Cameco Corporation Q4 FY2024 earnings call

• Strong 2024 results: Delivered strong fourth quarter and annual net earnings and adjusted net earnings, reflecting return to Tier-1 production, higher sales volumes, and improved average realized price.
• Market conditions: Supportive market conditions across the nuclear sector, with positive outlook for installed reactor base, reactors returning to service, and new builds. Westinghouse's adjusted EBITDA was very strong.
• Uranium production: McArthur River/Key Lake had exceptional production in 2024, Inkai production impacted by supply chain issues, Cigar Lake short of plan. 2025 plan is to produce 18 million pounds at McArthur River/Key Lake and Cigar Lake each.
• Balance sheet: Strong balance sheet, successfully refinanced $500 million in unsecured debt in 2024, extended maturity to 2031, and fully repaid $600 million U.S. floating rate term loan used for Westinghouse acquisition.
• Recent developments: Inkai production halted in January due to regulatory document issues, resumed on January 23; Westinghouse reached resolution in technology and export dispute with KEPCO and KHNP, received first distribution of $100 million with Cameco's share being $49 million.

In the Uranium segment, Cameco delivered just under 34 million pounds of uranium in 2024, producing about 23.4 million pounds. The McArthur River/Key Lake operation had very strong production, with 20.3 million packaged pounds in 2024, setting a new annual production record for the Key Lake mill and a world record for any uranium mill. Inkai production was impacted by ongoing supply chain issues in Kazakhstan, resulting in 7.8 million pounds in 2024, about 600,000 pounds lower than 2023. Cigar Lake also fell short of its plan due to challenges at the McClean Lake mill. The Uranium segment's long-term book of business now totals approximately 220 million pounds of uranium.

• Plan to produce 18 million pounds on a 100% basis at McArthur River/Key Lake and Cigar Lake in 2025.
• Expect strong cash flow generation in 2025.
• Successfully refinanced $500 million in unsecured debt in 2024, extending maturity to 2031.
• Fully repaid $600 million U.S. floating rate term loan used for Westinghouse acquisition as of January 2025.

• U.S. tariffs on Canadian energy: Monitoring the threat of U.S. tariffs on Canadian energy, currently no material expected impact but uncertainty around details.
• Supply chain issues: Ongoing issues at Inkai related to sulfuric acid supply affecting production plans.
• Geopolitical uncertainties: Impact on uranium and nuclear fuel supplies and services, with focus on durable demand and growth despite geopolitical changes.

Q: Adam Wijaya asked about current contracting activity in the term market and why fuel buyers might be sidelined.

A: Tim Gitzel passed to Grant Isaac who emphasized term prices were up, term volumes down, and the term market signals not at production economic pricing. Cameco is patient, focusing on downstream conversion prices and waiting for stronger term market formation.

Q: Andrew Wong asked about AP1000 builds, Westinghouse's resolution with KEPCO/KHNP, and impact of lifting Russian sanctions on uranium market.

A: Grant Isaac discussed AP1000 opportunities, Westinghouse's collaboration with Korea, and noted lifting Russian sanctions is unlikely to significantly impact uranium market due to strong supply demand fundamentals and Cameco's growth plan not dependent on it.

Q: Alexander Pearce asked about mitigating steps for U.S. tariffs and McArthur River production guidance.

A: Tim Gitzel and Grant Isaac discussed contracting provisions to place tariff responsibility on buyers, positioning material to avoid impact, and McArthur River production guidance of 18 million pounds indefinitely with focus on supply discipline and asset reliability.

Q: Orest Wowkodaw asked about tariff impact on contract behavior and U.S. utility customers.

A: Tim Gitzel and Grant Isaac explained tariffs are buyer's responsibility in new contracts, U.S. utility demand is inelastic for contracted volumes, and Cameco is diversified with broader market opportunities.

Q: Lawson Winder asked about conversion market, Westinghouse EBITDA guidance, and growth differentiators.

A: Grant Isaac discussed need for clear market access rules and long-term contracts for conversion restart, and Westinghouse growth guidance is conservative, with 6% to 10% growth depending on project triggers like final investment decisions and collaborations.

Q: Craig Hutchison asked about Westinghouse return of capital strategy and capital expenditures.

A: Tim Gitzel said Westinghouse's return of capital is an evolving situation, with decisions based on whether to leave money with Westinghouse for investment or take distributions, and capital expenditures are for revitalization and optimization to prepare for future uranium price increases.