Cameco (NYSE:CCJ) Conference Transcript

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]