Uranium Price Sensitivity

The following table is not a forecast of prices we expect to receive. The prices we actually realize will be different from the prices shown in the table. It is designed to indicate how the portfolio of long-term contracts we had in place on March 31, 2017 would respond to different spot prices. In other words, we would realize these prices only if the contract portfolio remained the same as it was on March 31, 2017 and none of the assumptions we list below change.

We intend to update this table each quarter in our MD&A to reflect deliveries made and changes to our contract portfolio. As a result, we expect the table to change from quarter to quarter.

Expected realized uranium price sensitivity under various spot price assumptions

(rounded to the nearest $1.00)

Spot prices ($US/lb U3O8) $20 $40 $60 $80 $100 $120 $140
2018 37 45 56 67 77 85 9
2019 34 44 56 66 75 83 89
2020 36 45 57 66 75 82 88
2021 33 44 58 68 77 86 94

The table illustrates the mix of long-term contracts in our March 31, 2017 portfolio, and is consistent with our marketing strategy. It has been updated to reflect contracts entered into up to March 31, 2017, and it excludes our contract under dispute with TEPCO.

Our portfolio includes a mix of fixed-price and market-related contracts, which we target at a 40:60 ratio. Those that are fixed at lower prices or have low ceiling prices will yield prices that are lower than current market prices.

Assumptions

Our portfolio is affected by more than just the spot price. We made the following assumptions (which are not forecasts) to create the table:

Sales

  • sales volumes on average of 24 million pounds per year, with commitment levels in 2017 through 2019 higher than in 2020 and 2021
  • excludes sales between our uranium, fuel services and NUKEM segments
  • excludes the contract under dispute with TEPCO

Deliveries

  • deliveries include best estimates of requirements contracts and contracts with volume flex provisions

Annual inflation

  • is 2% in the US

Prices

  • the average long-term price indicator is the same as the average spot price for the entire year (a simplified approach for this purpose only). Since 1996, the long-term price indicator has averaged 20% higher than the spot price. This differential has varied significantly. Assuming the long-term price is at a premium to spot, the prices in the table will be higher.

Caution about Forward-Looking Information

Please click here for additional information about the assumptions applied in making the forward-looking statements on this page and the factors that could cause results to differ materially.