Earnings Call Transcript - CCJ Q1 2023

Operator, Operator

Thank you for standing by. This is the conference operator. Welcome to the Cameco Corporation First Quarter 2023 Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Webcast participants are asked to wait until the Q&A session is started before submitting their questions as the information they are looking for may be provided during the presentation. I would now like to turn the conference over to Rachelle Girard, Vice President, Investor Relations. Please go ahead.

Rachelle Girard, Vice President, Investor Relations

Thank you, Operator, and good morning, everyone. Welcome to Cameco’s first 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 Cree Peoples and the homeland of Métis. With us today on the call are Tim Gitzel, President and CEO; Grant Isaac, Executive VP and CFO; Heidi Shake, Senior VP and Deputy CFO; 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 discuss how the improving growth outlook for nuclear power is translating into an improving growth outlook for Cameco. After this, we will open it up for your questions. As always, our goal is to be open and transparent with our communication. Therefore, if you have detailed questions about our quarterly financial results, or should your questions not be addressed on this call, we will be happy to follow up with you after the call. There are a few ways to contact us. 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 joined 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 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.

Tim Gitzel, President and CEO

Well, thank you, Rachelle, and good morning, everyone. I hope everyone is doing well. We appreciate you joining us on our call today. Let me start today by saying how excited we are about the growth opportunities ahead of us with demand for clean, reliable, secure, and affordable baseload electricity coming from across the globe. In fact, I’m not sure there has ever been a better time to be a pure-play investment in the growing demand for nuclear energy, and that is exactly how we have positioned Cameco. From the results we published earlier today, which clearly demonstrate the strength and purpose of our strategic decisions, to the continued support we see developing for nuclear power around the world, our optimism continues to grow. I attended an event about a month ago, the dinner with Prime Minister Trudeau and President Joe Biden, which took place in Ottawa. The related meetings and public statements that followed exemplify, without a doubt, the scale and scope of the opportunity in front of us. At the dinner, the two leaders discussed the critical role of nuclear energy and the importance of nuclear collaboration between Canada and the U.S. It was almost hard to believe, like a dream come true. Nuclear Energy would never have made top billing at a meeting between our countries even a few years ago. So it gives you a sense of just how important nuclear power and the fuel cycle to support it have become, and how critical Cameco’s role is in achieving this North American vision. In fact, I sat between Canadian Natural Resources Minister Jonathan Wilkinson and U.S. Secretary of Energy Jennifer Granholm, where we continued the discussion around Cameco’s role in North American Nuclear Energy Security. The dinner was followed up by the joint statement between the U.S. Department of Energy and Natural Resources Canada on nuclear energy cooperation. I don’t know if you have read it yet, but I can tell you it is really positive and puts nuclear power front and center. It is the kind of signal from government that our industry has been waiting for a long time. And while the statement was largely focused on North America, it went further, addressing the need to work together globally as the world grapples with providing clean, reliable, affordable, and secure energy. Furthermore, at the recent G7 meeting in Japan, five of the G7 nations—Canada, the United States, the United Kingdom, Japan, and France—created an alliance to leverage their respective civil nuclear sectors. This agreement will support the stable supply of nuclear fuels, as well as the nuclear fuel needs of future advanced reactors. Every day in the news, you will find more examples of that same sentiment being expressed. Whether it is the improving public opinion for nuclear power, changing policy decisions in support of nuclear, or market-based solutions being pursued, there is increasing evidence of the strong momentum for nuclear, evidence that supports full cycle demand growth for nuclear power and the uranium fuel required to run the reactors. The positive fundamentals you have heard us discussing for nearly a decade are no longer just a long-term story, they are right in front of us, and the picture is stronger than ever. We are seeing the reversal of early reactor retirement decisions, which represents unexpected near-term demand. As some utilities look to replace Russian fuel in their supply chains, we see new markets opening up, markets where our company was previously unable to compete, such as Central and Eastern Europe. This adds further pressure to the already tightening near-term market. In the medium-term, additional demand is coming from life extensions for existing reactor fleets. Although today’s focus is on energy security and fuel diversity, governments are not losing sight of their clean air and net-zero carbon targets. Those who are lucky enough to count operating and fully depreciated nuclear plants as part of their baseload generation recognize that those assets are more valuable than ever. And then there is growth in the long-term, which comes in the form of new builds, expansions to existing reactor programs, higher nuclear energy policy targets, and construction plans for small and advanced nuclear reactors—plans that are becoming more concrete every day. All of this points to what we believe are truly transformative tailwinds for our industry—tailwinds driven by the focus on clean energy, an energy crisis, and the geopolitical realignment of energy markets. In the past quarters, we focused on the vital aspects of supply and demand because about 95% of the questions we received were focused on the market. There seemed to be little interest in what Cameco was doing because we had almost everything shut down. However, those fundamentals characterized by durable full cycle demand growth against the backdrop of an uncertain supply picture are now pretty well understood. Now that we are restarting some operations and expanding in others, we see interest shift back to understanding how we position Cameco to benefit from the developing tailwinds. What a difference a year has made. The question on everyone’s mind now seems to be how quickly we can respond with more production. However, I think we have been very clear that for us, it is not about volume; it is about maximizing value. The key to our production planning and potential future growth decisions is long-term utility procurement. Contracting comes first in all segments of our business. As we have said, time and time again, nuclear is a long-term market, and spot activity is discretionary. That said, price and availability of uranium products and services in the near term do impact the market’s assessment of how much uranium is available across all time horizons. Near-term scarcity makes everyone think longer term, setting the right context for a new contracting cycle, which is now well underway. Once we have finalized contracts in hand and know when and where our material is needed, we will make the appropriate sourcing decisions to meet those delivery commitments. We have over three decades of experience operating in this industry. We understand that to create long-term value and provide supply reliability for our customers, we must build homes for our production under long-term contracts before we pull it out of the ground. This is a bit unusual for a mining company, but we are more than mining, and it is also unusual for a commodity, but uranium is unlike most other commodities. We continue to be balanced and disciplined in layering in contract volumes where it makes sense for us while building a diversified customer base. For the past couple of years, the volumes we have placed under long-term agreements have exceeded our annual delivery volumes. The most recent supply agreements we finalized in new markets in Eastern Europe are great examples of the type of contracting opportunities we are seeing. We are incredibly proud of the pivotal role that Cameco will be able to play in helping these countries gain energy independence. As a result of our contracting success, today we have about 215 million pounds of uranium and more than 70,000 tons of UF6 conversion under long-term contracts. Delivery under these contracts spans more than a decade, with some contracts extending up to 2040. The average annual delivery volume in our uranium segment over the next five years is 26 million pounds, and many of these contracts are market-related, providing us with exposure to an improving market. In addition, we have a large and growing pipeline of business under discussion, which we expect will help further build our long-term contract portfolio and guide our future production planning. This contracting success is expected to enable us to sustainably operate our assets and generate full cycle value for Cameco, providing our customers with access to the fuel they need to operate their reactors. However, while Cameco is enjoying replacement rate contracting, the nuclear industry overall has not yet achieved that milestone. Utilities' uncovered requirements continue to grow. With our experience in every commercial cycle, we believe this indicates we are still in the early stages of the market transition that is underway, and we know that additional demand must come to the market. Therefore, we remain patient in order to capture as much long-term value as possible. We are remaining selective in committing our unencumbered Tier 1 in-ground uranium inventory and UF6 conversion capacity under long-term contracts. We want to maintain additional exposure to future improvements in the market. As a commercial supplier, our decisions have uniquely positioned the company to capitalize on the increasingly undeniable conclusion that nuclear power must be an essential part of the clean and secure energy transition. With heightened security of supply concerns and geopolitical uncertainties stemming from Russia’s ongoing war in Ukraine, Cameco’s nuclear fuel supplies are highly coveted. With demonstrated Tier 1 assets, strategic Tier 2 assets, and investments across the fuel cycle, we have taken a balanced and disciplined approach to our strategy of full cycle value capture. We believe there is significant opportunity for Cameco to grow as we help new and existing customers de-risk their fuel supply needs. What is really exciting for us is that we do not have to build new capacity to compete for this business. We have Brownfield expansion capacity. We just need to maximize the best-in-class assets we already have, a position we have not enjoyed in previous price cycles. In the context of significant growth opportunities for nuclear power, we are also excited about our strategic partnership with Brookfield Renewable to jointly acquire Westinghouse Electric Company. Our excitement stems from extending our reach in the nuclear fuel cycle at a time when there is tremendous growth on the horizon. Our planned investment in Westinghouse is an investment in strategic, proven, licensed, and permitted assets located in geopolitically attractive jurisdictions. We expect these assets will be able to participate in the growing demand profile for nuclear energy and downstream services from their existing footprint. Our team is working towards closing the Westinghouse investment, which is still expected to occur in the second half of this year. Once it closes, we will be able to provide more details on the exciting prospects we see for that business. This brings us to our production decisions. Our production plans are balanced with our contract portfolio and where we believe the market transition currently stands. We will not front-run demand with uncommitted supply and risk being exposed to a discretionary spot market. We have seen other companies pursue a spot market strategy many times in the past, and it has always failed. It only served to transfer value from shareholders’ pockets into the pockets of utilities, traders, or other intermediaries. Any company that understands our industry has learned the lessons of the past. They understand that in the near term, there is very little uncovered demand; you just have to look at UXC’s uncovered requirements in 2023 and 2024—they are very small. Contracts being signed today aren’t for in-year demand; they are generally for requirements starting in 2025 and beyond when uncovered requirements start to grow. However, if you wait until then to contract, you will miss the contracting cycle. The demand will already be covered under long-term contracts being signed today, and your production will be exposed to a small discretionary spot market. So Cameco won’t ramp up production to beat spot demand. We align our production plans with our long-term commitments, and I think we have shown we can be trusted when we say we will maintain our discipline. Let me take a minute to discuss where we are with the next phase of our supply discipline. As we announced last quarter, with the contracting success we have had, we have changed our production plans from a year ago. We now plan to ramp up at McArthur River and Key Lake to produce 15 million pounds this year and 18 million pounds in 2024. At Cigar Lake, we plan to produce 18 million pounds this year and maintain production at 18 million pounds in 2024. But that is not the extent of our Tier 1 supply growth. As we see uncovered requirements translate into additional contract commitments, we also maintain the ability to expand and extend production from our existing Tier 1 assets. If we took advantage of all these opportunities, our annual share of Tier 1 uranium supply could be about 32 million pounds. As for our Tier 2 assets, we plan to keep those on care and maintenance unless we can secure long-term contracts that provide returns similar to what we can currently achieve on our Tier 1 assets. In addition to our plans to increase uranium production this year and in 2024, we are also working on expanding production at our Port Hope UF6 conversion facility to satisfy our growing book of long-term business at a time when conversion prices are near historic highs. We are targeting annual production of 12,000 tons by 2024. But, as is the case across all industries and jurisdictions right now, there are challenges. Inflation, the availability of personnel with the necessary skills and experience, the impact of supply chain challenges on the availability of materials and reagents, and global transportation challenges all contribute to elevated risks, which we must manage carefully. With improving market fundamentals plus our growing contract portfolio for both uranium and fuel services and our plans for increased production, our strategy has set us on a path that provides line of sight to a significant improvement in our financial performance as we return to our Tier 1 cost structure. You can see this starting to play out in our first quarter results, just as we expected. Our strategic decisions are translating into better earnings and cash flow as higher uranium prices flow through our existing market-related contracts and as we deliver into higher-priced UF6 conversion contracts. We are no longer incurring care and maintenance costs or operational readiness costs at McArthur River/Key Lake. As our production increases and our purchase volumes decrease, we are relying more on our lower-cost production to meet our delivery commitments. We will retain our conservative financial management to support our continued balanced and disciplined contracting and supply decisions. At the end of the first quarter, including the proceeds from an equity issue to support our planned acquisition of a 49% share of Westinghouse, we had $2.5 billion in cash, about $1 billion in long-term debt, and a $1 billion undrawn credit facility. This doesn’t include the $79 million U.S. dividend we just received from JV Inkai or the $86 million cash refund CRA sent us due to adjusted reassessments for the 2007 through 2013 tax years. The refund from CRA was cash we had to pay on account of taxes previously reassessed on income earned by our foreign subsidiary from the sale of non-Canadian produced uranium. Based on the information CRA provided us, we had actually expected to receive $89 million; however, nothing surprises us anymore when it comes to the CRA. They informed us that they apparently made an error in their calculations that was not in our favor. This is a serious business, which makes it frustrating. We still expect to recover $211 million in letters of credit, of course, assuming their calculations were correct, which I’m not sure is a safe assumption, but it is all we have. While we are happy to receive some of our cash and security back, our broader tax dispute with CRA does continue, and you can dive further into the details in the Q1 MD&A. Our decisions at Cameco are deliberate. We are a responsible, commercially motivated supplier with a diversified portfolio of assets, including a Tier 1 production portfolio that is among the best in the world. We are more than just mining, with investments across the nuclear fuel cycle. We are committed to operating sustainably by protecting, engaging, and supporting the development of our people and their communities, and protecting the environment—something we have been doing for over 30 years. Our strategy, which includes contracting discipline, supply discipline, and financial discipline, will allow us to achieve our vision of energizing the Clean Air world, delivering long-term value in a market where demand for safe, secure, reliable, and affordable clean nuclear energy is growing. So thanks for your interest today, and we are happy to take any questions.

Operator, Operator

Thank you. We will now begin the question-and-answer session. Our first question is from Greg Barnes with TD Securities. Please go ahead.

Greg Barnes, Analyst

I’m just trying to understand the jump from the 180 million pounds you had under long-term contracts that you reported with the Q4 results to the 215 million pounds reported today. Does that include the Ukraine contract and the Bulgarian contract or what is the composition of that jump from 180 to 215?

Tim Gitzel, President and CEO

Thank you, Greg. We got your question, and I’m going to ask the market expert Grant to answer that on our sales portfolio.

Grant Isaac, Executive VP and CFO

Yes, thanks, Greg. Great question. So we have added in those contracts: Ukraine at the lower volumes without the Daperithia unit and the Bulgaria volumes into those volume limits. But going forward, we are going to revert to what we have done in the past, which is wait until they are executed contracts before it lines up with our disclosure, for example, in our price sensitivity table. This addition further emphasizes the strong position we are in within this market as security of supply contracting returns, and there is an interest in contracting with proven Tier 1 producers with proven Tier 1 assets.

Tim Gitzel, President and CEO

Greg, did you catch that?

Greg Barnes, Analyst

Okay. I think that is sorted out. So Grant, the 180 million pounds didn’t include Ukraine and Bulgaria, but if we combine those two, that adds up to about 41 million pounds, and the jump is only 35 million. So just trying to understand the...

Rachelle Girard, Vice President, Investor Relations

Rightly put off what we have delivered to date.

Greg Barnes, Analyst

Okay. Just as a follow-on, can you give us an idea of the approvals you have actually received on Westinghouse to date and what is required from this point forward?

Tim Gitzel, President and CEO

Yes. We sure can. And Sean Quinn has been following this file meticulously. Obviously, it is a top priority for us. So Sean, can you give Greg an update on that?

Sean Quinn, Senior VP, Chief Legal Officer

Sure, Greg. There are over 30 approvals required in total. They are in three different buckets: regulatory approvals associated with the nuclear industry, competition law approvals, and foreign direct investment approvals. All of them are moving along nicely. We have received several of the nuclear regulatory approvals including some of the lead U.S. approvals. We are working on the competition law approvals and the foreign direct investment approval. I don’t have a schedule of the expected receipt dates for each of those, but they are all on schedule at this point, and we are not anticipating any major difficulties. We are on track for closing in the second half of this year.

Greg Barnes, Analyst

Okay. Good. Thank you.

Tim Gitzel, President and CEO

Thanks, Greg.

Operator, Operator

The next question is from Gordon Lawson with Paradigm Capital. Please go ahead.

Gordon Lawson, Analyst

Hey, good morning, everyone. I just have a generic question here. You have got your two keystone assets now running at or near your targeted rates, and the outlook is looking significantly more promising. What would be the required catalyst for you to start discussing quarterly financial results and providing a preview call similar to the downturn?

Tim Gitzel, President and CEO

Yes. I’m not sure I understood the question. Let me just take the first part of it. Obviously, you have seen our supply discipline. We have maintained that all the way through. We are now from McArthur, ramping up to 15 million pounds this year on our way to 18 million, and Cigar is staying at 18 in both of those years. We will see what happens going forward. I think we have been clear that we are not going to front-run any demand. We will wait until we have a contract portfolio that calls for more pounds, and then we will look at our assets to see which ones will move forward. I’m not sure I understand the part on the quarterly reporting.

Gordon Lawson, Analyst

We are not supposed to be allowed to talk about, say, your EBITDA results for the quarter. But with things now running much more smoothly and being in a much better position than a few years ago, I’m just wondering when you expect or what would be a key catalyst for us to start getting back into that.

Rachelle Girard, Vice President, Investor Relations

Yes, Gordon, I don’t think that we have ever really done that. We have always maintained that we don’t think about this business on a quarterly basis; it is not how our business operates. Our focus is really on sort of our performance for the year, not just on a quarterly basis. If you have got detailed questions on the quarter, we are happy to address those. We just feel this isn’t the right forum for that because we don’t think about our business on a quarterly basis.

Gordon Lawson, Analyst

Okay. Thank you.

Tim Gitzel, President and CEO

Sure. Thanks, Gordon.

Operator, Operator

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

Orest Wowkodaw, Analyst

Hey, good morning. I wanted to ask another question about your contract book. I was sort of pleased but surprised to see the jump in your average sales delivery over the next five years going up from 21 million pounds at year-end to 26 million pounds. Does that suggest that the majority of the volume you have added to the book is all front-end loaded if it is showing up in that five-year guidance?

Grant Isaac, Executive VP and CFO

That five-year guidance is an average, and you can always think about it as being more front-end loaded. So think about our leverage to the market coming from two distinct dimensions. The first is what we call our portfolio. We have planned sales this year of 29 million to 31 million pounds over an average of 26 million per year over five years. It declined over that five-year window. This is what we refer to as portfolio leverage. The second piece is pipeline leverage, and that is the pounds we haven’t sold yet. As you point out, in the outer years of that five-year average, we wouldn’t be at the same level of sales as we are today. It is exactly where we want to be; we see a market where uncovered requirements are growing. We believe we are in the early innings of the contracting cycle, and we are far from sold out of our Tier 1 production; we are not even planning or running out of Tier 1 production at full capacity at the moment as we are still in supply discipline. So you are thinking about it the right way, because we want to retain that leverage to improving markets.

Orest Wowkodaw, Analyst

Great. I don’t know if I have ever seen a five-million-pound average by year jump in your book. Just the magnitude of that move is pretty impressive.

Grant Isaac, Executive VP and CFO

Yes, it reflects what we have been talking about, which is the transition in the market to security of supply-driven contracting. So for us, there are a couple of dimensions to think about. One, obviously, is that fundamental story. I always want to point people to the growing uncovered requirements and reference the fact that the market is not yet even replacing what it consumes on an annual basis. Then we add to that new market opportunities we haven’t seen before. You have seen our press releases about Central and Eastern Europe, a region looking to pivot away from historic sources, historic dependence on Russia. Cameco is in an incredible position to satisfy the U.S. and other demands in that market. Tie that to our vertical integration; it is our conversion space that allows us to generate that kind of uranium business as well that is very advantageous for us. So we are just seeing that incumbent advantage play out. The good news is, as I said, we are not even at replacement rate yet. If you look at it from historical terms, we have never been at this stage of a contracting cycle at this high of a uranium price before. We have seen the enrichment price recover, we have seen the conversion rise to historic levels. We haven’t seen that kind of demand shown in the uranium side yet. So we are certainly pretty excited about it. Tie that back to my earlier comment; it is why we want to remain leveraged in both our portfolio and our pipeline.

Orest Wowkodaw, Analyst

Thanks, Grant. I appreciate the color.

Tim Gitzel, President and CEO

Thanks for your question, Orest.

Operator, Operator

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

Lawson Winder, Analyst

Thank you, operator, and good morning team, and Grant - today. Just a couple of questions for me. I wanted to ask if you could help us think about your contract with Ukraine and Bulgaria and how that sets up in terms of your targeted 60/40 split between market versus fixed price contracting. Generally, directionally, where does the pricing—if there is any fixed price component—sit for that contract? Thank you very much.

Sean Quinn, Senior VP, Chief Legal Officer

Yes, thanks, Lawson, for the question. First, I would just say we are delighted on both those fronts, both with Ukraine. We have been working hard with them. We saw all the details of our contract with them. It is a significant item for them and for us. It carries a bit of risk, but it is a risk we are prepared to take. There is more than just the commercial side to that one; we wanted to stand with Ukraine and their efforts on turning away from the Russians, and so that was an important one. Bulgaria was just there last week and we signed that up. That is another new market for us. I have never been there before, never dealt with them before, and there are more of those countries to come for us. So Grant, do you want to talk about how those two contracts fit into our portfolio?

Grant Isaac, Executive VP and CFO

You referenced, Lawson, our 60/40 market-related, base-escalated balance. Just a reminder that this is not a target per contract or per year; it is something we think of in full cycle. There are times where we want more market-related exposure and less base-escalated. That time is now, and the reason for that is because, as we mentioned, uncovered requirements are growing. That is demand that has to come to the market. Utilities can defer and delay this demand, but they ultimately cannot avoid it. This is growing because utilities have not even been contracting at a replacement rate yet. So for us, that suggests this market still has upward price momentum, and we want to be market exposed to that. There are times where the market hits replacement rate and goes above. When that occurs, we tend to think about base escalated prices to lock those moments in for a long tail of cash flow and earnings. But that is not where we are today; we want to be market-related. On a framework level, those contracts are very consistent with the type of preference we have in this market today, which is market-related references for the uranium portion of those UF6 contracts. For the conversion portion of those contracts, we will be locking in historic prices that will escalate over the delivery period as we navigate the unique demand points pushing our one segment above replacement rate and capturing that. But never think about the 60/40 referring to any single contract or year.

Lawson Winder, Analyst

Okay. Thanks for those comments. Can I maybe ask one follow-up then? With the market purchasing that you have guided to of 9 million to 11 million pounds, can you help us think about how active Cameco might be in the spot market this year? Have you been active in the spot market, and to what extent year-to-date? Also, what proportion of the 9 million to 11 million pounds would be pre-contracted purchase commitments from yourselves, and what proportion do you expect will be from Inkai?

Grant Isaac, Executive VP and CFO

Yes, great set of questions. Let me unpack it a little bit. The 9 million pounds to 11 million pounds is what we guided for purchases in 2023. Remember, our planned production or our share from JV Inkai is 4.2%. This means we need somewhere between nearly five million and nearly seven million pounds of purchasing. Our purchasing comes from a couple of different sources. We can buy in the spot market today for delivery right away; that is at our discretion. We have also entered into contracts to buy in the past when the price was much lower. We like to operate like a utility; when we see a low price of uranium, if somebody wants to fix that price, we will enter into a long-term commitment. We have some of those contracts available to bring forward into today’s market. We will also put our purchase requirements against our inventory and against material that we could potentially borrow. There are various factors that go into those sourcing decisions. But make no mistake, we are still in supply discipline, and we still have a requirement to purchase. We will be buying in the market. To date, we have only bought about 400,000 pounds, as you can see in our quarterly uranium table. So we do have a need to buy, and we are watching very closely as we see additional interest in physical funds build, along with some utilities stepping into the spot market to support it, even without the familiar spot vehicle that everyone keeps an eye on, which really hasn’t performed much lately. We will be very opportunistic. We don’t typically telegraph our purchases or timing, but we will be a buyer in the market for sure.

Lawson Winder, Analyst

Thank you both very much.

Tim Gitzel, President and CEO

Thank you, Lawson.

Operator, Operator

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

Tim Gitzel, President and CEO

Okay. Well, thank you very much, Operator. With that, I just want to say thanks to everyone who joined us on the call today. As always, we appreciate your interest and your support. Just a couple of comments: our world today is facing significant challenges, including decarbonization and electrification, while trying to ensure energy affordability and security without jeopardizing the ambitious net-zero targets that have been set. These are exciting times for Cameco. We are excited about the increasing recognition of the critical role nuclear power is going to play in helping address these challenges. We are excited about the fundamentals in the nuclear fuel market, and we are excited about the prospects for Cameco as we continue to build our long-term contract portfolio, which allows us to further expand production from our Brownfield capacity and invest in opportunities across the fuel cycle. We, as you know, are a responsible commercial supplier with a strong balance sheet, long-lived Tier 1 assets, and a proven operating track record and line of sight to return to our Tier 1 cost structure. We will continue to do what we said we would do, executing on our strategy. Consistent with our values, we will do so in a manner we believe will make our business sustainable over the long term. As always, we will continue to make the health and safety of our workers, their families, and their communities our top priority. Thank you, everybody. Stay safe and stay healthy.

Operator, Operator

Thank you. This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.