Cameco Corporation

Good morning, everyone. Welcome to Cameco's third quarter conference call. I would like to acknowledge that we are calling in from both Toronto and Saskatoon today. Toronto is on Treaty 13 territory and the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee, and the Wendat peoples, and now home to many diverse First Nations, Inuit, and Métis peoples. Our corporate office in Saskatoon, which is on Treaty 6 territory, is the traditional territory of the Cree people and homeland of the Métis. With us in Toronto are Tim Gitzel, CEO, Grant Isaac, President and COO, and Heidi Shaw, SVP and CFO. Rochelle Girard, SVP and Chief Corporate Officer, is joining from our Saskatoon headquarters. I'll hand it over to Tim momentarily to speak to the strong financial results we've delivered through the first nine months of the year, which have kept Cameco in a solid position amid growing momentum in nuclear markets. Tim will also touch on the recently announced agreement for the U.S. government to purchase Westinghouse reactors, which is expected to drive significant value to Westinghouse and to Cameco, setting up the Westinghouse reactors as the leading technology in the global deployment of gigawatt-scale nuclear. After, we will open it up to your questions. Today's call will be approximately one hour, concluding at 9 a.m. Eastern Time. Our goal is to be open and transparent with our communication, and we want to respect everyone's time and conclude the call by 9 a.m. Therefore, should we not get to your questions during this call, or if you would like to get into detailed financial modeling questions about our results, we would be happy to respond to any follow-up inquiries. 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 send us a message link in the investor section of our website, or you can use the ask a question form at the bottom of the webcast screen, and we'll be happy to follow up after this call. If you join the conference call through our website event page, there are slides available, which will be displayed during the call. In addition, for your reference, our quarterly investor handout is available for download in 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 return to the queue. Note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today except as required by law. As required by securities laws, we also need to make you aware that during today's discussion, the company will make a number of references to non-IFRS and other financial measures. Cameco believes these measures provide investors with useful perspective on underlying business trends and a full reconciliation of non-IFRS financial measures is available at cameco.com slash invest. Please refer to our most recent annual information form and MD&A for more information about the factors that could cause these different results and the assumptions we have made. I will now turn it over to our CEO, Tim Gitzel.

Well, thank you, Corey, and hello, everyone. We appreciate you taking the time to join our discussion today. Hope everyone is doing well and has had the opportunity to enjoy some quality time with friends and family over the past few months, whether that meant settling into the last days of summer or enjoying the early signs of spring, depending on where you are in the world. The baseball fans out there, what a ride it was for the Toronto Blue Jays and the LA Dodgers in the World Series this past week. As Corey said, we're actually calling in from Toronto, Canada today, and I can tell you the air is still a little heavy. Even though the home team Blue Jays didn't come out with the trophy as the only Major League Baseball team here in Canada, they certainly gave us all a thrilling run and plenty to be proud of. We're here in eastern Canada for this call because we had the opportunity as a board and a management team to head south to Georgia yesterday, where we took a tour of Vogel Units 3 and 4, which are Westinghouse AP1000 technology, and the two newest reactors in the U.S. Seeing that technology in action was a powerful reminder of what's possible when innovation, policy, and industry align. Speaking of alignment, I'm delighted to start today by touching on the recent announcement of the transformative partnership between Cameco, Brookfield and the US government and Westinghouse, marking a major milestone for the company and for the entire sector. Backed by at least $80 billion US in planned investments in Westinghouse nuclear reactors, We expect this milestone will accelerate the global deployment of Westinghouse's reactor technology, strengthening energy security, revitalizing domestic supply chains, and creating significant growth opportunities for both Westinghouse and for Cameco. For the nuclear industry, this long-term commitment to new nuclear is a clear sign that the growth story continues to build momentum. It's not just about energy security. It's about powering the infrastructure behind AI, data centers, and hard-to-abate sectors with the next generation of clean, reliable electricity. For Westinghouse, the partnership highlights clear support for its best-in-class reactor technology from the nation that hosts the largest nuclear fleet and has the most significant experience in operating nuclear reactors. Support from the U.S. bolsters confidence for the global jurisdictions that are currently advancing toward AP1000 deployment. And for those countries still deciding on a technology for their nuclear build-out, this partnership should provide an incredible amount of confidence that the Westinghouse designs are the technology of choice. For us at Cameco, the agreement adds significant support to the industry growth story. It's positive for the outlook for nuclear across North America and globally, and therefore positive for Cameco's long-term contracting and production strategy. It wasn't already clear from the press release this week. Let me reiterate that the agreement signed with the U.S. government is about support for nuclear energy and Westinghouse reactor technology. That's a great development for Cameco and our stakeholders, thanks to our investment in Westinghouse. We need directly address some of the misinformation we've seen published in the last few days. The U.S. government partnership interest does not extend the Cameco's core business, although our uranium products and fuel services are certainly well positioned to support the build-out and long-term operation of the global fleet as it grows. The partnership strengthens our footprint to create meaningful value for our stakeholders, but the participation interest by the U.S. government is only focused on the Westinghouse business. It's a rare opportunity to combine policy momentum, proven technology, and commercial scale. And we believe it positions both Cameco and Westinghouse to deliver sustainable growth, ongoing innovation, and energy leadership for decades to come. As we look ahead, it's clear that today nuclear energy is not just maintaining relevance as the global energy landscape evolves, it's undergoing an expansion and meaningful transformation. In that transformation, the entire fuel cycle is now receiving more significant attention than ever, not just the front end of uranium mining. From conversion and enrichment to fuel fabrication and reactor deployment, the momentum is real. and we're frequently seeing new promises of future supply and capacity within each stage. Unfortunately, a compelling narrative alone won't turn a turbine. Execution is key, and Cameco is in an exceptional position to execute and deliver value. With decades of experience operating unique and complex assets, we play a critical role in the long-term health of the nuclear industry. That experience gives us the ability to be selective and strategic, committing unencumbered productive capacity under long-term contracts that align with customer needs. Our approach ensures downside protection while preserving exposure to future market price improvements. It's a disciplined strategy that balances risk and opportunity, built on trust, performance, and a deep understanding of how to build value across market cycles. As demand continues to grow, driven by energy security, decarbonization and digital infrastructure, we're confident Cameco, with assets that are critical to the industry, is well positioned to support the next chapter of nuclear growth. Turning to a discussion centered on those assets, I want to run through a few brief highlights for the quarter and year to date. I'll first note the update we shared in late August regarding our MacArthur River and Key Lake operations, where development delays in 2025 resulted in a decreased annual production forecast. We previously expected 18 million pounds in MacArthur Key, and we now expect packaged production of between 14 and 15 million pounds on a 100% basis. Depending on operational performance at the Cigar Lake mine in the fourth quarter, we may be able to make up some of the shortfall from MacArthur, but we do not expect to make up all of it. We've therefore reduced our consolidated production outlook for 2025, and we now expect our share of production to be up to 20 million pounds of uranium. Remember that while our mine production is expected to be lower, Our supply sourcing flexibility is one of our many competitive advantages. At J.B. Inkai, which as a committed purchase is among our sources, production is going well. We continue to expect production of 8.3 million pounds, of which our purchase allocation is 3.7 million pounds. A portion of that allocation is currently in transit to Canada, including about 900,000 pounds that had remained at JV Inkei from our 2024 purchase allocation. In our fuel services division, our annual production outlook remains on track, totaling between 13 million and 14 million KGU of combined fuel services products. To meet our sales commitments and deliver full cycle value, we plan years in advance and always provide for flexibility in how we source the supply we need, including production, inventory, product loans, and both market and long-term purchases. This quarter reflects our flexibility as we adjusted a number of the supply levers that we have at our disposal, including our planned market purchases and product loans, to help offset the impact of the production changes. We will continue to balance all available sources with a focus on value creation, risk management, and sustainability. Moving to Cameco's financial results, after a solid first nine months, we're in a position for a strong finish to the year, supported by the higher expected deliveries in our uranium and fuel services segments in the fourth quarter, and a solid quarter for Westinghouse. A key contributor to the positive performance year to date was the increase of over $170 million in our share of Westinghouse's revenue recorded in the second quarter. While quarterly uranium and fuel services sales volumes were lower overall, we saw continued improvement in average realized prices in both segments. As we always highlight, quarterly results will vary due to timing of our customers' requirements, and it's our annual expectations that matter most. As I said earlier, those expectations continue to point to higher deliveries in the fourth quarter. Looking at our financial position, we've remained disciplined in managing liquidity to support our operations and sourcing decisions. Our discipline enables us to deliver on our strategy, take advantage of opportunities and self-manage risk. We're maintaining a strong balance sheet guided by our investment grade rating and supported a strong cash flow generation. So from a financial perspective, we are in excellent shape with $779 million in cash and cash equivalents, $1 billion in total debt, and a $1 billion undrawn revolving credit facility. Subsequent to the quarter in October, we received $171.5 million US from Westinghouse related to the Korean reactor build in the Czech Republic, which was announced in the second quarter. With our improving financial performance and the receipt of the additional distribution from Westinghouse, Our board of directors elected to accelerate our plan to grow the dividend and have declared a 2025 annual dividend of 24 cents per common share. These are incredibly exciting times for this industry and the outlook is becoming stronger with each passing day. That strength is reflected in Cameco's improving performance as we navigate challenges and seize opportunities. It's about more than just supplying fuel. It's about enabling a future energy system that is secure, reliable and carbon-free. We remain focused on strong partnerships and long-term value creation, enhancing energy and national security objectives and advancing nuclear as a cornerstone of the clean energy transition. We're not just participating in the energy transition, we're shaping it. Before we conclude, I'd like to highlight a couple of changes to our executive team. Our Chief Marketing Officer, David Dirksen, has announced his intention to retire at the end of the first quarter of 2026. It has been an absolute pleasure to work with David during his 28-year career with Gamico, over which he has held senior positions in corporate strategy, corporate development, treasury and marketing. On behalf of the board and management team, I'd like to thank David for his significant contributions, not only to Cameco, but to the entire nuclear industry, and for sharing his deep industry knowledge and expertise over the years. We wish him the absolute best in his retirement. Beginning January 1, 2026, David will assume the role of Senior Advisor Marketing until his retirement date of March 31, 2026. Lisa Aiken, currently vice president marketing, has been with Cameco's marketing group for nearly 20 years. She will be appointed senior vice president and chief marketing officer effective January 1, 2026. I'm pleased to welcome Lisa with her strong leadership and the market experience that she brings to the senior executive team. Tim Shirky, currently senior director in the marketing group, will move into Lisa's previous role of vice president marketing. So thank you all for joining us today, both on the line and via webcast. We appreciate your continued interest and will now open the floor to your questions.

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 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 keys. To withdraw your question, please press star then 2. Webcast participants are welcome to submit questions through the box at the bottom of the webcast frame. The Cameco Investor Relations team will follow up with you by email after the call. Once again, anyone on the conference call who wishes to ask a question, you may press star 1 at this time. The first question today comes from Ralph Profitti with Stifel. Please go ahead.