UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

For the month of November, 2024

 

 

Cameco Corporation

(Commission file No. 1-14228)

 

 

2121-11th Street West

Saskatoon, Saskatchewan, Canada S7M 1J3

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☐   Form 40-F ☑

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐   No ☑

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

 

Exhibit Index

 

Exhibit No.

   

Description

99.1    Press Release dated November 7, 2024
99.2    Management’s discussion and analysis for the quarter ended September 30, 2024
99.3    Condensed consolidated interim unaudited financial statements for the quarter ended September 30, 2024
99.4    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 7, 2024
99.5    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 7, 2024

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 7, 2024     Cameco Corporation
    By:   /s/ Sean A. Quinn
    Sean A. Quinn
    Senior Vice-President, Chief Legal Officer and Corporate Secretary

Exhibit 99.1

 

TSX: CCO

NYSE: CCJ

    LOGO   

website: cameco.com

currency: Cdn (unless noted)

2121 – 11th Street West, Saskatoon, Saskatchewan, S7M 1J3 Canada

Tel: 306-956-6200 Fax: 306-956-6201

Cameco reports Q3 results; improving operational performance supports dividend growth; strengthening prospects amid growing demand for nuclear power; long-term contracting activity gaining momentum; strong annual outlook; Cameco well-positioned

Saskatoon, Saskatchewan, Canada, November 7, 2024 .. . . . . . . . . . . . . . . .    

Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the third quarter ended September 30, 2024, in accordance with International Financial Reporting Standards (IFRS).

“Our third quarter operational performance was strong across all segments, supporting our return to a tier-one cost structure,” said Tim Gitzel, Cameco’s president and CEO. “Looking past quarterly earnings, which can vary significantly, there is a clear underlying trend of improving operational performance and cash flow generation, backed by stable and rising market prices. Apart from the impact of a stronger US dollar, our financial outlook for both Cameco and Westinghouse remained strong and unchanged. To recognize the return to our tier-one production rate and the continued strengthening of the industry’s long-term prospects, our board of directors declared an increased 2024 annual dividend of $0.16 per common share. We are also recommending a dividend growth plan to our board of directors, under which we expect to at least double last year’s dividend of $0.12 per common share, to $0.24 per common share, over the fiscal periods 2024 through 2026, subject to annual consideration by our board.

“Our disciplined strategy aligns our marketing, operational, and financially focused decisions. From a marketing perspective, we have contracts in both our uranium and fuel services segments that have deliveries spanning more than a decade. However, in a market where we are seeing sustained, positive momentum for nuclear energy, we are continuing to be selective in committing our unencumbered, tier-one, in-ground uranium inventory and UF6 conversion capacity under long-term contracts, to capture greater upside for many years to come.

“The marketing element of our strategy guides our operational decisions to ensure our supply aligns with our commitments, so we balance our production rates, inventory position, long-term purchases, product loans, and near-term market purchases in order to deliver full-cycle value. This past quarter was a good example of that prudent management of our supply sources, with our 2024 uranium production outlook increasing from 22.4 million pounds (our share) of uranium, to up to 23.1 million pounds (our share) of uranium, thanks to strong production from McArthur River/Key Lake. The higher production level for 2024 is fully committed within our contract portfolio and allows us to rebalance our other supply sources, including a partial offset of the increase in Saskatchewan by lower production and purchases from JV Inkai, where we now expect production of 7.7 million pounds (100% basis) of uranium, down about 600,000 pounds of uranium from last year due to the ongoing acid supply challenges in Kazakhstan.

“The marketing and operational decisions set the stage for the financial element of our strategy, under which we expect strong cash flow generation to underpin our conservative capital allocation priorities. Those priorities include a focus on debt management, as is evident with the prudent refinancing activities we have undertaken in 2024, and the prepayment of a large portion of the term loan we utilized to purchase Westinghouse.

“We are continuing to see a positive shift in government, industry and public support for nuclear energy, further supported by recent announcements between utilities, reactor developers, and the industrial energy users, who are now extending financial support to ensure future access to clean, reliable and scalable nuclear power. Cameco, with our assets and investments across the fuel and reactor life cycles, is uniquely positioned to benefit from those tailwinds as a responsible, commercial supplier with multiple long-lived, tier-one assets in reliable jurisdictions, proven operating experience, and a strong balance sheet to execute our strategy. In a market where we are seeing sustained, positive momentum for nuclear energy, we believe our disciplined strategy will allow us to achieve our vision of ‘energizing a clean-air world’ in a manner that reflects our values, including a commitment to address the risks and opportunities that we believe will make our business sustainable over the long term.”

 

- 1 -

  •  

Dividend: Our board of directors declared a 2024 annual dividend of $0.16 per common share, payable on December 13, 2024, to shareholders of record on November 27, 2024. The decision to declare an annual dividend is reviewed regularly by our board in context of our cash flow, financial position, strategy and other relevant factors, including appropriate alignment with the cyclical nature of our earnings. To recognize the return to our tier-one production rate, and in line with the principles of our capital allocation framework, we have recommended to our board of directors a dividend growth plan for consideration. Based on our plan, we expect an annual increase of at least $0.04 per common share over the fiscal periods 2024 through 2026, to achieve a doubling of the 2023 dividend from $0.12 per common share, to $0.24 per common share. In 2022, the board increased the dividend by 50% to reflect the expected improvement in our financial performance as we began the transition to our tier-one run rate.

 

  •  

Financial results impacted by purchase accounting: Third quarter results reflect normal quarterly variations in sales volumes, as well as delayed sales for Joint Venture Inkai (JV Inkai) due to continued transportation challenges, and the ongoing impact of purchase accounting for Westinghouse. Net earnings were $7 million, adjusted net losses were $3 million, and adjusted EBITDA was $308 million. During the first nine months of the year, net earnings of $36 million and adjusted net earnings of $115 million were lower, while adjusted EBITDA of $1.0 billion was higher than in 2023. Adjusted net earnings and adjusted EBITDA are non-IFRS measures, see page 5.

 

  •  

Strong 2024 financial outlook: We continue to expect strong cash flow generation. Due to the continued strengthening of the US dollar, we have updated our exchange rate assumption to reflect the average rate year-to-date in 2024 of $1.00 (US) for $1.35 (Cdn) (previously $1.00 (US) for $1.30 (Cdn)). As a result, our expected uranium average realized price increased to $77.80 per pound (previously $74.70 per pound), driving up several financial outlook metrics, including estimated consolidated revenue for the year, which is now expected to be about $3.01 billion to $3.16 billion (previously $2.85 billion to $3.0 billion), and our outlook for our share of Westinghouse’s 2024 adjusted EBITDA, which is now expected to be between $460 million and $530 million (previously $445 million to $510 million). See Outlook for 2024 in our third quarter MD&A for more information. Adjusted EBITDA attributable to Westinghouse is a non-IFRS measure, see page 5.

 

  •  

Strong uranium segment performance: In our uranium segment, production volumes for the third quarter and for the first nine months of the year were strong. Higher revenues and gross profit compared to last year were primarily driven by higher sales volume and higher Canadian dollar average realized price. Deliveries of 7.3 million pounds during the quarter were higher than the same period in 2023, while deliveries of 20.8 million pounds year-to-date were slightly lower than the same period last year due to normal quarterly variations, although it remained in line with the delivery pattern disclosed in our annual MD&A. Our annual expectation for uranium deliveries of between 32 million and 34 million pounds remains unchanged. See Uranium in our third quarter MD&A for more information.

 

  •  

Increased 2024 uranium production outlook: We updated our 2024 production outlook to be up to 37.0 million pounds (up to 23.1 million pounds our share) of uranium, to advance our strategy in step with the positive market momentum and to meet our commitments under our long-term contracts. The higher planned annual production level is due to the consistent run rate at the Key Lake mill, which we now expect to produce 19 million pounds (100% basis) of uranium in 2024 (previously 18 million pounds of uranium), partially offset by lower expected production and purchases from JV Inkai. Expected market and committed purchases for 2024 have been realigned to account for the increased uncertainty on the timing of receipt of our remaining share of 2024 production from JV Inkai. We have either taken delivery of, or have commitments for, the majority of our expected 2024 market purchases, but may look for additional opportunities to add to our inventory. See Outlook for 2024 in our third quarter MD&A for more information.

 

  •  

Inkai production lower than previously expected: At JV Inkai, production for the third quarter was similar to last year, but lower for the first nine months of this year compared to the same period in 2023, due to differences in the annual mine plan, a shift in the acidification schedule for new wellfields, and unstable acid supply throughout the year. Maximum annual expected production is now estimated to be approximately 7.7 million pounds (100% basis) of uranium, as the previous target of 8.3 million pounds of uranium was contingent upon receipt of sufficient volumes of sulfuric acid in accordance with a specific schedule and is now deemed unachievable. The first shipment containing approximately 2.3 million pounds of our share of Inkai’s 2024 production has arrived at the Canadian port and is expected to arrive at the Blind River refinery before the end of 2024. The timing for the shipment of our remaining share of 2024 production is uncertain, and our allocation of this year’s planned production from JV Inkai remains under discussion. The timing of deliveries from JV Inkai impacts our share of earnings from equity-accounted investee and the timing of receipt of our share of dividends. An updated NI 43-101 technical report for the Inkai mine is being finalized and is expected to be filed under Cameco’s profile on SEDAR+ within 45 days of this release. Changes to the mineral reserves, production profile, costs, sensitivities, environmental and regulatory matters, and other scientific and technical information will be updated in the relevant sections of the report.

 

- 2 -

  •  

Solid adjusted EBITDA from Westinghouse: While Westinghouse reported a net loss of $57 million (our share), for the third quarter compared to $47 million (our share) in the second quarter, adjusted EBITDA was $122 million, compared to $121 million in the second quarter. Due to normal variability in the timing of its customer requirements, and delivery and outage schedules, we expect to see stronger performance from the Westinghouse segment in the fourth quarter, with higher expected cash flows. Purchase accounting, which required the revaluation of Westinghouse’s inventory and other assets at the time of acquisition, and the expensing of certain non-operating acquisition-related transition costs continues to impact quarterly earnings and our 2024 earnings outlook. See Outlook for 2024 and Our earnings from Westinghouse in our third quarter MD&A for more information.

 

  •  

Selective long-term contracting, maintaining exposure to higher prices: As of September 30, 2024, we had commitments requiring delivery of an average of about 29 million pounds per year from 2024 through 2028. We also have contracts in our uranium and fuel services segments that span more than a decade, and in our uranium segment, many of those contracts benefit from market-related pricing mechanisms. In addition, we have a large and growing pipeline of business under discussion both on- and off-market, which we expect will help further build our long-term contract portfolio.

 

  •  

Maintaining financial discipline and balanced liquidity to execute on strategy:

 

  •  

Strong balance sheet: As of September 30, 2024, we had $197 million in cash and cash equivalents and $1.3 billion in total debt, demonstrating our ability to maintain liquidity while prioritizing repayment of our term loan debt. In addition, we have a $1.0 billion undrawn credit facility, which matures October 1, 2028. We continue to expect strong cash flow generation in 2024.

 

  •  

Focused debt reduction: Thanks to our risk-managed financial discipline, and strong cash position, in the third quarter we continued to prioritize the reduction of the floating-rate term loan used to finance the Westinghouse acquisition, repaying another $100 million (US) of the remaining $300 million (US) principal outstanding. We plan to continue to prioritize repayment of the remaining $200 million (US) outstanding principal on the term loan while balancing our liquidity and cash position.

 

  •  

Maintaining financial flexibility: We plan to file a new base shelf prospectus in the fourth quarter as the existing prospectus expired in October.

 

  •  

Changes to the executive team: Effective October 7, 2024, David Doerksen was appointed senior vice-president and chief marketing officer, overseeing the international marketing team in the development and execution of Cameco’s marketing strategy, and Lisa Aitken was appointed vice-president, marketing.

Consolidated financial results

 

HIGHLIGHTS    THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

($ MILLIONS EXCEPT WHERE INDICATED)

    2024     2023      CHANGE     2024      2023      CHANGE  

Revenue

      721       575        25 %      1,953        1,744        12 % 

Gross profit

      171       152        13 %      533        429        24 % 

Net earnings attributable to equity holders

      7       148        (95 )%      36        281        (87 )% 

$ per common share (basic)

      0.02       0.34        (94 )%      0.08        0.65        (88 )% 

$ per common share (diluted)

      0.02       0.34        (94 )%      0.08        0.65        (88 )% 

Adjusted net earnings (losses) (ANE) (non-IFRS, see page 5)

      (3 )      137        >(100 )%      115        249        (54 )% 

$ per common share (adjusted and diluted)

      (0.01 )      0.32        >(100 )%      0.26        0.57        (54 )% 

Adjusted EBITDA (non-IFRS, see page 5)

      308       234        32 %      992        511        94 % 

Cash provided by operations (after working capital changes)

      52       185        (72 )%      376        487        (23 )% 

 

- 3 -

The financial information presented for the three months and nine months ended September 30, 2023, and September 30, 2024, is unaudited.

Selected segment highlights

 

                THREE MONTHS
ENDED SEPTEMBER 30		             NINE MONTHS
ENDED SEPTEMBER 30		         

HIGHLIGHTS

          2024     2023      CHANGE      2024     2023      CHANGE  

Uranium

    Production volume (million lbs)        4.3       3.0        43%        17.3       11.9        45%  
   Sales volume (million lbs)        7.3       7.0        4%        20.8       22.2        (6)%  
   Average realized price1      ($US/lb )      60.18       52.57        14%        58.28       48.62        20%  
        ($Cdn/lb )      82.33       70.30        17%        78.97       65.40        21%  
   Revenue        600       489        23%        1,642       1,452        13%  
   Gross profit        154       139        11%        467       349        34%  
   Earnings before income taxes        171       218        (22)%        615       474        30%  
   Adjusted EBITDA2        240       224        7%        790       601        31%  

Fuel services

    Production volume (million kgU)        3.2       2.0        60%        9.9       9.6        3%  
   Sales volume (million kgU)        3.5       2.1        67%        7.9       7.8        1%  
   Average realized price 3    ($ Cdn/kgU )      34.54       39.87        (13)%        39.17       37.44        5%  
   Revenue        120       86        40%        311       291        7%  
   Earnings before income taxes        17       28        (39)%        71       97        (27)%  
   Adjusted EBITDA2        28       36        (22)%        96       121        (21)%  
   Adjusted EBITDA margin (%)2        23       42        (45)%        31       42        (26)%  

Westinghouse

    Revenue        726       —         n/a        2,052       —         n/a  

(our share)

    Net loss        (57 )      —         n/a        (227 )      —         n/a  
   Adjusted EBITDA2        122       —         n/a        320       —         n/a  

 

1 

Uranium average realized price is calculated as the revenue from sales of uranium concentrate, transportation and storage fees divided by the volume of uranium concentrates sold.

2 

Non-IFRS measure, see page 5.

3 

Fuel services average realized price is calculated as revenue from the sale of conversion and fabrication services, including fuel bundles and reactor components, transportation and storage fees divided by the volumes sold.

The table below shows the costs of produced and purchased uranium incurred in the reporting periods (see non-IFRS measures starting on page 5). These costs do not include care and maintenance costs, selling costs such as royalties, transportation and commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.

 

     THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

($CDN/LB)

    2024      2023      CHANGE     2024      2023      CHANGE  

Produced

                 

Cash cost

      29.21        32.37        (10 )%      20.90        25.60        (18 )% 

Non-cash cost

      10.40        12.24        (15 )%      9.66        11.92        (19 )% 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total production cost 1

      39.61        44.61        (11 )%      30.56        37.52        (19 )% 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Quantity produced (million lbs)1

      4.3        3.0        43 %      17.3        11.9        45 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Purchased

                 

Cash cost

      109.59        79.14        38 %      100.13        69.88        43 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Quantity purchased (million lbs)1

      1.8        0.8        >100 %      6.2        5.0        24 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Totals

                 

Produced and purchased costs

      60.26        51.88        16 %      48.91        47.09        4 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Quantities produced and purchased (million lbs)

      6.1        3.8        61 %      23.5        16.9        39 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

 

1

Due to equity accounting, our share of production from JV Inkai is shown as a purchase at the time of delivery. These purchases will fluctuate during the quarters and timing of purchases will not match production. There were no purchases during the quarter. In the first nine months of 2024, we purchased 1.2 million pounds at a purchase price per pound of $128.42 ($95.63 (US)).

 

- 4 -

Non-IFRS measures

The non-IFRS measures referenced in this document are supplemental measures, which are used as indicators of our financial performance. Management believes that these non-IFRS measures provide useful supplemental information to investors, securities analysts, lenders and other interested parties in assessing our operational performance and our ability to generate cash flows to meet our cash requirements. These measures are not recognized measures under IFRS, do not have standardized meanings, and are therefore may not be comparable to similarly titled measures presented by other companies. Accordingly, these measures should not be considered in isolation or as a substitute for the financial information reported under IFRS. We are not able to reconcile our forward-looking non-IFRS guidance because we cannot predict the timing and amounts of discrete items, which could significantly impact our IFRS results.

The following are the non-IFRS measures used in this document.

ADJUSTED NET EARNINGS

Adjusted net earnings is our net earnings attributable to equity holders, adjusted for non-operating or non-cash items such as gains and losses on derivatives and adjustments to reclamation provisions flowing through other operating expenses, that we believe do not reflect the underlying financial performance for the reporting period. Other items may also be adjusted from time to time. We adjust this measure for certain of the items that our equity-accounted investees make in arriving at other non-IFRS measures. Adjusted net earnings is one of the targets that we measure to form the basis for a portion of annual employee and executive compensation (see Measuring our results in our 2023 annual MD&A).

In calculating ANE we adjust for derivatives. We do not use hedge accounting under IFRS and, therefore, we are required to report gains and losses on all hedging activity, both for contracts that close in the period and those that remain outstanding at the end of the period. For the contracts that remain outstanding, we must treat them as though they were settled at the end of the reporting period (mark-to-market). However, we do not believe the gains and losses that we are required to report under IFRS appropriately reflect the intent of our hedging activities, so we make adjustments in calculating our ANE to better reflect the impact of our hedging program in the applicable reporting period. See Foreign exchange in our 2023 annual MD&A for more information.

We also adjust for changes to our reclamation provisions that flow directly through earnings. Every quarter we are required to update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 10 of our interim financial statements for more information. This amount has been excluded from our ANE measure.

As a result of the change in ownership of Westinghouse when it was acquired by Cameco and Brookfield, Westinghouse’s inventories at the acquisition date were revalued based on the market price at that date. As these quantities are sold, Westinghouse’s cost of products and services sold reflect these market values, regardless of their historic costs. Our share of these costs is included in earnings from equity-accounted investees and recorded in cost of products and services sold in the investee information (see note 7 to the financial statements). Since this expense is non-cash, outside of the normal course of business and only occurred due to the change in ownership, we have excluded our share from our ANE measure.

Westinghouse has also expensed some non-operating acquisition-related transition costs that the acquiring parties agreed to pay for, which resulted in a reduction in the purchase price paid. Our share of these costs is included in earnings from equity-accounted investees and recorded in other expenses in the investee information (see note 7 to the financial statements). Since this expense is outside of the normal course of business and only occurred due to the change in ownership, we have excluded our share from our ANE measure.

 

- 5 -

To facilitate a better understanding of these measures, the table below reconciles adjusted net earnings with our net earnings for the third quarter and first nine months of 2024 and compares it to the same periods in 2023.

 

     THREE MONTHS
ENDED SEPTEMBER 30		      NINE MONTHS
ENDED SEPTEMBER 30		  

($ MILLIONS)

    2024      2023      2024      2023  

Net earnings attributable to equity holders

      7        148        36        281  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjustments

            

Adjustments on derivatives

      (28 )       41        19        —   

Inventory purchase accounting (net of tax)

      —         —         50        —   

Acquisition-related transition costs (net of tax)

      5        —         24        —   

Adjustment to other operating expense (income)

      5        (48 )       (12 )       (42 ) 

Income taxes on adjustments

      8        (4 )       (2 )       10  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted net earnings (losses)

      (3 )       137        115        249  
  

 

 

     

 

 

     

 

 

     

 

 

  

The following table shows what contributed to the change in adjusted net earnings (non-IFRS measure, see above) for the third quarter and first nine months of 2024 compares to the same periods in 2023.

 

          THREE MONTHS
ENDED SEPTEMBER 30		      NINE MONTHS
ENDED SEPTEMBER 30		  

($ MILLIONS)

    IFRS      ADJUSTED      IFRS      ADJUSTED  

Net earnings - 2023

      148        137        281        249  
     

 

 

     

 

 

     

 

 

     

 

 

  

Change in gross profit by segment

            

(We calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A), net of hedging benefits)

 

Uranium

    Impact from sales volume changes      6        6        (22 )       (22 ) 
   Higher realized prices ($US)      74        74        270        270  
   Foreign exchange impact on realized prices      14        14        12        12  
   Higher costs      (78 )       (78 )       (139 )       (139 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  
   Change – uranium      16        16        121        121  
     

 

 

     

 

 

     

 

 

     

 

 

  

Fuel services

    Impact from sales volume changes      9        9        2        2  
   Higher (lower) realized prices ($Cdn)      (19 )       (19 )       14        14  
   Lower (higher) costs      13        13        (32 )       (32 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  
   Change – fuel services      3        3        (16 )       (16 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  

Other changes

            

Lower administration expenditures

      15        15        11        11  

Higher exploration and research and development expenditures

      (2 )       (2 )       (10 )       (10 ) 

Change in reclamation provisions

      (66 )       (13 )       (40 )       (10 ) 

Lower earnings from equity-accounted investees

      (66 )       (61 )       (176 )       (102 ) 

Change in gains or losses on derivatives

      68        (1 )       (23 )       (4 ) 

Change in foreign exchange gains or losses

      (68 )       (68 )       —         —   

Lower finance income

      (30 )       (30 )       (75 )       (75 ) 

Higher finance costs

      (12 )       (12 )       (48 )       (48 ) 

Change in income tax recovery or expense

      3        15        13        1  

Other

      (2 )       (2 )       (2 )       (2 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings (losses) - 2024

      7        (3 )       36        115  
     

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

EBITDA is defined as net earnings attributable to equity holders, adjusted for the costs related to the impact of the company’s capital and tax structure including depreciation and amortization, finance income, finance costs (including accretion) and income taxes. Included in EBITDA is our share of equity-accounted investees.

ADJUSTED EBITDA

Adjusted EBITDA is defined as EBITDA, as further adjusted for the impact of certain costs or benefits incurred in the period which are either not indicative of the underlying business performance or that impact the ability to assess the operating performance of the business. These adjustments include the amounts noted in the ANE definition.

 

- 6 -

In calculating adjusted EBITDA, we also adjust for items included in the results of our equity-accounted investees that are not adjustments to arrive at our ANE measure. These items are reported as part of other expenses within the investee financial information and are not representative of the underlying operations. These primarily include transaction, integration and restructuring costs related to acquisitions.

The company may realize similar gains or incur similar expenditures in the future.

ADJUSTED EBITDA MARGIN

Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue for the appropriate period.

EBITDA, adjusted EBITDA and adjusted EBITDA margin are non-IFRS measures which allow us and other users to assess results of operations from a management perspective without regard for our capital structure.

To facilitate a better understanding of these measures, the tables below reconcile net earnings with EBITDA and adjusted EBITDA for the third quarter and first nine months of 2024 and 2023.

For the quarter ended September 30, 2024:

 

            FUEL                     

($ MILLIONS)

    URANIUM      SERVICES      WESTINGHOUSE     OTHER     TOTAL  

Net earnings (loss) attributable to equity holders

      171        17        (57 )      (124 )      7  

Depreciation and amortization

      59        11        —        1       71  

Finance income

      —         —         —        (4 )      (4 ) 

Finance costs

      —         —         —        35       35  

Income taxes

      —         —         —        38       38  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
     230        28        (57 )      (54 )      147  

Adjustments on equity investees

             

Depreciation and amortization

      2        —         93       —     

Finance expense

      —         —         54       —     

Income taxes

      3        —         (2 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      5        —         145       —        150  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

EBITDA

      235        28        88       (54 )      297  

Loss on derivatives

      —         —         —        (28 )      (28 ) 

Other operating expense

      5        —         —        —        5  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
     5        —         —        (28 )      (23 ) 

Adjustments on equity investees

             

Acquisition-related transition costs

      —         —         7       —     

Other expenses

      —         —         27       —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      —         —         34       —        34  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

      240        28        122       (82 )      308  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

- 7 -

For the quarter ended September 30, 2023:

 

            FUEL                

($ MILLIONS)

    URANIUM      SERVICES      OTHER      TOTAL  

Net earnings (loss) attributable to equity holders

      218        28        (98 )       148  

Depreciation and amortization

      47        8        1        56  

Finance income

      —         —         (34 )       (34 ) 

Finance costs

      —         —         23        23  

Income taxes

      —         —         41        41  
  

 

 

     

 

 

     

 

 

     

 

 

  
     265        36        (67 )       234  

Adjustments on equity investees

            

Depreciation and amortization

      2        —         —      

Income taxes

      5        —         —      
  

 

 

     

 

 

     

 

 

     

 

 

  

Net adjustments on equity investees

      7        —         —         7  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

      272        36        (67 )       241  

Gain on derivatives

      —         —         41        41  

Other operating income

      (48 )       —         —         (48 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

      224        36        (26 )       234  
  

 

 

     

 

 

     

 

 

     

 

 

  

For the nine months ended September 30, 2024:

 

           FUEL                     

($ MILLIONS)

    URANIUM1     SERVICES      WESTINGHOUSE     OTHER     TOTAL  

Net earnings (loss) attributable to equity holders

      615       71        (227 )      (423 )      36  

Depreciation and amortization

      148       25        —        4       177  

Finance income

      —        —         —        (18 )      (18 ) 

Finance costs

      —        —         —        117       117  

Income taxes

      —        —         —        87       87  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  
     763       96        (227 )      (233 )      399  

Adjustments on equity investees

            

Depreciation and amortization

      12       —         267       —     

Finance income

      —        —         (3 )      —     

Finance expense

      —        —         172       —     

Income taxes

      27       —         (50 )      —     
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      39       —         386       —        425  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

EBITDA

      802       96        159       (233 )      824  

Gain on derivatives

      —        —         —        19       19  

Other operating income

      (12 )      —         —        —        (12 ) 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  
     (12 )      —         —        19       7  

Adjustments on equity investees

            

Inventory purchase accounting

      —        —         66       —     

Acquisition-related transition costs

      —        —         32       —     

Other expenses

      —        —         63       —     
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      —        —         161       —        161  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

      790       96        320       (214 )      992  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

 

- 8 -

For the nine months ended September 30, 2023:

 

            FUEL                

($ MILLIONS)

    URANIUM1      SERVICES      OTHER      TOTAL  

Net earnings (loss) attributable to equity holders

      474        97        (290 )       281  

Depreciation and amortization

      147        24        3        174  

Finance income

      —         —         (93 )       (93 ) 

Finance costs

      —         —         69        69  

Income taxes

      —         —         100        100  
  

 

 

     

 

 

     

 

 

     

 

 

  
     621        121        (211 )       531  

Adjustments on equity investees

            

Depreciation and amortization

      6        —         —      

Income taxes

      16        —         —      
  

 

 

     

 

 

     

 

 

     

 

 

  

Net adjustments on equity investees

      22        —         —         22  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

      643        121        (211 )       553  

Other operating income

      (42 )       —         —         (42 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

      601        121        (211 )       511  
  

 

 

     

 

 

     

 

 

     

 

 

  

CASH COST PER POUND, NON-CASH COST PER POUND AND TOTAL COST PER POUND FOR PRODUCED AND PURCHASED URANIUM

Cash cost per pound, non-cash cost per pound and total cost per pound for produced and purchased uranium are non-IFRS measures. We use these measures in our assessment of the performance of our uranium business. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS.

To facilitate a better understanding of these measures, the table below reconciles these measures to cost of product sold and depreciation and amortization for the third quarter and first nine months of 2024 and 2023.

 

     THREE MONTHS
ENDED SEPTEMBER 30		      NINE MONTHS
ENDED SEPTEMBER 30		  

($ MILLIONS)

    2024      2023      2024      2023  

Cost of product sold

      386.5        304.6        1,027.0        959.1  

Add / (subtract)

            

Royalties

      (38.4 )       (22.3 )       (88.5 )       (61.0 ) 

Care and maintenance costs

      (13.4 )       (12.1 )       (37.3 )       (35.2 ) 

Other selling costs

      (2.9 )       (3.0 )       (12.2 )       (7.1 ) 

Change in inventories

      (8.9 )       (106.8 )       93.4        (201.8 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Cash costs of production (a)

      322.9        160.4        982.4        654.0  

Add / (subtract)

            

Depreciation and amortization

      59.3        47.1        147.5        147.2  

Care and maintenance costs

      (0.2 )       (0.8 )       (0.6 )       (3.4 ) 

Change in inventories

      (14.4 )       (9.6 )       20.2        (2.0 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total production costs (b)

      367.6        197.1        1,149.5        795.8  
  

 

 

     

 

 

     

 

 

     

 

 

  

Uranium produced & purchased (million lbs) (c)

      6.1        3.8        23.5        16.9  
  

 

 

     

 

 

     

 

 

     

 

 

  

Cash costs per pound (a ÷ c)

      52.93        42.21        41.80        38.70  

Total costs per pound (b ÷ c)

      60.26        51.88        48.91        47.09  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

- 9 -

Management’s discussion and analysis (MD&A) and financial statements

The third quarter MD&A and unaudited condensed consolidated interim financial statements provide a detailed explanation of our operating results for the three and nine months ended September 30, 2024, as compared to the same periods last year. This news release should be read in conjunction with these documents, as well as our audited consolidated financial statements and notes for the year ended December 31, 2023, first quarter, second quarter and annual MD&A, and our most recent annual information form, all of which are available on our website at cameco.com, on SEDAR+ at sedarplus.ca, and on EDGAR at sec.gov/edgar.shtml.

Qualified persons

The technical and scientific information discussed in this document for our material properties McArthur River/Key Lake, Cigar Lake and Inkai was approved by the following individuals who are qualified persons for the purposes of NI 43-101:

 

MCARTHUR RIVER/KEY LAKE    CIGAR LAKE

•  Greg Murdock, general manager, McArthur River, Cameco

   

•  Kirk Lamont, general manager, Cigar Lake, Cameco

•  Daley McIntyre, general manager, Key Lake, Cameco

    INKAI
  

•  Sergey Ivanov, deputy director general, technical services, Cameco Kazakhstan LLP

Caution about forward-looking information

This news release includes statements and information about our expectations for the future, which we refer to as forward-looking information. Forward-looking information is based on our current views, which can change significantly, and actual results and events may be significantly different from what we currently expect. Examples of forward-looking information in this news release include: our view that our third quarter operational performance supports our return to a tier-one cost structure, and that there is a trend of improving operational performance and cash flow generation, backed by stable and rising market prices; our financial outlook for both Cameco and Westinghouse; our expectation of continued strengthening of the industry’s long term prospects; our recommended dividend growth plan and expectations regarding dividend payments, and increases through 2026; our perception of sustained, positive momentum for nuclear energy, and our ability to capture greater upside in future years; our view that our strategy will align with our commitments, permitting us to deliver fully-cycle value; our 2024 uranium production outlook; our ability to rebalance our supply sources; our production expectations for JV Inkai; our expectation of strong cash flow generation, and intention to prioritize debt management and reduction while maintaining liquidity and strong cash flow generation; our perception of a positive shift in government, industry and public support for nuclear energy, and continuing financial support for access to nuclear power; our belief that Cameco is uniquely positioned to benefit from those developments; our expected ability to achieve our vision, including a commitment to make our business sustainable over the long term; our expected uranium average realized prices, production and deliveries and outlook for our share of Westinghouse’s 2024 adjusted EBITDA, as well as its performance and cash flows; expected Key Lake Mill and JV Inkai production levels, and timing of shipments and deliveries; the expected timing of the finalization and filing of a new technical report for the Inkai mine; our expectations regarding the building of our long-term contract portfolio and pipeline of business under discussion; our intention to file a new base shelf prospectus in the fourth quarter; and the timing of our third quarter conference call and announcement of our 2024 fourth quarter and annual results.

 

- 10 -

Material risks that could lead to different results include: unexpected changes in uranium supply, demand, long-term contracting, and prices; changes in consumer demand for nuclear power and uranium as a result of changing societal views and objectives regarding nuclear power, electrification and decarbonization; the risk that our views regarding nuclear power, its growth profile, and benefits, may prove to be incorrect; the risk that we may not be able to achieve planned production levels within the expected timeframes, or that the costs involved in doing so exceed our expectations; the risk that the production levels at Inkai may not be at expected levels due to the unavailability of sufficient volumes of sulfuric acid or for any other reason, or that it may not be able to deliver its production when expected, risks to Westinghouse’s business associated with potential production disruptions, the implementation of its business objectives, compliance with licensing or quality assurance requirements, or that it may otherwise be unable to achieve expected growth; the risk that we may not be able to meet sales commitments for any reason; the risks to our business associated with potential production disruptions, including those related to global supply chain disruptions, global economic uncertainty, political volatility, labour relations issues, and operating risks; the risk that we may not be able to implement our business objectives in a manner consistent with our environmental, social, governance and other values; the risk that the strategy we are pursuing may prove unsuccessful, or that we may not be able to execute it successfully; the risk that Westinghouse may not be able to implement its business objectives in a manner consistent with its or our environmental, social, governance and other values; the filing of our new base shelf prospectus or the new technical report for the Inkai mine may be delayed for unanticipated reasons; we may be unable to pay dividends on our common shares through 2026 in the amounts we currently expect; and the risk that we may be delayed in announcing our future financial results.

In presenting the forward-looking information, we have made material assumptions which may prove incorrect about: uranium demand, supply, consumption, long-term contracting, growth in the demand for and global public acceptance of nuclear energy, and prices; our production, purchases, sales, deliveries and costs; the market conditions and other factors upon which we have based our future plans and forecasts; our contract pipeline discussions; Inkai production, its receipt of sufficient volumes of sulfuric acid, and our allocation of planned production and timing of deliveries; assumptions about Westinghouse’s production, purchases, sales, deliveries and costs, the absence of business disruptions, and the success of its plans and strategies; the success of our plans and strategies, including planned production; the absence of new and adverse government regulations, policies or decisions; that there will not be any significant adverse consequences to our business resulting from production disruptions, including those relating to supply disruptions, economic or political uncertainty and volatility, labour relation issues, aging infrastructure, and operating risks; the assumptions relating to Westinghouse’s adjusted EBITDA; the filing of our new base shelf prospectus and the new technical report for the Inkai mine will not be delayed for unanticipated reasons; annual dividends on our common shares will be declared and paid in the amounts we expected through 2026 and our ability to announce future financial results when expected.

Please also review the discussion in our 2023 annual MD&A, our 2024 first and second quarter MD&A and our most recent annual information form for other material risks that could cause actual results to differ significantly from our current expectations, and other material assumptions we have made. Forward-looking information is designed to help you understand management’s current views of our near-term and longer-term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by securities laws.

Conference call

We invite you to join our third quarter conference call on Thursday, November 7, 2024, at 8:00 a.m. Eastern.

The call will be open to all investors and the media. To join the call, please dial please dial (844) 763-8274 (Canada and US) or (647) 484-8814. An operator will put your call through. The slides and a live webcast of the conference call will be available from a link at cameco.com. See the link on our home page on the day of the call.

A recorded version of the proceedings will be available:

 

  •  

on our website, cameco.com, shortly after the call

 

  •  

on post view until midnight, Eastern, December 7, 2024, by calling (855) 669-9658 (Canada/ USA toll-free) or (412) 317-0088 (International toll) (Passcode 7713061)

 

- 11 -

2024 fourth quarter and annual report release date

We plan to announce our 2024 fourth quarter and annual consolidated financial and operating results before markets open on February 20, 2025. Announcement dates are subject to change.

Profile

Cameco is one of the largest global providers of the uranium fuel needed to energize a clean-air world. Our competitive position is based on our controlling ownership of the world’s largest high-grade reserves and low-cost operations, as well as significant investments across the nuclear fuel cycle, including ownership interests in Westinghouse Electric Company and Global Laser Enrichment. Utilities around the world rely on Cameco to provide global nuclear fuel solutions for the generation of safe, reliable, carbon-free nuclear power. Our shares trade on the Toronto and New York stock exchanges. Our head office is in Saskatoon, Saskatchewan, Canada.

As used in this news release, the terms we, us, our, the Company and Cameco mean Cameco Corporation and its subsidiaries unless otherwise indicated.

– End –

Investor inquiries:

Cory Kos

306-716-6782

cory_kos@cameco.com

Media inquiries:

Veronica Baker

306-385-5541

veronica_baker@cameco.com

 

- 12 -

Exhibit 99.2

 

LOGO

Management’s discussion and analysis

for the quarter ended September 30, 2024

 

6    THIRD QUARTER MARKET UPDATE
10    OUR STRATEGY
13    CONSOLIDATED FINANCIAL RESULTS
17    OUTLOOK FOR 2024
22    LIQUIDITY AND CAPITAL RESOURCES
24    FINANCIAL RESULTS BY SEGMENT
28    OUR OPERATIONS - THIRD QUARTER UPDATES
31    QUALIFIED PERSONS
31    NON-IFRS MEASURES
37    ADDITIONAL INFORMATION

This management’s discussion and analysis (MD&A) includes information that will help you understand management’s perspective of our unaudited condensed consolidated interim financial statements and notes for the quarter ended September 30, 2024 (interim financial statements). The information is based on what we knew as of and through November 6, 2024, and updates our first quarter, second quarter and annual MD&A included in our 2023 annual report.

As you review this MD&A, we encourage you to read our interim financial statements as well as our audited consolidated financial statements and notes for the year ended December 31, 2023, and annual MD&A. You can find more information about Cameco, including our audited consolidated financial statements and our most recent annual information form, on our website at cameco.com, on SEDAR+ at sedarplus.ca or on EDGAR at sec.gov. You should also read our annual information form before making an investment decision about our securities.

The financial information in this MD&A and in our financial statements and notes are prepared according to International Financial Reporting Standards (IFRS), unless otherwise indicated.

Unless we have specified otherwise, all dollar amounts are in Canadian dollars.

Throughout this document, the terms we, us, our and Cameco mean Cameco Corporation and its subsidiaries unless otherwise indicated.

Caution about forward-looking information

Our MD&A includes statements and information about our expectations for the future. When we discuss our strategy, plans, future financial and operating performance, or other things that have not yet taken place, we are making statements considered to be forward-looking information or forward-looking statements under Canadian and United States (US) securities laws. We refer to them in this MD&A as forward-looking information.

Key things to understand about the forward-looking information in this MD&A:

 

  •  

It typically includes words and phrases about the future, such as: anticipate, believe, estimate, expect, plan, will, intend, goal, target, forecast, project, strategy and outlook (see examples below).

 

  •  

It represents our current views and can change significantly.

 

  •  

It is based on a number of material assumptions, including those we have listed starting on page 4, which may prove to be incorrect.

 

  •  

Actual results and events may be significantly different from what we currently expect, due to the risks associated with our business. We list a number of these material risks below. We recommend you also review our most recent annual information form and annual MD&A, which includes a discussion of other material risks that could cause actual results to differ significantly from our current expectations.

 

  •  

Forward-looking information is designed to help you understand management’s current views of our near-term and longer-term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by applicable securities laws.

Examples of forward-looking information in this MD&A

 

•  our expectations regarding 2024 and future uranium supply, demand, contracting, geopolitical issues, and the market including the discussion under the heading Third quarter market update

 

•  the discussion under the heading Our strategy, including the role of nuclear energy in the world’s shift to a low-carbon, climate-resilient economy, our expectation that our strategy will allow us to increase long-term value, our intention to execute our strategy with an emphasis on safety, people and the environment, our belief that we have the right strategy to achieve our vision and will do so in a manner that reflects our values, our target to reduce our combined Scope 1 and Scope 2 greenhouse (GHG) emissions by 30% by 2030, from our 2015 baseline, our ability to address risks and opportunities that we believe may have a significant impact on our ability to operate sustainably and add long-term value for our stakeholders, our ambition to reach net-zero GHG emissions and our expected financial capacity to execute our strategy, invest in new opportunities and self-manage risk

 

•  the discussion under the heading Strategy in action, including expected Westinghouse segment performance, our expectations regarding uranium contracting, our contract portfolio and market conditions, our plans for production at McArthur River/Key Lake, Cigar Lake, and the Port Hope UF6 conversion facility, our expectations regarding production levels at JV Inkai and cash dividend entitlements and timing

 

•  the discussion of our expectations following the completion of our acquisition of a 49% interest in Westinghouse Electric Company (Westinghouse) including the variability of the impact of Westinghouse on our quarterly results due to its customer requirements, delivery and outage schedules

 

•  the discussion of our expectations relating to our Canada Revenue Agency (CRA) transfer pricing dispute, our confidence that the courts would reject any attempt by CRA to utilize the same position and arguments for tax years 2007 through 2014 or the alternate position advanced for tax years 2014 through 2017, and our belief that CRA should return the full amount of cash and security that has been paid or otherwise secured by us

   

•  the discussion under the heading Outlook for 2024, including our production plan, our planned production levels, expected care and maintenance costs for our tier-two assets, our cost of sales in our fuel services segment, our outlook for our uranium average realized price, and other information in the table under the heading 2024 Financial Outlook, our revenue, adjusted net earnings, and cash flow sensitivity analysis, our price sensitivity analysis for our uranium segment, our expected share of adjusted EBITDA from our equity investment in Westinghouse, and its expected adjusted EBITDA in 2024 and compound annual adjusted EBITDA growth rate over the next five years

 

•  the discussion under the heading Liquidity and capital resources, including our available alternatives to fund future capital requirements, our expectations regarding cash flow generation in 2024, our expectation that our cash balances and operating cash flows will meet our capital requirements during 2024

 

•  our expectation that our operating and investment activities for the remainder of 2024 will not be constrained by the covenants in our credit agreements, including the financial covenants

 

•  our intention to update the table under the heading Expected realized uranium price sensitivity under various spot price assumptions at September 30, 2024 each quarter to reflect deliveries made and changes to our contract portfolio

 

•  our future plans and expectations for each of our uranium operating properties and fuel services operating sites, including production levels and our expected cash cost of production at McArthur River/Key Lake and Cigar Lake

 

•  our expectations regarding future JV Inkai production levels and dividend payments, including its ability to transport shipments of our share of Inkai’s production using the Trans-Caspian International Transport Route, which does not rely on Russian rail lines or ports, the possibility of further delays in expected Inkai deliveries and the implications of announced tax law changes in Kazakhstan including our preliminary analysis of their impact on Inkai’s production costs and conclusions that indicate production costs in Kazakhstan would be similar to northern Saskatchewan operations

 

2    CAMECO CORPORATION            

•  our ability to draw upon long-term purchase agreements and loan arrangements to mitigate the risks of a production shortfall or delays in Inkai deliveries

 

•  the expected care and maintenance costs for our US ISR operations and Rabbit Lake for 2024

 

•  our intention to file a new base shelf-prospectus, our expectation that we will continue to navigate by our investment-grade credit rating, and our intention to prioritize repayment of the remaining $200 million (US) outstanding in floating-rate term loan debt used to finance the Westinghouse acquisition

   

•  the expected timing of the finalization and filing of a new technical report for the Inkai mine

 

•  our expectations regarding the payment of the 2024 dividend declared by our board of directors, and the expected amounts of dividend payments on our common shares through 2026

Material Risks

 

•  actual sales volumes or market prices for any of our products or services are lower than we expect, or cost of sales is higher than we expect, for any reason, including changes in market prices, loss of market share to a competitor, trade restrictions, or geopolitical issues

 

•  we are adversely affected by changes in currency exchange rates, interest rates, royalty rates, tax rates or inflation

 

•  our production costs are higher than planned, or necessary supplies are not available, or not available on commercially reasonable terms

 

•  our strategies may change, be unsuccessful or have unanticipated consequences, or we may not be able to achieve anticipated operational flexibility and efficiency

 

•  changing views of governments regarding the pursuit of carbon reduction strategies or that our view on the role of nuclear power in pursuit of those strategies may prove to be inaccurate

 

•  risks relating to the development and use of new technology or lack of appropriate technology needed to achieve our 30% GHG emissions reduction target or advance our ambition to reach net-zero GHG emissions

 

•  our estimates and forecasts prove to be inaccurate, including production, purchases, deliveries, cash flow, revenue, costs, decommissioning, reclamation expenses, or the receipt of future dividends from JV Inkai

 

•  that we may not realize expected benefits from the Westinghouse acquisition

 

•  that Westinghouse fails to generate sufficient cash flow to fund its approved annual operating budget or make distributions to the partners

 

•  the risk that we and Westinghouse may not be able to meet sales commitments for any reason

 

•  the risk that Westinghouse may not achieve the expected growth in its business

 

•  the risk to Westinghouse’s business associated with potential production disruptions, including those related to global supply chain disruptions, global economic uncertainty, political volatility, labour relations issues, and operating risks

 

•  the risk that Westinghouse may not be able to implement its business objectives in a manner consistent with its or our environmental, social, governance and other values

 

•  the risk that Westinghouse’s strategies may change, be unsuccessful, or have unanticipated consequences

 

•  the risk that Westinghouse may be unsuccessful in respect of its new business

   

•  the risk that Westinghouse may fail to comply with nuclear licence and quality assurance requirements at its facilities

 

•  the risk that Westinghouse may lose protections against liability for nuclear damage, including discontinuation of global nuclear liability regimes and indemnities

 

•  the risk that increased trade barriers may adversely impact Westinghouse’s business

 

•  the risk that Westinghouse may default under its credit facilities, impacting adversely Westinghouse’s ability to fund its ongoing operations and to make distributions

 

•  the risk that liabilities at Westinghouse may exceed our estimates and the discovery of unknown or undisclosed liabilities

 

•  the risk that occupational health and safety issues may arise at Westinghouse’s operations

 

•  the risk that there may be disputes between us and Brookfield regarding our strategic partnership

 

•  the risk that we may default under the governance agreement with Brookfield, including us losing some or all of our interest in Westinghouse

 

•  the risk that we are unable to enforce our legal rights under our agreements, permits or licences

 

•  disruption or delay in the transportation of our products

 

•  that we are subject to litigation or arbitration that has an adverse outcome

 

•  that the courts may accept the same, similar or different positions and arguments advanced by CRA to reach decisions that are adverse to us for other tax years

 

•  the possibility of a materially different outcome in disputes with CRA for other tax years

 

•  that CRA does not agree that the court rulings for the years that have been resolved in Cameco’s favour should apply to subsequent tax years

 

•  that CRA will not return all or substantially all of the cash and security that has been paid or otherwise secured in a timely manner, or at all

 

•  there are defects in, or challenges to title, to our properties

 

•  our mineral reserve and resource estimates are not reliable, or there are unexpected or challenging geological, hydrological or mining conditions

 

•  we are affected by environmental, safety and regulatory risks, including workforce health and safety or increased regulatory burdens or delays

 

•  necessary permits or approvals from government authorities cannot be obtained or maintained

 

        2024 THIRD QUARTER REPORT      3  

•  we are affected by political risks, including unrest in Kazakhstan, and geopolitical events, including the Russian invasion of Ukraine

 

•  operations are disrupted due to problems with our own or our joint venture partners’, suppliers’ or customers’ facilities, the unavailability of reagents, equipment, operating parts and supplies critical to production, equipment failure, lack of tailings capacity, labour shortages, labour relations issues, strikes or lockouts, fires, underground floods, cave-ins, ground movements, tailings dam failures, transportation disruptions or accidents, aging infrastructure, or other development and operating risks

 

•  we are affected by war, terrorism, cyber-attacks, sabotage, blockades, civil unrest, social or political activism, outbreak of illness (such as a pandemic like COVID-19), accident or a deterioration in political support for, or demand for, nuclear energy

 

•  a major accident at a nuclear power plant

 

•  we are impacted by changes in the regulation or public perception of the safety of nuclear power plants, which adversely affect the construction of new plants, the relicensing of existing plants and the demand for uranium

 

•  government laws, regulations, policies or decisions that adversely affect us, including tax and trade laws and sanctions on nuclear fuel exports and imports

 

•  our uranium suppliers or purchasers fail to fulfil their commitments

   

•  our McArthur River development, mining or production plans are delayed or do not succeed for any reason

 

•  our Key Lake mill production plan is delayed or does not succeed for any reason

 

•  our Cigar Lake development, mining or production plans are delayed or do not succeed for any reason

 

•  JV Inkai’s development, mining or production plans are delayed or do not succeed for any reason or JV Inkai is unable to transport and deliver its production

 

•  our production plan for our Port Hope UF6 conversion facility is delayed or does not succeed for any reason, including due to the availability of production supplies

 

•  our expectations relating to care and maintenance costs prove to be inaccurate

 

•  we are affected by natural phenomena, such as forest fires, floods and earthquakes as well as shifts in temperature, precipitation, and the impact of more frequent severe weather conditions on our operations as a result of climate change

 

•  the filing of our new base shelf prospectus or the new technical report for the Inkai mine may be delayed for unanticipated reasons

 

•  we may be unable to pay dividends on our common shares through 2026 in the amounts we currently expect

Material Assumptions

 

•  our expectations regarding sales and purchase volumes and prices for uranium and fuel services, cost of sales, trade restrictions, inflation, and that counterparties to our sales and purchase agreements will honour their commitments

 

•  our expectations for the nuclear industry, including its growth profile, market conditions, geopolitical issues, and the demand for and supply of uranium

 

•  the continuing pursuit of carbon reduction strategies by governments and the role of nuclear in the pursuit of those strategies

 

•  the availability or development of technologies needed to achieve our 30% GHG emissions reduction target or advance our net-zero GHG emission ambition

 

•  the assumptions discussed under the heading 2024 Financial Outlook, including the assumptions used to prepare the outlook table and assumptions relating to growth in Westinghouse adjusted EBITDA

 

•  our expectations regarding spot prices and realized prices for uranium, and other factors discussed under the heading Price sensitivity analysis: uranium segment

 

•  market conditions and other factors upon which we based the Westinghouse acquisition and our related forecasts will be as expected

 

•  the success of our plans and strategies relating to the Westinghouse acquisition

 

•  that the construction of new nuclear power plants and the relicensing of existing nuclear power plants will not be adversely affected by changes in regulation or in the public perception of the safety of nuclear power plants

   

•  our ability to continue to supply our products and services in the expected quantities and at the expected times

 

•  our expected production levels for Cigar Lake, McArthur River/Key Lake, JV Inkai and our fuel services operating sites

 

•  plans to transport our products succeed, including the shipment of our share of JV Inkai production to our Blind River refinery

 

•  our ability to mitigate adverse consequences of production shortfalls or delays in the shipment of our share of JV Inkai production to our Blind River refinery

 

•  our cost expectations, including production costs, operating costs, and capital costs

 

•  our expectations regarding tax payments, tax rates, royalty rates, currency exchange rates, interest rates and inflation

 

•  in our dispute with CRA that courts will reach consistent decisions for other tax years that are based upon similar positions and arguments

 

•  that CRA will not successfully advance different positions and arguments that may lead to different outcomes for other tax years

 

•  our expectation that we will recover all or substantially all of the amounts paid or secured in respect of the CRA dispute to date

 

•  our decommissioning and reclamation estimates, including the assumptions upon which they are based, are reliable

 

•  our mineral reserve and resource estimates, and the assumptions upon which they are based, are reliable

 

•  our understanding of the geological, hydrological and other conditions at our uranium properties

 

4    CAMECO CORPORATION            

•  our McArthur River and Cigar Lake development, mining and production plans succeed

 

•  our Key Lake mill production plans succeed

 

•  JV Inkai’s development, mining and production plans succeed, and that JV Inkai will be able to deliver its production

 

•  the ability of JV Inkai to pay dividends

 

•  our production plan for our Port Hope UF6 conversion facility succeeds

 

•  that care and maintenance costs will be as expected

 

•  our and our contractors’ ability to comply with current and future environmental, safety and other regulatory requirements and to obtain and maintain required regulatory approvals

 

•  neither our operations, nor those of our joint venture partners, suppliers or customers, are significantly disrupted as a result of political instability, nationalization, terrorism, sabotage, blockades, civil unrest, breakdown, climate change, natural disasters, aging infrastructure, forest or other fires, outbreak of illness (such as a pandemic like COVID-19), governmental, political or regulatory actions, litigation or arbitration proceedings, cyber-attacks, the unavailability of reagents, equipment, operating parts and supplies critical to production, labour shortages, labour relations issues, strikes or lockouts, health and safety issues, underground floods, increased loadings into the environment, cave-ins, ground movements, tailings dam failure, lack of tailings capacity, improper air emission or treated water releases, transportation disruptions or accidents, aging infrastructure, or other development or operating risks

 

•  the filing of our new base shelf prospectus and the new technical report for the Inkai mine will not be delayed for unanticipated reasons

 

•  annual dividends on our common shares will be declared and paid in the amounts we expect through 2026

   

•  Westinghouse’s ability to generate cash flow and fund its approved annual operating budget and make distributions to the partners

 

•  our ability to compete for additional business opportunities so as to generate additional revenue for us as a result of the Westinghouse acquisition

 

•  market conditions and other factors upon which we based the Westinghouse acquisition and our related forecasts will be as expected

 

•  the success of our plans and strategies relating to the Westinghouse acquisition

 

•  Westinghouse’s production, purchases, sales, deliveries, and costs

 

•  the assumptions and discussion set out under the heading Outlook

 

•  the market conditions and other factors upon which we have based Westinghouse’s future plans and forecasts

 

•  Westinghouse’s ability to mitigate adverse consequences of delays in production and construction

 

•  the success of Westinghouse’s plans and strategies

 

•  the absence of new and adverse government regulations, policies or decisions

 

•  that there will not be any significant adverse consequences to Westinghouse’s business resulting from business disruptions, including those relating to supply disruptions, economic or political uncertainty and volatility, labour relation issues, and operating risks

 

•  Westinghouse will comply with the covenants in its credit agreement

 

•  Westinghouse will comply with nuclear licence and quality assurance requirements at its facilities

 

•  Westinghouse maintaining protections against liability for nuclear damage, including continuation of global nuclear liability regimes and indemnities

 

•  that known and unknown liabilities at Westinghouse will not materially exceed our estimates

 

        2024 THIRD QUARTER REPORT      5  

Third quarter market update

Ongoing geopolitical events, energy security concerns, and the global focus on the climate crisis amid rising low-carbon energy demand have created what we believe are transformative tailwinds for the nuclear power industry, from both a demand and supply perspective. With many countries looking to reindustrialize and nationalize sourcing capabilities, at COP28 in 2023, global leaders, heads of state and industry leaders acknowledged that it is not possible to achieve net-zero carbon emissions (net-zero) without nuclear power and pledged to triple generating capacity by 2050. In addition, there is increasing demand for reliable, uninterrupted power supplies to underpin large, energy-intensive industries, with recognition from within those sectors that baseload nuclear power is on the critical path for achieving the anticipated transformations with secure and carbon-free sources. Alongside that recognition is an understanding that a sufficient supply of nuclear fuel and fuel cycle services are essential to realizing a tripling of nuclear power.

In the third quarter of 2024, the long-term uranium price increased to its highest level since 2012 (in 2024 constant dollars). The uranium spot price remained range-bound between $80 (US) and $85 (US), higher than the same period in 2023. Over the past two years, fuel buyers continued to secure their long-term requirements for conversion and enrichment services, and they have started to return their attention to the procurement of uranium required to feed into those services. In 2024, fuel buyers have secured over 90 million pounds U3O8 equivalent as of October 28, 2024, under long-term contracts (as reported by UxC LLC (UxC)). The continued contracting and focus on security of supply has resulted in higher prices across the fuel cycle, driven by requests for proposals from utilities entering the market alongside inbound requests for direct long-term off-market negotiations.

Some of the more significant developments affecting supply in the quarter and to date include:

 

  •  

Sprott Physical Uranium Trust (SPUT) has purchased nearly 3 million pounds U3O8 thus far in 2024, bringing total purchases since inception to nearly 48 million pounds U3O8. Volatility in equity markets has impacted whether SPUT is trading at a discount or premium to its net asset value, therefore impacting its ability to raise funds to purchase uranium.

 

  •  

On August 1, Kazatomprom (KAP) provided an update on 2024 production guidance, increasing expected total production from Kazakhstan from a range of 54.6 million to 58.5 million pounds U3O8, to a range of 58.5 million to 61.1 million pounds U3O8. Subsequently, KAP reported lower 2025 production guidance due to project delays and continued sulfuric acid shortages, with total Kazakh production guidance reduced from a range of 79.3 million to 81.9 million pounds U3O8 to a range of 65 million to 68.9 million pounds U3O8. A significant portion of the reduced 2025 guidance resulted from production delays at Appak LLP, as well as JV Budenovskoye LLP, where KAP also reduced its 2026 production target. Additionally, KAP reduced production guidance for JV KATCO LLP below annual production capacity until at least 2026.

 

  •  

The Prohibiting Russian Uranium Imports Act (H.R. 1042) went into effect in August and prohibits the imports of Russian low-enriched uranium (LEU) into the US until 2040. It contains a US Department of Energy (DOE) waiver process available until 2028, where utilities can apply through a public process for exception to the import ban in situations concerning energy and national security. Thus far, multiple waiver submissions have been approved in whole or in part, though full details have not been made public.

 

  •  

In October, the DOE announced four companies are now eligible to bid on future Delivery Orders/Task Orders related to the provision of enrichment services as part of its high assay low enriched uranium (HALEU) request for proposals. The contract awardees are each to receive a guaranteed minimum of $2 million (US). Companies selected under the request for proposals are: American Centrifuge Operating, General Matter, Louisiana Energy Services and Orano Federal Services. The DOE has approved total funding of up to $2.7 billion (US) for the HALEU program, subject to availability of appropriations and other eligibility requirements.

 

  •  

Orano announced in October that they are suspending operations at their SOMAIR mine in Niger, as an interim measure, due to growing financial difficulties resulting from the coup d’état in July 2023 and the closure of the main supply and export route in Niger.

 

  •  

BHP Group announced in October that they were forced to halt operations at Olympic Dam after severe electrical storms damaged critical transmission infrastructure in northern South Australia. Olympic Dam produced over 7.5 million pounds U3O8 in 2023, while the impact of this outage is not yet known.

 

6    CAMECO CORPORATION            

  •  

In October, Urenco announced it installed the first new centrifuges at their Urenco USA (UUSA) enrichment facility in New Mexico, US. The expansion is on track to begin producing enriched uranium from the newly installed centrifuges in 2025 and to be fully implemented by 2027, boosting UUSA’s total capacity by 15%, or approximately 700,000 SWU annually. A total of 1.8 million SWU capacity expansion is planned across three Urenco facilities including in Germany and the Netherlands, which represents a 10% capacity increase.

 

  •  

Orano announced in October that it laid the foundation stone of the Georges Besse II (GBII) expansion project at the Tricastin site in France. Orano previously announced the 1.7-billion-euro expansion project, where they seek to grow GBII’s enrichment capacity by more than 30%, or approximately 2.5 million SWU annually, and aim to commence initial operations by 2028 and full commissioning in 2030.

According to the International Atomic Energy Agency (IAEA), globally, there are currently 440 operable reactors and 63 reactors under construction. Demand-related developments continue to evidence growing support for the nuclear industry, with over 30 countries pledging to triple their nuclear power capacity by 2050. Many nations are reaffirming their commitment to existing nuclear and/or reversing policies to phase out nuclear, non-nuclear countries are emerging as candidates for new nuclear capacity, improvements are being made in global sustainable financing policies to include nuclear energy, and opinion polls indicate improving public support. With several reactors being saved from early retirement, life-extensions to existing reactors being sought and approved, and new build construction projects underway and many more planned, demand for uranium fuel continues to improve in the near-, medium- and long-term.

The more significant developments in the quarter affecting current and future demand include:

 

  •  

The International Energy Agency’s 2024 World Energy Outlook report was released in October. The projections for global electricity demand in the Stated Policies Scenario (SPS) are up 6%, or 2,200 terawatt-hours (TWh) higher in 2035, driven primarily by light industrial consumption, cooling, mobility, and data centers and artificial intelligence (AI). Nuclear generation showed a modest increase in the SPS while the Net Zero Scenario shows a 16% increase compared to the prior report by 2050, increasing from 6,000 to 7,000 TWh.

 

  •  

In the US, Constellation Energy announced in September their plans to restart the 835 MWe Crane Clean Energy Center (formerly Three Mile Island Unit 1), located in Pennsylvania. The restart is planned for 2028 with Microsoft agreeing to purchase dedicated energy from the reactivated plant over 20 years. The energy agreement is intended to match what is consumed by the Microsoft data center in the grid operator, PJM Interconnection.

 

  •  

In September, the DOE released its Nuclear Liftoff Report, outlining plans to add 200 GWe of new generating capacity by 2050 to triple US nuclear by 2050, as part of their net-zero emissions target. Starting in 2030, the report calls for a 13 GWe annual increase in output for 15 years to reach 300 GWe by 2050. This increase will come from extending reactor operating licences, uprating of capacity, and restarting shutdown reactors along with new large scale and advanced reactors. The report calls for a significant increase in supply across the nuclear fuel supply chain and notably a secure supply of uranium from the US, allies, and partners.

 

  •  

In October, the DOE opened funding applications for up to $900 million (US) to initially support the domestic deployment of Generation III+ small modular reactor (SMR) technologies.

 

  •  

With the rapid expansion of AI, data center demand continues to increase, and advanced reactors/SMR’s are now being considered a key solution. Google announced a deal recently with Kairos Power to buy the output from at least six first-of-a-kind fluoride salt-cooled, high-temperature reactors.

 

  •  

Amazon signed multiple agreements with X-energy to support the construction of more than 600 MWe of SMR capacity in Washington and Virginia. The company agreed to invest $500 million (US) through Energy Northwest with plans to generate up to 320 MWe of electricity by early 2030.

 

  •  

In July, the US Nuclear Regulatory Commission renewed the operating licenses of Vistra’s Comanche Peak units 1 and 2, extending the operating licenses for an additional 20 years, keeping the reactors online until the early 2050’s.

 

  •  

In Canada, Ontario Power Generation (OPG) began site preparations for the Darlington New Nuclear Project involving fabrication and pre-assembly buildings, site grading and drilling for the reactor building shaft retaining wall. Recently OPG completed the pre-requisite site preparation activities for units 2-4 with the grading for future units expected soon.

 

  •  

In August, China’s state council approved the addition of four new Westinghouse designed Hualong One (HPR 1000) reactors, bringing the total number of approved reactors in China to 16. The approval was granted to State Power Investment Corporation for two units at its Bailong project and to China General Nuclear Power Corporation for two units at its Lufeng project.

 

        2024 THIRD QUARTER REPORT      7  

  •  

In Japan, Chugoku Electric Power Company announced plans to restart Unit 2 at Shimane nuclear power plant, which has been offline since 2012, in early December 2024 and will commence commercial operations in January 2025.

 

  •  

In India, Rajasthan Unit 7 achieved criticality in September and is expected to be fully operational later in 2024. The 700 MWe reactor is the third of 16 indigenous pressurized heavy water reactors being built, while Rajasthan unit 8 is expected to begin operation in 2025.

 

  •  

Italy is moving towards a reversal of the country’s current ban on nuclear power production with plans to draft rules for new nuclear power technologies by early 2025. In addition, a memorandum of understanding was signed in July between Electricité de France (EDF), Edison, Ansaldo Energia, Ansaldo Nucleare and Federacciai, aiming to promote nuclear power to improve the competitiveness and reduce emissions for the Italian steel industry. This includes cooperation and co-investment opportunities in new reactor builds and construction of SMR’s in Italy within the next decade.

 

  •  

In September, a draft electric power plan was published by the Unified Energy System of Russia outlining the construction of up to 34 new reactors (28 GWe), bringing the country’s nuclear energy share from 18.9% today to 23.5% by 2042. This plan supports reaching the 2045 target nuclear share of 25% by 2045 as set by the President of the Russian Federation. The new generating capacity will come from a combination of large scale and small modular reactors and includes replacement of existing units as well as new locations.

 

  •  

In Romania, the US Exim Bank approved a $98 million (US) loan commitment for the financing of an SMR project with NuScale. The project aims for 462 MWe of capacity at a retired coal plant in the country with a total of six 77 MWe modules to be constructed.

 

 

Caution about forward-looking information relating to the nuclear industry

This discussion of our expectations for the nuclear industry, including its growth profile, uranium supply and demand, and reactor growth is forward-looking information that is based upon the assumptions and subject to the material risks discussed under the heading Caution about forward-looking information beginning on page 2.

Industry prices at quarter end

 

     SEP 30      JUN 30      MAR 31      DEC 31      SEP 30      JUN 30  
     2024      2024      2024      2023      2023      2023  

Uranium ($US/lb U3O8)1

                  

Average spot market price

      82.00        84.25        87.75        91.00        71.58        56.10  

Average long-term price

      81.50        79.50        77.50        68.00        61.50        56.00  

Fuel services ($US/kgU as UF6)1

                  

Average spot market price

                  

North America

      72.00        60.00        58.00        46.00        40.88        40.75  

Europe

      72.00        60.00        58.00        46.00        40.88        40.75  

Average long-term price

                  

North America

      43.25        38.00        35.50        34.25        31.50        30.75  

Europe

      43.25        38.00        35.50        34.25        31.50        30.50  

Note: the industry does not publish UO2 prices.

                  

 

1 

Average of prices reported by TradeTech and UxC

On the spot market, where purchases call for delivery within one year, the volume reported by UxC for the third quarter of 2024 was 12 million pounds U3O8 equivalent, slightly lower than the third quarter of 2023. Total spot purchases for the first nine months of 2024 were 34 million pounds U3O8 equivalent, compared to 44 million pounds U3O8 equivalent over the same period in 2023. As of September 30, 2024, the average reported spot price was $82.00 (US) per pound U3O8 equivalent, a decrease of $2.25 (US) per pound from the previous quarter due to very small volumes of uncommitted supply entering the near-term market, where there is little fundamental in-year demand.

 

8    CAMECO CORPORATION            

Long-term contracts generally call for deliveries to begin more than two years after the contract is finalized, and use a number of pricing formulas, including base-escalated prices set at time of contracting and escalated over the term of the contract, and market-related prices, which reference spot and/or long-term indicators, and are generally set a month or more prior to delivery, typically including floor prices and ceiling prices that are also escalated to time of delivery. Long-term contracting reported by UxC through the first nine months to September 30, 2024, totaled about 53 million pounds U3O8 equivalent, down from about 144 million pounds U3O8 equivalent reported over the same period in 2023. Reported long-term volumes increased substantially subsequent to the quarter end, totaling over 90 million pounds U3O8 equivalent as of October 28, 2024. The contracting volume in 2023 was much higher due to significant non-US utilities diversifying away from Russian supply, including our contracts with Ukraine and Bulgaria, which alone, accounted for about 46 million pounds U3O8. The long-term uranium volumes reported to date in 2024 can be attributed in part to US utilities awaiting clarity on implementation of the Russian uranium import ban, and clarity around the US waiver process, although requests for proposals from utilities are continuing alongside requests for direct off-market negotiations.

The average reported long-term price at the end of the quarter was $81.50 (US) per pound U3O8 equivalent, an increase of $2.00 (US) per pound from the previous quarter, and the highest reported long-term price since 2012 (in 2024 constant dollars).

With increased demand for western conversion services, pricing in both North America and Europe continues to be strong. At the end of the third quarter, the average reported spot price for conversion reached a record high of $72.00 (US) per kilogram uranium (kgU) as UF6, up $12.00 (US) from the previous quarter. Long-term UF6 conversion prices for North America and Europe finished the quarter at $43.25 (US) per kgU, up $5.25 (US) from the previous quarter.

 

        2024 THIRD QUARTER REPORT      9  

Our strategy

We are a pure-play investment in the growing demand for nuclear energy, focused on taking advantage of the near-, medium- and long-term growth occurring in our industry. We provide nuclear fuel and nuclear power products, services and technologies across the fuel and reactor life cycles, augmented by our investment in Westinghouse, that supports the generation of carbon-free, reliable, secure and affordable energy. Our strategy is set within the context of what we believe is a transitioning market environment. Increasing populations, a growing focus on electrification and decarbonization, and concerns about energy security and affordability are driving a global focus on tripling nuclear power capacity by 2050, which is expected to durably strengthen long-term fundamentals for our industry. Nuclear energy must be a central part of the solution to the world’s shift to a low-carbon, climate resilient economy. It is an option that can provide the necessary power in a reliable, safe, and affordable manner, and in a way that is expected to help avoid some of the worst consequences of climate change.

Our strategy is to capture full-cycle value by:

 

  •  

remaining disciplined in our contracting activity, building a balanced portfolio in accordance with our contracting framework

 

  •  

profitably producing from our tier-one assets and aligning our production decisions in all segments of our business with our contract portfolio and customer needs

 

  •  

being financially disciplined to allow us to

 

  •  

execute on our strategy

 

  •  

invest in new opportunities that are expected to add long-term value

 

  •  

self-manage risk

 

  •  

exploring other emerging opportunities within the nuclear power value chain that align with our commitment to manage our business responsibly and sustainably, contribute to decarbonization, and help to provide secure and affordable energy

We expect our strategy will allow us to increase long-term value, and we will execute it with an emphasis on safety, people and the environment.

Our vision – “Energizing a clean-air world” – recognizes that we have an important role to play in enabling the vast reductions in global greenhouse gas (GHG) emissions required to achieve a resilient net-zero carbon economy. We support climate action that is consistent with the ambitions of the Paris Agreement and the Canadian government’s commitment to the agreement, which seeks to limit global temperature rise to less than 2° Celsius, a target that climate scientists believe will require the world to reach net-zero by 2050 or sooner. Our uranium and fuel services are used around the world in the generation of safe, reliable, zero-carbon, base-load nuclear power.

We believe we have the right strategy to achieve our vision, and we will do so in a manner that reflects our values. For over 35 years, we have been operating and delivering our products responsibly. Building on that strong foundation, we have set a target to reduce our combined Scope 1 and Scope 2 GHG emissions by 30% by 2030, from our 2015 baseline, as our first major milestone in our ambition of being net-zero. In 2023, we targeted to refine the calculations to quantify our Scope 3 emissions to further understand our value chain GHG emissions. We successfully met this target, and for the first time, in our 2023 Sustainability Report, we have disclosed our estimated Scope 3 emissions value and quantification method. We remain committed to our efforts to transform our own, already low, greenhouse gas footprint, and we continue to identify and address the risks and opportunities that we believe may have a significant impact on our ability to operate sustainably and add long-term value for our stakeholders.

You can read more about our strategy in our 2023 annual MD&A and our approach to sustainability in our 2023 Sustainability Report.

Strategy in action

With the ongoing transition and improvements in the nuclear fuel market, our three-pillar strategy is guiding our disciplined contracting, supply and financial decisions.

In the third quarter, results reflect normal quarterly variation in sales volumes, delayed sales for JV Inkai due to continued transportation challenges, and the ongoing impact of purchase accounting and quarterly variability for Westinghouse. Net earnings were $7 million, adjusted net losses were $3 million, and adjusted EBITDA was $308 million. During the first nine months of the year, net earnings of $36 million and adjusted net earnings of $115 million were lower, while adjusted EBITDA of $1.0 billion was higher than in 2023.

 

10    CAMECO CORPORATION            

Our 2024 outlook was updated to reflect an expected 1-million-pound increase in production from McArthur River/Key Lake (100% basis), partially offset by lower expected purchases from JV Inkai. Expected market and committed purchases for 2024 have been realigned to account for the lower purchases from JV Inkai. In addition, we updated our estimates for the uranium average realized price, and consolidated uranium and fuel services revenue due to the strength of the US dollar. See Outlook on page 17 and Financial results by segment – Uranium on page 24 for more information.

While Westinghouse reported a net loss of $57 million (our share), for the third quarter compared to $47 million (our share) in the second quarter, adjusted EBITDA was $122 million, compared to $121 million in the second quarter. Due to normal variability in the timing of its customer requirements, and delivery and outage schedules, we expect to see stronger performance from the Westinghouse segment in the fourth quarter of 2024, with higher expected cash flows. The outlook for Westinghouse, in US dollars, is unchanged, and we believe, on track. We continue to expect our share of Westinghouse’s net loss to be between $130 million (US) and $180 million (US). However, due to the strength of the US dollar, our share of the expected 2024 net loss in Canadian dollars has increased to between $175 million and $240 million (previously $170 million to $230 million). Purchase accounting, which requires the revaluation of Westinghouse’s inventory and other assets at the time of acquisition, and the expensing of certain non-operating acquisition-related transition costs continues to impact 2024 results and earnings outlook. We do not believe the impact of the revaluation of Westinghouse’s inventory and assets, or the non-operating acquisition-related transition costs reflect its underlying performance for the reporting period, therefore, we use adjusted EBITDA as a performance measure for Westinghouse, our share of which was $320 million for the first nine months. We now expect our share of adjusted EBITDA of between $460 million and $530 million (previously $445 million and $510 million) for the year in the Westinghouse segment due to the strength of the US dollar. See Our outlook for 2024 starting on page 17 and Our earnings from Westinghouse, starting on page 27 for more information. Adjusted net earnings and adjusted EBITDA are non-IFRS measures, see the information starting on page 31.

We continue to responsibly manage our supply in accordance with our customers’ needs. As a proven and reliable commercial supplier with assets in geopolitically stable jurisdictions across all segments of the nuclear fuel cycle, we are being selective in committing our unencumbered, in-ground uranium inventory and UF6 conversion capacity under long term contracts. To support the long-term operation of our productive capacity, our contracting is focused on maintaining exposure to future improvements in the market while retaining downside protection. In our uranium segment, over the next five years, we have contracts in place for average annual deliveries of 29 million pounds of U3O8 per year, with commitments higher than the average in 2024 and 2025, and lower than the average in 2026 through 2028. We also have contracts in both our uranium and fuel services segments that have deliveries spanning more than a decade. In our uranium segment, many of those contracts incorporate market-related pricing mechanisms that are expected to benefit from the improving market conditions.

To advance our strategy in step with the positive market momentum and long-term contracts we have put in place, we are on track to produce up to 37 million pounds (up to 23.1 million pounds our share) of uranium in 2024 (previously 36 million pounds (22.4 million pounds our share)). At Joint Venture Inkai (JV Inkai), the maximum annual expected production is now estimated to be approximately 7.7 million pounds U3O8 (100% basis). The previous target of 8.3 million pounds of U3O8 was contingent upon receipt of sufficient volumes of sulfuric acid in accordance with a specific schedule. The first shipment containing approximately 2.3 million pounds of our share of Inkai’s 2024 production has been received at the Canadian port and is expected to arrive at the Blind River refinery before the end of 2024. The volume and timing for the shipment of our remaining share of 2024 production is uncertain. Our allocation of the planned production from JV Inkai remains under discussion.

At Port Hope, we expect annual UF6 production of 11,000 to 11,500 tonnes in 2024 and continue working to achieve an ongoing production rate that will supply 12,000 tonnes per year, in order to satisfy our book of long-term commitments and demand for conversion services. Our annual 2024 production expectation for fuel services, which includes UF6 conversion, UO2, and heavy water reactor fuel bundles, remains between 13.5 million and 14.5 million kgU of combined fuel services products.

With our operationally flexible and disciplined approach to supply, we continue to meet our sales commitments through a combination of production, inventory, product loans and purchases. In the third quarter, we produced 4.3 million pounds of uranium (our share), and we purchased 1.8 million pounds (purchased at an average unit cost of $109.59 per pound ($80.08 (US) per pound)). See Financial results by segment – Uranium starting on page 24 for more information. Our purchases to date in 2024 include our remaining share of JV Inkai’s 2023 production, which was delivered to our Blind River refinery in February with a cost per pound of $129.96 ($96.88 (US)). The cash dividend associated with the sale of pounds from Inkai in 2024 is expected to be received in 2025, once declared and paid by JV Inkai. See Revenue, adjusted net earnings, and cash flow sensitivity analysis in the Outlook for 2024 section starting on page 17. After delivering 7.3 million pounds in the third quarter, our uranium inventory was 12.9 million pounds on September 30, 2024, with an average inventory cost of $50.96 per pound.

 

        2024 THIRD QUARTER REPORT      11  

We expect to maintain the financial strength and flexibility necessary to execute our strategy by planning production in coordination with contracting success and market opportunities. As previously disclosed, work is underway to extend the mine life at Cigar Lake to 2036 and, in-line with our supply discipline and future sourcing requirements of our contract portfolio, we continue to evaluate the required work and potential investment necessary to advance to a future decision for increasing production at McArthur River/Key Lake up to its licensed annual capacity of 25 million pounds (100% basis) or, in alignment with our commitments, some level between its annual planned production and 25 million pounds (100% basis).

Thanks to our risk-managed financial discipline, our balance sheet remains strong. As of September 30, 2024, after a third quarter repayment of another $100 million (US) on the floating-rate term loan used to finance the Westinghouse acquisition, we had $197 million in cash and cash equivalents, and $1.3 billion in total debt and a $1.0 billion undrawn revolving credit facility.

We plan to continue to prioritize repayment of the remaining $200 million (US) outstanding floating-rate term loan debt that is due in November 2025. We will continue to navigate by our investment-grade rating through close management of our balance sheet metrics, maintaining sufficient liquidity and cash to pursue value-adding opportunities while self-managing risk, including from global macro-economic and geopolitical uncertainty and volatility.

 

12    CAMECO CORPORATION            

Financial results

This section of our MD&A discusses our performance, financial condition and outlook for the future.

In the fourth quarter of 2023, we announced the closing of the acquisition of a 49% interest in Westinghouse. Effective November 7, 2023, we began equity accounting for this investment. Our share of Westinghouse’s earnings has been reflected in our financial results from that date.

Consolidated financial results

 

     THREE MONTHS            NINE MONTHS         
HIGHLIGHTS    ENDED SEPTEMBER 30            ENDED SEPTEMBER 30         

($ MILLIONS EXCEPT WHERE INDICATED)

    2024     2023      CHANGE     2024      2023      CHANGE  

Revenue

      721       575        25  %      1,953        1,744        12 % 

Gross profit

      171       152        13  %      533        429        24 % 

Net earnings attributable to equity holders

      7       148        (95 )%      36        281        (87 )% 

$ per common share (basic)

      0.02       0.34        (94 )%      0.08        0.65        (88 )% 

$ per common share (diluted)

      0.02       0.34        (94 )%      0.08        0.65        (88 )% 

Adjusted net earnings (losses) (ANE) (non-IFRS, see page 31)

      (3 )      137        >(100 )%      115        249        (54 )% 

$ per common share (adjusted and diluted)

      (0.01 )      0.32        >(100 )%      0.26        0.57        (54 )% 

Adjusted EBITDA (non-IFRS, see page 31)

      308       234        32  %      992        511        94 % 

Cash provided by operations (after working capital changes)

      52       185        (72 )%      376        487        (23 )% 

Quarterly trends

 

HIGHLIGHTS    2024          2023          2022  

($ MILLIONS EXCEPT PER SHARE AMOUNTS)

    Q3     Q2      Q1          Q4      Q3      Q2     Q1          Q4  

Revenue

      721       598        634            844        575        482       687            524  

Net earnings (losses) attributable to equity holders

      7       36        (7 )         80        148        14       119          (15 ) 

$ per common share (basic)

      0.02       0.08        (0.02 )         0.18        0.34        0.03       0.27          (0.04 ) 

$ per common share (diluted)

      0.02       0.08        (0.02 )         0.18        0.34        0.03       0.27          (0.04 ) 

Adjusted net earnings (losses) (non-IFRS, see page 31)

      (3 )      62        56          90        137        (3 )      115          36  

$ per common share (adjusted and diluted)

      (0.01 )      0.14        0.13          0.21        0.32        (0.01 )      0.27          0.09  

Cash provided by operations (after working capital changes)

      52       260        63          201        185        87       215          77  

Key things to note:

 

  •  

The timing of customer requirements, which tend to vary from quarter to quarter, drives revenue in the uranium and fuel services segments, meaning quarterly results are not necessarily a good indication of annual results due to the variability in customer requirements.

 

  •  

Net earnings do not trend directly with revenue due to unusual items and transactions that occur from time to time. We use adjusted net earnings, a non-IFRS measure, as a more meaningful way to compare our results from period to period (see page 31 for more information).

 

  •  

Cash from operations tends to fluctuate as a result of the timing of deliveries and product purchases in our uranium and fuel services segments.

 

  •  

Our quarterly results are impacted by variability in the timing of Westinghouse’s customer requirements and delivery and outage schedules. The first quarter is typically weaker, with stronger expected performance in the second half of the year, and higher expected cash flows in the fourth quarter. In addition, the revaluation of Westinghouse’s inventory and other assets upon acquisition and the non-operating acquisition-related transition costs can have a significant impact on Westinghouse’s quarterly results. See Our earnings from Westinghouse, starting on page 27 for more information.

 

        2024 THIRD QUARTER REPORT      13  

The following table compares the net earnings and adjusted net earnings for the first quarter to the previous seven quarters.

 

HIGHLIGHTS    2024          2023          2022  

($ MILLIONS EXCEPT PER SHARE AMOUNTS)

    Q3     Q2     Q1          Q4     Q3     Q2     Q1          Q4  

Net earnings (losses) attributable to equity holders

      7       36       (7 )         80       148       14       119          (15 ) 
  

 

 

    

 

 

    

 

 

       

 

 

    

 

 

    

 

 

    

 

 

       

 

 

  

Adjustments

                       

Adjustments on derivatives

      (28 )      14       33            (59 )      41       (35 )      (6 )           (19 ) 

Inventory purchase accounting (net of tax)1

      —        12       38          20       —        —        —           —   

Acquisition-related transition costs (net of tax)1

      5       5       14          —        —        —        —           —   

Adjustment to other operating expense (income)

      5       (2 )      (15 )         40       (48 )      8       (2 )         88  

Income taxes on adjustments

      8       (3 )      (7 )         9       (4 )      10       4          (18 ) 
  

 

 

    

 

 

    

 

 

       

 

 

    

 

 

    

 

 

    

 

 

       

 

 

  

Adjusted net earnings (losses) (non-IFRS, see page 31)

      (3 )      62       56          90       137       (3 )      115          36  
  

 

 

    

 

 

    

 

 

       

 

 

    

 

 

    

 

 

    

 

 

       

 

 

  

 

1 

These adjustments relate to our investment in Westinghouse

Corporate expenses

ADMINISTRATION

 

     THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

($ MILLIONS)

    2024      2023      CHANGE     2024      2023      CHANGE  

Direct administration

      48        45        7 %      151        137        10 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Stock-based compensation

      3        21        (86 )%      25        50        (50 )% 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total administration

      51        66        (23 )%      176        187        (6 )% 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Direct administration costs were $3 million higher for the third quarter of 2024 compared to the same period last year, and $14 million higher for the first nine months mainly due to the impacts of inflation and higher payments under Collaboration Agreements tied to production volumes. Stock-based compensation in the first nine months of 2024 was $25 million lower than 2023 due to both the grant and vesting of a lower number of share-based awards compared to the same period last year. See note 18 to the financial statements.

EXPLORATION AND RESEARCH & DEVELOPMENT

In the third quarter, uranium exploration expenses were $5 million, an increase of $1 million from the third quarter of 2023. Exploration expenses for the first nine months of the year increased by $1 million compared to 2023, to $15 million.

We also had research and development expenditures in the third quarter of $9 million, an increase of $1 million from the third quarter of 2023. Research and development expenses for the first nine months of the year increased by $9 million compared to 2023, to $26 million. These expenses are related to our investment in Global Laser Enrichment, LLC.

INCOME TAXES

We recorded an income tax expense of $38 million in the third quarter of 2024, compared to an expense of $41 million in the third quarter of 2023.

In the first nine months of 2024, we recorded an expense of $87 million compared to an expense of $100 million in 2023.

 

14    CAMECO CORPORATION            

     THREE MONTHS
ENDED SEPTEMBER 30		      NINE MONTHS
ENDED SEPTEMBER 30		  

($ MILLIONS)

    2024      2023      2024      2023  

Net earnings before income taxes

            

Canada

      143        162        374        373  

Foreign

      (98 )       27        (251 )       8  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total net earnings before income taxes

      45        189        123        381  
  

 

 

     

 

 

     

 

 

     

 

 

  

Income tax expense

            

Canada

      37        39        81        93  

Foreign

      1        2        6        7  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total income tax expense

      38        41        87        100  
  

 

 

     

 

 

     

 

 

     

 

 

  

TRANSFER PRICING DISPUTE

Background

Since 2008, Canada Revenue Agency (CRA) has disputed our marketing and trading structure and the related transfer pricing methodology we used for certain intercompany uranium sale and purchase agreements.

For the years 2003 to 2014, CRA shifted Cameco Europe Limited’s income (as recalculated by CRA) back to Canada and applied statutory tax rates, interest and instalment penalties, and, from 2007 to 2011, transfer pricing penalties. In addition, for 2014 to 2017, CRA has advanced an alternate reassessing position. See Reassessments, remittances and next steps below for more information.

In September 2018, the Tax Court of Canada (Tax Court) ruled that our marketing and trading structure involving foreign subsidiaries, as well as the related transfer pricing methodology used for certain intercompany uranium sales and purchasing agreements, were in full compliance with Canadian law for the tax years in question (2003, 2005 and 2006). On June 26, 2020, the Federal Court of Appeal (Court of Appeal) upheld the Tax Court’s decision.

On February 18, 2021, the Supreme Court of Canada (Supreme Court) dismissed CRA’s application for leave to appeal the June 26, 2020 decision of the Court of Appeal. The dismissal means that the dispute for the 2003, 2005 and 2006 tax years is fully and finally resolved in our favour. Although not technically binding, there is nothing in the reasoning of the lower court decisions that should result in a different outcome for the 2007 through 2014 tax years, which were reassessed on the same basis.

Refund and cost award

The Minister of National Revenue issued new reassessments for the 2003 through 2006 tax years in accordance with the decision and, in July 2021, refunded the tax paid for those years. In October 2023, pursuant to a cost award from the courts, we received a payment of approximately $12 million for disbursements, which is in addition to the $10 million we received from CRA in April 2021 as reimbursement for legal fees.

Reassessments, remittances and next steps

The Canadian income tax rules include provisions that generally require larger companies like us to remit or otherwise secure 50% of the cash tax plus related interest and penalties at the time of reassessment. Following the Supreme Court’s dismissal of CRA’s application for leave to appeal, we wrote to CRA requesting reversal of CRA’s transfer pricing adjustments for 2007 through 2013 and the return of the $780 million in cash and letters of credit we had paid or provided for those years. Given the strength of the court decisions received, our request was made on the basis that the Tax Court would reject any attempt by CRA to defend its reassessments for the 2007 through 2013 tax years applying the same or similar positions already denied for previous years.

 

        2024 THIRD QUARTER REPORT      15  

The series of court decisions that were completely and unequivocally in our favour for the 2003, 2005 and 2006 tax years determined that the income earned by our foreign subsidiary from the sale of non-Canadian produced uranium was not taxable in Canada. In accordance with these decisions, CRA issued reassessments reducing the proposed transfer pricing adjustment from $5.1 billion to $3.3 billion, resulting in a reduction of $1.8 billion in income taxable in Canada compared to the previous reassessments issued to us by CRA for the 2007 through 2013 tax years. In March 2023, CRA issued revised reassessments for the 2007 through 2013 tax years, which resulted in a refund of $297 million of the $780 million in cash and letters of credit held by the CRA at that time. The refund consisted of cash in the amount of $86 million and letters of credit in the amount of $211 million.

The remaining transfer pricing adjustment of $3.3 billion for the 2007 to 2013 tax years relates to the sale of Canadian-produced uranium by our foreign subsidiary. Cameco maintains that the clear and decisive court decisions described above apply, and that CRA should fully reverse the remaining transfer pricing adjustments for these years and return the cash and security being held.

In October 2021, due to a lack of significant progress on our points of contention, we filed a notice of appeal with the Tax Court for the years 2007 through 2013. We have asked the Tax Court to order the complete reversal of CRA’s transfer pricing adjustment for those years and the return of the remainder of our cash and letters of credit being held, with costs.

In 2020, CRA advanced an alternate reassessing position for the 2014 tax year in the event the basis for its original reassessment, noted above, is unsuccessful. Subsequent to this, we received reassessments for the 2015, 2016 and 2017 tax years, all reflecting this alternative reassessing position. CRA holds about $555 million as security (approximately $209 million in cash and $346 million in letters of credit) related to the 2007 through 2017 tax years. To date, we have filed notices of appeal with the Tax Court for the 2007 through 2017 tax years.

The new basis of reassessment is inconsistent with the methodology CRA has pursued for prior years and we are disputing it separately. Our view is that this alternative methodology is unlikely to result in a materially different outcome from our 2014 to 2017 filing positions.

We will not be in a position to determine the definitive outcome of this dispute for any tax year other than 2003 through 2006 until such time as all reassessments have been issued advancing CRA’s arguments and final resolution is reached for that tax year. CRA may also advance alternative reassessment methodologies for years other than 2003 through 2006, such as the alternative reassessing position advanced for 2014 through 2017.

 

Caution about forward-looking information relating to our CRA tax dispute

This discussion of our expectations relating to our tax dispute with CRA and future tax reassessments by CRA is forward-looking information that is based upon the assumptions and subject to the material risks discussed under the heading Caution about forward-looking information beginning on page 2.

FOREIGN EXCHANGE

The exchange rate between the Canadian dollar and US dollar affects the financial results of our uranium and fuel services segments.

We sell the majority of our uranium and fuel services products under long-term sales contracts, which are routinely denominated in US dollars. While our product purchases are largely denominated in US dollars, our production costs are largely denominated in Canadian dollars. To provide cash flow predictability, we hedge a portion of our net US/Cdn exposure (e.g. total US dollar sales less US dollar expenditures and product purchases) to manage shorter term exchange rate volatility. Our results are therefore affected by the movements in the exchange rate on our hedge portfolio, and on the unhedged portion of our net exposure.

Impact of hedging on IFRS earnings

We do not use hedge accounting under IFRS and we are therefore required to report gains and losses on economic hedging activity, both for contracts that close in the period and those that remain outstanding at the end of the period. For the contracts that remain outstanding, we must treat them as though they were settled at the end of the reporting period (mark-to-market).

 

16    CAMECO CORPORATION            

However, we do not believe the gains and losses that we are required to report under IFRS appropriately reflect the intent of our hedging activities, so we make adjustments in calculating our ANE to better reflect the impact of our hedging program in the applicable reporting period.

Impact of hedging on ANE

We designate contracts for use in particular periods, based on our expected net exposure in that period. Hedge contracts are layered in over time based on this expected net exposure. The result is that our current hedge portfolio is made up of a number of contracts which are currently designated to net exposures we expect in 2024 and future years, and we will recognize the gains and losses in ANE in those periods.

For the purposes of ANE, gains and losses on derivatives are reported based on the difference between the effective hedge rate of the contracts designated for use in the particular period and the exchange rate at the time of settlement. This results in an adjustment to current period IFRS earnings to effectively remove reported gains and losses on derivatives that arise from contracts put in place for use in future periods. The effective hedge rate will lag the market in periods of rapid currency movement. See Non-IFRS measures on page 31.

For more information, see our 2023 annual MD&A.

At September 30, 2024:

 

  •  

The value of the US dollar relative to the Canadian dollar was $1.00 (US) for $1.35 (Cdn), down from $1.00 (US) for $1.37 (Cdn) at June 30, 2024. The exchange rate averaged $1.00 (US) for $1.36 (Cdn) over the quarter.

 

  •  

The mark-to-market position on all foreign exchange contracts was a $6 million loss compared to a $35 million loss at June 30, 2024.

For information on the impact of foreign exchange on our intercompany balances, see note 19 to the financial statements.

Outlook for 2024

Our outlook for 2024 reflects the continued transition of our cost structure back to a tier-one run rate, as we plan our production to satisfy the growing long-term commitments under our contract portfolio. With our plan to produce 18 million pounds (100% basis) at Cigar Lake, 19 million pounds (100% basis) at McArthur River/Key Lake (previously 18 million pounds), and to produce between 11,000 and 11,500 tonnes UF6 at our Port Hope conversion facility, we expect strong cash flow generation.

Our financial performance and the amount of cash generated will be dependent on sourcing the material required to meet our deliveries as planned, including achieving our production plans. In addition, our cash balance may be impacted by our planned prioritization of the repayment of our US term loan, as has been done so far in 2024.

As in prior years, we will incur care and maintenance costs for the ongoing curtailment of our tier-two assets, which are expected to be between $50 million and $60 million.

As a result of higher production expectations from McArthur River/Key Lake, we now expect to produce up to 23.1 million pounds (our share) in 2024. Please see Uranium 2024 Q3 updates on page 29 for more information. Due to the stronger US dollar, we have updated our exchange rate assumption of $1.00 (US) for $1.30 (Cdn) to reflect the average exchange rate to date in 2024 of $1.00 (US) for $1.35 (Cdn). With the update to the exchange rate assumption, we have updated our outlook for the anticipated uranium average realized price to $77.80 per pound (previously $74.70 per pound) and we now expect uranium revenue to be between $2,550 million and $2,680 million (previously $2,410 million to $2,530 million), fuel services revenue to be between $440 million and $470 million (previously $430 million to $460 million) and expected consolidated revenue to be between $3,010 million and $3,160 million (previously $2,850 million to $3,000 million).

Expected market and committed purchases for 2024 have been realigned to account for the increased uncertainty on the timing of receipt of our remaining share of 2024 production from JV Inkai. We have either taken delivery of, or have commitments for, the majority of our expected 2024 market purchases, but may look for additional opportunities to add to our inventory.

 

        2024 THIRD QUARTER REPORT      17  

2024 FINANCIAL OUTLOOK

 

     CONSOLIDATED      URANIUM      FUEL SERVICES      WESTINGHOUSE  

Production (owned and operated properties)

      —         up to 23.1 million lb       
 13.5 to 14.5 million
kgU		  
 		      —   

Market purchases

      —         up to 3 million lb        —         —   

Committed purchases (including Inkai purchase volumes)

      —         8 million lb        —         —   

Sales/delivery volume

      —         32 to 34 million lb        12 to 13 million kgU        —   

Revenue

    $ 3,010-3,160 million      $ 2,550-2,680 million      $ 440-470 million        —   

Average realized price

      —       $ 77.80/lb 1       —         —   

Average unit cost of sales (including D&A)

      —       $ 57.00-60.00/lb 2     $ 25.50-26.50/kgU 3       —   

Direct administration costs

    $ 190-200 million        —         —         —   

Exploration costs

      —       $ 20 million        —         —   

Research and development

    $ 37 million        —         —         —   

Capital expenditures

    $ 215-250 million        —         —         —   

Adjusted EBITDA (non-IFRS, see page 31)

      —         —         —       $ 460-530 million  

 

1 

Uranium average realized price is calculated as the revenue from sales of uranium concentrate, transportation and storage fees divided by the volume of uranium concentrates sold.

2 

Uranium average unit cost of sales is calculated as the cash and non-cash costs of the product sold, care and maintenance and selling costs, divided by the volume of uranium concentrates sold.

3 

Fuel services average unit cost of sales is calculated as the cash and non-cash costs of the product sold, transportation and weighing and sampling costs, divided by the volume of products sold.

We are not providing an outlook for the items in the table that are marked with a dash.

The following assumptions were used to prepare the outlook in the table above:

 

  •  

Market purchases – reflect the market purchases we have made to date or expect to make for the remainder of 2024. Market purchases may vary if planned production varies. In addition, if we decide to increase our working inventory from current levels our market purchases could be higher. We have either taken delivery of, or have commitments for, the majority of our expected 2024 market purchases.

 

  •  

Committed purchases - are based on the 4.7 million pounds of commitments we have made to date or agreed to acquire under contracts signed prior to 2024 and our JV Inkai purchases of 3.5 million pounds (previously we had assumed these would be equivalent to our 2023 purchase volume of 4.2 million pounds, including the 1.2 million purchased to date. Due to shipping challenges and lower expected production, we now expect fewer purchases in 2024). If Inkai production and/or deliveries vary, committed purchases may vary and we may choose to make additional market purchases, temporarily reduce our inventory levels, pull forward long-term purchase commitments, or draw on loan arrangements we have in place. We equity account for our minority ownership interest in JV Inkai. We record our share of its production as a purchase. However, this does not reflect our share of the economic benefit. Our share of the economic benefit is based on the difference between our purchase price and JV Inkai’s lower production cost and is reflected in the line item on our statement of earnings called, “share of earnings from equity-accounted investees”. As a result, increases in the spot price increase our cost of purchases from JV Inkai and also our “share of earnings from equity accounted investees”. The benefit is realized, through receipt of a cash dividend, when declared and paid by JV Inkai.

 

  •  

Our 2024 outlook for sales/delivery volume does not include sales between our uranium and fuel services segments.

 

  •  

Sales/delivery volume is based on the volumes we currently have delivered and our remaining commitments to deliver under contract in 2024.

 

18    CAMECO CORPORATION            

  •  

Uranium revenue and average realized price are calculated based on the terms contained in the base-escalated and market-related contracts under which we have deliveries in 2024. For market-related contracts not yet priced and for delivery in 2024, subject to any floors or ceilings, we used a uranium spot price of $81.75 (US) per pound (the UxC spot price as of September 30, 2024), a long-term price indicator of $81.00 (US) per pound (the UxC long-term indicator on September 30, 2024) and an exchange rate of $1.00 (US) for $1.35 (Cdn).

 

  •  

Uranium average unit cost of sales (including D&A) is based on the expected unit cost of sales for produced material and the market purchases and committed purchases made to date and the planned volume remaining noted in the outlook at an anticipated average purchase price of about $95 (Cdn) per pound and includes care and maintenance costs of between $50 million and $60 million. We expect overall unit cost of sales could vary if there are changes in production and market or committed purchase volumes or the mix of supply sources used to meet our contract deliveries, uranium spot prices, and/or care and maintenance costs in 2024.

 

  •  

Direct administration costs do not include stock-based compensation expenses. See page 14 for more information.

 

  •  

The adjusted EBITDA outlook for Westinghouse is based on the assumptions listed later in this section.

 

  •  

Westinghouse and JV Inkai are accounted for using the equity method for our share. Under equity accounting, Westinghouse and JV Inkai capital expenditures are not presented within our consolidated financial statements and are therefore not included in our outlook for capital expenditures.

For more information on how changes in the exchange rate or uranium prices can impact our outlook see Revenue, adjusted net earnings, and cash flow sensitivity analysis below, and Foreign exchange on page 16.

In 2024 we expect our share of adjusted EBITDA from our equity investment in Westinghouse to be between $460 million and $530 million (previously $445 million to $510 million), higher due to the strength of the US dollar and updated exchange rate assumption. Over the next five years, we expect its adjusted EBITDA will grow at a compound annual growth rate of 6% to 10%.

 

CAMECO SHARE (49%)

    US $      CDN $  

Net earnings (loss)

      (130-180 )       (175-240 ) 

Depreciation and amortization

      260-295        350-400  

Finance income

      (1-2 )       (2-3 ) 

Finance costs

      143-160        185-220  

Income tax expense (recovery)

      (30-40 )       (40-55 ) 
  

 

 

     

 

 

  

EBITDA (non-IFRS, see page 31)

      245-295        330-400  

Inventory purchase accounting

      50-55        70-75  

Acquisition-related transition costs

      20-25        30-35  

Other expenses

      40-50        55-65  
  

 

 

     

 

 

  

Adjusted EBITDA (non-IFRS, see page 31)

      340-390        460-530  
  

 

 

     

 

 

  

 

Note:

the ranges for 2024 outlook for EBITDA and adjusted EBITDA are not determined using the high and low estimates of the ranges provided for each of the detailed reconciling line items.

While our outlook for Westinghouse remains unchanged in US dollars, the Canadian dollar outlook has been adjusted to reflect the weakening of the Canadian dollar. We have updated our exchange rate assumption from $1.00 (US) for $1.30 (Cdn) to $1.00 (US) for $1.35 (Cdn) to reflect the average exchange rate to date in 2024.

The outlook for adjusted EBITDA for 2024 and its growth rate over the next five years are based on the following assumptions:

 

  •  

An exchange rate of $1.00 (US) for $1.35 (Cdn)

 

  •  

A compound annual growth rate in revenue from its core business of 4% to 6%, which is slightly higher than the anticipated average growth rate of the nuclear industry based on the World Nuclear Association’s Reference Case. In addition to orders for PWR reactor fuel and services, this includes orders for VVER and BWR fuel and services. The outlook assumes that work is fulfilled on the timelines and scope expected based on current orders received, and additional work is undertaken based on past trends. The expected margins on this work are aligned with the historic margins of 16% to 19%, with variability expected to come from product mix compared to previous years.

 

        2024 THIRD QUARTER REPORT      19  

  •  

Growth from new AP1000 reactor projects is based on agreements that have been signed and announcements where the AP1000 technology has been selected, including Poland, Bulgaria and Ukraine. It is assumed that work on announced agreements and announced selections to be done by Westinghouse would proceed on the timelines and revenue pattern noted under the New Build Framework in our 2023 annual MD&A. The growth only assumes Westinghouse undertakes the engineering and procurement work required prior to a new reactor project breaking ground, which is a small component of the overall potential. A delay in project timelines or cancellation of announced projects would result in a growth rate near or below the bottom of the range.

 

  •  

Estimates and assumptions, including development timelines for both announced and potential reactor builds are subject to government and regulatory approval, as well as risks related to the current macro-economic environment, and may differ significantly from those assumed.

 

  •  

It is also expected that investments in new technologies, including eVinci™ microreactor and AP300™ small modular reactor, will be made in accordance with the current business plan and are expected to contribute to adjusted EBITDA largely outside the five-year time frame.

 

 

Caution about forward-looking information relating to our future earnings and adjusted EBITDA form Westinghouse

This discussion of our expectations for Westinghouse’s future earnings and adjusted EBITDA and our share thereof is forward-looking information that is based upon the assumptions and subject to the material risks discussed under the headings Caution about forward-looking information beginning on page 2. Actual results and events may be significantly different from what we currently expect.

REVENUE, ADJUSTED NET EARNINGS, AND CASH FLOW SENSITIVITY ANALYSIS

We have sensitivity to the uranium price through both our sales and purchase commitments. However, at the current price levels many of the market-related sales contracts we have delivered into or are delivering into this year are subject to ceiling prices and therefore are generally less sensitive than our purchase commitments.

As a result, if the uranium spot price increased by $5 (US) per pound, we expect revenue would increase by $1 million, while ANE would decrease by $4 million and cash flow would decrease by $19 million. From a cash flow perspective, the sensitivity does not adequately capture the impact of JV Inkai purchases, which straddle two fiscal reporting periods due to when dividends are declared and paid by JV Inkai. The cash flow sensitivity includes the cash outflow for the remaining 2.3 million pounds of uranium assumed to be purchased from JV Inkai in 2024 at a 5% discount to the spot price but does not account for an associated increase in the cash dividend expected, which will be tied to our agreed to 2024 production purchase entitlement and is expected to be received in 2025. JV Inkai distributes excess cash as dividends to its owners, net of working capital requirements. In the case of a $5 (US) per pound increase in uranium prices, the JV Inkai purchases are responsible for about $15 million of the noted expected decrease in cash flow and we expect the impact of these purchases on the 2024 cash flow will be partially offset by dividends once declared and paid in 2025.

If the uranium spot price decreased by $5 (US) per pound, we expect revenue to decrease by $3 million, ANE to increase by $2 million, and cash flow to increase by $17 million. From a cash flow perspective, the impact of the noted decrease in uranium price on the assumed purchase of uranium from JV Inkai is expected to have the opposite impact from that described above for the noted uranium price increase.

In the case of a $5 (US) increase or decrease in the uranium spot price, the sensitivity for ANE compared to the sensitivity for cash flow is less due to the impact on our net earnings from the inclusion of our share of earnings from our equity-accounted investment in JV Inkai in the reporting period, the rate of inventory turnover, and income taxes.

The following assumptions were used to prepare the revenue, ANE and cash flow sensitivity analysis above:

 

  •  

3 million pounds of purchases are sourced from the market, including those pounds purchased to date.

 

  •  

Total JV Inkai purchases for the year of 3.5 million pounds, of which 2.3 million pounds remain for 2024.

 

  •  

For market-related contracts not yet priced and for delivery in 2024, subject to any floors or ceilings, we used a uranium spot price of $81.75 (US) per pound (the UxC spot price as of September 30, 2024), a long-term price indicator of $81.00 (US) per pound (the UxC long-term indicator on September 30, 2024) and an exchange rate of $1.00 (US) for $1.35 (Cdn).

 

20    CAMECO CORPORATION            

To the extent that our market purchases or Inkai purchases vary, the sensitivity of our ANE and cash flow to changes in the spot and long-term prices may be impacted. In the case of decreased market or Inkai purchases, our sensitivity would be reduced. In the case of increased market or Inkai purchases, our sensitivity would be greater.

A one cent increase or decrease in the value of the Canadian dollar compared to the US dollar would respectively increase or decrease expected revenue by $8 million, ANE by $6 million and cash flow by $3 million.

PRICE SENSITIVITY ANALYSIS: URANIUM SEGMENT

As discussed under Long-term contracting on page 25 of our 2023 annual MD&A, our average realized price is based on pricing terms established in our portfolio of long-term contracts, which includes a mix of base-escalated and market-related contracts that are layered in over time. Each confidential contract is bilaterally negotiated with the customer, and delivery generally does not begin until two years or more after signing.

 

  •  

Base-escalated contracts will reflect market conditions and pricing at the time each contract was finalized, with escalation factors applied based on when the material is delivered.

 

  •  

Market-related contracts reference a pricing mechanism that may be based on the spot price and/or the long-term price, and that price is generally set a month or more prior to delivery, subject to specific terms unique to each contract such as floors and ceilings set relative to market pricing at time of negotiation and typically escalated to time of delivery.

As a result of these contracting dynamics, changes to our average realized price will generally lag changes in market prices in both rising and falling price conditions. The magnitude and direction of the deviation can vary based on the degree of market price volatility between the time the contract price is set, and the time the product is delivered.

To help understand how the pricing under our current portfolio of commitments is expected to react at various spot prices at September 30, 2024, we have constructed the table that follows.

The table is based on the volumes and pricing terms under the long-term commitments in our contract portfolio that have been finalized as at September 30, 2024. The table does not include volumes and pricing terms in contracts under negotiation or those that have been accepted but are still subject to contract finalization. Based on the terms and volumes under contracts that have been finalized, the table is designed to indicate how our average realized price would react under various spot price assumptions at a point in time. In other words, the prices shown in the table would only be realized if the contract portfolio remained exactly as it was on September 30, 2024, using the following assumptions:

 

  •  

The uranium price remains fixed at a given spot level for each annual period shown.

 

  •  

Deliveries based on commitments under finalized contracts include best estimates of the expected deliveries and flexibility under contract terms.

 

  •  

To reflect escalation mechanisms contained in existing contracts the long-term US inflation rate target of 2% is used, for modeling purposes only.

It is important to note that the table is not a forecast of prices we expect to receive. The prices we actually realize will be different from the prices shown in the table. We intend to update this table each quarter in our MD&A to reflect deliveries made and changes to our contract portfolio. As a result, we expect the table to change from quarter to quarter.

Expected realized uranium price sensitivity under various spot price assumptions at September 30, 2024

(rounded to the nearest $1.00)

 

SPOT PRICES

($US/lb U3O8)

    $20      $40      $60      $80      $100      $120      $140  

2024

      55        56        57        57        57        57        57  

2025

      40        45        55        61        64        64        65  

2026

      42        44        56        66        68        69        70  

2027

      43        46        57        69        73        74        76  

2028

      47        49        59        70        75        77        78  

 

        2024 THIRD QUARTER REPORT      21  

As of September 30, 2024, we had commitments requiring delivery of an average of about 29 million pounds per year from 2024 through 2028, with commitment levels in 2024 and 2025 being higher than the average, and in 2026 through 2028, lower than the average. As the market continues to improve, we expect to continue layering in volumes that capture greater future upside using market-related pricing mechanisms.

Liquidity and capital resources

Our financial objective is to ensure we have the cash and debt capacity to fund our operating activities, investments and other financial obligations in order to execute our strategy and to allow us to self-manage risk. We have a number of alternatives to fund future capital requirements, including using our operating cash flow, drawing on our existing credit facilities, entering new credit facilities, and raising additional capital through debt or equity financings. We consider our financing options and the tools we have available so we can take advantage of favourable market conditions when they arise. To help provide this flexibility, we plan to file a new base shelf prospectus in the fourth quarter as our base shelf prospectus expired in October 2024. We may also consider other financial tools to provide added flexibility.

As of September 30, 2024, we had cash and cash equivalents of $197 million, while our total debt amounted to approximately $1.3 billion. We also have a $1.0 billion undrawn revolving credit facility. We expect our cash balances and operating cash flows to meet our capital requirements during 2024.

Our cash balances and investments are held in government securities or with banks that are party to our lending facilities. We have a risk management policy that we follow to manage our exposure to banking counterparties, which limits amount and tenor of cash or investments based on counterparty credit rating. Our investment decisions prioritize security and liquidity and consider concentration amongst our banking partners. The majority of our cash balances are with Schedule I Canadian banks.

During the quarter, we made a partial prepayment of $100 million (US) on our floating-rate term loan. We plan to continue to prioritize repayment of the remaining $200 million (US) outstanding in floating-rate term loan debt used to finance the acquisition of Westinghouse while balancing our liquidity and cash position.

We have large, creditworthy customers that continue to need our nuclear fuel products and services even during weak economic conditions, and we expect the contract portfolio we have built will continue to provide a solid revenue stream. In our uranium segment, from 2024 through 2028, we have commitments to deliver an average of about 29 million pounds per year, with commitment levels in 2024 and 2025 higher than the average and in 2026 through 2028 lower than the average.

With the Supreme Court’s dismissal of CRA’s application for leave, the tax dispute for the 2003 through 2006 tax years is fully and finally resolved in our favour. Furthermore, we are confident the courts would reject any attempt by CRA to utilize the same position and arguments for tax years 2007 through 2014, or its alternate reassessing position for tax years 2014 through 2017 and believe CRA should return the $555 million in cash and letters of credit we have been required to pay or otherwise secure. However, timing of any further payments is uncertain. See Transfer pricing dispute starting on page 15 for more information.

CASH FROM/USED IN OPERATIONS

Cash provided by operations was $133 million lower this quarter than in the third quarter of 2023 due to an increase in working capital requirements which required $99 million more in 2024 than in 2023. Cash from operations in the quarter compared to the prior year also reflects higher interest received in 2023 due to higher cash and investment balances being held in the third quarter of 2023 in anticipation of closing the Westinghouse acquisition.

Cash provided by operations was $111 million lower in the first nine months of 2024 compared to the same period in 2023 due mainly to higher working capital requirements, which required $121 million more in 2024 than in 2023. In addition, in 2023 we received an $86 million cash refund from CRA. These comparative decreases in 2024 were partially offset by a higher dividend payment from JV Inkai in 2024.

FINANCING ACTIVITIES

We use debt to provide additional liquidity. We have sufficient borrowing capacity with unsecured lines of credit of approximately about $2.7 billion at September 30, 2024, unchanged from June 30, 2024. At September 30, 2024, we had approximately $1.5 billion outstanding in financial assurances, which was unchanged from June 30, 2024.

 

22    CAMECO CORPORATION            

We have extended the maturity date of our $1.0 billion unsecured revolving credit facility from October 1, 2027 to October 1, 2028. The facility allows us to request increases above $1.0 billion, in increments of no less than $50 million, up to a total of $1.25 billion. At September 30, 2024, we had no short-term debt outstanding on our $1.0 billion unsecured revolving credit facility, unchanged from December 31, 2023.

Additionally, after making partial prepayments of $400 million (US) in 2024, $200 million (US) remains outstanding on the term loan debt incurred in connection with the execution of the Westinghouse acquisition agreement. The remaining principal of $200 million (US) matures in November 2025.

Long-term contractual obligations

Since December 31, 2023, we have repaid the full $300 million (US) of term loan debt that was set to mature in November 2026 and have made a partial repayment in the amount of $100 million (US) on the term loan debt that is set to mature in November 2025. There have been no other material changes to our long-term contractual obligations. Please see our 2023 annual MD&A for more information.

Debt covenants

As at September 30, 2024, we complied with all covenants in our credit agreements, including the financial covenants. The financial covenants place restrictions on total debt, including guarantees and other financial assurances. We do not expect our operating and investment activities for the remainder of 2024 to be constrained by these covenants.

SHARES AND STOCK OPTIONS OUTSTANDING

At November 5, 2024, we had:

 

  •  

435,188,572 common shares and one Class B share outstanding

 

  •  

383,469 stock options outstanding, with exercise prices ranging from $11.32 to $15.27

DIVIDEND

To recognize the return to our tier-one production rate, and in line with the principles of our capital allocation framework, we have recommended, to our board of directors, a dividend growth plan for consideration. Based on our plan, we expect an annual increase of at least $0.04 per common share over the fiscal periods 2024 through 2026, to achieve a doubling of the 2023 dividend from $0.12 per common share, to $0.24 per common share. In 2022, the board increased the dividend by 50% to reflect the expected improvement in our financial performance as we began the transition to our tier-one run rate.

Our board of directors declared a 2024 annual dividend of $0.16 per common share, payable on December 13, 2024, to shareholders of record on November 27, 2024. The decision to declare an annual dividend is reviewed regularly by our board in the context of our cash flow, financial position, strategy and other relevant factors, including appropriate alignment with the cyclical nature of our earnings.

OFF-BALANCE SHEET ARRANGEMENTS

We had three kinds of off-balance sheet arrangements at September 30, 2024:

 

  •  

purchase commitments

 

  •  

financial assurances

 

  •  

other arrangements

Purchase commitments

There have been no material changes to our purchase commitments since December 31, 2023. Please see our annual MD&A for more information.

Financial assurances

At September 30, 2024, our financial assurances totaled $1.5 billion, unchanged from June 30, 2024.

 

        2024 THIRD QUARTER REPORT      23  

Other arrangements

We have arranged for standby product loan facilities with various counterparties. The arrangements allow us to borrow up to 1.8 million kgU of UF6 conversion services and 6.4 million pounds of U3O8 over the period 2020 to 2027 with repayment in kind up to December 31, 2027. Under the loan facilities, standby fees of up to 1.5% are payable based on the market value of the facilities and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 3.0%. At September 30, 2024, we have 1.6 million kgU of UF6 conversion services and 2.5 million pounds of U3O8 drawn on the loans.

BALANCE SHEET

 

($ MILLIONS)

    SEP 30, 2024      DEC 31, 2023      CHANGE  

Cash and cash equivalents

      197        567        (65 )% 
  

 

 

     

 

 

     

 

 

  

Total debt

      1,264        1,784        (29 )% 
  

 

 

     

 

 

     

 

 

  

Inventory

      855        692        24 % 

Total cash and cash equivalents at September 30, 2024, were $197 million, or 65% lower than at December 31, 2023, due mainly to $400 million (US) in repayments on the floating-rate term loan during the year, partially offset by the receipt of $129 million (US) of dividend payments from JV Inkai. Net debt at September 30, 2024, was $1.1 billion.

Total product inventories are $855 million compared to $692 million at the end of 2023. Inventories increased due to sales being lower than production and purchases in the first nine months of the year. The average cost for uranium has increased to $50.96 per pound compared to $49.62 per pound at December 31, 2023. As of September 30, 2024, we held an inventory of 12.9 million pounds of U3O8 equivalent (excluding broken ore) (December 31, 2023 - 10.3 million pounds). Inventory varies from quarter to quarter depending on the timing of production, purchases and sales deliveries in the year.

Financial results by segment

Uranium

 

          THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

HIGHLIGHTS

         2024      2023      CHANGE     2024      2023      CHANGE  

Production volume (million lbs)

         4.3        3.0        43 %      17.3        11.9        45 % 

Sales volume (million lbs)

         7.3        7.0        4 %      20.8        22.2        (6 )% 

Average spot price

    ($US/lb)      81.58        62.63        30 %      87.93        55.95        57 % 

Average long-term price

    ($US/lb)      81.00        59.13        37 %      78.11        55.60        40 % 

Average realized price

                    
   ($US/lb)      60.18        52.57        14 %      58.28        48.62        20 % 
   ($Cdn/lb)      82.33        70.30        17 %      78.97        65.40        21 % 

Average unit cost of sales (including D&A)

    ($Cdn/lb)      61.18        50.36        21 %      56.53        49.68        14 % 

Revenue

         600        489        23 %      1,642        1,452        13 % 

Gross profit

         154        139        11 %      467        349        34 % 

Gross profit (%)

         26        28        (7 )%      28        24        17 % 

Earnings before income taxes

         171        218        (22 )%      615        474        30 % 

Adjusted EBITDA ($ millions) (non-IFRS, see page 31)

      240        224        7 %      790        601        31 % 

THIRD QUARTER

Production during the quarter was 4.3 million pounds, 43% higher than the third quarter of 2023. See Uranium 2024 Q3 updates starting on page 29 for more information.

Uranium revenues this quarter were up 23% compared to 2023 due to a 4% increase in sales volumes and an increase of 17% in the Canadian dollar average realized price, which was a result of the impact of the increase in the average US dollar spot price on market-related contracts. For more information on the impact of spot price changes on average realized price, see Price sensitivity analysis: uranium segment on page 21.

Total cost of sales (including D&A) increased by 27% ($446 million compared to $352 million in 2023) due to an increase of 21% in the average unit cost of sales and a 4% increase in sales volume. Unit cost of sales was higher in 2024 due to the higher cost of purchased material in 2024 compared to the same period in 2023.

 

24    CAMECO CORPORATION            

The net effect was a $15 million increase in gross profit for the quarter.

Equity earnings from investee, JV Inkai, were $26 million in the third quarter compared to $35 million in the same period last year.

FIRST NINE MONTHS

Production volumes for the first nine months of the year were 45% higher than in the previous year. See Uranium 2024 Q3 updates starting on page 29 for more information.

Uranium revenues increased 13% compared to the first nine months of 2023 despite a 6% decrease in sales volumes, due to an increase of 21% in the Canadian dollar average realized price, which was a result of the impact of the increase in the average US dollar spot price on market-related contracts. For more information on the impact of spot price changes on average realized price, see Price sensitivity analysis: uranium segment on page 21.

Total cost of sales (including D&A) increased by 6% ($1,175 million compared to $1,106 million in 2023) primarily as a result of a 14% increase in the average unit cost of sales partially offset by a 6% decrease in sales volume compared to the same period last year. Unit cost of sales was higher in 2024 due to the higher cost of purchased material in 2024 compared to the same period in 2023.

The net effect was a $118 million increase in gross profit for the first nine months.

Equity earnings from investee, JV Inkai, were $151 million in the first nine months of 2024 compared to $100 million in the same period last year.

The table below shows the costs of produced and purchased uranium incurred in the reporting periods (which are non-IFRS measures, see the paragraphs below the table). These costs do not include care and maintenance costs, selling costs such as royalties, transportation and commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.

 

     THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

($CDN/LB)

    2024      2023      CHANGE     2024      2023      CHANGE  

Produced

                 

Cash cost

      29.21        32.37        (10 )%      20.90        25.60        (18 )% 

Non-cash cost

      10.40        12.24        (15 )%      9.66        11.92        (19 )% 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total production cost 1

      39.61        44.61        (11 )%      30.56        37.52        (19 )% 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Quantity produced (million lbs)1

      4.3        3.0        43 %      17.3        11.9        45 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Purchased

                 

Cash cost

      109.59        79.14        38 %      100.13        69.88        43 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Quantity purchased (million lbs)1

      1.8        0.8        >100 %      6.2        5.0        24 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Totals

                 

Produced and purchased costs

      60.26        51.88        16 %      48.91        47.09        4 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Quantities produced and purchased (million lbs)

      6.1        3.8        61 %      23.5        16.9        39 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

 

1 

Due to equity accounting, our share of production from JV Inkai is shown as a purchase at the time of delivery. These purchases will fluctuate during the quarters and timing of purchases will not match production. There were no deliveries during the quarter. In the first nine months of 2024, we purchased 1.2 million pounds at a purchase price per pound of $128.42 ($95.63 (US)).

The average cash cost of production was 10% lower for the quarter compared to the same period in 2023. For the first nine months, the average cash cost of production was 18% lower than in the same period in 2023.

In 2024, we expect the average unit cost of production at McArthur River/Key Lake to continue to be higher than the average unit life of mine operating costs reflected in our most recent annual information form as we complete the ramp up of production and continue work to realize the benefits from the operational improvements that have been made. The estimated average unit life of mine operating costs reflected in our most recent annual information form are $16.70 per pound at McArthur River/Key Lake and $20.58 per pound at Cigar Lake.

 

        2024 THIRD QUARTER REPORT      25  

Our purchases in the third quarter of 2024 totaled about $197 million, representing an average cost of $109.59 per pound, about $70.00 per pound higher than our total unit production cost for the quarter. Although purchased pounds are transacted in US dollars, we account for the purchases in Canadian dollars. In the third quarter, the average cash cost of purchased material was $109.59 (Cdn) per pound, or $80.08 (US) per pound, compared to $79.14 (Cdn) per pound, or $59.26 (US) per pound in the third quarter of 2023. As a result, the average cash cost per pound of purchased material in Canadian dollar terms increased by 38% this quarter compared to the same period last year.

For the first nine months of the year, purchases totaled about $621 million, representing an average cost of $100.13 per pound, about $70.00 per pound higher than our total unit production cost for the year. The average cash cost of purchased material for the nine-month period was $100.13 (Cdn), or $73.87 (US) per pound, compared to $69.88 (Cdn), or $51.58 (US) per pound in the same period in 2023. As a result, the average cash cost per pound of purchased material in Canadian dollar terms increased by 43% for the nine months compared to the same period last year.

We equity account for our share of JV Inkai. As a result, we record our share of its production as a purchase, which under Kazakhstan’s pricing regulations, requires that we purchase the material at a price equal to the uranium spot price, less a 5% discount. Our share of the economic benefit is reflected in the line item on our statement of earnings called, “share of earnings from equity-accounted investee” and is based on the difference between our purchase price and JV Inkai’s lower production cost (estimated average unit life of mine operating cash cost of $12.42 per pound, prior to the implementation of the amended MET provisions). If there is a significant disruption to JV Inkai’s operations for any reason, it may not achieve its production plans, there may be a delay in production, and it may experience increased costs to produce uranium.

JV Inkai contribution to uranium segment

In the third quarter, included in net earnings attributable to equity holders for the uranium segment is $26 million of equity earnings and included in EBITDA is $31 million of EBITDA from JV Inkai, compared to $35 million and $42 million respectively in the same period last year.

For the first nine months of the year, $151 million is included in net earnings attributable to equity holders and $190 million is included in EBITDA from JV Inkai, compared to $100 million and $122 million respectively in the same period last year.

The increase in JV Inkai’s equity earnings and EBITDA was largely driven by the higher uranium prices in the first quarter and nine months of 2024 compared to the same periods in 2023, partially offset by increased costs. In April, we received a cash dividend of $129 million (US), net of withholdings, based on JV Inkai’s 2023 financial performance. From a cash flow perspective, we expect to realize the benefit from JV Inkai’s 2024 financial performance in 2025, once the dividend for 2024 is declared and paid.

 

26    CAMECO CORPORATION            

The following table reconciles our share of earnings from JV Inkai to EBITDA:

 

     THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

($ MILLIONS)

    2024      2023      CHANGE     2024      2023      CHANGE  

Share of earnings from equity-accounted investee

      26        35        (26 )%      151        100        51 % 

Depreciation and amortization

      2        2        —        12        6        100 % 

Income tax expense

      3        5        (40 )%      27        16        69 % 

EBITDA (non-IFRS, see page 31) attributable to JV Inkai

      31        42        (26 )%      190        122        56 % 

Fuel services

(includes results for UF6, UO2, UO3 and fuel fabrication)

 

          THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		         

HIGHLIGHTS

         2024      2023      CHANGE     2024      2023      CHANGE  

Production volume (million kgU)

         3.2        2.0        60 %      9.9        9.6        3 % 

Sales volume (million kgU)

         3.5        2.1        67 %      7.9        7.8        1 % 

Average realized price

    ($Cdn/kgU)      34.54        39.87        (13 )%      39.17        37.44        5 % 

Average unit cost of sales (including D&A)

    ($Cdn/kgU)      29.45        33.00        (11 )%      30.51        26.59        15 % 

Revenue

         120        86        40 %      311        291        7 % 

Earnings before income taxes

         17        28        (39 )%      71        97        (27 )% 

Adjusted EBITDA ($ millions) (non-IFRS, see page 31)

      28        36        (22 )%      96        121        (21 )% 

Adjusted EBITDA margin (%) (non-IFRS, see page 31)

      23        42        (45 )%      31        42        (26 )% 

THIRD QUARTER

Total revenue for the third quarter of 2024 increased by 40% from $86 million in the same period last year to $120 million. This was due primarily to a 67% increase in sales volume partially offset by a 13% decrease in realized price. Average realized price decreased mainly due to the mix of products sold.

The total cost of products and services sold (including D&A) increased 45% ($103 million compared to $71 million in 2023) due to a 67% increase in sales volume, which was partially offset by a decrease of 11% in the average unit cost of sales. Unit cost of sales decreased mainly as a result of the mix of products sold.

The net effect was an $11 million decrease in net earnings.

FIRST NINE MONTHS

In the first nine months of the year, total revenue increased 7% to $311 million from $291 million for the same period last year due to a 5% increase in average realized price and a 1% increase in sales volumes. The increase in average realized price was mainly the result of increased prices due to constructive market conditions.

The total cost of products and services sold (including D&A) increased 17% ($242 million compared to $207 million in 2023) due to a 15% increase in the average unit cost of sales and a 1% increase in sales volume. Average unit cost of sales was higher as a result of increased input costs as well as the mix of products sold.

The net effect was a $26 million decrease in net earnings.

Westinghouse

OUR EARNINGS FROM WESTINGHOUSE

On November 7, 2023, we announced the closing of the acquisition of Westinghouse in a strategic partnership with Brookfield. Cameco now owns a 49% interest and Brookfield owns the remaining 51%. Under the equity method of accounting, beginning on November 7, 2023, we have included our share of Westinghouse’s earnings in our financial results.

 

        2024 THIRD QUARTER REPORT      27  

     THREE MONTHS
ENDED SEPTEMBER 30		             NINE MONTHS
ENDED SEPTEMBER 30		         

($ MILLIONS)

    2024     20231      CHANGE      2024     20231      CHANGE  

Net loss

      (57 )      —         —         (227 )      —         —   

Depreciation and amortization

      93       —         —         267       —         —   

Finance income

      —        —         —         (3 )      —         —   

Finance costs

      54       —         —         172       —         —   

Income tax recovery

      (2 )      —         —         (50 )      —         —   

EBITDA2

      88       —         —         159       —         —   

Inventory purchase accounting

      —        —         —         66       —         —   

Acquisition-related transition costs

      7       —         —         32       —         —   

Other expenses

      27       —         —         63       —         —   

Adjusted EBITDA2

      122       —         —         320       —         —   

Capital expenditures

      33       —         —         98       —         —   

Adjusted free cash flow2

      89       —         —         222       —         —   

Revenue

      726       —         —         2,052       —         —   

Adjusted EBITDA margin2

      17 %      —         —         16 %      —         —   

 

1 

2023 results are presented for comparative purposes only. Cameco did not acquire its interest in Westinghouse until November 7, 2023.

2 

Non-IFRS measures, see page 31.

While Westinghouse reported a net loss of $57 million (our share), for the third quarter compared to $47 million (our share) in the second quarter, adjusted EBITDA was $122 million, compared to $121 million in the second quarter. Westinghouse’s results were and will continue to be impacted by amortization of the intangible assets that arose as a result of the fair values assigned to Westinghouse’s net assets at the time of acquisition.

Year to date the impact of purchase accounting, which required the revaluation of its inventories based on market prices at time of acquisition and the expensing of some other non-operating acquisition-related transition costs have resulted in a net loss of $227 million. The impact of these items was largely isolated to the first half of 2024 and are expected to have little impact in future years.

We use adjusted EBITDA as a performance measure as the impact of the revaluation of Westinghouse’s inventory and assets and the non-operating acquisition-related transition costs do not reflect the underlying performance for the reporting period. We believe Westinghouse remains on track to achieve its 2024 outlook.

We do not believe Westinghouse’s quarterly results are necessarily a good indication of annual results due to variability in timing of customer requirements and delivery and outage schedules. The first quarter is typically weaker, with stronger expected performance in the second half of the year, and higher expected cash flows in the fourth quarter.

Our operations

Uranium – production overview

We produced 4.3 million pounds of U3O8 (our share) in the third quarter and 17.3 million pounds production (our share) in the first nine months of 2024, compared to 3.0 million pounds and 11.9 million pounds in the same periods of 2023. In 2023, the Key Lake mill had not yet achieved an 18 million pound per year run rate, and at Cigar Lake, productivity was impacted by a transition to a new mining area.

We continue to evaluate the optimal mix of production, inventory and purchases in order to retain flexibility and deliver long-term value.

 

28    CAMECO CORPORATION            

URANIUM PRODUCTION

 

     THREE MONTHS
ENDED SEPTEMBER 30		            NINE MONTHS
ENDED SEPTEMBER 30		               

OUR SHARE (MILLION LBS)

    2024      2023      CHANGE     2024      2023      CHANGE     2024 PLAN  

Cigar Lake

      1.5        1.4        7 %      6.7        5.6        20 %      up to 9.8  

McArthur River/Key Lake

      2.8        1.6        75 %      10.6        6.3        68 %      up to 13.3 1 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total

      4.3        3.0        43 %      17.3        11.9        45 %      up to 23.1  
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

 

1 

Our outlook for production from McArthur River/Key Lake has changed. We now expect to produce 19 million pounds (100% basis) in 2024 (previously 18 million pounds). See Uranium 2024 Q3 for more information.

Inflation, the availability of personnel with the necessary skills and experience, aging infrastructure, and the impact of supply chain challenges on the availability of materials and reagents carry with them the risk that we do not achieve our production plans and/or, experience production delays and increased costs.

The annual maintenance shutdowns at Cigar Lake and at McArthur River and Key Lake were completed during the third quarter of 2024.

Uranium 2024 Q3 updates

PRODUCTION UPDATE

McArthur River/Key Lake

In the third quarter of 2024, total packaged production from McArthur River and Key Lake was 4.0 million pounds (2.8 million pounds our share) compared to 2.3 million pounds (1.6 million pounds our share) in the third quarter of 2023. Our share of production was higher in the third quarter of 2024 compared to 2023 with the mill having achieved its planned production run rate. Our share of production in the first nine months of 2024 was 10.6 million pounds compared to 6.3 million pounds in 2023 for the same reason.

We now expect production of up to 19 million pounds (13.3 million pounds our share) in 2024. The increase in production is attributed to improved performance at the Key Lake mill, which is benefiting from the implementation of a number of automation, digitization and optimization projects that were undertaken during the period the operation was in care and maintenance, and our ongoing focus on operational efficiency.

Cigar Lake

Total packaged production from Cigar Lake was 2.7 million pounds (1.5 million pounds our share) in the third quarter of 2024 compared to 2.6 million pounds (1.4 million pounds our share) in the third quarter of 2023. Our share of production in the first nine months of 2024 was 6.7 million pounds compared to 5.6 million pounds in the same period in 2023 due to lower production while transitioning to a new mining area in 2023.

We continue to expect production of up to 18 million pounds (9.8 million pounds our share) in 2024.

Inkai

Production on a 100% basis was 2.0 million pounds for the quarter, and 5.5 million pounds for the first nine months of this year, compared to 2.0 million pounds and 6.3 million pounds in the same periods last year. The lower production for the first nine months of the year is attributed to differences in the annual mine plan, a shift in the acidification schedule for new wellfields and unstable acid supply throughout the year.

Due to equity accounting, our share of production is shown as a purchase at a 5% discount to the spot price and included in inventory at this value at the time of delivery. Our share of the profits earned by JV Inkai on the sale of its production to the JV partners is included in “share of earnings from equity-accounted investee” on our consolidated statement of earnings. Excess cash, net of working capital requirements, is distributed to the partners as dividends once declared.

JV Inkai continues to experience procurement and supply chain issues, most notably, related to the stability of sulfuric acid deliveries. It is evident that JV Inkai will not be able to achieve its target production for 2024 of 8.3 million pounds of U3O8 (100% basis), as it was contingent upon receipt of sufficient volumes of sulfuric acid in accordance with a specific schedule. JV Inkai now estimates the maximum annual expected production to be approximately 7.7 million pounds. Our allocation of the planned production from JV Inkai remains under discussion.

 

        2024 THIRD QUARTER REPORT      29  

In addition to the issue of availability of sulfuric acid, achievement of JV Inkai’s 2024 production target requires it to successfully manage several other ongoing risks, including other procurement and supply chain issues, transportation challenges, construction delays and inflationary pressures on its production costs.

The geopolitical situation continues to increase transportation risks in the region. We continue to work closely with JV Inkai and our joint venture partner, Kazatomprom, to receive our share of production via the Trans-Caspian International Transport Route, which does not rely on Russian rail lines or ports. We could experience further delays to our expected Inkai deliveries this year if transportation using this shipping route takes longer than anticipated. The first shipment containing approximately 2.3 million pounds of our share of Inkai’s 2024 production has arrived at the Canadian port and is expected to arrive at the Blind River refinery before the end of 2024. The volume and timing for the shipment of our remaining share of 2024 production is uncertain.

To mitigate the risk of production shortfalls or transportation delays, we have inventory, long-term purchase agreements and loan arrangements in place we can draw on.

Depending on cost inflation impacts, actual production volumes and when we receive shipments of our share of Inkai’s 2024 production, our share of earnings from this equity-accounted investee and the timing of the receipt of our share of dividends from the joint venture may be impacted.

On July 10, our JV partner, Kazatomprom, issued a news release indicating that at the end of June, the government of the Republic of Kazakhstan introduced amendments to the country’s Tax Code, including significant increases to the MET rate paid by mining entities on uranium production, beginning in 2025. If it remains as currently formulated, depending on the assumptions used for uranium price, production profile, and exchange rate, the production costs for JV Inkai including MET, could be similar to northern our Saskatchewan operations, calculated including royalties.

An updated NI 43-101 technical report for the Inkai mine is in the process of being finalized and is expected to be filed under Cameco’s profile on SEDAR+ within 45 days of this release. Changes to the mineral reserves, production profile, costs, sensitivities, environmental and regulatory matters, and other scientific and technical information will be updated in the relevant sections of the technical report. Once filed, the new technical report will supersede and replace the current technical report titled “Inkai Operation, South Kazakhstan Oblast, Republic of Kazakhstan” dated January 25, 2018, with an effective date of January 1, 2018, which is available on SEDAR+ (www.sedarplus.com), on EDGAR (www.sec.gov), and on Cameco’s website (www.cameco.com/media/media-library).

TIER-TWO CURTAILED OPERATIONS

US ISR Operations

As a result of our 2016 curtailment decision, commercial production has ceased. As production is suspended, we expect ongoing cash and non-cash care and maintenance costs to range between $12.5 million (US) and $14.5 million (US) for 2024.

Rabbit Lake

Rabbit Lake remains in a safe state of care and maintenance following the suspension of production in 2016. We continue to evaluate opportunities to minimize care and maintenance costs while maintaining critical infrastructure and processes. We expect care and maintenance costs to range between $29 million and $33 million for 2024.

Fuel services 2024 Q3 updates

PORT HOPE CONVERSION SERVICES

CAMECO FUEL MANUFACTURING INC. (CFM)

Production update

Fuel services produced 3.2 million kgU in the third quarter of 2024, 60% higher than the third quarter last year due to eliminating the annual summer maintenance outage which is possible as a result of the commissioning of a new closed loop water system. Production in the first nine months of 2024 was 9.9 million kgU, up 3% compared to the same period last year, due to higher production in the third quarter, partially offsetting the impact of the temporary operational issues in the first half of 2024.

 

30    CAMECO CORPORATION            

Our fuel services segment includes the combined production of UO2, UF6, and heavy water reactor fuel bundles. Our annual production expectation for fuel services remains between 13.5 million and 14.5 million kgU of combined fuel services products in 2024, we continue to expect the conversion component of that guidance to be between 11,000 and 11,500 tonnes of UF6.

We are continuing our work at Port Hope to achieve an ongoing production rate that will supply 12,000 tonnes per year in order to satisfy our book of long-term commitments and demand for conversion services. Inflation, the availability of personnel with the necessary skills and experience, aging infrastructure, and the impact of supply chain challenges on the availability of materials and reagents carry with them the risk that we do not achieve our production plans and/or experience production delays and increased costs.

Qualified persons

The technical and scientific information discussed in this document for our material properties (McArthur River/Key Lake, Inkai and Cigar Lake) was approved by the following individuals who are qualified persons for the purposes of NI 43-101:

 

MCARTHUR RIVER/KEY LAKE

 

•  Greg Murdock, general manager, McArthur River, Cameco

 

•  Daley McIntyre, general manager, Key Lake, Cameco

 

CIGAR LAKE

 

•  Kirk Lamont, general manager, Cigar Lake, Cameco

   

INKAI

 

•  Sergey Ivanov, deputy general director, technical services, Cameco Kazakhstan LLP

Non-IFRS measures

The non-IFRS measures referenced in this document are supplemental measures, which are used as indicators of our financial performance. Management believes that these non-IFRS measures provide useful supplemental information to investors, securities analysts, lenders and other interested parties in assessing our operational performance and our ability to generate cash flows to meet our cash requirements. These measures are not recognized measures under IFRS, do not have standardized meanings, and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Accordingly, these measures should not be considered in isolation or as a substitute for the financial information reported under IFRS. We are not able to reconcile our forward-looking non-IFRS guidance because we cannot predict the timing and amounts of discrete items, which could significantly impact our IFRS results.

The following are the non-IFRS measures used in this document.

ADJUSTED NET EARNINGS

Adjusted net earnings is our net earnings attributable to equity holders, adjusted for non-operating or non-cash items such as gains and losses on derivatives and adjustments to reclamation provisions flowing through other operating expenses, that we believe do not reflect the underlying financial performance for the reporting period. Other items may also be adjusted from time to time. We adjust this measure for certain of the items that our equity-accounted investees make in arriving at other non-IFRS measures. Adjusted net earnings is one of the targets that we measure to form the basis for a portion of annual employee and executive compensation (see Measuring our results starting on page 36 of our 2023 annual report).

In calculating ANE we adjust for derivatives. We do not use hedge accounting under IFRS and, therefore, we are required to report gains and losses on all hedging activity, both for contracts that close in the period and those that remain outstanding at the end of the period. For the contracts that remain outstanding, we must treat them as though they were settled at the end of the reporting period (mark-to-market). However, we do not believe the gains and losses that we are required to report under IFRS appropriately reflect the intent of our hedging activities, so we make adjustments in calculating our ANE to better reflect the impact of our hedging program in the applicable reporting period. See Foreign exchange starting on page 16 for more information.

 

        2024 THIRD QUARTER REPORT      31  

We also adjust for changes to our reclamation provisions that flow directly through earnings. Every quarter we are required to update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 10 of our interim financial statements for more information. This amount has been excluded from our ANE measure.

As a result of the change in ownership of Westinghouse when it was acquired by Cameco and Brookfield, Westinghouse’s inventories at the acquisition date were revalued based on the market price at that date. As these quantities are sold, Westinghouse’s cost of products and services sold reflect these market values, regardless of their historic costs. Our share of these costs is included in earnings from equity-accounted investees and recorded in cost of products and services sold in the investee information (see note 7 to the financial statements). Since this expense is non-cash, outside of the normal course of business and only occurred due to the change in ownership, we have excluded our share from our ANE measure.

Westinghouse has also expensed some non-operating acquisition-related transition costs that the acquiring parties agreed to pay for, which resulted in a reduction in the purchase price paid. Our share of these costs is included in earnings from equity-accounted investees and recorded in other expenses in the investee information (see note 7 to the financial statements). Since this expense is outside of the normal course of business and only occurred due to the change in ownership, we have excluded our share from our ANE measure.

To facilitate a better understanding of these measures, the table below reconciles adjusted net earnings with our net earnings for the third quarter and first nine months of 2024 and compares it to the same periods in 2023.

 

     THREE MONTHS
ENDED SEPTEMBER 30		      NINE MONTHS
ENDED SEPTEMBER 30		  

($ MILLIONS)

    2024      2023      2024      2023  

Net earnings attributable to equity holders

      7        148        36        281  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjustments

            

Adjustments on derivatives

      (28 )       41        19        —   

Inventory purchase accounting (net of tax)

      —         —         50        —   

Acquisition-related transition costs (net of tax)

      5        —         24        —   

Adjustment to other operating expense (income)

      5        (48 )       (12 )       (42 ) 

Income taxes on adjustments

      8        (4 )       (2 )       10  
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted net earnings (losses)

      (3 )       137        115        249  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

32    CAMECO CORPORATION            

The following table shows what contributed to the change in adjusted net earnings in the third quarter and first nine months of 2024 compared to the same period in 2023.

 

          THREE MONTHS
ENDED
SEPTEMBER 30		      NINE MONTHS
ENDED
SEPTEMBER 30		  

($ MILLIONS)

    IFRS      ADJUSTED      IFRS      ADJUSTED  

Net earnings - 2023

      148        137        281        249  
     

 

 

     

 

 

     

 

 

     

 

 

  

Change in gross profit by segment

(We calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A), net of hedging benefits)

 

 

Uranium

   

Impact from sales volume changes

      6        6        (22 )       (22 ) 
  

Higher realized prices ($US)

      74        74        270        270  
  

Foreign exchange impact on realized prices

      14        14        12        12  
  

Higher costs

      (78 )       (78 )       (139 )       (139 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Change – uranium

      16        16        121        121  
     

 

 

     

 

 

     

 

 

     

 

 

  

Fuel services

   

Impact from sales volume changes

      9        9        2        2  
  

Higher (lower) realized prices ($Cdn)

      (19 )       (19 )       14        14  
  

Lower (higher) costs

      13        13        (32 )       (32 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  
  

Change – fuel services

      3        3        (16 )       (16 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  

Other changes

            

Lower administration expenditures

      15        15        11        11  

Higher exploration and research and development expenditures

      (2 )       (2 )       (10 )       (10 ) 

Change in reclamation provisions

      (66 )       (13 )       (40 )       (10 ) 

Lower earnings from equity-accounted investees

      (66 )       (61 )       (176 )       (102 ) 

Change in gains or losses on derivatives

      68        (1 )       (23 )       (4 ) 

Change in foreign exchange gains or losses

      (68 )       (68 )       —         —   

Lower finance income

      (30 )       (30 )       (75 )       (75 ) 

Higher finance costs

      (12 )       (12 )       (48 )       (48 ) 

Change in income tax recovery or expense

      3        15        13        1  

Other

      (2 )       (2 )       (2 )       (2 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings (losses) - 2024

      7        (3 )       36        115  
     

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

EBITDA is defined as net earnings attributable to equity holders, adjusted for the costs related to the impact of the company’s capital and tax structure including depreciation and amortization, finance income, finance costs (including accretion) and income taxes. Included in EBITDA is our share of equity-accounted investees.

ADJUSTED EBITDA

Adjusted EBITDA is defined as EBITDA, as further adjusted for the impact of certain costs or benefits incurred in the period which are either not indicative of the underlying business performance or that impact the ability to assess the operating performance of the business. These adjustments include the amounts noted in the ANE definition.

In calculating adjusted EBITDA, we also adjust for items included in the results of our equity-accounted investees that are not adjustments to arrive at our ANE measure. These items are reported as part of other expenses within the investee financial information and are not representative of the underlying operations. These primarily include transaction, integration and restructuring costs related to acquisitions.

The company may realize similar gains or incur similar expenditures in the future.

ADJUSTED FREE CASH FLOW

Adjusted free cash flow is defined as adjusted EBITDA less capital expenditures for the period.

ADJUSTED EBITDA MARGIN

Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue for the appropriate period.

 

        2024 THIRD QUARTER REPORT      33  

EBITDA, adjusted EBITDA, adjusted free cash flow, and adjusted EBITDA margin are non-IFRS measures which allow us and other users to assess results of operations from a management perspective without regard for our capital structure. To facilitate a better understanding of these measures, the tables below reconcile earnings before income taxes with EBITDA and adjusted EBITDA for the first quarter of 2024 and 2023.

For the quarter ended September 30, 2024:

 

($ MILLIONS)

    URANIUM1      FUEL
SERVICES		      WESTINGHOUSE     OTHER     TOTAL  

Net earnings (loss) attributable to equity holders

      171        17        (57 )      (124 )      7  

Depreciation and amortization

      59        11        —        1       71  

Finance income

      —         —         —        (4 )      (4 ) 

Finance costs

      —         —         —        35       35  

Income taxes

      —         —         —        38       38  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
     230        28        (57 )      (54 )      147  

Adjustments on equity investees

             

Depreciation and amortization

      2        —         93       —     

Finance expense

      —         —         54       —     

Income taxes

      3        —         (2 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      5        —         145       —        150  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

EBITDA

      235        28        88       (54 )      297  

Loss on derivatives

      —         —         —        (28 )      (28 ) 

Other operating expense

      5        —         —        —        5  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  
     5        —         —        (28 )      (23 ) 

Adjustments on equity investees

             

Acquisition-related transition costs

      —         —         7       —     

Other expenses

      —         —         27       —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      —         —         34       —        34  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

      240        28        122       (82 )      308  
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

1 

JV Inkai EBITDA of $31 million is included in the uranium segment. See Financial results by segment - Uranium for reconciliation.

 

34    CAMECO CORPORATION            

For the quarter ended September 30, 2023:

 

($ MILLIONS)

    URANIUM1      FUEL
SERVICES		      OTHER      TOTAL  

Net earnings (loss) attributable to equity holders

      218        28        (98 )       148  

Depreciation and amortization

      47        8        1        56  

Finance income

      —         —         (34 )       (34 ) 

Finance costs

      —         —         23        23  

Income taxes

      —         —         41        41  
  

 

 

     

 

 

     

 

 

     

 

 

  
     265        36        (67 )       234  

Adjustments on equity investees

            

Depreciation and amortization

      2        —         —      

Income taxes

      5        —         —      
  

 

 

     

 

 

     

 

 

     

 

 

  

Net adjustments on equity investees

      7        —         —         7  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

      272        36        (67 )       241  

Gain on derivatives

      —         —         41        41  

Other operating income

      (48 )       —         —         (48 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

      224        36        (26 )       234  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

1 

JV Inkai EBITDA of $42 million is included in the uranium segment. See Financial results by segment - Uranium for reconciliation.

For the nine months ended September 30, 2024:

 

($ MILLIONS)

    URANIUM1     FUEL
SERVICES		      WESTINGHOUSE     OTHER     TOTAL  

Net earnings (loss) attributable to equity holders

      615       71        (227 )      (423 )      36  

Depreciation and amortization

      148       25        —        4       177  

Finance income

      —        —         —        (18 )      (18 ) 

Finance costs

      —        —         —        117       117  

Income taxes

      —        —         —        87       87  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  
     763       96        (227 )      (233 )      399  

Adjustments on equity investees

            

Depreciation and amortization

      12       —         267       —     

Finance income

      —        —         (3 )      —     

Finance expense

      —        —         172       —     

Income taxes

      27       —         (50 )      —     
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      39       —         386       —        425  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

EBITDA

      802       96        159       (233 )      824  

Gain on derivatives

      —        —         —        19       19  

Other operating income

      (12 )      —         —        —        (12 ) 
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  
     (12 )      —         —        19       7  

Adjustments on equity investees

            

Inventory purchase accounting

      —        —         66       —     

Acquisition-related transition costs

      —        —         32       —     

Other expenses

      —        —         63       —     
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Net adjustments on equity investees

      —        —         161       —        161  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

      790       96        320       (214 )      992  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

 

1 

JV Inkai EBITDA of $190 million is included in the uranium segment. See Financial results by segment—Uranium for reconciliation.

 

        2024 THIRD QUARTER REPORT      35  

For the nine months ended September 30, 2023:

 

($ MILLIONS)

    URANIUM1      FUEL
SERVICES		      OTHER      TOTAL  

Net earnings (loss) attributable to equity holders

      474        97        (290 )       281  

Depreciation and amortization

      147        24        3        174  

Finance income

      —         —         (93 )       (93 ) 

Finance costs

      —         —         69        69  

Income taxes

      —         —         100        100  
  

 

 

     

 

 

     

 

 

     

 

 

  
     621        121        (211 )       531  

Adjustments on equity investees

            

Depreciation and amortization

      6        —         —      

Income taxes

      16        —         —      
  

 

 

     

 

 

     

 

 

     

 

 

  

Net adjustments on equity investees

      22        —         —         22  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDA

      643        121        (211 )       553  

Other operating income

      (42 )       —         —         (42 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

      601        121        (211 )       511  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

1 

JV Inkai EBITDA of $122 million is included in the uranium segment. See Financial results by segment - Uranium for reconciliation.

CASH COST PER POUND, NON-CASH COST PER POUND AND TOTAL COST PER POUND FOR PRODUCED AND PURCHASED URANIUM

Cash cost per pound, non-cash cost per pound and total cost per pound for produced and purchased uranium are non-IFRS measures. We use these measures in our assessment of the performance of our uranium business. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS.

To facilitate a better understanding of these measures, the table below reconciles these measures to cost of product sold and depreciation and amortization for the third quarter and first nine months of 2024 and 2023.

 

     THREE MONTHS
ENDED SEPTEMBER 30		      NINE MONTHS
ENDED SEPTEMBER 30		  

($ MILLIONS)

    2024      2023      2024      2023  

Cost of product sold

      386.5        304.6        1,027.0        959.1  

Add / (subtract)

            

Royalties

      (38.4 )       (22.3 )       (88.5 )       (61.0 ) 

Care and maintenance costs

      (13.4 )       (12.1 )       (37.3 )       (35.2 ) 

Other selling costs

      (2.9 )       (3.0 )       (12.2 )       (7.1 ) 

Change in inventories

      (8.9 )       (106.8 )       93.4        (201.8 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Cash costs of production (a)

      322.9        160.4        982.4        654.0  

Add / (subtract)

            

Depreciation and amortization

      59.3        47.1        147.5        147.2  

Care and maintenance costs

      (0.2 )       (0.8 )       (0.6 )       (3.4 ) 

Change in inventories

      (14.4 )       (9.6 )       20.2        (2.0 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Total production costs (b)

      367.6        197.1        1,149.5        795.8  
  

 

 

     

 

 

     

 

 

     

 

 

  

Uranium produced & purchased (million lbs) (c)

      6.1        3.8        23.5        16.9  
  

 

 

     

 

 

     

 

 

     

 

 

  

Cash costs per pound (a ÷ c)

      52.93        42.21        41.80        38.70  

Total costs per pound (b ÷ c)

      60.26        51.88        48.91        47.09  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

36    CAMECO CORPORATION            

Additional information

Critical accounting estimates

Due to the nature of our business, we are required to make estimates that affect the amount of assets and liabilities, revenues and expenses, commitments and contingencies we report. We base our estimates on our experience, our best judgment, guidelines established by the Canadian Institute of Mining, Metallurgy and Petroleum and on assumptions we believe are reasonable.

Purchase prices related to business combinations and asset acquisitions are allocated to the underlying acquired assets and liabilities based on their estimated fair value at the time of acquisition. The determination of fair value requires us to make assumptions, estimates and judgments regarding future events. The allocation process is inherently subjective and impacts the amounts assigned to individually identifiable assets and liabilities. As a result, the purchase price allocation impacts our reported assets and liabilities, future net earnings due to the impact on future depreciation and amortization expense and impairment tests.

Controls and procedures

As of September 30, 2024, we carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer (CEO) and chief financial officer (CFO), of the effectiveness of our disclosure controls and procedures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based upon that evaluation and as of September 30, 2024, the CEO and CFO concluded that:

 

  •  

the disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under applicable securities laws is recorded, processed, summarized and reported as and when required; and

 

  •  

such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

In April 2024, we implemented SAP S/4 HANA, an enterprise resource planning (ERP) system, across the entire organization. As a result of this implementation, we modified certain existing internal controls and implemented new controls and procedures. The implementation process included extensive involvement by key end users and required significant pre-implementation planning, design, and testing. We continue to evaluate and monitor our internal controls and make changes as required and believe we are taking the necessary steps to maintain appropriate internal controls over financial reporting during this period of change.

There have been no other changes in our internal control over financial reporting during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

        2024 THIRD QUARTER REPORT      37  

Exhibit 99.3

 

LOGO

Cameco Corporation

2024 condensed consolidated interim financial statements

(unaudited)

November 6, 2024

Cameco Corporation

Consolidated statements of earnings

 

(Unaudited)    Note    Three months ended     Nine months ended  

($Cdn thousands, except per share amounts)

         Sep 30/24     Sep 30/23     Sep 30/24     Sep 30/23  

Revenue from products and services

    12    $ 720,596     $ 575,079     $ 1,952,599     $ 1,744,041  

Cost of products and services sold

         478,624       367,302       1,243,462       1,140,886  

Depreciation and amortization

         71,130       55,987       176,155       174,212  
     

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales

    20      549,754       423,289       1,419,617       1,315,098  
     

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

         170,842       151,790       532,982       428,943  

Administration

         50,915       65,510       176,428       186,569  

Exploration

         5,329       4,106       15,392       14,262  

Research and development

         8,927       7,850       26,126       17,189  

Other operating expense (income)

    10      4,687       (61,304 )      (15,100 )      (54,962 ) 

Loss on disposal of assets

         644       92       1,056       368  
     

 

 

    

 

 

    

 

 

    

 

 

  

Earnings from operations

         100,340       135,536       329,080       265,517  

Finance costs

    13      (35,121 )      (22,960 )      (116,648 )      (69,302 ) 

Gain (loss) on derivatives

    19      21,433       (47,092 )      (38,607 )      (16,093 ) 

Finance income

         3,954       33,986       18,163       92,625  

Share of earnings (loss) from equity-accounted investees

    7      (30,642 )      35,466       (75,951 )      99,728  

Other income (expense)

    14      (14,506 )      53,694       7,352       8,073  
     

 

 

    

 

 

    

 

 

    

 

 

  

Earnings before income taxes

         45,458       188,630       123,389       380,548  

Income tax expense

    15      38,032       40,563       87,016       99,825  
     

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

         7,426       148,067       36,373       280,723  
     

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings (loss) attributable to:

            

Equity holders

       $ 7,427     $ 148,080     $ 36,380     $ 280,741  

Non-controlling interest

         (1 )      (13 )      (7 )      (18 ) 
     

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

       $ 7,426     $ 148,067     $ 36,373     $ 280,723  
     

 

 

    

 

 

    

 

 

    

 

 

  

Earnings per common share attributable to equity holders:

            

Basic

    16    $ 0.02     $ 0.34     $ 0.08     $ 0.65  
     

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

    16    $ 0.02     $ 0.34     $ 0.08     $ 0.65  
     

 

 

    

 

 

    

 

 

    

 

 

  

See accompanying notes to condensed consolidated interim financial statements.

 

2

Cameco Corporation

Consolidated statements of comprehensive earnings

 

(Unaudited)    Three months ended     Nine months ended  

($Cdn thousands)

    Sep 30/24     Sep 30/23     Sep 30/24     Sep 30/23  

Net earnings

    $ 7,426     $ 148,067     $ 36,373     $ 280,723  

Other comprehensive income (loss), net of taxes

         

Items that will not be reclassified to net earnings:

         

Remeasurements of defined benefit liability - equity-accounted investee1

      —        —        (31 )      —   

Items that are or may be reclassified to net earnings:

         

Exchange differences on translation of foreign operations

      (15,498 )      (21,279 )      47,064       (25,180 ) 

Losses on derivatives designated as cash flow hedges - equity-accounted investee2

      (56,979 )      —        (41,598 )      —   

Exchange differences on translation of foreign operations - equity-accounted investee

      78,474       —        61,209       —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss), net of taxes

      5,997       (21,279 )      66,644       (25,180 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income

    $ 13,423     $ 126,788       103,017       255,543  
  

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss) attributable to:

         

Equity holders

    $ 5,997     $ (21,279 )    $ 66,644     $ (25,180 ) 

Non-controlling interest

      —        —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss)

    $ 5,997     $ (21,279 )    $ 66,644     $ (25,180 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss) attributable to:

         

Equity holders

    $ 13,424     $ 126,801     $ 103,024     $ 255,561  

Non-controlling interest

      (1 )      (13 )      (7 )      (18 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income

    $ 13,423     $ 126,788     $ 103,017     $ 255,543  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

1 

Net of tax (Q3 2024 - $0; 2024 - $10)

2 

Net of tax (Q3 2024 - $18,173; 2024 - $13,155)

See accompanying notes to condensed consolidated interim financial statements.

 

3

Cameco Corporation

Consolidated statements of financial position

 

(Unaudited)    Note      As at  

($Cdn thousands)

           Sep 30/24      Dec 31/23  

Assets

         

Current assets

         

Cash and cash equivalents

       $ 197,140      $ 566,809  

Accounts receivable

         305,487        422,333  

Current tax assets

         1,987        974  

Inventories

      5        854,752        692,261  

Supplies and prepaid expenses

         154,142        149,352  

Current portion of long-term receivables, investments and other

      6        4,682        10,161  
     

 

 

     

 

 

  

Total current assets

         1,518,190        1,841,890  
     

 

 

     

 

 

  

Property, plant and equipment

         3,304,733        3,368,772  

Intangible assets

         40,747        43,577  

Long-term receivables, investments and other

      6        602,903        613,773  

Investment in equity-accounted investees

      7        2,986,279        3,173,185  

Deferred tax assets

         834,556        892,860  
     

 

 

     

 

 

  

Total non-current assets

         7,769,218        8,092,167  
     

 

 

     

 

 

  

Total assets

       $ 9,287,408      $ 9,934,057  
     

 

 

     

 

 

  

Liabilities and shareholders’ equity

         

Current liabilities

         

Accounts payable and accrued liabilities

         367,369        577,550  

Current tax liabilities

         17,821        24,076  

Current portion of long-term debt

      8        —         499,821  

Current portion of other liabilities

      9        63,056        48,544  

Current portion of provisions

      10        79,684        39,113  
     

 

 

     

 

 

  

Total current liabilities

         527,930        1,189,104  
     

 

 

     

 

 

  

Long-term debt

      8        1,263,518        1,284,353  

Other liabilities

      9        330,477        343,420  

Provisions

      10        955,703        1,022,871  
     

 

 

     

 

 

  

Total non-current liabilities

         2,549,698        2,650,644  
     

 

 

     

 

 

  

Shareholders’ equity

         

Share capital

      11        2,932,855        2,914,165  

Contributed surplus

         209,412        215,679  

Retained earnings

         3,016,092        2,979,743  

Other components of equity

         51,393        (15,282 ) 
     

 

 

     

 

 

  

Total shareholders’ equity attributable to equity holders

         6,209,752        6,094,305  

Non-controlling interest

         28        4  
     

 

 

     

 

 

  

Total shareholders’ equity

         6,209,780        6,094,309  
     

 

 

     

 

 

  

Total liabilities and shareholders’ equity

       $ 9,287,408      $ 9,934,057  
     

 

 

     

 

 

  

Commitments and contingencies [notes 10, 15]

See accompanying notes to condensed consolidated interim financial statements.

 

4

Cameco Corporation

Consolidated statements of changes in equity

 

     Attributable to equity holders              

(Unaudited)

($Cdn thousands)

    Share
capital		      Contributed
surplus		     Retained
earnings		     Foreign
currency
translation		     Cash
flow
hedges		     Equity
investments
at FVOCI		     Total     Non-
controlling
interest		     Total
equity		  

Balance at January 1, 2024

    $ 2,914,165      $ 215,679     $ 2,979,743     $ (18,040 )    $ 3,506     $ (748 )    $ 6,094,305     $ 4     $ 6,094,309  

Net earnings (loss)

      —         —        36,380       —        —        —        36,380       (7 )      36,373  

Other comprehensive income

                    

(loss)

      —         —        (31 )      108,273       (41,598 )      —        66,644       —        66,644  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss) for the period

      —         —        36,349       108,273       (41,598 )      —        103,024       (7 )      103,017  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Share-based compensation

      —         4,796       —        —        —        —        4,796       —        4,796  

Stock options exercised

      18,690        (3,939 )      —        —        —        —        14,751       —        14,751  

Restricted share units released

      —         (7,124 )      —        —        —        —        (7,124 )      —        (7,124 ) 

Transactions with owners - contributed equity

      —         —        —        —        —        —        —        31       31  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at September 30, 2024

    $ 2,932,855      $ 209,412     $ 3,016,092     $ 90,233     $ (38,092 )    $ (748 )    $ 6,209,752     $ 28     $ 6,209,780  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at January 1, 2023

    $ 2,880,336      $ 224,687     $ 2,696,379     $ 35,400     $ —      $ (748 )    $ 5,836,054     $ 11     $ 5,836,065  

Net earnings (loss)

      —         —        280,741       —        —        —        280,741       (18 )      280,723  

Other comprehensive loss

      —         —        —        (25,180 )      —        —        (25,180 )      —        (25,180 ) 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss) for the period

      —         —        280,741       (25,180 )      —        —        255,561       (18 )      255,543  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Share-based compensation

      —         2,710       —        —        —        —        2,710       —        2,710  

Stock options exercised

      28,075        (5,114 )      —        —        —        —        22,961       —        22,961  

Restricted share units released

      —         (6,409 )      —        —        —        —        (6,409 )      —        (6,409 ) 

Dividends

      —         —        3       —        —        —        3       —        3  

Transactions with owners - contributed equity

      —         —        —        —        —        —        —        24       24  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at September 30, 2023

    $ 2,908,411      $ 215,874     $ 2,977,123     $ 10,220     $ —      $ (748 )    $ 6,110,880     $ 17     $ 6,110,897  
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

See accompanying notes to condensed consolidated interim financial statements.

 

5

Cameco Corporation

Consolidated statements of cash flows

 

(Unaudited)    Note      Three months ended     Nine months ended  

($Cdn thousands)

           Sep 30/24     Sep 30/23     Sep 30/24     Sep 30/23  

Operating activities

            

Net earnings

       $ 7,426     $ 148,067     $ 36,373     $ 280,723  

Adjustments for:

            

Depreciation and amortization

         71,130       55,987       176,155       174,212  

Deferred charges

         (35,077 )      9,220       9,053       (11,992 ) 

Unrealized loss (gain) on derivatives

         (30,949 )      43,007       16,205       2,124  

Share-based compensation

      18        1,792       949       4,796       2,710  

Loss on disposal of assets

         644       92       1,056       368  

Finance costs

      13        35,121       22,960       116,648       69,302  

Finance income

         (3,954 )      (33,986 )      (18,163 )      (92,625 ) 

Share of loss (earnings) in equity-accounted investees

         30,642       (35,466 )      75,951       (99,728 ) 

Other operating expense (income)

      10        4,687       (61,304 )      (15,100 )      (54,962 ) 

Other expense (income)

      14        14,506       (53,694 )      (7,351 )      (8,073 ) 

Income tax expense

      15        38,032       40,563       87,016       99,825  

Interest received

         3,954       33,986       18,163       94,752  

Income taxes received (paid)

         (2,416 )      (1,155 )      (35,919 )      70,450  

Dividends from equity-accounted investees

         —        —        185,447       113,642  

Other operating items

      17        (83,196 )      15,561       (274,755 )      (153,871 ) 
     

 

 

    

 

 

    

 

 

    

 

 

  

Net cash provided by operations

         52,342       184,787       375,575       486,857  
     

 

 

    

 

 

    

 

 

    

 

 

  

Investing activities

            

Additions to property, plant and equipment

         (60,333 )      (43,142 )      (147,232 )      (110,037 ) 

Decrease in short-term investments

         —        19,507       —        1,136,687  

Decrease in long-term receivables, investments and other

         —        —        7,003       1,000  

Proceeds from sale of property, plant and equipment

         82       —        130       36  
     

 

 

    

 

 

    

 

 

    

 

 

  

Net cash provided by (used in) investing

         (60,251 )      (23,635 )      (140,099 )      1,027,686  
     

 

 

    

 

 

    

 

 

    

 

 

  

Financing activities

            

Increase (decrease) in debt

         (303 )      —        497,022       —   

Decrease in debt

         (136,600 )      —        (1,041,590 )      —   

Interest paid

         (11,677 )      (1,465 )      (62,560 )      (21,263 ) 

Lease principal payments

         (772 )      (721 )      (1,562 )      (1,625 ) 

Proceeds from issuance of shares, stock option plan

         45       8,912       14,751       22,961  

Dividends returned

         —        —        —        4  
     

 

 

    

 

 

    

 

 

    

 

 

  

Net cash provided by (used in) financing

         (149,307 )      6,726       (593,939 )      77  
     

 

 

    

 

 

    

 

 

    

 

 

  

Increase (decrease) in cash and cash equivalents, during the period

         (157,216 )      167,878       (358,463 )      1,514,620  

Exchange rate changes on foreign currency cash balances

         (7,261 )      45,877       (11,206 )      9,421  

Cash and cash equivalents, beginning of period

         361,617       2,453,960       566,809       1,143,674  
     

 

 

    

 

 

    

 

 

    

 

 

  

Cash and cash equivalents, end of period

 

    $ 197,140     $ 2,667,715     $ 197,140     $ 2,667,715  
  

 

 

    

 

 

    

 

 

    

 

 

  

Cash and cash equivalents is comprised of:

            

Cash

             197,140       969,052  

Cash equivalents

             —        1,698,663  
         

 

 

    

 

 

  

Cash and cash equivalents

           $ 197,140     $ 2,667,715  
         

 

 

    

 

 

  

See accompanying notes to condensed consolidated interim financial statements.

 

6

Cameco Corporation

Notes to condensed consolidated interim financial statements

(Unaudited)

(Cdn$ thousands, except per share amounts and as noted)

 

1.

Cameco Corporation

Cameco Corporation is incorporated under the Canada Business Corporations Act. The address of its registered office is 2121 11th Street West, Saskatoon, Saskatchewan, S7M 1J3. The condensed consolidated interim financial statements as at and for the periods ended September 30, 2024 comprise Cameco Corporation and its subsidiaries (collectively, the Company or Cameco) and the Company’s interests in associates and joint arrangements.

Cameco is one of the world’s largest providers of the uranium needed to generate clean, reliable baseload electricity around the globe. The Company has operations in northern Saskatchewan and the United States, as well as a 40% interest in Joint Venture Inkai LLP (JV Inkai), a joint arrangement with Joint Stock Company National Atomic Company Kazatomprom (Kazatomprom), located in Kazakhstan. Cameco also has a 49% interest in Westinghouse Electric Company (Westinghouse), a joint venture with Brookfield Renewable Partners and its institutional partners (collectively, Brookfield). Westinghouse is one of the world’s largest nuclear services businesses with corporate headquarters in Pennsylvania and operations around the world. Both JV Inkai and Westinghouse are accounted for on an equity basis (see note 7).

Cameco has two operating mines, Cigar Lake and McArthur River. Operations at McArthur River/Key Lake, which had been suspended in 2018, resumed in November of 2022. The Rabbit Lake operation was placed in care and maintenance in 2016. Cameco’s operations in the United States, Crow Butte and Smith Ranch-Highland, are also not currently producing as the decision was made in 2016 to curtail production and defer all wellfield development. See note 20 for the financial statement impact.

The Company is also a leading provider of nuclear fuel processing services, supplying much of the world’s reactor fleet with the fuel to generate one of the cleanest sources of electricity available today. It operates the world’s largest commercial refinery in Blind River, Ontario, controls a significant portion of the world UF6 primary conversion capacity in Port Hope, Ontario and is a leading manufacturer of fuel assemblies and reactor components for CANDU reactors at facilities in Port Hope and Cobourg, Ontario.

 

2.

Material accounting policies

 

A.

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with Cameco’s annual consolidated financial statements as at and for the year ended December 31, 2023.

These condensed consolidated interim financial statements were authorized for issuance by the Company’s board of directors on November 6, 2024.

 

B.

Basis of presentation

These condensed consolidated interim financial statements are presented in Canadian dollars, which is the Company’s functional currency. All financial information is presented in Canadian dollars, unless otherwise noted. Amounts presented in tabular format have been rounded to the nearest thousand except per share amounts and where otherwise noted.

 

7

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items which are measured on an alternative basis at each reporting date:

 

Derivative financial instruments    Fair value through profit or loss (FVTPL)
Equity securities    Fair value through other comprehensive income (FVOCI)
Liabilities for cash-settled share-based payment arrangements    Fair value through profit or loss (FVTPL)
Net defined benefit liability    Fair value of plan assets less the present value of the defined benefit obligation

The preparation of the condensed consolidated interim financial statements in conformity with International Financial Reporting Standards (IFRS) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may vary from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2023.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5 of the December 31, 2023, consolidated financial statements.

 

3.

Accounting standards

 

A.

Changes in accounting policy

A number of amendments to existing standards became effective January 1, 2024, but they did not have an effect on the Company’s financial statements.

 

B.

New standards and interpretations not yet adopted

A number of new standards and amendments to existing standards are not yet effective for the period ended September 30, 2024 and have not been applied in preparing these condensed consolidated interim financial statements. Cameco does not intend to early adopt any of the standards and amendments and does not expect them to have a material impact on its financial statements. The one new standard that is expected to have an impact on disclosures is described below.

 

i.

Financial statement presentation

In April 2024, the International Accounting Standards Board (IASB) issued IFRS 18, Presentation and Disclosure of Financial Statements (IFRS 18). IFRS 18 is effective for periods beginning on or after January 1, 2027, with early adoption permitted. IFRS 18 is expected to improve the quality of financial reporting by requiring defined subtotals in the statement of profit or loss, requiring disclosure about management-defined performance measures, and adding new principles for aggregation and disaggregation of information. Cameco has not yet determined the impact of this standard on its disclosures.

 

8

4.

Acquisition of Westinghouse Electric Company (Westinghouse)

On November 7, 2023, Cameco acquired a 49% interest in Westinghouse, one of the world’s largest nuclear services businesses, in partnership with Brookfield Asset Management alongside its publicly listed affiliate Brookfield Renewable Partners (Brookfield) and its institutional partners. Brookfield, with its institutional partners, owns the other 51%. The acquisition represents an investment in additional nuclear fuel cycle assets that the Company expects will augment the core of its business.

During the second quarter, the purchase price was finalized with amounts released from escrow, resulting in Cameco’s share of the purchase price being reduced by $4,434,000 (US) with a corresponding decrease to goodwill. To finance its 49% share of the purchase price, $2,135,871,000 (US), Cameco used a combination of cash, debt and equity. The Company used $1,535,871,000 (US) of cash and $600,000,000 (US) in term loans (see note 8). In 2022, Cameco had issued 34,057,250 common shares pursuant to a public offering to help fund the acquisition.

Cameco’s share of the acquisition date fair value of the underlying assets and liabilities was as follows:

 

Net assets acquired (USD)

       

Cash and cash equivalents

    $ 255,924  

Other current assets

      950,600  

Property, plant and equipment

      797,527  

Intangible assets

      2,839,550  

Goodwill

      580,248  

Non-current assets

      346,974  

Current liabilities

      (1,184,315 ) 

Non-current liabilities

      (2,450,637 ) 
  

 

 

  

Total

    $ 2,135,871  
  

 

 

  

Cash paid

      1,535,871  

Term loans

      600,000  
  

 

 

  

Total

    $ 2,135,871  
  

 

 

  

Fair values were determined using a number of different valuation methodologies depending on the characteristics of the assets being valued. Methods included discounted cash flows, relief from royalty and multi-period excess earnings, quoted market prices and the direct cost method.

Intangible assets include customer relationships and contracts, developed technology, the Westinghouse trade name and product development costs. Goodwill reflects the value assigned to the expected future earnings capabilities of the organization. This is the earnings potential that we anticipate will be realized through new business arrangements.

Since December 31, 2023, when the acquisition was first reported, amounts have been reclassified between the net assets acquired to reflect changes in the valuation to date and adjustments made to goodwill to reflect the finalization of the purchase price. While substantially complete, the valuation of the assets and liabilities assumed has not been finalized as of the date of these financial statements. The accounting for the acquisition will be revised in the fourth quarter when the measurement period ends, and the valuation is complete. Remaining to be finalized is the income tax impact on the fair value of the underlying assets and liabilities.

 

9

5.

Inventories

 

     Sep 30/24      Dec 31/23  

Uranium

      

Concentrate

    $ 659,895      $ 511,654  

Broken ore

      33,572        71,463  
  

 

 

     

 

 

  
     693,467        583,117  

Fuel services

      160,846        108,711  

Other

      439        433  
  

 

 

     

 

 

  

Total

    $ 854,752      $ 692,261  
  

 

 

     

 

 

  

Cameco expensed $434,260,000 of inventory as cost of sales during the third quarter of 2024 (2023 - $374,819,000). For the nine months ended September 30, 2024, Cameco expensed $1,212,671,000 of inventory as cost of sales (2023 - $1,170,997,000).

 

6.

Long-term receivables, investments and other

 

     Sep 30/24      Dec 31/23  

Derivatives [note 19]

      12,877        28,467  

Investment tax credits

      96,199        95,940  

Amounts receivable related to tax dispute [note 15](a)

      209,125        209,125  

Product loan(b)

      288,294        288,294  
  

 

 

     

 

 

  

Other

      1,090        2,108  
     607,585        623,934  

Less current portion

      (4,682 )       (10,161 ) 
  

 

 

     

 

 

  

Net

    $ 602,903      $ 613,773  
  

 

 

     

 

 

  

 

(a)

Cameco was required to remit or otherwise secure 50% of the cash taxes and transfer pricing penalties, plus related interest and instalment penalties assessed, in relation to its dispute with Canada Revenue Agency (CRA). In light of our view of the likely outcome of the case, Cameco expects to recover the amounts remitted to CRA, including cash taxes, interest and penalties paid.

(b)

Cameco loaned 5,400,000 pounds of uranium concentrate to its joint venture partner, Orano Canada Inc., (Orano). Orano is obligated to repay the Company in kind with uranium concentrate no later than December 31, 2028. As at September 30, 2024, 3,000,000 pounds have been returned as repayment on this loan (December 31, 2023 - 3,000,000 pounds).

Cameco also loaned Orano 1,148,200 kgU of conversion supply and an additional 1,200,000 pounds of uranium concentrate during 2022 and 2023. Repayment to Cameco is to be made in kind with U3O8 quantities drawn being repaid by December 31, 2027 and quantities of UF6 conversion supply drawn by December 31, 2035.

As at September 30, 2024, 3,600,000 pounds of U3O8 (December 31, 2023 - 3,600,000 pounds) and 1,148,200 kgU of UF6 conversion supply (December 31, 2023 - 1,148,200 kgU) were drawn on the loans and are recorded at Cameco’s weighted average cost of inventory.

 

10

7.

Equity-accounted investees

 

     Sep 30/24      Dec 31/23  

Interest in Westinghouse

    $ 2,747,758      $ 2,899,379  

Interest in JV Inkai

      238,521        273,806  

Interest in Global Laser Enrichment (GLE)

      —         —   
  

 

 

     

 

 

  
   $ 2,986,279      $ 3,173,185  
  

 

 

     

 

 

  

A. Joint ventures

i. Westinghouse

Westinghouse is a nuclear reactor technology original equipment manufacturer and a global provider of products and services to commercial utilities and government agencies. Effective November 7, 2023, Cameco holds a 49% interest and Brookfield holds 51%. Cameco has joint control with Brookfield over the strategic operating, investing and financing activities of Westinghouse. The Company determined that the joint arrangement should be classified as a joint venture after concluding that neither the legal form of the separate entity, the terms of the contractual arrangement, or other facts and circumstances would give the Company rights to the assets and obligations for the liabilities relating to the arrangement. As a result, Cameco accounts for Westinghouse on an equity basis.

Westinghouse provides outage and maintenance services, engineering support, instrumentation and controls equipment, plant modification, and components and parts to nuclear reactors. Westinghouse has three fabrication facilities that design and manufacture nuclear fuel supplies for light water reactors. In addition, Westinghouse designs, develops and procures equipment for the build of new nuclear reactor plants.

The following table summarizes the total comprehensive loss of Westinghouse (100%):

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Revenue from products and services

    $ 1,482,604      $ —       $ 4,187,002      $ —   

Cost of products and services sold

      (475,185 )       —         (1,523,241 )       —   

Depreciation and amortization

      (190,769 )       —         (544,381 )       —   

Marketing, administrative and general expenses

      (747,619 )       —         (2,137,360 )       —   

Finance income

      (38 )       —         5,519        —   

Finance costs

      (110,125 )       —         (351,790 )       —   

Other expense

      (78,793 )       —         (201,178 )       —   

Income tax recovery

      3,435        —         101,598        —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net loss

    $ (116,490 )     $ —       $ (463,831 )     $ —   

Other comprehensive income

      43,868        —         39,959        —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total comprehensive income

    $ (72,622 )     $ —       $ (423,872 )     $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Cameco did not acquire its interest in Westinghouse until November 7, 2023.

 

11

The following table summarizes the financial information of Westinghouse (100%) and reconciles it to the carrying amount of Cameco’s interest:

 

     Sep 30/24      Dec 31/23  

Cash and cash equivalents

    $ 222,473      $ 265,146  

Other current assets

      2,795,075        2,364,602  

Intangible assets

      7,540,848        7,655,386  

Goodwill

      1,615,385        1,534,947  

Non-current assets

      2,933,639        3,102,566  

Current portion of long-term debt

      (493,700 )       (208,959 ) 

Other current liabilities

      (2,291,250 )       (2,255,099 ) 

Long-term debt

      (4,656,298 )       (4,554,227 ) 

Other non-current liabilities

      (2,204,018 )       (2,130,446 ) 
  

 

 

     

 

 

  

Net assets

      5,462,154        5,773,916  

Net assets attributable to non-controlling interest

      (25,221 )       (24,036 ) 
  

 

 

     

 

 

  

Net assets attributable to shareholders

      5,436,933        5,749,880  

Cameco’s share of net assets attributable to shareholders (49%)

      2,664,097        2,817,441  

Acquisition costs(a)

      83,896        83,916  

Impact of foreign exchange

      (235 )       (1,978 ) 
  

 

 

     

 

 

  

Carrying amount of interest in Westinghouse

    $ 2,747,758      $ 2,899,379  
  

 

 

     

 

 

  

 

(a)

Cameco incurred $84 million of acquisition costs that were included in the cost of the investment.

 

ii.

Global Laser Enrichment LLC (GLE)

GLE is the exclusive licensee of the proprietary Separation of Isotopes by Laser Excitation (SILEX) laser enrichment

technology, a third-generation uranium enrichment technology. Cameco owns a 49% interest in GLE with an option to attain a majority interest of up to 75% ownership. Cameco has joint control with SILEX over the strategic operating, investing and financing activities and as a result, accounts for GLE on an equity basis. In 2014, an impairment charge was recognized for its full carrying value of $183,615,000. Following the impairment, under the equity method of accounting, Cameco discontinued recognizing its share of losses in GLE. Cameco’s contributions to GLE are recorded in earnings as research and development.

 

B.

Associate

 

i.

JV Inkai

JV Inkai is the operator of the Inkai uranium deposit located in Kazakhstan. Cameco holds a 40% interest in JV Inkai and Kazatomprom holds a 60% interest. Cameco does not have control over the joint venture so it accounts for the investment on an equity basis.

JV Inkai is a uranium mining and milling operation that utilizes in-situ recovery (ISR) technology to extract uranium. The participants in JV Inkai purchase uranium from Inkai and, in turn, derive revenue directly from the sale of such product to third-party customers.

 

12

The following tables summarize the total comprehensive earnings of JV Inkai (100%):

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Revenue from products and services

    $ 60,614      $ 79,319      $ 465,257      $ 280,819  

Cost of products and services sold

      (9,457 )       (12,531 )       (73,405 )       (48,725 ) 

Depreciation and amortization

      (3,672 )       (4,448 )       (29,962 )       (16,219 ) 

Finance income

      716        423        2,363        991  

Finance costs

      (174 )       (233 )       (533 )       (804 ) 

Other expense

      (9,196 )       (1,853 )       (19,374 )       (16,496 ) 

Income tax expense

      (7,767 )       (11,565 )       (68,877 )       (39,566 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings from continuing operations

    $ 31,064      $ 49,112      $ 275,469      $ 160,000  

Other comprehensive income

      —         —         —         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total comprehensive income

    $ 31,064      $ 49,112      $ 275,469      $ 160,000  
  

 

 

     

 

 

     

 

 

     

 

 

  

The following table summarizes the financial information of JV Inkai (100%) and reconciles it to the carrying amount of Cameco’s interest:

 

     Sep 30/24      Dec 31/23  

Cash and cash equivalents

    $ 35,339      $ 24,074  

Other current assets

      420,434        551,917  

Non-current assets

      315,039        332,655  

Current liabilities

      (35,078 )       (40,985 ) 

Non-current liabilities

      (29,001 )       (30,211 ) 
  

 

 

     

 

 

  

Net assets

      706,733        837,450  

Cameco’s share of net assets (40%)

      282,693        334,980  

Consolidating adjustments(a)

      (31,788 )       (74,223 ) 

Fair value increment(b)

      79,889        81,090  

Dividends declared but not received

      9,760        5,952  

Dividends in excess of ownership percentage(c)

      (107,179 )       (74,843 ) 

Impact of foreign exchange

      5,146        850  
  

 

 

     

 

 

  

Carrying amount of interest in JV Inkai

    $ 238,521      $ 273,806  
  

 

 

     

 

 

  

 

(a)

Cameco records certain consolidating adjustments to eliminate unrealized profit, recognize deferred profit and amortize historical differences in accounting policies. The historical differences are amortized to earnings over units of production.

(b)

Upon restructuring, Cameco assigned fair values to the assets and liabilities of JV Inkai. This increment is amortized to earnings over units of production.

(c)

Cameco’s share of dividends follows its production purchase entitlements which is currently higher than its ownership interest.

 

13

8.

Long-term debt

 

     Sep 30/24      Dec 31/23  

Unsecured debentures

      

Series F - 5.09% debentures due November 14, 2042

    $ 99,390      $ 99,374  

Series G - 4.19% debentures due June 24, 2024

      —         499,821  

Series H - 2.95% debentures due October 21, 2027

      398,847        398,582  

Series I - 4.94% debentures due May 24, 2031

      497,161        —   

Term loans

      268,120        786,397  
  

 

 

     

 

 

  
     1,263,518        1,784,174  

Less current portion

      —         (499,821 ) 
  

 

 

     

 

 

  

Total

    $ 1,263,518      $ 1,284,353  
  

 

 

     

 

 

  

On May 24, 2024, Cameco issued $500,000,000 of Series I debentures which bear interest at a rate of 4.94% per annum. The net proceeds of the issue after deducting expenses were approximately $497,000,000. The debentures mature on May 24, 2031, and are being amortized at an effective interest rate of 5.03%. In conjunction with the issuance of the Series I debentures, on June 24, 2024, the $500,000,000 principal amount of the Series G debentures was redeemed.

On November 7, 2023, the Company utilized a term loan for $600,000,000 (US) with a syndicate of lenders. The proceeds of the term loan were used to finance the 49% acquisition of Westinghouse. The term loan consisted of two $300,000,000 (US) tranches. The first tranche has a floating interest rate of SOFR plus 1.80% and matures on November 7, 2025. On September 9, 2024, Cameco repaid $100,000,000 (US) on the first tranche of the term loan. The second tranche was fully repaid on June 10, 2024.

 

9.

Other liabilities

 

     Sep 30/24      Dec 31/23  

Deferred sales

    $ 54,430      $ 45,372  

Derivatives [note 19]

      22,959        22,344  

Accrued pension and post-retirement benefit liability

      77,873        77,002  

Lease obligation [note 19]

      10,017        10,816  

Product loans(a)

      158,824        166,052  

Sales contracts

      4,304        6,314  

Other

      65,126        64,064  
  

 

 

     

 

 

  
     393,533        391,964  

Less current portion

      (63,056 )       (48,544 ) 
  

 

 

     

 

 

  

Net

    $ 330,477      $ 343,420  
  

 

 

     

 

 

  

 

(a)

Cameco has standby product loan facilities with various counterparties. The arrangements allow us to borrow up to 1,768,000 kgU of UF6 conversion services and 6,429,000 pounds of U3O8 by September 30, 2027 with repayment in kind up to December 31, 2027. Under the facilities, standby fees of up to 1.5% are payable based on the market value of the facilities and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 3.0%. At September 30, 2024, we have 1,567,000 kgU of UF6 conversion services (December 31, 2023 - 1,777,000 kgU) drawn on the loans with repayment due by December 31 of the following years:

 

14

     2024      2025      2026      2027      Total  

kgU of UF6

      —         318,000        1,249,000        —         1,567,000  

We also have 2,506,000 pounds of U3O8 (December 31, 2023 - 2,756,000 pounds) drawn with repayment due no later than December 31 of the following years:

 

     2024      2025      2026      2027      Total  

lbs of U3O8

      —         630,000        1,876,000        —         2,506,000  

The loans are recorded at Cameco’s weighted average cost of inventory.

 

10.

Provisions

 

     Reclamation      Waste disposal      Total  

Beginning of year

    $ 1,051,167      $ 10,817      $ 1,061,984  

Changes in estimates and discount rates

         

Capitalized in property, plant, and equipment

      (22,536 )       —         (22,536 ) 

Recognized in earnings

      (15,100 )       330        (14,770 ) 

Provisions used during the period

      (23,799 )       (592 )       (24,391 ) 

Unwinding of discount

      28,235        263        28,498  

Impact of foreign exchange

      6,602        —         6,602  
  

 

 

     

 

 

     

 

 

  

End of period

    $ 1,024,569      $ 10,818      $ 1,035,387  
  

 

 

     

 

 

     

 

 

  

Current

      75,436        4,248        79,684  

Non-current

      949,133        6,570        955,703  
  

 

 

     

 

 

     

 

 

  
   $ 1,024,569      $ 10,818      $ 1,035,387  
  

 

 

     

 

 

     

 

 

  

 

11.

Share capital

At September 30, 2024, there were 435,184,572 common shares outstanding. Options in respect of 387,469 shares are outstanding under the stock option plan and are exercisable up to 2027. For the quarter ended September 30, 2024, there were 4,000 options that were exercised resulting in the issuance of shares (2023 - 557,200). For the nine months ended September 30, 2024, there were 1,008,820 options exercised that resulted in the issuance of shares (2023 - 1,346,967).

 

12.

Revenue

Cameco’s uranium and fuel services sales contracts with customers contain both fixed and market-related pricing. Fixed-price contracts are typically based on a term-price indicator at the time the contract is accepted and escalated over the term of the contract. Market-related contracts are based on either the spot price or long-term price, and the price is quoted at the time of delivery rather than at the time the contract is accepted. These contracts often include a floor and/or ceiling prices, which are usually escalated over the term of the contract. Escalation is generally based on a consumer price index. The Company’s contracts contain either one of these pricing mechanisms or a combination of the two. There is no variable consideration in the contracts and therefore no revenue is considered constrained at the time of delivery. Cameco expenses the incremental costs of obtaining a contract as incurred as the amortization period is less than a year.

 

15

The following tables summarize Cameco’s sales disaggregated by geographical region and contract type and includes a reconciliation to Cameco’s reportable segments (note 20):

For the three months ended September 30, 2024

 

     Uranium      Fuel services      Total  

Customer geographical region

         

Americas

    $ 269,636      $ 94,045      $ 363,681  

Europe

      149,735        23,480        173,215  

Asia

      180,772        2,928        183,700  
  

 

 

     

 

 

     

 

 

  
   $ 600,143      $ 120,453      $ 720,596  
  

 

 

     

 

 

     

 

 

  

Contract type

         

Fixed-price

    $ 174,224      $ 118,346      $ 292,570  

Market-related

      425,919        2,107        428,026  
  

 

 

     

 

 

     

 

 

  
   $ 600,143      $ 120,453      $ 720,596  
  

 

 

     

 

 

     

 

 

  

For the three months ended September 30, 2023

 

     Uranium      Fuel services      Total  

Customer geographical region

         

Americas

    $ 155,999      $ 51,527      $ 207,526  

Europe

      198,214        26,576        224,790  

Asia

      135,348        7,415        142,763  
  

 

 

     

 

 

     

 

 

  
   $ 489,561      $ 85,518      $ 575,079  
  

 

 

     

 

 

     

 

 

  

Contract type

         

Fixed-price

    $ 180,116      $ 76,195      $ 256,311  

Market-related

      309,445        9,323        318,768  
  

 

 

     

 

 

     

 

 

  
   $ 489,561      $ 85,518      $ 575,079  
  

 

 

     

 

 

     

 

 

  
  

 

 

     

 

 

     

 

 

  

For the nine months ended September 30, 2024

 

     Uranium      Fuel services      Total  

Customer geographical region

         

Americas

    $ 926,565      $ 245,413      $ 1,171,978  

Europe

      329,232        56,876        386,108  

Asia

      386,056        8,457        394,513  
  

 

 

     

 

 

     

 

 

  
   $ 1,641,853      $ 310,746      $ 1,952,599  
  

 

 

     

 

 

     

 

 

  

Contract type

         

Fixed-price

    $ 531,693      $ 297,837      $ 829,530  

Market-related

      1,110,160        12,909        1,123,069  
  

 

 

     

 

 

     

 

 

  
   $ 1,641,853      $ 310,746      $ 1,952,599  
  

 

 

     

 

 

     

 

 

  

 

16

For the nine months ended September 30, 2023

 

     Uranium      Fuel services      Total  

Customer geographical region

         

Americas

    $ 589,849      $ 204,567      $ 794,416  

Europe

      453,250        72,141        525,391  

Asia

      409,567        14,667        424,234  
  

 

 

     

 

 

     

 

 

  
   $ 1,452,666      $ 291,375      $ 1,744,041  
  

 

 

     

 

 

     

 

 

  

Contract type

         

Fixed-price

    $ 488,430      $ 280,107      $ 768,537  

Market-related

      964,236        11,268        975,504  
  

 

 

     

 

 

     

 

 

  
   $ 1,452,666      $ 291,375      $ 1,744,041  
  

 

 

     

 

 

     

 

 

  

 

13.

Finance costs

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Interest on long-term debt

    $ 20,472      $ 10,397      $ 73,714      $ 31,254  

Unwinding of discount on provisions

      9,920        8,862        28,498        26,469  

Other charges

      4,729        3,701        14,436        11,579  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 35,121      $ 22,960      $ 116,648      $ 69,302  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

14.

Other income (expense)

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Foreign exchange gains (losses)

      (14,572 )       53,694        7,288        7,528  

Other

      66        —         64        545  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ (14,506 )     $ 53,694      $ 7,352      $ 8,073  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

17

15.

Income taxes

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Earnings (loss) before income taxes

            

Canada

    $ 143,294      $ 161,802      $ 374,090      $ 373,253  

Foreign

      (97,836 )       26,828        (250,701 )       7,295  
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 45,458      $ 188,630      $ 123,389      $ 380,548  
  

 

 

     

 

 

     

 

 

     

 

 

  

Current income taxes

            

Canada

    $ 1,668      $ 2,899      $ 19,420      $ 18,236  

Foreign

      4,669        2,719        9,070        6,947  
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 6,337      $ 5,618      $ 28,490      $ 25,183  

Deferred income taxes (recovery)

            

Canada

    $ 35,259      $ 35,201      $ 61,253      $ 74,358  

Foreign

      (3,564 )       (256 )       (2,727 )       284  
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 31,695      $ 34,945      $ 58,526      $ 74,642  
  

 

 

     

 

 

     

 

 

     

 

 

  

Income tax expense

    $ 38,032      $ 40,563      $ 87,016      $ 99,825  
  

 

 

     

 

 

     

 

 

     

 

 

  

Cameco has recorded $834,556,000 of deferred tax assets (December 31, 2023 - $892,860,000). The realization of these deferred tax assets is dependent upon the generation of future taxable income in certain jurisdictions during the periods in which the Company’s temporary tax differences are available. The Company considers whether it is probable that all or a portion of the deferred tax assets will not be realized. In making this assessment, management considers all available evidence, including recent financial operations, projected future taxable income and tax planning strategies. Based on projections of future taxable income over the periods in which the deferred tax assets are available, realization of these deferred tax assets is probable and consequently the deferred tax assets have been recorded.

Cameco has operations in countries where the global minimum top-up tax has been enacted or substantively enacted effective January 1, 2024, including: Canada, Switzerland, Luxembourg, Germany, Barbados and the United Kingdom. The exposure is currently only in Switzerland, as all other constituent entities have effective tax rates higher than 15% and the transitional safe harbour rules are expected to be met. As a result of this exposure, additional income tax expense of $2,295,000 has been recorded relating to the profits earned in Switzerland (2023 - $0).

Canada

On February 18, 2021, the Supreme Court of Canada (Supreme Court) dismissed Canada Revenue Agency’s (CRA) application for leave to appeal the June 26, 2020 decision of the Federal Court of Appeal (Court of Appeal). The dismissal means that the dispute for the 2003, 2005 and 2006 tax years is fully and finally resolved in the Company’s favour.

In September 2018, the Tax Court of Canada (Tax Court) ruled that the marketing and trading structure involving foreign subsidiaries, as well as the related transfer pricing methodology used for certain intercompany uranium sales and purchasing agreements, were in full compliance with Canadian law for the tax years in question. Management believes the principles in the decision apply to all subsequent tax years, and that the ultimate resolution of those years will not be material to Cameco’s financial position, results of operations or liquidity in the year(s) of resolution.

As CRA continues to pursue reassessments for tax years subsequent to 2006, Cameco is utilizing its appeal rights under Canadian federal and provincial tax rules.

 

18

16.

Per share amounts

Per share amounts have been calculated based on the weighted average number of common shares outstanding during the period.

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Basic earnings per share computation

            

Net earnings attributable to equity holders

    $ 7,427      $ 148,080      $ 36,380      $ 280,741  

Weighted average common shares outstanding

      435,181        433,587        434,749        433,181  
  

 

 

     

 

 

     

 

 

     

 

 

  

Basic earnings per common share

    $ 0.02      $ 0.34      $ 0.08      $ 0.65  
  

 

 

     

 

 

     

 

 

     

 

 

  

Diluted earnings per share computation

            

Net earnings attributable to equity holders

    $ 7,427      $ 148,080      $ 36,380      $ 280,741  

Weighted average common shares outstanding

      435,181        433,587        434,749        433,181  

Dilutive effect of stock options

      293        1,547        1,069        1,860  
  

 

 

     

 

 

     

 

 

     

 

 

  

Weighted average common shares outstanding, assuming dilution

      435,474        435,134        435,818        435,041  
  

 

 

     

 

 

     

 

 

     

 

 

  

Diluted earnings per common share

    $ 0.02      $ 0.34      $ 0.08      $ 0.65  
  

 

 

     

 

 

     

 

 

     

 

 

  

17. Statements of cash flows

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Changes in non-cash working capital:

            

Accounts receivable

    $ (165,892 )     $ (45,386 )     $ 118,574      $ (116,794 ) 

Inventories

      11,069        100,628        (140,260 )       171,798  

Supplies and prepaid expenses

      (19,567 )       (15,928 )       (4,734 )       (42,529 ) 

Accounts payable and accrued liabilities

      100,895        (15,864 )       (236,779 )       (133,434 ) 

Reclamation payments

      (8,282 )       (10,235 )       (24,391 )       (29,762 ) 

Other

      (1,419 )       2,346        12,835        (3,150 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Other operating items

    $ (83,196 )     $ 15,561      $ (274,755 )     $ (153,871 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

18.

Share-based compensation plans

 

A.

Stock option plan

The aggregate number of common shares that may be issued pursuant to the Cameco stock option plan shall not exceed 43,017,198 of which 33,204,879 shares have been issued. As of September 30, 2024, the total number of stock options held by the participants was 387,469 (December 31, 2023 - 1,396,289).

 

B.

Executive performance share unit (PSU)

During the period, the Company granted 178,600 PSUs. The weighted average fair value per unit at the date of issue was $55.00. As of September 30, 2024, the total number of PSUs held by the participants was 635,312 (December 31, 2023 - 830,279).

 

19

C.

Restricted share unit (RSU)

During the period, the Company granted 322,267 RSUs. The weighted average fair value per unit at the date of issue was $55.00. As of September 30, 2024, the total number of RSUs held by the participants was 733,550 (December 31, 2023 -814,683).

 

D.

Deferred share unit (DSU)

As of September 30, 2024, the total number of DSUs held by participating directors was 404,961 (December 31, 2023 -564,401).

Equity-settled plans

Cameco records compensation expense under its equity-settled plans with an offsetting credit to contributed surplus, to reflect the estimated fair value of units granted to employees. During the period, the Company recognized the following expenses under these plans:

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Employee share ownership plan(a)

    $ 1,166      $ 1,005      $ 3,546      $ 3,052  

Restricted share unit plan

      1,792        949        4,796        2,710  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,958      $ 1,954      $ 8,342      $ 5,762  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(a)

The total number of shares purchased in 2024 with Company contributions was 57,654 (2023 - 55,807).

Cash-settled plans

During the period, the Company recognized the following expenses (income) under these plans:

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Performance share unit plan

    $ 1,207      $ 6,577      $ 8,568      $ 17,821  

Deferred share unit plan

      (1,053 )       6,900        4,669        12,846  

Restricted share unit plan

      1,780        5,840        8,296        15,243  

Phantom stock option plan

      (108 )       787        422        1,776  

Phantom restricted share unit plan

      133        298        542        606  
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 1,959      $ 20,402      $ 22,497      $ 48,292  
  

 

 

     

 

 

     

 

 

     

 

 

  

Expenses related to share-based compensation plans are primarily included as part of administration expense in the statement of earnings.

 

20

19.

Financial instruments and related risk management

 

A.

Accounting classifications

The following tables summarize the carrying amounts and accounting classifications of Cameco’s financial instruments at the reporting date:

At September 30, 2024

 

     FVTPL      Amortized
cost		      Total  

Financial assets

         

Cash and cash equivalents(a)

    $ —       $ 197,140      $ 197,140  

Accounts receivable

      —         305,487        305,487  

Derivative assets [note 6]

         

Foreign currency contracts

      12,877        —         12,877  
  

 

 

     

 

 

     

 

 

  
     12,877        502,627        515,504  

Financial liabilities

         

Accounts payable and accrued liabilities

      —         367,369        367,369  

Lease obligation [note 9]

      —         10,017        10,017  

Derivative liabilities [note 9]

         

Foreign currency contracts

      18,796        —         18,796  

Interest rate contracts

      4,163        —         4,163  

Long-term debt

      —         1,263,518        1,263,518  
  

 

 

     

 

 

     

 

 

  
     22,959        1,640,904        1,663,863  
  

 

 

     

 

 

     

 

 

  

Net

      (10,082 )       (1,138,277 )       (1,148,359 ) 
  

 

 

     

 

 

     

 

 

  

At December 31, 2023

 

        FVTPL          Amortized 
cost		        Total  

Financial assets

               

Cash and cash equivalents

      $ —         $ 566,809        $ 566,809  

Accounts receivable

        —           422,333          422,333  

Derivative assets [note 6]

               

Foreign currency contracts

        28,467          —           28,467  
    

 

 

       

 

 

       

 

 

  
     $ 28,467        $ 989,142        $ 1,017,609  
    

 

 

       

 

 

       

 

 

  

Financial liabilities

               

Accounts payable and accrued liabilities

      $ —         $ 577,550        $ 577,550  

Lease obligation [note 9]

        —           10,816          10,816  

Current portion of long-term debt

        —           499,821          499,821  

Derivative liabilities [note 9]

               

Foreign currency contracts

        16,525          —           16,525  

Interest rate contracts

        5,819          —           5,819  

Long-term debt

        —           1,284,353          1,284,353  
    

 

 

       

 

 

       

 

 

  
       22,344          2,372,540          2,394,884  
    

 

 

       

 

 

       

 

 

  

Net

      $ 6,123        $ (1,383,398 )       $ (1,377,275 ) 
    

 

 

       

 

 

       

 

 

  

 

(a)

Cameco has pledged $160,544,000 of cash as security against certain of its letter of credit facilities. This cash is being used as collateral for an interest rate reduction on the letter of credit facilities. The collateral account has a term of five years effective November 1, 2023. Cameco retains full access to this cash.

 

21

B.

Fair value hierarchy

The fair value of an asset or liability is generally estimated as the amount that would be received on sale of an asset, or paid to transfer a liability in an orderly transaction between market participants at the reporting date. Fair values of assets and liabilities traded in an active market are determined by reference to last quoted prices, in the principal market for the asset or liability. In the absence of an active market for an asset or liability, fair values are determined based on market quotes for assets or liabilities with similar characteristics and risk profiles, or through other valuation techniques. Fair values determined using valuation techniques require the use of inputs, which are obtained from external, readily observable market data when available. In some circumstances, inputs that are not based on observable data must be used. In these cases, the estimated fair values may be adjusted in order to account for valuation uncertainty, or to reflect the assumptions that market participants would use in pricing the asset or liability.

All fair value measurements are categorized into one of three hierarchy levels, described below, for disclosure purposes. Each level is based on the transparency of the inputs used to measure the fair values of assets and liabilities:

Level 1 – Values based on unadjusted quoted prices in active markets that are accessible at the reporting date for identical assets or liabilities.

Level 2 – Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3 – Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.

 

22

The following tables summarize the carrying amounts and level 2 fair values of Cameco’s financial instruments that are measured at fair value:

As at September 30, 2024

 

     Carrying value      Fair Value  

Derivative assets [note 6]

      

Foreign currency contracts

    $ 12,877      $ 12,877  

Derivative liabilities [note 9]

      

Foreign currency contracts

      (18,796 )       (18,796 ) 

Interest rate contracts

      (4,163 )       (4,163 ) 

Long-term debt

      (1,263,518 )       (1,338,347 ) 
  

 

 

     

 

 

  

Net

    $ (1,273,600 )     $ (1,348,429 ) 
  

 

 

     

 

 

  

As at December 31, 2023

 

     Carrying value      Fair Value  

Derivative assets [note 6]

      

Foreign currency contracts

    $ 28,467      $ 28,467  

Current portion of long-term debt

      (499,821 )       (500,000 ) 

Derivative liabilities [note 9]

      

Foreign currency contracts

      (16,525 )       (16,525 ) 

Interest rate contracts

      (5,819 )       (5,819 ) 

Long-term debt

      (1,284,353 )       (1,303,681 ) 
  

 

 

     

 

 

  

Net

    $ (1,778,051 )     $ (1,797,558 ) 
  

 

 

     

 

 

  

The preceding tables exclude fair value information for financial instruments whose carrying amounts are a reasonable approximation of fair value. The carrying value of Cameco’s cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximates its fair value as a result of the short-term nature of the instruments.

There were no transfers between level 1 and level 2 during the period. Cameco does not have any financial instruments that are classified as level 1 or level 3 as of the reporting date.

 

C.

Financial instruments measured at fair value

Cameco measures its derivative financial instruments and long-term debt at fair value. Derivative financial instruments and current and long-term debt are classified as recurring level 2 fair value measurements.

The fair value of Cameco’s unsecured debentures is determined using quoted market yields as of the reporting date, which ranged from 2.7% to 3.1% (2023 - 3.1% to 4.9%). The fair value of the floating rate term loan is equal to its carrying value.

Foreign currency derivatives consist of foreign currency forward contracts, options and swaps. The fair value of foreign currency options is measured based on the Black Scholes option-pricing model. The fair value of foreign currency forward contracts and swaps is measured using a market approach, based on the difference between contracted foreign exchange rates and quoted forward exchange rates as of the reporting date.

Interest rate derivatives consist of interest rate swap contracts. The fair value of interest rate swaps is determined by discounting expected future cash flows from the contracts. The future cash flows are determined by measuring the difference between fixed interest payments to be received and floating interest payments to be made to the counterparty based on Canada Dealer Offer Rate forward interest rate curves.

 

23

Where applicable, the fair value of the derivatives reflects the credit risk of the instrument and includes adjustments to take into account the credit risk of the Company and counterparty. These adjustments are based on credit ratings and yield curves observed in active markets at the reporting date.

 

D.

Derivatives

The following table summarizes the fair value of derivatives and classification on the consolidated statements of financial position:

 

     Sep 30/24      Dec 31/23  

Non-hedge derivatives:

      

Foreign currency contracts

    $ (5,919 )     $ 11,942  

Interest rate contracts

      (4,163 )       (5,819 ) 
  

 

 

     

 

 

  

Net

    $ (10,082 )     $ 6,123  
  

 

 

     

 

 

  

Classification:

      

Current portion of long-term receivables, investments and other [note 6]

    $ 3,658      $ 9,137  

Long-term receivables, investments and other [note 6]

      9,219        19,330  

Current portion of other liabilities [note 9]

      (18,644 )       (14,338 ) 

Other liabilities [note 9]

      (4,315 )       (8,006 ) 
  

 

 

     

 

 

  

Net

    $ (10,082 )     $ 6,123  
  

 

 

     

 

 

  

The following table summarizes the different components of the gain (loss) on derivatives included in net earnings (loss):

 

     Three months ended      Nine months ended  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Non-hedge derivatives:

            

Foreign currency contracts

    $ 19,749      $ (45,329 )     $ (38,793 )     $ (12,355 ) 

Interest rate contracts

      1,684        (1,763 )       186        (3,738 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Net

    $ 21,433      $ (47,092 )     $ (38,607 )     $ (16,093 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

20.

Segmented information

Cameco has three reportable segments: uranium, fuel services and Westinghouse. Cameco’s reportable segments are strategic business units with different products, processes and marketing strategies. The uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The fuel services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion services. The Westinghouse segment reflects our earnings from this equity-accounted investment (see note 7). Westinghouse is a nuclear reactor technology original equipment manufacturer and a global provider of products and services to commercial utilities and government agencies. It provides outage and maintenance services, engineering support, instrumentation and controls equipment, plant modification, and components and parts to nuclear reactors.

Cost of sales in the uranium segment includes care and maintenance costs for our operations that have had production suspensions. Cameco expensed $13,607,000 of care and maintenance costs during the third quarter of 2024 (2023 - $12,887,000). For the nine months ended September 30, 2024, Cameco expensed $37,840,000 (2023 - $38,580,000).

Accounting policies used in each segment are consistent with the policies outlined in the summary of material accounting policies.

 

24

Business segments

For the three months ended September 30, 2024

 

     Uranium     Fuel services     (i)
WEC		     (i)
Adjustments		     Other     Total  

Revenue

    $ 600,143     $ 120,453     $ 726,476     $ (726,476 )    $ —      $ 720,596  

Expenses

             

Cost of products and services sold

      386,475       92,149       232,841       (232,841 )      —        478,624  

Depreciation and amortization

      59,303       10,588       93,477       (93,477 )      1,239       71,130  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales

      445,778       102,737       326,318       (326,318 )      1,239       549,754  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit (loss)

      154,365       17,716       400,158       (400,158 )      (1,239 )      170,842  

Administration

      —        —        366,333       (366,333 )      50,915       50,915  

Exploration

      5,329       —        —        —        —        5,329  

Research and development

      —        —        —        —        8,927       8,927  

Other operating expense (income)

      5,089       (402 )      —        —        —        4,687  

Gain (loss) on disposal of assets

      (124 )      775       —        —        (7 )      644  

Finance costs

      —        —        53,961       (53,961 )      35,121       35,121  

Gain on derivatives

      —        —        —        —        (21,433 )      (21,433 ) 

Finance income

      —        —        19       (19 )      (3,954 )      (3,954 ) 

Share of loss (earnings) from equity-accounted investees

      (26,438 )      —        —        57,080       —        30,642  

Other expense (income)

      —        —        38,609       (38,609 )      14,506       14,506  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings (loss) before income taxes

      170,509       17,343       (58,764 )      1,684       (85,314 )      45,458  

Income tax expense

                38,032  
            

 

 

  

Net earnings

              $ 7,426  
            

 

 

  

 

(i)

Consistent with the presentation of financial information for internal management purposes, Cameco’s share of Westinghouse’s financial results has been presented as a separate segment. In accordance with IFRS, this investment is accounted for by the equity method of accounting in these consolidated financial statements and the associated revenue and expenses are eliminated in the “Adjustments” column.

 

25

For the three months ended September 30, 2023

 

     Uranium      Fuel services      Other      Total  

Revenue

    $ 489,561      $ 85,518      $ —       $ 575,079  

Expenses

            

Cost of products and services sold

      304,551        62,751        —         367,302  

Depreciation and amortization

      47,065        8,040        882        55,987  
  

 

 

     

 

 

     

 

 

     

 

 

  

Cost of sales

      351,616        70,791        882        423,289  
  

 

 

     

 

 

     

 

 

     

 

 

  

Gross profit (loss)

      137,945        14,727        (882 )       151,790  

Administration

      —         —         65,510        65,510  

Exploration

      4,106        —         —         4,106  

Research and development

      —         —         7,850        7,850  

Other operating income

      (48,381 )       (12,923 )       —         (61,304 ) 

Loss on disposal of assets

      41        51        —         92  

Finance costs

      —         —         22,960        22,960  

Loss on derivatives

      —         —         47,092        47,092  

Finance income

      —         —         (33,986 )       (33,986 ) 

Share of earnings from equity-accounted investee

      (35,466 )       —         —         (35,466 ) 

Other income

      —         —         (53,694 )       (53,694 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Earnings (loss) before income taxes

      217,645        27,599        (56,614 )       188,630  

Income tax expense

               40,563  
           

 

 

  

Net earnings

             $ 148,067  
           

 

 

  

 

26

For the nine months ended September 30, 2024

 

     Uranium     Fuel services     (i)
WEC		     (i)
Adjustments		     Other     Total  

Revenue

    $ 1,641,853     $ 310,746     $ 2,051,631       (2,051,631 )    $ —      $ 1,952,599  

Expenses

             

Cost of products and services sold

      1,026,996       217,172       746,388       (746,388 )      (706 )      1,243,462  

Depreciation and amortization

      147,538       24,916       266,747       (266,747 )      3,701       176,155  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales

      1,174,534       242,088       1,013,135       (1,013,135 )      2,995       1,419,617  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit (loss)

      467,319       68,658       1,038,496       (1,038,496 )      (2,995 )      532,982  

Administration

      —        —        1,047,306       (1,047,306 )      176,428       176,428  

Exploration

      15,392       —        —        —        —        15,392  

Research and development

      —        —        —        —        26,126       26,126  

Other operating income

      (12,023 )      (3,077 )      —        —        —        (15,100 ) 

Loss on disposal of assets

      146       916       —        —        (6 )      1,056  

Finance costs

      —        —        172,377       (172,377 )      116,648       116,648  

Gain on derivatives

      —        —        —        —        38,607       38,607  

Finance income

      —        —        (2,704 )      2,704       (18,163 )      (18,163 ) 

Share of loss (earnings) from equity-accounted investees

      (151,326 )      —        —        227,277       —        75,951  

Other expense (income)

      —        —        98,577       (98,577 )      (7,352 )      (7,352 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Earnings (loss) before income taxes

      615,130       70,819       (277,060 )      49,783       (335,283 )      123,389  

Income tax expense

                87,016  
            

 

 

  

Net earnings

              $ 36,373  
            

 

 

  

 

(i)

Consistent with the presentation of financial information for internal management purposes, Cameco’s share of Westinghouse’s financial results has been presented as a separate segment. In accordance with IFRS, this investment is accounted for by the equity method of accounting in these consolidated financial statements and the associated revenue and expenses are eliminated in the “Adjustments” column.

 

27

For the nine months ended September 30, 2023

 

     Uranium      Fuel services      Other      Total  

Revenue

    $ 1,452,666      $ 291,375      $ —       $ 1,744,041  

Expenses

            

Cost of products and services sold

      959,060        182,551        (725 )       1,140,886  

Depreciation and amortization

      147,182        24,357        2,673        174,212  
  

 

 

     

 

 

     

 

 

     

 

 

  

Cost of sales

      1,106,242        206,908        1,948        1,315,098  
  

 

 

     

 

 

     

 

 

     

 

 

  

Gross profit (loss)

      346,424        84,467        (1,948 )       428,943  

Administration

      —         —         186,569        186,569  

Exploration

      14,262        —         —         14,262  

Research and development

      —         —         17,189        17,189  

Other operating income

      (41,602 )       (13,360 )       —         (54,962 ) 

Loss on disposal of assets

      5        363        —         368  

Finance costs

      —         —         69,302        69,302  

Loss on derivatives

      —         —         16,093        16,093  

Finance income

      —         —         (92,625 )       (92,625 ) 

Share of earnings from equity-accounted investee

      (99,728 )       —         —         (99,728 ) 

Other income

      (545 )       —         (7,528 )       (8,073 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Earnings (loss) before income taxes

      474,032        97,464        (190,948 )       380,548  

Income tax expense

               99,825  
           

 

 

  

Net earnings

             $ 280,723  
           

 

 

  

 

21.

Related parties

Transactions with key management personnel

Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel of the Company include executive officers, vice-presidents, other senior managers and members of the board of directors.

Certain key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. As noted below, some of these entities transacted with the Company in the reporting period. The terms and conditions of the transactions were on an arm’s length basis.

Cameco purchases a significant amount of goods and services for its Saskatchewan mining operations from northern Saskatchewan suppliers to support economic development in the region. The president of several of these suppliers became a member of the board of directors of Cameco in September 2023. During the quarter ended September 30, 2024, Cameco paid these suppliers $23,077,000 for construction and contracting services. During the month of September 2023, Cameco paid these suppliers $5,172,000. During the nine months ended September 30, 2024, Cameco paid these suppliers $69,485,000 (2023 - $5,172,000). The transactions were conducted in the normal course of business and were accounted for at the exchange amount. Accounts payable includes a balance of $1,722,000 at the reporting date (2023 - $1,358,000).

 

28

Other related party transactions

 

     Transaction value      Transaction value      Balance outstanding  
     Three months ended      Nine months ended      as at  
     Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23      Sep 30/24      Sep 30/23  

Joint venture(a)

                  

Sales revenue

    $ 126      $ —       $ 45,308      $ —       $ —       $ —   

Fuel storage and handling fees

      —         —         25        —         —         —   

Associate(b)

                  

Product purchases

      7,208        —         152,992        93,430        —         —   

Dividends received

      —         —         185,447        113,642        —         —   

 

(a)

Cameco has entered into various agreements with Westinghouse and its subsidiaries and has recognized sales revenue related to fuel supply agreements and incurred costs related to fuel storage and handling fees. Contract terms are at market rates and on normal trade terms.

(b)

Cameco purchases uranium concentrate from JV Inkai. Purchases from JV Inkai are at market rates with extended payment terms. Cash dividends are also received from JV Inkai.

 

29

Exhibit 99.4

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Tim Gitzel, president and chief executive officer of Cameco Corporation, certify that:

 

1.

I have reviewed this quarterly report on Form 6-K of Cameco Corporation;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

Page 2

 

 

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2024

 

/s/ Tim Gitzel
Tim Gitzel
President and Chief Executive Officer

Exhibit 99.5

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Grant Isaac, executive vice-president and chief financial officer, of Cameco Corporation, certify that:

 

1.

I have reviewed this quarterly report on Form 6-K of Cameco Corporation;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

Page 2

 

 

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2024

 

/s/ Grant Isaac
Grant Isaac
Executive Vice-President and Chief Financial Officer
Cameco (NYSE:CCJ)
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