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. Last Updated: 07/27/2016

Cameco to Explore for Uranium

Cameco agreed with Russia's state-owned nuclear trader to become the first foreign miner to explore for uranium in the country after prices of the radioactive metal soared.

Cameco signed a binding agreement with Techsnabexport, also know as Tenex, allowing the two companies to form a venture in Canada and in Russia within three months, said Yekaterina Shugayeva, a spokeswoman for the Moscow-based trader. Financing of the projects will be equally split, she said.

"Actual exploration will start this year as there's no point in delaying," Shugayeva said by telephone Monday. "In Russia, we're looking at totally new areas."

Canada's Cameco controls Cigar Lake, the world's largest untapped deposit of high-grade uranium with reserves of 232 million pounds, about one-sixth of those found in Russia. Flooding at the deposit last year sent uranium prices to record highs.

The spot price for uranium, from which fuel for nuclear power plants is made, advanced to $85 per pound earlier this month, 18 percent higher than at the start of the year, according industry publication Metal Bulletin. The price has surged in part on speculation by investors that there might not be enough of the metal to fuel the next generation of nuclear reactors.

Tenex expects prices this year will be between $65 and $85.

Cameco's venture in Russia will begin exploring in the south of the country in "several new regions deemed to have good prospects for high-grade uranium," Shugayeva said. Cameco will provide the technology, while Tenex will keep the mined ore.