Quarterly Report - 2017 - Q1

Summary Information

On April 28, Cameco reported its consolidated financial and operating results for the first quarter ended March 31, 2017 in accordance with International Financial Reporting Standards (IFRS).

“There were several first-quarter developments that generated both positive and negative sentiment in our market” said president and CEO, Tim Gitzel. “However, on balance, our cautious optimism remains unchanged and in the near term, we will continue to evaluate all of our supply sources in light of an unsustainably weak price environment.”

“As we expected, our first quarter sales were light, resulting in the usual seasonality of our cash flow. However, our strategic focus on costs and efficiency is beginning to pay off, with administration and production costs coming down significantly compared to last year. Our 2017 sales remain on track, at an average realized price that is well above the current market, a market that remains uncertain and oversupplied. We’re managing through the uncertainty, but even low-cost operations like ours, face pressure. Once the uncertainty clears and uranium demand picks up, we expect prices will move significantly higher, and we will be in the enviable position of being able to respond with expanded capacity at our low-cost, world-class assets. With Japan continuing down its path to restarting reactors, and with construction of new nuclear plants fueling increasing future uranium requirements, we believe our focus on value and on our tier-one assets will allow us to maintain our competitive position, and thrive in a rising market.”

Summary of first quarter results and developments:

• Net losses of $18 million; adjusted net losses of $29 million: Severance costs related to strategic changes, the TEPCO contract termination, continued market and price weakness, and strengthening of the Canadian dollar impacted our first quarter results in 2017 compared to 2016.
• Maintaining annual guidance: Our 2017 financial outlook and production expectations remained unchanged after the first quarter.
• Average realized price weighted to fourth quarter: In the second and third quarters, we expect the pricing on deliveries in our uranium segment to yield results similar to the first quarter, with a higher average realized price expected on deliveries in the fourth quarter; our expected 2017 annual average realized price remains unchanged at $49.00 per pound.
• Strategic focus starting to positively impact results: Our results reflect significant decreases in direct administration costs and cash production costs compared to last year; we continue to focus on lowering our costs and improving efficiency.