Executive Summary / Key Takeaways

• Cameco Corporation ($CCJ) is strategically positioned to capitalize on the global nuclear energy renaissance, driven by increasing demand for clean, secure, and reliable power, particularly from emerging sectors like AI and data centers.
• The company's disciplined, long-term contracting strategy and Tier 1 uranium assets provide a robust foundation, ensuring supply is matched with demand and protecting against market volatility while maintaining exposure to rising prices.
• The transformative acquisition of Westinghouse Electric Company has significantly expanded Cameco's reach across the nuclear fuel and reactor life cycles, offering substantial growth opportunities in new reactor builds and services, with an expected 6-10% adjusted EBITDA CAGR over the next five years.
• Despite geopolitical uncertainties and operational challenges at JV Inkai, Cameco maintains a strong financial position with robust cash flow generation, a fully repaid acquisition loan, and a commitment to dividend growth, underpinning its ability to self-manage risk and invest for future growth.
• The uranium market faces an "unavoidable" supply squeeze, with 70% of global reactor fuel needs through 2045 remaining uncovered, creating a compelling long-term pricing environment that Cameco is uniquely poised to leverage.

The Nuclear Renaissance and Cameco's Enduring Role

Cameco Corporation, established in 1987, stands as a central pillar in the burgeoning global nuclear energy sector, a testament to over 35 years of experience across the nuclear fuel and reactor life cycles. The company's overarching strategy, consistently emphasizing full-cycle value capture, disciplined marketing, and aligning production with long-term contracts, has proven resilient through various industry cycles and geopolitical shifts. This approach has positioned Cameco not merely as a supplier, but as a critical enabler of global energy security and clean energy solutions.

The world is witnessing an undeniable nuclear renaissance. Governments globally, from Canada and the U.S. to Poland and the Czech Republic, are reaffirming commitments to nuclear power, extending reactor lives, and planning new builds. This shift is driven by a confluence of factors: the urgent need for decarbonization, heightened energy security concerns amid geopolitical instability, and a surging demand for reliable, carbon-free electricity, notably from energy-intensive industries like AI and data centers. The World Bank's decision to lift its decades-old ban on nuclear financing further underscores this supportive global environment. Cameco, with its Tier 1 assets in stable jurisdictions and strategic investments, is uniquely poised to power this future.

Technological Edge and Operational Excellence

Cameco's competitive moat is deeply rooted in its proprietary mining assets and advanced operational technologies across its Uranium and Fuel Services segments. In the Uranium segment, the company leverages its world-class deposits, particularly McArthur River/Key Lake and Cigar Lake in Northern Saskatchewan. These Tier 1 assets benefit from advanced mining techniques, such as ground freezing, which enables safe and efficient extraction from challenging geological formations.

A prime example of Cameco's operational excellence and technological foresight is the record-setting performance at the Key Lake mill in 2024, which processed 20.3 million packaged pounds, a new annual record for any uranium mill globally. This achievement was a direct result of counter-cyclical investments in automation, digitization, and optimization projects undertaken during periods of care and maintenance. These initiatives have not only "bent the cost curve" by improving efficiency ahead of inflationary pressures but have also enabled a higher baseline production level without requiring significant new capital expenditures. This strategic investment in technology provides tangible benefits, enhancing operational reliability and cost-effectiveness, thereby strengthening Cameco's competitive position against rivals.

In the Fuel Services segment, Cameco's operations include refining, conversion (UF6 and UO2), and heavy water reactor fuel bundle fabrication. The commissioning of a new closed-loop water system at Port Hope, for instance, has not only delivered positive environmental and sustainability benefits but also eliminated the annual summer maintenance outage. This technological improvement directly contributed to a 60% increase in fuel services production in Q3 2024 compared to the previous year, demonstrating how targeted investments in process infrastructure translate into enhanced operational capacity and efficiency. The company is also committed to exploring entry into the enrichment space through projects like GLE, which is currently undergoing TRL6 evaluation to prove nuclear reliability, with first production expected by 2030 focused on re-enriching depleted UF6 tails.

Westinghouse: A Strategic Expansion into Reactor Technology

The acquisition of a 49% interest in Westinghouse Electric Company in 2024 marked a transformative expansion for Cameco, extending its influence across the entire nuclear reactor life cycle. Westinghouse, a leading nuclear reactor technology OEM, provides critical products and services, including AP1000 reactor technology, outage and maintenance, engineering support, and plant modification services. This investment positions Cameco as a "central pillar" supporting the global wave of new nuclear plans.

Westinghouse's AP1000 reactor technology is a key differentiator. It is an advanced Generation III+ reactor design, already licensed and operating (e.g., at Plant Vogtle in Georgia, U.S.), offering proven reliability and safety. This "deployable design" is a significant advantage in a market seeking standardized and sequenced new builds to accelerate deployment. Westinghouse's interim CEO, Dan Sumner, highlighted plans to build 10 large AP1000 reactors in the U.S. by 2030, a direct response to President Trump's executive orders aiming to quadruple U.S. nuclear power by 2050. Furthermore, a partnership with Google (GOOGL) to use AI tools aims to make AP1000 construction an "efficient, repeatable process," potentially addressing historical cost and schedule overruns in nuclear construction.

The recent resolution of a technology and export dispute with KEPCO (KEP) and KHNP has transformed Westinghouse's relationship with Korean partners from potential competitors into "important collaborators." This agreement significantly expands Westinghouse's energy systems business into new markets, including the Czech Republic, where Westinghouse is participating in a construction project for two nuclear reactors at the Dukovany power plant. This opportunity, along with potential projects in Poland, Bulgaria, Slovenia, and Ukraine, represents substantial upside not fully valued at the time of the acquisition. While the five-year adjusted EBITDA CAGR guidance for Westinghouse remains a conservative 6-10%, this figure does not yet incorporate the financial impact of these major new build projects until they reach Final Investment Decision (FID).

Financial Fortitude and Disciplined Growth

Cameco's financial performance reflects its disciplined strategy and the improving nuclear market fundamentals. In Q2 2025, the company reported strong overall financial performance, with uranium revenues increasing 47% to $510 million (CAD 705 million) and sales volumes up 40% year-over-year to 8.7 million pounds. The average realized price for uranium rose 5% to CAD 81.03 per pound, benefiting from long-term fixed-price contracts despite a 17% decline in the average U.S. dollar spot price. This underscores the value of Cameco's long-term contracting strategy in a volatile market. The Fuel Services segment also saw robust growth, with Q2 2025 production up 10% and sales volume surging 52%, contributing to a 37% increase in revenues to $117 million (CAD 162 million).

The Westinghouse segment, while reporting a net loss in Q1 2025 due to acquisition-related amortization, demonstrated a 19% improvement in adjusted EBITDA compared to Q1 2024. Cameco's 49% share of Westinghouse's adjusted EBITDA for 2025 is now projected to be between USD 525 million and USD 580 million, a significant increase of USD 170 million from previous guidance, primarily due to the Dukovany project. This strong performance contributed to Cameco's pre-tax net income jumping 46% in Q2 2025.

Cameco maintains a robust balance sheet, guided by its investment-grade rating. As of Q2 2025, the company reported $716 million in cash and cash equivalents, $1 billion in total debt, and a $1 billion undrawn revolving credit facility. Demonstrating strong financial hygiene, Cameco fully repaid the $600 million term loan used for the Westinghouse acquisition by January 2025. The company also received its first cash distribution from Westinghouse ($49 million) in February 2025 and an $87 million dividend from JV Inkai in April 2025. Capital allocation priorities remain conservative, focusing on risk-adjusted growth opportunities within its asset base, followed by returns to shareholders. The board has approved an increase in the dividend from $0.12 in 2023 to $0.16 for 2024, with a plan to at least double the 2023 dividend to $0.24 per share through 2026, signaling confidence in future cash flow generation.

Outlook, Guidance, and the Unavoidable Uranium Squeeze

Cameco's outlook for 2025 remains strong, underpinned by its long-term contract portfolio and Tier 1 assets. The company expects to produce 18 million pounds (100% basis) at both McArthur River/Key Lake and Cigar Lake. JV Inkai is targeting 8.3 million pounds (100% basis), with Cameco's purchase allocation at 3.7 million pounds, expected to ship in the second half of 2025. The Fuel Services division anticipates annual production of 13-14 million kgU of combined products. The annual average realized price for the Uranium segment is projected to see a slight increase due to rising market prices.

Management's guidance for Westinghouse's adjusted EBITDA growth of 6-10% over the next five years is considered conservative, as it largely excludes the impact of major new build projects until they reach FID. This implies significant upside potential as projects like the 10 AP1000s planned for the U.S. or the 14 potential gigawatt-scale reactors in Canada move forward. Analysts are bullish on uranium prices, with Morgan Stanley (MS) expecting $87/lb by Christmas 2025, and Citi (C) forecasting $100/lb next year, potentially peaking at $125/lb in a bull market. These projections are driven by China's nuclear expansion, the evolution of SMRs, and "overfeeding" by enrichment companies.

The long-term uranium market faces an "inevitable and unavoidable" supply squeeze. Utilities have purchased less than 40% of their uranium needs through 2040, leaving approximately 3.2 billion pounds to be contracted, with the source of 1.3 billion pounds of annual primary production currently unknown. This structural deficit is exacerbated by a decade of underinvestment and the anticipated end of mine life for major sources like Cigar Lake by 2036, which alone accounts for 10% of global demand. Cameco's patient and disciplined approach to contracting, refusing to "front-run the market" with uncommitted supply, positions it to command higher prices as this demand materializes.

Navigating a Complex Landscape: Risks and Competitive Dynamics

Cameco operates within a complex global landscape, facing both operational and geopolitical risks. Operational challenges include the inherent difficulties of uranium mining, such as ground freezing, developing new mining areas, securing skilled labor (exacerbated by events like wildfires), and commissioning new equipment. At JV Inkai, risks persist regarding sulfuric acid availability, supply chain disruptions, and transportation challenges via the Trans-Caspian corridor. While Cameco has never missed a delivery, these factors can impact production timing and costs.

Geopolitical and trade policy uncertainties also pose risks. The U.S. threat of a 10% tariff on Canadian energy products, including uranium, is a notable concern. However, Cameco has proactively mitigated this by revising contract terms to place tariff responsibility on customers and strategically prepositioning material. The company believes such tariffs would effectively raise the uranium price by 10% as non-tariff countries adjust their offers, ultimately making the market more price-supportive. The role of Russia in the nuclear fuel cycle remains a key uncertainty. While U.S. legislative bans on Russian enriched uranium imports are in place, the potential for waivers or a future peace settlement could impact market dynamics. Cameco, however, views the likelihood and consequence of Russian material significantly disrupting its long-term contracts as low, given the increased global demand and the switching costs utilities have already absorbed to secure Western supply.

In the competitive landscape, Cameco stands out with its specialized expertise and integrated full-cycle offerings, from mining to fuel services and reactor technology. While diversified mining giants like BHP Group (BHP) and Rio Tinto Group (RIO) have broader commodity exposure and potentially greater financial resilience during market downturns, Cameco's focused nuclear strategy provides a deeper understanding of the nuclear fuel cycle and stronger, long-term customer relationships. Smaller, more exploration-focused competitors like Uranium Energy Corp (UEC) and Denison Mines Corp (DNN) offer agility in new deposits but lack Cameco's operational scale, established production, and comprehensive service offerings. Cameco's Tier 1 assets and disciplined production strategy allow it to be a "strategic and deliberate buyer" in the spot market, capitalizing on opportunistic purchases when others sell below perceived value. The company's commitment to long-term contracts, with floors in the $70s and ceilings in the $130s (escalated), reflects its confidence in future pricing and its refusal to be swayed by short-term spot market softness caused by "clumsy" selling. This strategic patience, backed by a strong balance sheet, is a significant competitive advantage.

Conclusion

Cameco Corporation is not merely participating in the nuclear energy resurgence; it is actively shaping it. Through a combination of world-class Tier 1 assets, a disciplined and patient market strategy, and the transformative acquisition of Westinghouse, Cameco has established itself as a resilient, full-cycle provider uniquely positioned to meet the escalating global demand for clean, secure, and reliable power. The company's operational excellence, driven by strategic investments in technology and optimization, underpins its ability to deliver consistent production and manage costs effectively.

With a robust financial position, a clear path for dividend growth, and a conservative yet optimistic outlook for its Uranium, Fuel Services, and Westinghouse segments, Cameco offers a compelling investment thesis. The looming structural deficit in uranium supply, coupled with increasing global commitments to nuclear power and the burgeoning energy needs of advanced technologies like AI, creates an environment where Cameco's long-term value proposition is set to strengthen significantly. While geopolitical and operational risks persist, Cameco's proactive risk management and strategic positioning against its competitors ensure it remains a formidable force, ready to capitalize on the "unavoidable" shift towards a nuclear-powered future.