Rock Fall Floods Cameco Mine

Updated from 3:42 p.m. EDT

A rock fall at Cameco's(CCJ Quote) Cigar Lake uranium project caused a water inflow into the mine's underground areas, which will significantly delay production at the site.

The uranium producer said Monday afternoon that all underground areas of the Cigar Lake project, located in northern Saskatchewan, are expected to be filled with water after efforts to protect the main shaft weren't successful.

Earlier in the day, the company said that just a portion of the site was filled.

Shares of Cameco tumbled 12% after the company said it couldn't control the inflows. The stock recently traded at $33.74, down $4.37.

Cameco previously planned for a Cigar Lake production startup for early 2008, and it said in its early Monday press release that the production would be delayed at least a year. In its second, late-afternoon release, however, Cameco said it will assess a new production timetable after remediation plans are developed.

The incident began Sunday afternoon. The company decided to close two bulkhead doors Sunday evening to contain the water inflow. Cameco said, however, that one of the doors didn't seal properly, which allowed significant water to flow into the processing area.

The company said the capital cost of the project is now expected to be significantly higher, and it will develop new timelines for construction, cost estimates and production forecasts.