Thank you for your patience. Welcome to the Cameco Corporation Second Quarter 2024 Results Conference Call. All participants are in listen-only mode, and the conference is being recorded. After the introductory remarks, there will be time for questions. I will now turn the call over to Cory Kos, Vice President of Investor Relations. Please proceed.

Thank you, operator. Good morning, everyone. Welcome to Cameco's second quarter conference call. I would like to acknowledge that we are speaking from our corporate office, which is on Treaty 6 territory, the traditional territory of the Cree people and the homeland of the Métis. With us today are Tim Gitzel, President and CEO; Grant Isaac, Executive VP and CFO; Heidi Shockey, Senior VP and Deputy CFO; Rachelle Girard, Senior VP and Chief Corporate Officer; Brian Reilly, Senior VP and Chief Operating Officer; and Sean Quinn, Senior VP, Chief Legal Officer and Corporate Secretary. I'm going to hand it over to Tim in just a moment to briefly reinforce the double demand story for nuclear energy and discuss the execution of our strategy in the current market which is positioning us to benefit from the tailwinds. After we will open it up to your questions. Today's call will be approximately 1 hour, concluding at 9:00 a.m. Eastern Time. As always, our goal is to be open and transparent with our communications. However, we do want to respect everyone's time and conclude the call on time. Therefore, should we not have time to get to your questions during this call, or if you have detailed questions about our quarterly financial results, we will be happy to follow up with you after the call. 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 contact tab on our website, or you can use the Ask a Question form at the bottom of the webcast screen and we will 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 then return to the queue. Please note that this conference call will include forward-looking information, which is based on a number of assumptions and that 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. 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. With that, I will turn it over to Tim.

Well, thank you, Cory, and good morning, everyone. We appreciate you joining us on our call today. Hope everyone is doing well and that you are able to enjoy some time this summer with friends and family. Here in Saskatchewan, we're in a bit of a heat wave, something that has become more and more common in many parts of Canada and around the world. Last year in July, for instance, the planet recorded its hottest day on record, and last week we saw a global average temperature that beat that record. Then again, last week, the very next day, we saw it again, a record high global temperature two days in a row. As you can imagine, if you're fortunate enough to have it, demand for air conditioning increases significantly during these times, and countries need safe, reliable, affordable, and secure energy sources to support that demand. Sources that provide base load power that won't make the problem of rising temperatures worse by releasing carbon into the atmosphere. Sources like nuclear. To help avoid some of the worst consequences of climate change, carbon-free nuclear power continues to be highlighted as a central part of the solution, driving durable demand, which we believe is unlike anything we've seen before in this industry. And that's a key theme of today's call, continued demand durability. The support for nuclear energy continues to emerge across governments of all stripes, energy-intensive industries, and within the general public. And that strong support for nuclear energy is generating durable, full-cycle demand throughout the fuel cycle. By that I mean opportunities in the near, mid, and long-term. However, as we have seen over the past few weeks, capital markets tend to be much more shortsighted. We've seen equities in the uranium and nuclear sector being negatively impacted by risk-off factors affecting adjacent sectors, political developments driving questions about ongoing support for sanctions and green initiatives, and uncertain economic indicators. But despite the news cycle and the downward pressure affecting sectors that nuclear has become somewhat associated with, the industry fundamentals remain robust, firmly positioned in the center, enjoying strong bipartisan political support in the U.S. and in many countries around the world. That support and interest is defining long-term demand growth. In the context of the risk-off uncertainty as of late, it's important to remember that governments thinking about long-term energy policy and certain sectors considering carbon-free nuclear for their future energy needs are only a couple of the factors driving that full-cycle demand. The need to replace retiring fossil fuel generation is right in front of us. We have existing energy-intensive industries that need to integrate reliable carbon-free baseload power to reduce emissions today. And with global geopolitical tensions, countries need to secure reliable energy sources right now. Nuclear energy provides that solution. And in a world where the social license to operate has never been more important, self-sanctioning by many countries and companies is already underway to procure nuclear fuel from responsible, reliable, and sustainable suppliers like Cameco. The demand is clearly full-cycle. But as we continue to see durable demand for nuclear energy fuel supply, the long-term cost of that supply continues to be uncertain. Today, we're not seeing investments in significant Greenfield projects that will be needed to satisfy growing demand from reactors being saved and restarted, reactor life extensions, and new reactor builds. There are a few idle production centers restarting, but new supply sources take time. The recent cancellation of permits and the negative developments in Niger, the refusal to renew the lease at Jabiluka in Australia, and the unexpected significant tax increase in Kazakhstan contribute even more to the uncertainty. At the same time, finite secondary supplies from sources like enrichment, underfeeding, government inventory, and excess commercial inventory are rapidly diminishing. So in a tightening market, we're also finding ourselves without the same shock absorbers that we relied on in the past, which leaves the industry very susceptible to any significant interruptions in primary supply. That tightness of supply puts Cameco in an enviable position of having what we believe are the world's premier tier one fuel cycle assets alongside our investments across the reactor lifecycle. As the market transition continues, we are doing exactly what we said we would do with those assets and investments. With every decision we make being guided by our marketing, operational and financially focused strategy. We continue to capture fundamental demand across the fuel cycle and we continue to be selective in committing our uranium inventory and UF6 conversion capacity in order to maintain a contract book that preserves exposure to rising prices while maintaining downside protection. In the second quarter, the spot market was relatively quiet and long-term contracting volume was much lower than last year. The Russian uranium import ban imposed by the U.S. government, which takes effect in early August, and the uncertainty with respect to the waiver process caused many U.S. utilities to step back and reconsider their procurement strategies. And because the nuclear industry is global, certain U.S.-based fuel cycle services use uranium that may be imported from Russia and subsequently re-exported for international customers. The contracting activity of those international utilities is also impacted by the waivers process. So the long-term fuel procurement uncertainty related to the ban goes beyond U.S. utilities. So although utilities are being cautious as they adjust and contracting was slower in the first half, we still expect to see increasing requests in the market with a continued uptick in off-market activity. When comparing the industry's fuel requirements to the level of contract coverage, it's important to remember that contracting can be delayed and deferred, but it cannot be avoided. There's no substitute for the uranium required to run a reactor. While the industry-wide contracted volumes suggest a quieter second quarter, our long-term book of business continued to grow. Our average level of commitments over the next five years increased from 28 million to 29 million pounds per year. And with a pipeline of potential new business under negotiation keeping the marketing team very busy, we carefully manage our supply sources to meet those commitments and retain access to multiple levers to manage risks. Production at our MacArthur River, Key Lake, and Cigar Lake operations is on track, with every pound from these operations already sold, in fact, sold several years ago. As we build our contract book, we continue to evaluate the work and capital requirements to expand our McArthur River and Key Lake operations from 18 million of annual production to the licensed capacity of 25 million per year. If additional supply is required to meet our commitments, we want to be ready to make a decision on expansion. On the fuel services front, we experienced temporary operational issues that impacted the first half of 2024. As a result, our previous UF6 production target of 12,000 tons from Port Hope was reduced. We now expect 11,000 to 11,500 tons of UF6 this year. The adjustment to our UF6 target does not affect our combined fuel services guidance range of 13,500 to 14,500 tons, which includes UF6, UO2, and fuel bundles. And the decrease in expected UF6 production will be managed using our inventory. In both our uranium and fuel services segments, we are pleased to have signed new three-year collective agreements with unionized employees. At MacArthur River and Key Lake, the agreement is in place until December 2025, while at Cameco fuel manufacturing, the agreement expires in June of 2027. In Kazakhstan, production was down at the Inkai operation for the quarter and for the first half of 2024 compared to last year, due primarily to continued challenges with sulfuric acid availability. The current production target at Inkai is 8.3 million for 2024, but that target is tentative and contingent upon receipt of sufficient volumes of sulfuric acid. We are continuing to work with Kazatomprom to determine the exact portion of that production we will purchase this year, as well as the timing of deliveries on the Trans-Caspian transportation route and our planned production for the coming year. However, all of that has become more complicated due to the sudden tax changes that will take effect beginning in 2025. To be blunt, we're becoming increasingly concerned with what we're seeing in Kazakhstan. The government there has introduced amendments to the country's tax code, which includes significant increases to the MET, the Mineral Extraction Tax, beginning in 2025. The surprising and disappointing change appears to have the greatest impact on foreign asset investors, as well as foreign equity investors in Kazakhstan, transferring expected value and profits away from investors and to the government. We're evaluating the changes to the MET, but if it remains as currently formulated, depending on the assumptions used for uranium price, future production profile, and exchange rate, preliminary conclusions indicate that production costs in Kazakhstan would be similar to our northern Saskatchewan operations. The increase in cost is happening at a time when the industry is still in the early stages of recovery, and it impacts about 40% of global primary production. So the global supply cost curve is expected to move up significantly. That would mean higher long-term prices are required for future investment decisions. So more to come as we continue with that analysis and with the discussions with our partner. So those are the key developments so far in 2024 affecting our decisions in the marketing and operational areas of our strategy. Looking at the financial aspects, we are in great shape, remaining on track for our 2024 outlook. We've been diligent in maintaining liquidity and the capital resources to carry our strategic plans with a strong balance sheet guided by our investment-grade rating. With the improving prices under our long-term contract portfolio, progress toward our tier one cost structure, and higher UF6 conversion production, we expect to see strong cash flow generation. During the quarter, we remained focused on debt reduction and prudently executing our refinancing plans. That included repaying another $100 million of the remaining principal outstanding on the term loan we took on for the financing of Westinghouse, and maintaining our prioritization of repayments of the remaining $300 million while managing our liquidity and cash reserves. It also meant that we refinanced the $500 million of senior unsecured debentures that matured in June. To ensure we have the financial tools in place to provide continued flexibility as we move through the year, we plan to file a new base shelf prospectus when our current one expires in October. Looking at our Westinghouse investment, performance to date this year is as expected and aligned with our outlook, including our expectation for adjusted EBITDA from Westinghouse to be between $445 million and $510 million this year. We're continuing to see more opportunities emerging than we valued at the time of acquisition, and we still anticipate adjusted EBITDA growth at a compound annual growth rate of 6% to 10% over the next five years. Before we conclude, I would like to highlight a few changes to our executive team. At the end of June, Alice Wong announced her retirement as Senior Vice President and Chief Corporate Officer. It has been a pleasure to work with Alice during her 37-year career with Cameco and in her current role for the past 11 years. I'd like to thank Alice for her expertise, wisdom, leadership, and outstanding contributions, and I wish her all the best in retirement. Rachelle Girard has been appointed Senior Vice President and Chief Corporate Officer. Rachelle has been with Cameco for 18 years and the investment community knows her very well as the former Vice President of Investor Relations. Cory Kos has moved into her previous role, and Rachelle will maintain executive oversight of Investor Relations and add our human resources, supply chain management, internal audit, and corporate ethics functions to her responsibilities. I'm pleased to welcome Rachelle to the Senior Executive Team. With her knowledge, sound judgment, and leadership qualities, I look forward to Rachelle making a strong contribution as we position the company to leverage opportunities in these very exciting times for the nuclear industry. So with that, I thank all of you for your interest today and we would be happy to take your questions.

Thank you. Our first question is from Alexander Pearce with BMO Capital Markets. Please proceed.

Good morning, Tim and Grant and everyone on the line. It was a very strong performance from the McArthur River this quarter. It looks like you produced more than 60% of your annual guidance, but you've kept guidance essentially unchanged overall, so we know that the McArthur River has done more than 18 million for the whole year in the past. Is there a chance that you can beat this guidance? Do you think that this better quarter through Q2 could mean a new kind of higher level going forward even without having to spend on the expansion, as you move towards the 25 million per annum level?

Thank you. Well, hi, Alex. Thanks for the question. Nice to hear your voice. Well, obviously, we're delighted with the performance of both MacArthur and of course the Key Lake Mill. Last year we were still in a ramp-up phase and didn't quite get to where we wanted to. This year, we're really, really seeing the benefits now of some of the changes we made over the last couple of years, the robotics digitization, things like that, really paying dividends now. So yes, we're on track, in fact, even ahead at mid-year on our production targets. We'll see. We don't like to get too far out in front of the game. We know how things can go, but I would just say right now it is performing exceptionally well. And we'll see what our numbers look like. We'll continue to update you and the market going forward. But right now, we're well on track.

Can I just follow up on the same question, essentially just ask what part of the asset is currently the bottleneck that probably needs a little bit more work for you to be more confident of consistency through the year?

Do you mean to increase production higher than the 18, Alex?

Yes, exactly, to kind of keep the run rate that you've achieved through this quarter.

I believe we have made significant progress and currently do not face any real bottlenecks. We are testing the capabilities of our facilities, and as I mentioned, we are ahead of schedule. However, we must remember that unexpected events can occur, as we've experienced in previous years, which could cause downtime. Fortunately, that has not been the case so far, and things are going very well. Looking ahead, we are exploring the potential for sustainable production increases at MacArthur and Key Lake. We have received licensing approvals to ramp up to 25 million at both sites. If market demand arises for those pounds, they are the highest quality available. At this point, we are assessing what it would take to mitigate risks and remove bottlenecks so that we are prepared when the market requires it, and our marketing team will notify us in advance of any new contracts. If necessary, we will have ample time to address any de-bottlenecking or risk management. We are actively evaluating this situation. From Cameco's perspective, these are prime pounds to focus on, consisting of tier one resources from established facilities supported by a reliable workforce and government. With a stable tax regime, we are proud to operate in Saskatchewan.

Right, Thanks Tim.

The next question is from Neil Mehta with Goldman Sachs. Please go ahead.

Good morning Tim, Grant and team. I want to build on your comments on Kazakhstan, which has been in focus for investors, given the ongoing sulfuric acid shortage along with the MET commentary that you referenced. How should we be thinking about that Inkai business in the near term in terms of both volumes and margins? Can you just expand on your latest thoughts about operating in that region?

Let me be clear from the outset that we've had a long-standing and positive relationship with Kazakhstan and Kazatomprom over many, many years, decades in fact. So that's the foundation. I'd say, as I said on the call, we’re increasingly concerned about what we're seeing now. I mean, that MET or that mineral extraction tax change that kind of got sprung on us for sure and everybody else, no notice, no consultation, and it's significant. It really makes us gives us great concern, I would say, and where that's going to go. So we haven't had a chance to talk to our partners about it yet to see what their views are. I mean that just adds to some other things we've been seeing over the last while. Kazakhstan's in a bit of a tough neighborhood there as we know. And so there's been the sulfuric acid issues that we've been dealing with and trying to get a grip on. You'll probably hear more from Kazatomprom in a couple weeks on where that's going. The transportation, the Trans-Caspian route that we've had to move to, that's new from when we started. We're still discussing production levels and allocations, Sean Quinn and his team with the Kazakh. So it's just becoming a bit more complicated than we like, and so that's causing us some concern.

Thank you for that. And then the follow-up is just around Westinghouse, a very solid quarter after a little bit of a softer Q1. Can you just talk about how that business is being folded and you are referencing additional opportunities relative to which base case when you when you announce the deal and how do you think about the 2H in 2025 set up for Westinghouse?

So I would just open and I'll turn over to Grant, who's on the rep on the board there, but saying that we're even happier with the Westinghouse deal; it's looking even better than the day we made the deal or closed the deal. It's really looking positive; there are so many opportunities going forward, but Grant you wanted to talk to them.

Yes, happy to. Thanks Neil for your question. Obviously, no change to our outlook for Westinghouse for 2024. And you also referenced kind of going forward where are the positives and what we should be looking for and just a reminder that we like to characterize Westinghouse as having kind of two main components. One, you might want to call the core; we think of that as the nuclear fuel and the operating plant systems business, very stable, highly recurring and enjoying the tailwinds that we're seeing across the Western nuclear fuel cycle for sure. So that's the expansion of new markets, Central and Eastern Europe with their VVER fuel manufacturing capability. It's the reactors being saved, reactors going through life extensions as well as new builds that create additional opportunities for Westinghouse among their traditional customer base. It's new product offerings, the expansion more into the BWR market away from just the PWR market for Westinghouse is an exciting opportunity. Of course, fuels like LEU Plus, accident-tolerant, higher burn-up fuels, all creating additional opportunity. And don't forget, the core of the business would also include the Springfields plant in the U.K., which is a very important industrial complex to achieve not just the U.Ks nuclear ambition but also its participation in the Sapporo 5 Western group of companies looking to secure the fuel cycle. So lots going on in the core to watch for. We're very excited about, and of course, energy systems. Energy systems are enjoying the tailwinds of a world that realizes it needs new power. It needs power that's reliable, power that's clean, power that is dispatchable, and increasingly the demand is so significant that conversations have restarted in earnest in most jurisdictions about gigawatt scale new build, and of course that AP1000 offering is the best performing gigawatt scale reactor on the planet. So it's a very exciting outlook for Westinghouse, one we continue to be watching very closely, and their participation in both the fuel and reactor cycle is very, very strong.

Thanks, Grant.

The next question is from Ralph Profiti with Eight Capital. Please go ahead.

Thanks, operator. Good morning to Cameco and the team. Tim, when it comes time to open a dialogue with the Kazakhstan government, just wondering if that's going to take the form of Cameco acting alone with its joint venture partners, or will there be more sort of an industry lobby dictating or at least addressing the concerns and how it may impact future capital allocations decisions?

Yes, Ralph, I don't know the answer to that. Obviously, we know our Orano friends have a big joint venture over there with the Kazakhs, and there's some Japanese players as well. So our interest, we know the Kazakhs well enough, both at the government level and at the Kazatomprom level. We'll be meeting with them to talk about what's going on, and especially this mineral extraction tax piece, and put our positions forward. I'm certain that the other companies will be doing the same. And no doubt we'll run into them first week of September in London at the big World Nuclear Association meeting that everybody shows up to. So there'll be lots of discussion about it there.

No, Ralph, I just want to jump in here and just remind everybody that there are broader industry implications by the events that we're seeing in Kazakhstan that we shouldn't lose sight on. Of course, as Tim referenced in the outset, when you see the kind of moves like we've seen with the Mineral Extraction Tax and the complications around some of the supply chain challenges, this just all suggests that the global cost curve for uranium has gone up, which then means that we need to see more sustainable, higher pricing to incent new supply, in particular new supply from elsewhere. So there is a broader industry implication that's actually very constructive. The days of easy, cheap pounds coming out of Central Asia are effectively over. And then I do want to tie it to the Cameco context. Strategically, we have always had a diversified portfolio of production. That has been our strategy. That's not an accident. That is a deliberate portfolio approach we've always had. So yes, costs going up in Kazakhstan and uncertainty going up in Kazakhstan impacts Cameco roughly to about 10% of what we would expect to meet our committed sales. But it's 40% or a little bit more of the global supply of uranium. So the impact on the market is actually more significant than it is for Cameco. And effectively, the value transfer back to our sovereign safe Tier 1 assets, and quite frankly, our Tier 2 assets that remain in care and maintenance, is always to the benefit of our investors. So we may spend a bit of time talking about Kazakhstan, but I don't want to lose sight that it actually reinforces this strategic fundamental view that we think is very constructive. It's yet more uncertain supply in the face of durable demand. And Cameco's strategy is deliberately resilient to these kinds of events.

Great. Thank you. I appreciate that. If I can ask a follow-up question on replacement rate contracting and whether or not it has come as a surprise to you, Grant, on the trajectory of 2024. How much of that is a pause due to HR 1042 or perhaps the Kazakhstan 2025 guidance perhaps causing a pause?

I would remind that we've been working towards replacement rate contracting for some time. If you look past the volatility in the spot market, you see a very strongly performing long-term price of uranium. It's up significantly year-to-date. There is very strong momentum for continued price discovery in term contracts on very small volumes. That's a very interesting fact that very little volume has gone through the market and yet we're still seeing constructive pricing in that term market. Do not lose sight of that. That indicates just how tight and just how thin the market is. And it indicates it really shines a light on why we're very constructive about the price and adding to my earlier comments about that global cost curve is just going to cost more than the supplies that we always used to count on. So when you think about the factors that are causing maybe some delay in returning to replacement rate, there is some uncertainty in the market and I think it is giving pause. If you look at the U.S. situation with respect to the Russian ban, of course, we now see legislation. That legislation says Russian material is out except for a waiver period between now and 2028. And that waiver period allows for utilities who entered into contracts with the Russians under good faith at a time when they were considered reliable suppliers to appeal to the Department of Energy and say that they should be able to continue to take delivery of material. And we've seen a few waivers granted already. So there's a bit of a pause if you will to try to understand whether these waivers are going to have teeth or whether these waivers are going to be very easy. And if the waivers are very easy, then that will take a little bit of pressure out of the near term of the market. That doesn't mean it's going to diminish the future demand, be it 2028 and beyond. We still see a lot of off-market activity there, but it just takes a bit of near-term pressure out of the market. But always important to remember that the longer that Russian material flows into the U.S., then the bigger the gap is going to become when the day arrives that no more Russian material is allowed in the market. So if you think about it, it may delay, but it won't prevent a shift to the higher prices that are required in order to incent production. So this is why we remain disciplined. This is why we remain forward-focused with our contracting because we see a very constructive setup occurring. And once these factors have cleared and there's a bit more certainty, we do expect the type of demand approach replacement rate. And of course, if it goes beyond, that will be a very, very constructive time in the market because we've never been at these prices at a below replacement rate scenario before. So I would say that the opportunity for upside appears to be much, much greater than the opportunity for downside.

Got you. Yes, those are very helpful answers. Thank you. And congratulations to Alice on her retirement and Rachelle and Cory on their new appointments.

Very kind of you. Thanks, Ralph.

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

Hey, good morning. With respect to contracting, it's great to see some volumes being added for the next five years, but I imagine a lot of the activity taking place happens beyond 2028. So can you just talk about some of the contracted volumes into the late 2020s and into the 2030s?

Grant?

Yes, I just mentioned in my previous answer that we still see a very constructive market. Remember, in the term space, it's quite common for a lot of the demand to come off-market, meaning not through RFPs that are easy to track, but bilaterally where utilities come directly to suppliers. In this type of market, where the underlying trend is strong, the term price continues to go up on low volumes, and we haven't seen that big rush of demand. These are exactly the conditions that we've talked about before, Andrew, that lead themselves to an incumbent’s recovery. That off-market demand comes to those who have licensed, permitted existing production with brownfield leverage opportunities, and now with that sovereign, safe, Western platform of production, Cameco is the primary beneficiary of that kind of demand that comes to the market. So it continues to build, term price continues to go up. We're seeing, if you look at the reporting from TradeTech, for example, $70-plus escalated floors, $135 escalated ceilings, and of course Cameco, with our position, tends to be able to even outperform those markers as we move forward. So we are really happy with our position in the market, and we are being somewhat fussy about the terms and conditions that we would settle for as this market evolves for the reasons I spoke about. Demand is durable, supply is increasingly uncertain, not just Kazakhstan, but look at what's going on in Niger and elsewhere. That supply cost curve, that supply risk has gone up in just the past few months. That puts us in an extremely strong position.

Okay, great. And maybe just switching to Westinghouse a bit here, is there anything you can talk about with regard to the IP dispute between Westinghouse and KHNP, and is there a path for Westinghouse to participate in KHNP builds like the one in the Czech Republic?

Yes, we're certainly happy to make a few comments on it, recognizing of course that it is a legal dispute between KHNP and Westinghouse. But that Westinghouse technology, the instrumentation and control and the fundamental reactor technology is pretty strong. It's the best performing reactor on the planet, so no surprise, it's kind of the baseline for best-in-class pressurized water reactors. Over the years, as partnerships developed between Westinghouse and others, the sharing of technology was common, and now what we see is a dispute based upon a belief at Westinghouse, and shared certainly by Cameco and Brookfield, that there are really critical elements of the Korean technology that are effectively Westinghouse's. And so the dispute is really the ability of Korea to use that technology in foreign jurisdictions. That dispute is going through a relatively normal dispute resolution, with of course the opportunity that maybe at some point Westinghouse and Korea can come together and recognize that there might be an industrial partnership that makes sense to deliver gigawatt scale reactors globally. So we'll see how that works out. But we believe in Westinghouse's position on this dispute, we stand behind it, and we think that they're taking the right approach, and that countries that are choosing the Korean technology without adequately engaging Westinghouse may find themselves on the wrong side of a technology transfer law in the U.S. So it's got a ways to go, but I wouldn't rule out Westinghouse in markets like Czechia at this point.

Okay, and just on that, I'm assuming that means none of that business is included in your guidance for Westinghouse?

Oh yeah, sorry Andrew. So remember we have a 6% to 10% CAGR growth rate on Westinghouse's EBITDA over the next five years. And that 10%, that upside was really only reflecting the very beginning of some of the energy system new builds. So in Poland where 6 AP1000s have been awarded, there's an assumption made that the first three of those six are in the very early stages of the front-end engineering and design contracts. And in Bulgaria where 2 AP1000s are awarded, there's only an assumption about the first of the two in the front-end engineering and design. So additional announcements are only going to add upside to that energy systems profile. So obviously a very exciting opportunity, but these are big binary decisions and right now it's a very conservative view on energy systems in that Westinghouse outlook.

Okay, thank you very much.

Thanks Andrew.

Thank you. Our next question is from Orest Wowkodaw with Scotiabank. Please go ahead.

Hi, good morning. Perhaps another question about just contracting philosophy here. I’m not sure, a bit surprised to see that the average, the five-year contract books crept up. Is the implication of that, that you are receiving very favorable terms from utilities? Cause it certainly seems like you guys were stepping back to be more discerning with what customers and what terms are embedded in those contracts. So the right way to think about that increase?

Yes, that's the right way to think about it. As we, with each year that rolls off, we are able to move away from contracts that are older to contracts that are newer. I mean, the magic of the nuclear fuel cycle is that you contract on a long-term forward basis. Now, that also creates a situation where the contracts that you're negotiating in the market today may or may not be reflective of the market at the time of delivery. So if you take a slice through our 2024 deliveries, you'll see contracts that were entered into many years ago, and this might be the last year or two of delivery. And then you just roll back and say what were terms and conditions like back then. Part of those contracts were caught, might be in the middle of a contract signed a few years ago. And then now we're starting to see the early stages of those first contracts signed as the market has really gone through a transition. As we roll forward, we just continue to capture that value. So we like to say, while we don't get spikes the day they arrive in the spot market, our contracting strategy takes those spikes and knocks them sideways and buries them into long-term cash flow and earnings. And so now we're seeing those improving terms and conditions in those outer years of the table. But remember that table only reflects what we're committed to sell. What's missing from that analysis is all the pounds we haven't yet contracted in that window, which of course is by definition market levered to a market that we're finding very constructive. So this is how it works in a long-term contracting business. You capture the demand that's for you before you. You're very disciplined and selective in the terms and conditions that work. And you like to be in a position with a contract orientation in an up-market, not a down market, and that's where we find ourselves.

Okay. Just as a quick follow-up, I mean, you're up to 29 million average committed for the next five years. Should we anticipate that potentially continuing to creep up towards your sort of sales volume target of 32 to 34? Is that kind of the end game here?

Well, I would say we respond to the quality of the demand that's come to the market. Instead of saying we have an absolute hard sales target that we're pursuing on a volume basis, think of it as we are capturing the demand that's coming. And we'd already talked about earlier in the call, we're not even at replacement rate yet. So we're in a market that has not yet found enough demand to even replace what's consumed on an annual basis, let alone beyond. So think about it as we would prefer to be a bit more disciplined right now, which we are. We could probably place more volumes if we wanted to. But the issue is making sure they're at acceptable terms and conditions, meaning giving us acceptable upward leverage in the market. So when you think about that five-year portfolio, we always like to be covered in the year because there's no in-year demand. We've talked about that before. It's why we're not a spot exposed producer. We like to be covered next year because there's not a lot of next year sales that are fundamental and high quality. But then as we roll out into years three, four, and five, we like those commitments to come off because we want to be positioning a new supply into a market that we think is constructive. That's always been our strategy, continues to be our strategy. So I would say watch more for the demand numbers that are coming in order to think about how we're responding, but don't think of us as having a hard volume sales target because then we would just be chasing the market and probably not discovering the terms and conditions that we would want.

Thanks, Grant.

The next question is from Lawson Winder with Bank of America Securities. Please go ahead.

Thanks very much, Operator. Good morning, everyone, and on that extent, congratulations as well to Rachelle, Cory, and Alice. I wanted to ask about the conversion market and just get your views on conversion spot pricing versus long-term pricing. So we haven't seen the spot conversion price move to the spot price the way that we've seen in the spot U308 market. Do you have a view on why that might be and what might cause that gap to close?

The conversion market is very, very tight for the simple reason that existing facilities are in care and maintenance. So we have four Western facilities, obviously. Cameco's, Port Hope, conversion facility. You've seen our guidance on that. We've pulled it back a little bit relative to what our 2024 initial target was. Got a facility in the U.S. that looks to be holding at 7,000 tons of conversion, but it's run at more in the past. You've got a French plant not running at its original design capacity and an idle plant at Springfields. That's what's keeping real tightness in the conversion market. The conversion market is also one where, if you need a conversion today, there just isn't any kicking around. Uranium has a bit more option. There are more producers. There are producers in the uranium space that tend to be less disciplined, less focused on the long-term market. Conversion doesn't really suffer from that. It really only has actors in it who sell on a term basis. So the conversion that you might say would be spot is just incredibly hard to come by. But it's not where the vast majority of the work is being done. But let's not forget that the term price in conversion is at historic levels. And we expect that tail to continue because of the delays in getting all of the conversion producing centers up to full production in the Western world. So conversion has a very good tail of strength for the next little while for sure until more capacity comes on. But it's not really a spot market, so I wouldn't get too focused on thinking conversion's going to close with spots, but where conversion is sitting at right now on a term basis is historic and expected to continue.

Okay, great. Thanks for the comments, Grant. Also wanted to get a sense of your views on M&A. And so just in light of recent activity in the Athabasca basin as well as a view from Investment Canada that they will be approaching foreign acquirers with increased rigor, does this maybe open up a window for Cameco to look at potentially consolidating in the Athabasca basin? And I might front-run your answer and acknowledge that obviously Cameco doesn't need to do that, but there's always opportunities and chances to be opportunistic. And I would just like to get your views on that in particular.

Well, we always appreciate when analysts answer their own questions, so we appreciate that Lawson. So you're right, what I'm going to say. You heard me earlier say that the best pounds on the planet are already in our portfolio, the MacArthur River. If we took it up to full speed, it would be a 7 million increase. There's not another 7 million producing facilities sitting out there waiting to go anywhere. And so, I mean, that would be our first run. And then we'd look at our tier two assets that we have. Rabbit Lake is sitting there. We've got Wyoming, and we've got Nebraska that are on care and maintenance that we could bring on if the market calls for those pounds. And then we have our own Greenfield projects as well. And I don't want to miss out to GLE that we're working very hard on as well. That project down in the United States is very attractive to the U.S. utilities and U.S. government. And that goes back to Grant's last answer on conversion. If we get that going and start to re-enrich those depleted tails, I mean, that brings uranium and conversion back to the market. And so that's another option for us. I don't say we're made any decisions on that, but we're working on that project as well. And so we've got a stable or a suite of projects that we'd love to get after our own. So we're not looking for anybody else's. We're focused on our own assets.

Thanks very much.

Yes, thanks, Lawson.

The next question is from Gordon Johnson with GLJ Research. Please go ahead.

Hey guys, thanks for taking the question. I guess just taking a step back, a lot of the question I've been asked, but just looking at some of the positive news that's come out, you've had China lost the construction of a new, 1250 megawatt reactor; you had Biden signed the Advanced Act; you had an SMR announced in Canada and Saskatchewan; a number of positive news stories out of Europe with respect to advancing nuclear yet prices seem to be stuck. So I just wanted to get your thoughts on why that may be and what your outlook is near-term. Thank you.

Yes, I think we've already discussed the pricing situation regarding the Russian Act in the U.S. and the current state of waivers and summer sluggishness. Let’s focus on the exciting aspects. We are witnessing unprecedented interest in nuclear energy from utilities, governments, policymakers, and the public today. We recently listed countries that have committed to developing new nuclear facilities. At COP 28 last December, 30 countries pledged to triple their nuclear power capacity, and this commitment has been reiterated at various conferences since then. Countries like Canada and Ontario are planning 18 new gigawatts of nuclear power. During the Vogel opening a couple of months ago, Secretary Granholm highlighted the need for 198 more reactors in the U.S. This reflects the strong demand we are experiencing globally. We also see older reactors like Duane Arnold in Iowa and Palisades TMI ready to come back online, which, although it takes time to restore, are not new builds. On the uranium and fuel supply front, as Grant mentioned, we are facing a lot of instability. Some companies are struggling in the current chaotic environment. However, I don't believe this instability is going to persist. The supply-demand fundamentals remain solid, with around 2 to 2.2 billion pounds of uranium to be contracted by 2040, averaging about 150 to 160 million pounds per year and on the rise. Therefore, we aren't worried about the underlying fundamentals or any short-term price dips. We are still seeing historic price levels, and the term price, which is what we monitor, is strong. We are very optimistic about the future.

One last one if I could. Some of the naysayers out there have argued that if slash when prices fall we could see some of the financial buyers step in and begin to sell product. Do you guys address that and give us your time to kind of what that means?

Yes, it's a phenomenon that we've seen before in the market. If you think about that 06, 07 price run up, I would say the last marginal buyers were financial interests and the first marginal sellers were financial interests. It's why we never go out of our way to support that. What is different this time though is I think the orientation or commercial strategy of some of the big financial buyers and that is to really look at uranium as an almost precious metal as saying there's an intrinsic quality to an energy supply that will hold value. And so we haven't actually seen any evidence that some of the big holds or the big funds have any interest in selling and we haven't seen any leakage out of those funds. Now there are some private holds and that material does make it back into the market. I think maybe you could see a bit of material coming into the spot market as a result of that, but that doesn't change the fundamentals in any way. The fundamentals are still that term demand is growing as evidenced by the uncovered requirements. I would add to that that uncovered requirements don't capture inventory building. We're starting to see very strong evidence of utilities beginning to build new inventory policies, both independent utilities as well as sovereign buyers looking to acquire very significant volumes. Now these are one-time, but they're going to hit at a very tight market as well. So if you look at the gap between supply and demand, there really isn't a pocket of uranium that is big enough to affect the fundamentals in any substantial way. It might create a bit of softness if it's all dumped into the spot market, then we'll quickly move through it and we're back on the fundamentals. Because remember, as primary production is underperforming demand, we no longer have the shock absorbers of secondary supply that we used to have. This is a very constructive market and I wouldn't be taking the bet. I wouldn't be taking the bear bet.

Thanks for the question, Grant.

Thank you.

And the last question is from Brian MacArthur with Raymond James. Please go ahead.

Good morning and let me start again by congratulating Alice on her retirement after all those years and also Rachelle and Cory on their new position. Two quick questions in the interest of time. Just on MacArthur River, it obviously had a very good production quarter. Can I read into that, was that grade-related or something unique to the ore body, or is that actually starting to demonstrate the potential of the mine? You talked about being licensed for 25 million. Then the bottleneck to get up there, the mill versus the mine. And my second question goes back to the statement saying costs are similar potentially based on a whole bunch of assumptions, I get it, between Kazakhstan and northern Saskatchewan right now. Are we talking, when you do that, just out of curiosity, what sort of price are you basing at that? Because I assume it compares costs in the northern mines including graduated royalties versus royalties in Kazakhstan. Thanks.

Thank you, Brian. So on the operational front, let me turn it over to Brian Reilly, our Chief Operating Officer, and then Grant, maybe you can chip in on the cost comparison. So Brian, just on the operations at MacArthur Key.

Sure. Thanks, Tim. And Brian, great question. Let me just say it's all about the mill, Brian. This is not a grade issue in terms of mine production. And Tim alluded to this. For the past, I would say the past two quarters, we have this mill running at steady state, and so those investments we made in digitization, automation, robotics, they're starting to pay dividends now. So we're seeing the results of those investments, Brian. So this is all about the mill operating at a very high level at the moment.

Grant?

Yes, and Brian, like more to come, as Tim mentioned, we're evaluating the proposed tax increase and its implementation, and there are a number of assumptions that need to go into it. But the comment was more of a general comment that if you look on sort of an average unit cost of sales basis that rolls in things like taxes and royalties, that cost advantage in Kazakhstan seems to be gone. And yet it's a higher risk jurisdiction. So the benefit to a MacArthur and a Cigar and a Rabbit and our U.S. assets is clearly in Cameco's favor.

Great. Thanks very much.

Thank you, Brian.

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

Thank you very much, Jaylene, and thanks to everyone who joined us today. As Cory noted in the intro, if you have any detailed questions or follow-up you want on the second quarter results or any questions that we didn't get a chance to answer today, please send those in, and we will be absolutely happy to address them directly. So we're a responsible commercial supplier with a strong balance sheet, long-lived Tier 1 assets, and a proven operating track record. We're invested across the nuclear fuel and reactor life cycles and believe we have the right strategy to achieve our vision of energizing a clean air world, and we'll do so in a manner that reflects our values. Embedded in all our decisions is a commitment to address the risks and opportunities that we believe will make our business sustainable over the long-term. So thank you all again for joining us today. Stay safe and healthy and have a great day. Thank you.

This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.