Thread by @quakes99

Today's Cameco $CCO Fireside Chat with CEO Tim Gitzel is now available for replay. Highly recommend #uranium investors spend 30 minutes listening to Tim's #U3O8 & #nuclear market analysis & company activities. In this thread I'll provide some highlights. cibcvirtual.com/banff2020/s/37…

Section 232 overhang gone but most #nuclear utilities remain paralyzed waiting for #Trump to act on #NFWG report he now has in hand. Frozen #Uranium sector still not thawed as majority of fuel buyers prefer to wait for clarity. 🥶

Cameco has taken 25M lbs out of #uranium supply since 2016 thru multiple mine closures & #Kazahstan has cut 20% thru 2021, creating a 50M lbs #U3O8 primary supply deficit today. Inventories are being drawn down significantly.

#Nuclear #energy is coming back into vogue. We added 25M lbs to our sales portfolio in Q1 last year. We like contracts with market pricing at time of delivery & will consider term contracts with a 4 handle. We have more irons in the fire today than at any time since Fukushima.

With China ramping up #nuclear capacity and big mines like Cigar Lake running down by 2030, a crunch is coming and we'll be ready. We're keeping out best Tier 1 #uranium lbs in the ground for now & are the biggest buyer in the spot market to fill our delivery contracts.

In order to restart McArthur/Key we need to rebuild our sales portfolio with best priced contracts & having some success. C&M costing $7.5M/month. Working on modernization program for McArthur/Key & will need to re-hire & train 800-1000 workers as per #Nuclear Safety Act.

From point of making restart decision it will take 1 year just to get McArthur Mine & Key Lake Mill into operating state & a year to get to 4M lbs #uranium production & another 1+ years to reach previous 18M lbs/yr level.

Conversion is leading the #uranium story.. going from a massive oversupply at $4/KgU to $22/KgU in major supply shortage over past 14 months or so. We think it's a harbinger of things to come for uranium.

Cameco is in a solid financial position. Took off $500M debt last year & have $900M cash in a super strong balance sheet. CRA Appeal ruling is imminent, with $300M + costs that could come as well in 2020.

Commenting on Japan and #uranium inventories, overall #nuclear utilities have consumed 1.2B lbs in recent years but only bought back 450-500M. 880M lbs need to be procured to cover contracts. We have not seen Japan putting material into the market, except 150K lbs via trader.

We've actually sold #uranium to Japan. Their restart process is going very slowly tho, just 9 restarts plus another 16 in the restart pipeline. Every Japanese utility has a different view & operating plan so you can't think of them as Japan Inc.

#ESG is dominating the #investment conversation. Cameco is becoming more popular as a #nuclear #CleanEnergy story with strong emphasis on aboriginal issues & economy, environment, water, emissions, is a strong selling point with customers that gives us a competitive advantage.

#Uranium spot market is just a merry-go-round with same lbs being tossed back and forth between traders. Cameco was largest actual buyer in 2019 with more lbs to buy this year but still sticking to policy of not being buyer of last resort, waiting for other buyers to participate.

Cameco has a solid solid balance sheet, we're confident on CRA appeal, we will consider making new investments when #uranium market becomes constructive. McArthur could increase 7M lbs/yr, which would be first priority lbs then may make further investments for future production.

Finally, #China has become very aggressive at securing #uranium supply to feed their #nuclear build-out that is back on track. They'd own us by 5 o'clock if we went up for sale today. They already have interest in #Canada with Fission & NexGen. China will be part of our future.