Q3 2023 Cameco Corp Earnings Call

October 31, 2023

[music].

Thank you for standing by this is the conference operator welcome to the Chemical Corporation third quarter 2023 Conference call. As a reminder, all participants are in listen only mode and the conference is being recorded.

After the presentation there'll be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing star and zero webcast participants are asked to wait until the Q&A session before submitting their.

Operator: Should you need assistance during the conference call, you may signal an operator by pressing star and zero. Webcast participants are asked to wait until the Q&A session before submitting their questions, as the information they are looking for may be provided during the presentation. I would now like to turn the conference over to Rachelle Girard, Vice President, Investor Relations. Please go ahead.

Questions as the information, they're looking for maybe provided during the presentation I would now like to turn the conference over to Rachelle Girard Vice President Investor Relations. Please go ahead.

Rachelle Girard: Thank you, operator, and good morning, everyone. Welcome to Cameco's Q3 conference call. With a very busy international travel schedule this quarter, our quarterly board meetings were held off-site rather than at our corporate office in Saskatoon. With us today on the call are Tim Gitzel, President and CEO, joining the call from Vienna, Austria, Grant Isaac, Executive VP and CFO, Heidi Shockey, Senior VP and Deputy CFO, Brian Reilly, Senior VP and Chief Operating Officer, Sean Quinn, Senior VP, Chief Legal Officer and Corporate Secretary, and Alice Wong, Senior VP and Chief Corporate Officer. I'm going to hand it over to Tim in just a moment to discuss the current nuclear market environment, how today's market compares to previous cycles, and how it provides the basis for Cameco's improving prospects. After, we will open it up for your questions.

Thank you operator, and good morning, everyone welcome to chemicals third quarter conference call.

With a very busy international travel schedule this quarter, our quarterly board meetings were held off site rather than at our corporate office in Saskatoon.

With us today on the call are Gensel, President and CEO, joining the call from Vienna, Austria.

Grant Isaac Executive VP, and CFO hiding Sharkey senior VP and Deputy CFO, Brian Reilly Senior VP, and Chief operating Officer, Sean Quinn Senior VP, Chief Legal officer, and corporate Secretary and Alice Wong Senior VP and Chief Corporate Officer.

I'm going to hand, it over to Tim in just a moment to discuss the current nuclear market environment, how today's market compares to previous cycles and how it provides the basis for chemicals improving prospects.

After we will open it up for your questions.

Rachelle Girard: As always, our goal is to be open and transparent with our communications. Therefore, if you have detailed questions about our quarterly financial results, or should your questions not be addressed on this call, we will be happy to follow up with you after the call. There are a few ways to contact us. You can reach out to the contacts provided in our news release. You can submit a question through the Contact tab on our website, or you can use the Ask a Question form at the bottom of the webcast screen, and we will be happy to follow up after this call. If you joined the conference call through our website event page, there are slides available which will be displayed during the call. In addition, for your reference, our quarterly investor handout is available for download in a PDF file on our website at cameco.com.

As always our goal is to be open and transparent with our communications. Therefore, if you have detailed questions about our quarterly financial results or should your questions not be addressed on this call. We will be happy to follow up with you after the call.

There are a few ways to contact us.

Can reach out to the contacts provided in our news release.

You can submit a question through the contact tab on our website or you can use but asked a question form at the bottom of the webcast screen and we will be happy to follow up after this call.

If you joined the conference call through our website event page there are slides available which will be displayed during the call. In addition for your reference our quarterly Investor Handout is available for download in a PDF file on our website at Cameco dotcom.

Rachelle Girard: Today's conference call is open to all members of the investment community, including the media. During the Q&A session, please limit yourself to two questions and then return to the queue. Please note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today except as required by law. Please refer to our most recent annual information form and MD&A for more information about the factors that could cause these different results and the assumptions we have made. With that, I will turn it over to Tim.

Today's conference call is open to all members of the investment community, including the media.

During the Q&A session. Please limit yourself to two questions and then return to the queue.

Please note that this conference call will include forward looking information, which is based on a number of assumptions and actual results could differ materially you should.

Should not place undue reliance on forward looking statements actual results may differ materially from these forward looking statements and we do not undertake any obligation to update any forward looking statements, we make today, except as required by law.

Refer to our most recent annual information form and MD&A for more information about the factors that could cause these different results and the assumptions. We have made with that I will turn it over to Tim.

Tim Gitzel: Well, thank you, Rachelle, and good morning, everyone. We appreciate you joining us for today's call. I'm pleased to start today's call by announcing an addition to Cameco's executive team. Effective November 1, Dominic Kieran will be joining Cameco as Global Managing Director of our subsidiary in the United Kingdom. Dominic brings extensive international executive experience in the nuclear fuel, chemical, and broader technology industries, which will enhance the skill set of our strong and experienced leadership group. His wide-ranging expertise will help facilitate Cameco's growth across the nuclear value chain. Dominic brings over 20 years of leadership experience to Cameco. Most recently, he served as Chief Executive Officer with Babcock Nuclear. Previously, he was with Urenco for 15 years in increasingly senior leadership roles, including Chief Commercial Officer, and gained a wealth of experience from his diverse responsibilities. We look forward to having Dominic join our Cameco team.

Well, thank you Michelle and good morning, everyone.

Appreciate you joining us for today's call.

I'm pleased to start today's call by announcing an addition to chemicals executive team.

Effective November one Dominique Kieran will be joining cameco as global managing director of our subsidiary in the United Kingdom.

Dominic brings extensive international executive experience in the nuclear fuel chemical and broader technology industries, which will enhance the skill set of our strong and experienced leadership group here.

He is wide ranging expertise will help facilitate chemicals growth across the nuclear value chain.

Dominic brings over 20 years of leadership experience to Cameco. Most recently he served as Chief Executive Officer with Babcock nuclear.

Previously he was with drink for 15 years, and increasingly senior leadership roles, including Chief Commercial officer.

Gained a wealth of experience from his diverse responsibilities.

We look forward to having Dominic join our cameco team.

Tim Gitzel: As Rochelle mentioned, I'm joining you today from Vienna, Austria, where tomorrow I'll be attending meetings of the IAEA's Standing Advisory Group on Nuclear Energy. Mr. Rafael Grossi, the IAEA's Director General, appoints group members from governments, research institutions, and the nuclear industry to advise the agency on nuclear power and fuel cycle activities and provide guidance on matters concerning capacity for long-term energy security. This trip adds to what has been a very busy fall. Back in Canada, I met with Ukrainian President Zelensky and Prime Minister Trudeau in September, followed by a trip with a Cameco delegation in October to the head office and operations of Energoatom in Kyiv, reinforcing our commitment and support for Ukraine's energy independence. We also joined the OECD's inaugural Roadmaps to New Nuclear Conference in Paris, where government and industry leaders met to build leadership and cooperation in nuclear energy.

As Michel mentioned I'm joined today from Vienna, Austria, where tomorrow I'll be attending meetings of the Iea's standing Advisory group on nuclear energy Mr.

Mr. Raphael gross E. The Iea's director General appoints group members from governments research institutions in the nuclear industry to advise the agency on nuclear power and fuel cycle activities and provide.

Guidance on matters concerning capacity for long term energy security.

This trip adds to what has been a very busy fall.

Back in Canada that I met with Ukrainian President Zalenski and Prime Minister Trudeau in September.

Full of buy a trip with a chemical delegation in October to the head office and operations of inner go at them in Q3.

Reinforcing our commitment and support for Ukraine's energy independence.

We also joined the OECD inaugural Roadmaps to new nuclear conference in Paris, where government and industry leaders met to build leadership and cooperation in nuclear energy.

Tim Gitzel: These are all proud moments for us at Cameco that highlight the impact our work is having around the world. Our invitation to these types of influential meetings highlights our credibility as a company and our well-respected position in the nuclear fuel market. They provide us with unique insight and the opportunity to be in the room where important policies are discussed in support of the global nuclear industry. It's an industry that is getting significant attention today, and that's being recognized for the numerous benefits and advantages it can offer to the global energy supply and to energy security. This past quarter, we saw players from all facets of the nuclear sector congregate in London for the World Nuclear Association's annual symposium, where the atmosphere was more optimistic than it's been for over a decade, maybe ever.

These are all proud moments for us at Cameco that highlight the impact of our work is having around the world.

Our invitation to these types of influential meetings highlights our credibility as a company.

And our well respected position in the nuclear fuel market.

And they provide us with unique insight down the opportunity to be in the room were important policies are discussed in support of the global nuclear industry.

It's an industry that is getting significant attention today and that's being recognized for the numerous benefits and advantages it can offer to the global energy supply and energy security.

This past quarter, we saw players from all facets of the nuclear sector congregate in London for the World Nuclear Association annual Symposium.

Where the atmosphere was more optimistic than it's been for over a decade maybe ever.

Tim Gitzel: With over 40 years in this industry, I feel well qualified in saying yes, we've seen enthusiasm in past cycles. However, at the symposium this year, there was a sense of urgency that I can't say we've experienced before. Each time the market has entered a period of transition, stakeholders look back at previous cycles to highlight similarities and common threads in an attempt to predict the duration and durability of the positive momentum. If you followed the industry and Cameco through the 2000s, or if you're one of the exceptional few that might have been paying attention even earlier than that, you would have heard us talking about things like potential long-term demand growth or supply pressure building on the horizon or the level of financial interest in buying physical uranium.

With over 40 years in this industry I feel well qualified and saying, yes, we have seen enthusiasm in past cycles.

However at the symposium this year there was a sense of urgency that I can't say we've experienced before.

Each time the market has entered a period of transition stakeholders look back at previous cycles to highlight similarities in common threads in an attempt to predict the duration and durability of the positive momentum.

If you follow the industry and cameco through the two thousands or if you're one of the exceptional few that might've been paying attention even earlier than that you would've heard us talking about things like potential long term demand growth for supply pressure building on the horizon or the level of financial interest in buying <unk>.

Uranium.

Tim Gitzel: We are, of course, seeing those similarities right now, but with the added element of urgency, I think there is much more to the story this time. For today's call, rather than our customary approach of highlighting industry developments in the context of Cameco's strategy, I thought we would provide our view of what sets the current industry environment apart from previous cycles, pulling the various factors together into one discussion. In doing so, I want to emphasize how Cameco, as one of the leading suppliers in the industry, is also evolving to maximize value while addressing the urgent call to action. Let's consider the durability of demand, first in the context of climate change. Some will argue that the climate crisis isn't new, as it's been part of the conversation for decades now. What's different today is that urgency.

We are of course seeing those similarities right now, but with the added element of urgency I think theres much more to the story this time.

So for today's call rather than our customary approach of highlighting industry developments in the context of chemicals strategy.

I thought we would provide our view of what sets the current industry environment apart from previous cycles pulling the various factors together into one discussion.

And in doing so I want to emphasize how cameco is one of the leading suppliers in the industry is also evolving to maximize value while addressing the urgent call to action.

Yeah.

Let's consider the durability of demand first in the context of climate change.

Some will argue that the climate crisis isn't new is it's been part of the conversation for decades now.

But what's different today is that urgency.

Tim Gitzel: It's no longer just a model on paper with academics running computer simulations. Increasing average global temperatures and the fires and floods that are becoming more and more frequent can't be ignored. The evidence continues to point to our carbon-based energy systems as a key contributor to the problem. This has led to enhanced accountability and proposals by countries, and companies for achieving net zero targets taking center stage. Today it's clear achieving those targets does not happen without nuclear power. That itself is a notable difference, but it goes even deeper. This time, policymakers are not shying away from proposing nuclear as a key part of their energy mix, some even reversing their previously anti-nuclear stance.

It's no longer just a model on paper with academics running computer simulations.

Increasing average global temperatures and the fires and floods that are becoming more and more frequent can't be ignored.

The evidence continues to point to our carbon based energy systems is a key contributor to the problem.

This has led to electron accountability and proposals by countries and companies for achieving net zero targets taking center stage.

And today its clear achieving.

Achieving those targets does not happen without nuclear power.

That itself is a notable difference, but it goes even deeper.

This time policymakers are not shying away from proposing nuclear as a key part of their energy mix.

Some even reversing their previously anti nuclear stamps.

Tim Gitzel: The WNA sessions in London that I mentioned opened with US Member of Congress, Chuck Fleischmann, and the UK Parliamentary Under-Secretary of State and Minister for Nuclear and Networks, Andrew Bowie, on a panel where they discussed today's bipartisan support in government. That certainly differs from what we've seen in the past, and it forms what might be considered a solid base of support for demand growth using clean, reliable, secure, and well-established nuclear technology. It's growth that is starting to move beyond Asia, which has been the key component of the industry growth story since the late 2000s. Asia's nuclear expansion obviously remains very important today, but the broader interest and level of potential growth has expanded and is now much more global.

The WNS sessions in London that I mentioned to open with U S member of Congress, Chuck Fleishman in the UK under Secretary of state administer for nuclear and metrics, Andrew Bowie on a panel where they discussed today has bipartisan support in government.

That's certainly different from what we've seen in the past and it forms what might be considered a solid base of support for demand growth using clean reliable secure and well established nuclear technology.

It's growth of it is starting to move beyond the Asia, which has been the key component of the industry growth story since the late two thousands.

Asia's nuclear expansion, obviously remains very important today, but the broader interest and level of potential growth has expanded and is now much more global.

Tim Gitzel: Beyond that base of demand growth, another emerging difference in today's demand profile is the potential deployment of new nuclear reactor designs with a number of small modular reactors and small advanced microreactors in development. These represent a clean energy source that would be more accessible in terms of output that better matches small or modest local demand. They're expected to have better cost and schedule control by way of factory production. They can also address needs beyond electricity, such as applications for industrial heat, desalination, or hydrogen production. Big industrial energy consumers are not waiting for those government decisions and policies I just mentioned. They are moving much more quickly. A number of private companies are taking action and announcing their own plans to support the expansion of clean nuclear energy in the years to come using those promising new technologies.

Beyond that base of demand growth in other emerging difference in today's demand profile has the potential deployment of new nuclear reactor designs with a number of small modular reactors and small advanced micro reactors and development.

These represent a clean energy source. So it would be more accessible in terms of output that better matches small or modest local demand.

They are expected to have better cost and schedule control by way of factory production.

And they can also address needs beyond electricity such as applications for industrial heat.

Desalinization or hydrogen production.

Big Industrial energy consumers are not waiting for those government decisions policy as I just mentioned they are moving much more quickly.

The number of private companies are taking action and announcing their own plans to support the expansion of clean nuclear energy in the years to come.

Using those promising new technologies.

Tim Gitzel: Another big difference that won't be news to anyone is on the geopolitical front. The tension and uncertainty are increasing daily. Events like Russia's invasion of Ukraine and a coup in Niger leave countries reevaluating their energy security and who they want to rely upon to supply fuels, avoiding dependencies such as Russian gas. That evaluation of security is being done in the context of their carbon footprint and emissions accountability, which leads to consideration of nuclear to a degree we have not seen for nearly a half-century. While countries need secure and dependable energy supply, they also want it to be clean. Political views and policies generally represent the will of the people, and it's clear that public opinion is changing as well. We're seeing a social shift happening like never before. Nuclear energy is an undeniable part of the social conversation.

Another big difference that won't be news to anyone is on the geopolitical front.

The tension and uncertainty are increasing daily.

Events like Russia's invasion of Ukraine, and a cool in Niger leaves countries reevaluating their energy security and who they want to rely upon to supply fuels avoiding dependencies, such as Russian gas.

That evaluation of security is being done in the context of their carbon footprint and electron accountability.

Which leads to consideration of nuclear to a degree we have not seen for nearly a half century.

And while countries need secure and dependable energy supply. They also want it to be clean.

Political views and policies generally represent the will of the people and it's clear that public opinion is changing as well.

We're seeing a social shift happening like never before.

Nuclear energy is an undeniable part of the social conversation.

Tim Gitzel: There's vocal support from diverse and sometimes unexpected sources. Sources like social media influencers, Hollywood personalities, and even longtime nuclear protesters like Bono of U2, who just last month admitted that although he has campaigned against nuclear energy for a long time, his view has flipped to support nuclear amid the climate crisis. Taken altogether, the overarching differences we're seeing this cycle contribute to that full cycle demand growth you've heard us talk about. Previous bullish cycles were typically underpinned by demand that was more or less out in the future and in the longer-term segment of the forward demand curve. This time, we are really seeing that durable demand growth across the full cycle. In the near term, we have financial interest buying physical uranium in a way that is much different than in the past.

There's vocal support from diverse and sometimes unexpected sources.

As like social media, Influencers Hollywood personalities, and even long time nuclear protesters like bundle of Youtube.

Just last month admitted that although he has campaigned against nuclear energy for a long time.

His view has slipped to support nuclear amid the climate crisis.

Taken altogether the overarching differences, we're seeing this cycle contribute to that full cycle demand growth you've heard us talk about.

Previous bullish cycles, where typically underpinned by demand that was more or less out in the future and then the longer term segment of the forward demand curve.

This time, we are really seeing that durable demand growth across the full cycle.

In the near term, we have a financial interest buying physical uranium in a way that is much different than in the past.

Tim Gitzel: Financial participants are not acting as a marginal buyer and seller, purchasing today and selling tomorrow when the price rises by a few cents. Instead, they are providing better transparency by buying material at the market and with limited redemption capabilities, providing a better sense for the intrinsic value of uranium in the near term. Additionally, we have some real end user near and midterm demand. That demand is coming from several fully depreciated, safe, operable reactors. Reactors that were slated for decommissioning due to the economics of broken electricity markets are now being saved for their significant low carbon and secure energy benefits. It's coming from reactor life extensions.

Financial participants are not acting as the marginal buyer and seller purchasing today and selling tomorrow when the price rises by a few cents.

Instead, they are providing better transparency by buying material at the market and with limited redemption capabilities, providing a better sense for the intrinsic value of uranium in the near term.

Additionally, we have some real end user near and midterm demand.

That demand is coming from several fully depreciated safe operable reactors.

Reactors that were slated for decommissioning due to the economics of broken electricity markets are now being saved for their significant low carbon and secure energy benefits.

And it's coming from reactor life extensions again, thanks to the security and low carbon advantages and recognition that there is no equivalent clean baseload alternative.

Tim Gitzel: Again, thanks to the security and low carbon advantages and recognition that there's no equivalent clean baseload alternative. In the long-term portion of the cycle, demand growth is coming from more traditional new builds as well as the emergence of the advanced reactors, SMRs and microreactors, which have the potential to add significant demand in the coming decades. In the WNA's updated fuel cycle report released in September, demand is looking more robust than ever, averaging growth of 3.6% annually compared to 2.6% in the previous 2021 report. That only includes a very light and conservative estimate for demand to fuel those SMRs and new nuclear designs. Geopolitical tensions and energy security concerns are also changing the demand picture.

In the long term portion of the cycle demand growth is coming from more traditional new builds as well as the emergence of the advanced reactors.

S M ours, and micro reactors, which have the potential to add significant demand in the coming decades.

And the WNS updated fuel cycle report released in September.

<unk> is looking more robust than ever averaging growth of three 6% annually compared to two 6% in the previous 2021 report.

And that only includes a very light and conservative estimate for demand to fuel those SME ours in new nuclear designs.

Geopolitical tensions and energy security concerns are also changing the demand picture.

Tim Gitzel: The number of new markets seeking fuel from reliable suppliers and safe jurisdictions have opened up to create fuel cycle contracting opportunities, especially in Eastern Europe. Those are some significant differences in the context of demand. What about supply? Well, the uranium market has had its share of supply challenges in past cycles, but the difference today is that the supply picture is more uncertain than ever. First and foremost is primary supply. As demand grows and the mines are depleted, there is no Kazakhstan equivalent source of supply waiting on the sidelines somewhere to meet that growing demand into the 2030s. Even the existing uranium coming out of Kazakhstan is not going to be splashing around in the market as it has in the past, 'cause Kazatomprom has stated that under their value strategy, production now has a home in their long-term contract book.

The number of new markets seeking fuel from reliable suppliers in safe jurisdictions have opened up to create full cycle contracting opportunities, especially in eastern Europe.

So those are some significant differences in the context of demand.

But what about supply.

Well the or any market has had its share of supply challenges in past cycles, but the difference today is that the supply picture is more uncertain than ever.

First and foremost is primary supply.

As demand grows in the mines are depleted there is no kazakhstan equivalent source of supply waiting on the sidelines somewhere to meet that growing demand into the 20th thirties.

Even the existing uranium coming out of Kazakhstan is not going to be splashing around in the market as it has in the past.

Is that a problem has stated that under their value strategy production now has a home in their long term contract book.

Tim Gitzel: A big reliable supply source is simply not going to materialize, and the pockets of potential production that could be added to the supply stack carry significant greenfield risk. With no clear emerging primary supply, we have to look at the sources of secondary supply, which have been filling the gap. The shock absorbers of the past are not what they used to be either. So far this year, industry-wide, there has been nearly 144 million pounds committed under long-term contracts, which is a level we've not seen in 10 years, indicating the market remains on track to replacement rate contracting. These signposts provide a signal that inventories in all forms have been run down, and there are certainly no Megatons to Megawatts program in the works to ease the pressure.

A big reliable supply source is simply not going to materialize in the pockets of potential production that could be added to the supply stack carry significant greenfield risk.

With no clear emerging primary supply we have to look at the sources of secondary supply, which have been filling the gap.

But the shock absorbers of the past are not what they used to be either.

So far this year industry wide, there's been nearly 144 million pounds committed under long term contracts, which is a level we've not seen in 10 years, indicating the market remains on track to replacement rate contracting.

These signposts provide a signal that inventories in all forms have been run down.

Thank you for standing by. This is the conference operator.

Operator: Welcome to the Camico Corporation third quarter, 2023 conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero.

And there are certainly no megatons to megawatts program in the works to ease the pressure.

Tim Gitzel: Also on secondary supply, there's an ongoing shift to replace Russian fuel supply services and create more capacity in the enrichment segment of the fuel cycle by moving from underfeeding to overfeeding. I won't get into the technical aspects of underfeeding, overfeeding, but the punchline is that it means less secondary supply going back into the market from enrichers. In fact, similar to the story of rebuilding a depleted inventory beyond run rate requirements, overfeeding has an exaggerated impact on supply tension by not only reducing secondary supply but creating secondary demand. Primary and secondary supply of the natural uranium needed at the very start of the fuel cycle is declining. There is the matter of actually moving that supply through the cycle.

Also on secondary supply, there's an ongoing shift to replace Russian fuel supply services.

And create more capacity in the enrichment segment of the fuel cycle by moving from under feeding to Overfeed them.

I won't get into the technical aspects of Underfeed overfeed, but the punch line is that it means less secondary supply going back into the market from an Richards.

Operator: Webcast participants are asked to wait until the Q&A session before submitting their questions as the information they are looking for may be provided during the presentation.

In fact, similar to the story of rebuilding a depleted inventory beyond run rate requirements.

Overfeeding has an exaggerated impact on supply tension by not only reducing secondary supply, but creating secondary demand.

Rachelle Girard: I would now like to turn the conference over to Rachelle Girard, vice president investor relations. Please go ahead. Thank you operator and good morning everyone.

So primary and secondary supply of the natural uranium needed at the very start of the fuel cycle is declining.

Rachelle Girard: Welcome to Camico's third quarter conference call. With a very busy international travel schedule this quarter, our quarterly board meetings were held off site, rather than at our corporate office in Saskatoon.

Then there is the matter of actually moving that supply through the cycle.

Rachelle Girard: With us today on the call are Kim Getzel, president and CEO joining the call from Vienna, Austria. Grant Isaac, executive VP and CFO, Heidi Shockey, senior VP and deputy CFO, Brian Riley, senior VP and chief operating officer, Sean Quinn, senior VP, chief legal officer and corporate secretary, and Alice Wong, senior VP and chief corporate officer.

Tim Gitzel: Nobody will say that moving Class 7 nuclear material around the globe has ever been easy, but it's clearly facing new risks and challenges as a result of geopolitics. However, the uranium supply story does not end there. Stakeholders have recognized that much more than natural uranium is needed to build a nuclear fuel bundle. The services refining, conversion, enrichment, deconversion, pelletization, and fuel fabrication are getting more attention than ever, and the degree to which they are interdependent complicates the typical supply-demand analysis of a commodity. Those other segments of the fuel cycle are also facing challenges. Based on lessons learned, we're seeing a new common theme across producers and services at all stages of the cycle. Suppliers have been clear they are not going to front-run demand with uncommitted supply.

Nobody will say that moving class seven nuclear material around the globe has ever been easy, but it is clearly facing new risks and challenges as a result of geopolitics.

However, the uranium supply story does not in there.

Stakeholders have recognized that much more than natural uranium is needed to build a nuclear fuel bundle.

The services refining conversion enrichment, deconversion, pelletize, they shouldn't and fuel fabrication or getting more attention than ever and the degree to which they are interdependent complicates. The typical supply demand analysis of a commodity.

Rachelle Girard: I'm going to hand it over to Tim in just a moment to discuss the current nuclear market environment, how today's market compares to previous cycles, and how it provides the basis for Camico's improving prospects. After we will open it up for your questions, as always, our goal is to be open and transparent with our communications. Therefore, if you have detailed questions about our quarterly financial results, or should your questions not be addressed on this call, we will be happy to follow up with you after the call.

And those other segments of the fuel cycle are also facing challenges.

Based on lessons learned we are seeing a new common theme across producers and services at all stages of the cycle suppliers have been clear, they're not going to front run demand with uncommitted supply.

Rachelle Girard: There are a few ways to contact us. You can reach out to the contact provided in our news release. You can submit a question through the contact tab on our website, or you can use the Ask a Question form at the bottom of the webcast screen and we will be happy to follow up after this call. If you join the conference call through our website event page, there are slides available which will be displayed during the call.

Tim Gitzel: If they're going to add back, expand, or build new production or processing capacity, they need contracts and commitments from end users to support their investments. That has not been a central consideration in the past. As we hold those contracting conversations with customers to lock in long-term value, it's also important to consider today's pricing environment. We've never been this early in the cycle with prices as high as they are today. That's a significant factor that some might be thinking could hamper the momentum, but it isn't. That's because of the improving electricity prices rising faster than front-end fuel prices, which has rarely, if ever, been the case for us in nuclear. That means customers can better tolerate the realities of sustainable fuel pricing and focus on shoring up inventories to help ensure security of supply.

If theyre going to add back expand or build new production or processing capacity, they need contracts and commitments from end users to support their investments.

That has not been a central consideration in the past.

As we hold those contracting conversations with customers to lock in long term value.

It's also important to consider todays pricing environment.

Rachelle Girard: In addition, for your reference, our quarterly investor handout is available for download in a PDF file on our website at canico.com. Today's conference call is open to all members of the investment community including the media. During the Q&A session, please limit yourself to two questions and then this conference call will include forward-looking information which is based on a number of assumptions and actual results could differ materially. You should not place undue reliance on forward looking statements. Actual results may differ materially from these forward-looking statements and we do not undertake any obligation to update any forward-looking statements we make today except as required by law.

We've never been this early in the cycle with prices as high as they are today.

That's a significant factor that some might be thinking could hamper the momentum, but it isn't.

That's because of the improving electricity prices rising faster than front end fuel prices, which has rarely if ever been the case for us in nuclear.

That means customers can better tolerate the realities of sustainable fuel pricing and focus on shoring up inventories to help ensure security of supply.

Tim Gitzel: All those differences in today's nuclear fuel cycle from both the demand and supply perspective mean that Cameco, as a diversified nuclear fuel supplier, has more opportunities in front of us than ever. Compared to the Cameco of previous cycles, we're different as well. This time we don't have big capital-intensive greenfield mines under construction. As we see demand come to the market, we have multiple Tier 1 licensed, permitted, and approved assets we can bring back to capacity and expand. In fact, the Canadian Nuclear Safety Commission just awarded us 20-year license extensions at McArthur River and Key Lake, which is double the term of our previous license. At Rabbit Lake, we received a 15-year license extension.

So all of those differences in today's nuclear fuel cycle from both the demand and supply perspective mean that cameco.

Rachelle Girard: Please refer to our most recent annual information form in MD&A for more information about the factors that could cause these different results and the assumptions we have made.

As a diversified nuclear fuel supplier has more opportunities in front of us than ever.

And compared to the chemical previous cycles, we're different as well.

Tim Gitzel: With that, I will turn it over to Tim. Well, thank you, Rochelle, and good morning, everyone. We appreciate you joining us for today's I'm pleased to start today's call by announcing an addition to Camico's executive team.

This time, we don't have big capital intensive Greenfield mines under construction.

As we see demand come to the market, we have multiple tier one licensed permitted and approved assets, we can bring back to capacity and expand.

Tim Gitzel: Effective November 1, Dominic Kirin will be joining Camico as Global Managing Director of our subsidiary in the United Kingdom. Dominic brings extensive international executive experience in the nuclear fuel, chemical and broader technology industries, which will enhance the skill set of our strong and experienced leadership group. His wide-raging expertise will help facilitate Camico's growth across the nuclear value chain. Dominic brings over 20 years of leadership experience to Camico. Most recently, he served as chief executive officer with Babcock Nuclear. Previously, he was with Durango for 15 years in increasingly senior leadership roles, including chief commercial officer, and gained a wealth of experience from his diverse responsibilities. We look forward to having Dominic join our Camico team.

In fact, the Canadian Nuclear Safety Commission, just awarded US 20 year license extensions in Mcarthur River and key Lake, which is double the term of our previous license.

And at Rabbit Lake, we received a 15 year license extension.

Tim Gitzel: We believe that our commitment to protecting the health and safety of our people and the public and to protecting the environment is reflected in the extended duration of the licenses. As we add contracts to our portfolio for the delivery of uranium in the years to come, we also have several already built and permitted Tier 2 assets where costs and economics are established and proven. These are all sources of proven and reliable supply from a preferred jurisdiction. Of course, it doesn't end there. We have what we believe are some of the best advanced exploration projects and most prospective land positions in the business. Today, we are more focused on our core expertise, having divested interests in gold and power generation. As a pure-play nuclear investment, we are very well-positioned to maximize value.

We believe that our commitment to protecting the health and safety of our people in the public and to protecting the environment.

As reflected in the extended duration of the licenses.

And as we add contracts to our portfolio for the delivery of uranium in the years to come. We also have several already built and permitted tier two assets where costs and economics are established and proven.

These are all sources of proven and reliable supply from a preferred jurisdiction.

And of course, it doesn't end there.

Tim Gitzel: As Rochelle mentioned, I'm joining today from Vienna, Austria, where tomorrow I'll be attending meetings of the IAEA's Standing Advisory Group on Nuclear Energy. Mr. Raphael Grossy, the IAEA's Director General, appoints group members from governments, research institutions, and the nuclear industry to advise the agency on nuclear power and fuel cycle activities, and provide guidance on matters concerning capacity for long-term energy security. This trip adds to what has been a very busy fall.

We have what we believe are some of the best advanced exploration projects and most prospective land positions in the business.

Today, we are more focused on our core expertise, having divested interest in gold in power generation and as a pure play nuclear investment we are very well positioned to maximize value.

Tim Gitzel: There's improved recognition of the importance and interdependence of the entire fuel cycle beyond uranium as a core commodity. This means that our long-established and reliable Fuel Services division, as well as our investment in Global Laser Enrichment and its next-generation enrichment technology, are being highlighted for their strategic importance. I'm not using the word strategic in place of economic. We have been invested across the fuel cycle since inception, and I think those assets are more valuable to us today from a financial perspective than they've ever been. Considering our uranium and fuel cycle assets together from an investment perspective, we offer exciting upside exposure to an in-demand commodity at a time when supplies have never been more uncertain.

There was improved recognition of the importance and interdependence of the entire fuel cycle beyond uranium as a core commodity.

This means that our long established and reliable fuel services division.

Tim Gitzel: Back in Canada, I met with Ukrainian President Zelensky and Prime Minister Trudeau in September, followed by a trip with a Camico delegation in October to the head office and operations of Energo Adam in Kiev, reinforcing our commitment and support for Ukraine's energy independence. We also joined the OECD's inaugural road maps to new nuclear conference in Paris, where government and industry leaders met to build leadership and cooperation in nuclear energy. These are all proud moments for us at Camico that highlight the impact our work is having around the world.

As well as our investment in global laser enrichment and its next generation enrichment technology are being highlighted for their strategic importance.

And I'm not using the word strategic in place of economic.

We've been invested across the fuel cycle since inception, and I think those assets are more valuable to us today from a financial perspective than they've ever been.

Considering our uranium and fuel cycle assets together from an investment perspective.

We offer exciting upside exposure to an in demand commodity at a time when supplies have never been more uncertain.

Tim Gitzel: Our invitation to these types of influential meetings highlights our credibility as a company and our well-respected position in the nuclear fuel market. And they provide us with unique insight and the opportunity to be in the room where important policies are discussed in support of the global nuclear industry. It's an industry that is getting significant attention today and that's being recognized for the numerous benefits and advantages it can offer to the global energy supply and to energy security.

Tim Gitzel: At the same time, we offer the stability and protection of an impressive long-term contract portfolio, representing a stream of earnings and cash flow that provides exposure to rising prices. Our pipeline of contract discussions continues to grow. With our partner, Brookfield, we continue to work toward closing our acquisition of Westinghouse by the end of the year. That transaction is very well aligned with our pure play nuclear strategy. With several parts of that business being more stable and less tied to the ups and downs of the commodity, it's expected to complement our high-quality Tier One uranium and fuel services assets. Cameco's valuation should therefore reflect a scarcity premium. No other publicly traded uranium company offers similar exposure to that durable full-cycle demand growth across the fuel cycle that's occurring in the nuclear industry.

And at the same time, we offer the stability and protection of an impressive long term contract portfolio.

Representing a stream of earnings and cash flow that provides exposure to rising prices.

And our pipeline of contract discussions continues to grow.

And with our partner Brookfield, we continue to work toward closing our acquisition of Westinghouse by the end of the year.

That transaction is very well aligned with our pure play nuclear strategy.

Tim Gitzel: This fast quarter, we saw players from all facets of the nuclear sector congregate in London for the World Nuclear Association's annual symposium, where the atmosphere was more optimistic than it's been for over a decade, maybe ever. With over 40 years in this industry, I feel well-qualified in saying yes we've seen enthusiasm in past cycles. Over at the symposium this year there was a sense of urgency that I can't say we've experienced before.

With several parts of that business being more stable and less tied to the ups and downs of the commodity it's expected to complement our high quality tier one uranium and fuel services assets.

Chemicals valuation should therefore reflect a scarcity premium.

No other publicly traded uranium company offer similar exposure to that durable full cycle demand growth across the fuel cycle, that's occurring in the nuclear industry.

Tim Gitzel: I think it's clear the drivers that supported the positive momentum of cycles in that past are important factors in today's environment. However, the urgency and the differences impacting demand and supply and the strategy Cameco has pursued over the past decade has made us a different company today than we've been in the past. Combined, these factors set up this cycle to be more exciting than ever. The improving market conditions, coupled with our strategic decisions, are also benefiting our financial performance. We're seeing improvements in our earnings, gross profit, and cash flow, which was evident again this quarter. We expect our financial performance to improve further as we continue our transition back to a Tier One run rate. Cameco's strategy of contracting discipline, production discipline, and risk-managed financial discipline is set within the context of the transitioning market environment we're currently in.

So I think it's clear the drivers that supported the positive momentum of cycles in that past are important factors in today's environment.

Tim Gitzel: Each time the market has entered a period of transition, stakeholders look back at previous cycles to highlight similarities and common threads in an attempt to predict the duration and durability of the positive momentum. If you follow the industry and Cameco through the 2000s, or if you're one of the exceptional few that might have been paying attention even earlier than that, you would have heard us talking about things like potential long-term demand growth or supply pressure building on the horizon or the level of financial interest in buying physical Uranium. We are of course seeing those similarities right now, but with the added element of urgency, I think there is much more to the story this time.

However, the urgency and the differences impacting demand and supply and the strategy Cameco has pursued over the past decade has made us a different company today than we've been in the past.

Combined these factors set up this cycle to be more exciting than ever.

The improving market conditions, coupled with our strategic decisions are also benefiting our financial performance.

We're seeing improvements in our earnings gross profit and cash flow, which was evident again this quarter.

And we expect our financial performance to improve further as we continue our transition back to a tier one run rate.

Tim Gitzel: So for today's call, rather than our customary approach of highlighting industry developments in the context of chemical strategy, I thought we would provide our view of what sets the current industry environment apart from previous cycles, pulling the various factors together into one discussion. And in doing so, I want to emphasize how Cameco, as one of the leading suppliers in the industry, is also evolving to maximize value while addressing the urgent call to action.

Cameco strategy of contracting disciplined production discipline.

And risk managed financial discipline is set within the context of the transitioning market environment. We're currently in.

Tim Gitzel: With CAD 2.7 billion in cash, CAD 1 billion in total debt, and a CAD 1 billion undrawn credit facility, our balance sheet remains strong. We will retain our conservative financial management to support our balanced and disciplined contracting and supply decisions, providing us with the ability to self-manage risks and retain the capacity to pursue value-adding investments like Westinghouse. Before moving into our Q&A session today, it is with an enormously heavy heart that I acknowledge and remember Ian Bruce, a dear friend, valued colleague, and Cameco's longtime board chair, who tragically passed away at his cottage in Ontario on 16 October. I've worked with Ian since he joined our board more than a decade ago, and on behalf of the entire Cameco family, I extend our deepest condolences to Ian's wife, Darlene, and his family, many friends, and loved ones.

With $2 $7 billion in cash and $1 billion in total debt and a $1 billion Undrawn credit facility, our balance sheet remains strong.

We will retain our conservative financial management to support our balanced and disciplined contracting and supply decisions, providing us with the ability to self manage risks and retain the capacity to pursue value, adding investments like Westinghouse.

Tim Gitzel: Let's consider the durability of demand, first in the context of climate change. Some will argue that the climate crisis isn't new, as it's been part of the conversation for decades now. But what's different today is that urgency. It's no longer just a model on paper with academics running computer simulations. The increasing average global temperatures and the fires and floods that are becoming more and more frequent can't be ignored. The evidence continues to point to our carbon-based energy systems as a key contributor to the problem.

Before moving into our Q&A session today.

It is with the enormously heavy heart that I acknowledge and remember Ian Bruce.

Dear friend valued colleague and chemicals longtime board chair, who tragically passed away at as Cartage in Ontario on October 16th.

I've worked with <unk> since he joined our board more than a decade ago and on behalf of the entire chemical family.

Tim Gitzel: This has led to electron accountability and proposals by countries and companies for achieving net zero targets taking center stage. And today it's clear that achieving those targets does not happen without nuclear power. That itself is a notable difference but it goes even deeper. This time policy makers are not shying away from proposing nuclear as a key part of their energy mix. Some even reversing their previously anti-nuclear stance. The WNA sessions in London that I mentioned opened with US Member of Congress Chuck Fleischmann and the UK Undersecretary of State and Minister for Nuclear and Networks Andrew Bowie on a panel where they discussed today's bipartisan support in government.

I extend our deepest condolences to his wife, Darlene and his family and many friends and loved ones.

Tim Gitzel: His business acumen, personal and professional advice, overall leadership, and most importantly, friendship, were absolutely invaluable to Cameco, and his absence during yesterday's board discussions was notable. Ian was excited about nuclear energy and the company's future, and he was extremely proud to be part of the Cameco team. He will be profoundly missed. Thank you for your interest today, and we are happy to take your questions.

His business acumen personal and professional advice overall leadership and most importantly friendship we're absolutely invaluable to cameco in his absence during yesterday's board discussions.

Was notable.

Ian was excited about nuclear energy and the company's future and he was extremely proud to be part of the cameco team.

He will be profoundly missed.

So thank you for your interest today, and we are happy to take your questions.

Operator 2: Thank you. We will now begin the question-and-answer session. In the interest of time, we ask that you limit your questions to one with one supplemental. If you have additional questions, you are welcome to rejoin the queue. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw from the question queue, please press star then two. Webcast participants are welcome to submit questions through the box at the bottom of the webcast frame. The Cameco investor relations team will follow up with you by email after the call. Once again, anyone on the conference call who wishes to ask a question may press star then one at this time. Our first question comes from Orest Wowkodaw of Scotiabank.

Operator: Thank you. We will now begin the question-and-answer session. In the interest of time, we ask that you limit your questions to one with one supplemental. If you have additional questions, you are welcome to rejoin the queue. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw from the question queue, please press star then two. Webcast participants are welcome to submit questions through the box at the bottom of the webcast frame. The Cameco investor relations team will follow up with you by email after the call. Once again, anyone on the conference call who wishes to ask a question may press star then one at this time. Our first question comes from Orest Wowkodaw of Scotiabank.

Thank you we will now begin the question and answer session in the interest of time, we ask that you limit your questions to one with one supplemental if you have additional questions. You are welcome to rejoin the queue to.

Tim Gitzel: That certainly differs from what we've seen in the past and informs what might be considered a solid base of support for demand growth using clean, reliable, secure and well-established nuclear technology. It's growth that is starting to move beyond Asia which has been the key component of the industry growth story since the late 2000s. Asia's nuclear expansion obviously remains very important today but the broader interest and level of potential growth has expanded and is now much more global.

To join the question queue. You May Press Star then one on your telephone keypad, you'll hear atone acknowledging your request if.

If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw from the question queue. Please press Star then two webcast participants are welcome to submit questions through the box at the bottom of the webcast frame. The cameco Investor Relations team will follow up with you by email after the call once again.

Tim Gitzel: Beyond that base of demand growth and other emerging difference in today's demand profile is the potential deployment of new nuclear reactor designs with a number of small modular reactors and small advanced micro reactors in development. These represent a clean energy source that would be more accessible in terms of output that better matches small or modest local demand. They're expected to have better cost and schedule control by way of factory production. And they can also address needs beyond electricity, such as applications for industrial heat, decolonization or hydrogen production.

On the conference call, who wishes to ask a question Press Star then one at this time.

Our first question comes from Rs walked out with Scotiabank. Please go ahead.

Operator 2: Please go ahead.

Operator: Please go ahead.

Orest Wowkodaw: Hi. Good morning. Grant, I was hoping we could get some color on what's happening with contracting. Obviously, the uranium price has moved up a lot, even in the last three months, and I'm wondering if you're seeing what kind of behaviors you're seeing from your customers, whether the higher price movement is actually engaging them to sign more contracts or whether you're seeing them pulling back. Alternatively, how's Cameco approaching this behavior, and are you continuing to pull back in terms of signing contracts in hopes of better terms with respect to higher floors and ceilings down the road? Just wondering sort of what that engagement looks like right now.

Oh, hi, good morning.

Greg I was hoping we could get some color on what's happening with contracting obviously the uranium prices moved up a lot even in the last three months and I'm wondering if you're seeing them what kind of behavior, you're seeing from your customers, whether they're the higher price movement is actually engaging them to find more.

Tim Gitzel: Big industrial energy consumers are not waiting for those government decisions and policies I just mentioned, they are moving much more quickly. A number of private companies are taking action and announcing their own plans to support the expansion of clean, nuclear energy in the years to come using those promising new technologies.

Tax or whether you're seeing them pulling back.

Alternatively, How's cameco, we're approaching this behavior and are you continuing to pull back in terms of signing contracts in hopes of better terms with respect to higher floors and ceilings down the road just wondering through what that engagement looks like right now.

Grant Isaac: Yeah. Orest, great questions, great place to start. There have been a lot of opportunities to be with customers in the last couple of months. The WNA symposium that Cameco or that Tim referred to, as well as the recent NEI conference in Charlotte. There still is a very pervasive urgency in the market. That urgency is reflected in improving contracting rates. We now are looking at year to date across the industry. Excuse me. About 145 million pounds contracted. That is much higher than it had been in each of the last 10 years. Starting to approach that, you know, durable replacement rate contracting. I would say in general, it is a broad-based demand recovery.

Yes.

Questions Great place to start there have been a lot of opportunities to be with customers in the last couple of months.

WNS symposium that cameco or that Tim referred to as well as the recent Nei conference in Charlotte There still is a very purse a pervasive urgency.

In the market that urgency is reflected in improving.

Contracting rates, we now are looking at year to date across the industry excuse me about 145 million pounds contracted that is much higher than it had been in each of the last 10 years starting to approach that that you know durable replacement rate Contra.

Tim Gitzel: And while countries need secure and dependable energy supply, they also want it to be clean. Political views and policies generally represent the will of the people and it's clear that public opinion is changing as well. We're seeing a social shift happening like never before. Nuclear energy is an undeniable part of the social conversation. There's vocal support from diverse and sometimes unexpected sources, sources like social media influencers, Hollywood personalities, and even longtime nuclear protesters like Bono of View 2, who just last month admitted that, although he has campaigned against nuclear energy for a long time, his view has flipped to support nuclear amid the climate crisis.

<unk> I would say in general it is a broad based demand recovery. It reflects demand from those who might have thought they'd been shutting down a reactor early coming to the market those who are now pursuing a life extension for reactors that might have.

Grant Isaac: It reflects demand from those who might have thought they had been shutting down a reactor early, coming to the market. Those who are now pursuing life extensions for reactors that might have been retired after their initial license extension. Of course, it's demand for those who are building new. It also is, as a very important regional focus, the emergence of Central and Eastern European customers into the Western supply piece, which is a demand that is new and is quite frankly competitive with the demand that we used to see from Western Europe, from North America, Canada, the US, as well as parts of Asia. It is broadly based.

And then retired after their initial license extension and then of course its demand for those who are building new it also is a very important regional focus and that is the emergence of central and eastern European customers.

Into the western supply piece, which is that a demand that is new and is quite frankly competitive with the demand that we used to see from Western Europe from North America, Canada, The U S as well as parts of Asia. So it is broadly.

Tim Gitzel: Taking all together, the overarching differences we're seeing this cycle contribute to that full cycle demand growth you've heard us talk about. Previous bullish cycles were typically underpinned by demand that was more or less out in the future and in the longer term segment of the forward demand curve. This time we are really seeing that durable demand growth across the full cycle. In the near term, we have financial interest buying physical uranium in a way that is much different than in the past.

It is broadly based.

Grant Isaac: I would say that there are some utilities that have been more aggressive than others in shoring up their longer term supply. Probably no surprise, those who are on the front end of rising electricity prices and energy security, have moved quicker. I would say that is characteristic of Western European utilities as well as Central and Eastern European utilities. The good news, Orest, is that some have yet to come to the market. When Tim refers to this situation where, we're in the early innings of a contracting cycle, it is because we know there are pockets of demand, bigger utility customers yet to come.

I would say that there are some utilities that have been more aggressive than others in shoring up their longer term supply.

Tim Gitzel: Financial participants are not acting as a marginal buyer and seller purchasing today and selling tomorrow when the price rises by a few cents. Instead, they are providing better transparency by buying material at the market and with limited redemption capabilities providing a better sense for the intrinsic value of uranium. Additionally, we have some real end user near and midterm demand. That demand is coming from several fully depreciated, safe, operable reactors. Reactors that were slated for decommissioning due to the economics of broken electricity markets are now being saved for their significant low carbon and secure energy benefits, and it's coming from reactor life extensions.

<unk> no surprise, those who are on the front end of rising electricity prices and energy security.

Have moved quicker I would say that is characteristic of western European utilities, as well as central and eastern European utilities. The good news is that some have yet to come to the market and so when Tim refers to the situation where.

We're in the early innings of a contracting cycle. It is because we know there are pockets of demand bigger utility customers yet to come.

Grant Isaac: All of this suggests to us we are absolutely in the right position at Cameco to be strategically positioning our contract portfolio for higher prices, being biased towards market-related long-term contracting that will reference prices at time of delivery out into the future. We have been more selective in ensuring that we're getting that exposure to a rising price environment. We lead the market with respect to the construction of floors and the construction of ceilings. This is for us exactly where we wanna be. Sorry for the long answer. I just wanted to cover it in its full dimensions.

All of this suggests to US we are absolutely in the right position as cameco to be strategically.

Positioning our contract portfolio for higher prices being bias towards market related long term contracting that will reference prices at time of delivery out into the future we have been.

Tim Gitzel: Again, thanks to the security and low carbon advantages and recognition that there is no equivalent clean, base load alternative. In the long-term portion of the cycle, demand growth is coming from more traditional new builds, as well as the emergence of the advanced reactors, SMRs and microreactors, which have the potential to add significant demand in the coming decades.

More selective and ensuring that we're getting that exposure to a rising price environment, we lead the market with respect to the construction of floors in the construction of ceilings.

As a fourth exactly where we want to be sorry for the long answer I just wanted to cover it in its full dimensions.

Tim Gitzel: In the WNA's updated fuel cycle report released in September, demand is looking more robust than ever. Averaging growth of 3.6% annually compared to 2.6% in the previous 2021 report. And that only includes a very light and conservative estimate for demand to fuel low SMRs and nuclear designs. Geopolitical tensions and energy security concerns are also changing the demand picture. The number of new markets seeking fuel from reliable suppliers and safety restrictions have opened up to create full cycle contracting opportunities, especially in Eastern Europe. So, those are some significant differences in the context of demand.

Orest Wowkodaw: Okay. No, thank you for that. Just as a follow-up, the Kazatomprom announced a pretty aggressive 2025 production target a few weeks ago, going to 80 million pounds from somewhere in the 55 to 60 million pounds. Should we anticipate? Like, how does Cameco think about that strategy? I mean, you obviously have a lot of curtailed capacity, both in terms of still Tier 1 expansion potential, but also with respect to your Tier 2. What do you need to see to further increase your production plans?

Okay, well, thank you for that and just as a follow up your the Kazakhs announced some pretty aggressive 2025 production targets a few weeks ago go.

Go to 80 million pounds from somewhere in the 55 to 60 million pounds.

Hum.

Should we anticipate.

Cabot's Cameco think about that strategy I mean, you obviously have a lot of curtailed capacity both in terms of skill tier one expansion potential but also with respect to your tier two.

What do you need to see to further increase your production plants.

Grant Isaac: Yeah. Let me just make a comment on the Kazatomprom announcement, because I think across the industry, certainly on the uranium supply side, not a lot of surprise. I think just a general expectation that as Kazatomprom has pivoted to a strategy that's very similar to Cameco's, which is you build the homes under long-term contract, and then you call for more production. They've been successful in building long-term contract homes. I think a lot of people had noted some of the volumes that they had committed to go into China, for example. It's pretty clear they need those pounds, as part of commitments they've already entered into.

Yeah, Let me just make a comment on the cause Adam problem announcement, because I think across the industry certainly on the uranium supply side.

Not a lot of surprise I think just a general expectation that as is that a problem has pivoted to a strategy. That's very similar to <unk>, which is you build the homes under long term contract and then you call for more production and they've been successful in building long term contract homes by I think a lot of people had noted.

Tim Gitzel: But what about supply? Well, the Uranium market has had its share of supply challenges in past cycles, but the difference today is that the supply picture is more uncertain than ever. First and foremost is primary supply. As demand grows and the mines are depleted, there is no Kazakhstan equivalent source of supply waiting on the sidelines somewhere to meet that growing demand into the 2030s. Even the existing Uranium coming out of Kazakhstan is not going to be splashing around in the market as it has in the past.

Some of the volumes that they had committed to to go into China. For example, so it's pretty clear they need those pounds as part of commitments. They have already entered into so that is a very big departure from because Adam problem of the past, which had produced a lot of material held it as uncommitted.

Grant Isaac: That is a very big departure from the Kazatomprom of the past, which had produced a lot of material, held it as uncommitted primary production, and then was required to sell it through a spot market not capable of absorbing those volumes. Not a lot of surprise that those announcements were made. Of course, the backdrop for achieving those increased production numbers is performance on the operating side. You see a lot of risks being raised by Kazatomprom with respect to challenges in their supply chain, the types of things, acid supply, for example, drilling, availability, the types of things that make achieving those production targets difficult. I...

Tim Gitzel: Because Adam Prom has stated that under their value strategy, production now has a home in their long-term contract book. A big reliable supply source is simply not going to materialize, and the pockets of potential production that could be added to the supply stack carry significant greenfield risk. With no clear emerging primary supply, we have to look at the sources of secondary supply, which have been filling the gap. But the shock absorbers of the past are not what they used to be either.

Primary production.

And then was required to sell it through a spot market not capable of absorbing those volumes. So not a lot of surprise that that those announcements were made and of course the backdrop for achieving those increased production numbers is.

It is our performance on the operating side and you see a lot of risks being raised by bike as Adam problem with respect to a.

Challenges in their supply chain.

Types of things asset supply for example drilling.

Tim Gitzel: So far this year, industry wide, there has been nearly 144 million pounds committed under long-term contracts, which is a level we have not seen in 10 years, indicating the market remains on track to replacement rate contracting. These signposts provide a signal that inventories in all forms have been run down, and there are certainly no megatons to megawatts program in the works to ease the pressure. Also on secondary supply, there is an ongoing shift to replace Russian fuel supply services and create more capacity in the enrichment segment of the fuel cycle by moving from underfeeding to overfeeding.

Availability of the types of things that make achieving those production targets difficult. So.

Grant Isaac: You know, I hope folks weren't surprised by that announcement or weren't surprised to the negative because I think it's very consistent with the commercial strategy Kazatomprom's been following. With respect to Cameco, we remain in supply discipline. We have seen these markets before. We believe these are the early innings of a robust contracting cycle. We've never been at this stage of a contracting cycle at these prices. It suggests that we wanna be leveraged with our in-ground production, our in-ground inventory to higher prices. What we need to see is an urgency of supply translate into an urgency of demand.

I, you know I hope folks weren't surprised by that announcement or werent surprised to the negative because I mean, it's very consistent with the commercial strategy because out of <unk> been following.

With respect to cameco, we remain in supply discipline, we have seen these markets before we believe these are the early innings of a robust contracting cycle, we'd never been at this stage of our contracting cycle at these prices. It suggests that we want to be leveraged with.

Our with in ground production are in ground inventory to higher prices. So what we need to see is an urgency of supply.

Tim Gitzel: I won't get into the technical aspects of underfeed overfeed, but the punchline is that it means less secondary supply going back into the market from enrichors. In fact, similar to the story of rebuilding a depleted inventory beyond run rate requirements, overfeeding has an exaggerated impact on supply tension by not only reducing secondary supply, but creating secondary demand. So primary and secondary supply of the natural uranium needed at the very start of the fuel cycle is declining.

Translate into an urgency of demand, we just need to see more demand in the market that that that demand in the market is going to restore true production economic pricing the type of pricing required to be considering in a meaningful way the restart of tier two production for example.

Grant Isaac: We just need to see more demand in the market, that demand in the market is going to restore true production economic pricing, the type of pricing required to be considering in a meaningful way the restart of tier two production, for example, and then after that, of course, real investment in greenfield. Because we've seen these markets before, we can be strategically patient. We are not in a rush to produce material that doesn't have a home requiring us to either build an inventory or sell it into the spot market, neither of which have been supportive of value for our owners, and we just won't do that.

And then after that of course real investment in Greenfield because we've seen these markets before we can be strategically patient we are not in a rush to produce material that doesn't have a home requiring us to either building inventory or sell it into the spot market neither of which have been supportive of that.

Tim Gitzel: Then there is the matter of actually moving that supply through the cycle. Nobody will say that moving class seven nuclear material around the globe has ever been easy, but it's clearly facing new risks and challenges as a result of geopolitics.

<unk> for our owners.

And we just won't do that.

Orest Wowkodaw: Thanks, Grant.

Thanks, Craig.

Tim Gitzel: However, the uranium supplies supply story does not end there. The stakeholders have recognized that much more than natural uranium is needed to build a nuclear fuel bundle. The services, refining, conversion, enrichment, deconversion, pelletization, and fuel fabrication are getting more attention than ever, and the degree to which they are interdependent complicates the typical supply demand analysis of a commodity. And those other segments of the fuel cycle are also facing challenges. Based on lessons learned, we're seeing a new common theme across producers and services at all stages of the cycle.

Tim Gitzel: Thanks for your question, Orest, and sorry, I wasn't ignoring you. We got cut off for a minute, but we're back.

Thanks for your question worst and sorry, he wasn't ignoring you we got cut off for a minute, but we're back.

Operator 2: Our next question comes from Ralph Profiti of Eight Capital. Please go ahead.

Operator: Our next question comes from Ralph Profiti of Eight Capital. Please go ahead.

Our next question comes from Ralph <unk> of eight capital. Please go ahead.

Ralph Profiti: Thanks, operator. Good morning, Tim and Grant. Is there a specific window of time where you can refer us to, with respect to your comments about sort of future demand being more near-term, right? Is this equal across all tenors, or is there a specific window, say, within 2 to 3 years or sort of 3 to 5 years that may be of particular interest to highlight for us?

Thanks, operator, good morning, Tim or grant.

Is there a specific window of time, where you can refer to with respect to your comments about sort of future demand being more near term right is this equal across all tenors or is there a specific window stay within two to three years or sort of three to five years that may be of particular interest to highlight for us.

Tim Gitzel: Grant, why don't you carry on with the marketing piece and the market?

Tim Gitzel: Suppliers have been clear. They are not going to front run demand with uncommitted supply. If they're going to add back, expand or build new production or processing capacity, they need contracts and commitments from end users to support their investments. That has not been a central consideration in the past.

[noise] Grant why don't you carry on with the marketing piece in the in the market.

Grant Isaac: Yeah. When you think about that near-term demand, we're often referring to those who are running reactors may have been planning to shut them down early, but then the policy condition changes for them to be saved. If you just think in the recent past, some examples would be the Diablo Canyon units in California or perhaps the Byron and Dresden units in Illinois. Why we call this near-term demand is because the reality for the utility that's been operating those units is not only have they not been procuring run rate material, they've probably been drawing down their inventory that was assigned to those units. When those units are extended, we often see two very distinct types of near-term demand.

Yeah. When you think about that near term demand, we're often referring to those who are running reactors may have been planning to shut them down early but then the policy condition changes for them to be saved and so if you just think in the recent past.

Some examples would be the Diablo Canyon units in California are perhaps the buyer and in Dresden units in Illinois.

Tim Gitzel: As we hold those contracting conversations with customers to lock in long term value, it's also important to consider today's pricing environment. We've never been this early in the cycle with prices as high as they are today. That's a significant factor that some might be thinking could hamper the momentum, but it isn't. That's because of the improving electricity prices rising faster than front end fuel prices, which has rarely if ever been the case for us in nuclear. That means customers can better tolerate the realities of sustainable fuel pricing and focus on showing up inventories to help ensure security of supply.

And why do we call. This near term demand is because the reality for the utility that's been operating those units is not only have they not been procuring run rate material, they've probably been drawing down their inventory that was assigned to those units and so when those units are extended we often see two very distinct.

Types of near term demand in the first is those utility stepping into the market and looking for a run rate requirements now for the next three years now for the next five years and they put that demand in the market looking for term material and then oftentimes you'll see that demand also show.

Grant Isaac: The first is those utilities stepping into the market and looking for run rate requirements, you know, now for the next three years, now for the next five years, and they put that demand in the market, looking for term material. Then oftentimes you'll see that demand also some demand show up in the spot market in the form of restoring some inventory targets that had been drawn down. Now, that is a, you know, kind of in the next five-year window, Ralph.

Tim Gitzel: So all those differences in today's nuclear fuel cycle from both the demand and supply perspective mean that Camico, as a diversified nuclear fuel supplier, has more opportunities in front of us than ever. And compared to the Camico of previous cycles, we're different as well. This time we don't have big capital intensive greenfield mines under construction. As we see demand come to the market, we have multiple tier one licensed permitted and approved assets.

Some demand show up in the spot market in the form of restoring some inventory targets that had been drawn down now that is a.

Kind of in that next five year window, Ralph and so that that is really helpful demand with respect to to price formation, because what it effectively does when you see those announcements as those who might have say uncommitted primary production or an off take agreement with.

Grant Isaac: That is a really helpful demand with respect to the price formation, because what it effectively does when you see those announcements is those who might have, say, uncommitted primary production or an offtake agreement with, perhaps, a state-owned enterprise that is continuing to produce without a home, those types of folks might step back from selling material in the spot market in anticipation of that demand to show up. It tends to be very constructive. That's a little distinct, I would say, from that medium-term demand that Tim referred to, which is really around life extensions. The US fleet pioneered life extensions, but now with a clean energy and an energy security crisis going on, a lot of jurisdictions are considering running their reactors for a lot longer, and then that starts to extend the tenor of the term contracting.

Tim Gitzel: We can bring back the capacity and expand. In fact, the Canadian Nuclear Safety Commission just awarded us 20-year license extensions at MacArthur River and Key Lake, which is double the term of our previous license. And at Rabbit Lake, we received a 15-year license extension. We believe that our commitment to protecting the health and safety of our people and the public and to protecting the environment is reflected in the extended duration of the licenses.

Perhaps a state owned enterprise that is continuing to produce without a home those.

Those types of folks might step back from from selling material in the spot market in anticipation of that demand to show up so it tends to be very constructive that's a little distinct I would say from that medium term demand that Tim referred to which is really around life extension.

The us fleet pioneered life extensions, but now with the clean energy and energy security crisis going on a lot of jurisdictions are considering running their reactors for a lot longer and then that starts to extend the tenor of the term contracting and so for example, we are now seeing term.

Tim Gitzel: And as we add contracts to our portfolio for the delivery of uranium in the years to come, we also have several already built and permitted tier two assets, where costs and economics are established and proven. These are all sources of proven and reliable supply from a preferred jurisdiction. And of course it doesn't end there. We have what we believe are some of the best advanced exploration projects and most prospective land positions in the business.

Grant Isaac: For example, we are now seeing term contracting push through the end of this decade and into the early part of the 2030s, in a fairly significant way. We often think of that near and the midterm demand quite distinctly.

Contracting pushed through the end of this decade and into the early part of the 2000 Thirty's.

In a fairly significant way, so we often think of that near and midterm demand quite quite distinctly.

Ralph Profiti: Gotcha. Yeah, very helpful. In the production update in September, your team cited equipment reliability issues, availability of skilled labor, and supply chain challenges. Just wondering, are you seeing these as temporary and transitory, and how are you tackling these issues?

Got you very helpful.

Tim Gitzel: Today we are more focused on our core expertise having divested interests in gold and power generation, and as a pure play nuclear investment, we are very well positioned to maximize value. There's improved recognition of the importance and interdependence of the entire fuel cycle beyond uranium as a core commodity. This means that our long-established and reliable fuel services division, as well as our investment in global laser enrichment and its next generation enrichment technology, are being highlighted for their strategic importance.

In the production update in September.

Your team cited our equipment reliability issues availability of skilled labor and supply chain challenges. Just wondering are you seeing these as temporary and transitory and how you're tackling that how are you tackling these issues.

Tim Gitzel: Yeah. Ralph, we're working through those issues. You know, when you're down for four or five years, like we were at McArthur and Inkai, nothing's that simple, and we put in a lot of automation and robotics that we have to fine-tune. You know, I think we're coming around now. I've seen some numbers in the last little while, and our production is running nicely, and we hope to get it to steady state. We're working through those issues that we mentioned, I think it was in early September, 3 September, and at both McArthur, Inkai, and Cigar. We wanna get back to steady state. Our plan is to get back up to 18 million pounds a year at both of those sites next year, and that's what we're gonna do.

Yeah, Ralph we're working through those issues you know when you're down for four or five years like we were at Mcarthur key it's nothing says that simple and we put in a lot of automation and robotics that we have to fine tune. So you know I think we're coming around now I've seen some numbers in the last little while on our <unk>.

Tim Gitzel: And I'm not using the word strategic in place of economic. We've been invested across the fuel cycle since inception, and I think those assets are more valuable to us today from a financial perspective than they've ever been.

Production is running nicely and we hope to get it just at a steady state. So we're working through those issues that we mentioned I think it was in early September through September and at both Mcarthur key and cigar and so we are we want to get back to steady state. Our plan is to get back up to 18 million pounds a year.

Tim Gitzel: Considering our uranium and fuel cycle assets together from an investment perspective, we offer exciting upside exposure to an in-demand commodity at a time when supplies have never been more uncertain. And at the same time, we offer the stability and protection of an impressive long-term contract portfolio, representing a stream of earnings and cash flow that provides exposure to rising prices. And our pipeline of contract discussions continues to grow.

Those sites next year and that's what we can do.

Brian MacArthur: Yeah. Excellent to hear. Thanks, Tim. Thanks, Grant.

Ralph Profiti: Yeah. Excellent to hear. Thanks, Tim. Thanks, Grant.

Excellent to hear thanks, Tim Thanks Grant.

Tim Gitzel: Thanks.

Operator 2: Our next question comes from Lawson Winder of Bank of America. Please go ahead.

Operator: Our next question comes from Lawson Winder of Bank of America. Please go ahead.

Our next question comes from Lawson Winder of Bank of America. Please go ahead.

Lawson Winder: Yes, thank you, operator. Good morning Tim, Grant, and Rochelle as well. Nice to hear from you all, and thank you for the update. I would like to ask about Westinghouse. First of all, just ask if you could confirm that the UK is the final remaining competition authority approval that is needed, and maybe if you could please comment on why the process has taken a little longer than expected.

Yes, Thank you operator, and good morning, Tim grants and Rochelle as well nice to hear from you all and thank you for the update.

Tim Gitzel: And with our partner Brookfield, we continue to work toward closing our acquisition of Westinghouse by the end of the year. That transaction is very well aligned with our pure play nuclear strategy. With several parts of that business being more stable and less tied to the ups and downs of the commodity, it's expected to complement our high quality, cheer on uranium and fuel services assets. Chemicals valuation should therefore reflect a scarcity premium.

I would like to ask about.

Westinghouse.

And first of all just ask if you could confirm that the UK is the final remaining competition authority approval than needed.

And maybe if you could please comment on why the process has taken a little longer than expected.

Tim Gitzel: Yeah. It's Tim. I think we've worked our way through about 40 or 40-plus approvals so far. We do have the UK left to go, and so we're still expecting to close the deal by the end of the year. I think everything's on track for that. Nothing too new there. We're super excited about closing the deal when that day comes. We think we've got the right partner, the right target and the right timing. More to come on that as soon as we get all the approvals in place.

Yeah, So it's Tim.

I think we've worked our way through about 40 or 40, plus approvals. So far you do have the U K left to go and so we're still expecting to close the deal by the end of the year. So I think everything is on track for that and nothing nothing to new there were super excited about.

Tim Gitzel: No other publicly traded uranium company offers similar exposure to that durable, full cycle demand growth across the fuel cycle that's occurring in the nuclear industry. So I think it's clear the drivers that supported the positive momentum of cycles in that past are important factors in today's environment. However, the urgency and the differences impacting demand and supply and the strategy chemical has pursued over the past decade has made us a different company today than we've been in the past.

Closing the deal win when that day comes we think we got the right partner the right target and the right timing so yeah.

More to come on that are it's easy to get all the approvals in place.

Lawson Winder: UK definitely is just the last one? Sorry, just wanted to be totally clear on that.

So it's a U K definitely is just the last one sorry, just wanted to be totally clear on that yeah. That's that's correct.

Tim Gitzel: Yeah, that's correct.

Lawson Winder: Okay. Yeah, fantastic. Well, that's exciting.

Tim Gitzel: Combine these factors set up this cycle to be more exciting than ever. The improving market conditions coupled with our strategic decisions are also benefiting our financial performance. We're seeing improvements in our earnings, gross profit and cash flow, which was evident again this quarter. And we expect our financial performance to improve further as we continue our transition back to a tier one run rate. Chemical strategy of contracting discipline, production discipline and risk managed financial discipline is set within the context of the transitioning market environment we're currently in.

Okay Fantastic that's exciting.

Tim Gitzel: Yeah.

Lawson Winder: The follow-up I would add to that question would just be in terms of financing the $2.2 billion required on closure. The MD&A spoke about a funding mix of cash, debt, and equity. I just wanted to ask whether the equity proportion refers to the equity offering already completed in 2022, or is there some consideration for an additional equity raise on close?

And then the.

But all of that that question would just be in terms of financing the U S $2 2 billion required on closure.

The <unk> DNA spoke about a funding mix of cash and equity.

I just wanted to ask whether the equity proportion refers to the equity offering already completed in 2022 or is there some consideration for an additional equity raise on close.

Tim Gitzel: It was the one we already did, but I'll ask our CFO maybe just to give a little bit of detail of how we're going to end up paying for our acquisition, Grant.

It was the one we already did but I'll ask our CFO, maybe just to give a little bit of detail of how we're going to end up paying for acquisition grant yeah.

Grant Isaac: Yeah. The good news is, Lawson, it's already in place, the financing. This is the action that we took last 11 October. The equity that we raised is the only equity we intend to raise for this transaction. We also put in place two syndicated term loans, one of a 2-year tenor and one of a 3-year tenor, both $300 million. Those are in place to be drawn at time of closing. Of course, we would just work really quickly to pay those down. This is all occurring while the cash flow, as you see, is building in the uranium segment as well as the conversion segment. Of course, the financial contribution of Westinghouse will be added to it.

The good news is loss and it's already it's already in place the financing Guy. This is the action that we took last October 11th.

Tim Gitzel: With $2.7 billion in cash, $1 billion in total debt and a $1 billion undrawn credit facility, our balance sheet remains strong. We will retain our conservative financial management to support our balanced and disciplined contracting and supply decisions, providing us with the ability to self-manage risks and retain the capacity to pursue value-adding investments like Westinghouse.

The equity that we raised is the only equity we intend to raise for this transaction. We also put in place to Cindy.

Syndicated term loans, one of our one of a two year tenor and one of a three year 10 are both $300 million U S. Those are in place to be drawn at time of closing and then of course, we would just work really quickly to pay those down. This is all occurring while the cash flow as you see us building in the array.

Tim Gitzel: Before moving into our Q&A session today, it is with an enormously heavy heart that I acknowledge and remember Ian Bruce, a dear friend valued colleague in Camaco's long-time board chair who tragically passed away at his cottage in Ontario on October 16. I've worked with Ian since he joined our board more than a decade ago, and on behalf of the entire Camaco family, I extend our deepest condolences to Ian's wife, Darlene, and his family and many friends and loved ones.

<unk> segment as well as the conversion segment and of course.

The financial contribution of Westinghouse will be added to it. So we're in a terrific position in that can absolutely confirm theres no additional equity required.

Grant Isaac: We're in a terrific position and can absolutely confirm there's no additional equity required.

Okay.

Lawson Winder: That's fantastic. I look forward to that deal closing. Good luck, guys.

That's fantastic I look forward to that deal closing good luck guys.

Grant Isaac: Do I.

Tim Gitzel: Thanks, Lawson. So do we.

Thanks, Louis and so do we [laughter].

Tim Gitzel: His business acumen, personal and professional advice, overall leadership, and most importantly friendship, were absolutely invaluable to Camaco and his absence during yesterday's board discussions was notable. Ian was excited about nuclear energy in the company's future and he was extremely proud to be part of the Camaco team. He will be profoundly missed.

Operator 2: Our next question comes from Gordon Johnson of GLJ Research. Please go ahead.

Operator: Our next question comes from Gordon Johnson of GLJ Research. Please go ahead.

Our next question comes from Gordon Johnson of G. L. J research. Please go ahead.

Yeah.

Gordon Johnson: Hey, guys. Thanks for taking my question. Just two questions. First up, can you guys let us know what happens to, I guess, your contracts, when you contracted out, yet you have capacity issues? With respect to that question, you know, what happens to those guys who, you know, have contracted out some of the other guys out there who have contracted out, yet aren't able to produce? Is there a price that potentially could hurt demand if some of these capacities aren't available? Then I have a follow-up. Thank you.

Hey, guys. Thanks for taking my question just.

Just two questions first of all.

Can you guys, let us know what happened.

I guess your contracts.

When you contracted out yet you have capacity issues with them.

Second question you know.

Operator: So thank you for your interest today, and we are happy to take your questions. Thank you. We will now begin the question and answer session. In the interest of time, we ask that you limit your questions to one with one supplemental. If you have additional questions, you are welcome to rejoin the queue. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request.

What happens to those guys too.

You'll have contracted out some of the other guys out there who contracted out yet arent able to produce and is there a price.

Since we could hurt demand at some of these capacities are available and then I have a follow up thank you.

Tim Gitzel: I'm not sure I understood that question, Gordon. You're asking if there's other producers that can't fill their contracts, what will happen?

I'm not sure I understood. The question Gordon if you're asking if if theres other producers that cant pillar contracts what will happen.

Gordon Johnson: Yes. Let me be very specific here. You guys have contracted, you know, out your capacity looking forward.

Yeah, Let me let me go.

You guys have contracted.

Operator: If you are using the speaker phone, please pick up your handset before pressing any keys. To withdraw from the question queue, please press star then two. Webcast participants are welcome to submit questions through the box at the bottom of the webcast frame. The Camaco investor relations team will follow up with you by email after the call. Once again, anyone on the conference call who wishes to ask a question may press star then one at this time.

You had capacity looking forward.

Tim Gitzel: Yes.

Gordon Johnson: There, there's some production issues. Is there anything in your contracts that potentially benefit and/or not benefit you guys with respect to your, I guess, contracted capacity if those production issues persist?

There's some production issues.

So is there anything in your contracts.

Since the benefit or not benefit you guys with respect to your.

Ah I guess contracted capacity at those production issues persist.

Tim Gitzel: Well, let me be very clear. We will fill our contracts. We have multiple ways of filling contracts. I think Grant's been pretty clear on that over time. We have production, of course, and we're ramping that up. We have inventories, we have short-term loans. We have other purchases that we've made in the past that we can draw forward. I assure you, we will fill all of our contracts that we've signed with those different levers we have to pull.

Well, let me be very clear, we will fill our contracts. We are we have multiple ways of filling contract.

Orest Wagoda: Our first question comes from Orest, Wagoda, a Scotiabank. Please go ahead. Hi, good morning.

It's been pretty clear on that overtime, we have production of course and and.

Wrapping that up we have inventory.

Grant Isaac: Grant, I was hoping we could get some color on what's happening with contracting. Obviously, the Uranium price has moved up a lot even in the last three months. I'm wondering if you're seeing what kind of behavior you're seeing from your customers, whether the higher price movement is actually engaging them to find more contracts or whether you're seeing them pulling back. Alternatively, how's Camaco approaching this behavior? Are you continuing to pull back in terms of signing contracts in hopes of better terms with respect to higher floors and feeling down the road?

<unk>, we have a short term loans, we have but we have other purchases that we've made in the past that we can draw forward. So I assure you we will fill all of our contracts that we've signed.

With the with those different levers we have to pool.

Gordon Johnson: Okay. One last question, if I could. It seems like you guys have plans to buy around 13 million pounds of U3O8 this year, but it seems like so far you've bought 5 million. Is the plan to buy, you know, roughly 8 million on the spot market? Can you just give us an update there? Thanks for the questions. Congrats on the results.

Okay and then one last question if I could.

Like you guys have plans to buy around 13 million pounds.

This year, but it seems like so far you've brought 5 million so.

Goodbye.

The 8 million on the spot market.

Give us an update here thanks for the questions and congrats on results.

Tim Gitzel: Yeah. Thanks, Gordon. It is a mix. We certainly have a mix of purchases we make on an annual basis. Grant, you maybe wanna break them down between our Inkai and long-term and spot.

Yeah. Thanks Gordon It is a mix we have a mix certainly.

Grant Isaac: Just wondering what that engagement looks like right now? Yeah, Orest, great questions. Great place to start. There have been a lot of opportunities to be with customers in the last couple of months. The WNA symposium, the Camaco, or that Tim referred to, as well as the recent NEI conference in Charlotte. There still is a very pervasive urgency in the market. That urgency is reflected in improving contracting rates. We now are looking at year-to-date across the industry.

Mix of purchases, we make on an annual basis Grant you maybe want to break them down between her inc, and long term and spot.

Grant Isaac: Yeah. Gordon, those are great questions, and in many ways they're tied together. As we've said over and over again, we don't sell into the spot market. The spot market is not capable of absorbing uncommitted primary production, certainly of the scale that we can produce and those who have done it in the past, it's always ended in tears for their shareholders. That is not a wise strategy. It has not been in the past, it isn't going forward. What we do is we layer in long-term contract commitments, and it is very typical for us actually to plan to produce less than we're going to deliver. The reason is we know how this market works.

Gordon those are great questions and in many ways. They are tied together so.

As <unk> heard us say over and over again, we don't sell into the spot market. The spot market is not capable of absorbing uncommitted primary production certainly of the scale that we can produce and those who have done it in the past. It's always ended in tears for their shareholders that is not it's not a wise strategy has not.

Grant Isaac: Excuse me, about 145 million pounds contracted. That is much higher than it had been in each of the last 10 years, starting to approach that durable replacement rate contracting. I would say in general, it is a broad-based demand recovery. It reflects demand from those who might have thought they'd been shutting down a reactor early coming to the market. Those who are now pursuing life extensions for reactors that might have been retired after their initial license extension.

Been in the past it isn't going forward. So what we do as we layer in long term contract commitments and it is very typical for us actually to plan to produce less than we're going to deliver the reason is we know how this market works in this market, there's always somebody who's willing to sell into the front end of the spot market.

Grant Isaac: This market, there's always somebody who's willing to sell into the front end of the spot market, and we always like to have a bit of demand to deploy to pick up that material because quite frankly, it is very supportive of not just our portfolio of sales that are already contracted, but it's very supportive of the negotiations we currently have going on to structure new contracts. We like the fact that with demand in the market, there tends to be stronger pricing to achieve in both our portfolio as well as our pipeline. We always have the issue of how do we source these committed sales. Production is an important source of it. We carry an inventory to deal with any production shortfalls like we have today.

And we always like to have a bit of demand to deploy to pick up that material because quite frankly. It is very supportive of not just our portfolio of sales that are already contracted but it's very supportive of the negotiations. We currently have going on to structure new contracts and so.

Grant Isaac: Of course, it's demand for those who are building new. It also is, as a very important regional focus, and that is the emergence of Central and Eastern European customers into the Western supply piece, which is a demand that is new and is quite frankly competitive with the demand that we used to see from Western Europe, from North America, Canada, the U.S., as well as parts of Asia. It is broadly based. East.

We like the fact that with demand in the market there tends to be stronger pricing to achieve in both our portfolio as well as our pipeline. So then we always have the issue of how do we source. These committed sales production is an important source of it we carry an inventory too.

Deal with any production shortfalls like we have today, we will make purchases in the near term of the spot market for immediate delivery, we will occasionally buy on the forward curve for.

Grant Isaac: We will make purchases in the near term of the spot market for immediate delivery. We will occasionally buy on the forward curve, for delivery out into the future, and we can take delivery of that material sooner if we need it. We have other tools in the toolbox, including, as Tim said, folks have a lot of material parked at our facilities, and in some cases, we have the ability to borrow it. All of that to say that we think about these sourcing decisions, years in advance, not just weeks in advance, but years in advance. We will buy material in the market. That's exactly where we want to be at this point in the cycle. We are far from sold out from an overall contract portfolio point of view.

Grant Isaac: I would say that there are some utilities that have been more aggressive than others ensuring up their longer-term supply. Probably no surprise, those who are on the front end of rising electricity prices and energy security have moved quicker. I would say that is characteristic of Western European utilities as well as Central and Eastern European utilities. The good news, Orest, is that some have yet to come to the market. And so when Tim refers to this situation where we're in the early innings of a contracting cycle, it is because we know there are pockets of demand, bigger utility customers yet to come.

For delivery out into the future and we can take delivery of that material sooner. If we need it we have other tools in the toolbox, including as Tim said our.

Folks have a lot of material parked at our facilities and in some cases, we have the ability to borrow at all of that to say that we think about the sourcing decisions.

Years in advance not just weeks in advance but years in advance. So we will buy material in the market Thats exactly where we want to be at this point in the cycle.

We are far from sold out from a overall contract portfolio point of view, we've got a lot of pounds that can be contracted out into that window that I talked about late <unk> to early <unk>. We obviously want that material contracted it's stronger prices and one way to achieve that is to actually have some <unk>.

Grant Isaac: We've got a lot of pounds that can be contracted out into that window that I talked about, late twenties to early thirties. We obviously want that material contracted at stronger prices, and one way to achieve that is to actually have some demand to deploy in the near term of the market. This is exactly where we want to be. Nobody should be surprised by it. It is an important part of that full cycle value capture that we talked about. I think great question, Gordon.

Grant Isaac: All of this suggests to us we are absolutely in the right position at Cameco, to be strategically positioning our contract portfolio for higher prices, being biased towards market-related long-term contracting that will reference prices at time of delivery out into the future. We have been more selective in ensuring that we are getting that exposure to a rising price environment. We lead the market with respect to the construction of floors and the construction of ceilings. This is the forest exactly where we want to be.

A man to deploy in the near term of the market. So this is exactly where we want to be nobody should be surprised by it it is a.

An important part of that full cycle value capture that we talked about so I think great great question Gordon.

Orest Wagoda: Sorry for the long answer, I just wanted to cover it in its full dimensions. Okay, thank you for that.

Brian MacArthur: Thank you again, guys.

Gordon Johnson: Thank you again, guys.

Hey, Thanks again guys.

Tim Gitzel: Thanks, Gordon.

Thanks Gordon.

Operator 2: Our next question comes from Katie Lachapelle of Canaccord Genuity. Please go ahead.

Operator: Our next question comes from Katie Lachapelle of Canaccord Genuity. Please go ahead.

Our next question comes from Katy, let Chapelle of Canaccord Genuity. Please go ahead.

Katie Lachapelle: Thanks, operator, and good morning, Tim and Grant. Most of my questions have already been addressed, but maybe just one quick one. Your team just returned from the NEI conference, I'm assuming in Charlotte last week, and now we've got spot prices sustainably above $70 a pound. What was the chatter among the industry participants at the NEI conference and how, if at all, have these conversations evolved since WNA in September?

Thanks, operator, and good morning, Tim and grant most of my questions have already been addressed but maybe just one quick one.

Grant Isaac: And just as a follow-up, the COVAX announced a pretty aggressive 2025 production target a few weeks ago, going at 80 million pounds from somewhere in the 55 to 60 million pounds, should we anticipate, like how does Cameco think about that strategy? I mean, you obviously have a lot of curtailed capacity both in terms of still pure one expansion potential, but also with respect to your tier two. What do you need to see further increase your production plans?

Our team just returned from the Nei conference I'm, assuming in Charlotte last week, and now we've got spot prices sustainably above $70 or pounds, what was the chatter among the industry participants at the NII conference.

And how if at all have these conversations evolved from WNS in September.

Tim Gitzel: Well, Katie, I wasn't there, so the information I got was from one of the weekly publications that comes out. Grant had a team there, and I know some of his people, and I saw a report go through to Grant. Do you want to give an update on what your marketing people saw, Grant?

Locate ER I wasn't there so what I the information I got was from.

One of the weekly publications that comes out, but grant had a team there and I know some of these people and that's our report goes through the grants or do you want to give an update on what your marketing people sovereign.

Grant Isaac: Yeah, let me just make a comment on the because Adam Prom announcement, because I think across the industry, certainly on the uranium supply side, not a lot of surprise. I think just a general expectation that is, because Adam Prom has pivoted to a strategy that's very similar to Cameco's, which is you build the homes under long-term contract and then you call for more production. They've been successful in building long-term contract homes.

Grant Isaac: Yeah, that particular conference, Katie, really is dominated by US utilities. Unlike, say, the WNA symposium that has a lot more of the global utility base there, that is very much a US utility-focused conference. The US utilities, I think, as a whole, have been slower to respond to the energy security, the clean energy, and the long-term contracting that you would want to start to put in place. I guess, no surprise, as a consequence, at the NEI conference just recently, there was a strong sense of urgency that there are many utilities who may have left it later than they should have. There's a high expectation of demand to come to the market.

Yes.

That particular conference Katie really is dominated by U S utilities. So unlike say the WMA symposium that has a lot more of the global utility base. There that is a very much a U S utility focused conference.

The U S utilities, I think as a whole have been slower to respond to the the energy security in the clean energy and the and the long term contracting that you would want to start to put in place and so I guess no surprise as a consequence at the Nei conference.

Grant Isaac: I think a lot of people had noted some of the volumes that they had committed to to go into China, for example. So it's pretty clear, they need those pounds as part of commitments they've already entered into. So that is a very big departure from the because Adam Prom of the past, which had produced a lot of material, held it as uncommitted primary production and then was required to sell it through a spot market, not capable of absorbing those volumes.

Just recently there was a strong sense of urgency.

That there are many utilities, who may have left it later than they showed up there is a high expectation of demand to come to the market.

Grant Isaac: This is a market that is experiencing a lot of off-market activity where utilities are trying to quietly find material. They don't want to be putting RFPs in the market and having a bunch of them all in at once, sending a very strong demand signal. We've seen this before. This is all part of why we think we're in the early stages of a contracting cycle. I would say if there's a takeaway word, it's urgency. It's urgency of ensuring that the fuel supply is there and all components of it, not just the uranium, to fuel what is a terrific demand outlook for nuclear power in the United States.

This is a market that is experiencing a lot of off market activity, where utilities are trying to quietly five materials. They don't want to be putting rfps in the market and having a bunch of them all in at once sending a very strong demand signal.

Grant Isaac: So not a lot of surprise that those announcements were made, and of course the backdrop for achieving those increased production numbers is performance. On the operating side, you see a lot of risks being raised by Adam Prom with respect to challenges in their supply chain. The types of things, assets supply, for example, drilling availability, the types of things that make achieving those production targets difficult. So I hope folks weren't surprised by that announcement or weren't surprised to the negative because I'm very consistent with the commercial strategy because Adam Prom has been following.

We've seen this before this is all part of why we think we're in the early stages of a contracting cycle. So I would say if there's a takeaway word it's urgency it's urgency of ensuring that the fuel supply is there and all components of it not just the uranium to fuel what is a terrific demand.

The outlook for nuclear power in the United States.

Katie Lachapelle: Thanks, Grant. Appreciate the additional color.

Thanks, Scott I appreciate the additional color.

Tim Gitzel: Thanks, Katie.

Thanks Katie.

Grant Isaac: With respect to Cameco, we remain in supply discipline. We have seen these markets before. We believe these are the early innings of a robust contracting cycle. We've never been at this stage of a contracting cycle at these prices. It suggests that we want to be leveraged with our in-ground production, our in-ground inventory to higher prices. So what we need to see as an urgency of supply translate into an urgency of demand.

Operator 2: Our next question comes from Brian MacArthur of Raymond James. Please go ahead.

Operator: Our next question comes from Brian MacArthur of Raymond James. Please go ahead.

Our next question comes from Brian Macarthur of Raymond James. Please go ahead.

Brian MacArthur: Good morning. I just want to follow up on the mix of sales. For your new guidance, where you've increased your revenue forecast this year, you also talk about two-thirds of Inkai shipments coming this year. Is two-thirds reflected in your forecast this year? Or how should we start to think about this? As you mentioned, you have a large number of sources.

Good morning, I, just wanted to follow up on the mix of sale.

For your new guidance, where you've increased your revenue forecast this year.

To talk about two thirds of <unk> shipments coming this year is two thirds reflected in your <unk>.

For cash this year or how should we start to think about that.

Grant Isaac: We just need to see more demand in the market that demand in the market is going to restore true production economic pricing, the type of pricing required to be considering in a meaningful way the restart of Tier 2 production, for example, and then after that, of course, real investment in Greenfield. Because we've seen these markets before, we can be strategically patient. We are not in a rush to produce material that doesn't have a home requiring us to either build an inventory or sell it into the spot market, neither of which have been supportive of value for our owners. And we just won't do that. Thanks, Chris. Thanks for your question, Orest, and sorry I wasn't ignoring you. We got cut off for a minute, but we're back.

As you mentioned you have a large number of sources.

Tim Gitzel: Grant?

Grant Isaac: Yeah. Yeah, Brian. Sorry, Tim. Brian, there's obviously a bit of a lag. Remember that our production out of Inkai, we equity account for. Obviously, when we take delivery of that material this year, we will pay for it. Remember, we have the right to buy it from the joint venture at a discount to market. That financial commitment of purchasing it will be booked this year. Then the big reward, of course, is the dividend that gets paid out from Inkai to its owners. Of course, we're one of them, which is the difference between what you can produce for, and what the material was sold for to its owners. That will flow in next year.

Right Yep, Yep, sorry, sorry, Tim Brian There is obviously a bit of a lag remember that our production out of in Cai, We equity account for so obviously when we take delivery of that material. This year, we will we will pay for it and remember we.

Have the right to buy it from the joint venture at a discount to market and so that financial commitment of purchasing it will be book will be booked this year, but then the big reward of course is the dividend that gets paid out from <unk> to its owners and of course, we're one of them which is the difference.

Between what you can produce four.

What the material was sold for to its owners and that will flow in next year. So there is a bit of a timing lag where we'll have dollars out the door to purchase the material, but the dividend will come usually in that April may window of next year.

Grant Isaac: There is a bit of a timing lag where we'll have dollars out the door to purchase the material, but the dividend will come usually in that April, May window of next year. Just a bit of a timing issue, but make no mistake, the economic value of that really good tier one asset is always ours.

Ralph Profiti: Our next question comes from Ralph Profiti of Eighth Capital. Please go ahead. Thanks, operator. Good morning, Tim and Grant. Is there a specific window of time where you can refer us to with respect to your comments about sort of future demand being more near term, right? Is this equal across all tenors, or is there a specific window, say within two to three years, or sort of three to five years, that maybe a particular interest to highlight for us?

And so just a bit of a timing issue, but make no mistake the economic value of that it really good tier one asset is always ours.

Brian MacArthur: No, yeah, no, I get that. Just in your cost of goods sold, do you not have to make some assumption about what you're gonna get?

No yeah, no I get that but just in your cost of goods sales do not have to make some assumptions about what youre going to get.

Grant Isaac: Yeah, absolutely. In the cost of goods will be the purchase of the material that arrives this year. That'll be reflected in there.

Grant Isaac: Grant, why don't you carry on with the market in the market? Yeah, when you think about that near term demand, we're often referring to those who are running reactors may have been planning to shut them down early, but then the policy condition changes for them to be saved. And so if you just think in the recent past, some examples would be the Diablo Canyon units in California, or perhaps the Byron and Dresden units in Illinois.

Yeah, absolutely so in the cost of goods will be the purchase of the material that arrives this year, so that will be reflected in there.

Brian MacArthur: Right. At the beginning of the year, it would have been 100%, now it's two-thirds. Is that fair? Is that the way you do it?

Right. So at the beginning of year it would've been 100% now its two thirds is that fair is that the way you do it.

Heidi Shockey: It's Heidi Shockey here. I guess really Inkai shows in our cost of sales as a spot purchase.

It's hard to hear so I I guess.

Really <unk> shows in our in our cost of sales as a spot purchase and so we kind of you know whether it's a purchase that we do through our long term purchase commitments or through the spot or its impact we have a we work into our cost of sales the amount that we need to purchase so <unk>.

Grant Isaac: And why we call this near term demand is because the reality for the utility that's been operating those units is not only have they not been procuring run rate material, they've probably been drawing down their inventory that was assigned to those units. And so when those units are extended, we often see two very distinct types of near term demand. And the first is those utilities stepping into the market and looking for run rate requirements, you know, now for the next three years, now for the next five years, and they put that demand in the market, looking for term material.

Brian MacArthur: Right.

Heidi Shockey: We kinda, you know, whether it's a purchase that we do through our long-term purchase commitments or through the spot or it's Inkai, we work into our cost of sales the amount that we need to purchase. Inkai would be reflected as part of the 11 million pounds that we plan to purchase this year.

Grant Isaac: And then oftentimes you'll see that demand also show some demand show up in the spot market in the form of restoring some inventory targets that had been drawn down. Now that is a, you know, kind of in the next five year window Ralph. And so that that is a really helpful demand with respect to the price formation, because what it effectively does when you see those announcements is those who might have, say, uncommitted primary production or an off take agreement with perhaps a state owned enterprise that is continuing to produce without a home. So those types of folks might step back from selling material in the spot market in anticipation of that demand to show up. So it tends to be very constructive.

It'd be reflected as part of the 11 million pounds that we plan to purchase this year.

Brian MacArthur: Okay. Just with a 5% discount on that at market when you get it.

Okay.

Percent discount on that market when you get.

Grant Isaac: Yeah.

Heidi Shockey: Yeah. Correct.

Yeah, Yeah correct.

Brian MacArthur: Perfect. Thank you very much.

Perfect. Thank you very much.

Tim Gitzel: Thank you, Brian.

Thank you Brian.

Operator 2: Our next question comes from Alex MacPherson of allSaskatchewan.com. Please go ahead.

Operator: Our next question comes from Alex MacPherson of allSaskatchewan.com. Please go ahead.

Our next question comes from Alex Alex Macpherson of all Saskatchewan. Please go ahead.

Alex MacPherson: Hi, everyone. Good morning. Thanks for taking my call. One of the previous callers asked about Northern Saskatchewan, but I was hoping you might be able to provide a bit more color on the specific challenges you faced in terms of the announcement in September and sort of what steps you're taking and working on to resolve those issues. Thanks very much.

Hi, everyone. Good morning, Thanks for taking my call one of the previous callers asked about northern Saskatchewan, but I was hoping you might be able to provide a bit more color on the.

Vic challenges you faced in terms of the announcement.

In September and sort of what steps, you're taking in and working on to resolve those issues. Thanks very much.

Tim Gitzel: Yeah. Thanks, Alex. Nice to hear from you. You know, I think we detailed in previous when we put out our press release in September that we were having some short-term issues regarding I think at Cigar Lake we were moving more zone, and that's never easy. So we just had to adapt to that. We were having a few issues getting some skilled labor. We're fixing that up. So reliability of equipment was another piece that we had to work on. You know, those are. That's our business. That's what we do. Those are things we can fix.

Yeah. Thanks, So it's a nice to have nice to hear from US you know I think our I think we detailed.

And previous Ah when we when we put.

The press release in September that we were having some short term issues.

Regarding I think at cigar Lake we're moving.

Ore zone, that's never easy and so we just have to adapt to that we were having a few issues getting some skilled labor.

Grant Isaac: That's a little distinct, I would say from that medium term demand that Tim referred to, which is really around life extensions, the US fleet pioneered life extensions, but now with a clean energy and an energy security crisis going on. A lot of jurisdictions are considering running their reactors for a lot longer. And then that starts to extend the tenor of the term contracting. And so for example, we are now seeing term contracting push through the end of this decade and into the early part of the 2030s in a fairly significant way. So we often think of that near and the midterm demand quite quite distinctly. Gotcha. Yeah, very helpful.

That up.

So and reliability of equipment was another piece that we had to work on but you know those are those are that's our business. It's what we do and those are things we can make so as I said in the last <unk> been watching obviously, we get updates from Brian.

Tim Gitzel: As I said in the last, I've been watching, obviously. We get updates from Brian every day, every week on how production is going, and I'm happy to say it's going a lot better. We haven't changed our guidance that we put out from September. Our goal, Alex, as you know, is to get back to a run rate of 18 million pounds per year on a 100% basis at both McArthur River and Cigar Lake. Then we'll see what the future brings. If there is demand for our product that shows up in the form of long-term contracts from good customers, we'll see if we can increase our production.

Every day every week on how production is growing and I'm happy to see it's going well.

A lot better and and so we haven't changed our guidance.

It out from September and our our goal Alex as you know is to get back to a run rate of 18 million pounds per year on 100% basis at both Mcarthur key and cigar and then we'll see what the future brings if if there's demand for a product that shows up in the form of long term contracts from from good to us.

Tim Gitzel: In the production update in September, your team cited equipment reliability issues, availability of skilled labor and supply chain challenges. Just wondering, are you seeing these temporary and transitory and how you tackling these issues? Yeah, Ralph, we're working through those issues. You know, when you're down for four or five years, like we were in MacArthur and Key, nothing's that simple. And we put in a lot of automation and robotic projects that we have to fine tune.

Tumors. So we'll see if we can increase our production.

Alex MacPherson: Perfect. Thank you very much.

Perfect. Thank you very much.

Tim Gitzel: Thanks, Alex.

Thanks, though.

Operator 2: Our next question comes from Grace Sims of Energy Intelligence. Please go ahead.

Operator: Our next question comes from Grace Sims of Energy Intelligence. Please go ahead.

Our next question comes from Great signs of Energy Intelligence. Please go ahead.

Grace Sims: Good morning. My question is just if there's any update on efforts to build a calciner at JV Inkai.

Good morning. My question is just if there are if there's any update on efforts to build the calciner at J D.

Tim Gitzel: So, you know, I think we're coming around now. I've seen some numbers in the last little while on our production is running nicely and we hope to get it just at a steady state. So we're working through those issues that we mentioned. I think it was in early September, 30 September and at both MacArthur Key and the cigar. And so we want to get back to steady state. Our plan is to get back up to 18 million pounds a year, both of those sites next year. And that's what we're going to do.

Tim Gitzel: I'm gonna ask Sean Quinn, who looks after our Kazakh interests, to answer that one. Sean?

Uh huh.

Tim Gitzel: I'm gonna ask Sean Quinn, who looks after our Kazakh interests, to answer that one. Sean?

Sean Quinn, who.

It looks up your.

Interests to answer that one John.

Grant Isaac: Sure. Yeah, the project continues, Grace. It is moving slowly, but we're hoping to get construction completed, I would say, in H1 next year now, with commissioning to follow. It is well behind schedule from significant plans, but the project is continuing, and it's still viewed as a very important objective for our Inkai joint venture so that we can have a fully calcined product coming out of that operation.

Sean Quinn: Sure. Yeah, the project continues, Grace. It is moving slowly, but we're hoping to get construction completed, I would say, in H1 next year now, with commissioning to follow. It is well behind schedule from significant plans, but the project is continuing, and it's still viewed as a very important objective for our Inkai joint venture so that we can have a fully calcined product coming out of that operation.

Sir you have the project.

Continues great is moving slowly.

But we're hoping to get.

Construction completed.

The first half of next year now.

To follow.

So it is well behind schedule from significant plan, but the project is continuing and it's still viewed as a very important.

Tim Gitzel: Excellent to hear. Thanks, Tim. Thanks, Grant. Thanks.

The objective for our guide joint venture so that we can have portfolio calpine product coming out of that Australia.

Lawson Winder: Our next question comes from Lawson Winder of Bank of America. Please go ahead. Yes. Thank you, operator. And good morning, Tim Grant and Richelle as well. Nice to hear from you all. Thank you for the update.

Grace Sims: Okay. Just to follow up, once that calciner is commissioned, would Cameco plan to transport material directly from Inkai to China to fulfill some of its Chinese contracts?

Okay.

Just a follow up once the Calciner is commissioned with cameco plan to transport material directly from <unk> to China to fulfill some of its Chinese contracts.

Tim Gitzel: I would like to ask about Westinghouse. And first of all, just ask if you could confirm that the UK is the final remaining competition authority approval that is needed. And maybe if you could please comment on why the process has taken a little longer than expected. Yeah, so it's Tim. I think we've worked our way through about 40 or 40 plus approvals so far. We do have the UK left to go and so we're still expecting to close the deal by the end of the year.

Grant Isaac: We might. It's, we're looking to complete the calciner because it'll create that sort of optionality for the pre-production out of JV Inkai.

We might.

We're looking to complete the calciner because they look great sort of optionality for the product production out of JV income.

Grace Sims: All right. Thank you very much.

Alright, Thank you very much.

Tim Gitzel: Thanks, Grace.

It's Chris.

Operator 2: Our next question comes from Richard Hatch of Berenberg. Please go ahead.

Operator: Our next question comes from Richard Hatch of Berenberg. Please go ahead.

Our next question comes from Richard Hatch of Baird. Please.

Please go ahead.

Speaker 17: Thanks very much. Yeah. Thanks, Tim and team, and good morning. Just a question on the purchase commitment. I've seen 2024 and 2025, that's increased up to 117 million pounds from 102 in the previous quarter.

Richard Hatch: Thanks very much. Yeah. Thanks, Tim and team, and good morning. Just a question on the purchase commitment. I've seen 2024 and 2025, that's increased up to 117 million pounds from 102 in the previous quarter.

Thanks, very much yes, thanks, Tim and team and good morning, and just a question on the purchase commitments of <unk> 24, and 25, that's increased up to 117 million pounds from 102 in the previous quarter.

Tim Gitzel: So I think everything's on track for that. Nothing, nothing too new there. We're super excited about closing the deal when when that day comes. We think we got the right partner, the right target and the right timing. So more to come on that soon as we get all the approvals employees. So the UK definitely is just the last one. Sorry, just want to be totally clear of that. Yeah, that's that's correct. Okay, yeah, fantastic. Well, that's exciting.

Speaker 17: I think you kinda answered the question to an extent, I think a bit earlier, but just to kind of add a little bit more meat to the bones, is that just a function of the fact that you're seeing more interest on those term contracts, particularly over the next sort of couple of years, and therefore you're just covering yourself from a supply standpoint if the mines, perhaps, you know, can't ramp up as quick as you want them to, or just to give yourself a little bit of extra flexibility because you're seeing more demand over those next couple of years? Thanks.

Sean Quinn: I think you kinda answered the question to an extent, I think a bit earlier, but just to kind of add a little bit more meat to the bones, is that just a function of the fact that you're seeing more interest on those term contracts, particularly over the next sort of couple of years, and therefore you're just covering yourself from a supply standpoint if the mines, perhaps, you know, can't ramp up as quick as you want them to, or just to give yourself a little bit of extra flexibility because you're seeing more demand over those next couple of years? Thanks.

He can answer the question to the extent I think a bit earlier, but just to kind of add a little bit more meets the paint is not just a function of the fact that you're seeing more.

Interesting nice 10 contracts, particularly over the next couple of years and therefore, you just covering yourself from a supply standpoint, if the mines and perhaps can't ramp up as quick as you want them to just to give yourself a little bit of extra flexibility mm.

Grant Isaac: And then the whole about that that question, which is being in terms of financing the US 2.2 billion required on closure, the MD and a spoke about a funding mix of cash yet an equity. And I just wanted to ask whether the equity proportion refers to the equity offering already completed in 2022, or is there some consideration for an additional equity raise on close. It was the one we already did, but I'll ask our CFO maybe just to give a little bit of detail of how we're going to end up paying for acquisition grant.

Because you're seeing more demand over these next couple of years. Thanks.

Grant Isaac: Yeah.

Tim Gitzel: Do you want to take that one?

Yeah.

Grant Isaac: Yeah, sorry, Tim. I would just maybe characterize it a little different. We don't sell into the spot market. We don't sell into sort of the trader churn that goes on in that market. But occasionally we'll have a customer that says we're in a long-term contract discussion with, who wants pounds out in a long-term window and says, "Oh, but can you find some material in the near term as well?" And occasionally for the right customer and the right circumstance, we will do that. As a result, you might see our requirements to purchase material tick up in that near-term window.

Yeah, sorry, yeah.

I would just I would make.

Maybe characterize it a little different we don't we don't sell into the spot market, we don't sell into that into sort of the trade or churn that goes on in that market, but but occasionally we will have a customer that say we're in a long term contract discussion with who wants pounds out into classic term window it and so.

But can you find some material in the near term as well.

Grant Isaac: Yeah, good news is lost and it's already it's already in place, the financing. This is the action that we took last October 11th, the equity that we raised is the only equity we intend to raise for this transaction. We also put in place to syndicated term loans, one of a one of a two year tenor and one of a three year tenor, both $300 million US. Those are in place to be drawn at time of closing.

<unk> for the for the right customer at the right circumstance, we will do that and so as a result, you might see our requirements.

You purchase material tick up in that near term window, but I just I wanted to go back to a comment I made to Gordon's question, which is you know.

Grant Isaac: I want to go back to a comment I made to Gordon's question, which is, you know, we didn't design this market, but we know how it works. When Cameco comes to purchase, those who have material to sell hang on to it, prices strengthen, and yes, we might make a purchase at a slightly higher price, but then don't forget, we have a portfolio that reference market prices, and that improves. And more importantly, the long-term contracting that we're actively negotiating is now negotiating higher price measures. So the area under those latter two curves is always bigger than the area under the curve of purchasing a bit of material on the front end.

We didn't design this market, but we know how it works when when cameco comes to purchase those who have material to sell hang onto it.

Grant Isaac: And then of course, we would just work really quickly to pay those down. This is all occurring while the cash flow as you see is building in the Uranium segments, as well as the conversion segment. And of course, the financial contribution of Westinghouse will be added to it. So we're in a terrific position and can absolutely confirm there's no additional equity required. That's fantastic. I look forward to that deal closing. Good luck guys. Thanks, Lawson. So do we.

Prices strengthen and yes, we might make a purchase at a slightly higher price.

But then don't forget we have a portfolio that reference market prices and that improves and more importantly, the long term contracting that we're actively negotiating is now negotiating higher price measure so the area under those later two curves.

It is always bigger than the area under the curve of purchasing a bit of material on the front end and Thats just the way this market behaves and we Didnt design. It this way, but we always intend to capture full cycle value with the way its structured so don't think of that as as spot sales to traders or spot sales.

Grant Isaac: That's just the way this market behaves, and we didn't design it this way, but we always intend to capture full cycle value with the way it's structured. Don't think of that as spot sales to traders or just spot sales into the churn. They are very much end user sales, but we just might have a customer with a slightly nearer demand.

Gordon Johnson: Our next question comes from Gordon Johnson of GLJ Research. Please go ahead. Hey guys, thanks for taking my question. Just two questions. First up, can you guys let us know what happens to, I guess, your contract? When you contract it out, that you have capacity issues. And with a second back question, you know, what happens to those guys who, you know, have contracted out some of the other guys out there who have contracted out yet aren't able to produce, and is there a price that potentially could hurt demand is some of these capacities are available and that will follow up. Thank you. I'm not sure I understood that question, Gordon, you're asking if there's other producers that can't build our contracts. What will happen?

The chart.

Our very much end user sales, but we just might have a customer with a slightly near demand.

Speaker 17: Okay. Yeah, I wasn't implying it was into the spot market, but effectively that $80s to 117 increase is really to feed your utility customers just because they're wanting a bit more material in the near term.

Richard Hatch: Okay. Yeah, I wasn't implying it was into the spot market, but effectively that $80s to 117 increase is really to feed your utility customers just because they're wanting a bit more material in the near term.

Okay. So yeah. It wasn't inferring it was into the spot market, but he's actually into you said effectively that when I say, it's one seven increase is really to feed you your utility.

Utility customers, just because they are running a bit more materially in the near term.

Grant Isaac: Yeah, great way to think about it.

Right way to think about it.

Speaker 17: Cool. Thank you for that.

Richard Hatch: Cool. Thank you for that.

Thank you for that.

Tim Gitzel: Thanks, Richard.

Thanks Richard.

Operator 2: Our next question comes from Kip Keen of S&P Global. Please go ahead.

Operator: Our next question comes from Kip Keen of S&P Global. Please go ahead.

Our next question comes from Kip keen of S&P Global. Please go ahead.

Speaker 18: Hi, guys. Thanks for taking my question and condolences for your loss of Ian Bruce.

Kip Keen: Hi, guys. Thanks for taking my question and condolences for your loss of Ian Bruce.

Hey, guys. Thanks for taking my question and condolences for your loss of Ian Bruce.

Tim Gitzel: Let me, let me, let me be very specific. So you guys have contracted, you know, out your capacity looking forward, but there's some production issues. So is there anything in your contracts that potentially benefit and or not benefits you guys with respect to? You're, I guess, contracted capacity if those production issues persist?

Tim Gitzel: Thank you. Thank you.

Speaker 18: Yeah. I wondered if you might talk a little bit about your cash cost expectations. I think they were 47% higher in the quarter over the same period a year ago, 34% for the year to date, higher than 2022. Do you think the cash costs will moderate in Q4 and into 2024, or are these sort of levels where things will stay, you know? How are you thinking about it?

Kip Keen: Yeah. I wondered if you might talk a little bit about your cash cost expectations. I think they were 47% higher in the quarter over the same period a year ago, 34% for the year to date, higher than 2022. Do you think the cash costs will moderate in Q4 and into 2024, or are these sort of levels where things will stay, you know? How are you thinking about it?

Thank you yeah.

I wondered if you might.

Talk a little bit about your cash cost expectations.

They were 49, 47% higher in the quarter over the same period a year ago, 34%.

For the year to date higher than 2022 do you think those.

The cash cost moderate in Q4 and into 2024 or are these sort of level, where things will state.

Tim Gitzel: Well, let me be very clear. We will fill our contracts. We have multiple ways of filling contracts. I think Grant's been pretty clear on that over time. We have production. Of course, and we're ramping that up. We have inventories. We have short-term loans. We have other purchases that we've made in the past that we can draw forward. So I, I assure you, we will fill all of our contracts that we've signed with those different levers we have to pull.

How are you thinking about it.

Tim Gitzel: Brent?

Right.

Grant Isaac: Yeah. If I've said a couple of times on the call, but maybe I'll just reinforce it. We are still in transition. We've seen these markets before. We are never the company that tries to front run demand with supply. It always makes sense to let demand strengthen ahead of us making supply decisions. The consequence of that strategy, though, is that we're still in supply discipline. We're still transitioning to those tier one cost structures, which is great news, by the way. It means that the financial performance of the Uranium segment is still in front of us, as opposed to behind us.

Jeff.

If.

I've said a couple of times on the call, but maybe I'll just reinforce it we are still in transition. We've seen these markets before we are never as the company that tries to front run demand with supply it always makes sense to let demand.

Strengthen ahead of us making supply decisions. The consequence of that strategy, though is that we're still in supply discipline were still transitioning to those tier one cost structures.

Grant Isaac: Okay, and then one last question if I could. It seems like you guys have plans to buy around 13 million pounds of U308 this year, but it seems like so far you've brought five million. So is the plan to buy roughly 8 million on the spot market? Can you just give us an update there? Thanks for the questions. You'll have some results. Yeah, thanks, Gordon. It is a mix. We have a mix.

Great news by the way it means that the financial performance of the uranium segment is still in front of us as opposed to behind us. So when youre thinking about kind of a longer term trend I would encourage you not to look at any one particular quarter, especially a quarter, where we've had an outage at cigar Lake for a month for example, and what not.

Grant Isaac: When you're thinking about kind of a longer term trend, I'd encourage you not to look at any one particular quarter, especially a quarter where we've had an outage at Cigar Lake for a month, for example. What I'd encourage you to do is turn to our AIF, our annual information form. On an annual basis, we are required to update the life of mine operating costs of our technical reports of our material properties. What you'll see in our most recent one is that, you know, McArthur River is at just over CAD 16 per pound, Cigar Lake, just over CAD 18 per pound, and Inkai is below CAD 8 per pound.

Grant Isaac: We certainly have a mix of purchases we make on an annual basis. Grant, you maybe want to break them down between our Incai and long-term and spot. Yeah, Gordon, those are great questions. And in many ways, they're tied together. So as we've heard us say over and over again, we don't sell into the spot market. The spot market is not capable of absorbing uncommitted primary production. Certainly of the scale that we can produce.

I'd encourage you to do is turn to our Aif our annual information form so on an annual basis, we are require to update the law.

Life of mine operating costs of our.

Of our technical reports of our material properties and what Youll see in our most recent one is that Mcarthur is at just over $16 Canadian per pound.

Grant Isaac: And those who have done it in the past, it's always ended in tears for their shareholders. That is not, it's not a wise strategy has not been in the past. It isn't going forward. So what we do is we layer in long-term contract commitments, and it is very typical for us actually to plan to produce less than we're going to deliver. The reason is we know how this market works. This market, there's always somebody who's willing to sell into the front end of the spot market.

<unk> Lake just over $18 Canadian per pad and in case below $8 Canadian per path. So if you're trying to kind of get a sense of where that longer term reversion is too I would stay away from the quarterly numbers, which can be distorted by production outages or maintenance shutdown and I would just refer to back to that.

Grant Isaac: If you're trying to get a sense of where that longer term reversion is to, I would stay away from the quarterly numbers, which can be distorted by production outages or maintenance shutdowns. I would just refer back to that AIF. It's a much better marker for you, Kip.

Yes.

It's a much better marker for you Kevin.

Speaker 18: Okay. Yep. Thanks a lot. Yep.

Kip Keen: Okay. Yep. Thanks a lot. Yep.

Okay, yes, thanks a lot.

Tim Gitzel: Thanks, Kip, for your question.

Grant Isaac: And we always like to have a bit of demand to deploy to pick up that material, because quite frankly, it is very supportive of not just our portfolio of sales that are already contracted, but it's very supportive of the negotiations we currently have going on to structure new contracts. And so we like the fact that with demand in the market, there tends to be stronger pricing to achieve in both our portfolio, as well as our pipeline.

Thanks, Kip for your question.

Operator 2: This concludes the question and answer session. I would like to turn the conference back over to Tim Gitzel for any closing remarks.

Operator: This concludes the question and answer session. I would like to turn the conference back over to Tim Gitzel for any closing remarks.

This concludes the question and answer session I would like to turn the conference back over to Tim <unk> for any closing remarks.

Tim Gitzel: Well, thank you very much, operator, and thank you to everybody who joined us today on the call. As always, we appreciate your interest and your support. You know, there's a number of notable differences in the market's evolution and prospectivity compared to past cycles. I can tell you at Cameco, we're certainly excited to see the positive momentum that's building for nuclear energy. One thing that will remain consistent is our vision of energizing a clean air world, which keeps us focused on delivering long-term value in a market where demand for safe, secure, reliable, and affordable clean nuclear energy is growing. We will continue to do what we said we would do and execute on our strategy in a manner we believe will make our business sustainable over the long term.

Well. Thank you very much operator, and thank you to everybody who joined US today on the call.

As always we appreciate your interest and your support you know Theres a number of notable differences in the markets evolution and prospectively compared to past cycles and I can tell you at chemical was certainly excited to see the positive momentum that's building for nuclear energy.

Grant Isaac: So then we always have the issue of how do we source these committed sales. Production is an important source of it. We carry an inventory to deal with any production shortfalls like we have today. We will make purchases in the near term of the spot market for immediate delivery. We will occasionally buy on the forward curve for delivery out into the future, and we can take delivery of that material sooner if we need it.

One thing that will remain consistent as our vision of energizing, a cleaner world, which keeps us focused on delivering long term value in a market where demand for safe secure reliable and affordable clean nuclear energy is growing.

We will continue to do what we said, we would do and execute on our strategy in a manner. We believe will make our business sustainable over the long term.

Tim Gitzel: With that, thanks, everybody, and thank you for your kind wishes with respect to Mr. Bruce. Please stay safe and healthy. Thank you.

Grant Isaac: We have other tools in the toolbox, including, as Tim said, folks have a lot of material parked at our facilities, and in some cases, we have the ability to borrow it. All of that to say that we think about these sourcing decisions years in advance, not just weeks in advance, but years in advance. So we will buy material in the market that's exactly where we want to be at this point in the cycle.

So with that thanks, everybody and thank you for your kind wishes.

With respect to Mr. Bruce Please stay safe and healthy thank you.

Operator 2: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Okay.

Grant Isaac: We are far from sold out from an overall contract portfolio point of view. We've got a lot of pounds that can be contracted out into that window that I talked about late 20s to early 30s. We obviously want that material contracted at stronger prices, and one way to achieve that is to actually have some demand to deploy in the near term of the market. So this is exactly where we want to be. Nobody should be surprised by it. It is an important part of that full cycle value capture that we talked about. So I think great, great question board. Thanks, Gordon.

Okay.

Yeah.

Okay.

[music].

Okay.

Katie Lishapel: Our next question comes from Katie Lishapel of Canacquired Genuity. Please go ahead. Thanks operator and good morning, Tim and Grant. Most of my questions have already been addressed, but maybe just one quick one. Your team just returned from the NAI conference. I'm assuming in the Charlotte last week, and now we've got spot prices sustainably above $70 a pound. What was the chatter among the industry participants at the NAI conference and how, if at all, have these conversations evolved since W and A in September?

Yeah.

Okay.

Yeah.

Yes.

Okay.

Yeah.

Grant Isaac: Well, Katie, I wasn't there, so the information I got was from one of the weekly publications that comes up. But Grant had a team there, and I know some of these people in the cell report go through to Grant, because you want to give an update on what you're marketing people saw Grant. Yeah, that particular conference, Katie, really is dominated by US utility. So unlike say the W and A symposium that has a lot more of the global utility base there, that is a very much a US utility focused conference.

Grant Isaac: The US utilities, I think, as a whole, have been slower to respond to the energy security and the clean energy and the long-term contracting that you would want to start to put in place. And so I guess no surprise as a consequence of the NAI conference just recently, there was a strong sense of urgency that there are many utilities who may have left it later than they should have. There's a high expectation of demand to come to the market.

Grant Isaac: This is a market that is experiencing a lot of off-market activity where utilities are trying to quietly find material. They don't want to be putting RFPs in the market and having a bunch of them all in at once sending a very strong demand signal. We've seen this before. This is all part of why we think we're in the early stages of a contracting cycle. So I would say if there's a takeaway word, it's urgency.

Grant Isaac: It's urgency of ensuring that the fuel supply is there and all components of it, not just the uranium, to fuel what is a terrific demand outlook for nuclear power in the United States. Thanks, Grant. Appreciate the additional color. Thanks, Katie.

Brian Macarthur: Our next question comes from Brian MacArthur of Raymond James. Please go ahead.

Grant Isaac: Good morning. I just want to follow up on the mix of fail. For your new guidance, where you've increased your revenue forecast this year, you'll also talk about two-thirds of Inkai shipments coming this year. It is two-thirds reflected in your forecast this year or how should we start to think about this as you as you mentioned, you have a large number of sources. Grant. Yeah. Yeah, we're sorry, sorry, Tim. Brian, there's obviously a bit of a lag.

Grant Isaac: Remember that our production out of Inkai, we equity account. Thank you, for. So obviously, when we take delivery of that material this year, we will pay for it. And remember, we have the right to buy it from the joint venture at a discount to market. And so that financial commitment of purchasing it will be booked, will be booked this year. But then the big reward, of course, is the dividend that gets paid out from InKai to its owners.

Grant Isaac: And of course, we're one of them, which is the difference between what you can produce for and what the material was sold for to its owners. And that will flow in next year. So there is a bit of a timing lag where we'll have dollars out the door to purchase the material. But the dividend will come usually in that April may window of next year. And so just a bit of a timing issue, but make no mistake, the economic value of that, it really good tier one asset is always ours.

Grant Isaac: No, yeah, no, I guess that. But just in your cost of good sales, do you not have to make some of something about what you're going to get? Yeah, absolutely. So in the cost of goods will be the purchase of the material that arrives this year. So that'll be reflected in there. Right. So at the beginning of year, it would have been 100% now. It's two thirds that fair. Is that the way you do it?

Grant Isaac: It's high here. So I guess really InKai shows in our in our cost of sales as a spot purchase. And so we kind of, you know, whether it's a purchase that we do through our long term purchase commitments or through the spot or its InKai. We have a, we, we work into our cost of sales the amount that we need to purchase. So InKai would be reflected as part of the 11 million pounds that we plan to purchase this year. This was my first discount on that market, wouldn't you get it? Yeah, correct. Perfect.

Brian Macarthur: Thank you very much. Thank you, Brian.

Alex McPherson: Our next question comes from Alex, Alex McPherson of all Saskatchewan.

Tim Gitzel: Please go ahead. Hi, everyone. Good morning. Thanks for taking my call. One of the previous callers asked about Northern Saskatchewan, but I was hoping you might be able to provide a bit more color on the specific challenges you faced in terms of the announcement in September and sort of what steps you're taking and working on to resolve those issues. Thanks very much.

Sean Quinn: Yeah, thanks, Alex. Nice to hear from you. You know, I think, I think we detailed in previous when we, when we put out our press release in September that we were having some short-term issues regarding, I think it's a garlic we're moving towards on and that's never easy. And so we just had to adapt to that. We're having a few issues getting some skilled labor. We're fixing that up. So reliability equipment was another piece that we had to work on, but you know, those are those are, that's our business.

Sean Quinn: That's what we do. Those are things we can fix. So as I said, in the last that I've been watching, obviously we get updates from Brian every day, every week on how production is going and I'm happy to say it's going a lot, and so we haven't changed our guidance that we put out from September and our goal, Alex, as you know, is to get back to a run rate of 18 million pounds per year on a hundred percent basis at both MacArthur Keith and Cigar, and then we'll see what the future brings. If there is demand for our product that shows up in the form of long-term contracts from good customers, so we'll see if we can increase our production. Perfect. Thank you very much.

Tim Gitzel: Thanks, Alex.

Grace Simes: Our next question comes from Grace Simes of Energy Intelligence. Please go ahead.

Sean Quinn: Good morning. My question is just if there are, is there's any update on efforts to build a calisiner at JVN Chi? I'm going to ask Sean Quinn, who looks after Kazak interests to answer that one, John. Sure. Yeah, the project continues, Grace. It is moving fully, but we're hoping to get construction completed. I would say in the first half of next year now, we're conditioning to follow. It is, well, it is behind schedule from significant plans, but the project is continuing and so viewed as a very important objective for our in-chi joint venture so that we can have a fully calisiner product coming out of that operation.

Sean Quinn: Okay. And just to follow up once that calisiner is commissioned, would Kamigo plan to transform material directly from in-chi to China to fulfill some of its Chinese contracts? We might say that we're looking to complete the calisiner because it'll create that sort of optionality for the production out of JVN Chi. All right.

Grace Simes: Thank you very much. Thanks, Grace.

Richard Hatch: Our next question comes from Richard Hatch of Baronberg. Please go ahead. Thanks very much. Yeah. Thanks, Tim and Tim, and good morning. Just a question on the purchase commitment to see in 24 and 25, that's increased up to 117 million pounds from 102 in the previous quarter.

Grant Isaac: I think he kind of answered the question to an extent, I think a bit earlier, but just to kind of add a little bit more meat to the bones. Is that just a function of the fact that you're seeing more interest on those term contracts, particularly over the next sort of couple of years and therefore you're just covering yourself from a supply standpoint. If the mind's perhaps, you know, can't ramp up as quick as you want them to or just give yourself a little bit of extra flexibility because you seem more demand over those next couple of years. Thanks.

Grant Isaac: Yeah, I would just maybe characterize it a little different. We don't sell into the spot market. We don't sell into the sort of the trader churn that goes on in that market, but occasionally we'll have a customer that say we're in a long term contract discussion with who wants pounds out in a classic term window and says, oh, but can you find some material in the near term as well. And occasionally for the for the right customer and the right circumstance, we will do that. And so as a result, you might see our requirements to purchase material, pick up in that near term window.

Grant Isaac: But I just, I want to go back to a comment I made to Gordon's question, which is, you know, we didn't design this market, but we know how it works. When, when, when Kamiko comes to purchase those who have material to sell, hang on to it prices strengthen. And yes, we might make a purchase at a slightly higher price. But then don't forget we have a portfolio that reference market prices and that improves.

Grant Isaac: And more importantly, the long term contracting that we're actively negotiating is now negotiating higher price measures. So the area under those later two curves is always bigger than the area under the curve of purchasing a bit of material on the front end. And that's just the way this market behaves.

Grant Isaac: And we didn't design it this way, but we, we always intend to capture full cycle value with, with the way it's structured. So don't think of that as spot sales to creators or spot sales into the chart. They are very much end user sales, but we just might have a customer with a slightly near demand.

Richard Hatch: Okay, so yeah, I wasn't inferring, it was into the spot market, but he's actually into, so effectively that 180 to 117 increase is really to feed your utility customers just because they're wanting a bit more material in the near term. Yeah, great way to think about it. Cool, thank you for that. Thanks, Richard.

Kip Keen: Our next question comes from Kip Keen of S&P Global. Please go ahead. Hi guys, thanks for taking my question and condolences for your loss of Ian Bruce.

Grant Isaac: Thank you. Yeah, I wondered if you might talk a little bit about your cash cost expectations. I think they were 47% higher in the quarter over the same period a year ago, 34% for the year to date higher than 2022. Do you think those will the cash costs moderate in Q4? And in 2024 or at the sort of level where things will stay, you know, how are you thinking about it? Grant?

Grant Isaac: Yeah, if I said a couple times on the call, but maybe I'll just reinforce it. We are still in transition. We've seen these markets before. We are never in the company that tries to front run demand with supply. It always makes sense to let demand. Strengthen ahead of us making supply decisions. The consequence of that strategy, though, is that we're still in supply discipline. We're still transitioning to those tier one cost structures, which is great news, by the way.

Grant Isaac: It means that the financial performance of the Uranium segment is still in front of us as opposed to behind us. So when you're thinking about kind of a longer term trend, I'd encourage you not to look at any one particular quarter, especially a quarter where we've had an outage at Cigar Lake for a month, for example. And what I'd encourage you to do is turn to our AIF, our annual information form.

Grant Isaac: So on an annual basis, we are required to update the life of mine operating costs of our technical reports, of our material properties. And what you'll see in our most recent one is that MacArthur is at just over $16 Canadian per pound Cigar Lake, just over $18 Canadian per pound and in guys below $8 Canadian per pound. So if you're trying to kind of get a sense of where that longer term reversion is to, I would stay away from the quarterly numbers, which can be distorted by production outages or maintenance shutdowns. And I would just refer to back to that AIF. It's a much better marker for you, Kim. Okay, yes, thanks a lot.

Tim Gitzel: Thanks, Kim, for your question.

Tim Gitzel: This concludes the question and answer session. I would like to turn the conference back over to Tim Gitzel for any closing remarks. Well, thank you very much, operator, and thank you to everybody who joined us today on the call. As always, we appreciate your interest and your support. You know, there's a number of notable differences in the market's evolution and prospectivity compared to past cycles. And I can tell you, at chemical, we're certainly excited to see the positive momentum that's building for nuclear energy.

Tim Gitzel: One thing that will remain consistent is our vision of energizing the cleaner world which keeps us focused on delivering long-term value in a market where demand for safe, secure, reliable and affordable clean nuclear energy is growing. We will continue to do what we said we would do and execute on our strategy in a manner we believe will make our business sustainable over the long-term. So with that, thanks everybody and thank you for your kind wishes with respect to Mr. Bruce. Please stay safe and healthy. Thank you.

Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Operator: Thank you.

Q3 2023 Cameco Corp Earnings Call

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