More connecting of the dotsExtracts from the Cameco first 1/4...

More connecting of the dots
Extracts from the Cameco first 1/4 investors presentation. I have highlighted the critical bits.

Tim Gitzel - President and Chief Executive Officer

Grant Isaac - Senior Vice President and Chief Financial Officer

Sean Quinn - Senior Vice President, Chief Legal Officer and Corporate Secretary

Unidentified Analyst

Yeah. What I'd like to ask you about is global laser enrichment, if you can go into some detail about that and about whether that's being ramped up to increase production for all this new demand that's going on?

Tim Gitzel

Yeah, that's a great question, Paul. And it's something - I'm going to pass it over to Sean in a minute just to give an update on where we're at. But it's super exciting for us. It's something that we see now as kind of a triple threat for us with the discussion we're having this morning where you take 40% of the world's enrichment kind of tuck it away and say it's not available to the Western markets, all of a sudden, everybody is looking for enrichment.

And so as we said in our comments, people are looking for just pure swoosh for LEU. They're also looking for HALEU, the high assay, low enriched uranium that's going to feed the SMRs going forward. Everybody thought the Russians were going to supply that for the first - for the first 10 years or so until somebody could build a HALEU plant. So no, that's on the front burner.

And then, of course, just those tails, the DOE tails, we see as a potential new mine in the United States. You re-enrich those sales not only you get the uranium component, but you've got dormant conversion, if you like, sitting in there. And so when you re-enrich you get - you have six and so which is hot demand today. So it's - we're really - by our excitement level has gone up a few octaves on thatone.

But let me turn it to Sean just to give you an update as to where we're at and we stood up the company and just some of the progress we've made in the last months.

Sean Quinn

Sure. Thanks, Tim. I will add to what you said that the underpinning of GLA remains the tails disposition agreement that we have with the GLE [ph] but we are actively considering- we'll be considering whether there is a plan to accelerate development totake advantage of the openings we see in the market, particularly forenrichment and conversion. And whether there's some way to get some assistance from that in the various initiatives that are being undertaken by the U.S., mostly led by the DOE to see if we canadvance deployment and perhaps change the focus of the first facility that we're considering in Paducah, so that it would provide more commercial through HALEU and tap the conversion opportunity even more. So more to come on that over thenext few months.

Unidentified Analyst

Okay. Great. I'm just wondering - I understand that you guys have an option to increase your share, I think, to 70% or 75% from the current 49%. Isthat something that you're considering?

Tim Gitzel

We do, and we are, yes,absolutely.

The next question is from Patrick Sogeti, a private investor. Please go ahead.

Unidentified Analyst

Good morning, guys. So you guys seem to have the business under control. With the cash balance now ballooning and perhaps some inspiration from the oil and gas sector, are there any discussions beyond raising the dividend to manage the share price more directly such as buybacks?

And then my second unrelated question is on the Canada tax port website [ph] your docket is ready to be scheduled because you are hearing. So I'm just wondering if there's any time line for that?

Tim Gitzel

So Patrick, thanks for the question. I would say we - hopefully, we've had things under control at all times here, but I'm going to turn it to Grant to talk about capital allocation, just our principles around capital allocation. Then I'll say a word about the CRE and pass it to Sean for an update on that, so...

Grant Isaac

Yeah. In terms of capital allocation, we are still in the mode of matching risk with reward. Ours is a market where you're hearing us, I think, talk very optimistically about the demand that's ahead of us. But keep in mind, it's still ahead of us. There's still a lot of value we need to capture through our contracting.

We haven't done as much as we'd want to yet. That's why we're still technically in a supply discipline mode. And as we're in a supply discipline mode, we're technically over contracted. We have more commitments than we have production coming in the door, which means we're going to make some purchases along the way or access some of the long-term purchases that we've done.

All of that suggests to me that we're still in that self-managed risk mode as the market evolves. I'm pretty optimistic about how it evolves, of course. Andat the same time, we're seeing opportunities that, as Tim mentioned, withrespect to global laser enrichment, opportunities that just really have beenthrust to the forefront just in the last 60 days as a result of this effort toexclude Russia.

So from a capital allocation point of view, between balancing the risk and looking at the reward opportunities, we're right where we want to be in terms of the balance sheet. The trigger for us thinking about different moves, of course, is shoring up, building those homes for that production, getting our planned production back to capacity, getting out from under care and maintenance costs, matching our commitments with Tier 1 production, which when you look at our financials as they're starting to improve already, this is just the beginning. I mean we still have care and maintenance costs in there that are going to go away as McArthur ramps up.

And so we're just in that mode where we still think it's prudent to be cautious and let this market evolve. And that's what gives us the ability to be strategically patient and not have to chase contracts in this market, but let them evolve so we can capture the terms and contracts that we want.

When we achieve those kind of principles, thenit will be time to review the cash balance versus the run rate cash flow comingin from that contract portfolio as it's rebuilt, and then we'll be examiningall of those questions. Do we have an opportunity to create the kind of returnsour investors would expect by investing. And we don't have anything we canpoint to, then what's the best way to return that money to our owners becausethey're far better off with it than we are. And under that analysis, alloptions would be on the table