Q1 2024 Cameco Corp Earnings Call

Operator: Thank you for standing by. This is the conference operator. Welcome to the Cameco Corporation first quarter 2024 results conference call. As a reminder, all participants are in listen only mode, and the conference is being recorded. Following the introductory remarks, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0.

Thank you for standing by this is the conference operator welcome to the Chemical Corporation first quarter 2024 results Conference call. As a reminder, all participants are in listen only mode and the conference is being recorded following my introductory remarks, there will be an opportunity to ask questions to join the <unk>.

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 should.

Operator: Webcast participants should be 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. The Q&A session will conclude at 9 a.m. Eastern time. I would now like to turn the conference over to Rachelle Girard, Vice President, Investor Relations. Please go ahead.

Or asked to wait until the Q&A session before submitting their questions as the information they're looking for may be provided during the presentation. The Q&A session will conclude at nine a M eastern time.

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 <unk> first quarter conference call I would like to acknowledge that we are speaking from our corporate office, which is on treaty six territory. The traditional territory of pre people in the homeland at the May Tee.

Rachelle Girard: Thank you, operator, and good morning everyone. Welcome to Cameco's first quarter conference call. I would like to acknowledge that we are speaking from our corporate office, which is on Treaty 6 territory, the traditional territory of Cree peoples and the homeland of the Métis. With us today are Tim Gitzel, President and CEO; joining the call today from Washington, D.C., 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 Dominic Kieran, Global Managing Director of Cameco UK Limited.

Rachelle Girard: With us today are Tim Gibson, President and CEO, joining the call today from Washington D. C 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.

Certain corporate Secretary and Dominic Kieran Global managing director of Cameco UK limited.

Rachelle Girard: I'm going to hand it over to Tim in just a moment to briefly discuss the momentum that continues to build behind nuclear energy and how the continued execution of our strategy and transition back to our Tier 1 cost structure have positioned us to benefit from the tailwind. Then we will open it up for your questions. Today's call will be for approximately one hour, concluding at 9 a.m. Eastern time. As always, our goal is to be open and transparent with our communications. However, we do want to respect everyone's time and conclude the call on time.

Timothy S. Gitzel: I'm going to hand, it over to Tim in just a moment to briefly discuss the momentum that continues to build behind nuclear energy and how the continued execution of our strategy and transition back to our tier one cost structure has positioned us to benefit from the tailwind.

Timothy S. Gitzel: After we will open it up for your questions.

Timothy S. Gitzel: Today's call will be approximately one hour concluding at nine a M eastern time.

Timothy S. Gitzel: As always our goal is to be open and transparent with our communications. However, we do want to respect everyones time and conclude the call on time.

Rachelle Girard: Therefore, should we not have time to get to your questions during this call, or if you have detailed questions about our quarterly financial results, we will be happy to follow up with you after the call. There are a few ways you can contact us with additional questions. 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.

Timothy S. Gitzel: Therefore should we not have time to get to your questions. During this call or if you have detailed questions about our quarterly financial results, we will be happy to follow up with you. After the call. There are a few ways you can contact us with additional questions you can reach out to the contacts provided in our news release.

Timothy S. Gitzel: You can submit a question through the contact tab on our website.

Timothy S. Gitzel: 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.

Rachelle Girard: 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 as a PDF file on our website at Cameco.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 return to the queue.

Timothy S. Gitzel: 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 a quarter he investor Handout is available for download in a PDF file on our website at Cameco dotcom.

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

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

Rachelle Girard: Please note that this conference call will include forward-looking information that is based on a number of assumptions and that 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 in the 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.

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

Timothy S. Gitzel: 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.

Timothy S. Gitzel: As required by law.

Timothy S. Gitzel: Please refer to our most recent annual information form and the 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.

Timothy S. Gitzel: Well, thank you Michelle and good morning, everyone. We appreciate you taking the time to join today's call.

Timothy S. Gitzel: Well, thank you, Rachelle, and good morning, everyone. We appreciate you taking the time to join today's call. As Rachelle mentioned, I'm joining the call remotely from Washington, D.C., where this afternoon I'll be attending the Energy Transition Metals Summit hosted by the Northern Miners. In the days to come, we will also be meeting with some of the key policy makers here, to discuss current and future industry fundamental And importantly, we'll talk about how we're going to translate the significant government and public support for the expansion of nuclear power generation into meaningful actions that generate tangible results, to the benefit of the entire planet.

Timothy S. Gitzel: As Michel mentioned I'm, joining the call remotely from Washington D. C, where this afternoon I'll be attending the energy transition metals summit hosted by the northern minor.

Timothy S. Gitzel: In the days to come we will also be meeting with some of the key policymakers here in D C.

Timothy S. Gitzel: <unk> current and future industry fundamentals.

Timothy S. Gitzel: And importantly, we will talk about how we're going to translate to significant government and public support.

Timothy S. Gitzel: With the expansion of nuclear power generation.

Timothy S. Gitzel: The meaningful actions that generate tangible results to.

Timothy S. Gitzel: So the benefit of the entire planet.

Timothy S. Gitzel: As Cameco and as an industry, we're ready to respond to the global need for carbon-free, reliable, and secure nuclear energy for decades. We've said it several times over the years, and it's worth repeating. Our invitation to symposiums and high-level discussions now taking place around the world is a testament to Cameco's deep understanding of how the nuclear fuel market works and acknowledgement of the strong relationships we've established over several decades of experience. Let me tie together a few key themes today before we get to your questions.

Timothy S. Gitzel: As cameco and as an industry, we are ready to respond to the.

Timothy S. Gitzel: The global need for carbon free reliable and secure nuclear energy for decades to come.

Timothy S. Gitzel: We said it several times over the years and it's worth repeating.

Timothy S. Gitzel: Our invitation to symposiums in high level discussions now taking place around the world is.

Timothy S. Gitzel: As a testament to <unk> deep understanding of how the nuclear fuel market works and acknowledgment of the strong relationships, we have established over several decades of experience.

Let me tie together a few key themes today before we get to your questions.

Timothy S. Gitzel: First nuclear is being recognized by governments.

Timothy S. Gitzel: First, nuclear energy is being recognized by governments, power suppliers, and industrial power consumers as a carbon-free energy source that is key to net zero and energy security. On that basis, Cameco, along with our investments in Westinghouse and Global Laser Enrichment, is key to the nuclear industry and therefore key to the path to net zero. And within that broad positive demand context and in the face of uncertain supply, our strategy and experience provide us with unmatched leverage to add significant long-term value while ensuring strong downside protection.

Power suppliers and industrial power consumers because of carbon free energy source that is key to net zero and energy security.

Timothy S. Gitzel: On that basis chemical along with our investments in Westinghouse and global laser enrichment is.

Timothy S. Gitzel: It is key to the nuclear industry and therefore key to the path to net zero.

Timothy S. Gitzel: And within that broad positive demand context, and in the face of uncertain supply first.

Timothy S. Gitzel: Our strategy and experienced provides us with unmatched leverage to add significant long term value, while ensuring strong downside protection.

Timothy S. Gitzel: And our results so far in 2024 remain on track for delivering that value and establishing that protection.

Timothy S. Gitzel: And our results so far in 2024 remain on track for delivering that value and establishing that protection. So thinking back to this time last year, we were highlighting 18 months of growing momentum and interest in the nuclear space and in Cameco. And I can absolutely say that now, 12 months later, the interest and positive outlook have only improved. I would even qualify that further and say it has improved significantly.

Timothy S. Gitzel: So thinking back to this time last year, we were highlighting 18 months of growing momentum and interest in the nuclear space and then cameco.

Timothy S. Gitzel: And I can absolutely say that now 12 months later, the interest and positive outlook have only improved.

Timothy S. Gitzel: I would even qualify that further let's say it has improved significantly.

First is improved based on the impact of the global emphasis on clean energy.

Timothy S. Gitzel: First, it's improved based on the impact of the global emphasis on clean energy. We believe nuclear power is essential for the ongoing clean energy transition. If the world is going to meet its net zero targets, we need carbon-free base load and dispatchable power that can be located where it's needed and is always available and consistently reliable. I don't need to tell you that nuclear power is one of, if not the only energy source that meets all of those requirements. And we don't just need a bit of it; we need a lot of it.

Timothy S. Gitzel: We believe nuclear power is essential for the ongoing clean energy transition.

Timothy S. Gitzel: If the world is going to meet its net zero targets, we need carbon free base load and dispatch will power that can be located where it's needed and as always available and consistently reliable.

Timothy S. Gitzel: I don't need to tell you that nuclear is one of if not the only energy source that meets all of those requirements.

Timothy S. Gitzel: And we don't just need a bit of it we need a lot of it.

Timothy S. Gitzel: From a sustainability and scientific perspective, both the international community and large power consuming industries are calling for a tripling of nuclear energy from where it is today.

Timothy S. Gitzel: From a sustainability and scientific perspective, both the international community and large power consumers are calling for a tripling of nuclear energy from where it is today. And if we are to follow that path, it means a very significant increase in the number of new builds on the horizon, translating into significant value across the fuel cycle and reactor life cycle. The outlook has improved based on today's focus on secure energy. Nations must ensure that their critical energy infrastructure and fuel supplies are not excessively reliant on risky jurisdictions, unreliable partners, and unstable actors.

Timothy S. Gitzel: And if we were to follow that path. It means a very significant increase in the number of new builds on the horizon translating into significant value across the fuel cycle and reactor lifecycle.

Timothy S. Gitzel: Next the outlook has improved based on today's focus on secure energy.

Timothy S. Gitzel: Nations must ensure that their critical energy infrastructure and fuel supplies are not accessibly reliance on risky jurisdictions.

Timothy S. Gitzel: Global partners and unstable actors.

Timothy S. Gitzel: And again, nuclear energy checks those boxes. Fuel supplies and services for nuclear energy are sourced from multiple safe jurisdictions and suppliers in the Western world, and the nature of the fuel itself allows for long-term inventories and storage. So not only can you keep years of reloads behind a reactor, but that reactor can provide carbon-free and reliable energy for months without refueling, giving governments and utilities a runway to adapt should circumstances change.

Timothy S. Gitzel: And again nuclear checks those boxes.

Timothy S. Gitzel: Fuel supplies and services for nuclear energy are sourced from multiple safe jurisdictions and suppliers in the western World.

Timothy S. Gitzel: The nature of the fuel itself allows for long term inventories and storage.

Timothy S. Gitzel: So not only can you keep years of reloads behind a reactor, but that reactor can provide carbon free and reliable energy for months without refueling.

Timothy S. Gitzel: Giving governments and utilities or runway to adapt should circumstances change.

Timothy S. Gitzel: And finally, keeping both clean energy and energy security in mind. The outlook is more positive in the context of the current debate around AI data centers and the considerable energy needs that are coming with the rapid evolution of technology.

Timothy S. Gitzel: And finally, keeping both clean energy and energy security in mind, the outlook is more positive in the context of the current debate around AI, data centers, and the considerable energy needs that are coming with the rapid evolution of technology. For example, I recently read that using generative AI to provide search results in the same way we use Google requires a tenfold increase in power requirements, ten times.

Timothy S. Gitzel: I recently read that using generative AI to provide search results in the same way you use Google requires a 10 fold increase in power requirements.

Timothy S. Gitzel: 10 times.

Timothy S. Gitzel: And gone are the days of rolling out new technology without worrying about future potential runaway environmental impact. Companies driving the technology forward are doing so while keeping the carbon footprint and 24-7 reliability top of mind. And again, nuclear is the clear winner. You don't even have to take my word for it.

Timothy S. Gitzel: And gone are the days of rolling out new technology without worrying about future potential runway environmental impacts.

Timothy S. Gitzel: Companies driving the technology forward are doing so while keeping carbon footprint and $24 seven reliability.

A mind.

And again nuclear is the clear winner.

Timothy S. Gitzel: You don't even have to take my word for it we're seeing both industrial power users and tech sector experts voicing support for nuclear energy.

Timothy S. Gitzel: We're seeing both industrial power users and tech sector experts voicing support for nuclear energy, with some now taking action and signing agreements to ensure their facilities can access zero carbon and reliable nuclear energy now and into the future. Clean and secure electrons are on the critical path for generative AI development, putting nuclear energy and Cameco on the critical path to the digital revolution and strategic reindustrialization. So putting all that together, it is clear that we need to deploy zero carbon, global, and secure energy production to move the world forward, and the world is now acknowledging the benefits of nuclear energy.

Timothy S. Gitzel: With some now taking action and signing agreements to ensure their facilities can access zero carbon and reliable nuclear energy now and into the future.

Timothy S. Gitzel: Clean and secure electrons are on the critical path for degenerative AI development.

Timothy S. Gitzel: Nuclear and chemical on the critical path, the digital Revolution and strategic Reindustrialization.

So grouping all that together it is clear that we need to deploy zero carbon global and secure energy production to move the world forward and the World is now acknowledging the benefits of nuclear.

Timothy S. Gitzel: I attended the inaugural nuclear energy Summit, a couple months ago, which took place in Brussels with presidents and Prime ministers from 32 countries.

Timothy S. Gitzel: I attended the inaugural Nuclear Energy Summit a couple months ago, which took place in Brussels, with presidents and prime ministers from 32 countries. The goal was to join forces to back supportive measures in areas including financing, regulatory cooperation, technological innovation, and workforce training, enabling the expansion of nuclear power to help boost energy security, address climate change, and meet our collective net zero target. Because, as I said, without nuclear energy, there is no net zero. Without nuclear energy, there is no global and secure energy. And without nuclear energy, the next generation of energy-intensive technologies could result in increasingly detrimental environmental impacts.

Timothy S. Gitzel: The goal was to joined forces tabak supportive measures in areas, including financing regulatory cooperation technological innovation and workforce training, enabling the expansion of nuclear power to help boost energy security address climate change and meet our collective net zero targets.

Timothy S. Gitzel: Because as I said without nuclear there is no net zero with no nuclear there is no global and secure energy.

Timothy S. Gitzel: And without nuclear the next generation of energy intensive technologies could result in increasingly detrimental environmental impacts.

Timothy S. Gitzel: Nuclear is key to addressing those challenges, and that's where Cameco comes in, playing a key role in current and future power generation. We believe that at Cameco we have the right strategy, the right people, and the right assets to deliver long-term value, and along with our investments in Westinghouse and Global Laser Enrichment, we expect to benefit significantly from the tailwind. From the front end of the fuel cycle and through the reactor life cycle, from fuel supply to plant services to new builds and advanced reactors. We've never been in a better position with licensed and permitted brownfield assets in safe, sovereign jurisdictions and the capacity to grow to meet our commitment. So the future looks bright.

Timothy S. Gitzel: Nuclear is key to addressing those challenges and that's where <unk> comes in playing a key role in current and future power generation.

Timothy S. Gitzel: We believe that our chemical we have the right strategy the right people and the right assets to deliver long term value along with our investments in Westinghouse and global laser enrichment, we expect to benefit significantly from the tailwind.

Timothy S. Gitzel: From the front end of the fuel cycle and through the reactor lifecycle.

Timothy S. Gitzel: Fuel supply the plant services to new builds and advanced reactors.

Timothy S. Gitzel: Never been in a better position with licensed and permitted brownfield assets in safe sovereign jurisdictions and the capacity to grow to meet our commitments.

Timothy S. Gitzel: So the future looks bright.

Timothy S. Gitzel: Turning briefly to the quarter, our first quarter performance was as expected, highlighting the benefits of aligning our operational, marketing, and financially focused strategy in a market where we are seeing persistent positive momentum for nuclear energy like never before. The run rate at our operations is on pace to meet our annual production guidance. Operationally, our production results in the first quarter were strong and on track with our 2024 plans, with production rates and total production costs in our uranium segment continuing to reflect the transition back to our Tier 1 cost structure.

Timothy S. Gitzel: Turning briefly to the quarter, our first quarter performance was as expected highlighting the benefits of aligning our operational marketing and financially focused strategy.

Timothy S. Gitzel: In a market, where we're seeing that persistence positive momentum for nuclear energy like never before.

The run rate at our operations is on pace to meet our annual production guidance.

Timothy S. Gitzel: Operationally our production results in the first quarter was strong and on track with our 2024 plans with production rates and total production costs in our uranium segment continuing to reflect the transition back to our tier one cost structure.

Timothy S. Gitzel: In fact, we didn't change our 2024 operational or financial guidance metrics in any of our business segments after the first quarter. However, we can't overlook the geopolitical events that have been amplifying global supply chain and transportation. Those risks have continued to have a significant impact on nuclear fuel procurement strategies and the fuel cycle, especially in terms of transportation, which is not getting any easier. It's an elevated risk that we have a team focused on each and every day, and as it evolves, our stakeholders can be confident that, as always, Cameco will be transparent with our related disclosures. In the market, we continue to be selective in committing our unencumbered tier one in ground uranium inventory and UF6 conversion capacity.

Timothy S. Gitzel: In fact, we didn't change our 2024 operational or financial guidance metrics in any of our business segments. After the first quarter.

Timothy S. Gitzel: However, we can't overlook the geopolitical events that have been amplifying global supply chain and transportation risks.

Timothy S. Gitzel: Those risks have continued to have a significant impact on nuclear fuel procurement strategies and the fuel cycle, especially in terms of transportation, which is not getting any easier.

Timothy S. Gitzel: It's an elevated risk that we have a team focused on each and every day and as it evolves our stakeholders can be confident that as always chemical will be transparent with our related disclosure.

Timothy S. Gitzel: In the market, we continue to be selective in committing our unencumbered tier one in ground uranium inventory and you have six conversion capacity.

Timothy S. Gitzel: We don't focus on the small, irrelevant spot marks but on high quality term demand where the majority of uranium fuel and services are secured. In Q1, we successfully layered in additional long-term contracts. We are increasing our annual commitments to an average of about 28 million pounds per year from 2024 through 2028. Every contract we add reflects the sentiment and dynamics in the market at the time it is negotiated. So in today's market, that allows us to take those price peaks and carry them into the future, creating value for years to come while maintaining significant downside protection for when the cycle turns.

Timothy S. Gitzel: We don't focus on the small irrelevant spot market.

Timothy S. Gitzel: But on high quality term demand, where the majority of uranium fuel and services are secured.

Timothy S. Gitzel: In Q1, we successfully layered in additional long term contracts, increasing our annual commitments to an average of about 28 million pounds per year from 2024 through 2028.

Timothy S. Gitzel: Every contract we add reflects the sentiment and dynamics in the market at the time it is negotiated.

Timothy S. Gitzel: So in today's market that allows us to take those price peaks and carry them into the future create.

Timothy S. Gitzel: Creating value for years to come while maintaining significant downside protection for when the cycle turns.

Timothy S. Gitzel: From a risk managed financial perspective, our strong balance sheet and the expectation of strong cash flow generation tied to our contracting strategy guides, our conservative capital allocation priorities.

Timothy S. Gitzel: From a risk-managed financial perspective, our strong balance sheet and the expectation of strong cash flow generation tied to our contracting strategy guide our conservative capital allocation priority. In 2024, that includes focused debt reduction and prudent refinancing plans. As for our Westinghouse segment, results for the first quarter were as we expected and as guided in Q4. And we continue to expect our share of adjusted EBITDA from Westinghouse this year to be between $445 million and $510 million.

Timothy S. Gitzel: In 2024 that includes focused debt reduction and prudent refinancing plans.

Timothy S. Gitzel: As for our Westinghouse segment results for the first quarter were as we expected as guided in Q4.

Timothy S. Gitzel: And we continue to expect our share of adjusted EBITDA from Westinghouse this year to be between $445 million and $510 million.

Timothy S. Gitzel: It was and is a great investment where the prospects continue to improve, and where we still anticipate growth at a compound annual growth rate of six to ten percent over the next five years. So I'll stop there. Thank you for your interest today, and we are happy to take your questions.

Timothy S. Gitzel: It was and is a great investment where the prospects continue to improve and.

Timothy S. Gitzel: And where we still anticipate EBITDA growth at a compound annual growth rate of 6% to 10% over the next five years.

Speaker Change: So I'll stop there. Thank you for your interest today, and we are happy to take your questions.

Speaker Change: We will now begin the question and answer session in the interest of time, we ask you to limit your questions to one with one supplemental if you have additional questions you're 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.

Operator: We will now begin the question and answer session. In the interest of time, we ask you to limit your questions to one, with one supplementary.

Operator: If you have additional questions, you are welcome to rejoin the queue. To join the question queue, you may press star, then 1 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 key. To withdraw from the question queue, please press star then 2. Webcast participants are welcome to submit questions through the box at the bottom of the webcast frame.

Speaker Change: Knowledge and 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 chemical Investor Relations team will follow up with you by E.

Operator: 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 1 at this time. Our first question comes from Neil Mehta of Goldman Sachs. Please go ahead.

Speaker Change: Mail after the call once again anyone on the conference call who wishes to ask a question May Press Star then one at this time.

Speaker Change: Our first question comes from Neil Mehta of Scotia.

Neil Mehta: Goldman Sachs. Please go ahead.

Neil Mehta: Yeah, good morning team, and thanks for the time and the big picture thoughts. I had a couple of specific questions, one on Westinghouse. You reiterated the annual guide, but the adjusted EBITDA did look a little softer in the quarter, a lot of that was in March, and so can you just walk us through the seasonality of that business, what gives you conviction for the full year, and any color you can provide on that.

Neil Mehta: Yeah, good morning team and thanks for the time.

Neil Mehta: At the Big picture thoughts.

Neil Mehta: A couple of specific questions one on <unk>.

Neil Mehta: On the Westinghouse you reiterated the annual guide, but the adjusted EBITDA did look a little softer in the quarter a lot of that was on March and so.

Can you just walk us through the seasonality of that business. What gives you conviction on the full year end.

Neil Mehta: Any color you can provide on that segment.

Timothy S. Gitzel: Yeah, thanks, Neil. And thanks to you for your participation on Cameco. We appreciate it. Listen, I'm going to turn this over to Heidi Shockey, I think just to talk about the EBITDA on the quarter and for the year and it was a kind of a special quarter in that regard with kind of, purchase price allocation work that had to go on there so I'd like to say in general I can tell you we're delighted with the whole Westinghouse piece it's it's even better than we thought when we bought it the potential there in all elements of their business is is really good and so yeah there's some there's some accounting pieces that that came up in the quarter so Heidi can I just push it over to you just to give us a little bit of an overview of Westinghouse on Mr. Kim, thanks.

Speaker Change: Yeah, Thanks, Neal and thanks to you for your participation known chemical we appreciate it.

Speaker Change: I'm going to turn this over to Heidi Shockey, I think just to talk about.

Heidi Shockey: The EBITDA in the quarter and for the year and it was a kind of a special quarter in that regard with.

Heidi Shockey: The purchase price allocation work that had to go on there. So I'd just say in general I can tell you we're delighted with the whole listing those pieces.

Heidi Shockey: Even better than we thought when we bought it the potential there in all elements of their business is.

Speaker Change: Is really good and so yes. There is some there is some accounting pieces that came up in the quarter. So how can I just push it over to you just to give us a little bit of an overview of Westinghouse on the quarter and the EBITDA in our guidance for the year there.

Heidi Shockey: Sure, Tim, thanks. Yeah, there were a few accounting pieces that impacted our results this quarter for Westinghouse, the first of which has really to do with purchase accounting. So we had to fair value our assets and our inventory when we had the acquisition. And so, generally, we're going to see higher amortization on the asset balances and the intangible assets. On the inventory side, all the inventory that they held on the date of acquisition would have been fair valued, and so as they sell that off, you won't see any accounting margin on that.

Speaker Change: Sure Tim. Thanks, Yes, there was a few accounting pieces that impacted our results this quarter.

For Westinghouse the first of which is really to do with the purchase accounting. So we had to fair value our assets and our inventory when we had the acquisition and so generally we're going to see higher <unk>.

Speaker Change: Amortization on.

Speaker Change: The asset balances and the intangible assets.

Speaker Change: On the inventory side that all the inventory that they held on the date of acquisition.

Speaker Change: It would have been fair valued and so as they sell that off.

Speaker Change: You won't see any accounting margin on that we still get the cash flow of course, but the margin in terms of result is very low.

Heidi Shockey: We still get the cash flow, of course, but the margin in terms of results is very low. A lot of that inventory will be sold off here in Q1, Q2, so you'll see that diminish over time. And then, of course, we had some acquisition-related transition costs that also hit the quarter, and those will also kind of come off over the course of the year. But in terms of their operations, there's also seasonality to their operations, so the outage season is during the year. Typically, near the end of the year, you'll see higher results, just really tied to that outage season, where they do a lot of work for the utilities.

Speaker Change: A lot of that inventory will be sold off here in Q1, Q2, so you'll see that diminish over time.

Speaker Change: Then of course, we had some acquisition related transition costs that also hit the quarter and those were also kind of how that will come off over the course of the year, but in terms of their operations. There is also.

Seasonality to their operation. So the outage season is is in the year.

Speaker Change: Typically near the end of the year, you'll see higher results, just really tied to that that outage season, where they do a lot of work for the utilities.

Speaker Change: Thanks, Heidi and Tim.

Neil Mehta: Thanks, Heidi. And then, and Tim, the follow-up big picture questions just on the long-term price we've been tracking on your website, the term price kind of grinding here from $68 at the end of last year up to $77.50, and just your perspective on the conversations you're having with nuclear buyers, and do you still see upward pressure on the term price in your conversations?

Speaker Change: To follow up a big picture question, just on long term price we've been tracking.

Speaker Change: On your website the term price kind of grinding here from 68 at the end of last year up to 70, 750, and just your perspective on conversations youre, having with nuclear buyers in.

Speaker Change: Do you still see upward pressure on an.

Speaker Change: On term price in your conversations.

Timothy S. Gitzel: Yeah, Neil, I'm going to turn it over to Grant, who looks after the marketing shop and sales, but I can tell you, we are seeing it bump along, well, it's gotten more than bump along. If you go back a year or two, we weren't anywhere near the kind of 75, 80, average 77, 50 on the term price, and we're just, as Grant has said many, many times, I think in the early innings of this game, you just see overall, I mean, these conferences where you're talking tripling nuclear power over the next 25 years, and some would say, well, that's never going to happen. Okay.

Speaker Change: Yeah, Neal I'm going to turn it over to grant who looks after the marketing.

Grant E. Isaac: Drop in sales.

Grant E. Isaac: I can tell you we are seeing it bump along.

Grant E. Isaac: God morning bump along.

Grant E. Isaac: Back a year or two we weren't anywhere near the kind of 75 to 80 average 70 750 on the term price.

Grant E. Isaac: We're just as grant said, many many times I think in the early innings of.

Grant E. Isaac: This game you just see overall.

Grant E. Isaac: I mean.

Grant E. Isaac: These conferences, where youre talking tripling nuclear power over the next 25 years, and some would say well that's never going to happen because it okay well it doubled.

Timothy S. Gitzel: Well, it's doubled. And you say, well, then we need all the uranium that we've got now and double it again. And so the pressure is going to be there on the price. We haven't hit a price yet, I think, an incentive price for new production. We're not seeing a whole lot. We're seeing a little bit coming out. So yeah, the pressure is going to be there for, I think, a long time to come.

Grant E. Isaac: And you say well then we need all the uranium that we've got now in double it again, doubling yet again and so the pressure is going to be there on the on the price. We haven't had a price I think an incentive price for new production, we're not seeing a whole lot. We are seeing a little bit coming out so the pressure's going to be there for a long time to come.

Grant E. Isaac: But Grant, let me turn it over to you. You're the better expert. Thanks, Tim. Neil, a great question, and thank you for focusing on it.

Grant E. Isaac: Glenn Let me turn it over to you you are the better expert on the market.

Grant E. Isaac: Thanks, Tim. Neil, great question and thank you for focusing on kind of that term market because that really is what to watch in order to figure out where this market is going. The term price remains in a constructive build, and that is very simply because we are seeing this continual pivot to more security of supply contracting. You know, the contracting where utilities become increasingly concerned about the availability of future supply, that concern is reflected in some important contracting characteristics. You've heard me talk about them before. Number one is that tenors go out.

Glenn: Thanks, Tim Great question, and thank you for focusing on kind of that term market because that really is.

Glenn: What to watch in order to figure out where this market is going the term price.

Glenn: Remains in a constructive build it and that is very simply because we're seeing this continue will pivot to more security of supply contracting.

Glenn: The contracting where utilities become increasingly concerned about the availability of future supply that concern is reflected in some important contracting characteristics you've heard me talk about them before.

Number one is tenders go out so utilities come to the market and Theyre looking for more material over a longer period of time.

Grant E. Isaac: So utilities come to the market, and they're looking for more material over a longer period of time. And then you start to see volumes going up, not just because more years are being added, but utilities are taking bigger bites out of each year, and then, of course, we're seeing time frames be extended, with utilities looking for material well into the mid-2030s now. That is all reflective of this underlying security of supply pivot that's occurring.

Glenn: And then you start to see volumes going up not just because more years are being added but utilities are taking bigger bites out of each year and then of course, we're seeing timeframe be extended utilities looking for material well into the mid 2000 <unk> now that is all reflective of this underlying security of supply.

Glenn: Pivot that's occurring it's occurring because of the multi <unk> of the market that's going on it's occurring because some of the production challenges you are seeing with some uranium production.

Grant E. Isaac: It's occurring because of the multifurcation of the market that's going on, and it's occurring because of some of the production challenges you're seeing with some uranium production. We continue to believe we're in the early innings of it because if you add up the amount of contracting that's in the market, it's not even at the replacement rate yet. So we just find it to be very, very constructive because to have, you know, an average term price of $77.50 when we're not even at replacement rates yet, that's a pretty good place for us to be and a great place for an incumbent producer with tier one assets and brownfield leverage, a great opportunity for us to take advantage of that value capture. So we're feeling very, very constructive about that underlying market fundamental.

Glenn: We continue to believe we are in the early innings of it because if you add up the amount of contracting that's in the market, it's not even at replacement rate yet. So we just find it to be very very constructive because to have.

Glenn: On average term price of $77 50, when we're not even at replacement rate yet.

Glenn: A pretty good place for us to be and a great place for an incumbent producer with tier one assets in brownfield leverage.

Glenn: A great opportunity for us to take advantage of that value capture so we're feeling very very constructive of that underlying market fundamentals.

Speaker Change: Thanks Grant.

Grant E. Isaac: Thanks Neil.

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

Ralph M. Profiti: Our next question comes from Ralph Profiti of 8 Capital. Please go ahead.

Ralph: Thanks, operator, and good morning, everyone. Thanks for taking my questions.

Ralph M. Profiti: Thanks, operator, and good morning everyone. Thanks for taking my questions.

Timothy S. Gitzel: Tim or Grant, you know, INCAI guidance of 8.3 million pounds is currently a tentative target, right, and under discussion. Can you talk a little bit about progress on securing sulfuric acid supply and, you know, maybe one step further, is there any range of production volumes that you could potentially see that's at risk in that guidance number? And, you know, just thinking about sulfuric acid shortages only, perhaps leaving out even more, you know, unpredictable logistical challenges. Any context around volume at risk would be helpful.

Ralph: Tim or grant.

Ralph: <unk> guidance of $8 3 million pounds. This is currently a tentative target right and under discussions can.

Ralph: Can you talk a little bit about progress on securing sulfuric acid supply in <unk>.

Ralph: Maybe one step further is there any range of production volumes that you could potentially see that's at risk in that guidance number and just thinking about sulfuric acids shortages, only perhaps leaving out even more.

Ralph: Unpredictable logistical challenges any context around volume at risk would be helpful.

Timothy S. Gitzel: Yeah, Ralph it's Tim.

Timothy S. Gitzel: Yeah, Ralph. It's Tim. I'll start because I just met Sean Quinn, and I just came back from there. We were over there last week with obviously Kazaks and other joint venture partners, and obviously sulfuric acid is an issue. It's short, it's tight, there are other industries keeping the supplies they have and using them, and they're having trouble accessing their regular channels of sulfuric acid from the Russians and others because the Russians are sanctioned and are not able to produce like they were.

Timothy S. Gitzel: I'll start because we just Sean Quinn and I just came back from there we were over there last week.

Timothy S. Gitzel: Obviously meetings with the.

Because <unk> and other joint venture partners.

Timothy S. Gitzel: Obviously sell through I guess it is an issue it's short it's tight.

Timothy S. Gitzel: Other industries or keeping the suppliers, they have and using them, they're having trouble accessing their regular channels sulphuric acid from the Russians and.

Timothy S. Gitzel: Others, because the Russians are sanctioned and not able to produce like the water. So you know their plan is to bring the Italians and to bring it to build a new plant to mature that's even started yet so I think we're into this vehicle for a couple years until that new plant gets built so.

Timothy S. Gitzel: So you know their plan is to bring the Italians in to build a new plant. I'm not sure that's even started yet. I think we're into this pickle for a couple years until that new plant gets built.

Timothy S. Gitzel: I know Sean had direct conversations with the CEO of Javienka, Kazatomprom. So, Sean, do you have anything to add to the 8.3 was the best information we had when we put out their information? Not a lot, other than in our conversations with KazAtomPOM. They're getting more comfortable that $8.3 million is achievable this year. They're obviously working hard on sulfuric acid, both the supply and the logistics challenges that you mentioned. But really, not much more detail than that, other than some increasing comfort that that.

Timothy S. Gitzel: No Sean had direct conversations with the CEO of J.

Timothy S. Gitzel: Jay Veeco, because Adam Proms, So Sean do you have anything to add on the $8. Three was the best information we had when we put out their information, obviously, Sean anything to add to that.

Sean Anthony Quinn: Not a lot other than in our conversations with because Adam com, they're getting more comfortable that $8 8 million is achievable this year.

Sean Anthony Quinn: We're obviously working hard on the self airgas.

Speaker Change: Both the supply and the logistics challenges that you mentioned.

But really not much more detail than that other than I just.

Some increasing comfort that that will be achievable.

Speaker Change: Okay got it thank you and that's it.

Ralph M. Profiti: Got it, thank you, and as a follow-up, I'd like to come back to something that Grant talked about, which is this supply pivot and how the characteristics of these contracts are changing in terms of tenor volume and time frame. It sounds like that's becoming perhaps more important than the actual volume. Secured in the term market, which so far, at 26 million pounds or so year to date, is kind of sort of underwhelming when we look at what the replacement rate is and what we did actually last year. Yeah, sorry Tim.

Speaker Change: Follow up I'd like to.

Speaker Change: Come back to something that grant talked about which is the supply pivot in how characteristics of these contracts are changing in terms of tenor volume and timeframe then it sounds like that's becoming perhaps more important than the actual volumes.

Grant E. Isaac: Secured in the term market, which so far at 26 million pounds or so year to date is kind of sort of underwhelmed. When we look at what is replacement rate in and what we did actually last year would that be a fair comment.

Grant E. Isaac: Great guys, yes, sorry, Tim.

Grant E. Isaac: Ralph, I might characterize it by just saying more to come. When we evaluate the types of conversations that we're involved in in our pipeline, it is indicating a lot of security of supply interest, and we're presuming it's a leading indicator for what you might see in the term market. So we are expecting strong contracting volumes through 2024. But if there are any delays, it might be reflective of perhaps two things. One is a bit of uncertainty around where some of these legislative efforts are going with respect to things like Russian supply.

Speaker Change: Ralph I might characterize it by just saying more and more to come when we evaluate the types of conversations that we're involved in in our pipeline. It is indicating a lot of security of supply interest and we're presuming, it's a leading indicator for what you might see in the term market. So we are expecting.

Speaker Change: Strong contracting volumes through 2024, if there are any delays it might be reflective of perhaps two things.

One is a bit of uncertainty around where some of these legislative efforts are going with respect to things like Russian supply, we're very close to seeing legislation in the U S that legislation I think has been well planned from a.

Grant E. Isaac: You know, we're very close to seeing legislation in the U.S. That legislation, unless, of course, the Russians retaliate to that legislation by restricting supply in the immediate term. The market is not priced in for that risk. But that's maybe causing a bit of a pause or maybe a slowdown, I would say, in final negotiations for term material out past that 2028 phase-out window. And the second thing is... Don't forget, we have a bunch of new customers as a result of this bifurcation and multifurcation in the market.

Speaker Change: Utility supply point of view.

Speaker Change: Unless of course, the Russians retaliate to that legislation by restricting supply in the immediate term the market is not priced in that risk.

Speaker Change: But thats, maybe causing a bit of a pause.

Speaker Change: Or maybe a slowdown I would say in final negotiations for term material out past that 2028 phase out window and the second thing is.

Don't forget we have a bunch of new customers as a result of this bifurcation multi frication in the market customers in central and Eastern Europe, who were traditionally captive to Russian supply and not accustomed actually to buying components in a big way receiving instead of fabricated.

Grant E. Isaac: Customers in Central and Eastern Europe who were traditionally captive to Russian supply and not accustomed, actually, to buying components in a big way, received instead a fabricated fuel bundle from the Russians. And there is a learning curve to go up for this demand, to kind of learn how to buy the uranium and the conversion and the enrichment and the fabrication services, as well as the outage services. So it's kind of the learning effects of new customers combined with maybe this overhang of legislative challenges or opportunities in the market, maybe causing a bit of a pause, but the underlying security of supply sentiment is growing stronger and stronger, Ralph.

Speaker Change: <unk> bundle from the Russians and there is a learning curve to go up as for this demand to kind of learn how to buy the uranium in the conversion and the enrichment and the fabrication services was as well as the outage services. So it is kind of learning effects of new customers combined with maybe this overhang of legislative.

Speaker Change: Offer our challenges are our opportunities in the market, maybe causing a bit of pause, but the underlying security of supply and demand is growing stronger and stronger route.

Speaker Change: Quite helpful. Thanks.

Speaker Change: Thanks, everyone.

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

Speaker Change: Thanks Ralph.

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

Gordon Johnson: Hey, Thanks for taking my question guys I appreciate it.

Gordon Johnson: Hey, thanks for taking my question, guys. I appreciate it.

Timothy S. Gitzel: So just two questions. First, you guys talked about this just now with respect to the potential Biden ban on a product coming in from Russia. But can you talk a little bit more about the actual impact here? Because it seems like it's an executive order? It doesn't take effect until 2028, so it seems like the real impact will be muted unless, like you guys said, the Russians react. But I just want to make sure I have that correct. If you could provide your insights and then a follow-up, thank you.

Gordon Johnson: So just two questions first you guys talked about this just now with respect to the.

Gordon Johnson: Potential biden band.

Gordon Johnson:

Gordon Johnson: Product coming in from Russia, but can you talk a little bit more about the actual impact here because it seems like it's an executive order it doesn't take effect until 2028, well it seems like the real impact will be muted unless like you guys said, the Russians react, but I just wanted to make sure.

Speaker Change: I have that correct. If you could provide your insights and then a follow up thank you.

Timothy S. Gitzel: Well, Gordon, I'll start and then Grant can chip in, but part of the reason I'm down here is to have those meetings first to see where that legislation is at. We'll be going through the different secretariats to talk to the people in charge and just see where that's at. I mean, that has already had a chilling effect. It's going to have even more of a chill when it gets passed, and so you know we talked about 2028. Well, you can still buy until then.

Speaker Change: Well Gordon I'll start and then grant to chip in but.

Speaker Change: Part of the reason I'm down here is to have those meetings first to see where that legislation is that we'll be going through the different.

Speaker Change: Secretary.

Speaker Change: To talk to the to the people in charge and just see where that said I mean that is already had a chilling effect, it's going to have even more of a chill when it when it gets passed and so when we talk about 2028, you can still but until then if youre looking at the market now there's not a whole lot of material available until then and most utilities are looking in.

Timothy S. Gitzel: If you're looking at the market now, there's not a whole lot of material available until then, and most utilities are looking in that window. So Grant, I'll pass it over to you to give your view on that. Yeah.

Grant E. Isaac: That window, so grant I'll pass it over to you to give your view on that.

Grant E. Isaac: Yeah, we are very close to seeing a legislative ban. In fact, I believe if it wasn't for one senator, we would have seen a ban in place by now on the legislative side.

Grant E. Isaac: We're very close to seeing a legislative ban in fact, I believe if it wasn't for one senator we would've seen a ban in place by now on the legislative side absent a legislative opportunity Gordon our strong census, there might be an administrative action as you tell as you mentioned either at the secretary level.

Grant E. Isaac: Absent a legislative opportunity, Gordon, our strong sense is there might be an administrative action, as you mentioned, either at the secretary level or even at the executive order level, in order to codify the intent to shut out Russian supply by 2028. So let's first talk about the potential impacts there. As we've mentioned a number of times, utilities have been largely, I would call it, self-sanctioning because of the underlying Russian suspension agreement, which was already sunsetting in 2028. So a lot of that forward contracting was already looking to avoid Russian supply. But meanwhile, contracts that were signed in the past were being delivered on.

Grant E. Isaac: <unk> or even at the executive order level in order to codify the intent to to shut out Russian supply by 2028. So let's first talk about the potential impacts there as we've mentioned a number of times utilities have been largely I would call it self sanctioning because of the.

You're lying Russian suspension agreement, which was already sunsetting in 2028, so a lot of that forward contracting was already looking to avoid Russian supply, but meanwhile, contracts that have been signed in the past were being delivered into so theres kind of two elements to a bad from a U S point of view.

Grant E. Isaac: So there's kind of two elements to a ban from a US point of view. The number one is, you know, when is the ban effective? Is it going to be effective sooner than 2028, or is that the date certain? And, number two, what is the strength of the waivers that might be granted to utilities to take in supplies between now and 2028, for example? So if you have a strong ban but weak waivers, it might not have much of an effect.

Grant E. Isaac: The number one is when is the ban effective is it going to be effective sooner than 2028 or is that the date certain and number two what is the strength of the waivers that might be granted to utilities to take in supplies between now and 2028. For example, so if you have a.

Strong bad, but weak waivers it might not have much of an effect, but if you have a strong backlog and strong waivers meaning.

Grant E. Isaac: But if you have a strong ban and strong waivers, meaning that utilities really have to demonstrate that there is no other alternative for them to fuel their reactors, and you know, it's really in the national security interest, and only then will they get a waiver for importing the Russian material, then that will really be a strong signal to focus on sovereign safe jurisdictions for supply. Now the final piece, and I already mentioned it, but it's worth mentioning again, is that all of this assumes it's up to the West to decide when the Russian material is done.

Grant E. Isaac: That utilities really have to demonstrate that there is no other alternative for them to fuel their reactors.

Grant E. Isaac: It's really in the National security interest and only then will they get a waiver for importing the Russian material, then that will really be a strong signal to focus on.

<unk> safe jurisdictions for supply now the final piece I already mentioned it but it's worth mentioning again is all of this presumed it's up to the west to decide when the Russian material has done and what we forget about is there is the other side to that coin and that is the risk that if a bank comes in place in a band.

Grant E. Isaac: And what we forget about is there's the other side to that coin, and that is the risk that if a ban comes in place, and a ban with, say, strong waivers comes in place, that the Russians don't react by simply saying, oh, you don't want our material come 2028. I'll tell you what, you can't have it now. That kind of voluntary export restraint on the part of the Russians has absolutely not been priced into the market and has not been anticipated in terms of future supply.

Grant E. Isaac: With a strong waivers come in place.

Grant E. Isaac: Let the Russians don't react by simply saying Oh, you don't want our material come 2028, I'll tell you. What you can have it now that kind of voluntary export restraint on the part of the Russians has absolutely not been priced into the market and has not been anticipated in terms of future supply.

Grant E. Isaac: And I would say you would have to go back and look at an analog like the Cigar Lake flood event to see the kind of shock that it would create. So that piece really isn't well thought through in the market. But the ban itself, come 2028, the self-sanctioning, it has been kind of well-planned, subject to strong waivers and subject to Russian retaliation.

Grant E. Isaac: And I would say you would have to go back and look at an analog like the cigar Lake flood event to see that kind of shock that it would create so that that piece really isn't well thought through in the market, but the band itself come 2028, the cell sanctioning.

Grant E. Isaac: It has been kind of well planned subject to strong waivers and subject to a Russian retaliation.

Speaker Change: Yeah. That's very helpful that that was the biggest risk I saw that the Russian retaliation will really be we'll call. It pricing I agree that's not price then one quick follow up if I can go seems to be.

Gordon Johnson: Yeah, that's very helpful. That was the biggest risk I saw, that the Russian retaliation would really be what caused prices to move, and I agree, that's not pricey. And one quick follow-up, if I can. There seems to be a constituency of people out there who are saying, you know, Cameco Forward sold a lot of their pounds at $70, and thus, you know, they're not going to benefit from this increase in prices.

Speaker Change: A constituency of people out there who are saying.

Speaker Change: Chemical forward sold a lot of their pounds at $70.

Speaker Change: And thus they are not going to benefit from the increase in prices yet when I go through your financials.

Gordon Johnson: Yet, when I go through your financials, and please correct me if I'm wrong, it looks like, to me, you guys have only committed 20% of your reserves, so that leaves about 800 million pounds for future contracts. And from what I'm hearing in the market, those contracts are being signed at floor prices of 80 with ceilings at 135. Is that accurate? Can you comment on that? Thanks for the question, guys.

Speaker Change: Correct me, if I'm wrong, it looks like to me.

Speaker Change: Gabon, we committed 20% of your reserves, so that leaves about 800 million pounds for future contracts and from what I'm hearing in the market. Those contracts are being signed at floor prices of 80 was selling at 135 is that accurate can you comment on that thanks for the questions guys.

Speaker Change: Yes, Gordon Thanks for that question.

Gordon Johnson: Yeah, Gordon, thanks for that question. You're singing our song there because you're accurate with what you said. I think we have sold about 20% of our total reserve resource base and more to come. We've got lots.., to go. So Grant, do you want to answer that again? Yeah, Gordon. Thanks for that question.

Speaker Change: We're seeing our song there because you are accurate with what you said I think we have sold about 20% of our total reserve resource base and more to come we have good lots.

Speaker Change: To go so grant do you want to answer that again.

Grant E. Isaac: Yes, Gordon Thanks for that question and it is something that we occasionally here.

And let's just go through that in a little bit of detail and sorry for folks that are very familiar with this explanation, but for those who aren't I think it bears a little bit of time.

Timothy S. Gitzel: Yeah, Gordon, thanks for that question, and it is something that we occasionally hear. Let's just go through that in a little bit of detail, and sorry for folks that are very familiar with this explanation, but for those who aren't, I think it bears a little bit of time. There is a notion out there that a producer in the uranium space should produce uranium and sell it on the spot market. And I think if that debate isn't clearly over for folks, it's just because they're not paying attention.

There is a notion out there that a producer in the uranium space should produce uranium and sell it into the spot market and I think.

Grant E. Isaac: If that if that debate isn't clearly over for folks, it's just because they're not paying attention. We saw significant downward price action in the spot market in March on the back of a couple of hundred thousand pounds dangled over the spot market. So you are talking about an industry consuming about 180 million pounds a year.

Grant E. Isaac: And a couple hundred thousand pounds being aggressively moved into the spot market had a $6 seven dollar effect over the course of a couple of days and why is that it's because of a very simple fact and that is there is not a reactor anywhere on the planet that is loading of fuel bundle in 2000.

Timothy S. Gitzel: We saw significant downward price action in the spot market in March on the back of a couple hundred thousand pounds dangled over the spot market. So you're talking about an industry consuming about 180 million pounds a year, and a couple hundred thousand pounds being aggressively moved into the spot market had a $6, $7 effect over the course of a couple of days. And why is that?

Grant E. Isaac: <unk> 24 that need uranium in 2020 for the uranium thats in that fuel bundle was bought years ago at least in 2021 and probably even years before that so there is never high quality fundamental in year demand for uranium utilities instead are looking for there.

Grant E. Isaac: It's because of a very simple fact, and that is, there is not a reactor anywhere on the planet that is loading a fuel bundle in 2024 that needs uranium in 2024. The uranium that's in that fuel bundle was bought years ago, at least in 2021, and probably even years before that. So there is never high quality, fundamental in-year demand for uranium. Utilities, instead, are looking for their material out into the future.

Grant E. Isaac: Cereal out into the future that's the high quality fundamental term market and that is the market that matters to a uranium producer and when you look at that market here is a really important fact.

Grant E. Isaac: <unk> never sells below the market.

Grant E. Isaac: So if the market is the term market, what's being negotiated today.

Grant E. Isaac: Cameco is always able to capture.

Grant E. Isaac: That's the high quality, fundamental term market. And that is the market that matters to a uranium producer. And when you look at that market, here's a really important fact: Cameco never sells below the market.

Grant E. Isaac: Leading prices in the market, we are able to take advantage of our incumbent production are brownfield leverage our reputation as a reliable supplier and discover.

Grant E. Isaac: Best pricing in the market in terms of floors and ceilings and market related contracts.

Grant E. Isaac: So if the market is the term market, what's being negotiated today? Cameco is always able to capture leading prices in the market. We are able to take advantage of our incumbent production, our brownfield leverage, our reputation as a reliable supplier and discover the best pricing in the market in terms of floors and ceilings and market-related contracts, or the base escalated portion, the fixed portion in the term market. We don't miss that market at all.

Grant E. Isaac: For the the base escalated portion the fixed portion in the term market, we don't Miss that market at all in fact in many cases, we're helping lead the discovery of prices in that market because of all of the advantages we bring to the table relative to somebody who might be producing from.

Grant E. Isaac: That's not considered sovereigns safe or somebody who doesn't have the reputation of reliable supply like we do or doesn't have multiple sources of supply like we do so those incumbent advantages.

Grant E. Isaac: In fact, in many cases, we're helping lead the discovery of prices in that market because of all the advantages we bring to the table relative to somebody who might be producing from a jurisdiction that's not considered sovereign safe, or somebody who doesn't have the reputation of reliable supply like we do, or doesn't have multiple sources of supply like we do. So those incumbent advantages create this opportunity for us to capture leading value going forward. So where the market is today is exactly where Cameco is. We never miss that market. And the inverse is not true.

Grant E. Isaac: Create this opportunity for us to capture a leading value going forward, so where the market is today is exactly where cameco is we never missed that market and the inverse is not true. If we had if we had preserved 5 million pounds to sell through the spot market when it hit 100.

Grant E. Isaac: $6 first of all the market would never hit $106, because it would see that material sitting there and the second we showed up with a 100000 pounds of fresh production the market would back up and you don't have to take my word for it look at what happened because Adam prong during their volume strategy days, when they were selling material through the spot.

Grant E. Isaac: If we had preserved five million pounds to sell on the spot market when it hit $106, first of all, the market would never hit $106 because it would see that material sitting there. And the second we showed up with 100,000 pounds of fresh production, the market would back up. And you don't even have to take my word for it.

Grant E. Isaac: <unk> in big volumes or look at what happened to Paladin and their spot exposure days. So no surprise looking forward the responsible producers of uranium.

Grant E. Isaac: Have landed on a very common message, which is you build homes for your production before you call Ford you stay off the spot market, because it's not capable of absorbing those volumes because theres never any high quality in year demand for uranium.

Grant E. Isaac: Look at what happened to Kazatomprom during their volume strategy days when they were selling material through the spot market in big volumes. Or look at what happened to Paladin during their spot exposure days. So no surprise, looking forward, the responsible producers of uranium have landed on a very common message, which is you build homes for your production before you call for it. You stay off the spot market because it's not capable of absorbing those volumes because there's never any high-quality in-year demand for uranium.

Grant E. Isaac: And that strategy is what captures the most amount of value going forward and when you're a producer like cameco.

Grant E. Isaac: You are at the top of that market and finding that forward value. So.

Grant E. Isaac: You look at our at Cameco, our exposure is second to none and our pipeline of reserves and resources means we have about 800 million pounds, we haven't even tried to sell yet.

Grant E. Isaac: That is best in class exposure to this constructive market.

Speaker Change: Thanks for the question.

Grant E. Isaac: And that strategy is what captures the most amount of value going forward. And when you're a producer like Cameco, you're at the top of that market in finding that forward value. You look at Cameco, our exposure is second to none, and our pipeline of reserves and resources means we have about 800 million pounds we haven't even tried to sell yet. That is best-in-class exposure to this constructive market.

Speaker Change: Thanks Gordon.

Speaker Change: Our next question comes from Andrew Wong of RBC capital markets. Please go ahead.

Andrew Wong: Hey, good morning, Thanks for taking my questions. So just wanted to go back to contract terms can you just talk about the escalators that are being built into contracts today.

Andrew Wong: We're in a more inflationary environment rates or higher demand is stronger.

Andrew Wong: Our next question comes from Andrew Wong of RBC Capital Markets. Please go ahead.

Andrew Wong: How those escalators torn up and maybe just talk about how those might affect pricing in the future periods. Since we don't really care much about the escalators.

Andrew Wong: Hey, good morning. Thanks for taking my questions. So, just wanted to go back to contract terms. Can you just talk about the escalators that are being built into the contracts today? We're in a more inflationary environment, rates are higher, demand is stronger. Have those escalators gone up? And maybe just talk about how those might affect pricing in the future period since we don't really hear much about the escalators.

Speaker Change: Thanks, Andrew.

Speaker Change: Yes.

Andrew Wong: <unk> for escalators on contracts.

Andrew Wong: Has really improved dramatically for suppliers of uranium and remember what we're talking about here is in a term contract. There is those two bookends you could have a term contract.

Grant E. Isaac: Thanks, Andrew.

Andrew Wong: <unk> escalated. So you start at today's term price average term price of $77 50.

Grant E. Isaac: Yeah, the situation for escalators on contracts has really improved dramatically for suppliers of uranium. And remember, what we're talking about here is in a term contract, there are those two bookends. You can have a term contract that's base escalated. So you start at today's term price, an average term price of $77.50.

Andrew Wong: And then the negotiation is how does it escalate to first deliveries and then how does it escalate through the delivery window. The other types of escalators are actually on market related contracts because the floors and the ceilings have escalators built into them. So a floor price you get today is subject to an escalator of ceiling price.

Andrew Wong: I'll get to an escalator and when I say the environment for escalators has improved what I mean is that in the post Fukushima window. When we saw a lot of material hitting the market a lot of uncommitted material oversupply, we actually saw some producers who were willing to even discuss.

Grant E. Isaac: And then the negotiation is, how does it escalate to first delivery, and then how does it escalate through the delivery window? The other types of escalators are actually on market-related contracts because the floors and the ceilings have escalators built into them. So the floor price you get today is subject to an escalator; the ceiling price is subject to an escalator. And when I say the environment for escalators has improved, what I mean is that in the post-Fukushima window, when we saw a lot of material hitting the market, a lot of uncommitted material oversupplying, we actually saw some producers who were willing to even discount a standard inflation indicator.

Andrew Wong: <unk> a standard inflation indicators, so you take a CPI indicator and they would offer.

Andrew Wong: <unk> 75 of the normal CPI indicators now what we're seeing is indicators that are capturing escalation at least at industrial escalation and in some cases, having success building, yet regulatory cost or industrial cost escalators and this is.

Grant E. Isaac: So you take a CPI indicator, and they would offer, you know, 0.75 of the normal CPI indicator. Now what we're seeing is indicators that are capturing escalation, at least at industrial escalation, and in some cases, having success building in, you know, regulatory cost or industrial cost escalators. And this is just a function of the security of supply pivot that I talked about, rather than pulling them out of the ground and trying to pound them into a market where you don't have any negotiating leverage. And now that this market has changed, and security of supply is back in the market, it gives incumbent producers incredible advantages, and escalators are one of those advantages. So that environment has definitely changed.

Andrew Wong: Is just a function.

Andrew Wong: The security of supply pivot that I talked about and it's exactly why when the market is oversupplied and prices are soft cameco chooses to leave pounds in the ground.

Andrew Wong: Rather than pulling them out of the ground and trying to pound them into a market, where you don't have any negotiating leverage and now as this market has changed and security of supply is back in the market. It gives incumbent producers incredible advantages and escalators or one of those advantages so that environment is.

Andrew Wong: Definitely changed.

Speaker Change: Okay. That's great and then maybe just switching to something else here.

Andrew Wong: Okay, that's great. And then maybe just switch to something else here.

Timothy S. Gitzel: Can you talk more about the Don Lake project? It looked like drilling and exploration there hit some pretty significant mineralization last year. What's the exploration plan for that project going forward? And maybe when might we hear some of those results?

Speaker Change: Can you talk more about the Thorn Lake projects.

Speaker Change: Like drilling and exploration there had some pretty significant mineralization last year.

Speaker Change: What's the exploration plan for that project going forward and maybe one when might we hear some of those results.

Speaker Change: Yes, Thanks, Andrea that we don't often talk about exploration the.

Sean Anthony Quinn: Yeah, thanks, Andrew. Yeah, we don't often talk about our exploration program, which is probably one of the best in the world. And we've got some of the best property in the world, including the Don Lake property, which is close to our existing infrastructure. So yeah, we have had a bit of success there. Sean, do you want to say a few words about our Q22 or Don Lake project and just where that's at?

Speaker Change: Program, which is probably one of the best in the World and you got to some of the best property in the world, including the Dawn Lake property, which is close to our existing infrastructure. So yeah, we have had a.

A bit of success there as Sean do you want to say a few words about our Q2, 'twenty two or Don Lake project, and just where that's at.

Sean Anthony Quinn: Sure and I'll just start by noting its across the fence line, we have isoantigen their hurricane deposit.

Sean Anthony Quinn: But.

Sean Anthony Quinn: Sure, and I'll just start by noting that across the fence line we have ISO Energy and their hurricane deposit, but we had a very active winter program, and we are analyzing the results, and sharing them with our joint venture partner in Orano. And then we'll be moving into a summer drill program, assessing the results of that, and I think we might anticipate having some results to share with the market after the conclusion of that summer program.

Sean Anthony Quinn: We had a very active winter program.

And.

Sean Anthony Quinn: We are analyzing the results sharing them with our joint venture partner Toronto.

Sean Anthony Quinn: And then we will be moving into the summer drill program.

Sean Anthony Quinn: Assessing the results of that.

Sean Anthony Quinn: And.

Sean Anthony Quinn: I think might anticipate having some results to share with the market.

Sean Anthony Quinn: After the conclusion of that summer program.

Speaker Change: And thanks Andrew.

Speaker Change: Thanks, Andrew.

Andrew Wong: Okay, great. Thanks.

Andrew Wong: Okay.

Andrew Wong: Yes.

Andrew Wong: Our next question comes from Alexander Pearce of Bank of Montreal. Please go ahead.

Alexander Robert Peel Pearce: Great. Thanks, good morning.

Alexander Robert Peel Pearce: Thanks, Andrew. Our next question comes from Alexander Pearce of the Bank of Montreal. Please go ahead. Great, thanks. Good morning, all.

So just turning back to the contracting again.

Alexander Robert Peel Pearce: Looks like you may have on in a few million pounds you submit.

Alexander Robert Peel Pearce: Mid term contracting book.

Alexander Robert Peel Pearce: Our next question comes from Alexander Pearce of the Bank of Montreal. Please go ahead.

This 28 million pounds.

Alexander Robert Peel Pearce: Now for the next five years in the previous call you provided a total number of contracts.

Alexander Robert Peel Pearce: Thanks, y'all, and sweet dreams. Sorry, Tim. Go ahead, go ahead, Grant. Yeah, sorry.

The contract so I wonder if you could provide an updated number for that.

Grant E. Isaac: We moved away from kind of giving those quarterly updates, Alex, on where we were at with contracting. We did it for a period of time because we were seeing the market recovery before others were seeing it, and we thought we were there to play a pretty important role in convincing folks that contracting was underway, and we were seeing the return of term contracting. But now the data are pretty clear.

Alexander Robert Peel Pearce: Yes.

Alexander Robert Peel Pearce: Yes.

Sorry, Tim.

Timothy S. Gitzel: Go ahead go ahead grant, yes, yes, sorry.

Timothy S. Gitzel: We moved away from kind of giving those quarterly updates Alex on where we were at with contracting we did it for a period of time, because we were seeing the market recovery before others. We're seeing it and we thought we were there to play a pretty important role in convincing folks that that contra.

Racking was underway and we were seeing the return of term contracting but now the data are pretty clear. So what we want to do obviously is kind of go back to our maximum negotiating position, which is on an individual basis.

Grant E. Isaac: So what we want to do, obviously, is kind of go back to our maximum negotiating position, which is, you know, on an individual basis, not revealing what's committed at any time in the market when we're negotiating with customers. And that's just a position we want to be in, because we just don't think we have to convince anybody that the term contracting cycle is underway. Now, to your question about adding some near-term demand, what I want to emphasize there is that you often hear us talking, Alex, about staying off the spot market.

Timothy S. Gitzel: Revealing what's committed at any time in the market when we're negotiating with customers and that's just.

Timothy S. Gitzel: A position we want to be and because we just don't think we have to convince anybody that term contracting cycle is underway now to your question about adding some near term demand.

Timothy S. Gitzel: What I, what I want to emphasize there is.

Timothy S. Gitzel: You often hear us talking Alex about staying off the spot market. So I don't want anybody to interpret us adding near term.

Grant E. Isaac: So I don't want anybody to interpret us adding near-term commitments as, well, you're saying one thing and doing the other. Occasionally, we'll be in a term contract negotiation with the utility. And we'll be talking about a classic term window starting two years from now and going out for, you know, seven to 10 years. But that utility might say to us, but we'd really like you to find some material in the near term.

Timothy S. Gitzel: <unk> as well Youre, saying, one thing and doing the other occasionally we'll be in a term contract negotiation with the utility.

Timothy S. Gitzel: And we will be talking about a classic term window, starting two years from now going out for seven to 10 years, but that utility might say to us, but we'd really like you to find some material in the near term. So it is fundamental and user demand it's not material, we're putting to a trader to then churn through.

Grant E. Isaac: It's not material we're putting on a trader to then churn through the spot market. And it's also demand that we can deploy when we want to deploy it. So if we have it in our back pocket, it's like our up to 2 million pounds of potential market purchases; we can deploy it when it makes sense for maximum value creation for us. So it's a good strategy for us to follow when it works.

Timothy S. Gitzel: The spot market and it's also demand that we can deploy when we want to deploy it so.

Have it in our back pocket, it's like are up to 2 million pounds of potential market purchases, we can deploy it when it makes sense for maximum value creation for us. So it's a good strategy for us to follow when it works, but there are other times, where we simply say we can't find any material in the near term so.

Grant E. Isaac: But there are other times where we simply say we can't find you any material in the near term. So sometimes we will add those commitments, but they're never commitments to a trader for material that gets churned through the market because that is not value-creating.

Timothy S. Gitzel: So sometimes we will add those commitments, but but it's never commitments to a trader for material that gets churn through the market because that is not value creating.

Speaker Change: Okay Fair enough, Thanks, Tom and maybe I can social second question then.

Grant E. Isaac: Okay, fair enough, thanks Grant. Maybe I can ask a second question then, just in terms of where you stand on the MacArthur River expansion, obviously, the last update you're investigating what it could cost. The same probably as last quarter, Alex, we are investigating. We've got a team looking at whether we can expand and what it'll take to expand. Obviously, as we've said over and over, kind of ad nauseum, we'll let the market call for those pounds, and then we'll move ahead, bring, you know, production up.

Speaker Change: Just in terms of where you stand on the Mcarthur River expansion, you'll see lots of things youre investigating what it could cost.

Speaker Change: Same same probably this last quarter, Alex we are investigating where we've got a team looking at whether we can expand and what it will take to expand obviously.

Speaker Change: As we've said over and over again AD Nauseum, we'll let the market call for those bonds and then we'll move ahead and.

Speaker Change: <unk> bring up the production. So we're just doing the background work that we need to do now to look at the different circuits in the mill and the mine. We know we can get there. We're just going to evaluate what it will take to get there. So we will have more news on that as the year goes on but.

Grant E. Isaac: So we're just doing the background work that we need to do now to look at the different circuits in the mill and in the mine. We know we can get there; we're just kind of evaluating what it'll take to get there. So we'll have more news on that as the year goes on, but we're progressing. Great. Thanks, Tim. Thanks, Grant.

Speaker Change: Progressing.

Speaker Change: Great. Thanks, Tim Thanks Graham.

Speaker Change: Yes, Thanks, Alex.

Speaker Change: Okay.

Speaker Change: Please note we are nearing the 10 minute mark for questions and any we don't get too can reach out to the IR team.

Speaker Change: Our next question comes from Ross <unk> with Scotiabank. Please go ahead.

Lawson Winder: Great. Thanks, Tim. Thanks, Grant. Yeah, thanks, Alex. Please note we are nearing the 10 minute mark for questions, and any we don't get to can reach out to the IR team. Our next question comes from Orest Wowkodaw of Scotiabank. Please go ahead.

Ross: Hi, good morning.

Ross: Curious about the contracting strategy relative to your production base. We saw your five year average book I guess creep up to 28 million pounds from 2007 is the idea there that we should expect that to continue to move higher.

Lawson Winder: Please note we are nearing the 10 minute mark for questions, and any we don't get to can reach out to the IR team. Our next question comes from Orest Wowkodaw of Scotiabank. Please go ahead.

Ross: Almost to the point, where it could be above well above your production range and then we see effectively the Mcarthur River expansion.

Grant E. Isaac: Grant, you want to take that? Yeah, happy to do that. So Orest, great.

Ross: I would assume approved.

Ross: At what level do we start thinking about bringing tier two capacity back.

Grant E. Isaac: Yeah, happy to do that. So Orest, great question because it gives us an opportunity to remind folks that we are still transitioning as Cameco to our full tier one run rate. You know, our plan this year, MacArthur at 18 million pounds on a 100% basis, Cigar at 18 million pounds on a 100% basis, Incai, Sean's already talked about it, is really the return of that tier one cost structure. And we're not there yet, but you're seeing the benefit in our cash cost, unit cash costs, which are down substantially. So, great operating performance there.

Congratulate to take them.

Speaker Change: Yes, happy to do that so or it's a great question because it gives us an opportunity to remind folks that we are still transitioning as cameco.

Speaker Change: Two our full tier one run rate our plan this year Mcarthur at $18 million has a 100% basis cigar at 18 million pounds at 100% basis.

Speaker Change: <unk> already talked about it is really the return of that tier one cost structure and we're not there yet but you are seeing the benefit in our cash cost unit cash costs, which were down substantially so great operating performance there, but it is a reminder, that we are actually not in full.

Grant E. Isaac: But it is a reminder that we are actually not in full production mode yet. We have not made the decision, as Tim just talked about, around MacArthur River Key Lake expansion to 25 million pounds on a 100% basis. We're doing that evaluation right now.

Speaker Change: Production mode, yet we have not made that decision as Tim just talked about around Mcarthur River key Lake expansion to 25 million pounds on a 100% basis, we're doing that evaluation right now and then there's the tier two so between what's possible at our tier one up flex that's another 15% of production potentially <unk>.

Grant E. Isaac: And then there's tier two. So between what's possible at our tier one up flex, that's another 15% of production, potentially 30% if we brought back our tier twos. So what gets us there is actually that we need to see more demand in the market. It's tied to my earlier point that we don't front run demand with supply. We wait for that demand, security of supply driven demand, to come to the market and capture that demand.

Speaker Change: <unk>, we brought back our tier twos, so what gets US there is actually we need to see more demand in the market. It's tied to my earlier point that we don't front run demand with supply we wait for that demand security of supply driven demand to come to the market and capture that demand and then we call for higher levels of production.

Grant E. Isaac: And then we call for higher levels of production. So as we're in this transition, we do have a bigger over-contracted gap than we typically have as a run rate over-contracted gap in the past, but much, much smaller than it was when we had MacArthur River Key Lake in care and maintenance, for example.

Speaker Change: Sure.

Speaker Change: So as we're in this transition we do have a bigger over contracted gap than we have typically had as a run rate over to contract a gap in the back.

Speaker Change: In the past, but but much much smaller than it was when we had Mcarthur River key lake in care and maintenance for example, so as we're transitioning through this it's about capturing appropriate demand at the right price indicators for us than calling for that production in terms of where we how we get to tier two think about.

Grant E. Isaac: So as we're transitioning through this, it's about capturing appropriate demand at the right price indicators for us, then calling for that production. In terms of how we get to Tier 2, think about that more like Tier 2 is competing with greenfield pricing. This market absolutely needs new uranium production. There's no doubt about that.

That more like tier twos, competing with Greenfield pricing this market absolutely needs new uranium production there is no doubt about that.

Grant E. Isaac: But a key point of that is bringing back tier twos, and the way we look at those tier twos is we say, when the market discovers greenfield pricing, and we're going to know that because we're going to see capital being deployed, like meaningful capital being deployed for folks to advance a greenfield mine and a greenfield mill. And, of course, that hasn't occurred yet, and that's pretty obvious to see.

Speaker Change: The good news for Cameco is we can grow with this market without greenfield dollars for a very long time.

Speaker Change: But a key point of that is bringing back tier twos and the way we look at those tier twos as we say when the market discovers greenfield pricing and we're going to know that because we're going to see capital being deployed like meaningful capital being deployed for folks to advance a greenfield mine in a greenfield mill and of course that hasnt occurred yet.

Speaker Change: That's pretty obvious to see but when those prices are being signals.

Grant E. Isaac: But when those prices are signaled, we will offer utilities a very simple alternative. We'll say, you can take the risk with a greenfield project and all of the challenges with a greenfield, the mine development, the licensing, the permitting, the supply chain, the productivity factors. You can take all those chances with a greenfield that may be in the hands of someone who's never done it before, or for that same greenfield price, we could bring back already existing, already licensed, already permitted tier two capacity that is proven, it's operated in the past, the supply chain is there, and the skilled labor is there.

Speaker Change: We will offer utilities are very simple alternative will say you can take the risk with a greenfield project in all of the challenges with a greenfield the mine development the licensing the permitting the supply chain. The productivity factors you can take all of those chances with.

Speaker Change: Greenfield that maybe in the hands of someone who has never done it before or for that same greenfield pricing, we could bring back already existing already licensed already permitted tier two capacity.

Speaker Change: And that has proven its operated in the past the supply chain is there in the skilled labor is there but for us it's about waiting for that demand to form and not getting in front of it at the front running it because we've seen how others have destroyed shareholder value by doing that in the past that is not the game. We play so think about those tier twos is.

Grant E. Isaac: But for us, it's about waiting for that demand to form and not getting in front of it and front running it because we've seen how others have destroyed shareholder value by doing that in the past. That is not the game we play. So think about those tier twos as being an alternative to high-risk greenfield.

Speaker Change: Being an alternative to high risk Greenfield.

Speaker Change: Thanks for the color.

Speaker Change: Thanks George.

Speaker Change: Our next question comes from Lawson Winder of Bank of America Securities. Please go ahead.

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

Lawson Winder: Thank you, operator. And good morning, Tim and Grant. Nice to hear from you all. Thank you for the update.

Lawson Winder: Thank you operator, and good morning, Tim and grant nice to hear from you. All thank you for the update I just wanted to ask about the sales and you had provided guidance in your annual report.

Lawson Winder: I just wanted to ask about the sales. And you had provided guidance in your annual report, just through a chart that indicated that sales in Q1 would be around 8.5 million pounds for uranium. They came in at 7.3, which, you know, looks like a pretty substantial difference. Can you just speak to some of the reasons that might have driven that and, just generally, in the business, some of the factors that drive that seasonality in sales?

Lawson Winder: Just through a chart that indicated that sales in Q1 would be around $8 5 million pounds for uranium they came in at seven three weeks.

Lawson Winder: It looks like a pretty substantial difference can you just speak to some of the reasons that might have driven that and just generally in the business. Some of the factors that drive that seasonality in sales.

Grant E. Isaac: Thanks. Grant?

Lawson Winder: Brent.

Grant E. Isaac: Yeah, thanks for noticing that. Obviously, we put out that table as part of our Q4 every February that gives you a directionally what the quarters are going to look like in terms of uranium volume. That table is derived by the collection of non-binding delivery notices that we get from the utilities, usually six months prior to that table being constructed. So we receive non-binding delivery notices that help us build the schedule. Later on, those are converted to binding delivery notices, and there can sometimes be slippage between one quarter or another.

Brent: Yes, thanks for noticing that obviously, we put out that table as part of our Q4 every February that gives you.

Brent: Directionally, what the quarters are going to look like in terms of uranium volumes.

Brent: That table is derived by the collection of non binding delivery notices that we get from the utilities, usually six months prior to that table being constructed. So we received non binding delivery notices that helps us build the schedule later on those are.

Brent: Converted to binding delivery notices and there can be sometimes slippage between.

One quarter or another and whenever you see that it's always important to then step back and look at our broader outlook table and see if we've changed our committed sales for the year and obviously you see we haven't done that so that's a pretty that's the evidence that really this is about just volume shifting from Q1.

Grant E. Isaac: And whenever you see that, it's always important to then step back and look at our broader outlook table and see if we've changed our committed sales for the year. And, obviously, you can see we haven't done that. So that's the evidence that really this is about just volumes shifting from Q1 into Q2 into Q3 as opposed to being lost or sales that commitments that somehow went away. So a little bit lower than what we thought when we constructed those delivery patterns last fall. But ultimately, for the calendar year, we're still holding that same guidance for sales.

Brent: Into Q2 into Q3 as opposed to being lost or sales that debt commitments that somehow went away so a little bit lower than what we thought when we constructed those delivery patterns last fall, but ultimately the calendar year, we're still holding that same guidance for sales.

Lawson Winder: And if I could just follow up on that, any guidance as to what Q2 might look like at this point given where we are in the quarter? And then I also, if I could, wanted to ask about your contracting conversations and where the discussions are around caps and floors. Later last year, yourselves and your competitor, one of your competitors had indicated sort of $90 floors and $120 caps. Is that still kind of the range that we're talking about? Thanks very much. And that's it for me.

Speaker Change: And if I if I could just follow up on that any guidance as to what Q2 might look like at this point given where we are in the quarter and then also if I could wanted to ask about your contracting conversations and where the discussions are around caps and floors.

Later last year yourselves and your competitor one of your competitors had indicated sort of $90 floors.

$120 caps is that still kind of the range that we're talking about thanks very much that's it for me.

Grant E. Isaac: Yep, thanks a lot, Lawson and Grant. The Q2...

Speaker Change: Yes, Thanks, a lot less in grant.

Speaker Change: The Q2 delay.

Grant E. Isaac: The Q2 deliveries, yeah, we don't, I don't have an updated disclosure for that, Lawson, so sorry, that's probably not a satisfactory answer, but, you know, just continue to look at that annual number, it hasn't changed, so, you know, we're going to, you know, deliver those volumes, they are committed, and the utilities will take delivery. You know, I don't know what others are doing in the market, and I don't know exactly what they say, but ultimately, if you look at the trade press, if you look at where Trade Tech and UXC are at, you're seeing that floors in the market on market-related contracts are constructing up to be kind of just under the long-term price, and ceilings are stretching out into the hundreds, you know, $120, $130, and that's just really a function of the fact that while the spot market is not a place to sell uncommitted volumes, the spot market sentiment helps drive the callers around market-related contracting.

Speaker Change: Deliveries, yes, we don't I don't have an updated disclosure for that loss and so sorry, that's probably not a SaaS factory answer, but just continue to look at that annual number it hasnt changed so you know.

Speaker Change: We're going to.

Speaker Change: Deliver those volumes they are committed in the utilities will will take deliveries.

Speaker Change: I don't know what others are doing in the market and I don't know exactly what they say.

But ultimately if you look at the trade press, if you look at where trade tack and UX here at Youre seeing that floors in the market on a market related contracts are constructing.

Speaker Change: To be kind of just under the long term price and ceilings are stretching out into the one hundreds 120, <unk> hundred 30, and Thats just really a function of the fact that while the spot market is not a place to sell uncommitted volumes the spot market sensitive it helps drive the call.

Speaker Change: <unk> is a route market related contracting.

Grant E. Isaac: You know, I think when others say things like $90 floors, they're doing the escalation for you, Lawson. They're not actually telling you the price today. They're saying, oh, but by the time we're done delivering it, it'll have escalated to $90. Now, that might be technically accurate, but I find it a bit misleading in the market when folks do that. But ultimately, let's face it, we're talking about floor prices in market-related contracts that start with $7 escalated in U.S. dollar terms. This is a pretty constructive market for an incumbent producer. Many thanks. Thanks, Lawson. Our next question comes from Greg Barnes of TD Securities.

Speaker Change: I think one other state things like $90 floors, theyre doing the escalation for yield loss and they are not actually telling you the price today theyre, saying over by the time, we're done delivering it it'll have escalated till now.

Speaker Change: Now that might be technically accurate, but I find it a bit misleading in the market when folks do that but ultimately let's face. It we're talking about floor prices and market related contracts that start with a seven escalated in U S. Dollar terms and this is a pretty constructive market for an incumbent producer it's early and.

Speaker Change: The contracting cycle Havent seen prices. This early at this stage of the contracting cycle and we know prices need to still in fact, greenfield and they just haven't done that yet so feeling pretty good test.

Speaker Change: Many thanks.

Speaker Change: Thanks Lawson.

Speaker Change: Our next question comes from Greg Barnes of TD Securities. Please go ahead.

Greg Barnes: Yes. Thank you just a couple of questions around Westinghouse one any commentary around the order backlog on AP 1000.

Greg Barnes: How discussions are going with additional utilities outside of what's already signed and secondarily any commentary around the potential restart of Springfield.

Greg Barnes: So Greg, I would just say on the AP1000s, lots of interest, like lots around now. Nothing that we're going to announce and walk through, but you probably saw just over the last couple of weeks in Ukraine that Hemelnitsky 5 and 6, they're looking at AP1000s there. I think they poured the first concrete for some of those.

Greg Barnes: Thanks.

Greg Barnes: So Greg I would just say on the on the AP one thousands.

Greg Barnes: Lots of interest like like lots around no nothing.

Greg Barnes: We're going to announce and walked through but you probably saw just over the last couple of weeks in Ukraine.

Greg Barnes: Ski a five and six.

Greg Barnes: AP one thousands there I think before the first concrete.

Greg Barnes: For some of those so that's kind of that's moving ahead in Ukraine. I think is committed to up to nine new ones now of course, it's all subject to what's going on there Greg as you know.

Timothy S. Gitzel: So that's moving ahead, and Ukraine, I think, is committed to up to nine new ones. Now, of course, it's all subject to what's going on there, Greg, as you know. [inaudible] at Westinghouse a couple of days ago in North America, in Europe, and in Asia, so lots going on with that. Anybody, Grant, or did you have anything or Dominic anything to add, and maybe Dominic, you could say a word about Springfield. I'd like Dominic to come into the conversation. Anything on the new builds and or Springfield's done? Yeah, of course, Greg.

Greg Barnes: A good order there, Bulgaria, because literally I think 7% to eight.

Greg Barnes: The chosen the AP 1000, I think the feed contracts side for those.

Greg Barnes: And of course, those are all using listing those fuel as well.

Greg Barnes: With those I can tell you theres a lot more conversations going on at the start of the leadership there.

Greg Barnes: Westinghouse.

Greg Barnes: Days ago in North America and Europe.

Greg Barnes: And in Asia, So so lots and lots going on that front.

Speaker Change: Anybody who would grant or did you have anything or Dominic anything to add and maybe Dominic you can say a word about Springfield.

Speaker Change: Dominic to come in the conversation so anything on the new builds and or Springfield stone.

Dominic: Yes of course.

Dominic Kieran: Yeah, of course, Greg, good morning to you. Maybe a couple of words from my side on Springfield. Yeah, thanks for the question.

Dominic: Good morning, maybe a couple of them.

Dominic: Coupled with the buy side on Springfield So.

Speaker Change: Excuse me.

Dominic: Thanks for the question.

Speaker Change: We.

Dominic Kieran: We kind of use Springfields as quite a strategic asset, not just for the UK but for the global fuel market. And alongside our partner Brookfield, we are indeed supporting Westinghouse, who are looking at options for that site and how we can use Springfields, obviously, to support that market. And clearly, you mentioned the restarter conversion. We have an active project looking at what could be a restart, or could actually be a new build of a conversion facility.

Speaker Change: We kind of view spring sales is quite a strategic asset.

Speaker Change: Not just in the U K for us.

Speaker Change: <unk> fuel market.

Speaker Change: But I will set out partner Brookfield, we are indeed, supporting Westinghouse who are looking at options for that site and how we can use Springfield.

Speaker Change: Market and clearly.

Speaker Change: You mentioned the restart of conversion.

Speaker Change: We have an active project looking at could.

Speaker Change: It could be a restart.

Speaker Change: I'd actually be newbuild of accumulation facility.

Speaker Change: Scrubbed saluted.

Dominic Kieran: As Grant alluded to, the fuel market is strong, so we think there is absolutely customer demand for that, and we are just supporting Westinghouse, who are looking at options at the moment. So, yeah, thanks for the question.

Speaker Change: <unk> market is strong and so we think there is absolute base cost of the customer demand for that.

Speaker Change: And we are just supporting Westinghouse who are looking.

Speaker Change: So we're looking at options at the moment so thanks.

Speaker Change: Thanks for the question.

Speaker Change: Okay, great. Thanks very much.

Speaker Change: Thanks, Greg.

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

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

Brian Macarthur: Good morning, and thank you for taking my question. It kind of follows on from Greg's, but can I ask it this way?

Brian Macarthur: Good morning, and thank you for taking my question it kind of follows on to Greg, but can I ask it. This way he made a comment a number of times that.

Timothy S. Gitzel: You've made a comment a number of times that Westinghouse looks a lot better than when you first bought it. Is that because of the AP1000 outlook? Is it a fabrication outlook? Is it that it helps your uranium business more? Is it, you know, better margins on contracts, on the servicing? Any color, or maybe it's all of the above.

Brian Macarthur: Westinghouse looked a lot better than when you first bought it is that because of a the AP 1000 outlook fabrication outlook isn't it helps your uranium business more.

Brian Macarthur: Is it.

Brian Macarthur: Better margins on contracts on the servicing any any color or maybe it's all of the above.

Timothy S. Gitzel: I don't know. I'd just be curious if you could expand on what you've seen that's different and better within Westinghouse and what it has since the deal was done. Yeah, Brian, thanks for the question. I'd say it's probably all of the above.

Brian Macarthur: I'd just be curious if you could expand on what <unk> seen the different and better within Westinghouse in line.

Brian Macarthur: Since the deal was done.

Brian Macarthur: Yes, Brian Thanks for the question I'd say, it's probably all of the above.

Timothy S. Gitzel: I mean, I'll turn to Grant in a minute, but when we valued and did the work, the due diligence, on Westinghouse, we put value on certain things and not on others, and AP1000s. We didn't put a whole lot of value on any new build, and now we're seeing that move ahead, so that's good. The AP300, you'll remember the SMR, didn't exist, or it wasn't planned for, I should say, when we went out for Westinghouse. But it's there now, and we're getting a lot of interest in that.

Speaker Change: And then I will turn to grant in a minute because when we were valuing and did the work the due diligence on unless he knows we put value on certain things and not on others.

Speaker Change: AP one thousands we didn't put a whole lot of value on any new build and now we're seeing that move ahead. So that's good the AP 300, Youll remember the S. R didn't exist where it wasn't planned for I should say when we when we went out for Westinghouse that's there now and we're getting a lot of interest in that obviously the vinci is there.

Timothy S. Gitzel: Obviously, the Avinci is there. We're picking up a whole bunch of the Eastern Europe fuel supply, you know, the VVRs that are running. I think there are 35 of them in Eastern Europe, but I think we're getting most of the fuel for all of them. And so just things like that, Brian, that we hadn't really calculated that obviously the Russian move into Ukraine has sped things along for us and for Westinghouse. So, Grant, do you have anything you want to add to that?

Speaker Change: We're picking up a whole bunch of those eastern Europe.

Speaker Change: Fuel supply it was the <unk>.

Speaker Change: <unk> that are running I think there's 35 of them in eastern Europe, where I think we're getting most of the fuel for all of them.

Speaker Change: So just things like that Brian that we hadn't really calculated that obviously, the Russian move into Ukraine.

Grant E. Isaac: Sped things along for us and for Westinghouse. So grant do you have anything you want to add to that.

Grant E. Isaac: Yeah, of course I do, Tim. I just can't resist.

Grant E. Isaac: Yeah of course, I do too I just can't resist.

Grant E. Isaac: Bryan Bryan.

Grant E. Isaac: Brian, it's a good question, and I would echo Tim's comment on all of the above, and maybe just highlight a few things. And we like to, you know, first of all, just talk about how strong that team is. It's a great team at Westinghouse, and they are executing very well on their strategy. We like to think about them as the core. So, at the core of the business, Central and Eastern Europe. You're seeing the emergence of existing customers who are saving reactors that we thought were going to shut down and existing customers that are extending the life of reactors that we thought were probably going to retire after the end of their operating licenses. And those are big deals.

Grant E. Isaac: Sure.

Grant E. Isaac: It's a good question and I would echo <unk> comment on all of the above and maybe just highlight a few things and we like to.

Grant E. Isaac: First of all just talk about how strong that team is its a great team at Westinghouse head and they are executing very well on their strategy, we like to think about them as core so in the core of the business.

Grant E. Isaac: Youre seeing the pickup new customers.

Grant E. Isaac: Central and Eastern Europe, you are seeing the pick up of existing customers, who are saving reactors that we thought were going to shut down and existing customers that are extending the life of reactors that we thought were probably going to retire after the end of their operating license and those are those are big deals.

Grant E. Isaac: When a reactor goes through a life extension, you're adding another 20 years of operation to it. That's a substantial tail of business that really wasn't part of the model. And it's just part of the enthusiasm for nuclear power. Springfields. Greg just asked about Springfields.

Grant E. Isaac: When a reactor goes through a life extension youre, adding another 20 years of operation to it that's a substantial tail of business that really wasn't part of the model and its just part of just the enthusiasm for nuclear.

Grant E. Isaac: Springfield as Greg just asked about Springfield to the conversion market is at historic pricing. The Springfield plant has a conversion like that would be in the core and that would just be additional opportunity within the core of the business because it's part of that nuclear fuel and nuclear fuel supply and then of course, all the wrap around services reactors that.

Grant E. Isaac: The conversion market is at historic prices. The Springfields plant has a conversion line. That would be in the core. And that would just be additional opportunity within the core of the business because it's part of that nuclear fuel and nuclear fuel supply. And then, of course, all the wraparound services.

Grant E. Isaac: Reactors that are being saved, reactors that are being extended, typically need more services wrapped around them. So the core is performing very well, and we're quite happy about it. But I just would echo Tim's comment on the new build.

Grant E. Isaac: Being safe reactors that are being extended typically need more services wrapped around them.

Grant E. Isaac: Core is performing very well and we're quite happy about it but I just would echo Tim's comment on Newbuild Newbuild is the area, where I think the potential is very very significant now obviously, we wait until projects are at final investment decision stage before we.

Grant E. Isaac: New build is the area where I think that the potential is very, very significant. Now, obviously, we wait until projects are at the final investment decision stage before we, you know, count them in a meaningful way in the business plan. You get the first initial pickup of front-end engineering and design projects, but the final investment decision is really what's required. But having said that, the quality of the conversation around new nuclear power far exceeds our highest case assumptions, even 12 months ago.

Grant E. Isaac: Count them in a meaningful way in the business plan you get the first initial pick up front end engineering and design projects.

Grant E. Isaac: But final investment decision is really what's required, but having said that the quality of the conversation around new nuclear far exceeds our highest case assumption, even 12 months ago and what I mean, there is just the reality up how much power is actually required.

Grant E. Isaac: And what I mean is just the reality of how much power is actually required for industrial onshore, for Onshoring of Manufacturing for Generative AI, and the whole investment in digital technology. When you think about all of that effort that's going on in Western countries and all of the support that's being given for that, the critical path item is electricity. That is the critical path item to seeing all of those investments succeed.

Grant E. Isaac: For industrial Onshoring four.

Grant E. Isaac: Onshoring of manufacturing.

Grant E. Isaac: For generative AI and the whole investment in digital technologies.

Grant E. Isaac: You think about all of that effort thats going on in western countries and all of the support that's being given for that the critical path item is electricity.

Grant E. Isaac: That is the critical path item to seeing all of those investments succeed.

Grant E. Isaac: And the critical path item is very well served by a technology that is secure, dispatchable, and reliable 99% of the time. So nuclear is getting a lot of attention. But if nuclear is part of the critical path item, then the nuclear fuel is part of the critical path.

Grant E. Isaac: And the critical path item is very well served by a technology that is secured dispatch able reliable 99% of the time. So nuclear is getting a lot of attention, but if nuclear as part of the critical path item than the nuclear fuel as part of the critical path. So it's that combination of say we get to participate in.

Grant E. Isaac: So it's that combination of saying we get to participate in the uplift in nuclear fuel, we now get to participate in the new build for that reliable electricity, and then that long tail of servicing it. It's a pretty exciting outlook. You have to forgive us for being as excited as we are, but there were a lot of lean years. So this is a pretty good opportunity for Cameco, for Westinghouse, and potentially for our GLE investment. This is a constructive market the likes of which we haven't seen before, Brian.

Grant E. Isaac: The uplift on nuclear fuel, we now get to participate in the new build for that reliable electricity and then that long tail of servicing it. It's a pretty exciting outlook you have to forgive us for being as excited as we are but there were a lot of lean years. So this is a pretty good opportunity for cameco.

Grant E. Isaac: Westinghouse potentially our GLA investment this is a constructive market the likes of which we havent seen before Brian.

Brian Macarthur: Sorry, maybe one quick follow-up just on Springfield. I mean, a year ago, it sort of sounded like when you talked about maybe excess capacity on US 6 in the market in the West, or maybe that market didn't look as It sounds now that maybe you're more positive on the U.S. fixed outlook as you look forward to Springfield. Is that fair, or are you thinking of using it for something else?

Speaker Change: Sorry, maybe one quick follow up just on Springfield, I mean year ago, it sort of sounded like when you talk to may be excess capacity in U S. <unk> in the market and the less well maybe that market didn't look at.

Speaker Change: Positive it sounds now that maybe you're more positive on the U F pick that look as you look forward to Springfield is that fair or are you thinking of using it for something else.

Grant E. Isaac: Sorry Brian, I didn't catch which mark is looking more positive. Sorry, a year ago, UF6, you might have been a little more cautious given there was excess capacity, but now, sort of, Springfield sounds a little more positive. Yeah, if you look at the breakdown of potential Western supply, it's very different for conversion than it is for uranium and enrichment. In the West, we need to see more investment in new uranium production, the need for greenfields like we've talked about, and we need to see more investment in Western enrichment in order for uranium and enrichment to match Western demand. The conversion space is actually a little bit different.

Grant E. Isaac: Grant.

Speaker Change: Sorry, Brian I didn't catch which markets looking more positive.

Speaker Change: Sorry, I missed a year ago, you have six you might've been a little more cautious given there was excess capacity, but now sort of Springfield sounds a little more positive.

Speaker Change: Yes.

Speaker Change: If you look at the breakdown of potential western supply, it's very different for conversion than it is for uranium enrichment in the west we need to see more investment in new uranium production the need for Greenfield like we've talked about and we need to see more investment in <unk>.

Speaker Change: Western enrichment.

Speaker Change: Order for uranium enrichment to match western demand the conversion space is actually a little bit different what we really need is the four conversion plants to be running at full capacity plus perhaps the addition of our global laser enrichment project producing a U F. Six products. So it is.

Grant E. Isaac: What we really need is the four conversion plants to be running at full capacity, plus perhaps the addition of our global laser enrichment project, producing a UF6 product, so it's already converted. Then you actually see a little more balance between Western demand and Western supply, and one of those four facilities is Springfield. So we're ramping up that Port Hope production, you're seeing Converdyne come back in the US to 7,000 tons of conversion, you've got the plant in France running at, we think, about 12 or 12.5 out of a potential 15, and that does require the Springfields plant to come back in order to kind of balance that Western market.

Speaker Change: Already converted.

Speaker Change: And then you actually see a little more balance between western demand in western supply and one of those four facilities in Springfield. So.

Speaker Change: We're ramping up that port hope production Youre seeing convert <unk> come back in the U S to 7000 tons of conversion you have got the plant in France running it we think about 12 or 12 five out of a potential 15 and that does require the Springfield plant to come back in order to kind of.

Speaker Change: Balanced that western market. So the need is definitely there and thats reflected in the very tight front ended the U F six market and the historic pricing, but <unk> like uranium you don't start a U F. Six plant and then knock on People's doors, and say do you want to buy <unk>.

Grant E. Isaac: So the need is definitely there, and that's reflected in the very tight front end of the UF6 market and the historic prices, but UF6 is like uranium. You don't start a UF6 plant and then knock on people's doors and say, "Do you want to buy UF6?" because they don't have in-year demand for UF6. It's got to be part of a committed sales portfolio built out over time, and then you call for additional production. So for us, it's about combining that solid marketing strategy with the right production.

Speaker Change: They don't have in year demand for U F. Six it's got to be part of our committed sales portfolio build out overtime. Then you call for the additional production so for US it's about combining that solid marketing strategy with then the right production decisions.

Brian Macarthur: Thank you very much. I appreciate it.

Speaker Change: Thank you very much I appreciate it.

Speaker Change: Thanks, Brian.

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

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

Timothy S. Gitzel: Yeah, thanks very much, Ariel, and thanks to everybody who joined us today. You can probably sense our excitement about not only the market and where it's at, but how our company is positioned in that market. Pretty exciting times for us at Cameco.

Timothy S. Gitzel: Yes, thanks, very much Ariel and thanks to everybody who joined US today, you can probably sensor.

Speaker Change: In.

Timothy S. Gitzel: Not only the market and where its at how our company is positioned in that market.

Timothy S. Gitzel: Exciting times for us at Cameco, So we didn't get placed through the queue. Today. So as Michelle noted if you have any detailed follow up questions related to the first quarter results or any questions that we didn't get to today on the call. Please contact us or we will contact you and we're happy to address them directly.

Timothy S. Gitzel: So we didn't get quite through the queue today, so as Rachelle noted, if you have any detailed follow-up questions related to the first quarter results or any questions that we didn't get to today on the call, please contact us or we'll contact you, and we're happy to address them directly. As always, we're a responsible commercial supplier with a strong balance sheet, long-lived tier one assets, and a proven operating track record.

Timothy S. Gitzel: As always we're responsible commercial supplier with a strong balance sheet long lived tier one assets and a proven operating track record we are invested across the nuclear fuel and reactor late cycles. As we believe we have the right strategy to achieve our vision of energizing a cleaner world and we will do so in a manner that reflects our values embedded in all of our.

Timothy S. Gitzel: We're invested across the nuclear fuel and reactor life cycles, and we believe we have the right strategy to achieve our vision of energizing a clean air world, and we will do so in a manner that reflects our values. Embedded in all our decisions is a commitment to address the risks and opportunities that we believe will make our business sustainable over the long term.

Timothy S. Gitzel: Decisions is a commitment to address the risks and opportunities that we believe will make our business sustainable over the long term. So thanks again very much for joining us today stay safe and healthy and have a great day. Thank you.

Timothy S. Gitzel: So, thanks again very much for joining us today. Stay safe and healthy, and have a great day. Thank you.

Operator: This brings the end to today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Speaker Change: This brings an end to today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.

Timothy S. Gitzel: [music].

Timothy S. Gitzel: Okay.

Timothy S. Gitzel: Okay.

Timothy S. Gitzel: Yes.

Timothy S. Gitzel: [music].

Timothy S. Gitzel: Sure.

Timothy S. Gitzel: Okay.

Timothy S. Gitzel: Okay.

Timothy S. Gitzel: [music].

Timothy S. Gitzel: Yes.

Timothy S. Gitzel: [music].

Timothy S. Gitzel: Sure.