Welcome to the Canaccord Zoom room. With us today, we have Grant Isaac, who is the CFO of Cameco. He also holds the role of global marketing, he's got some unique insights as to what's going on right now in the uranium market. A huge amount of volatility recently, certainly on the way up and also on the way down in the last couple of days. I think it's going to be a great opportunity to hear what he has to say. Just a little bit of admin as well. In terms of the questions, we'll just get you to put your hand up. You can see that in the reactions button at the bottom of your screen, we'll just facilitate the questions as you raise your hand. With that short introduction, just to say Grant is, I think, probably one of the best, if not the probably the preeminent guy in the space in terms of his insights. I think you'll find this really valuable today. Grant, over to you. Yeah. Brett, thank you. That was a kind introduction, and I hope it didn't set the expectations too high and struggle to meet them. Welcome, everybody. It's election day in Canada, so polls are going to close in a couple of hours over here. We don't know who the winner is, but I heard an interesting comment the other day. We know who the loser is going to be, and that's all Canadians. We'll see how it goes. Don't expect a whole lot of change on this side, that's for sure. Brett and I had a chance to talk over the past few weeks, and we thought this would be a good opportunity to come on and talk about observations post-WNA. Many of you know that's the big gathering in our industry. Kicks off what is the calendar year in the uranium space. Of course, that went virtual this year. It loses some richness when that happens. Certainly have some observations, but let's face it, the timing couldn't be better given, I would say, some of the noise and confusion and, I would say, outright unnecessary panic that we've seen in the uranium market. With Brett's permission, I thought I would use this opportunity to make a few comments on the fundamentals, how we see them, and why we conclude that the outlook for nuclear is as constructive as probably it's ever been, or certainly in my time in this space. Pretty excited about that. Thought I'd make some comments on the market and would actually address some of the noise that we're hearing in the market right now. I got a couple of examples that I want to highlight and say, "Well, I'm not sure what the big deal is now." Could be some pretty controversial stuff. Look forward to how that targets or triggers a discussion. Then I want to talk a bit about Cameco, because really, it's the fundamentals plus the market shapes what we do and why we do it. I want to explain that a little bit. Let me start with probably the stuff that's non-controversial, and that is the fundamentals. I doubt anybody who bothered to dial in is going to take issue with this, but it is pretty interesting times. It is a very constructive outlook for nuclear. Let's start with the demand side. Pretty easy to conclude that demand is growing. Importantly, it feels real durable this time. Durable in a way that's probably escaped the uranium business in the past. Let's talk about growth. We all know that one of the big drivers right now is nuclear's link to decarbonization. It's hard to argue against. There's lots of pieces that you might argue against with nuclear, but its role in base load carbon-free power is you cannot argue against that. Nuclear's ESG bona fides on top of its role in decarbonization, I think is beginning to take a role that's pretty well-deserved, the role that it should have been taking all along. That's obviously setting up a good condition for growth. What's also interesting is growth is happening not just in the long term. We've talked for a long time about new builds. Well, new builds are what? They're 10- years out. They could even be longer. They're easy to hear the announcement and then sort of forget about it and say, "Well, I'll worry later when those new builds are actually consuming." It's an important part of the story. We've seen very significant increases in the role of nuclear in places like China and India that are part of that long-term growth story. That's very exciting. We've seen growth in the midterm too. This is kind of unusual for us. The example I would use is France confirming several months ago that yes, indeed, they are going to run about 30, 32 of the reactors from 2025 to 2035 that were at some risk of not being part of the energy grid. EDF's a smart utility. They wouldn't have been uncovered for all of that demand, but they wouldn't have been completely covered either. That announcement, 17.5 million pounds of uranium consumption per year for another 10 years, that's midterm demand. We're also seeing near-term demand, aren't we? The announcements in Illinois the other day, Byron and Dresden units, that's near-term demand. Saving a reactor today is, in fact, just as important, perhaps more important for the constructive story in nuclear as building a new one 10 years out. That's new for us to see demand improve across the horizon like that, near-term, midterm, and long-term. What's also exciting about the demand story in nuclear is it's not just the traditional markets. Very quietly, The Nuclear Fuel Report came out at the WNA and had a 2.6% growth rate, up from 2%. I think that the team presenting probably could have done a better job emphasizing that improvement to the growth rate. We have to remember, that's just the traditional side of our business. That's just the traditional big reactors, and it really doesn't capture a pretty exciting story around small modular reactors. Taking the benefits of big carbon-free baseload, reliable 24-hour production and moving it into markets where big isn't necessarily the best, where you want smaller, either for communities or industrial applications. None of that is part of that 2.6% growth. There's this entire leg of nuclear demand that's coming. Pretty exciting as countries like Canada are pursuing an SMR strategy and other countries. Forgive me for being a bit bullish on the demand, but it comes down to the durability, doesn't it? I still come across folks who go, "Yeah, I've heard this all before. The nuclear renaissance, it sounds familiar. Where did it go? It disappeared." Well, the durability feels different this time for a very important reason. In the past, we've always relied upon policymakers, governments, lawmakers to get behind nuclear. At times they haven't had the courage. We all know that nuclear is confronted by a very vocal minority of opponents. That tests the courage of policymakers time and time again. What's different this time is as we talk about decarbonization, net zero carbon targets are not just the purview of governments. They're the purview of companies. Some of the largest energy consumers in the world now have net zero carbon targets. They're driving an electron accountability the likes of which we've never seen before. They're asking the questions, where are my electrons coming from? They're no longer getting a pass where they can throw up their arms and say, "Well, I didn't know that the local grid was coal-fired. I didn't know it was natural gas. I didn't know that there wasn't a lot of solar and wind on it, but it's not my problem because those weren't my decisions." They're now accountable for that. Now something like 8, I think I heard Mark Carney say like 1,800 of the world's biggest companies now have these net carbon zero targets. They're really taking the discussion out of the policy, the public policy domain, and driving it into sort of the fundamental determinations of how we achieve net carbon zero. To me, that feels like it's going to be more durable this time and not subject to the whims of the policymaker. Certainly, an electron accountability that I welcome. The demand side, I think most people wouldn't argue looks pretty good. It wouldn't matter if the supply side looked even better, right? Like if people were rushing ahead with projects and there was all sorts of supply coming out of everywhere, you'd say, well, it doesn't matter that demand's going up, supply's going to front-run it, and therefore there's no price transition. Happily, I don't see that either. To some degree, markets work. After years and years of insufficient incentive pricing, the supply stack doesn't look great. If you're talking about primary production, you're really talking about a down and to the right profile on current productive capacity, and that's even after you bring back the idled supply. You still have the exhaustion outstripping the replacement. Some people say, "Yeah, but it doesn't matter. It doesn't matter because there's all this secondary supply, and secondary supply will fill the gap. Well, look again, by virtue of the fact that markets work, by virtue of the fact that we haven't been through a term contracting cycle, we've consumed a lot of material off of term contracts. We haven't gone in and signed new contracts. That has not created the price incentive to create new productive capacity. By definition, we've been exhausting the secondary supply. It's got to come from someplace. You kind of look out over the 10-year, the 15-year horizon, you got a demand story that's improving, and you got a supply story that's actually slipping away, and that is just obviously great for an incumbent uranium producer who's very involved in the fuel cycle and can be involved in the new nuclear going forward. For us, the demand picture's setting up, the supply picture's setting up, and it really suggests a fundamental price transition that's going to have a durability to it this time in a way that's escaped us in the past. It's important to always remind ourselves, where does that durability come from, or where does that price transition come from? It comes from a long-term contracting cycle. It comes from when utilities decide that they need to go in and shore up the coverage of their run rate requirements in the term market. I think probably a good spot, Brett, to maybe stop, pause, see if you have a question on the fundamentals before then I slide into the uranium market with that backdrop of the fundamentals. Yeah, great. We talked about this earlier, guys. If anyone wants to just jump in on the basis of what Grant's just said there, just raise your hand and we'll open that up. Just pause for one second. If not, we can just do all the questions at the back end by the looks, Grant. Why don't you keep going? Okay. Actually, James is there. I can see James Bourne's got a question. Go, James. Yeah, thanks. Just one question. I guess the Japanese have built up relatively high levels of inventory while they've had their nuclear down. I'm just wondering what you think in terms of whether that inventory could become mobile, or whether you think they're going to hold that for potentially nuclear restarts. Yeah, it's a great question. I am actually going to address that a little bit later. Japan has really gone from this central country of focus many years ago, just after Fukushima, to really kind of over onto the sidelines. We have seen restarts finally in Japan. We have seen reactors begin to run and consume some of the uranium that they have in inventory. In addition, we have seen those who aren't yet running reactors still working really hard to get them restarted. This is the home of the Kyoto Protocol, who quietly became the world's largest importer of coal just a few short years ago. This story doesn't work for Japan, yet you've got these assets that, if they meet the regulatory standards, can come up and safely run for many years. What we've seen over time is that as we've been the largest buyer in the market since our extreme supply discipline started, I think very soon the Sprott folks are going to take over that mantle from us, which I'm happy about, quite frankly. The Japanese inventories were not a source of supply for us. The message was always the same. It was, "We're trying to get our reactors running. We need the uranium to fuel the reactors. Why would I sell it to you now at a low price, only to have to buy it back later at a higher price? It would be higher if our reactors were back up and running. No, please stop asking. Once restarts began, nine reactors approved, eight of them I think right now running, we just kind of moved Japan over to the sidelines, and really the rest of the world has grown through the supply deficit, or sorry, the demand deficit created by the shutdowns in Japan. It's not central to the story anymore. Okay. Let's keep going, Grant, on the market. Okay, let's talk about the market. Brett, if you'd said to me, "When we get together in September, it'll be a CAD 50 uranium market," I would've said, "Well, I'm not so sure we'd be there." That's exactly where we are. To some degree, it's a bit astonishing the pressure on uranium equities that we've seen. We're in a CAD 50 spot market, folks. We're actually in a market where there's a meaningless long-term price, quite frankly, too. Let's talk about that a little bit. Remember, these observations on the market come from a company that's been involved with every single commercial transition that's happened in the uranium space, the ones up and the ones down. We've seen it all. We've been through it all. I think it's important really to talk about a few of the first principles that you got to root your market view in. The first principle is there's no substitute for a full-blown security of supply utility contracting cycle, right? Like I talked about at the end of the fundamentals, that's what really drives value capture in the uranium business. That's not what's happening today. Let's be clear about that. This is not utilities that are driving the tightness in the spot market. It was in conversion two years ago, and certainly it was utilities in 2010, the last time we saw one of those contracting cycles. Here's the good news. The demand that we're seeing from a financial vehicle that is building up a trust to sequester pounds that aren't coming back to the market is about as good alternative as you could possibly have to utility demand. It's far superior to Cameco's demand. When Cameco puts demand into the market to buy uranium, that's yesterday's demand. Those are committed contracts that were in the market years ago, in some cases, many, many years ago. It's not new demand. This is new demand, and it's a fact change to the market, and it's different than the financial demand we saw last time. The financial demand through that 2006, 2007 price run-up, was some of the last buyers in the market at the top of the spike and the first sellers. They were the constructive price in the market, and then they were the destructive sellers, and really brought that spike down quickly. This structure isn't set up that way. It's buying material in the spot market in the most transparent and verifiable way I've ever seen. For those who say, "Well, this seems like it could be a really risky move," I can't think of a more clear and transparent way to inject true price discovery into uranium. Along comes this vehicle, it puts a bid on the broker platform. It's public for everybody to see. Anybody who wants it could try to get in front of it. The mechanism for having the funding to be able to continue purchases is clear to everybody and posted on a daily basis. This is transparency we haven't seen before. Really, it's addressing what's been the big problem in our industry. That is uncommitted primary production that doesn't have a home. The problem that we've seen, prices going below production economics, the breaking of our price mechanism, where term price broke away from production economics and became nothing more than the carry trade on spot, was because there were producers out there who were producing material that didn't have a home, and they were jamming it through a spot market that was never designed to absorb those volumes of primary production. The clever folks at Sprott watched what we've done for the last four years with our extreme supply discipline and our purchase program, and they waited until there was evidence of elasticity in the market, and away they went. Sure enough, they've had a very dramatic impact on the broker platform, bidding for material because the spot market just wasn't as deep as people had thought it was. It had really begun to thin out. The spot market has really gone through an important transition, and I think there's some lessons to be learned here. The lesson is, let's not lose the momentum of this cycle by deciding that we need more uncommitted primary production to go through the spot market. For those that are out there that believe that they can just have a strategy to build productive assets and then worry about marketing it later or sell it into the spot market, those are going to be the folks that will take the cycle down and into the future. That's not us. We're not a spot market seller, never have been. We've in fact been dealing aggressively with the spot oversupply, now we see a different vehicle, and a better vehicle than us to deal with the spot oversupply. That's pretty important, and it sets up what I think is an important point in our market. Real value creation in the uranium space is created because you have a project that's technically feasible, that's obvious. One that has a regulatory pathway in a world where regulations are just getting harder and harder. One that has the stakeholder approvals that you need. At that point, you have the necessary conditions for creating value, but you don't have the sufficient conditions. You need to have a plan for what to do with the production and keep it out of the spot market and not believe that you're just going to dump it into this magical spot market where there's going to be all this demand waiting for you when your project is done. We've learned that lesson over and over again in the market. We've been shown that lesson over and over, so hopefully we can learn it this time. Brett, let's talk about the term market and then how it sets up then. If that spot market is tightening, and to the extent that a tighter spot market shifts utility attention to security of supply, to securing their run rate volumes they need to actually fuel their reactors, that's certainly what we need to see in order to have that durable price transition. Are we there yet? No. We've got a few green shoots for sure. Couple RFPs in the market. One a U.S. utility, one an Asian utility. How producers respond to those RFPs will have a very important role in setting up where that long-term price is going to go, how much of the gap between the spot and the long-term price will be covered through this RFP process. We'll watch that very carefully for sure. I just want to address three things that have come up about the term market in the last couple of days, that have created an unnecessary amount of panic, in my opinion, an unnecessary amount of panic. The first thing was on Friday, a fellow I know at Kazatomprom, Askar Batyrbayev, who's their Chief Commercial Officer, did an interview and I'm not sure the ins and outs of it, but at one point was quoted as saying, "Utilities are well-covered in 2022 and 2023." The reaction was panic. It was, "Oh, is Kazatomprom saying there's no demand in the market and therefore, are they going to sell into spot or are they going to deeply discount to move material?" I'm pretty certain that that is not what Askar was saying. In fact, let's all step back and remember two things can be true at the same time. In 2010, global utilities were really well-covered in 2011, 2012, and 2013. Yet in 2010, the uranium price went through a transition from the mid-30s to $74 a pound. Of course, an earthquake and tsunami hit the shores of Japan. How is that possible? Utilities are well-covered and we went through a price transition. Of course, the Chinese stepped into the market, to the term market for the first time. They began contracting material largely 2014 and 2015 - 2024, 2025. Utilities were very well-covered 2011, 2012, 2013. When the big new entrant started gobbling up future supply, it forced the others into a contracting cycle in that window, and that actually created price discovery in 2010. Askar said absolutely nothing wrong at all. Utilities are well-covered in 2022 and 2023, and that has nothing to do with the possibility of them coming into the market in order to term contract 2024 and beyond, and that will drive price discovery today. There was a panic that was totally unnecessary to those comments. Second one I heard on Friday was, some producer sold material in the mid-40s in the market out in the term space. It was sort of like, yeah, so what? It probably is a producer who is more spot exposed than we've ever been. As I said, we don't sell on the spot market as Cameco. We sell our material into a committed sales portfolio in which our average realized price has outperformed the market through those bad years of Fukushima. Probably a spot-exposed producer who sold material sub-20, sub-25, sub-$30 a pound in the last couple of years. Probably got offered $45 material or said: We're willing to sell at $45, just to crystallize some of the move in the market. It's important because, yes, it forms price discovery. Someone's willing to sell at $45. My view is, let's wash that material out of the contracting cycle. If they want to sell it now before the big demand is in the market, go ahead. Good for you. We don't have to worry about competing against those pounds. We're not talking about very much. In the fundamentals, where demand is rising and supply is falling, selling CAD 200,000 at $45 out in 2024, 2025, and 2026 is pretty much immaterial. It drove panic that I don't think was rooted in the fundamentals and where the opportunity is out there. I would just say, a little bit of, "So what?" to that one. The third one that I saw spinning around this weekend was that, what's going to happen now when we have backwardation is utilities are going to start selling spot material, then they're going to put term demand in and buy cheaper term material. It's sort of like, again, what if they do? There's demand for spot material right now. That's why the price has gone up CAD 20 i n a very short period of time. There's homes for that material if it comes into the market. Let's go back to the fundamentals. A utility selling material now in the spot market, well, that's a drawdown of commercial inventories. Isn't commercial inventories the big bugbear of our industry that's going to ruin the momentum? If utilities want to draw down their commercial inventories, go ahead. While there's demand to sell it into, you do that, and then we have less inventories to worry about being used in the future. You're going to sell spot in order to put more term demand in the market? Well, term demand is exactly what we need. More of it would be welcome, because term demand begets term demand in our business. Again, it's sort of like, well, I don't panic over that because, let's face it, there would only be a couple utilities who would get away with it. It would probably put a bit of downward temporary pressure on the spot price. It would close the backwardation, especially after the RFPs were in the market that will be awarded this fall, and then they won't do that again because there won't be an opportunity. There's a built-in self-correcting mechanism. At the end of the day, a drawdown of commercial inventories and more term demand, well, that's actually what drives the recovery in our business. Those are positives. They're not negatives. Brett, let me pause there. I don't normally go into those noisy examples, but I just saw so much panic over the weekend that wasn't in accord with where the fundamentals are and how our market works. I just raise those as three examples of an overreaction. Yeah, that's great, Grant. I think it's important just to clarify that KAP news as well, so that was helpful. Thank you. Guys, just once again, just so you know the process here, if you'd just like to put up your hand in the screen, and we'll just call you out. Let's go to Karim. Question there. Hey, Grant. Hello. How are you, Karim? I'm all right. How are you? Good, thanks. Nice to hear from you. Nice to hear from you as well. Quick question for you. This may be slightly off-topic from where you just ended, but just curious. When you're having discussions with fuel buyers, what do they make of the Sprott entrance into the market, and how do they see the connection or disconnection between this spot price and the term market that they will be contracting into? Good question. The reactions kind of ranged from, "Who is Sprott and what is this about?" Which may surprise many of you on the call, but I would say there were some who weren't paying any attention to those dynamics whatsoever, to a handful who said, "Yeah, okay, I see that vehicle coming, but it's only CAD 300 million, and that's not a lot of uranium." Once they're done buying, momentum will be lost. At the end of the day, they'll sell the material if they make a decent return or they'll use it. This was a good one. They'll use it to become the big carry trader in the business. They'll use it to carry trade into midterm demand, so I'll be able to access that. Obviously, both have proven to be the wrong bet because that's not how it functions. It didn't stop at CAD 300 million. It isn't going to be the source of carry trade or supply for the midterm. I don't think the full appreciation of that vehicle is imputed in the market at the moment. I think we saw a quick move through the 30s. We saw an even quicker move through the 40s, which was illustrating the increasing returns to scale that we were seeing in the price elasticity from their buying. I'm not sure we've seen the full effect of what CAD 1.3 billion will do, plus the possibility of upsizing if there's a cross-border listing. I think more to come on that, Karim. I think that the story isn't completely written there. Thank you. Sorry, I was on mute. Guy, do you want to go? Hey, Grant. How you going? Yeah, good, Guy. Good to see you. Yeah, you too. Obviously, the elephant in the room with respect to potentially putting a bit of a pause to this is McArthur River restart. How do you manage that? You guys in the past have stated on a number of occasions that any sort of restart contracting or sales commitments need to have a high four. The market's sort of pointing to the fact that Sprott's there. Whilst I understand, obviously, the term's not there, how are you planning to manage that news flow into the market, that expectation that as you get closer to an announcement or not. I view it as very bullish when you announce a restart, because the next million pounds is that much harder to come by. How are you planning on managing that, and where are you up to on that? Yeah. I'm going to beg your indulgence a bit here, Guy. The third portion of my rambling is a full sales pitch on Cameco. I do want to address exactly that, as well as a couple of other things that I've heard. If you don't mind, I will reserve that one for when I get into the Cameco pitch. Absolutely. No problem. Okay. Sorry about that. No, that's all right. It's a great question. We'll get to that, Guy, and we'll come back to that question. Katie? Yeah. Thanks, Guy. Grant, you've made evident in the past that you've been in depth off-market discussions with utilities. I'm just wondering how those discussions maybe have evolved since Sprott's entered the market. I'm going to say not much, but I don't want anybody to panic over that. Sprott hasn't been in the market that long. This is actually a really new phenomenon, and everybody who's been circling around this industry for a long time knows contracting takes a long time. The fact that there hasn't been this massive response from the fuel buyers shouldn't surprise anybody or disappoint them, quite frankly. It does take time to sort of adjust to the new facts. The good news, obviously, is that any conversation we were having about market-related contracts and how they might look in structure, well, those are all just grown in value in terms of what expectations would be, and very much in our favor. There hasn't been a huge response, but I wouldn't have expected it to move that quickly, Katie. All right. Let's keep going. I see MK is in the screen there. I can't see your name, but do you want to go ahead? Okay. This is Moji Kuye from TELUS. I was just wondering, aren't you concerned with that much uranium in a financial hand? I've seen this played out in the gold space. It's easy come, easy go. Yeah, it's a great question, and one probably better directed. I think you're probably referring to the Sprott vehicle. In the past, when vehicles haven't been structured the same way, we have seen financial material come back into the market. We've never lost sight of it. It's always been in our analysis. This one's different, though. It's different in the way it's constructed. It's different in the way it's being executed, and I would say it doesn't give me the kind of sleepless nights that the financial holdings in the past have. Because I take them at their word when they say they've never sold from their gold trust, never sold from their silver trust, and don't plan on selling from their uranium trust. I would say my concern about it is a lot lower than it has been in the past. We'll always build up a supply stack. We'll always factor in the state-owned enterprises that have Tier 0 material. We'll always factor in the idle production coming back. We'll always keep an eye on where that is. We'll always factor who has a financial holding that might be unwound. This feels a lot stickier and a lot more sequestered than what we've seen in the past. Thank you. Great question. Okay. Ron, would you like to ask your question? Yes. Grant, thank you very much for your discussion here, and I think it's really insightful. I do want to mention that in a recent NEI conference call, Sprott CEO, John Ciampaglia, was asked at the end of the call whether they would consider lending inventory, and he was maybe caught off guard, but he responded very promptly, saying, "Yes, we would. We need to provide any revenue sources for our investors." That was kind of the gist of his quote. I'm just wondering whether you're aware of that. No, I'm not. I don't know the structure of the vehicle, and I don't know the opportunities for lending. As you know, lending material is actually pretty normal course in our business, and I think everybody kind of gets it conceptually. You want a world where you have as little Class 7 material moving around as possible. What happens between all our licensed facilities is quite an elaborate structure that allows for swaps, and it allows for loaning rather than just moving material between counterparties at the drop of a hat, right? It's not uncommon. It's always been going on. It's always been a part of our industry. It's one that I do expect to continue to some degree. I think some of the structures that are in place now are actually going to make loaning harder, not easier, and so it's yet another factor on the report card that seems to be more positive compared to the previous cycles. All right, we'll keep going. Grant McAdam, just to be clear, Grant McAdam? Hey, Grant. Yeah, just a quick follow-up on Katie's question on the off-market fuel buyer contracts. What do you think is the straw to finally push them to start contracting? Secondly, you highlighted two RFPs. I'm just wondering if you guys are participating in those. To the first question, my observation is that when I think about what's in our pipeline and the people that we're talking to, they're really driven by their own calendars and their own needs. I think about some of the countries we're negotiating with, not companies, but countries. We're dealing with people who are also dealing with COVID, for example. There's other priorities or broken supply chains in other critical commodities or critical supplies. That naturally creates a bit of a delay, especially for those who may have had a market-related preference. Well, they've missed a big move, and those are now fairly expensive pounds. Some of them are entrants that have never seen an upcycle in the uranium space. It could have quite a helpful reset on what a long-term partnership looks like. In terms of the RFPs, we've said this before, we look at an RFP always from the perspective of, we can bid to be competitive, we can bid to be responsive, or quite frankly, we can no bid. We've done all of those at times. We would not be in a hurry to set where the long-term price is. You may see us be more responsive, for example, than competitive. I'm pretty sure we wouldn't be offering the cheapest pounds, because we don't have to right now. We don't have to give anything away. There's quite a transition that's occurred. We'll continue to be very disciplined. We'll continue to make decisions that fit with our broader portfolio of contracting, which I am going to talk about. We'll react accordingly. We don't see these RFPs as the last two that'll ever come in the market, and so we'll just design our responses accordingly. Great. Thanks. Okay. We've got a separate question here. I can't see the name, but it's under A. Hi. Yes, sorry. This is Andrew from Pala. Hi, Grant. How are you? Yeah, good. Hi, Andrew. Hi. Just a couple of questions, actually. First of all, is Sprott actually managing to get material in the spot market now, or are they already going into the near-term market? Secondly, could you comment on the Chinese utilities and if you see any change in behavior there or what you expect to see? Because I think a lot of people are focused on U.S. utilities usually, but the Chinese utilities are probably pretty important. Thank you. Yeah. I probably shouldn't. My observation is the vast majority of what Sprott seems to be doing is the on-market, on the broker platform, buying in the near term of the spot. When folks are reconciling what they've raised and what they've bought, I think there's very little left to be doing anything off-market. Other than that observation, that most of it seems to be on-market and in the near term spot, I should probably let them answer that question, Andrew. To your question about the utilities, there was a time where I think we were tempted to talk about maybe China Inc, for example, but I don't think that's accurate anymore. The utilities have gone off in very different directions. One of them's acquired a lot of properties in other countries, Africa notably, more so than the other, kind of shored up more of its supply coming in, some investments recently in Kazakhstan, than the other one has. I don't see them on the same footing. I wouldn't be surprised to see one be in a position to have to move before the other. Again, like in our business, term contracting begets term contracting, it will be noticed if you have that kind of big buyer in the market. I don't expect a repeat of 2010, they don't have to repeat 2010 in a market that's transitioning the way it is right now. A little different behavior from the different utilities there than we'd seen in the past. All right. Now we're going to give you a chance just to round it out, Grant, but there is another question here from Arthur. Sure. Perfect. Sorry for being a little late there, guys. I know you want to move on. Hey, Grant. Hi, Arthur. The one other kind of negative or bearish comment I've heard from, actually, a utility I spoke with last week was that there's a scenario where prices keep rising. Let's say they go to CAD 60 in spot and the term contract market comes up to CAD 50 or CAD 55. In that case, you might see producers willing to sell mid-term pounds, call it 2023, 2024 in the CAD 50s. What that could allow for is actually a break of some carry trades. Without going into too much background, I think most on the phone are likely familiar. Carry trade is when, let's say in 2018, 2019, 2020, a trader had sold pounds forward into 2023 or 2024, at a spot-derived price from the time of sale. If those break and come back into the market, it does create pressure on spot, meaning that those are incremental pounds that Sprott would have to buy. My counter to that is generally that as a producer or a producing asset, that's kind of the best-case scenario. You suddenly have incremental utility demand in 2023 and 2024 in years that otherwise were quote unquote covered. Can you think about that concept of midterm carry trades breaking, and how would, one, impact the broader market, and two, impact Cameco specifically? Thank you. Yeah. Art, good question. The answer fits in like it does the third noisy observation on the market that I made, which was this idea that, oh, people will take advantage of backwardation. They'll want to sell spot, and they'll come into the market with term demand that'll be priced cheaper. From a fundamentals point of view, this is not to be feared. First of all, you can't do a lot of it, because if a lot of it occurred, it would ruin the backwardation, and therefore it would remove the motivation. Secondly, this is the basis of getting rid of the commercial inventories, which is always the scary bugbear out there. Oh, commercial inventories are going to take the momentum off this. Well, if people are going to exhaust their commercial inventories, then there's going to be less of them. If there's less of them, it's going to be a pure term contracting cycle. The final one being, Art, and you've heard me say this before, I would take a little bit of spot sale today for more term demand out in the future any day, because term demand is what creates sustainable recovery in the uranium business. More of it would actually be welcome. Too much of it would actually self-correct and fix its own problem. It doesn't scare me. It did create a panic, and I think folks saw a lot of tweets going around over the weekend about these kind of issues. If you step back and think about them fundamentally, less commercial inventories and more term contracting sounds pretty good to me, actually. Okay, Grant, I'm going to squeeze one in just because. Sure. I've got the opportunity. I was reading the MD&A 2Q last night just around Cigar Lake and project work, and you allude in that to potential impacts into 2022 on production. Without providing specific numbers, but how are you thinking about that and production levels? Yeah. The reference there is to, there's a lot of mining talent on this call, and in fact, a lot more mining experience than I have. Let me say the obvious. Whenever you disrupt operations at a mine, an actual mine, you're actually disrupting two things. You're disrupting in-year production, and you're disrupting the development work required for future production. All we wanted to raise was, look, if we've got a COVID shutdown or a COVID disruption, it doesn't necessarily just create risk for meeting production targets in year. If it stops the development work, it may actually have an impact on future production. We had our development paused as well as our in-year mining. We just wanted to flag that, and so goes for Cameco, so goes for everybody else. I think it's part of the story that's quite positive. We're seeing a price transition right now driven by real demand that's fundamentally different than what we've seen before from the financial industries, and I don't see the supply response in the near term rushing in to fill it because people are still dealing with COVID and supply chain disruptions and pauses to their development, and therefore challenges to future production. I have to take at face value, but when somebody like, I'll use his name again, Askar Batyrbayev from KAP says, "Look, CAD 60 spike in the spot price doesn't get us off supply discipline." I think it's fundamentally because of their strategy, but I also think it's fundamentally because they know they couldn't snap back because there are issues in the supply chain going on in Kazakhstan. It's a positive to the story that there isn't this rush of material from primary production that's going to suddenly snap forward and meet these spot prices because people are still dealing with COVID. It's a risk to us, it's a risk to others. It's actually a positive for the overall fundamentals. Okay. Now we've been running up almost 50 minutes, give you a chance just to round it out, Grant. I think you had some additional things you wanted to talk about. I do, and I've got to get to Guy's question because I think it's really important. Here comes the sales pitch. For those who aren't interested, dial out now. It was nice talking to everybody. You've heard us say before that our competitive advantages mean that for Cameco, we're in pole position for an incumbents' recovery. I think occasionally we have to remind people what we've been up to and how we've positioned ourselves, because we don't talk about it a lot. The last several years has not been the time to talk about our pipeline. It's not been the time to talk about our exploration portfolio. It's not been the time to talk about our ability to expand production because the world didn't need to hear that there was more production possible. It is important to remember we are well set up for the macro strategy that I outlined. Our Tier 1 assets, licensed, permitted, long-lived, proven operations backed up by what we think is the best-in-class exploration portfolio that leverages brownfield. If you think about our pounds being adjacent to existing infrastructure, that's a pretty good position for us to be in versus it's lots of pounds, but all greenfield, for example. That's not the way we're set up. We have Tier 2 assets that right now we've got zero plans for those Tier two assets. Enough of a security of supply-driven price recovery, and it's possible for Cameco to see additional value, but we'd be very strict about what those value targets would have to be. Our Fuel Services group, value comes in our space from more than just mining. We are integrated in the Fuel Services sector. We've locked in the value that's come through conversion. We're positioned in enrichment. We can play a role in not just the traditional, but the new nuclear, and that's a source of our competitive advantage, whether it's HALEU fuel or new fuels for SMRs. Our contract portfolio, I keep going on and on and on about how you have to have homes for your production in the uranium business to create real value. We've done a modest amount of term contracting because we've been very disciplined, but we still have well over 100 million pounds of uranium that's already sold. We've got homes for all of that, over 50 million kilograms of Fuel Services is already sold. We've got a contract portfolio that underpins quite a going concern for a while here. We've got a balance sheet that's very strong. We're negative net debt coming out of, on a cost-adjusted basis, the worst down cycle in the uranium business. We're CAD 1.2 billion in cash. We're CAD 1 billion in long-term debt. Nothing comes due till 2024. After that, it's 2027. We won the CRA case. There's another CAD 300 million at some point that's coming back our way. We've got an extraordinarily strong balance sheet coming out of a pretty tough cycle in the business. We're commercial, we're not a state-owned enterprise in a world where that is mattering from an industrial and trade policy point of view. We've got great origins, Canadian origins. We've got access to U.S. origins. We've potentially got Australian origins in a world where origins are mattering. For us, we just think, well, probably our own fault, but we haven't spent a lot of time talking about Cameco. Make no mistake, we'll continue to be as disciplined as we have been for the last several years. Just three items that I want to raise. There was a lot of noise over the weekend on Twitter, most of it inaccurate, almost all of it misleading. I want to address them. The first one I saw was that Cameco is over-contracted. Cameco has more sales than they have production. That's been the case for Cameco for two decades. Being over-contracted is actually part of our strategy because we know that with some suppliers in our industry that are state-owned enterprise, in particular, they just don't play by balance sheet rules. They don't make commercial decisions. That supply is coming. It's always made sense for us to sell more than we produce. There's nothing unusual about Cameco being over-contracted. At various times in the past, we will always make sure we have the risk management in place to deal with an over-contracted position. Yeah, we're over-contracted, but that's normal course for us. It's why we carry an inventory. It's the benefit of having licensed facilities. Much of this uranium that's being sequestered is actually sitting at our facilities, and Ron asked the question about loans. It gives us the opportunity to get our hands on material if we need it to be replaced with production later. We are very familiar with this situation. Anybody who's out there saying, "Oh, Cameco's got itself into a short position." No. This is exactly where we wanted to be. In fact, my kids would call this a Hollywood problem. A rising uranium price benefiting our existing committed sales portfolio, shifting up the price expectations in future contracts with risk management in place to deal with it effectively. That's where we wanted to be. Our strategy was always designed to handle that scenario. Second one I hear, this gets to Guy's question, I think I agree with his premise, that is this narrative going around that the world needs to fear McArthur/Key's restart. As though we've taken this extraordinary supply discipline for four years, then Cameco's suddenly going to lose it all and restart McArthur and what? Oversupply the spot market or build up an inventory that overhangs the market? We wouldn't have asked our owners to go on this journey with us to then abandon it when there's value in front of us to capture. It makes no sense. I agree with Guy's premise. We have earned the trust that when Cameco announces McArthur/Key's restart, I'm not announcing it today, it is in care and maintenance, folks. It's not coming back right now. When that day comes, that will be a signal from the leading commercial supplier of uranium and Fuel Services that the time has come to prepare Tier 1 assets to capture value. We're seeing something that after being through all of these cycles, that it's time for us to step up and capture that value. We've certainly earned that trust. Remember, restart doesn't happen overnight. It takes time. For a year and a half, closer to two years, we're still busy sourcing material the way we have been. Anybody who says we would bring back McArthur and ruin everything we've worked so hard to do is a pretty misguided view. It's not accurate. We will continue with a market alignment strategy. Any pounds that come out of McArthur will have a home. This isn't material that's going into the spot. It's not material that will go into an inventory and overhang the market and in any way ruin the recovery. Quite frankly, it's unequivocally beneficial for us. Imagine what Cameco looks like when our cost structure falls to Tier 1 pounds and we're out from under care and maintenance costs and we're not buying material three, four times what it costs us to produce. Unequivocally good for Cameco. We've earned the trust that it'll be a very positive signal for the industry. That's how we look at McArthur/Key in the context of everybody should fear it. Of course, the third thing that we've heard is that our contracting, we'll be in a rush to contract and we'll give away all the upside. I would just point out to folks, that's the lesson that we learned in the late 1990s. That's the lesson that Cameco learned through a very, very tough cycle a couple cycles ago. When we went into that 2006, 2007 price shock and we weren't participating in the upside in our average realized price. That's when our contracting approach fundamentally changed, and that was to make sure we retain market leverage, to not contract through a down cycle, and to develop what is a, I would say, a lagging value capture. I guess my frustration with some of the tweets that I see is people misunderstanding differential calculus for integral calculus. Integral calculus is the area under the curve. That's what value is. Look at uranium price spikes. They're short, and they're steep, and there's not a hell of a lot of area under the curve. Look at Cameco's average realized price relative to the uranium prices since Fukushima. It has outperformed because of this contracting approach we have where we wait for these kind of transitions, we reset the expectations on where the prices will be, and we capture as much value for as much of the area under the curve as we possibly can. Do we forego three weeks, and maybe CAD 300,000 worth of spot sales at the top of the spike for months and years of value capture that gives us zip line protection over a market that might come off? Yeah, we do. That's the responsible thing to do in a market because the spot market we've already established will never be capable of absorbing the kind of volumes that some people are theorizing should be withheld from the market and dumped into the spot the day it hits CAD 100. You might get a couple CAD 100,000, CAD 100. You might get a couple CAD 100,000 sold at that price, and then it'll just be a rapid destruction of the market down as offer after offer comes in. That's never been a pathway to create value. For us, the noise we hear, we're caught short, no, we're not. We've always lived in an over-contracted situation. People should fear McArthur River. Absolutely not. We wouldn't lose our discipline when we make that decision someday. Contracting will limit upside. Well, gosh, the facts don't bear that out. Many cycles ago it did. We've learned those lessons, and our performance since Fukushima more than establishes that the area under the curve was very much in our favor. Those were the three noisy bits, Brett, that I wanted to get out of the way after the sales pitch on Cameco. That's great. I'm really conscious of time here, guys. There are two more questions here. I think we'll do those, and then we'll wrap it up. Maybe, Brett, if we could, and if he's still on, we'll cycle back to Guy and see if I answered his question on McArthur. Yeah. He's got his thumb up there, so I think he's happy on McArthur River. Okay. He's smiling. Okay, MK, and then we'll go to Grant. Yes. My question is more on labor. Are you seeing any labor issue? Then, you said you're now restarting McArthur. How easy really will it be to recall all those people that were laid off to come back, even if you do? Really good question. There's some features of Cameco that maybe, again, we don't do a very good job talking about. Cameco has an extraordinary ESG record, especially the S part of it. When McArthur is up and running and we're at normal state, we're Canada's largest employer of Indigenous Canadians. We draw heavily from the communities around which our operations are, and that has been something we've been working so hard on for decades. Like, not just years, decades. As a result, we actually find that there's a very well-qualified labor pool and skilled labor, I'm not saying unskilled labor, but skilled labor pool that's already there and waiting actually for the opportunity. Remember, Rabbit Lake is shut down and absolutely no idea if that will ever restart again, quite frankly. We have a pool that we'll draw from the people who used to work at McArthur/Key, the people who used to work at Rabbit. When we've done some hiring in the last year and a half, there's zero issue with that. We've put in place some strategies over the years, which we did because they were the right thing to do, and now they're paying dividends because we have a pool of skilled labor that we can draw on. In terms of restarting a mine like McArthur River, when that day comes, we put out a technical report in 2019 and we said, "Pick a year zero." I'm not picking it today, but pick a year zero. If January 1st, year zero is when you begin the effort, then we're kind of 18- months out before you're at whatever capacity you want to be running at. Will it be hard to restart McArthur? Yeah. It's hard to start any operation. Since it's been down, we've had a very expensive care and maintenance bill, in part because we believe our owners want us to not just keep the physical capital in good condition so there's no penalty capital that needs to be spent when it restarts, but also to keep the labor, the people who actually know how to run those assets, keep them there and attached to it and working on various projects. It'll be hard, but we've de-risked it as much as we possibly can. We're confident when that day comes, and it is a positive signal, that the pathway to that production will be very clear. But again, don't ever imagine we would lose our discipline through that process. Okay. Final question now, just from Grant McAdam. Yeah, sure. Hey, I just wanted to dive into that comment about resetting the expectations for the price. I know in the past when you guys do your off-market deals, you don't disclose the price. Does that mean going forward, you will let the market know what you contract at? No, not likely. The confidentiality requirements in price reporting aren't driven by us. They're typically driven by the utilities. The price reporters have ways of sort of sussing out. If you think about that first RFP that's coming, it'll be a real test. You've got some people representing potential supply that have never been through one of these cycles before. Are they referencing a CAD 50 spot market, or are they referencing a meaningless CAD 33.50 term market? I have to believe that at the very least, they'll say that the CAD 33.50 probably doesn't have any reference to what an appropriate price will be. It'll be through the process of responding to those RFPs, awarding those RFPs, and the engagement that the price reporters have, that will give folks a sense of where material was being offered. As I said, because we've been through these before, we're not going to approach it as there's never gonna be another RFP again, so we've got to pull out all stops to win it. There's a time to step forward, and there's a time to step back, and this kind of move feels like perhaps a time to step back. All right. Just to round it out, just to thank you, Grant. Wonderful to get the update, very timely. I think important to just get that clarification on the KAP rumor. That was helpful. Thank you everyone for joining today and the insights that you brought, Grant. Appreciate your time. Yeah. Brett, thank you very much. We really appreciate it and hope to do it again. Bye for now, everyone. Okay, guys. Thank you. Thanks, Grant