Thank you for standing by. This is the conference operator. Welcome to the Cameco Corporation Fourth Quarter 2021 Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instruction] I would now like to turn the conference over to Rachelle Girard, VP, Investor Relations, Treasury, and Tax. Please go ahead.

Thank you, operator and good morning everyone. Welcome to Cameco’s fourth quarter conference call. I would like to acknowledge that we are on Treaty 6 territory and the Homeland of the Métis. Today’s call will focus on the trends we are seeing in the market and on our strategy. As always, our goal is to be open and transparent with our communications. Therefore, if you have detailed questions about our quarterly financial results or should your questions not be addressed on this call, we will be happy to follow-up with you after the call. There are a few ways to contact us. You can reach out to the contacts provided in our news release. You can submit a question through the contact tab on our website or you can use the Ask a Question form at the bottom of the webcast screen and we will be happy to follow-up after this call. With us today on the call are Tim Gitzel, President and CEO; Grant Isaac, Senior VP and CFO; Brian Riley, Senior VP and Chief Operating Officer; Alice Wong, Senior VP and Chief Corporate Officer; and Sean Quinn, Senior VP, Chief Legal Officer, and Corporate Secretary. I am going to hand it over to Tim to talk about the long-term fundamentals for our industry, the current market dynamics and about Cameco’s strategy to add long-term value. After, we will open it up for your questions. If you have joined the conference call through our website event page, there are slides available which will be displayed during the call. In addition, for your reference, our quarterly investor handout is available for download in a PDF file on our website at cameco.com. Today’s conference call is open to all members of the investment community, including the media. During the Q&A session, please limit yourself to two questions and then return to the queue. Please note that this conference call will include forward-looking information, which is based on a number of assumptions and actual results could differ materially. Please refer to our annual information form and MD&A for more information about the factors that could cause these different results and the assumptions we have made. With that, I will turn it over to Tim.

Well, thank you, Rachelle and welcome to everyone on the call today. We appreciate you taking the time to join us. Hope it’s not too late to wish all of you a happy new year and I hope that you and your families are doing well. A year ago I spoke to you about our excitement for the future of our industry, the growth occurring in traditional and non-traditional uses of nuclear power and about our role in supporting the transition to a net zero carbon economy. And I can tell you, none of that has changed. In fact, the developments in our industry over the past year further support our belief that there is durability to demand that I am not sure we have ever seen in our industry before. And the fundamentals are pointing to a transfer of risk from the suppliers of uranium fuel to the users. The thinning of material available in the spot market and the growing uncertainty of supply has led to the recognition that uranium prices need to rise to reflect production economics. The economics that will be needed to ensure the availability of reliable and sufficient productive capacity to fuel the growing demand for carbon-free baseload nuclear electricity. We have seen a nearly 40% increase in uranium spot prices since a year ago and a 22% increase in the long-term price and that of course is good news for us. We believe that our actions have contributed to the growing security of supply concerns in our industry. As a result of our planned and unplanned production cuts, our inventory reduction and our market purchases, we have removed more than 190 million pounds from the market since 2016. As a commercial supplier, our decisions have uniquely positioned Cameco with demonstrated Tier 1 assets,…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question is from Orest Wowkodaw from Scotiabank. Please go ahead.

Hi, good morning. I am curious if we could get some more details on your plans to restart McArthur River. I know in the past, you talked about needing I guess to pre-sell the majority of the future pounds from McArthur. I am just curious if your philosophy there has changed or whether you are seeing enough with respect to re-contracting, including I guess, the 40 million pounds you have signed year-to-date of long-term book. But any additional color there in terms of what’s prompting you to restart early relative to the contract book?

Yes, Orest, it’s Tim. Thanks for the question. No change store strategy at all. We are doing exactly what we said we were going to do. And we have been saying it for years now that we are going to prudently manage the company in the best interest of our stakeholders. We won’t add to an oversupplied market. We are not going to produce for inventory. We have homes for our production. And so you have seen some of the sales commitments we have taken on in the last years, but especially in 2021 have allowed us to take a look at McArthur and decide we are going to move to the next phase of our disciplined strategy, which is to get that going. You see by 2024 we plan to continue to exercise discipline at Cigar Lake and at McArthur and so we have homes for our production worst. And so, we – I think everyday and I am looking at Grant, we talk about how many sales should we have now versus how much open non-commitments should we have going forward? We want to be open going forward. And we get people saying, well, you don’t have enough committed sales now and then you have others saying we have too many committed sales now. And so that’s both sides. And we think we have made – taken a really prudent approach to that, that we have homes for everything we produce, Orest. Grant, I don’t know if you want to add anything to that?

Tim, I think it’s the absolute right message obviously. If there is a takeaway on the market side from Tim’s comments today and the message we want to leave in the market is that we are saying a transition is underway, a transition that is a security of supply-driven transition. And it’s not as bold to call as you might think because of course UxC and TradeTech, World Nuclear Association have been saying the same thing. But we are clearly seeing it underway. There are certainly really important indicators that suggest that’s the case. We are in the early innings of that transition. So for us, it is about balance and it is about discipline. So on the contracting side, Orest, it really is a measured patient approach to contracting success with a diversified base of customers building a best-in-class book going forward, but not being sold out. Now is not the time you want to have a volume strategy and trying to be pushing volume. So with experience in every market transition, let me just say we are exactly where we want to be.

Okay. And Grant, if I can follow-up, I mean, you’ve disclosed that you’ve sold, I guess or added 40 million pounds to your long-term contract book in the first month of this year. I mean, that’s more than the 30 million pounds of all of last year. Can you maybe give us some color on what’s changed as the calendars rolled forward here?

Yes, couple of things, that I think are important to draw out and first of all, the backdrop is the fundamentals. You can’t escape that. The understanding that almost on a daily basis, the outlook for demand is improving. And almost on a daily basis, the outlook for supply is becoming more uncertain as we think about the risks to existing productive capacity and even greater risks to bringing on new capacity in a world where there still is a pandemic and that pandemic is creating absenteeism and productivity issues and supply chain issues and inflation and all of those other things. It’s just making that supply picture even more uncertain. And so there is a gap. And I think it’s just the general recognition that, that gap is getting bigger. And so we have been talking about for some time, our pipeline. And this is clear evidence that when we say in our pipeline between origination and execution, we have got a lot of pounds under discussion. This is clear evidence of exactly what we mean? So, some of this was contracting that, not just measured in months or quarters, but years. I mean, it was these were long discussions and long negotiations and others we are starting to see a bit of urgency. And we are starting to see folks come to the market quickly and look to do a deal quickly. And I would note three characteristics of this market that I think are important to draw out. Number one is we are seeing tenors increase. Back in the days when carry-trade was really defining the term price, we were seeing a lot of term business that was kind of inside that 2 to 5 year window where utilities quite smartly wanted to make sure that there…

Excellent. Thank you.

Thanks, Orest.

Next question is from Andrew Wong from RBC Capital Markets. Please go ahead.

Hey, good morning. So maybe just following on a little bit from that line of discussion and maybe taking it from the other perspective, understanding you are not sold out, but then also the commentary sounds very bullish for the outlook over the next few years. Can you maybe just talk about the decision to add volumes now to your contract book, because obviously that was a lot of volumes that were added in January and Q4 versus maybe waiting a little bit longer? I understand these are contract discussions that you have over several years and it’s not as easy as just waiting. But can you just talk about the thinking around that strategy? Thanks.

Yes, thanks, Andrew. Let me get our market expert Grant to answer that. Go ahead.

Yes. And I actually appreciate the pivot to that question, Andrew, because it really highlights the boundary questions that we get. There are those who ask us why contract to anything at all? Why don’t you just hold out, get all your production ready, how even produce some of it and inventory it and wait till the market is at $100 a pound and then sell it off? Well, that’s not how the uranium market works. Just by virtue of that strategy, the market would never achieve those prices. And then we get the other question, which is why don’t you sell more? Why don’t you have more under contract? And so those are the kind of boundary conditions. So, to those who say, why contract anything right now? We say well, this is how the uranium market works. It is not a spot market. It is not a market, where you have an opportunity on an annual basis to capture full global demand, because it recharges every 12 months. That’s not how the uranium market works. Uranium market works, where utilities come typically in ways and they look to layer in volumes and they push enough contracting that we hit not only replacement rate, but above replacement rate. And then when they have covered a lot of their demand going forward, they step out of the market and we enter those complacency periods. So for us, it’s about responding to the actual market and industrial structure of the uranium space, not to some mythical spot market assumption for creating value in uranium, because that’s been a failed strategy over and over again. So for us, it’s about building that balanced portfolio, we talk about it at great length in our MD&A, Page 20, just to just to flag it,…

Great. That’s very helpful commentary. And then just a follow-up on the production costs in 2024, when Cigar and McArthur are up and running, I think Cameco has been doing some work to kind of improve the efficiencies there. So, it allows you to do partial ramp-ups, but obviously, like you might not get some of the economies of scale benefits. So, can you just talk about the costs in 2014 versus what we have seen historically? Thanks.

Well, we obviously don’t have guidance on 2024 operating cost out there. But what I can tell you is that our Chief Operating Officer and his excellent team are looking at the life of mine technical report costs and say here is our marker. And so if I just remind everybody on the call that the technical reports that we have outstanding for McArthur, Cigar and Inkai on a Canadian dollar basis have operating costs at $14.75 per pound at McArthur, $15.98, so $16 per pound at Cigar, and less than $7 per pound at Inkai. So if you think about McArthur and Cigar, those are the targets that we are working towards as or better in an inflationary environment in an environment of difficult supply chain. Those are the targets that we are striving for. And you can imagine that we have laser focus on the economic performance of those incredible assets.

Great. Thank you very much.

Thanks, Andrew.

The next question is from Alexander Pearce from BMO. Please go ahead.

Great. Good morning, all. It’s great to see those contract volumes come through the last couple of months. I have got kind of two-part questions to those contracts. Obviously, you have got – you have stated your target previously is I think, 40:60 kind of fixed market related pricing portfolio. I just wonder maybe you could just comment on how that fits utilities kind of current preferences at the minute and what you have seen, are they both aligned? And then also maybe given the volume, you could just kind of comment on what we haven’t seen much volatility in the term price yet?

Well, to your first question about our portfolio, yes, we have talked about this 60:40 balance and I am glad you raise it, because it does. I think there is often confusion about what we mean there. We don’t mean we want a balance between market related and base escalated in any single contract or any single year. What we mean is that over the lifetime of the portfolio and full cycle when our market has gone through one of those security of supply driven contracting cycles, but also when our market has lived through those moments where fuel buyers cover a lot of their run-rate requirements and then they step back and we see those periods of complacency, which is just a natural function of the long-term nature of our market. That’s where we say we want to be balanced. So, what we need to think about in today’s context is our preference on our pricing mechanism relative to where we are in a cycle. And today, our preference is market-related. We see a cycle that’s starting to form some very important notable indicators, tenor, volume and timeframes that I talked about. The wedge, you have uncovered requirements, the supply uncertainty, all suggests that there is still price formation ahead of us. We want to be leveraged to that. So, our preference right now is very strongly market related as opposed to fixing in today’s price. But I would say we are misaligned with a general fuel buyer on that idea, because I think the fuel buyers around the nuclear space also recognize that the outlook for demand is improving and the outlook for supply is uncertain. And I can almost kind of prove this by just the approach to the market if we see fuel buyers wanting to…

It was about why we haven’t seen much removing the term price like we have what’s in…

Yes, yes, thank you. The term market obviously saw a very significant structural move in the fall as the – as we saw a lot of spot market buying, especially with the presence of financials and in particular, the Sprott Physical Uranium Trust, we saw lot of material coming out of the spot market that was pushing up the spot price, but more importantly, it was drying up the carry-trade. It was drying up those uncommitted volumes that didn’t have a home that were splashing through the spot market and became a source of utilities to say, hey, I don’t have to go into the term market, I will go into the spot market and find somebody to carry those pounds on an interest rate of low interest rate carry, those pounds began to dry up. So, we saw RFPs in the market that were really targeting producers and we saw producers I think sufficiently disciplined to see the term price push up into the force. Since then, I think the RFPs have been greeted with a little bit more aggression than we would take in this market, but it does reflect I think a couple of things. I think that a few of the producers in the market probably don’t have the same value focus we do and are a little more interested in volume. But also, I think that some of the participants on the sell-side of the market don’t have experience with every contracting cycle like we do. And I think the third issue is they don’t enjoy the off-market pipeline negotiations that we do. So, I think all of those things are a bit of a combination where the initial push, the response was, uranium needs to be priced with a 4 and we got there very quickly in the term market. And then we have seen some competition on the on-market RFPs to win that business, Cameco has not been very successful at all in any of that business, but others have been. And we just have to work through this. We just have to work through a few of these volume targets. But here is the good news, 1.4 billion pounds of uncovered requirements, that’s a heck of a lot of demand that still has to come into the market.

Thanks, Grant. That’s really helpful.

Thanks, Alex.

The next question is from Greg Barnes from TD Securities. Please go ahead.

Thank you. With all that being said, Grant, do you think you are capturing market share given the events of Kazakhstan and security supply being front and center too I think?

Yes, this has been a trend for us. When you and others have asked over the years about this pipeline that we keep referring to, which of course, we are today here is the evidence of it. So trust us when I say that our pipeline continues to be very robust going forward. But when you have asked in the past, well, why would utilities be interested in that? The answer is a variety of reasons. I think over the years, we have seen a shift to focus on origins, because of trade policy concerns. I think that just the globalization trend in the nuclear fuel cycle is under a little bit of pressure, because of trade policy concerns, because of geopolitical concerns and that has been a factor. So we have seen the pursuit of certain origins and more diversity there. I think that for some of the customer base that we have dealt with off-market, it’s a function of bringing balance back into their portfolio. They may have used low prices as an opportunity to fill up on other origins and on other suppliers. And of course, we were very resistant to do any contracting through that window. And so, I think Cameco’s share of some of those utilities fell and then they needed us back in their portfolio. And then I think this ESGP, but let’s not underestimate that one of the things that many of our customers are targeting is the type of financing cost savings that come from green financing. But when you put yourself forward to achieve some of that green financing, you are being judged according to a set of ES&G criteria for which Cameco is super competitive on those criteria. I think we enjoy competitive advantages over others. And that’s also a factor. So there are a number of things coming together. And I think the geopolitical like you referenced this one, but it’s a number of factors that are coming together to drive this, this ability for us to at a measured and patient rate bring in some contracting success, but still retain the leverage to more of it that we see in the market.

That’s great. Just back to Andrew’s question about the cost, it just seems odd to bring Cigar down, which obviously would be more economic to run at the full capacity and bring the costs around where at a lower rate it wouldn’t be as lower cost. So just how is that balance being worked out?

Yes, I would think about that, that balance is a portfolio approach. I mean, obviously having one Tier 1 asset running and the other at zero is a very difficult economic proposition. So for us as we had success in building homes and as we retain leverage to that future demand that’s coming, it just makes sense to step back and say, okay, having McArthur at zero doesn’t make economic sense, but we can’t be done supply disciplined yet. So, we still have to be disciplined. So, it’s the balance between the two. It’s looking at the Northern Saskatchewan production as a cluster, if you will and balancing it with what the Kazakhs are doing in Kazatomprom. So for us, this is actually a very attractive scenario to have both assets included. An additional advantage with Cigar Lake, of course, is now the extension of what we have referred to as Phase 1. So, Cigar Lake joint venture is now looking at an opportunity to extend the life of that asset, not be forced into a decision about what to do with Phase 2 in a market that’s in the early innings of a transition, which of course is a good place to be and reserve some of those pounds for what we think is a better price scenario anyway. So for us on balance, think of it as a portfolio decision, a portfolio decision that allows us to begin to restore our Tier 1 cost structure, get out from under those care and maintenance costs at McArthur, but then run both in a very disciplined fashion balanced with the opportunities we are seeing in the market.

Okay, great. Thanks, Grant.

The next question is from Lawson Winder from BofA Securities. Please go ahead.

Hi, good morning. Thank you for the update and some excitement in our morning with the new contracting announcement. Two questions for me. So first off, I think it would be really helpful to understand the nature of some of the contracting you have done beyond your realized conversion pricing table so beyond 2026. So clearly, in that table, there are a series of price caps. And that’s why at $140 you expect around $74 pricing, but when we look out beyond 2026, should we think of the blue sky in similar terms or are – is there more market related further out? And then along with that if you can provide any commentary in terms of the 70 million pounds of new contracting how that looks geographically as well as in light of sort of the type of contracting in terms of market versus fixed would be very helpful? Thank you.

Thanks Lawson. And Grant, on the contracting role, why don’t you keep going?

Yes, absolutely. So great questions and thanks for recognizing that how our cable is constructed. And I want to spend a bit of time on that, because I think it’s really important and I think it’s a source of confusion for a few folks that find themselves commenting on Cameco inappropriately at times. So, the contracting nature, I said that the pricing mechanisms that we are pursuing, we have a preference for market-related right now. So no surprise, what we are really interested in is not market exposure out into the future. So, that’s one source of leverage. The second source of leverage is, of course, the pounds that we haven’t sold yet. And so remember that our table is constructed in a very specific way and it’s different than others in our industry. So, our table only shows our current commitments over the next 5 years sort of that lower wedge of what we are going to deliver each year over the next 5 years that is known to us. It does not reflect – the sensitivity in that table does not reflect the unsold pounds in any of those years. And so we see others in our market that will construct their price sensitivity table by assuming a top line sales number, for example. And so, the lower wedge is what they know they are going to sell. And then they just assume that every pound that’s not currently committed in those subsequent years is sold in spot. And that’s an easy way to construct a table. But we believe it’s pretty misleading. It’s pretty misleading, because as we constantly say, the spot is not the market. If you had a primary producer, who in years 4 and 5 were planning on selling over 70% of their production…

Thanks for the comments. I would also like to get an idea for what the bullet train might look like in 2022, in terms of contracting. So, speaking to industry sources that we have indications are that contracting is expected to continue to be very strong for the remainder of 2022. And what would your expectation be, or what kind of guidance can you provide us in terms of additional contracting, that could be possible in 2022?

You are probably picking up significant optimism in our comments, and you would be right, in interpreting us as being optimistic on where the market is at. We know that in the uranium space contracting begets contracting. When there is very little contracting going on, it sort of confirms the view of some that they don’t have to worry about where uranium – their uranium supply is coming from in the future. But when you start to see contracting success, and when you start to see the future production not yet pulled out of the ground already being claimed, that tends to then motivate others to say, hey, I need to lay a claim to some of those pounds too. So, you don’t have to look any further back then in the uranium space. Then in 2010, when we saw the big new entrants to the market, the Chinese stepped into the term market for the first time. It wasn’t that the rest of the utilities were short material in 2011, 2012, 2013, 2014. It was that China stepped in to start contracting material largely 2014 to 2024 when the rest of them hadn’t kind of paid much attention to that window and when that triggered real contracting cycle to lock in volumes. So, I see nothing today that suggests that the current cycle is any different. So, we know contracting begets contracting as we have success. And I would note that, because Kazatomprom in a recent disclosure talked about the success they are having in contracting. These are all future pads that are being claimed, in a window, where there is a lot of uncertainty about supply. And the demand outlook is improving. So, we are quite optimistic on what the prospects for contracting are in 2022. We know that our own pipeline continues to be robust. And hopefully, with the results you see today, people trust us when we say that, so we are optimistic Lawson.

Okay. Thank you very much.

Thanks, Lawson.

The next question is from Brian MacArthur from Raymond James. Please go ahead.

Good morning. So my first question is, and I applaud for sure the price or volume strategy, but how do you probably take it maybe a little longer than your first thought, the care and maintenance costs build up every year? How do you think about that, when you go to customers now? So for instance, say, I thought originally, I want at $45 a pound and now it’s taken me 2 years longer. So, I have absorbed another $200 million and standby costs, do I tie and sell that same pound at $48 now a pound versus $45 to balance out shareholders getting an additional return for the longer way, is that how you sort of think about in the context of the market as well. And the second part of that is, with that in place spending, roughly $60 million for your Tier 2 assets and I get it, there is some diversification with source grid, which you talked about, how do you think about how long you are willing to do that, because obviously, those pounds won’t be quite as profitable coming forward?

Yes. Great questions as always, Brian. Let me start with the first question on how we think about the sunk costs of care and maintenance versus price discovery in the market. And I would just say, we look at our strategy as an investment. Our supply discipline strategy was an investment in the future value of our assets. On a top line basis, the 140 million pounds, and 150 million pounds that we have left in the ground, since we started our extreme supply discipline, you would have priced it at what $18 a pound in the spot market at the time of making those decisions. And today, you are going to price it in the mid-$40s. That’s a very significant value capture. So, ours has been a very smart investment to leave those pounds in the ground, and wait for a window where they are going to be priced higher. So, that’s kind of how we think about the care and maintenance costs as an investment on the future value of our production. But in terms of pricing it, we have a market related preference, as opposed to a fixed price preference at the moment. So, we could engage customers on the basis of, well, here is where the fixed price would need to be in order to cover those sunk costs. But I would just say, we are probably a little greedier than that. We look at a market that needs a lot of new production to come, that new production needs a higher price signal, it needs a price signal that’s going to support Greenfield investment. We would actually love to achieve a lot more Greenfield investment pricing for Brownfield Tier 1 assets, because we love the margin prospects there, so less about kind of covering our…

Great. Thanks. And maybe I want to just go to another comment that was made talking about and we have certainly seen secondary supply coming down, but looking forward, I think it was, we expect that maybe to go lower. And I am kind of curious, maybe I misheard that. Obviously, as price goes up, there is changing in underfeeding and stuff, too. But you also have this opportunity to possibly process some pounds through the U.S., feel you have tails and stuff. Are you including that material going forward in that statement that secondary is going down, or do you think box is going down or any comments on how you sort of see the secondary going the next few years in the context of the said your opportunities with secondary?

Yes. I am going to jump in on this one and apologies to everybody on the call for monopolizing all the time on these issues. But with secondary supplies, this is a great part of the story, because remember, the price transition that occurred, go back to the Cigar Lake inflow events as a supply shock, or even the demand shock of 2010 that I already talked about the Chinese stepping into term markets for the first time. Those price transitions occurred when there was a heck of a lot of secondary supply still kicking around and a heck of a lot of inventory. But we actually don’t have that profile anymore. That HEU material is all gone. Some of those big sources of inventory have been chewed through. And that makes sense, because we have been consuming a lot of material off of existing contracts and not going back in the replacement rate. So, while secondary supplies have always historically filled the gap, the prospect of them playing that role going forward is greatly diminished. If you just look at the supply stack and whether it’s and you named a few, whether it’s the inventories that we see from governments that remember DOE inventory. I mean, there is a moratorium on that right now. And besides, if they were still trying to sell materials, there just isn’t much left anymore, it wouldn’t even be material in today’s structural gap between demand and primary production. The Western enricher underfeeding, you have heard me say for some time, now, this isn’t an underfeed story anymore. Yes, enrichers underfeed and they use some of that underfeed uranium to sell into term contracts supportive of their enrichment contracts, but we don’t see enricher underfeed in the spot market. It’s not a factor there. It’s not a source for. The reprocessing material, we just see that declining over the next 10 years. We are just chewing through that material. And then of course, that big black box of the material that comes out of Russia and whether it’s tails re-enrichment, underfeeding government stockpiles, no matter what it is just that entire supply just declines over the same window. So, you have got the secondary supplies that have always filled the gap in the market can’t fill the gap in the market the way they have before. And so when we look at the DOE re-enrichment of the U.S., we think of that more as not secondary supply. But actually, that’s a U.S. mine is in fact what it is. And that’s probably the best model to think about it.

And do you assume that you are going to be able to do that in the next 5 years to 10 years?

We think that is a great project. It’s a project that still has some technology readiness issues in front of it that need to be worked on. But as a source of supply, as a source of potentially U.S. origin supply, it is very attractive and features well into some of the things I talked about earlier, like the regionalization of supply and geopolitical concerns. So, we are supportive of that project. It has the ways to go. It’s not at the front of the line ahead of McArthur and Cigar, obviously. But it is a good project.

Great. Thanks very much for all the details. I appreciate it. I will pass it on to someone else.

Sounds good, Brian. Thanks a lot.

The next question is from Gordon Johnson from GLJ Research. Please go ahead.

Hi, guys. Thanks for taking the question. So, I guess first off from the presentation, it seems like the net addition of capacity is relatively small, when you also factor in the reduction of Cigar Lake. So, I just wanted to get your comments there. And then additionally, correct me if I am wrong, but it seems like all the additional capacity you are adding is currently accounted for, meaning none of this additional capacity is going into the spot market. So, if you can address those two, and then I have a few follow-ups.

Gordon, yes, you are absolutely right. When we bring McArthur back on, we were bringing it back on, we hope to be in 2024, about 15 million pounds. And you recall, 5 years or 6 years ago, when we were running it, I mean it has licensed capacity is 25 million pound. We ran it at 20 million pound for a while, and then backed it off to 18 million pound in 2016, and then we shut it down in 2017. So, in conjunction with that, when McArthur gets up and running, and that’s a couple of years to get it going, we plan to bring Cigar down from its 18 million pound capacity, as Grant mentioned to 13.5 million pounds, a significant reduction. That fits with our strategy of supply discipline going forward. And the added benefit for Cigar Lake is that gives us a little extra time when we are producing 13.5 million pounds, five instead of 18 million pounds, to look at the future of Cigar Lake and extra resources and reserves that we can bring into the picture to keep that unit running into the 2030s. So, yes, we will continue as Grant has said with our supply discipline. Every day we look at our sales and our production and we try to be consistent. We actually under-produced for the sales we have, which makes us go out and buy in the market. So, I can tell you we have a home for every pound we produce. And we are going to keep it that way.

Okay, that’s helpful. And correct me if I am wrong, but it seems like so your contracted volumes, it seems like in 2021, 38% of your contracted volumes since 2016 were signed in 2021 alone. So, this seems like, again, correct me if I am wrong. This seems like a catalyst that my team has been waiting for a while. I know this question was touched on before. But in previous contracting cycles, it’s typically not just 1 year of contracting. So, when you consider is long question, but when you consider that Europe just labeled nuclear and natural gas sustainable investments, and the comments from the Energy Secretary in the U.S., do you guys expect additional contracts in 2022? And can you also address if maybe some of these Chinese nuclear facilities are starting to re-contract?

Well, I will be starting and then the Grant will cover the marketing piece and so I will turn it back to him. But we are certainly seeing good signs on some of the areas you mentioned. I mean the U.S. if you look at 2021, that was really a pivotal year for nuclear and for the U.S. with the change in administration, whatever you have to say about them, the first move they made was to sign back onto the Paris Agreement and then hold an Earth Summit and sign the Infrastructure Act. They are working on the build back better act, and there is a lot of support for nuclear like support that we haven’t seen for four decades in the U.S. and being a world leader, that’s good news. Here in Canada, we are seeing support. You have got Bruce with their major component replacement to OPG, the same thing OPG picking a spot for an SMR at Darlington, I mean, good news. You mentioned Europe. I mean we have been fighting that fight through the WNA and Kazatomprom on the taxonomy of nuclear trying to have nuclear included in the green taxonomy. And guess what, first day of this year, we found that it was going to be included. So, lots of good tailwinds right now for nuclear. So, that – I mean, that just bolsters and reinforces the comments we made at the start of this meeting. On the demand side, we see demand growing and we don’t just feel it, we can see it, we can see the numbers that WNA and IEA, and IEA put out showing a growth in nuclear demand, which is good news for our business. And so the Chinese, you mentioned China, I mean that is a great story. They have 50 reactors today. They are going to 70 reactors. So, you can even imagine that 20 new reactors in 5 years, 70 by 2025, and we have seen from some of their organizations well over 100 by 2030. And so then you start asking where is the supply coming from at a time when supply is going down. Remember, we started 2021 with Cominak going down and Ranger going down. And so yes, the supply-demand fundamentals are really setting up nice for the industry. And then of course during the year, you had some spots and other juniors come in and buy significant quantity of uranium and put it away. And so yes, I think the market is setting up very nicely. And we – it’s in this context that we expect to add to our portfolio going forward.

Okay, and actually, one last one, if I could. Can you guys talk about the impact to, I guess the fundamentals? Clearly, these contracts are being signed at much higher prices? Can you go into at all like how we should think about the effects on margins and cash flow? And also, I guess is there any other – is there any potential headwinds you see out there? It seems like this is quite the positive call. Do you see any negatives out there that could contribute? Thanks for the questions.

Yes. Thanks, Gordon. I will just say not that turned to grab on the finance. But this is undeniably positive for Cameco financially, both the earnings and cash flow going forward. So, after some tough years, in the trough that our shareholders have stuck with us, we are hoping to reward our loyal shareholders going forward, so.

So, we keep using the term Gordon, balanced and disciplined. And we apply it to balanced contracting discipline, balanced supply discipline and balanced financial discipline. And so, in keeping with that notion, the decisions to bring in some contracts really underpins that book of business going forward, the 160 million pounds that we have in front of us, that supports our planned production, with which by the way, the main message there is supply discipline is continuing indefinitely, not productions all back on no matter what, we are still looking for further market improvements. And then the balanced financial discipline, yes, we are announcing today that our owners need to share in the improved business outlook, in the improved book of business. But we are still managing in a conservative way, from a financial point of view, because we still have to support strategic patients in our contracting discipline as we wait for that demand to come and those improvements to come. And we still have to support continued supply discipline. We are not going to run McArthur at capacity. We are not going to – we are not planning to run Cigar at capacity out into the future. So again, that balance is across all three dimensions of our strategy, but unequivocally supportive. Remember, our investment in our strategy financially had two big impacts. One was the care and maintenance costs of keeping pounds in the ground. And I have already referenced those pounds are worth a lot more than they were the day we made that decision. The second was purchasing material at a much higher cost than we could produce it for. So, as we build homes and as we restore production, even if it’s not at full capacity, we are anticipating significant improvements to cash flow and earnings. So, unequivocally supportive for us and we are going to do it in a responsible way, a disciplined way that is supportive of the market.

Thanks again, guys.

Thanks, Gordon.

The next question is from Patrick Sogeti, a Private Investor. Please go ahead.

Hi, thanks for taking my call. So, I have two questions. The first one is in late-2020, you guys said you would release an updated Cigar Lake Technical Report in 2021 and you never did. So, I am wondering if there is any reason for the delay. And kind of tying it into the other analysts question about the cash costs in 2024, like with a lot of other commodity companies having cost overruns, how do you expect those to stay, the same, or are you basically saying automation is done is going to negate any increases? So, that’s my first question, if someone wants to correct that.

Patrick, thank you for the questions. I am going to answer the second one and I see Brian Riley, this year has just give an update on the Cigar Lake Technical Report. Just you talked about costs in 2024. Obviously, we are looking at costs. We are concerned about costs like everyone else is, you are seeing inflation, you are seeing supply chain issues across the board. This isn’t just Cameco, I think it’s in every industry, everywhere labor, availability of labor, all things we are watching, we think we have a competitive advantage in Northern Saskatchewan in that 50% plus, and we are going to make it as plus as we can. Our employees are indigenous people from the region that live up there. We are delighted to be bringing them back. Our digitization and automation efforts, we think will bring us benefits, cost benefits, reducing the costs of our operations, making them more flexible. And so we are pretty excited about that. So, we – I was in a meeting the other day, Business Council of Canada, and they are talking about capital projects, new capital projects on Brownfield and they have said, if you got a feasibility study that’s more than six months old, you might as well throw it in the garbage, because things have changed that fast. And so we are fortunate to be on Greenfield here with the experienced workforce. And we are not – we have got an existing team that we are going to add to and so we are quite excited about the future there. But let me talk. Let me ask Brian, to just give us an update on where Cigar Lake Technical Reports are?

Sure, good question. The Cigar Lake Technical Report dates back to 2016. And really nothing has changed in terms of the technical parameters, the mining methods, the financial analysis. So, it might be 6-years-old, but it’s still valid. And quite frankly, it has a shelf life. We believe have a few more years yet, so, no plans today or even in the immediate future to update that report. It’s valid. It was valid then and remains valid today.

And Patrick, I might just add in the AIF annually, we do update sort of that cost profile. So, you see that annually, and that comes out in…

Yes. I was more interested in like, there was something like 60,000 meters to outline the resources in Phase 2. But I guess you said you are kind of putting that on the backburner anyway. So, thank you for that. The second question, maybe Tim, you could speak a little bit from your experience at Nutrien as well as sort of taking some cues from energy and oil stocks with this record level of cash and I get you guys are financially conservative. But would you say possibly that this, I guess, token dividends increase sort of marks, maybe a sustained dividend growth strategy? Would you say you could commit to something like that at this point or not yet?

Well, thanks for that, Patrick. I haven’t yet had experienced with Nutrien. I do see that on the Mosaic Board, however, so they would be happy to – for me to make that correction, I am sure. But listed, yes, we are on the block, obviously, we are sitting on a little over a look at, it’s $1.33 billion cash and short-terms now that we have got, thank goodness, nobody asked us about the CRA because my blood pressure gets going pretty good when you do that. But that’s still out there. We are looking at recovering, I think it’s $295 million of cash from them, and about $482 million in creditor balance sheet space. And with our new strategy, our continuing discipline strategy, we are going to be adding both earnings and cash flow. So, you are right, the question is a good one, that capital allocation, I can tell you, our Board has spent a lot of time thinking about this. Grant and his team, obviously responsible for it. So, the decision taken this quarter was to increase 50% increase to the dividends clearly sustainable for us, and no new decisions from there. We will see we are off on a new path now. We got a lot of work to do up in Northern Saskatchewan, not easy bringing those facilities back on. But we are confident we can do it. If the future unfurls the way we think it will, we will have significant capital allocation decisions to make going forward and it will certainly keep you and the market informed as we progress.

Thank you.

Yes. Thanks, Patrick.

This concludes the question-and-answer session. I would like to turn the conference back over to Tim Gitzel for any closing remarks.

Okay, well, thank you, operator. With that, I just want to say thank you to everybody who has joined us on the call today. We certainly as always appreciate your interest and support. Let me just conclude by saying we are excited about the future that we are seeing for nuclear power generation. We are excited about the fundamentals for uranium supply and demand. And we are excited about the prospects for our company. As we embark on the next phase of our market alignment strategy. We say this every time and we won’t stop. We are responsible commercial supplier. With a strong balance sheet, long live Tier 1 assets, and a proven operating track record in line of sight to return on our Tier 1 cost structure. At Cameco, we are well positioned to respond to the changing market dynamics and benefit from the long-term growth we see coming, driven by the need around the world for safe, reliable, affordable and carbon-free base load electricity. We will continue to do what we say we will do, executing on our strategy and consistent with our values, we will do so in a manner that we believe will make our business sustainable over the long-term. And we will continue always to make the health and safety of our workers, their families and their communities our priority. So, with that thanks everybody, stay safe and healthy and have a wonderful day. Thank you.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.