Hello. Hello, and thanks for joining us at the 2025 Annual Western Conference here at CIBC. I'm Anita Soni, the Senior Metals Analyst here at CIBC. And today we have Tim Gitzel, President and CEO of Cameco, joining us. So let's hop right into it because we've got a lot of content to cover. So let's start with uranium fundamentals. Can you give us a lay of the land on the current supply-demand setup and what the current demand profile for nuclear power is, and how is global long-term supply looking?
Sure. Thanks and welcome, everybody. Nice to see a lot of familiar faces out there. When you've been around this long, you kind of get to know some of the people. And welcome back to you. I'm delighted to have you back. Let me just give you something that might not Cameco, who we are. Based in Saskatoon, nuclear fuel company. We've been in business for 36, 37 years, I think we were put together. And so our business has been uranium conversion. We've been dabbling in enrichment in the past. And then we make CANDU fuel for the CANDU fleet in Canada. And so that's been our core business. A year ago, we closed a deal with Brookfield to buy Westinghouse, and that's just kind of changed our lives completely. It's been a whirlwind since then.
And we'll get into all of those different pieces, if you like, this morning. Supply-demand. Well, let's start with demand. I mean, pick up any newspaper, any trade publication. This morning it was, who did I see? Sweden, 10 new units. Italy going to come back to nuclear power after 40 years or 30 years being out of it. I mean, there isn't a country anymore that isn't thinking about it or planning to build. And I can start in Canada, in Ontario, where just last week, Minister Lecce announced 10,000 megawatts right by us at Port Hope that they want to build nuke. Bruce Power is looking for 4,800. Saskatchewan is looking for four SMRs. Darlington's building SMRs. So Canada is going to be a leader, by the way, in nuclear because we have all of the pieces of the puzzle to do it.
And then yesterday morning, I think we're sitting in our meetings and we see that V.C. Summer. So that's one of the Westinghouse sites that went bankrupt about a decade ago, that they'd started the units and said they're finished, we're never finishing. And well, guess what? They're back. And the owners are out looking for willing data centers or Microsofts or Google or Amazons or Metas or whoever wants to come in and finish building those units and take the power. And they will find them, I promise you that. So that's just North America. Same story around the world. You can go. I see Grant Isaac, my good partner in crime, just walked in back there. Most of you met Grant, but we went to COP28 in Dubai and then 29 in Baku. 31 countries around the world pledging to triple nuclear. Triple. Think about that.
800 new reactors around the world. 800,000 megawatt reactors. And we just start rolling around. Then we start thinking about, we fuel a lot of those. Where's that coming from? And so, I mean, that's the global piece to it. And so beads of sweat start kind of coming down the side of our face. But so you say, well, that's ridiculous. That's never going to happen. It's only going to be 600. You say, okay, that'll work too. Or 400. I don't know. But that's just the excitement and the euphoria around nuclear now, clean energy. And it started out, you know, a few years ago, we were feeling tailwinds from the decarbonization, electrification, race to net zero, climate change, climate crisis, climate catastrophe, all of that stuff. We said, hey, this is kind of going our way with nuclear.
Then the Russians walk into Ukraine three years ago, just about three years ago now. And you take off 30%-40% of the nuclear fuel and kind of isolate them. Nobody wants to deal with them anymore. All of a sudden, our phones ringing like crazy on the fuel side. Then we have a chance meeting with Bruce Flatt in Canary Wharf in London, who I know from another movie. He says, hey, we should get together and do something. Well, what do you want to do? Well, Westinghouse is for sale. Okay, how much is it? $8 billion. And we're thinking, that's just about our market cap, I think. And that falls out of Bruce's pocket most days. And so I said, well, we'll see what we can do. And so, you know, we did about six or eight months of due diligence.
And we said, you know what? If we're ever going to, this is the time. Most of our competitors and people we deal with are state-owned enterprises. So there's not a lot of assets that come around. Westinghouse was for sale, went bankrupt, they'd recovered it. So we pushed our chips in the middle of the table. We said, let's go, we're going to buy it. And we bought it. It's the best thing we ever did. Maybe we're lucky at that, but we couldn't have found better timing for that. We put no value on any new build or anything when we were valuing the assets. And now it's just a whirlwind. It is honestly a whirlwind for us between the Cameco and Westinghouse piece. So demand is there, supply shaky on the fuel side. Supply shaky. You see what happened to our good buddies at Orano in Niger.
I had the pleasure of running those assets for five years when I was with Areva at the time. And I really feel bad for the people that work there because they're great people. And we had COMINAK and SOMAÏR running. COMINAK's closed now and SOMAÏR's been taken over. And I don't know if the Russians have it or who has it, but there's nothing coming out of there. A couple of Canadian juniors in there, I think, struggling to see a future in Niger. So that comes off. Kazakhstan still 40%-45% of the production coming out of Kazakhstan. So we need Kazakhstan. The world needs Kazakhstan. If we're going to have any chance of this doubling or tripling of nuclear, Kazakhstan's got to play a big role. So we had a little bit of a dust up there at the end of the year.
We can talk about that. So nothing new really coming on. You don't see, I mean, there's a lot of talk, but we're obviously not at the incentive price needed to bring on new greenfield because I don't see any. I mean, other than little dribs and drabs in the U.S., Paladin's got a little bit coming on. Northern Saskatchewan, nothing moving at the moment. Lots of talk, but nothing moving yet. And I know I see David back there. He's got a good project that he's going to bring on and the world's going to need it at some point. But those will take time to bring on. So supply at the moment shaky and demand strong. So those are the fundamentals, obviously, that we're looking for.
That seems like a good spot to ask about. With the U.S. administration coming in and their potential restrictions, sorry, tariffs, do you see any impact to the U.S., sorry, to your operations?
Yeah. Yeah, that's really the whole thing's kind of unfortunate, and I'm involved in some of the discussions around that, like what do we do, obviously, with our Saskatchewan premier. We've talked to him quite a bit and we've talked to the federal government, and the premiers are all getting together with the federal government, and everybody's hair's on fire a little bit on that whole thing. You know, I found the solution. I was just up in my room, just getting ready before I came down, and the president was on. He said, just become the 51st state and it all goes away, and so that'd be one option. I'm just saying that's an option. You know, for us, we've been through this movie before in 2017, 2018 with the Section 232 action that came on aluminum and steel. Was it aluminum and steel and aluminum? Yeah, sorry.
And they included uranium in there. And so Grant and I spent about half a year down in Washington at the White House and at the DOE and State and Commerce making our pitch saying the United States has just under 100 reactors. They consume 45-50 million pounds of uranium a year and they produce none, zero. So you're going to put a tariff on Canadian uranium. We supply about 30% of what they use. I mean, go through all the math and the bottom line is electricity prices go up in the United States. And so that's, you know, we were able to convince them the last time that wasn't a great idea to do that. And they backed down on that. So I don't know what's going to happen this time. We'll continue to make our case on that. For Cameco specifically, we learned from that.
We said any new contracts we're signing in the U.S., and by the way, our weighting in the U.S. has gone down. We have other markets. But any new contracts we sign, we're passing anything like that on to the customer. So any of our new contracts have that passed on to the customer. So it's a pass-through for us. It's their issue. Some of the other ones, it's not quite as clear. We'll have to decide what we're going to do. We've actually relocated a bit of material into the U.S. now and done that. And so we'll see how it plays out. Hopefully, you know, kind of cooler heads prevail in this whole thing. Our story on this, and you know, I was at some meetings earlier in the week and I said, okay, if they do this, we're doing this.
And they did this tit for tat tariff thing, which I think gets nobody anywhere. It's just inflationary and it's regressive. We said, hey, let's tell the story. But between Canada and the U.S., we have everything it takes to be a nuclear powerhouse. We have uranium in Saskatchewan. We've got conversion in Port Hope, Ontario. The U.S. has some conversion. We're working on enrichment. And then we have Westinghouse that can build you any kind of reactor and service them and fuel them. We can be energy self-sufficient in nuclear in North America if we all work together, which is a national security, energy security solution.
Then we can go out and one of my goals is to fight back in the world and regain the space we gave up to the Chinese and the Russians over the last 20-25 years, where we just let it go and they moved in everywhere with their technology and are building. We need to go back and do that. And so that's going to be our story. We're heading to Washington from here and we'll be there for a week and we'll see how it goes. But that's our story and we're going to really push hard to kind of save the nuclear piece if we can.
That seems like a good spot to talk about the Westinghouse transaction. Can you talk about the key driving point behind the deal and how you see that adding value to your company?
Yeah, well, it's certainly, you know, if you plug, if you take Cameco and Westinghouse, you can kind of plug them in and then you can go from exploration to mining to refining to conversion. We're working on enrichment. And then we can build you an eVinci five megawatt unit, an AP300, AP1000, fuel them and service them. That's what we provide now. So, you know, does it stabilize our company, our earnings? Perhaps we don't get the big flows that you do from the commodity business, but it just seemed like a good fit. And like I said, those companies don't, 80% of our competition is state-owned. They're not selling their assets to us. We're not going to own more in Kazakhstan or France or China. This came along and we thought the timing's pretty good. The currents are flowing in our favor and let's go.
So we did. We paid a healthy price. Now looking back, as I say, we didn't value any new build in there. We said, no, it's too far out, too shaky. We're not valuing. Now, as I say, we look around the world on the new build side for Westinghouse. There's the two at V.C. Summer that were announced yesterday. We've got Ukraine, they're building one. They want to build nine. We've got Poland for six AP1000. Bulgaria's got two units. We think we've got a good shot in North America at a few of the projects. Yeah, it's going to go. eVinci, or the Saskatchewan government wants to build one. Yeah, we'll see how it goes. We've got lots of work to do, but so far, so good. We're super proud. It's a good company. We're just changing.
Patrick Fragman ran the place and he really did a great job. He kind of, they asked him to go in and clean it up and bring it back to prosperity, which is exactly what he did and sold it, and Patrick's moving on now. He's going back to Europe, but we'll find a new CEO that'll take it up to the next level because the possibilities are just endless for that company.
Can you just add a little bit of insight onto Patrick's decision to step down?
Yeah. No, it's something we talked about with him. He did a great job. He's a turnaround artist and he did, he painted a nice picture on that turnaround. I think Brookfield bought it for about four or five billion in 2017 and sold it for eight-ish. So that's not a bad return. That's what Brookfield likes to see, I think. And we stepped in, but they stayed in, which the reason we got in was because part of Brookfield stayed in. They said there's more to come on this. And they just, you know, they moved their assets around. And so they're in for 51, we're in for 49. And it just seemed to fit well with, we want to grow and we want to be bigger and do more and offer more services to our customers around the world. And now we're it.
Like we can compete with the Russians, Cameco, Westinghouse. And with the Russians and the French and the Chinese, we have all of the elements. And not everybody wants to deal with some of those countries. And so the Western alternative is really Westinghouse, Cameco.
Okay, so switching back to your uranium producing assets, you announced, well, I mean, your partner announced a suspension at the JV with Inkai earlier this month. Can you just give us some color on what led to that and, you know, some potential implications and what's the next steps there?
We don't really know because it was. We were heading out to our New Year's Eve parties on December 31st, and we got a call and said we may have to stop production at Inkai for a while because the paperwork hasn't been done to whatever, get all the permits we need. We were really disappointed with that. I mean, they're the operator and there was no notice of that. We had no idea that was going to happen, so we said, Grant and I said, really, we got to put a press release out on this? I mean, it makes them look not so good, really, and so we had lots of conversation with them. They said it's temporary. We'll get it fixed. You'll be back running by the end of the month. We still hold to that. We believe that's the case.
In fact, we have a team over there today meeting with Kazatomprom and the government and the ministry. And so we're optimistic that, but it's, you know, it's just something that's really disappointing. I mean, they're in a tough neighborhood. I've been going there for over 25 years to Kazakhstan. We have good relations. They're good friends, but they're in a tough spot between the Russians who are trying to build their program and the Chinese. And the Kazakhs have all of this material. And so they're, and yet they want this, they want this multi-vector country strategy where they can deal with the Chinese, they can deal with the Russians, and they can deal with the rest of the world because they want to sell their product into the Western markets as well.
So that didn't shine particularly well, that piece on their reputation, I don't think. And they didn't like it either. So I think it'll get fixed shortly and we'll move on. So it's still a great country. They have great reserves and we've had a good run there and we hope we have many more years of a good run there.
Okay. Well, that sort of touches on my next question, which would be, how do you think about your long-term strategy with Inkai and in Kazakhstan?
Yeah. No, we're there. We're, you know, I'm not sure we would increase our interest there, but we've got a good project. We've got good reserves. We have an agreement to continue to go after them until 2045, and so we'll do that. We'll keep working with them. And, you know, it represents 10% or 15% of our production. So it's, you know, we're not putting all our eggs in any one basket for sure, but it's been a good producer for us and it complements, gives us some diversity of supply from McArthur and Cigar. And no, we'll hang in there and they've got, they're sending a big contingent of ministers over to PDAC. So we'll meet with them and talk to them and this is a blip, but we'll keep it going.
Okay. So talking about some of your Canadian operations, let's move to Cigar Lake. Can you talk about your extension of reserves? I think it was mine life went from, was in 2031 and now it's 2036. And what drove that and what are the potential opportunities with that extension and any further opportunities?
We always knew we had, you know, we kind of called it phase one, phase two. There was a pod about a kilometer to the west of the existing ore body that someday we'd go after, but market conditions weren't where we wanted them to be to go after it. We will not front-run the market with production. Never. We will produce. When we have contracts that say, please make produce uranium and we have a home for it, then we'll produce. We got to a point where Grant's in charge of the marketing team and the contract portfolio. I think we have over 200 million pounds under contract now, I think averaging about 29 million pounds of sales over the next five years per year. We're in a good spot. Pricing is constructive, I would say, and probably getting more constructive going forward.
So we had the confidence to drift out into that area. So it's not a, you know, it's not really an expansion of anything. It's just a continuation of the 18 million we've been producing since 2014-ish. And so it'll give us another kind of five or six years of life there, which we're going to need. Saying that, I stop and pinch myself. That's not that far away because we don't have a whole lot more there. And so, you know, you should be thinking longer term. That'll take, when that one does go down, if it's 2036, you're going to be right in the heat of when things are really rolling on the demand side, same time as Kazakhstan's probably starting to draw down some of there. So we've got some work to do for sure on new projects.
You know, so we've got Cigar Lake. We'll run it to 2036, McArthur River. You know, that's just a beautiful mine. I think when we started that in about 2000, we had, I can't remember the number, 350 million pounds. I think today we have 350 million pounds. That's a good mine. And so, but it won't last forever. And so we have, we're producing there at 18 million pounds a year. We actually, I think, guided to 19 for this year. So it's running well. We have authority, we have regulatory approval to increase production to 25. So those are probably the best six or seven million pounds on the planet that incremental pounds. So we're going to, over the next while, do a study.
We could put a bit of CapEx in and we know we could get it to 25 million pounds, but we could maybe not put the CapEx in and get it up higher to, we don't know, 20, 21, 22 without the CapEx, without the risk. So we're doing that work now, taking a look at which is the better option for us. And so you'll hear from us over time what we're going to do there. If you can avoid putting capital in, I mean, that's always comes with risk, especially in Northern Saskatchewan. I think it was minus 50 degrees Celsius on Monday or something, you know. So it's always tricky. And so we're doing that study now, but that'll be our workhorse for a long time to come.
I assume because you're trying to avoid putting that capital in, that it's a significant amount of capital that you'd have to put in.
No, it's not that significant, but I'll tell you what we did do. And again, we're probably more lucky than smart, but when we shut down, you know, when we took all our production off in 2016, 2017, when the market wasn't there and there's big, too much inventory, we decided we wouldn't just sit on our hands. We said, okay, that mill has been there since 1983. We've kept it going. We put the sustaining capital, all of that stuff. But what else can we do? Can we put some AI? Can we put some robotics in there? Can we put better ways of working? So when we do bring the workers back, maybe we don't have to bring quite as many back and we can be more efficient and more cost-effective. Well, it did. In fact, that was the result.
And we were able to, we're seeing we're able to produce a bit more, which we weren't really expecting. So that, like I say, it's a good mine. We'll do that study to say, you know, how much capital do we put in and what are the results? And we'll try and find the sweet spot there.
Okay. I'm going to, I'm just going to ask if the audience has any questions. There's a lot of attendees in the room. So I'm wondering if anyone has any questions. All right. Nope. Okay. I'll continue on with mine. What are your plans for your second tier operations that are currently on care and maintenance, like Millennium, Kintyre?
Yeah. Well, we're certainly proud to have them, happy to have them. And they're going to go someday. We're going to need them somewhere in the mix. And so, you know, our first priority will be to run our big cores as fast as we can. So we'd go to McArthur, our tier one first. That's our best. So we'll focus on McArthur, get that work done that I was talking about, decide what the right level of production is there. But then we've got Rabbit Lake. It's a hundred miles away. The mill's there. We kept a skeleton crew, about a hundred people. It's on care and maintenance, has been since 2016, Grant, I think. And so we kept it ready. And there were days when we said, ooh, this is costing us $25 million-$30 million a year to stay on standby.
But now it looks like the right decision because we're going to go after that at some point. But again, we're not going to front-run the market. We'll wait until somebody comes and says, hey, we'll buy, you know, we can produce probably four or five million pounds a year there. Somebody will come and say, we'll pay you a decent price for it if you'll restart it. And we'll sign that deal for 10 years or whatever it takes. And then we'll have the confidence to go ahead. So it's there ready to go. We've got U.S. assets, Wyoming and Nebraska that we shut down again in 2016 that are on standby. We have a skeleton crew there keeping them ready. I have a feeling U.S. pounds are going to become pretty valuable the way things are going forward.
I know Senator John Barrasso would love if we ever restarted Wyoming. We're watching that same thing. If somebody wants U.S. pounds, U.S. production, we will get those going again. It'll take us probably 18 months to get the wells rolling again, get the team back and get, you know, tighten up all the pumps and pipes. That's sitting there. That's ready to go. We've got some projects. We've got the Millennium project in Saskatchewan. That's a little over 100 million pounds there that we could get going. We've got the Yeelirrie project, which we love.
I avoided writing because I didn't know how to pronounce it.
Yeah, WA, Western Australia. Great project. It's like right at surface. There's 120 or 30 million pounds there. We'd love to do that. So, but our business is tricky. You just don't have a mine and you say, well, let's go. You need a cooperative government and cooperative communities around you. We've got all of that, but we don't have a cooperative government at the time in WA. The Labor government just said no on the uranium mining. They mine everything else, but for some reason, but we feel the tides turning in Australia. I don't know. Some of you have probably been working in Australia. There was no talk of nuclear at all in Australia. There was off the table. Well, now they're part of the AUKUS deal. So you're, sorry, you're in it now. And so there's talk.
The opposition has, I can't remember, 21 sites for nuclear plants. I see Neil back there shaking his head. So we feel the tide turning. So we'll, again, we'll make a trip over there and just say, hey, here's what we offer. If you want to go ahead, it's a great project. It would employ a lot of people. We'd get a lot of local involvement. So we're keeping that ready. Things have to line up for these projects. Everything has to line up at the right time. So that's why we want diversity. We've got lots of options as to what we do. The other piece that we didn't talk about is the enrichment piece where we've got these depleted tails down in Portsmouth and Paducah in the U.S. from their old enrichment facility.
So we have a deal with the DOE to re-enrich those using our laser enrichment, which we're working on. And the end product of that is UF6, so uranium and conversion, both of which are in tight supply these days. So, you know, we're looking at maybe that's our next mine. We don't know. We'll see. We're pushing that one ahead too. So we like optionality and we've got it.
So in the last few months, you've seen a little bit of downward pressure on spot prices for uranium and then not a lot of movement in the longer-term price. Can you talk about what are the implications of this shift on the industry and on your company in particular?
You know, the amount of time I spend thinking about the spot market is like next to zero. I know everybody watches that. That's a bunch of traders turning pounds around that the utilities don't, you know, they may dip in for four or five million pounds a year out of the 30 or 40 or whatever it turns around. We watch the term market, watch the long-term market. That's what we deal with. That's what we play on. Today it's a little over $80 a pound and holding pretty firm. We think there's more room there. And the reason we think that is because, you know, the market's tight and utilities start at the back end. So they start with their fuel fabrication. That's okay. There's a sufficient amount of that. Enrichment, very short now because the Russians had about 40% of the world market and they're gone.
Like they're off. The U.S. has banned Russian LEU enrichment. And so the Russians said, well, you don't have to ban us because we're not sending it anyway. And so that's off. So all of a sudden, I mean, the price of enrichment has gone through the roof. Then you back on to conversion. You can't have enrichment unless you have conversion. And that's gone through the roof. I mean, we couldn't give this stuff away. Five years ago, we were $6 a kgU. I think I touched 100 the other day, didn't it, Grant? On the spot market. Now I told you to forget the spot market. So, but even on the term market, it's $50 a kgU. So, you know, it's, yeah, we'll see where things go, but we're not, we don't focus on the spot market. The spot market's not the fundamental market.
Utilities don't buy off the spot market, and anybody that's basing their project on the spot market in the future, ask Paladin how that worked out for him and John Borshoff, who's a good friend of mine, by the way, how that worked out for them when, you know, we were getting $50 a pound and they were getting $90 on the spot market until it went down to $17. We were still getting $50 and they were getting $17. Like if you want to play that game, and I know Don Lindsay's here, some of the other commodities play that game. We don't. Like that's not how we play. So.
Yeah. And actually that leads me to the last question that I had, which was, can you just give us a quick update on the status of your contract book and do you see contracting picking up going forward?
Quite frankly, it hasn't slowed down that much for us. We're able to be selective now because our book, we've got a good book, as I said, we're over 200 million pounds under contract, about 29 million a year for the next five years. We've got contracts that run out to 2040. I saw one the other day to 2045. We can be selective on who we want to contract with. Obviously, we're selective in the sense that we want to diversify by customer base, by country. If we had everything locked into the U.S. right now, that probably wouldn't be good. In 2011, if we ever, we could have sold everything to Japan that we could ever produce for the next 20 years. Good thing we didn't do that because we'd have been in big trouble on that one.
And so, you know, the on-market stuff, we, you know, sometimes we bid, sometimes we don't. Most of it's off-market for us that utilities will come to us and say, okay, look, we want to lock up from 2030 to 2040. What's the offer? Let's make a deal because there's not a whole lot of suppliers and they're not all going Kazakhstan and they're probably not all going Cameco. So if Kazatomprom wins a bid on the market, they'll probably come to us right after and say, okay, we need to fill out our book with something else. So.
Well, that's it for our time, but I want to thank you. That was very informative. I think you're probably the foremost authority on everything.
Great to hear.
It's always good to listen to you.
Thanks.