Cameco reports first quarter results, beginning to benefit from strategic decisions as uranium prices improve; well-positioned with leverage to market transition
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TSX: CCO website: cameco.com
NYSE: CCJ currency: Cdn (unless noted)
2121 – 11th Street West, Saskatoon, Saskatchewan, S7M 1J3 Canada
Tel: 306-956-6200 Fax: 306-956-6201
Cameco reports first quarter results, beginning to benefit from strategic decisions as uranium
prices improve; well-positioned with leverage to market transition
Saskatoon, Saskatchewan, Canada, May 5, 2022 . . . . . . . . . . . . . . . .
Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the first quarter ended
March 31, 2022 in accordance with International Financial Reporting Standards (IFRS).
“With the recent uranium price increase, we are beginning to enjoy the benefits of the strategic and deliberate decisions we
have made. And, with leverage to rising prices, we are well-positioned to continue to capture value from the market transition
we believe is underway, and that is supported by the fundamentals; fundamentals characterized by durable, full-cycle demand
against a backdrop of growing concerns about security of supply,” said Tim Gitzel, Cameco’s president and CEO.
“Durable demand is being driven by the accountability for achieving net-zero carbon targets, while balancing the need for
affordable, reliable and secure baseload electricity, all while diversifying away from reliance on Russian energy supplies.
Governments and policy makers are increasingly recognizing the role that nuclear plays in achieving those objectives. It is
why, since the start of 2022, we have seen announcements from countries like the United States, the United Kingdom, France,
South Korea and Belgium focused on preserving and expanding the life of their existing reactor fleets as well as on building
new reactors. There is also momentum building for non-traditional commercial uses of nuclear power around the world such as
development of small modular reactors and advanced reactors, with numerous companies and countries pursuing projects.
We’re seeing countries and companies turn to nuclear with an appetite that I’m not sure I’ve ever seen in my four decades in
this business.
“The supply side is quite a different picture. For some time now we have said that we believed the uranium market was as
vulnerable to a supply shock as it has ever been due to persistently low prices. The low prices and resulting lack of investment
have put productive capacity at risk and not just for uranium, but for conversion and enrichment as well. We have seen the
deepening of geopolitical and origin risk as supply has become increasingly concentrated. With Russia’s invasion of Ukraine,
whether because of sanctions or because of conflict with company values, the industry now faces the challenge of
disentangling its supply chain from dependence on Russian nuclear fuel supplies. It is still early days, but we are seeing what
we believe is an unprecedented geopolitical realignment occurring in the nuclear fuel cycle.
“With geopolitics complicating and potentially bottlenecking nuclear fuel supplies, we are seeing not just utilities but some of
the intermediaries and service providers beginning to shift their attention to securing material for their uncovered requirements,
and to derisk some of their origin dependencies. And we are seeing the continued thinning of the spot market by physical
uranium investors. As a result, uranium prices have increased significantly with the spot price up 38% and the long-term price
up 15% since the start of the year. The conversion spot price is up 65% and the long-term price is up 25%.
“As the market continues to transition, we expect to continue to place our uranium and conversion services under long-term
contracts and to meet rising demand with production from our best margin operations. While we have not concluded any new
contracts in 2022 beyond the 40 million pounds disclosed in our fourth quarter MD&A, we have a significant pipeline of
contract discussions underway. However, we will continue to exercise strategic patience in our contracting activity.
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“We will also take a balanced and disciplined approach to our supply decisions. Even though we have seen considerable
pricing pressure resulting from the geopolitical uncertainty, we will not change our production plans. We will not front-run
demand with supply. As we announced in February, we are continuing with indefinite supply discipline. Starting in 2024, with
McArthur River/Key Lake and Cigar Lake operating at less than licensed capacity, we plan to be operating at about 40% below
our productive capacity (100% basis). This will remain our production plan until we see further improvements in the uranium
market and have made further progress in securing the appropriate homes for our unencumbered, in-ground inventory under
long-term contracts, once again demonstrating that we are a responsible supplier of uranium fuel.
“Thanks to our deliberate actions and conservative financial management we have been and continue to be resilient. Our
strong balance sheet, with $1.5 billion in cash and cash equivalents and short-term investments, positions us well to self-
manage risk, including any global macro-economic or geopolitical uncertainty and volatility that may arise.
“We are optimistic about Cameco’s role in capturing long-term value across the fuel chain and supporting the transition to a
net-zero carbon economy. We have tier-one assets that are licensed, permitted, long-lived, are proven reliable, and that have
expansion capacity. These tier-one assets are backed up by idle tier-two assets and what we think is the best exploration
portfolio that leverages existing infrastructure. We are vertically integrated across the nuclear fuel cycle. We have locked in
significant value for the fuel services segment of our business and we are exploring opportunities to further our reach in the
nuclear fuel cycle and in innovative, non-traditional commercial uses of nuclear power in Canada and around the world.
“We believe we have the right strategy to achieve our vision of ‘energizing a clean-air world’ and we will do so in a manner that
reflects our values. Embedded in all our decisions is a commitment to addressing the environmental, social and governance
risks and opportunities that we believe will make our business sustainable over the long term.”
Net earnings of $40 million; adjusted net earnings of $17 million: first quarter results are driven by normal quarterly
variations in contract deliveries and the continued execution of our strategy in a market that we believe is in the early stages
of transition. Adjusted net earnings is a non-IFRS measure, see page 4.
Strong performance in the uranium and fuel services segments: First quarter results reflect the impact of increased
average realized prices in both the uranium and fuel services segments. In our uranium segment we produced 1.9 million
pounds (our share) during the quarter and sold 5.9 million pounds at an average realized price 34% higher than the same
period last year. In our fuel services segment average realized prices were 8% higher than in the first quarter of 2021.
Significant pipeline of contract discussions in strengthened price environment: As we announced in February, in our
uranium segment, since the beginning of 2022, we had been successful in adding 40 million pounds to our portfolio of long-
term uranium contracts. While we have not concluded any additional contracts in 2022, we continue to have a significant
pipeline of contract discussions underway. Origin risk is driving interest in securing uranium supply as well as conversion
services. We are being strategically patient in our discussions to capture as much value as possible in our contract portfolio.
In addition to the off-market contracting interest, there has been a re-emergence of on-market requests for proposals from
utilities looking to secure their future requirements and reduce origin risk.
Operational readiness for McArthur River/Key Lake is on-track: During the first quarter, at the McArthur River mine and
Key Lake mill we focused on recruitment and training activities. There are now approximately 600 employees and long-term
contractors employed at the mine and mill. When we resume operations later this year, we expect to have approximately
850 employees and long-term contractors. In addition, we advanced the work necessary to complete critical projects and
the maintenance readiness checks at both the mine and mill. We expensed the operational readiness costs directly to cost
of sales, which totaled approximately $40 million during the quarter. We continue to expect we could produce up to 5 million
pounds (100% basis) this year depending on our success in completing operational readiness activities and managing the
potential risks of the COVID-19 pandemic and related supply chain challenges.
JV Inkai shipments: The geopolitical situation arising as a result of the Russian invasion of Ukraine is creating
transportation risk in the region. Sanctions on Russia and restrictions on and cancellations of some cargo insurance
coverage create uncertainty about the ability to ship uranium products from Central Asia, potentially complicating the
logistics for deliveries from those areas, including JV Inkai’s final product. We are working with Inkai and our joint venture
partner, Kazatomprom, to secure an alternate shipping route that doesn’t rely on Russian rail lines or ports. In the
meantime, we have decided to delay a near-term delivery for our share of production from JV Inkai. In the event that it takes
longer than anticipated to secure an alternate shipping route, we could experience further delays in our expected Inkai
deliveries this year. To mitigate the risk, we have inventory, long-term purchase agreements and loan arrangements in
place that we can draw on. See Uranium 2022 Q1 updates in our first quarter MD&A for more information.
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2022 guidance updated: Our outlook has been amended to reflect the increases in uranium prices. See Outlook for 2022
in our first quarter MD&A for more information.
Strong balance sheet: As of March 31, 2022, we had $1.5 billion in cash and cash equivalents and short-term investments
and $996 million in long-term debt. In addition, we have a $1 billion undrawn credit facility.
Received dividends from JV Inkai in April: On April 28, we received dividend payments from JV Inkai totaling $83 million
(US). JV Inkai distributes excess cash, net of working capital requirements, to the partners as dividends.
Consolidated financial results
THREE MONTHS
HIGHLIGHTS ENDED MARCH 31
($ MILLIONS EXCEPT WHERE INDICATED) 2022 2021 CHANGE
Revenue 398 290 37%
Gross profit (loss) 50 (40) >100%
Net earnings (losses) attributable to equity holders 40 (5) >100%
$ per common share (basic) 0.10 (0.01) >100%
$ per common share (diluted) 0.10 (0.01) >100%
Adjusted net earnings (losses) (non-IFRS, see page 4) 17 (29) >100%
$ per common share (adjusted and diluted) 0.04 (0.07) >100%
Cash provided by operations (after working capital changes) 172 45 >100%
The financial information presented for the three months ended March 31, 2021 and March 31, 2022 is unaudited.
NET EARNINGS
The following table shows what contributed to the change in net earnings and adjusted net earnings (non-IFRS measure, see
page 4) in the first quarter of 2022, compared to the same period in 2021.
THREE MONTHS
ENDED MARCH 31
($ MILLIONS) IFRS ADJUSTED
Net losses – 2021 (5) (29)
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))
Uranium Higher sales volume (11) (11)
Higher realized prices ($US) 82 82
Lower costs 17 17
Change – uranium 88 88
Fuel services Lower sales volume (4) (4)
Higher realized prices ($Cdn) 5 5
Higher costs (2) (2)
Change – fuel services (1) (1)
Other changes
Higher administration expenditures (47) (47)
Higher exploration expenditures (2) (2)
Change in reclamation provisions (2) 1
Higher earnings from equity-accounted investee 22 22
Change in gains or losses on derivatives 1 (1)
Change in foreign exchange gains or losses (4) (4)
Canadian Emergency Wage Subsidy in 2021 (12) (12)
Change in income tax recovery or expense (1) (1)
Other 3 3
Net earnings – 2022 40 17
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Non-IFRS measures
ADJUSTED NET EARNINGS
Adjusted net earnings (ANE) is a measure that does not have a standardized meaning or a consistent basis of calculation
under IFRS (non-IFRS financial measure). We use this measure as a more meaningful way to compare our financial
performance from period to period. Adjusted net earnings is our net earnings attributable to equity holders, adjusted to better
reflect the underlying financial performance for the reporting period. We believe that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this information to evaluate our performance. 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 2021 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 2021 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 8 of our interim
financial statements for more information. This amount has been excluded from our ANE measure.
Adjusted net earnings is a non-IFRS financial measure and should not be considered in isolation or as a substitute for financial
information prepared according to accounting standards. Other companies may calculate this measure differently, so you may
not be able to make a direct comparison to similar measures presented by other companies.
The following table reconciles adjusted net earnings with net earnings for the first quarter and compares it to the same period
in 2021.
THREE MONTHS
ENDED MARCH 31
($ MILLIONS) 2022 2021
Net earnings (losses) attributable to equity holders 40 (5)
Adjustments
Adjustments on derivatives (11) (9)
Adjustments to other operating income (19) (22)
Income taxes on adjustments 7 7
Adjusted net earnings (losses) 17 (29)
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Selected segmented highlights
THREE MONTHS
ENDED MARCH 31
HIGHLIGHTS 2022 2021 CHANGE
Uranium Production volume (million lbs) 1.9 - >100%
Sales volume (million lbs) 5.9 5.0 18%
Average realized price 1 ( $ U S / l b ) 43.24 32.25 34%
($Cdn/lb) 55.05 41.05 34%
Revenue ($ millions) 322 205 57%
Gross profit (loss) ($ millions) 24 (64) >100%
Fuel services Production volume (million kgU) 4.1 4.0 2%
Sales volume (million kgU) 2.2 2.6 (15)%
Average realized price 2 ($Cdn/kgU) 34.49 31.91 8%
Revenue ($ millions) 76 84 (10)%
Gross profit ($ millions) 26 27 (4)%
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 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.
Management's discussion and analysis (MD&A) and financial statements
The first quarter MD&A and unaudited condensed consolidated interim financial statements provide a detailed explanation of
our operating results for the three months ended March 31, 2022, as compared to the same period 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, 2021, 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 sedar.com, 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
Greg Murdock, general manager, McArthur River/Key
Lake, Cameco
CIGAR LAKE
Lloyd Rowson, general manager, Cigar 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.
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Examples of forward-looking information in this news release include: our views that we have leverage to rising prices and are
well-positioned to continue to capture value from the market transition we believe is underway; our view that uranium
fundamentals are characterized by durable, full-cycle demand against a backdrop of growing concerns about security of
supply; our view that governments and policy makers are increasingly recognizing the role that nuclear plays in achieving net-
zero carbon targets and other objectives; our view that there is momentum building for non-traditional commercial uses of
nuclear power around the world; our belief that the uranium market is vulnerable to a supply shock; our belief that we are
seeing an unprecedented geopolitical realignment occurring in the nuclear fuel cycle; our belief that we are seeing utilities and
some intermediaries and service providers beginning to shift their attention to securing material for their uncovered
requirements; our expectation to continue to place our uranium under long-term contracts and to meet rising demand with
production from our best margin operations; our continuing commitment to our supply discipline strategy; our plan, starting in
2024, to be operating at about 40% below our productive capacity (100% basis); our intention to maintain our announced
production plan pending further improvements in the uranium market and progress in our long-term contracting; our
anticipation that we will continue to be resilient; our views regarding our balance sheet and ability to self-manage risk; our
optimism about Cameco’s ability to capture long-term value across the fuel chain and support the transition to a net-zero
carbon economy; the reliability and expansion capacity of our tier-one assets and quality of our exploration portfolio; our efforts
to further our reach into the nuclear fuel cycle and innovative uses of nuclear power; our commitment to addressing
environmental, social and governance risks and opportunities that we believe will make our business sustainable; our belief
that we are in early stages of a market transition; our view that we have a significant pipeline of contract discussions in a
strengthened price environment; our view that operational readiness for McArthur River/Key Lake is on track; our expectation
that in 2022 we could produce up to 5 million pounds (100% basis) of uranium at McArthur River/Key Lake; we have inventory,
long-term purchase agreements and loan arrangements in place that mitigate the risk of delay of Inkai deliveries in 2022; and
the expected date for announcement of our 2022 second quarter results.
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; our expectations regarding the market
fundamentals and demand for nuclear power, geopolitical realignment in the nuclear fuel cycle, and the shifting attention of
utilities and some intermediaries and service providers may be incorrect; our contract portfolio may not realize the expected
benefits of rising uranium prices or we may not be successful in our contracting strategy; we may not have the expected
degree of financial strength and ability to self-manage risk; our tier-one assets may not have the expected levels of reliability or
expansion capacity; our exploration portfolio may not have the expected quality; we may be unsuccessful in furthering our
reach in the nuclear fuel cycle, or pursuing innovative uses of nuclear power, or capturing value from a transition to a net-zero
carbon economy; the risk that we may not continue with our supply discipline strategy; the risk that we may not be able to
implement changes to future operating and production levels for Cigar Lake and McArthur River/Key Lake to the planned
levels within the expected timeframes; the risk that we may not be able to meet sales commitments for any reason; the risk
that we may not be able to continue to be resilient; the risks to our business associated with the ongoing COVID-19 pandemic,
related global supply chain disruptions, global economic and political uncertainty and volatility; 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; disruption
or delay in the transportation of our products, including our share of Inkai production; we fail to mitigate the consequences of
delay in delivery of our share of Inkai production; 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, and prices; growth in the demand for and global public acceptance of
nuclear energy; our production, purchases, sales, deliveries and costs; our ability to expand into additional areas of the nuclear
fuel cycle and pursue innovative uses of nuclear power; our ability to address ESG risks and opportunities successfully; plans
to transport our products succeed, including our share of Inkai production; our ability to mitigate adverse consequences of
delay in delivery of our share of Inkai production; the market conditions and other factors upon which we have based our future
plans and forecasts; the success of our plans and strategies, including planned operating and production changes; the
absence of new and adverse government regulations, policies or decisions; that there will not be any significant unanticipated
adverse consequences to our business of the ongoing COVID-19 pandemic, supply disruptions, and economic or political
uncertainty and volatility; and our ability to announce future financial results when expected.
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Please also review the discussion in our 2021 annual MD&A and 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 first quarter conference call on Thursday, May 5, 2022 at 8:00 a.m. Eastern.
The call will be open to all investors and the media. To join the call, please dial (800) 319-4610 (Canada and US) or (604) 638-
5340. 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, June 5, 2022, by calling (800) 319-6413 (Canada and US) or (604) 638-9010
(Passcode 8606)
2022 second quarter report release date
We plan to announce our 2022 second quarter results before markets open on July 27, 2022.
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. Utilities
around the world rely on our nuclear fuel products to generate power in safe, reliable, carbon-free nuclear reactors. Our shares
trade on the Toronto and New York stock exchanges. Our head office is in Saskatoon, Saskatchewan.
As used in this news release, the terms we, us, our, the Company and Cameco mean Cameco Corporation and its
subsidiaries unless otherwise indicated.
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Investor inquiries:
Rachelle Girard
306-956-6403
Media inquiries:
Jeff Hryhoriw
306-385-5221