00:00You know, you and I were just remarking how busy it's been here.
00:03Why do you feel it's so much busier this year than on Sarah Week by S&P Global in the
00:08past?
00:08Well, I think it's just energy's back in everybody's conversation.
00:13It is the thing we took for granted.
00:15We expected when we pulled up to the pumps, the gas price would be reasonable.
00:20And when we fired up our furnace, the gas price, natural gas price would be good.
00:26And, you know, when we flipped on the switch, the lights would come on.
00:29And I think the last couple of years have reminded us that energy is not something to take for granted.
00:33It's something we need to be very thoughtful about.
00:35We're surging interest, of course, in nuclear energy.
00:37Is that driving up the demand?
00:39How is it driving up the demand for uranium?
00:41Well, in a couple of ways.
00:43I mean, if we think about the first big energy reminder in the nuclear industry, it was the Russian invasion
00:50of Ukraine, which upset the fuel markets.
00:53And you had a number of customers, Eastern, Central Europe, really wanted to de-risk from Russian supply of fuel.
01:01So that immediately led to a fuel supply interest in nuclear.
01:05But now with the Iran conflict, you have a reminder that if, you know, if the world's going to rely
01:12upon things like gas, there's going to be volatility to it.
01:16So nuclear's characteristics, it's baseload, it's 24-hour, it's carbon-free, and it's very secure and robust.
01:24And it's not reliant upon a gas pipeline that's coming to the plant today or coal trains that are coming
01:30to the plant.
01:31It's very hardened electricity.
01:33And those characteristics are being revalued and repriced.
01:37And that's being reflected in just a strong demand for nuclear.
01:40Do you see uranium prices hitting the highs they hit two years ago?
01:43Well, we do.
01:44We think that despite the fact that we haven't been at replacement rate contracting in uranium, which is the notion
01:52that utilities who almost exclusively buy forward under term contracts, on an annual basis, they have not been buying new
01:59material to replace what they've been consuming off old contracts, which means by definition, they're below replacement rate.
02:05They haven't been at replacement rates since 2012.
02:07And despite that, we're already at $90 U.S. uranium.
02:12It's very interesting to think we're at prices that we've only ever discovered on the back end of a big
02:17contracting cycle, never on the front end.
02:20So it feels pretty constructive.
02:21It just reflects that while there is uranium out there, you need a strong enough price in order to be
02:28incented to go get it as a producer.
02:30And right now, we're just not quite seeing those prices yet, but they feel like they're coming.
02:36The demand is building.
02:36Your company owns 49% of Westinghouse.
02:39The company is expected to benefit from an $80 billion U.S.-Japan deal.
02:43That was announced in October.
02:44We haven't really gotten any specific details on this, so can you bring us up to date?
02:49Sure can.
02:50A lot of momentum since that deal was signed.
02:53A couple of things, a couple of big projects to think about under it.
02:56Number one is part of the strategic partnership was a recognition that if you want utilities to start building, you
03:04have to give them confidence in things like the supply chain.
03:07They have to know they're not taking on the risk of restarting a global supply chain all on their own.
03:13So as part of this package was a desire to order long lead items ahead of time, just really stimulate
03:21that global supply chain with a big enough order, not just two reactors, but say for 10 reactors.
03:26The second is a project to identify where these reactors are going to be and the financial model they're going
03:32to be built under.
03:32And then the third is what is the financing going to look like as the U.S. and Japan work
03:38together on energy investments.
03:40So this wasn't just an announcement and then people went away and did other things.
03:44There's a lot of momentum to it.
03:45And in nuclear terms, things are moving quickly.
03:48These are big, complicated deals and a lot of attention is being paid to it.
03:52When you talk about long lead time for supplies, is anything being interrupted because what we're seeing in the Middle
03:58East?
03:59At the moment, no.
04:00So the Middle East wouldn't have been a big provider of any of the long lead time items in the
04:07nuclear island part of our reactors.
04:10It really is just a matter of stimulating the supply chain with Western demand for a fleet build model to
04:18be deployed in the United States, perhaps in Canada, but then in countries like Poland, Slovakia, Slovenia, Bulgaria.
04:25It's a pretty exciting time.
04:26Now, do you expect more long-term contracts this year following that blockbuster agreement struck between Canada and India last
04:33month?
04:33Yeah, the uranium demand is picking up more customers, be they countries or utilities, understand they need to lock up
04:44more of their forward demand for uranium.
04:46So we are seeing long-term contracting build and build towards that replacement rate level that we spoke about earlier.
04:52So I think something like India coming along and signing a big deal with Cameco, but also signing a big
04:58deal with our big competitor, Kazatomprom, the state-owned enterprise in Kazakhstan, just means more supply is being diverted from
05:05Western fuel buyers and they're going to have to get more active and secure more uranium under long-term contract.
05:11And that's good for uranium price discovery.
05:15What impact will NextGen's Rook project have on the uranium market?
05:19We're talking about how everything is affecting it.
05:21What impact do you think that will have?
05:23Well, it depends.
05:24There is a great project.
05:25It's a great deposit in the ground on the west side of the Athabasca Basin in Saskatchewan.
05:31It's a part of the basin that hasn't produced uranium for decades.
05:34It's not infrastructure rich, so a lot of infrastructure has to be put in.
05:39But ultimately, uranium is a very special commodity in that there is no fundamental in-year demand for uranium.
05:47There isn't a reactor on the planet loading a fuel bundle in the next 12 months that needs uranium in
05:52the next 12 months.
05:53They've already procured it.
05:55So we've given the blueprint to the world of how you bring on big supply.
05:58You bring it on in a long-term contract portfolio that you've built.
06:03And if you do that and you do it well, there's no impact.
06:06The material is spoken for.
06:08It doesn't hit the spot market.
06:10It goes into existing contracts.
06:12And then you continue to contract forward.
06:15So it need not be negative if it's marketed properly.
06:18Appreciate your time.
06:19Thank you so much.
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