Flooding to push up costs at Cameco mine

Delays caused by flooding in a mine shaft at Cameco Corp.'s Cigar Lake project in northern Saskatchewan are expected to push the cost of the mine up by 10 to 20 per cent, the company said Friday.

Investors responded to the news by sending shares of Cameco (TSX:CCO) down by more than five per cent to $43.00 on the TSX.

Late Thursday, Cameco said production at the uranium mine may be delayed by about six months and begin in late 2007.

The company said water began leaking into the second shaft at the mine on Wednesday. Nobody was injured and there was no impact on the environment, the firm said.

Cameco said it was already in the process of reviewing the cost of mine, which was pegged at $520 million prior to the flooding.

The company is expected to provide an update on the capital costs of the mine when it reports its first-quarter results on April 28.