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 June 30, 2021 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 June 30, 2021 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
2021 Provided in the Q2 2021 MD& A - financial outlook table, adjusted net earnings and cash flow sensitivity analysis
2022 26 38 50 57 61 64 66
2023 27 39 50 58 61 64 67
2024 29 39 50 56 58 59 60
2025 30 41 53 63 65 68 70

The table illustrates the mix of long-term contracts in our June 30, 2021 portfolio and is consistent with our marketing strategy. The table shows contracts entered into up to June 30, 2021. The table and assumptions below reflect all of the additional 16 million pounds finalized and executed under long-term sales contracts year-to-date.

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 higher prices or have high floor prices will yield prices that are higher 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 19 million pounds per year, with commitment levels in 2021 and 2022 higher than in 2023 through 2025
  • excludes sales between our segments

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 may 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.