Cameco Corporation

Thank you for standing by. This is the conference operator. Welcome to the Cameco Corporation's fourth quarter 2025 results conference call. As a reminder, all participants are in a 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 zero. Webcast participants are asked to wait until the Q&A session before submitting their questions, as the information they are looking for may be provided during the presentation. The Q&A session will conclude at 9 a.m. Eastern Time. I would now like to turn the conference over to Corey Koss, Vice President, Investor Relations and Communications. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Cameco's fourth quarter and annual 2025 conference call. I would like to acknowledge that we are speaking from our corporate office in Saskatoon, Saskatchewan, Canada, which is on Tree 6 territory, the traditional territory of the Creek people and the homeland of the Métis. With us today are Tim Gitzel, Chief Executive Officer, Grant Isaac, President and Chief Operating Officer, Heidi Shockey, Senior Vice President and Chief Financial Officer, and Rochelle Girard, Senior Vice President and Chief Corporate Officer. Tim will provide some commentary to start the call, and we will open it up for 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 communications, so if we do not have time to get to your questions during this call, or if you would like to get into detailed financial modeling questions about our quarterly and annual results, we'd be happy to respond to any follow-up inquiries. There are a few ways to 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 with you 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. For your reference, our quarterly investor handout is also available for a download in a PDF 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. Please note that this conference call will include forward-looking information, which is based on a number of assumptions, and actual results could differ materially. You should not place undue reliance on forward-looking statements, Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today except as required by law. As required by securities laws, we also need to make you aware that during today's discussion, the company will make references to non-IFRS and other financial measures. Gamico believes these measures provide investors with useful perspective on underlying business trends, and a full reconciliation of non-IFRS measures is available at www.cameco.com slash invest. Please refer to our most recent annual information forum and MD&A for more information about the factors that could cause these different results and the assumptions we've made. With that, I will turn it over to Tim.

Well, thank you, Corey, and good morning, everyone. Thank you for joining us to discuss Cameco's fourth quarter and full year 2025 results. Earlier this week, the U.S. Government Department of Energy requested a meeting in Washington, D.C., which turned out to be overlapping with our earnings call this quarter. So, due to the exceptional circumstances, I'm recording these introductory comments just before we release, and then I'm catching a plane to Washington. Needless to say, continuing to advance our landmark partnership agreement signed last fall with the U.S. government to build Westinghouse reactors remains a priority. So I'll lead in with my remarks and hand off to Grant, Heidi, and Rochelle for the Q&A portion of today's call. We're into the second week of February now, but I'll start by wishing everyone a belated Happy New Year. As I reflect on this past year, on one side of the coin, we saw ongoing geopolitical turmoil, incredible volatility, and general uncertainty seemingly at every turn. But on the other side of that same coin, we also saw resilience. People, institutions, and industries adapting, refocusing on the fundamentals, and continuing to make meaningful progress and long-term decisions despite the noise. I'm reminded that progress like this doesn't happen overnight. It's built through consistency, strong communities, great people, and a lot of discipline. If I were to summarize the past year in the context of our business and our strategy, I would say that 2025 reflects disciplined execution across the organization. Discipline, because we remained anchored to our long-term strategy, We've learned to look past the distractions of near-term volatility and shifting market themes. And I believe the execution shows up clearly in our business today. Cameco has invested across the fuel cycle, and we are delivering meaningful value to our owners, customers, partners, and communities. We operate world-class uranium mines in what we call Tier 1 because they're proven to be Tier 1, not only in terms of the quality of the deposits, but the established economics of the operations. Beyond our flagship mining assets, we also maintain proven Tier 2 operations that are currently in care and maintenance, providing future flexibility. Our long-term production plans are further supported by our advanced exploration projects and by some of the best uranium exploration properties on the planet. We operate refining, conversion, and fuel fabrication businesses with the decades of expertise required to be a long-term partner that customers can rely on. We continue to explore our way into next-generation enrichment through our investment in global laser enrichment, where tangible progress is advancing the technology for use in tails re-enrichment. And through our investment in Westinghouse, not only have we added more fuel cycle and reactor lifecycle expertise, but we have insight into the future of nuclear fuel demand like never before. Through that investment, we are continuing to advance deployment of the industry-leading Gen 3 Plus AP1000 reactor in Western markets. It's a proven, construction-ready design, and not unproven concepts, so it aligns with our focus on disciplined execution. Turning to our results, the quarter and the year reflect a strong finish to 2025, supported by robust contributions from all segments of the business, improved realized pricing, and continued value creation from our investment in Westinghouse. As anticipated, the fourth quarter was an important contributor to full-year performance. reinforcing the benefits of our long-term contracting strategy and our measured approach to production and supply. Looking more broadly at the market, 2025 marked another year of accelerating momentum across the nuclear fuel cycle. On the demand side, we saw an inflection, not because of a single data point, but because policy, fundamentals, and contracting behavior increasingly moved from rhetoric to action, Governments, utilities, industrial energy users, and the public have recognized nuclear's essential role in delivering secure, reliable, and carbon-free baseload power. On supply, however, we're not yet seeing a comparable inflection. Long-term contracting volumes in 2025 remain below replacement rate levels, reinforcing the need for continued disciplines. Utilities are focused on securing dependable supply in an environment where secondary supplies are thinning and potential new production faces long lead times, inflationary pressures, and geopolitical uncertainty. While long-term contracting activity increased late in the year, we are simply not prepared to satisfy that demand at today's economics, which do not support sustainable supply. Our discipline is intentional. History tells us that real price discovery occurs when contracting levels reach or exceed replacement rates. We continue to negotiate contracts and unlock value by selectively adding to our long-term portfolio while preserving significant uncommitted volumes to be priced when more demand comes to the market. The pounds we are adding have pricing terms that provide downside protection but allowing us to retain exposure to improving demand. To start 2026, we have commitments to deliver an average of about 28 million pounds of uranium annually over the next five years. Average realized prices continue to improve, reflecting the strengthening long-term market environment. We ended the year with approximately 230 million pounds committed under long-term contracts. Considering the reserves and resources we have in the ground, we are preserving significant uncommitted productive capacity to deploy as fundamentals continue to strengthen. That alignment between long-term contracting and our supply sourcing remains a cornerstone of our strategy. Touching briefly on the results we released this morning, we reported Our annual revenue increased to about $3.5 billion in 2025, up 11% compared to 2024. Adjusted EBITDA was about $1.9 billion, which was up 26% from the previous year. And adjusted net earnings of just under $630 million represent a 115% improvement compared to 2024. Needless to say, we're very pleased with the outcome. The theme of disciplined execution can be seen in our financials, with discipline providing us with the flexibility to manage risk, support operations, and respond to opportunities as markets evolve. Our balance sheet remains a core strength, ending the year with approximately $1.2 billion in cash and short-term investments, $1 billion in total debt, and strong liquidity supported by consistent cash flow generation. Operationally, in our uranium segment, we produced 21 million pounds on a consolidated basis in 2025, exceeding our revised annual guidance. Cigar Lake once again demonstrated its world-class performance, producing above expectations, while MacArthur River and Key Lake delivered in line with our revised plans following the development delays earlier in the year. Importantly, while production volumes from our Canadian mines were lower than initially planned, our supply flexibility and long-term planning of our supply sources allowed us to meet delivery commitments and continue to capture value. Our supply levers include inventory, loans, spot purchases when appropriate, and committed long-term purchases like the production we buy from our JV Inkay asset in Kazakhstan. In 2025, despite a rocky start to the year and a pause in production in January last year, JV Inkay met its annual production target. We took delivery of 3.7 million pounds, representing our share of 2025 production, as well as 900,000 pounds that remained in Kazakhstan from our share of 2024 production. Our fuel services segment delivered another strong year as well, including record UF6 production at Port Hope. Pricing in the conversion market remains at historically high levels, supported by tight supply, growing demand, and a renewed focus on security of supplies. With the tension stemming from a supply deficit and conversion, we continue to add long-term contracts with pricing that underpins the sustainability and the value of our operations. Our investment in Westinghouse continues to exceed the acquisition case expectations. In 2025, Westinghouse delivered strong underlying performance, including a significant increase in adjusted EBITDA. We received cash distributions related to both the strong results as well as an additional distribution in 2025, tied in part to its participation in the Korean nuclear project in Czech Republic. While we do not expect comparable distributions in 2026, the Korean consortium continues to advance the Dukovani project, which Westinghouse will be involved in, along with work on another two-reactor project at the Temelin site in Czechia. Westinghouse's outlook remains strong and reinforces the long-term value of our investment. During the fourth quarter, we announced a strategic partnership between Cameco, Brookfield Westinghouse, and the U.S. government aimed at accelerating the deployment of Westinghouse reactor technologies. Backed by at least US$80 billion in planned investment from the US government, this initiative underscores the growing alignment between policy, energy security, and the only proven nuclear technology that is ready to deploy today. Following the term sheet signed in October, constructive discussions are continuing in support of reaching a definitive agreement As I said, I'm on my way to Washington for the ongoing discussions literally as you listen to this call today. For Cameco, this partnership also supports long-term demand across the fuel cycle and enhances our insight and ability to meaningfully participate in the global nuclear build-out. Looking ahead, we expect growth across the nuclear fuel cycle to continue, driven by electrification, decarbonization, and energy and national security priorities. These are all themes you've heard us repeat call after call, but it's important to reinforce them because they reflect a durability we've not seen before in nuclear. And as the focus on the sector grows, commitments will increasingly be measured by delivery. Plans for a future uranium supply, along with headline-grabbing narratives promising greenfield conversion and Novel enrichment technologies continue to attract attention. But the next phase will be defined by execution. Execution is the proof behind commitments and the foundation of trust. And this is where Cameco's experience, assets, and discipline matter. In 2026, we expect to produce between 19.5 million and 21.5 million pounds of uranium. and between 13 million to 14 million kilograms of uranium product in our fuel services division. JV Inkeye is planning to ramp up to its full capacity of 10.4 million pounds this year, our share of which is 4.2 million pounds. That's accounted for as a committed purchase, along with other long-term purchase commitments. We plan to buy up to 3 million pounds, keeping in mind that we expect to use our various supply levers efficiently, so we're not forced to buy in the spot market if it doesn't make sense. We expect to deliver between 29 and 32 million pounds of uranium in 2026, with an average realized price between 85 and 89 Canadian dollars. Fuel services deliveries are expected to match production at 13 to 14 million KGU, Our outlook for our share of adjusted EBITDA from Westinghouse is approximately $370 million to $430 million US dollars, representing continued strong performance, albeit lower than in 2025. Remember that back in the second quarter of 2025, we accounted for the significant payment related to the Korean reactor built in the Czech Republic, which was $170 million US dollars, for our share related to that specific project. It's a good reminder that as new build activity gains momentum, you can expect some degree of lumpiness in the results from Westinghouse with these big reactor projects pushing forward. So to conclude, we believe the risks to supply continue to be greater than the risks to demand. We believe that Cameco, as a disciplined operator with proven Tier 1 assets, Integrated capabilities across the nuclear industry and a strong balance sheet is well positioned to deliver long-term value. So thank you for your continued interest and support. And operator, the team is now ready to take questions.