Inkai

2024 Q3 Update

Production

Production on a 100% basis was 2.0 million pounds for the quarter, and 5.5 million pounds for the first nine months of this year, compared to 2.0 million pounds and 6.3 million pounds in the same periods last year. The lower production for the first nine months of the year is attributed to differences in the annual mine plan, a shift in the acidification schedule for new wellfields, and unstable acid supply throughout the year.

Supply chain

JV Inkai continues to experience procurement and supply chain issues, most notably, related to the stability of sulfuric acid deliveries. It is evident that JV Inkai will not be able to achieve its target production for 2024 of 8.3 million pounds of U₃O₈ (100% basis), as it was contingent upon receipt of sufficient volumes of sulfuric acid in accordance with a specific schedule. JV Inkai now estimates the maximum annual expected production to be approximately 7.7 million pounds. Our allocation of the planned production from JV Inkai remains under discussion.

In addition to the issue of availability of sulfuric acid, achievement of JV Inkai’s 2024 production target requires it to successfully manage several other ongoing risks, including other procurement and supply chain issues, transportation challenges, construction delays and inflationary pressures on its production costs.

Transportation

The geopolitical situation continues to increase transportation risks in the region. We continue to work closely with JV Inkai and our joint venture partner, Kazatomprom, to receive our share of production via the Trans-Caspian International Transport Route, which does not rely on Russian rail lines or ports. We could experience further delays to our expected Inkai deliveries this year if transportation using this shipping route takes longer than anticipated. The first shipment containing approximately 2.3 million pounds of our share of Inkai’s 2024 production has arrived at the Canadian port and is expected to arrive at the Blind River refinery before the end of 2024. The volume and timing for the shipment of our remaining share of 2024 production is uncertain.

To mitigate the risk of production shortfalls or transportation delays, we have inventory, long-term purchase agreements and loan arrangements in place we can draw on.

Earnings

Due to equity accounting, our share of production is shown as a purchase at a 5% discount to the spot price and included in inventory at this value at the time of delivery. Our share of the profits earned by JV Inkai on the sale of its production to the JV partners is included in “share of earnings from equity-accounted investee” on our consolidated statement of earnings. Excess cash, net of working capital requirements, is distributed to the partners as dividends once declared.

Depending on cost inflation impacts, actual production volumes and when we receive shipments of our share of Inkai’s 2024 production, our share of earnings from this equity-accounted investee and the timing of the receipt of our share of dividends from the joint venture may be impacted.

On July 10, our JV partner, Kazatomprom, issued a news release indicating that at the end of June, the government of the Republic of Kazakhstan introduced amendments to the country’s Tax Code, including significant increases to the MET rate paid by mining entities on uranium production, beginning in 2025. If it remains as currently formulated and depending on the assumptions used for uranium price, production profile, and exchange rate, the production costs for JV Inkai including MET, could be similar to our northern Saskatchewan operations, calculated including royalties.

Technical Report Update

Cameco reported on Nov. 12, 2024 that it filed a technical report for the Inkai operation on a voluntary basis under National Instrument 43-101 – Standards of Disclosure of Mineral Projects (“NI 43-101”). The technical report was filed to provide updated information relating to the Inkai operation and not as a result of a requirement under NI 43-101. The technical report has been posted on our website and SEDAR+ at www.sedarplus.ca and on EDGAR on the SEC website at www.sec.gov. Readers are encouraged to read the technical report in its entirety, including all qualifications, assumptions and exclusions therein.

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Environment & Safety

Worker safety, environmental monitoring and proper decommissioning after project completion are of the utmost importance to Cameco.

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Reserves & Resources

Our mineral reserves and resources are the foundation of our company and fundamental to our success.

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