Industry Overview - The global interest in nuclear power is increasing, with 75 new nuclear reactors under construction and another 120 planned in various countries including Russia, Hungary, India, China, and Turkey [4] - France generates 70% of its electricity from nuclear energy and has approved life extension measures for 20 of its reactors [2] - Japan aims to generate 20% of its power from nuclear energy as it revives its nuclear grid after a decade of inactivity [3] Company Profile: Cameco - Cameco is the second largest uranium miner globally, producing 15% of the world's uranium, with only three producing mines [6] - The company operates high-grade uranium mines, including McArthur River, which has an average grade of 6.48% and is projected to produce until 2044 [6] - Cameco's other mines include Cigar Lake and Inkai, with varying grades and lifespans [7] Financial Performance - For the full year 2025, Cameco reported revenue of $3.48 billion, an 11% increase from 2024, despite producing 10% less uranium [14] - The adjusted and diluted earnings per share (EPS) grew by 114.9%, driven by a 6% increase in the average realized price of uranium sold, from $58.34 per pound to $62.11 [14] - Cameco maintains a net profit margin of 16.93% and a healthy balance sheet with a debt-to-equity ratio of 0.14% [15] Strategic Positioning - Cameco is involved in nearly every aspect of the nuclear supply chain, from uranium mining to fuel manufacturing and reactor engineering [10] - The company holds a 49% stake in Westinghouse, which manufactures advanced nuclear reactors, including the AP1000 and is developing the AP300 [11][12] - A recent supply agreement with India for 22 million pounds of uranium ore concentrate worth $1.9 billion positions Cameco favorably in the growing nuclear market [12]

Summary of Cameco Conference Call - February 23, 2026 Industry Overview - The uranium market is characterized by a lack of a useful spot market due to no in-year demand for uranium, as utilities typically procure uranium under long-term contracts [2][3] - The uncovered requirements wedge, representing the amount of uranium that utilities have not yet purchased, is at an all-time high, indicating strong future demand [3][4] - Utilities have been purchasing uranium at levels below replacement rates since 2012, leading to a growing uncovered requirements curve [4] Demand Insights - The demand for uranium is expected to increase significantly as utilities are not building up inventory, which suggests they are drawing down existing supplies [4] - The long-term price of uranium is currently at $90, influenced by limited fundamental demand, and is expected to rise as utilities recognize the supply-demand gap [6][9] - Utilities are willing to pay three-digit prices for uranium, indicating a strong market sentiment despite current demand not reaching replacement rates [9][10] Supply Dynamics - The supply stack is believed to be overstated due to various factors including operational disruptions and planned supply delays [5][6] - Cameco currently has 30% of its licensed capacity shut in, which affects overall supply availability [5] - The market is evolving quickly, and higher prices are anticipated as the gap between supply and demand widens [9][10] Production and Capacity - Cameco produced 34 million pounds of uranium in 2025, with guidance for 2026 indicating production from the McArthur River mine at 17 million pounds [20] - The company is not rushing to increase production due to the current market conditions and is focused on maintaining discipline in contracting and production [21][22] Strategic Partnerships and Government Involvement - A significant deal with the U.S. government to stimulate the construction of AP1000 reactors is expected to create additional uranium demand [12][14] - The urgency created by the announcement of the AP1000 project has led to increased interest from utilities in securing uranium supply [17] Conversion Market Insights - The conversion market is currently at historic pricing levels, driven by a lack of supply and the need for fresh uranium to be converted [26][27] - Cameco's Port Hope facility is the largest operating conversion facility in the West, and the company is looking to capitalize on the current market conditions [27][28] - There is a need for long-term contracts to incentivize the restart of additional conversion capacity, as the current tenor of contracts is insufficient [28][29] Conclusion - The uranium market is poised for significant changes with increasing demand and potential price hikes due to supply constraints and strategic government initiatives - Cameco is maintaining a disciplined approach to production and contracting, positioning itself to benefit from future market developments while managing existing assets effectively [21][22][23]