Alexander Pearce

Alexander Pearce asked about the progress in finalizing the strategic partnership agreement with the U.S. government, Cameco, Brookfield, and Westinghouse, inquiring if a definitive agreement or significant milestones could be expected in the near term. He also questioned if successful advancement of the U.S. units could lead to upside in the 2026 Westinghouse guidance.

Answer

Grant Isaac, President and Chief Operating Officer, clarified that discussions are ongoing to fulfill next steps, including identifying sites for two-pack reactors, ordering long-lead items, and securing Japanese financing. He noted that the separation of long-lead item orders from site identification could lead to procurement revenues and margins flowing earlier. Isaac suggested that while some upside is built into the guidance, substantial orders for long-lead items could significantly impact the Westinghouse business in 2026, potentially reversing the typical revenue flow framework.

Alexander Pearce asked for an update on the finalization of the strategic partnership agreement between Cameco, Brookfield, Westinghouse, and the U.S. government, inquiring if it's nearing completion or expected later in the year. He also questioned if there could be upside to the 2026 Westinghouse guidance if all planned units materialize.

Answer

Grant Isaac, President and Chief Operating Officer, clarified that discussions are focused on fulfilling next steps, including identifying reactor sites, ordering long-lead items (separated to meet the 2030 executive order), and securing Japanese financing. He expressed optimism for a long-lead item order in 2026, which could coincide with other programs. Mr. Isaac suggested potential upside to the 2026 Westinghouse guidance, noting that procurement revenues and margins might flow earlier due to the separation of long-lead item orders from site identification.

Alexander Pearce from BMO Capital Markets questioned Cameco's comfort level with its current low inventory levels and asked if the Westinghouse guidance range is driven more by timing than by the number of new reactors.

Answer

Executive VP & CFO Grant Isaac responded that Cameco manages sourcing on a long-term basis and will be a 'very strategic and deliberate buyer' in the market, taking advantage of soft spot prices. Regarding Westinghouse, he confirmed the 6-10% guidance range reflects a floor based on the core business, with the upside dependent on the timing of new build projects achieving Final Investment Decision (FID).

Alexander Pearce followed up on JV Inkai, asking if 2025 deliveries would be weighted towards the end of the year and if there was risk of further delays. He also inquired about the status of studies for potential production upside at the McArthur River mine.

Answer

CEO Tim Gitzel confirmed that deliveries from JV Inkai are expected in the second half of 2025 but could not provide more specific timing, expressing confidence the material would arrive this year. Regarding McArthur River, Gitzel reiterated that Cameco remains in supply discipline and has made no decision to expand production beyond the current 18 million pound target until its long-term contract book justifies an increase.

Alexander Pearce from Bank of Montreal inquired about the mitigating actions Cameco is taking against potential U.S. tariffs on Canadian uranium. He specifically asked if existing contracts include clauses that address who bears the cost of such tariffs. He also questioned if the lower 2025 production guidance for McArthur River signals a permanent return to that level or if it's a temporary measure related to increased capital expenditures.

Answer

President and CEO Timothy Gitzel explained that lessons from the 2018 Section 232 investigation led to new contract clauses that place tariff costs on the customer. He also mentioned prepositioning material and the value of their U.S. assets as mitigating factors. Executive VP and CFO Grant Isaac added that a tariff would likely raise the overall uranium price. On production, Gitzel confirmed the company remains in supply discipline, producing only for its contract portfolio, and the current plan is to hold McArthur River/Key Lake at 18 million pounds.

Alexander Pearce followed up on the Inkai mine, asking if the production issues are transitory and how Cameco might recoup its share of lost volumes given the complex ownership agreement.

Answer

President and CEO Timothy Gitzel characterized the issues as related to the timing of sulfuric acid deliveries, not a permanent shortfall, and confirmed they are in discussions with Kazatomprom to recoup the volumes. He noted that while Inkai is important, it represents about 10% of Cameco's production, placing it in the context of the larger business.