Cameco's Q3 2025: Contradictions Emerge on Westinghouse Growth, McArthur River Production, U.S. Nuclear Expansion, and Uranium Demand Shifts

Business Commentary:

• Strong Financial Performance and Westinghouse Deal:
• Cameco reported a significant increase of over USD 170 million in its share of Westinghouse's revenue in Q2, contributing to a positive financial performance year-to-date.

• The partnership between Cameco, Brookfield, and the U.S. government for the Westinghouse AP1000 reactors is expected to bring substantial value and technology leadership to the nuclear sector.

• Supply Chain Flexibility and Market Discipline:

• The company relies on strategic supply sourcing, including supply levers like product loans, to manage potential production shortfalls, exemplified by a reduction in McArthur River and Key Lake production forecasts.

• Cameco maintains discipline in sourcing and managing its supply chain, balancing production strategy with market demands and long-term contracts.

• Uranium Market Dynamics and Pricing:

• Cameco expects higher deliveries in the fourth quarter, influenced by strong uranium and fuel services average realized prices, despite lower quarterly sales volumes.

• The market is characterized by supply and demand dynamics, with utilities showing interest in securing supply but hesitant due to uncertainties in new supply promises.

• Executive Team Changes and Strategic Focus:

• Cameco announced that its Chief Marketing Officer, David Dirksen, will retire in Q1 2026, with Lisa Akin appointed as the new Senior Vice President and Chief Marketing Officer.
• The change reflects Cameco's ongoing focus on strategic marketing and business development to capitalize on nuclear's growth potential.

Contradiction Point 1

Westinghouse Growth Guidance

It involves different interpretations of growth guidance for Westinghouse, which could impact investor expectations and strategic planning.

How does the $80 billion agreement with the U.S. government work? - Brian Lee(Goldman Sachs)

20251105-2025 Q3: The agreement is designed to stimulate gigawatt-scale reactor deployments. The U.S. government commits to facilitating financing and will receive an equity stake in Westinghouse upon meeting vesting conditions. - Grant Isaac(COO)

Why has the 5-year CAGR guidance for Westinghouse remained unchanged at 6% to 10% despite recent positive nuclear announcements? - Orest Wowkodaw(Scotiabank)

2025Q2: The guidance reflects a conservative approach. Projects like the Czech project are not yet at final investment decision. Until then, they are not included in the plan. - Grant Isaac(CFO)

Contradiction Point 2

McArthur River Production Challenges

It involves differing views on the production challenges and uncertainties at McArthur River, which could impact production forecasts and financial planning.

Are the standby product loan facilities as flexible as in the past? What is the repayment timing for these loans? - Ralph Profiti(Stifel)

20251105-2025 Q3: Mining is challenging, with new areas, ground freezing, labor, and equipment issues. The guidance has not changed, and we remain focused on working through these challenges. - Timothy Gitzel(CEO)

What is the status of potential bottlenecks at McArthur River, and can you achieve the 18 million pound guidance? - Lawson Winder(BofA Securities)

2025Q2: Mining is challenging, with new areas, ground freezing, labor, and equipment issues. The guidance has not changed, and we remain focused on working through these challenges. - Timothy Gitzel(CEO)

Contradiction Point 3

U.S. Nuclear Expansion and Westinghouse's Role

It involves differing perspectives on the potential impact and role of Westinghouse in the U.S. government's nuclear expansion plans, which could affect strategic decisions and investor expectations.

Can you explain the structure of the $80 billion agreement with the U.S. government? - Brian Lee(Goldman Sachs)

20251105-2025 Q3: The first claim is for $17.5 billion, reflecting Westinghouse's current value. The U.S. government will participate beyond that, potentially achieving an 8% stake if conditions are met. - Grant Isaac(COO)

What are the current floor and ceiling terms for contracts? - Craig Hutchison(TD Cowen)

2025Q1: We're holding out for floors in the $70 range, escalated. We're holding firm on floors and believe in the structural demand deficit. - Grant Isaac(CFO)

Contradiction Point 4

Westinghouse's Relationship with China

It involves differing views on the impact of trade disputes on Westinghouse's relationship with China, which could affect strategic partnerships and market access.

Can you walk us through the mechanics of the $80 billion agreement with the U.S. government? - Brian Lee(Goldman Sachs)

20251105-2025 Q3: The agreement is designed to stimulate gigawatt-scale reactor deployments. - Grant Isaac(COO)

What is Westinghouse's relationship with China amid trade tensions, and how does this affect its business? - Bob Brackett(Sanford C. Bernstein & Co)

2025Q1: Westinghouse has a strong relationship with China, contributing to their AP1000 builds. - Tim Gitzel(CEO)

Contradiction Point 5

Demand Shifts in the Uranium Industry

It involves differing assessments of the timing and drivers of demand shifts in the uranium industry, which could impact strategic decisions and supply chain management.

Can you explain the details of the $80 billion agreement with the U.S. government? - Brian Lee(Goldman Sachs)

20251105-2025 Q3: Condolences on the Blue Jays, and kudos on the Westinghouse deal. Can you walk us through the mechanics of the $80 billion agreement with the U.S. government? - Brian Lee(Goldman Sachs)

What are the industry indicators for a shift to upstream procurement, and how close are we to this transition? - Ralph Profiti(Stifel)

2025Q1: Fuel buyers have traditionally focused downstream, but the structural deficit will push them upstream. There's no panic yet, but we expect demand to shift to uranium as primary supplies are needed. - Tim Gitzel(CEO)