Hathor buffs Roughrider ahead of new response to Cameco

Hathor closed up 1.7% at C$4.17 on Tuesday in Toronto where it is worth $522 million. $8 billion industry bellwether Cameco’s stock has almost halved in 2011 as uranium oxide prices languish around $50/pound.

Hathor said 2011 Cameco’s unsolicited all-cash takeover offer of $3.75 per share effectively values Hathor and its Roughrider Uranium Deposit, as well as the Russell Lake and Henday projects, at approximately $468 million or $3.37 per Hathor share after adjusting for approximately $52 million, or $0.38 per fully diluted Hathor share, of existing Hathor cash as of the date of the offer (calculated on a fully diluted basis, including proceeds from outstanding options and warrants).

A low daily milling rate of about 200 tonnes per day thanks to high metallurgical recovery and shallow depth will keep production costs low. Hathor (TSE:HAT) said in a statement average operating costs for Roughrider is estimated at $14.44/lb U3O8. This compares to Cameco Corp’s (TSE:CCO) Cigar Lake and McArthur River (pictured) of $23.14/lb U3O8 and $19.69/lb U3O8 respectively.

The capital expenditure for the mine and mill at Roughrider is estimated at C$567 million and the undiscounted pre-tax net present values is pegged at $2.0 billion over an estimated 11 year mine life. Roughrider is located near Cameco’s Rabbit Lake mill in Northern Saskatchewan.

Uranium-oxide concentrate for immediate delivery sells for around $50 a pound and the spot price for the nuclear fuel has declined 24% since the March 11 earthquake and tsunami in Japan damaged the Fukushima nuclear power station. Uranium oxide prices peaked above $70/pound at the start of 2011.