact our remediation and production schedules.

That is a remarkably honest statement written in a style quite different from the rest of the news release.  May I credit their professionalism?  My cynical friends credit 43-101.  Regardless of who or what you credit, it should be mandatory and obligatory reading before you decide to change your share status. 

PS.  Just one question I would like answered:  who are the experts (consultants) in groundwater control that are mentioned in the press releases.  Maybe their names and their successes should be available for public scrutiny as another pointer to evaluating share price fluctuations.