quakes99 wrote: This is a 32-minute "must listen" to get the full story from Tim Gitzel, not just the cherry-picked bits taken out of context. Here's the link:
https://www.cibcvirtual.com/whistler2018/cameco?return_to=%2Fwhistler2018%2Fcameco Highlights that I noted:
They think they now have hands on the levers that will have an impact on the uranium market, making significant supply cuts over the past 2 years. Other producers joining in on supply discipline so 2018 could see significant market changes as a result.
Have reduced workforce by about 40%... closed Rabbit Lake in 2016 - took 7M lbs out.
Kazakhs cut 10% in 2017 which was 5-6M lbs out.
Shutting down McArthur/Key... now down and last few employees finishing up - takes 18M lbs out in 2018 if only 10 months.... will stay closed longer if prices don't rise.
Kazakhs announced 20% cut for 2018. Still confusion on exactly what the end result is. Looks like the 20% cut results in the same level as the 10% cut last year over the next few years. Expecting Kazakhs to trim more production.
Expecting to sell 26M lbs of existing inventory into contracts over the next 5 years. That will significantly increase the company's cash position as that inventory is sold without incurring additional production costs.
Nuclear demand continuing to grow 1-2% per year. Could see that accelerate given huge Electric Vehicle demand... all EV by 2025 goal will increase electrical demand by something like 50%. Solar/Wind can't meet demand running at only 30% capacity factor compared to nuclear at near 100%. Can't run major infrastructure on renewables. Nuclear needed as part of the mix. China talking 100 more reactors by 2030.
Major shift in philosophy in Saudi Arabia. Rather than use their oil for domestic power they make more money selling it abroad. Expect to build 17 reactors. Bids for first in next few months. Russians building in Egypt & Turkey. Demand is for baseload power & desalination, etc. UAE reactors starting up this year.
Areva is joining in on the production cuts, reduced workforce/production at Somair in Niger.
Paladin is out.
ERA's Ranger mine will be done in 2019-2020.
Cigar Lake will be done in 2027.
Should be raising capital to finance next big mine but not spending a dime on that with these low prices as they are.
Buying 13-14-15M lbs on Spot market, maybe? (wasn't clear to me)
McArthur is expected to be shut down for 10 months so they can keep workforce ready to return to work. Could be shorter 6-7-8 months if prices rebound, but if goes 10 months without prices rising substantially then shut down will go beyond 10 months but will not be able to retain staff so that will be a problem if it comes to that.
Bruce Power has been setting up supply contracts with Cameco for 2020-2030 post refurb.
Need higher prices and utilities with long view are willing to pay higher for secure supply.
Expecting 10M lbs/yr underfeeding to continue, though he says customers are now getting wise to what enrichers are doing... buying 4 units of U, using only 3 for enrichment then selling the 4th unit back into Spot market to the same customers who bought the 4. Now customers are catching on and ordering less, which will reduce underfeeding. Also, Japan's reactors require enrichment so as they restart more that will also reduce need to underfeed for extra cash.
Expecting 5 Japan restarts in the next couple of months.
CRA decision could be anytime in the next 12 months. CRA only going to give them 24 hours notice prior to decision being released, so they are trying to be prepared as best they can for a quick response. Looking forward to that being done.
TEPCO contract cancellation worth over $1B is going to arbitration in January 2019. If successful could see $800M+ coming from that.
Apologies if I misheard or misrepresented what was said.
Those were the points I noted. Lots more in there if you listen to the whole thing.
Cheers!