Cameco’s Commentary on the Ongoing Situation in Kazakhstan

An incomplete and inaccurate representation of our comments has recently appeared in certain media outlets. Here is our full emailed response to a series of questions posed to us by Reuters:

The situation in Kazakhstan is dynamic and evolving. The national protests and the security clampdown on transport, financial and communication systems may add to pre-existing operating risks such as the COVID-19 pandemic’s impact on employees and contractors, as well as global supply chain disruptions to critical goods and services required for uranium production. We will have a better understanding of the operating risks once we have had a chance to communicate with our JV partner Kazatomprom.

As 40% of world’s uranium supply, any disruption in Kazakhstan could of course be a significant catalyst in the uranium market. If nothing else, it’s a reminder for utilities that an over-reliance on any one source of supply is risky. It also reinforces the shift in risk from suppliers to utilities that has occurred in this market.

These considerations underline the benefit of Cameco’s strategy to maintain a diversified portfolio of supply sources in multiple uranium-producing jurisdictions. Cameco currently has five North American uranium operations at which production has been suspended due to the weak market conditions that emerged following the Fukushima incident, but which remain in a safe state of care and maintenance. These include the McArthur River mine and Key Lake mill (the world’s largest high-grade uranium mine and mill) and the Rabbit Lake mine/mill in northern Saskatchewan; along with the Smith Ranch-Highland and Crow Butte mines in Wyoming and Nebraska respectively.

Together, these operations represent about 24 million pounds of annual productive capacity of uranium concentrate that could be brought back online should the commodity price improve to the point where the market once again calls for increased production and we have a line of sight to the appropriate homes under long-term contracts to deliver those pounds into. At present, we can’t comment with any certainty on the length of time it might take to resume production at any of these facilities.