Areva has agreed to sell its 27.94 percent stake in the Millennium project in Saskatchewan to uranium producer Cameco for $150 million, Cameco announced March 2.

With the purchase, Cameco will hold a 69.9 percent stake in the project. However, Japan-Canada Uranium (JUC) owns 30.1 percent of the Millenium project and has the right of first refusal on ownership transfers.

Japan-Canada Uranium is owned by Itochu, OURD, Mitsubishi and Mitsubishi Materials. Japan-Canada Uranium, through subsidiary JCU Exploration.

If it uses the right, JCU can get a further 11.67 percent stake in the Millennium project, Cameco said. In this case Cameco would end up with an additional 16.27 percent of Millennium.

Cameco said the transaction could close as early as March 15 but as late as June 6.

Cameco would go from controlling to majority shareholder of Millennium. If JCU pulls the trigger on the right of first refusal Cameco still ends up with 58.23 percent of the Millennium project.

And Areva isn't signing off all its ties. If production exceeds 63 million lbs uranium concentrate at Millennium, Cameco said Areva gets a four percent royalty on 27.94 percent of project revenue.

While Cameco has yet to say for sure if it will go ahead at Millennium - right now it is working on a feasibility of the project - it has stated that it is a key part of its strategy to replace reserves and grow uranium production. Cameco president and CEO Tim Gitzel put Millennium on a list of two projects beyond expansion of mining operations that Cameco was looking to as a means to achieve such growth in comments he made just days ago at the BMO Global Metals & Mining conference.

As Gitzel noted, one of the key advantages to Millennium is its proximity to Cameco's operating mines in northern Saskatchewan.

"If this project moves to development," he said, "it would allow us to capitalize on our existing milling capacity available in the Athabasca Basin." Indeed, Millennium, to be a high-grade underground mine, is just 36 kilometres north of Cameco's Key Lake mill, which is undboutedly where the would-be mine's ore would end up.

Indicated resources at Millennium are 508 kt @ 4.55 percent U3O8 for about 51 million lbs U3O8.

The other development asset Gitzel put at the top of Cameco's list was the Kintyre project in Western Australia.

Another project Cameco tried to get in the development pipeline was Hathor Exploration's exceptionally high grade Roughrider project in the Athabasca Basin.

In the second half of last year Cameco squared off with Rio Tinto in a bidding war for Hathor. But Rio trumped Cameco's offer of C$4.50 a share.