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Uranium Demand

According to the World Nuclear Association, in 2012, the world mined an equivalent of 151.7 Mlb U3O8 (about 90% of the 169 Mlb annual demand).

36.5% of that production came from Kazakhstan - all of it produced by in-situ recovery operations at cash costs around USD 20 per pound. Kazakh uranium was produced by 6 ISR operations, each generating between 3 and 6 Mlb U3O8 per year.

In 2012, Canada produced 15.41% of the world supply and all of it came from two underground mines, McArthur River (approximately 20 Mlb U3O8) and Rabbit Lake (approximately 4 Mlb U3O8). Given the mining method and depths (below 500 m), Canadian production has relatively low cash costs due to extraordinarily high ore grades - 16.5% U3O8 at McArthur River (reserve grade, with dilution and mining losses factored in). The phenomenal richness of the ore can be demonstrated as follows: each metric tonne of ore contains almost 364 lb U3O8. Its revenue potential is a staggering USD14,550 per tonne of ore even at the market prices of USD 40 /lb U3O8. And at USD 70 /lb, it balloons to USD 25,460. At the same prices, for example, Olympic Dam, one of the richest mines in the world, is mining ore containing only about USD 370 worth of copper, uranium, gold, and silver per tonne of mill feed. At USD 70 /lb U3O8, one tonne of Roessing's 2009 reserve contains ore only worth about USD 48 in which the 85% processing recovery already factored in.
As Cameco reported 2012 cash costs at approximately USD 20/lb, along with a solid resilience of its mining operations, it signaled exceptionally high running costs and their susceptibility to grade fluctuations. Cameco's figures may also indicate the quality criteria to be met by new uranium projects in the Athabasca Basin as well as the appeal of ISR projects elsewhere.

Mining

Removing uranium ore from the ground can be undertaken in one of three ways, depending on how it is deposited. Open pit mining is used to extract uranium deposits close to the surface.

Underground mining methods are used for deep deposits. The known 'in situ leaching' (ISL) process injects chemicals to dissolve the uranium underground into a uranium-bearing solution that can be pumped to the surface for processing.