Cameco Corporation Q3 FY2024 earnings call

• Cameco continues to improve operational performance and return to a Tier 1 cost structure.
• Dividend increased from $0.12 in 2023 to $0.16 per common share for 2024, with a plan to double the 2023 dividend to $0.24 by 2026.
• In the uranium segment, Key Lake Mill production boost from automation projects, and Inkai production challenges due to acid delivery delays.
• Fuel services segment saw strong production due to a new closed-loop system.
• Westinghouse investment performance impacted by purchase price accounting, but long-term outlook remains positive.
• Focus on debt management, with $100 million additional repayment on Westinghouse acquisition loan, reducing year-to-date repayments to $400 million.

In the uranium segment, Key Lake Mill production is expected to be about 19 million pounds (up from 18 million previously) due to automation, digitization, and optimization projects. JV Inkai production is now expected to be about 7.7 million pounds, down from 8.3 million previously due to sulfuric acid delivery timing issues. The fuel services segment had 60% higher production than the third quarter last year, aided by a new closed-loop water system at Port Hope that eliminated the annual summer maintenance outage.

• Westinghouse has a 6% to 10% growth rate outlook over the next five years, conservative pending final investment decisions on new builds.
• Cameco's annual outlook remains largely unchanged except for supply source realignment and U.S. dollar impact on Westinghouse's average realized price, revenue, and adjusted EBITDA.
• Dividend growth plan aims to at least double the 2023 dividend to $0.24 per common share by 2026.

• Uncertain future uranium supply due to lack of significant investments in projects to meet demand.
• Issues at JV Inkai related to sulfuric acid delivery delays affecting production.
• Spot market volatility impacting long-term contracting, with spot price softening causing uncertainty in floor and ceiling prices for long-term contracts.

Q: Ralph Profiti asked about long-term contracting shifting and Westinghouse's EBITDA growth rate.

A: Tim Gitzel and Grant Isaac responded that contracting is shifting upstream, and Westinghouse's 6-10% growth rate is conservative pending final investment decisions on new builds.

Q: Adam Wijaya asked about Inkai and inorganic growth.

A: Tim Gitzel said Inkai issues are transitory, and Cameco focuses on Tier 1 assets like MacArthur River Key Lake, with Tier 2 assets on care and maintenance and Greenfield projects ready.

Q: Andrew Wong asked about MacArthur Key Lake production and the U.S. Amazon-Talon deal.

A: Tim Gitzel and Grant Isaac discussed MacArthur Key Lake's production potential without significant new capital and viewed the U.S. deal as a positive for new nuclear behind the meter.

Q: Lawson Winder asked about uranium pricing and cost inflation.

A: Grant Isaac said uranium fundamentals are positive with structural supply-demand gap, and Cameco's automation projects at MacArthur Key bent the cost curve ahead of inflation.

Q: Craig Hutchison asked about Westinghouse and uranium sales seasonality.

A: Heidi Shockey and Grant Isaac explained Westinghouse's seasonality with stronger second half and Cameco's Q4 uranium sales due to committed deliveries.