McClean Lake Mill, Canada

The McClean Lake Mill is operated by Orano Group and processes all of the ore produced at the Cigar Lake mine in return for a C$/lb tolling fee.

In 2017, Ecora provided Denison Mines Inc (‘Denison’) with a C$40.8m, 13-year loan bearing interest at a rate of 10% per annum. The interest payments are payable from the cash flows received by Denison from the toll revenue generated from its 22.5% interest in the McClean Lake Mill. In any period where the cash flow from the toll revenue exceeds the interest payment, the balance is received by Ecora as a repayment of principal. In any period where the cash flows are less than the interest, the interest will capitalise and be repaid out of cash flows in the following period. Any amounts outstanding at maturity are due and payable regardless of the cash generated from the toll.

As the income from the toll revenue is based on an inflation linked C$/lb of throughput, it is not sensitive to movements in the uranium price. As such, the Group’s cash flows are subjec to changes in production, as opposedd to uranium price fluctuations. 

The agreement covers all reserves and resources as defined in Cameco's 2023 Cigar Lake technical report related to "CL Main" and CL EXT". In addition to the loan, the Group also entered into a subsequent stream with Denison to purchase the entire share of its toll receipts received from Cigar Lake for C$2.7m. This allows for potential mine life extension at Cigar Lake above the reserves already reported by Cameco.