Cameco (CCJ) 4 Nov 202020 Q3 Earnings call transcript

Welcome to the Cameco Corporation's Third Quarter 2020 Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Rachelle Girard, Vice-President, Investor Relations. ahead. go Please

And Quarter operator. everyone. to Welcome Thank Call. good Third Conference Cameco's you, morning,

We around we the quarters. but be format continue we very will with conducting feedback recognize there the of have dialogue. allow quarter differently positive calls the the of than our this most that, previous back past and the investor we two question. is on in We've two some call two-way has QA a and we'll lines, also executive and office our time for certainty more With will benefit in phone team analyst a little

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both Rachelle. you, I might your well physically many time thank for and Good us been morning, for have taking hope Well, a night of everyone. families are after what to the you. and long today you mentally. join doing Thanks

we now about excited happy And pandemic future into seven here say our So to the COVID-XX months of company shape. we're in are. over industry. this We're good is and the I'm

why over of uranium for our that In fact, needed our supplier has the pure-play remain future I belief industry year, carbon-free clean, electricity. would of we in bright to say fuel produce That's a the course a baseload this strengthened.

We very market. remain bullish uranium on also the

electrification reliable there fossil new finally, seeing the are the are occurring on an around will be world achieve at same is decarbonisation follow-on example, road replacement on clan XXXX. has become precisely there's looking of vehicles for And stated electric like XX to China, who have led nuclear neutral goal point and A who are of objective on is both things the decarbonisation. electrification a to from that study time. baseload carbon that to the view XXXX fuel recently by million before toolbox its a globe countries quadrupling estimated for capacity the needed be about country to And reasons. that This power we're that? the is is the scientist largest Well, country. the which increasing in policy achieve That from first, around that are recognition various of for reactors the the in electrification will installing of require a this focused predicted focus time the in that XXX transportation. Then for world. that goal that of There fleet, demand to U.S. are for alone, to currently at in why double So an those would power. nuclear China sources. those has that same sustainably

increasing. is nuclear for demand So

world's the of we to nuclear and that growing would some committed we supply the shrinking do. the marks reserve prices, disruptions. what low to unplanned there's to However, up and from side, come where why secondary remain due These on morning doing fleet big uranium end question about are fundamentals and supplies, the persistently in us fuel the life we get will said

we Let would remind you it that me what do. is said we

this for foremost, where starts us. and is First all it

we're protecting employees, decisions communities. about make And we the focused doing and their best Every on manage safety through health our workforce day and families pandemic. our of operations our this and that. how their We are to

wave And COVID-XX we've second with remains far appears priority. this the a what pandemic, So to be successful. our been of

Second, we've execution of the not wavered from strategy. our

executing financial. on and which are marketing, there Let our remind me that we are fronts you operational, strategy, three

the suspension and market, has our supply River U.S. production in side, implemented the and, them pounds pounds McArthur assets of discipline, Key which planned supply in off at includes the Lake. almost course, of Rabbit XX left operational total. of The the and lot kept we Lake, ground the a million On discipline

market spot material the to marketing the meet committed side, On on our purchasing deliveries. we've been

spot pulled into material placed that off In Our the long-term million more and total, in market activity XXX million contracts. a is has almost purchasing supply than that the pounds XX fundamentals. pound-swing

lifting. of have heavy certainly we done lot a So

to shown our In patience appropriate to an value our off. long-term we've Tier-X market. into risking sticking committing pounds sales We've pay our shown deliver return under an them provide not or spot oversupplied addition, don't And strategic having contracts patience that strategy. seeing discipline we're

While modest, activity it is momentum. gaining the on-market is some

off market it's gets the However, activity us excited. that

historically, chunky that broader take has not continue Many see transition. to this a a the time leading of big, these is negotiate. growing business. area indicator We and agreements it remember, market But this are subscription-based to been of

in that our contract with India. XXXX For the signed we example, the think and XXXX, of Chinese our Bruce in contract contract with XXXX or Power

All the of but the these reward agreements was took worth time to negotiate, wait.

shoring were up this further balance coming all Finally, to Cigar the advantage our sheet. in due we've coupon XXXX was debt markets of not Having on capacity on our October. It helping offset part year. of March. the capital We started financial capacity have to And in rate balance contributes our of XXXX. strategy. the active and running sheet record our to very to favorable front Lake We for million reset was activity. the with maintenance strengthened of deliberate us been financial supply discipline resolve. purchasing low the of in we the And risk always care plan and and and thrown self-manage off is our performing Cigar a X.XX%, debt the a took maturity we by that on refinanced strategic disruption when costs of we XXX our and financial well with our Lake we in so of we're part our maintain bit unplanned side, that That fronts. at strategy three course to say Obviously, production was in our impact

safely to It's to not it have to challenges restarted we're we without us there vigilant. strategy. and are pleased be need still returning So though, risks our

want I Before we other a few items. begin to highlight the Q&A,

to announcement course, of week. last related First, our is

many complied we As have our and and and It Supreme incredibly decisive of the again with despite thrown in the intent of both the once and will into is Court letter to and stakeholders of the be Canada the Tax that disheartening two Federal of employees other Court the uncertainty. to Appeal is rulings for unfair from determined law. you Canada to CRA favor clear appeal the seeking leave heard, Court

of We legal process. at the have every stage prevailed

what been be Canada's Cameco and considerably contributed Canada, the billions and has leading to indigenous citizen. well-being our communities, supporters one of You've say employers different dollars me consistently heard want, then recognized laws invested of of We've same feels worked accomplishing people. as arguments a government good hard again the they outcome. before. expect the moving should a this change the aren't over over law court before If pursue and the CRA the a different in to and of partners, not forward, have corporate

of posed on way economic all continued As over Canada global businesses through the a employees companies we not by COVID-XX off to challenges pandemic, we to time pandemic, in facing when manage any Canadian support and have chill stage. to our challenging markets world At actions in provide our communities. a a CRA's upheaval, the cast are our worldwide have extraordinary trying unprecedented the compete laid

the market nuclear results, The with provides de-risk as the of market working we commercial Cameco help including nuclear of and to and leave the to lot around is amendment remain us extension moving the sector fuel Suspension access and will the certainty the and nuclear also the quite of at for greater be highlight Russian we stage ready. fuel on and our reliance opportunity Suspension had the renegotiation. them prevailed a by are supply. we clear forward spent the that played and access time to is in set and Agreement group, to Agreement. We supplier to agreement position, I sort if granted, energy Russian nuclear us important their policy confident process on and Russian industry These U.S. pleased with provides utilities appeal However, in fuel an believe XXX role dispute, the trade U.S. a Russian Section amended this rules issues for establishes which every want are it suppliers. a leadership particularly disputes of

advantage. for the to addressing and it and that our carbon-free and important and their environment. that And clean, opportunities will XXX% our we I highlight to risks believe us over is electricity. We're baseload This product support we focus the business is development commitment sustainable and to you remind on responsibly proud want our a believe communities, the ESG our protect make I goes Finally, XX-year protect, super competitive engage products want our our people, producing of long-term. of to to very delivering of

delivered. are decisions Our

a motivated assets, portfolio among a portfolio with diversified best are the commercially supplier is of production including that responsible, world. the We in Tier-X

risk the than believe supply we where market demand. to a is risk of advantage greater to take to well-positioned are We the

to for Rachelle So over turn that, few back we then I'm your with now questions it going will questions. things and to up for open a

purchasing has been on current you do market number say now. has been? curtailing expect Cameco of material strategy on Tim. Thanks, production the when for How its the a to effective you would and years And spot it benefits? realize

have effective. Well, say I think it's very I to

by conversion started our our the pounds the over-producing the world, that Let when going really XXXX me leading That way we needed. Springfield's we're that conversion Rabbit Fukushima then say cascade the remember or start quite announced I there. I on that I Same and real would in facility saying market we Lake to in wasn't market, taking healthy. conversion flew Wyoming, we course, when day continue XXXX the actually of exercise Lake. same couldn't at we we did in in discipline in with wanted then that U.S. of that that other of announcement reductions in facility starting today XXXX, We on started production our UK. to to facilities at conversion back a happy nobody our our is down. up Nebraska of are uranium followed this McArthur River. We took curtailed with in pulled market the to back And down then, McArthur in production River/Key and we post

I comments, million about uranium of pounds off XX as said market. taken So the in we've my

So we've we've I a team more lot XX the there. we we've lifting supply to and purchasing think on or of his off time, purchasing heavy material. been market that side, Grant out side. the have same million pulled spot think been material, pounds the done At

purchased more. been So put XXX produced been could think by done have pounds that million that have into we've contracts, we to share us or and our long-term maybe

of as conservative our balance been On we're highway sheet, in bad now we're that. very XX the heard strength proud the shape in pretty us about balance We've And financial after in of with without XXXX, front, nuclear. that. right is improving you've my talk not market electrification, years we the of in the to you've our from sheet. be whole our there we're comments, I think, is think this 'XX, And by carbon as and we world in 'XX leaders, And favor. going get neutral heard decarbonisation said to playing

And so I want nuclear think a on got we're on play. coming they're that really just in space side, has pieces we that. right to supply to the role think quickly. We couple the a mention due

any going are I think a We're down the thing, out ERA next COMINAK, that in Olympic long in coming months. the Dam in production. March in more. mean same ahead, couple anticipated their mine used year of that to not the at at expansion tapping see for recently decades. I too shutting been Niger, mine our the going mine friends a BHP market not supply they've time. Ranger that from they for least at responsibility of this some have not the of heard We in to

supply not rocket at disruptions speed, time but a real is the think some nonetheless. demand when at growing I growing So

we're we're done So the can future. I right space you good things, the in think we and a optimistic think about we tell we've super

Mill, and McLean increasing the confirmed that at Lake the with will of again? suspend Cigar what Lake have the production Orano's Tim, to at COVID-XX, cases is risk you cases

this our be that safety communities the restate our one, an watching into it their me so sites. every our times, especially spread we don't that our ago and will and it and I'll COVID around to and We down let in and we're the on health Cigar closely. number restate be Well, families always, and for at pandemic. these were We have five outbreak at months question we we and Lake, want is the it, said risk quickly take employees it on through moved could sites, communities of very that

we think I I been at responsibly put place. absolutely very Cigar the proactively and how and into measures many it. was site ago, safety So moved deal Lake was we a about with at to up shocked have month

center. their airplane without put measures your you so There's can't the The in masks, being much an when So looks you so call those on taken. checked get temperature a taken on plexiglass there you up spacing arrive. we've get without cafeteria the planes, like and are

as the protect will ore great employees. Lake well, quickly We our certainly have Cigar everything site We day do not at we where come our a We sure and have make need don't every We good. had calls isolate someone's to is outbreak hope we they're a we'll there where watch they're every them an close few we but McLean sites and or milled day. it them, well. over doing feeling test and the at job

forward. a think But we're -- job. we're issue going people won't precautions doing we an so very now, That And for good are guarantee all our taking doesn't we the have need. I

the secure We're to Tim. disappointed you've contracting? interested of by to you to Thanks, going what take will now. been market Great. and lack in utilities it able get Are business term the term to back

me Let that that. Grant an over to update Grant? for turn on

Yeah. Thanks, Tim.

good lack think be Low for from And that's produced fundamentals. productive significant contracting future a storm course, past to of on occurring exacerbated the been to -- went news supply brewing. I requirements, -- have We've of substantial Given reasonable severe the And, duty, those that it's might this supply you if side, electrification prices number a review in uranium to due cuts. the industry. uncovered supply pressure within I of demand pressure for of And fundamentals, the years will, decreasing know the demand Low expect emphasize lack capacity increasing geopolitical unplanned global really I that improving, on more so supply that's is replacement actually activities occurring just created side, let's perspective. is outlook it's but we've nuclear rate think, the prices with longer-term through the in the term doing carbonization. over happening concentration. important uranium demand-supply this them, the somebody seen required. seen supply we've investment market. in while is short-term global SOV planned due under seen a and have under And gap the that's Tim

access production, seamless the is You've It's a little but is of be consumed or regionalization the Group, to have that secure can preferential matter, of around a the heard where in highly the extension uranium origins days Working no U.S. or say XX% issues But contribute minerals cloud to the XX% by various regionalized an talk us strategic RSA supplied Nuclear have become trade markets. globalization between about era over that replaced of policy, of match optimism In countries supply the no doesn't around the to dominant, uranium trade-dependent by initiatives consumption. countries commodity. before, that market alone, demand. or little all the XXX, critical Fuel appear countries Section

bit So important those about fundamentals of, that. based kind important business. yeah, of expect upon make in and really to sort term contracting when But start couple there's it's a conclude, contracting you'd, you our to, think a observations of, more just to see little with

would The our new I talking familiar and to first make, but portfolio. I sales contracts are We're committed know point here, with this, about not want it. many I emphasize

past in extraordinary they've the portfolio proven be these during especially sales are committed Our times, to the pandemic. signed we resilient and through contracts the

market. the we business talking we're So into about new the that bring

it's before there's as happens. substitute into that be it and at will have uranium. It supply. for period, the that less seen will is market to point delayed term it because but simply we this future procured deferred, hasn't demand or piles to more no the point It disappeared. come put, movie some important second And The is be same will up that chasing when demand

Cameco, balance, The the XXXX than higher driven Lake only think are we've a shock about rational substantial XXXX shock that talk back you've our third the remember were of market contracting due the investment the term us rate seems transition historically, been We to demand productive of did to markets realization when been really In because And as market prices in markets the the enjoying point simply to incent this others have and in important to to demand heard that's happening think contracting. due vulnerable current have The We booked supply. of need business point at. that, rather or XXXX, contracting is by exceed make, difference between to supply future of to supply shocks level go XXXX for that Chinese I to at than to a the is lack And year. that shock in activity level. sold about the flooding industry where the new of too, there's coming a into we capacity. what's happening Cigar more activity achieve term replacement and we or the a market. want XXXX off you fourth is future to

this services. very began, had As uranium full we year of and pipeline a conversion

market contracts -- in moves takes we've Tim some talked about, the as contracting year XXXX, hasn't those to now. mentioned off should of term to right transitioned it in our example, He XXXX, typically follow pipeline. target, China conversion Bruce has obviously, time. it quarterly translate power takes price into Tim anyone It suggested conversion market term that last actually time And And COVID activity said, chunky. just important are delays demand. never an XXXX. contracting for and in for us India the in as level that predictable caused us heard remains talk grown, contract diminished You've the but industry Consider, term before has a success that

right market be be at point So optimistic, think this the we at continue we we from and contracting need we a continue to bullish be term look where when we and we back of to fundamentals, to step and positioned view. we're look

Thanks, Grant.

the softening and why us While seeing market we're we're the on can price? in understand a contracting, spot you help

ahead. go Grant,

to the about be It's suggest reflects to the remind spot our way the fundamental to business, fundamental It's probably to that production Sure. in we just the market the important supposed isn't price market. market to is market, that when It's talk be it where everybody a just it in at not it's term the economics. discount outset supposed what's a any it's it into market home, future Fukushima, outsize role spot term a spot the what's the it price. took as triggered and be to for the essentially trade It was required brought the this ultimately Since downward contract surplus market. forward market folks market pressure supply production. on without dumped spot an telling price carry term down. undisciplined down on And of a put

And failed so the failed and it's price of signal largely, years. has last in term couple the

productive capacity So the required to of ensure investments surprise, future are not are because failure. occurring no the today in that that

So signaling spot about view. we but broken point market, the it sales the have our buyer, is largest from of think some remember, a you focus not When spot there. are we do

the And is here's we story important today. market, demand, It's demand. in in. sellers of but how we've observations a just don't as be largest real discretionary of really a about buyer. not come And but cute make story oversupply, spot to spot to the spot fundamental mean I'll it I seen yet demand comment, think that the discretionary So seen under we a some it's willing a understand

little a seen demand. supply we supply or more mismatch a and between So

does material. market Cigar but today. Lake it's bigger not to spot into market XXXX, 'XX contract and home. a from the a this production. is it's include It's have spot that don't coming mobilization. In part the of market 'XX, not centers primary uncommitted where's understand of coming the The been inventory supply That And the main coming This from? have terms supply, important is not might spot of source through it story term

term market. it's for For Lake produced Cigar is example, into not sold the contracts; spot

market. creating uncommitted demand So uncommitted material who turn up in mismatched what production hands just around and in is up half spot shows call sustainable. primary see that would say the same production I of market, market the But about the This Any simply the the ample good but the we is of around ends is for is this would illusion supply, primary reality, when what of I traders here's the news. not in churn.

of of think Tim Some sources are COMINAK unlimited production the mentioned primary as the ceasing, Mine. think Mine, the Ranger

For demand not the other up through sources of market. find supply will as homes the contract forced production picks primary term market term be and spot

and a Or that capacity. long advanced way the various backed productive through sundry intermediaries expansion, with simply In counting projects addition, And ultimately, up were incredible there, shown expected put simply some [ph] not discipline of the the into or from those exploration be this. reality. on Dam production just palette Somair who counting the Olympic restart. are on future won't traders, or They've are

it back will the for XXXX. the in And So uranium and churn reduce to our in the initially XXXX and if conversion market of is and term dramatically will XXXX, think XXXX, guide, in economics. time, history be ultimately, transition period overshoot to XXXX, a production uranium will think think reflecting price XXXX,

new are demand? the of Russian Great. amended and the this main Thanks, portion call. coming Grant. the out changes are for of What question driving suspension the improvements two Final agreement

talking how Russian it market, year knowing I especially the where the U.S. overhang going the was certainty market of for is about value agreement take is on more biggest the to provides suspension land. coming this the it Rachelle. I one, mean, to now, bit or out a probably it a an I'll of not mean, we've Well, the been

the is brings it credit not, an gentleman of good to Kessler, think, on our but, a Commerce. and, we had others Probably disparate by an trying views of and certainty welcomed, our unenviable agreement. I think, the job, trying the him we And shop of know how were who's be job provide outstanding Sean who all think, the broker middle did ground. I between at delighted? give this an in that they absolutely Department have everybody named of helpful Commerce, I in Quinn to and I to tried arrangement hit was the to in Jeff So to reach everybody. could to parties a I Department

are out so acceptable feed. rules then benefit be U.S. and market. and we to call return in feed the amount And it us. with returned, uranium So about an the number the being that conversion us on the the in of going cap improvements? up I away a think right good ending translated, level or process that's it one What a allows agreement, two. there coming main for the probably market. That's it's we're return feed that back on wasn't issue huge are there's has as It's so would come the happy been and think, going chunk was the to U.S. and are actually ended that. EUP can issue It's access market. we that important cap some the on an at and return into really This of be up

think to And tight going now around pretty big benefit. that's we that some a rules so and there's be

is say, going anyone the ecstatic about for that's agreement? is a everyone I But as the think so. years? work say overall next to XX Probably So good I not. it's agreement

that. happy about so we're very And

you of are as seeing these? any demand new And a result

not a of just, things confusion. on demand, have COVID I buyers been that we've that. a about, caused Grant, talking about but, has sure up background. holding we've in removes but There's been think obviously material comments bit been it's of certainly one further are the talked I'm in that RSUs know, you any all the item utilities the that's kept list covered spot. it's has this in one impediment, The if you those Well,

with the non-Russian the uranium or we extension, to of seen confirm supply have the can RSA interest completion in the that Well, certainly amendment of and conversion.

expected Canadian with We about creates great are see because for it and starting opportunity very excited we it our supply. it, to see us it to

Great, thanks.

I call. will turn So that operator open to the Q&A of portion for it the our concludes this Session. back

Thank you.

will we questions [Operator answer session. now ask and begin of interest the time the one with Instructions]. your you In We supplemental. limit one question to

from first from Capital Please The RBC Markets. ahead. Andrew question go Wong is

good Hi, morning. me the Thanks for call. on having

So about. maybe just we since we'll RSAs with start just the heard

XXXX a and pretty And the coming XXXX up close quarter even amendment of with much the for has already the natural significant think sort soon, pretty have demand? that does between material? EUP do to that spot and gap if How any been U.S. a pretty that's accounted there's big gap utilities stimulate with in utility gap the is that of in So just non-Russian uranium near-term you quickly gap. because purchasing of relatively and

Yeah. Sean thanks for have here question. the joining I And this to talk for Quinn about Andrew, that. morning. thanks

I probably it's contracts were talk quarter already chunk that were But The already of used is that about negotiations early healthy to do that? used in existing probably up. in the good a so place years think already. want you I to of and think cover Sean, up

to think But sure, for I'm just Tim. gratify answer. your I going Yes,

under the quota through and first is already few years understanding negotiation for contract portfolio. enrichment goal was the existing the the period Our heavily that subscribed [indiscernible] for

Yes.

Sorry.

have that their source you're clear, would be saying? to so the is non-Russian material that just have already utilities saying they return, what or -- spot So you're the the to that

Yeah. going jump to here. Hi, just Grant. Andrew. in I'm It's

in, call, that volumes perhaps but the the four of included, part consider good you what RSA, the to the signed, some phase of expiration it outside of were grandfathering So actually prior you'd of a XXXX. contracts agreement

coverage some of So there's that. been

the the those been have kind and Russians in into of that part the Some conversion really of grandfathering. puts out the enrichment services preserved supplying window. opportunities the of That with 'XX-'XX the as contracts uranium for obviously

that non-Russian interests it uranium that that for in But when to so I conversion. up No, from have say, conclusion of And come expecting off been it of spot but and demand we're with effect. your remainder uranium the conversion, can of those in shortfalls demand will to us to interest that coming and That's that really we would of RSA. U.S. seen expected is grandfathering We confirm that of out because we've past, the we'll we source for question some just in directly said the as there's of haven't. earlier a market, 'XX think window of and of have to and the utilities, it's that opposed term some U.S. yet? shorter see it prior to weeks, I nearer-term seen actually get utilities on covered looking come utilities the the we XXXX couple the wasn't some market

the isn't update the there's facilitate that you that Okay. maybe I'm in just low carry some that. on does as pretty your market market? that the rates that just And maybe give much happened now, trades views clarifying thoughts then be your activity And the some curious material activity? that right interest you. us of thank maybe on And for limit to of updated some on as excess an that. or nowadays that on Thank help so are hear

again. we're The seeing to diminish. I'm Grant diminish. is business, Yeah. going it are it Thanks, carry we not suggest away, This going our trade And but part seeing Andrew. of

about spot about we've an changes you market of But trade. today think a importantly program, the a DOE function fed think, sources rates, structure of number I number the that part to source combined The could just what and some be came carry to term material barter is traders to I the limits material because then end Europe the market on of of say, for of was the of a but into seen, source to pre-COVID us into With order source alone come be COVID curtailments means more grab another probably return terms million the would material. pounds put grabbed and -- trades. that to grab back uncommitted trade. pejorative in the be used used come of this you the you amount we're got Russian supply that to term, fact material have expected the of Tim it just carry to and in feed. of important low near had talked that for of we which mean years there's is a the really that of the a into could into was laundered oversupply that into with another of out to market last rules interest growing as seen year in kind XX shortfall it a in has the So of contract. supply. less carry material in carry market but the market, That U.S. production primary through

it's uncommitted of So supply drying those sources up. are importantly, that

grab you're carry into tuck low, limits seeing much trade. you can rates interest to still the away with how even So

funds just borrow traders those that strike it's we've the of because supply in they're of that seen think of one past. the and been more with deals that funds sources the look available or perhaps loan to finding not some uranium the ample it's I or had to have material probably reasons -- material reflecting go

So supply rates. it's combination plus ample that of low interest

part underlying that's make it fundamentals away, of While is the the supply optimistic. that further of going part us ample that

TD ahead. question next go Securities. The from is from Greg Barnes Please

you know term I the done? utilities it's some and and in find actually terms highest you the And can past utilities But activity urgent Grant, that the been the characterize that years. getting today? clean does your said see you contracting is of on where in do discussions with your how stand contracting?

Greg. Yeah. Great question,

often So the more market market. clear be -- than a off on and just versus is it been distinction of to maybe that bit this notion on I've I past, we the want little in make

where supply. what operate for talking were market. come future exclusive And preferring really to about when are in call, them. the is for have we're our were we And we quite on customers ones we conversations. those what off supply right with the is, the say of RFPs where That's off market, seeing now about about market, we we're pipeline when year, talking types discussions on significant bilateral when where still earlier market into we these we and So competitive term competition are talking

I customers, for with bigger future. satisfy be into they think, fleets, future. our have We here is the tend requirements discipline because opportunity, for we reset to into so probably XXXX. the supply but the at predictable expectations going is to you unplanned just out for market, the out future. the And to to at coming before, future. Cameco fact into that a off and it we out of need for common from required where of they're said is know I have to more the disruptions, an bigger that the sense greater preference the And a run risk XXXX these into where their away to today, kind just sure decisions out reflect have the fleets, supply into production. of going to would are not to These And believe us price the And COVID be conversations the the rate are today's that supply simply denominator prices needs say the market-related make the not is They ones have is we as look they're the high future pricing this that prices don't there. but could market recognize spot the and event, continuing utilities into an echo looking look there who out

to us, a the of terms market kind type conversations for and little conditions tip of back a want. way so are those off bit balance the that into we And

market overall pricing, a need And prepared we that portfolio pursue has that of to on the so can statement lot still it the for mention would I the we're up. fruitful we're are balance and prices. of of you're well, to And important we related a other where where future some exposure. to of at base-escalated because a utilities to we more market, then terms because market be, market is that. that say no an it's think profound have positive base-escalated the off the related need signal. it's where strike Cameco, seeing dig competing out willing also of expected market-related portion we're In that is utilities don't on that and no people being oftentimes a is a the framework, I wasn't that price it is recognize hybrid want than deep than alarming with that But producers the of portion to fact to powerful that the contract, contract successful kind a all think would some think go up, market without is it uranium not we're this. of largely trying risk, about But gives offer for going of us signal view taking fundamentally a the us us exposure it And problem cheap that considerably majority actually out just to price pretty believe market is If are to to value to market more far going go into the so a really RFPs negotiating into still coming a contracts future is today. all their uranium We based-escalated.

risk the going future, you're is into taking price on so out a the So lower be to all you.

Okay, go ahead.

represent that that's Let's supply to is situation. of to do ensure the understand a need They they today's course, not where not have contract. market-related prices But, there. be

is pricing a way, base-escalated doing coming in and get as trying as to to they they're competitive can. what much So market the

escalated be recognizing it there's these as by of that yeah, discipline is great there was would they'd bit pretty lock low But prices, powerful much so, market little And there more bidding a a possible. in utilities those RFPs. are signal this into on base them are that in and if better some as that those

bit. sorry, get a of there distinction wandered I clear it market. So, on because and the be But confused just off I market wanted we little to sometimes Greg, between our see

replace That was forward. that I going So the are continue to forward, helpful, your to grow very Grant. portfolio and still want of but be all continue you view going to you that just check, able will to

let -- to go going not by You're

Yeah.

been about, talked conversion and away. of beginning that big origination of would was demand, pipeline that had has to Happily, before none if say, since from at gone we So Fukushima. uranium a as you of will, the I service we discussions as the it's negotiation year,

reasons, other a or for and to had we want what utility us this to don't say, We situation discussion. haven't COVID a have come

seen away. we So anything haven't go

some seen have about QX. this talked We delays. in I

really and so in they going on making fuel COVID as past up. operate. them delivery response material immune from Our to weren't jurisdictions they sure was we that in customers for their our that was saw was year focus COVID buyers, Their bought the show to a within the

supply making they opposed as kind activity So thinking a year what this fuel triage in get in running terms years. COVID they to for of, need of environment in sure bundles few uranium to need really, a the their in they they could a

demand but And us would So say the caused like it things delay, that hit good that just the fact, us I more any replace Kazakhstan, in restrictions Russian is that and -- need demand disruptions and has supply that to unplanned that that's conversion, the then disappear. to uranium but we Russian that about on demand. more discuss. in hasn't And the and hit to to created news RSA, a talked brought the

it that been broader always active we're the indicator happy because is -- very and not about market we this clear also and very in transition So far that leading for that we want be the -- a in is comments bit but idea it's in little this. away, heard mention pipeline about absolutely too to and that his -- not a a just market Tim did we've

very take be result is should reference reporting, our these that portfolio like, suggested they chunky. conversion, negotiate have that in was The conversion. pipeline time, I when to a made they quarterly We predictable, we contracts, active of never now contracting, can part

While market of last kind the transitioned the think that's you conversion about. year, delay

are not contract. conversations term works sure set it negotiating up we contracting a way that's contract never still to hit X industry by is The there, the we but I'm our making over pipeline QX that QX, a takes trying So fast disappointment. The priority of there. because we now. a not by amount still suggested have or in quality negotiate would

ahead. Alexander is question from from Pearce BMO. Please next The go

little So from the a I for just market wanted to away the move bit moment.

add bit moment given reported really there earlier we up positive impact a think production where on operation, at is is. week, ability Just at any cases purchasing year-to-date operations income from if from situation below purchases you the the attributable still purchases, the this some having and it's obviously, little Kazatomprom your running its your

expect is moment? down Is So thinking anything timing can unwind? we it there at to about we else to the be or just still that should

the things with touch how X and And all some as we months weekly the now of proactive going taking as for this re-mobilize some have. in we're us on Kazatomprom down to Alex, a And, there on are or that rest course, get they're go the starting They've their holes basis. and summer steps back flowing they're in daily of ISR the Well, and cautious drilled it's drilling get same takes so taken all up. the the the time, time, it and takes sit the well, some time. drills fluids production

talked production million through the been I a I there, think, through months. pounds, and summer those of And so XX there's overall, I think, loss about

Yes, And so, they depending how all that ramp yes, had what back again. said I can shortfalls we're might they think XXXX back get continue Kazakhstan. to Rizvi I quickly up, production the we're in into watching on can up think, Riaz how behind, see bit a production

about there. on secret what's nothing there's -- nothing So going

by out we come. of any not we're look is of cases will stretch, just catch-up super seeing to the being all production I months cautious they're the so of some I in our here that whatever now Kazakhstan Sean and us in And Kazatomprom third and we're increased think, like being rest we're I special. second or wave. so the watching hope We're nothing know aware for woods cautious. the again to

on of level on still for X,XXX estimated year to that X,XXX tonnes, they're produce They're still kind down from they tonnes, this the but earlier Tim. track so that, track reduced that's Yes.

Yes.

The ahead. is Lawson Paradigm Capital. from Gordon Go question next from

McArthur and to specific that term to and could provide understand supply I relative demand from morning. Lake there restarts. balance related data comment others? But any production good Hey, respect is Rabbit you're on numbers to prices hesitant you to River, justify with

that can some Greg clear Grant, we it good that some there and our we've with Well, key and at our until on we keeping leads McArthur shareholders are us we're down great We've think, just we're I been last refill levels contract not to really made just and conversation, portfolio got acceptable yet. the year. progress

I million about long-term under sold contracts. in think, XX pounds you XXXX,

been bit going We a continue delayed by doubt on to refill our no have be work those. but we basket COVID, able to we'll It's contract forward.

and then, then months coming it's course, back the haven't go from on, And out move about the they material there here of you're million we years to it and go up talking, on our we the place, to to TradeTech It'll restart depend was we've think, on Grant XXXX to be in the been in our since was there. production comes we've bit up. talking mine visit, that another pounds now And The that want have XXX COVID been is that if five it. you billion just again. there's consultation to have that. to and production X,XXX,XXX,XXX a while of contracting to make looking but it's And it's and with Once McArthur, pounds switch a other in a flick can a something and date years, that or of partners in hiatus that then the I to or there I expect utilities numbers. go course, Just and Ux coming down. three would we been over not like again, we see out due essays pick sold. a firm a and in don't we matters, uncovered

it do on. some bring So we've to work got back to

some to months year maybe So it's to get bring even going. going a to it take up and us back it

a So no, a every we we not have out We want McArthur. there, contract portfolio numbers -- we dose come pounds the pound of need home restart that we certainly them need but healthy of don't a out to than last it. want don't of to sell we other would give before specific out

The question Raymond go James. from ahead. next is Brian from Please MacArthur

Hi, good morning.

of, Greg's and Matt's So I, question. to question kind follow-up, want guess, I

from the XX Are keep down you actually you outside. case takes to be months longer contracts and would cost going back into been actually forward, the the there thought pricing and you shut a additional never So stays for the the EV it to everything to McArthur is whatever I've whole you to are a say this able forward, restart chemical that at and down of base utilities But our value check going an because bears. saying obviously in down. keeping Because market? going there's ago get longer if it the everything this cost the expected

shareholder, As of want write a I kind return. a to

days, XX you because capture at base have and them is part I'm additional what So because you you'll get want to it, taken time actually to trying say by. the what a XX. trying longer, strategy all a contract waited you out I year the so market-related say, longer, got go you're to now could for of I do as thing. it's figure the But that cost goes to at ago

on? take that one you don't why Grant, Brian. Thanks, Yes.

Brian. absolutely, out trying sure that capturing Well, to of make much Yes. as assets we're for can. value possibly comes that We're the our as we production

has our development oversupplied price signal on So noticed carry the trade any And their will The important think; has down been production the was what an business, has talked to that trade you they longer term TradeTech with, about failure more what I be came call, spot the out in price what production the important, to cost economics. spot price of attempt correct it would this price. reporters link one have have to an been whereby term earlier, been and nothing dragged than an no -- I the and indicator.

in the it. heels is change if reporter is according out there's to as that's And kind that. a broken and spot signal time this expectations. and And then the reset trade suggest it's last all so permitted capacity of, cost mean And Brian. market and on recognizing to of the that cost pre-COVID it I positive that's say, this industry help doing And them, the and licensed restart, development a their a well, to want part in that that you to already very year and a our coming would of already I mid-XXs. in resets idled

saying is price pound. ask and they'd a XX they participant would a say uranium bucks a bucks what credible If that XX you pound cheap probably thought same today of be, probably market person

the So where expectations to very and significant it's over economics. price a are on shift production the change from spot

back. value So much as and there's absolutely about we do supply we're bringing before, of trying to obviously, signaling that can capture that, any as

I return Like, But depending go wait. you if -- you incur you're you for conceptually, I'm mean capture cost that. of you try much guaranteed it's value want EE, like you'll and can capture function option how as of is because forward, I rate that. you as your Do just there saying? the more that's mean And that base balance how that's thinking versus what on said, future changed more as on is much, market-related you retain you rate see effectively

today that. got we say, feels boy, -- remember XXXXs they prices, kind a today. time terms complacent of the destroying of baseload If low, you portfolio XXs similar think, others. we're upside no, and looking we to because, I to the in would a mightily uranium to looking lot probably market started eerie before been to when so essentially at the And the prices period an side at we've actually late that very look of maintain price trade or in other I they lot we're of you're that very because the missed suggesting period have say, by and And where fundamentals that early we of of similarity criticized prices, supply, we're fixed balance of fixed in on and

a movie seen So to and don't those of wonderful and we either. to utility to to in be portion. a that to contain asset, the really that leverage that some base maintain the to escalate conversations we MacArthur opportunity our that then Well, But that want value. want off-market we've base just particularly yes, with we have -- -- that attractive lock to would extent wants no upside simply that escalated that before us restart wasn't do upside that

that So strike Brian. balance,

of The Please is from Securities. ahead. BofA Winder go next question Lawson

Hi. Thanks the guys. taking question, for

you curious from. to on on think churn? XX% And stated churn. commentary you that some year market from terms it'd get you've of that coming the your be seen that's this come Just And of then very context that where is in

any have of in the spot is churn? the high that seen deterioration amount the past? you been market is that how So in And

Grant?

we market overall, the So of amount is the where that I a back of XX% we kg. much churn. market fact, roughly just always standalone our spot forth. in traders-to-traders had to recognize it's it has our think the every had space in That's significant pound When how was been. of saying trading actually and just know that and or cam, always lived And saw day I came and new probably it fairly don't same

supply. illusion ample each You why have six which counted going around this created and separately around say and around time, I and of being is

let this supply, supply size the that's a of market is changed, just Fukushima that's demand was of again. changed. don't got kind spot very our So market it's down it's at think of me a know, that well. And through the off the market churned that's the -- event when industry precisely bit demand of proportion to because, had go I they coming of you was history producing. But and control ended rather so course, demand on, prices, kept a reason and came coming big which in the the led than result who was time decisions, And with supply up the in making of was led commercial decisions, Fukushima discovered that the those to to that just and that no on, smart higher as we discovered which supply falling event. in in on And still home. away was while reaction XXXX investment it XXXX, supply coming a

spot and market spot it place them. sell the became them. no hit the to had no was for There so other for market. And the only term it robust market option They

the went reasons of think that's I earlier I bit don't market right sustainable. a through spot bunch unique So why that size And it's the a of now. is

The first about being, And production of COMINAK. talked primary going centers that some are those I uncommitted away. and Ranger

like have but bunch production, for material have reality, to of said, don't of production from greenfield that that might HP of of who be to. example, not material, new some is And a talked even in you would production an not would whole also when fact the about those there have expectation who the that supply, well, home there uncommitted term going lots ahead juniors, need going a look you a that happen. We not spot, that's actually primary the that that grown, that's we raised have for thought course, might thought the would be

fundamentals face the part news So the churn of us is say always the it's spot it, of of would the in size kind the been not the But of for sustainable. churn. yes, market is I good XX% about

term I on UX, supplies Hey, mentioned past future see supply, these the In contracts you you potential wanted that unbuilt that the bidding market. in that's And you've unbuilt And the projects. then contracting great. question, course term touched the of on start just the follow-up they'll started a Thanks. projects said asked not ask they of to them which see But and up before. have to get before. I've a it lot win unbuilt once those then any you

a really incumbent's use an We This we and recovery. not. strong point. on will are Absolutely actually term Yes. be this

your uranium, have utility mind turn to you you're supply of a you If and a choice. future

you You can unpermitted, going history. a operating at for we're seeing that to off-market who unlicensed, the permitted why an exactly activity to something operating with And we're no either that's has has somebody history go or take Cameco. licensed that's go could the you're facility your seeing former, chance with

that Orano to and normal, a where Kazatomprom rationale transition supply recovery, incumbent's of it an it'll and go to these goes and it's that's market in the Cameco before other occur. So just unproven will think, sources I

we by And of that on have like. we the is in live know so to we of the don't these heard some in is promotion what that projects fear sit projects utilities. is every the hydro and these The extent comment because reality day past there's made

that future be who operating the hear a so period like maybe are at I movie more uranium emerged might of something four supply supply. ones market. yet I'm aren't and XXXX/XXXX the the were well, to all going that the going were We've companies planet think low because seen out when say, might about these XXX for there to complacent that again, material before. And And only that promising were in of Well, that the around extraordinarily seen wait time. And worried they little that's hundreds we've costs.

it's very recovery. improving incumbent's So us fundamentals that an It's going to because that be movie we've optimistic before. seen has

The Brown. Fai Please next question from Odlum is from go Lee ahead.

Sorry.

the just Well Okay. right there? one

that just We wait know. every I time. would for

Yes.

a couple quick Just of questions.

First, management managing perspective you're that be inventories. on into down of a It the Do you over talk next the maybe a like drawing a of sense moving have subsequent what cash looks of can inventories? them quarters. to from about -- going phase you

we can. Yes, Grant?

And But context think I'm we've so Fai. going of again When far pounds. And of pounds. lot of how so look Thanks, year, it's million -- today, XX.X to that Yes. great this, to have right. this about million XX That's a I'm going purchases we a folks. question. QX, an inventory this bit sorry about to made provide a very you at clear

the and to -- are I set remain say, they folks Cameco there's so as Cameco's building key or MacArthur will mean remain key inventory, as I are the long down are down. part And straight. less Cameco purchasing significant with of down, required And is view record purchasing that life. might want a MacArthur well, going that by an to

end is be to would purchasing that thinks would draw. be an who for that wrong the wrong, coming to anybody So conclusion Cameco

purchases flow. inflows And have production period, they sales, example. and delivery build between our Fai, know, you for outflows a higher been of ahead As and we our inventory being always

play at principle basis. general seen target. say year-end on point is And below that inventory And I'll still that at would XXXX, is our I here. you've example to that So a was quarterly the

to bit about but the our this meet have rebuild an so And portfolio, also we inventory. outset of to buy sales to talked at committed a would we year of

to resilient those. we'll quarter a very contract have about thinking purchases have we to delivering so and under So supply already into we that to into we make portfolio. fourth contract And deliveries XXXX portfolio have have certainly start a probably and inventory

kind that when market committed me I of for purchase some because want meet accounting don't points that target We after is on our the buy. to think this inventory sales So our sales those we And only. purchase targeting criteria going our what the market, production committed and and demand. portfolio we takes know met we see for anybody belt. we're purchase that exactly very product we to spot feeding inventory. clarifying of just Because timing in for When the an we it's because origin, we to have it's we're fundamental requirements purchasing location, specific into, when portfolio, we

is So inventory buy to of we our that's a in point And as the do to buy we balance an build not do you the inventory. opportunistic about possible. as when buy important other market think the we cheaply not spot disciplined, in speculate, really excess manner

a heard a loosens, looking cash. we year. with have curtailments spot more market we as but a time, market and is that be inventory tight, will that the lot as our working inventory for When bought market sales cheaply When lot COVID actually period to material you've the so us has saw So we with possible. at lot material time step It of material, retreated, that our it market in committed a of builds we this The the home it. we still to a our buy say needed we of buy, spend of buy back we for but as sentiment. bought we the it, up turned sales, we before capital bought portfolio committed into

curtailments So sales this to it that and we've the and we our the portfolio market said year proved front of our got securing committed material that's the inventory would bought market, in what we -- up When COVID for an needed we came built bought eye we but do. event. that we and do exactly we've tightened what

cheaper. buy stepped As as demand too coming. kept stock loosen stepped started some to We because then supplies the to it of market but discretionary back, the back going we're

to it it's, was of is that about marketing need purchasing that part you management -- all overall think it, cash So strategy.

wanted, it of you all fits wanted together. but background more be than clear I way to how just So

No, That's super helpful. no appreciate. I

importance I more bit Just of that's a factor to of believe the alluded quick supply of follow-up, Tim, becoming of a uranium a you for origin these days.

growth kind China more the of of just being or that to Asia you maybe and Canadian shift that? about reactor talk With can help hinder might how

be issues Fai, Canada the Yes. passport now. China still trade despite that Canadian with good, might is some having right

have with on not business China all. relations at BXB changed Our a

and strong there; continue make deliveries We Korea. South relations India our with very in to are

all So customers we in of we'll countries to. have continue and those

important. think, I mentioned and production routes availability trade the more Grant the consumption of versus becoming

We should got come of We've are watching that from? Canada. very we've production closely to some out of and Asia, our coming say where some coming got out

It's into American very now. And of ensure great we material we we're just governments conscious with our that of we affected keep very something and closely it markets. we our but it's watch and right Canadian, question. the all flowing work business, our hasn't so to that others It watch. of And a can

next Investor. The MSN question Solder is ahead. from a [ph] Private Please go

showing fleet their the weakness big and Japanese signs rollouts particularly include strength you any which picture shifts maybe aging? how restart of acceleration or in morning. have visibility U.S. SMR major Or new learning of Germany on good Do Hi, demand might lesson? is Russian or

MSN. Thanks,

of there's China watched saying, not construction. XXX under or watching Now, of, the demand building, simple XX are construction. well, is with some said certainly today, I under we're and a reactors but that's and Chinese now it's bullish, there's one XX a building think, only big I and got another Well, running for XXXX positive the we're question. they'd good they them XX closely running a press okay, running have I very feat, the nuclear XX. that. picture, and we're see, kind we've That's, world in reactors XX trade well, XX world, by

and by I carbon XXth think net mentioned so that five-year anywhere I that's quadruple plan XXXX, to that think, have it's if this positive. and the they're zero going think to Grant they're to get we near their going nuclear

into now. approved XX the think, and I have new just that Japan, hopper. safety But for in think I I Japan. have the units have more They're features that has mentioned saw putting with up another down think they're that been Japan comply and nine some started You and are I they laws.

realizes the it these to So they've assets on, picture trying got XX and being on. be nuclear Tsuga nine on bullish them working of to they're back all is has Minister forward. XX they're and that bring Prime going part there

money SMR regulator coming going really know for We that which from on Canada -- I alone, the area. excited. think put There's the there's the story now sure, So lot behind Asia XX a to in some plays whatever government's What provincial like We've approval for right where mentioned, forward know watching is lot. Cameco that government. sitting some and looks in of least in the U.S. front has looking a front at near you, backing that's excitement different there's models of you the SMR they of we're and and well, term. closely is SMRs. Canadian to watching that the government, I see got in tell funding

Thunberg reduction, COVID the keeping climate fundamentals there that last a carbon reduction, the has committing Greta but has it's be XXXX, eight our still the or of to, And everybody zero that, we now put talking out for for a away. and And like role change, down, by net has not temperature come or attention XXXX, COX I XXXX. to were nuclear. day whatever There months, XXXX so say, elsewhere back to this gone before carbon I the seven still

And that's so the field we're in. playing

So thank you for the good question. It's one. a

go Retail ahead. The next question is Investor. Please from [indiscernible], a

you've off-market of with added think, book. us during that to a just Can taking to to you discussions that year, you your had you've your that earned for pounds and off-market contracting contracting that it give you've you please. had QX, customers. times call, was my Thank you few us report? mean question. information can't this bit announced I added And Last that conference pounds regarding explain you a mentioned And that, does utilities

our mean. Grant, I do you want about to book talk

Yes. Sure.

competitive on uranium, thousand is it XXXX, an of about pounds about XX our market, So conversion couple our new -- say tonnes year-end talking we're the we of into long-term we're When the our off It's success talked disclosure, a through bilateral pursuing XXXX in contracts. we QX RFP. what that's that basis. business there generated million where exclusive entered was not

of material directly reluctantly, down. could reasons. coming okay, to coming from because So or -- their maybe have up because and material the they're to enterprises, or or is to know they us already their to require they're serious, more us them say, production own And in to take in filled customers I they McArthur going to or McArthur criteria in procurement maybe need us want variety future portfolio, to maybe their the more it's see met a supply. for state-owned Kazakh requirements come be get what material, shut they they've They ESG Uzbek commercial with this

can but said the we of the are are there's these as off-market, until come But reasons contracts variety complete, long are that us executed. book So a and they to don't a exclusive bilateral these wait, We negotiations negotiations. be earlier. why them

you're not assure of that actually We are on we fundamentals book Tim contract doing out it pipeline disclosure, have give long-term is that That when want that there competitive to is the been it seeing fact some portfolio concerned folks that out be, that market they're to And between the about, there the of seeing the in developments like is incenting, prices not though is be that our today's they these that mean being we it haven't see are solutions here rate. or also and to And you're the some production the the that discussions. level, us of been just this just in doesn't recognizing replacement their way are QX not are we've utilities you just future. counting It's just there simply origination decisions announced signed. demand sense that on. what that they into where point going RFPs at that have new talking timeframe. any going the there won't about at supply not on even we there. to a and in recognize So reflecting not find add they're might off-market executed to they're means for The bilateral

distinction trying is give So the just we're draw there's the pipeline activity there. an that of lots the to, insight kind to into that you that's of, out reference to

already, the were this statements like Thanks. prices contracts the -- you've answer mid-XXs with and looking looking I'd but year higher the a that you conditions a And gentleman on uranium then just like for able press later sector, to more already, for for as I'd specific a looking to to in in be improved mind follow-up, prices for little to talked a new having the investor different a as sign you in in asked as mid-XXs? about my you your retail conference calls are here,

there's than there operating Kazatomprom for prices higher And a balance, is that. two subsoil observations. looking less a still there no on its it's not McArthur point just would at always is data market. obviously then absolutely about One Well, market, doubt the I down. make is limit. -- still of buyer's still are use seller's Key XX%

not a $XX between So price the about $XX clearly, need a pound. yet where term price price average about has we're market the spot term sitting pound two the to point recognized sitting the at the at reporter a

running is McArthur moved not generate the subsoil Kazatomprom have it up be enough, capacity, use. enough to at running moved, price So not and at is have full to or their of discovery type needs to it it to where moved

reality off-market. still haven't our the there at off-market those an future hands exclusive it's every tell in a that but fundamentals within the to market the when The hands that bilateral most too moment fruitful is find can than we're more of -- sellers the seller's just level. our we're far way why with we place demand power pricing that for because right us that's on discussions, squeeze penny still we discussion. replacement and their to market in the rate seen buyer's it, -- transitioning it's there now utilities find is in buyers of we a So In space production than the occupy more is that get not away negotiating we from that which into

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

always challenging assure We you and Well, that us and thanks, They're this today. times. that joined support. interest to during say just unprecedented. as operator. your everybody These appreciate I easy just I can our long-term. thanks to the to will to period, we'll But aren't people. on execute promise after a manner business and we our continue we And in that over will I we're so also going believe that sustainable want our make look you strategy do

a So thanks Stay Thanks. great Have and healthy. day. safe everybody.

call. conference today's concludes This

your have disconnect and for may participating lines. You Thank you pleasant day. a