Investor Information
Common Shares
Toronto (CCO) | New York (CCJ)
Transfer Agents and Registrars
The registrar and transfer agent for Cameco’s common shares is TSX Trust Company. For information on common shareholdings,
dividend cheques, lost share certificates and address changes, contact:
Canada
TSX Trust Company
P.O. Box 700, Station B
Montreal, Quebec H3B 3K3
1-800-387-0825 or
1-416-682-3860 (outside of North America)
www.tsxtrust.com
USA
American Stock Transfer &
Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Energizing a
clean-air world
Annual Meeting
The annual meeting of shareholders of Cameco Corporation is
scheduled to be held on May 10, 2022 at Cameco’s head office
in Saskatoon, Saskatchewan.
Inquiries
Dividends
Cameco Corporation
2121 - 11th Street West
Saskatoon, Saskatchewan S7M 1J3
Phone:
306-956-6200
Fax:
306-956-6201
For comprehensive financial information, visit:
cameco.com
In 2021, our board of directors declared a dividend of $0.08 per
common share, which was paid December 15, 2021.
A dividend of $0.12 per common share has been declared for
2022, payable on December 15, 2022 to shareholders of record on
November 30, 2022. The decision to declare an annual dividend
by our board is reviewed regularly and will be based on our cash
flow, financial position, strategy and other relevant factors including
appropriate alignment with the cyclical nature of our earnings.
2021 Annual Report
Management’s discussion and analysis
February 9, 2022
8
13
19
27
30
31
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87
89
2021 PERFORMANCE HIGHLIGHTS
MARKET OVERVIEW AND DEVELOPMENTS
OUR STRATEGY
OUR ESG PRINCIPLES AND PRACTICES
MEASURING OUR RESULTS
FINANCIAL RESULTS
OPERATIONS AND PROJECTS
MINERAL RESERVES AND RESOURCES
ADDITIONAL INFORMATION
2021 CONSOLIDATED FINANCIAL STATEMENTS
This management’s discussion and analysis (MD&A) includes information that will help you understand management’s
perspective of our audited consolidated financial statements (financial statements) and notes for the year ended December 31,
2021. The information is based on what we knew as of February 8, 2022.
We encourage you to read our audited consolidated financial statements and notes as you review this MD&A. You can find
more information about Cameco, including our financial statements and our most recent annual information form, on our
website at cameco.com, on SEDAR at sedar.com or on EDGAR at sec.gov. You should also read our annual information form
before making an investment decision about our securities.
The financial information in this MD&A and in our financial statements and notes are prepared according to International
Financial Reporting Standards (IFRS), unless otherwise indicated.
Unless we have specified otherwise, all dollar amounts are in Canadian dollars.
Throughout this document, the terms we, us, our, the Company and Cameco mean Cameco Corporation and its subsidiaries,
unless otherwise indicated.
Caution about forward-looking information
Our MD&A includes statements and information about our expectations for the future. When we discuss our strategy, plans, future financial
and operating performance, or other things that have not yet taken place, we are making statements considered to be forward-looking
information or forward-looking statements under Canadian and United States (US) securities laws. We refer to them in this MD&A as forward-
looking information.
Key things to understand about the forward-looking information in this MD&A:
It typically includes words and phrases about the future, such as: anticipate, believe, estimate, expect, plan, will, intend, goal, target,
forecast, project, strategy and outlook (see examples below).
It represents our current views and can change significantly.
It is based on a number of material assumptions, including those we have listed on page 4, which may prove to be incorrect.
Actual results and events may be significantly different from what we currently expect, due to the risks associated with our business. We
list a number of these material risks on page 3. We recommend you also review our most recent annual information form, which includes
a discussion of other material risks that could cause actual results to differ significantly from our current expectations.
Forward-looking information is designed to help you understand management’s current views of our near- and longer-term prospects,
and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by securities
laws.
Examples of forward-looking information in this MD&A
our view that we have the strengths to take advantage of the
world’s rising demand for safe, reliable, affordable and
carbon-free energy
we will continue to focus on delivering our products
responsibly and addressing the environmental, social and
governance (ESG) risks and opportunities that we believe
will make our business sustainable and will build long-term
value
our expectations about 2022 and future global uranium
supply, consumption, contracting, demand and the market
including the discussion under the heading Market overview
and developments
our expectations for the future of the nuclear industry,
including that nuclear power must be a central part of the
solution to the world’s shift to a low-carbon climate-resilient
economy
our efforts to participate in the commercialization and
deployment of small modular reactors (SMRs) and increase
our contributions to global climate change solutions by
exploring SMRs and other emerging opportunities within the
fuel cycle
our views on our ability to self-manage risk
the discussion under the heading Our strategy
the discussion under the heading Our response to the
COVID-19 pandemic, including the priority of employee
health and safety in our plans
our expectations regarding the operation of, and production
levels for, the Cigar Lake mine and McArthur River/Key Lake
operation
the discussion under the heading Our ESG principles and
practices: A key part of our strategy, reflecting our values,
including our belief there is a significant opportunity for us to
be part of the solution to combat climate change and that we
are well positioned to deliver significant long-term business
value
our expectations for uranium purchases, sales and deliveries
our intentions regarding our 2022 annual dividend payment
2 CAMECO CORPORATION
the discussion of our expectations relating to our Canada
Revenue Agency (CRA) transfer pricing dispute, including
our expectations regarding receiving refunds and payment of
disbursements from CRA, our confidence that the courts
would reject any attempt by CRA to utilize the same or
similar positions for other tax years currently in dispute, and
our belief that CRA should return the full amount of cash and
security that has been paid or otherwise secured by us
the discussion under the heading Outlook for 2022, including
expected business resiliency, expectations for 2022 average
unit cost of sales, average purchase price per pound,
deliveries and production, 2022 financial outlook, our
revenue, expectations for 2022 cash balances, adjusted net
earnings and cash flow sensitivity, and our price sensitivity
analysis for our uranium segment
the discussion under the heading Liquidity and capital
resources, including expected liquidity to meet our 2022
obligations and our expectations for our uranium contract
portfolio to provide a solid revenue stream
the outlook for our uranium and fuel services segments for
2022
our expectation that the uranium contract portfolio we have
built will continue to provide a solid revenue stream
our expectation that our cash balances and operating cash
flows will meet our anticipated 2022 capital requirements
our expectations for future capital expenditures
our expectation that in 2022 we will be able to comply with all
the covenants in our unsecured revolving credit facility
life of mine operating cost estimates for the Cigar Lake and
Inkai operations
future plans and expectations for uranium properties,
advanced uranium projects, and fuel services operating
sites, including production levels and suspension of
production at certain properties
our expectations related to care and maintenance costs and
operational readiness costs
our mineral reserve and resource estimates
our decommissioning estimates
Material risks
actual sales volumes or market prices for any of our products
or services are lower than we expect for any reason,
including changes in market prices, loss of market share to a
competitor, trade restrictions or the impact of the COVID-19
pandemic
we are adversely affected by changes in currency exchange
rates, interest rates, royalty rates, or tax rates
our production costs are higher than planned, or our cost
reduction strategies are unsuccessful, or necessary supplies
are not available, or not available on commercially
reasonable terms
our strategies may change, be unsuccessful or have
unanticipated consequences
changing views of governments regarding the pursuit of
carbon reduction strategies or our view may prove to be
inaccurate on the role of nuclear power in pursuit of those
strategies
our estimates and forecasts prove to be inaccurate, including
production, purchases, deliveries, cash flow, revenue, costs,
decommissioning, reclamation expenses, or receipt of future
dividends from JV Inkai
we are unable to enforce our legal rights under our existing
agreements, permits or licences
we are subject to litigation or arbitration that has an adverse
outcome
that we may not receive expected refunds and payments
from CRA
that the courts may accept the same, similar or different
positions and arguments advanced by CRA to reach
decisions that are adverse to us for other tax years
the possibility of a materially different outcome in disputes
with CRA for other tax years
that CRA does not agree that the court rules for the years
that have been resolved in Cameco’s favour should apply to
subsequent tax years
that CRA will not return all or substantially all of the cash and
security that has been paid or otherwise secured in a timely
manner, or at all
there are defects in, or challenges to, title to our properties
our mineral reserve and resource estimates are not reliable,
or there are unexpected or challenging geological,
hydrological or mining conditions
we are affected by environmental, safety and regulatory
risks, including workforce health and safety or increased
regulatory burdens or delays resulting from the COVID-19
pandemic or other causes
necessary permits or approvals from government authorities
cannot be obtained or maintained
we are affected by political risks, including the recent and
any potential future unrest in Kazakhstan
operations are disrupted due to problems with our own or our
suppliers’ or customers’ facilities, the unavailability of
reagents, equipment, operating parts and supplies critical to
production, equipment failure, lack of tailings capacity, labour
shortages, labour relations issues, strikes or lockouts,
underground floods, cave-ins, ground movements, tailings
dam failures, transportation disruptions or accidents,
unanticipated consequences of our cost reduction strategies,
or other development and operating risks
we are affected by terrorism, sabotage, blockades, civil
unrest, social or political activism, outbreak of illness (such
as a pandemic like COVID-19), accident or a deterioration in
political support for, or demand for, nuclear energy
we may be unable to successfully manage the current
environment resulting from the COVID-19 pandemic and its
related operational, safety, marketing, or financial risks
successfully, including the risk of significant disruptions to
our operations, workforce, required supply or services, and
ability to produce, transport, and deliver uranium
a major accident at a nuclear power plant
we are impacted by changes in the regulation or public
perception of the safety of nuclear power plants, which
adversely affect the construction of new plants, the
relicensing of existing plants and the demand for uranium
government laws, regulations, policies or decisions that
adversely affect us, including tax and trade laws and
sanctions on nuclear fuel imports
our uranium suppliers or purchasers fail to fulfil their
commitments
our McArthur River development, mining or production plans
are delayed or do not succeed for any reason
our Cigar Lake development, mining or production plans are
delayed or do not succeed for any reason
the McClean Lake’s mill production plan is delayed or does
not succeed for any reason
water quality and environmental concerns could result in a
potential deferral of production and additional capital and
operating expenses required for the Cigar Lake operation
JV Inkai’s development, mining or production plans are
delayed or do not succeed for any reason
we may be unsuccessful in pursuing innovation or
implementing advanced technologies, including the risk that
the commercialization and deployment of SMRs may incur
unanticipated delays or expenses, or ultimately prove to be
unsuccessful
our expectations relating to care and maintenance costs or
operational readiness costs prove to be inaccurate
the risk that we may become unable to pay our 2022 annual
dividend at the expected rate
we are affected by natural phenomena, including inclement
weather, fire, flood and earthquakes
MANAGEMENT’S DISCUSSION AND ANALYSIS 3
the risks relating to our tier-one uranium operations
discussed under the heading McArthur River mine/Key Lake
mill – Managing Our Risks beginning on page 65, under the
heading Cigar Lake – Managing Our Risks beginning on
page 69, and under the heading Inkai – Managing Our Risks
beginning on page 72
our decommissioning and reclamation estimates, including
the assumptions upon which they are based, are reliable
our mineral reserve and resource estimates, and the
assumptions upon which they are based, are reliable
our understanding of the geological, hydrological and other
conditions at our uranium properties
our Cigar Lake development, mining and production plans
succeed
the McClean Lake mill is able to process Cigar Lake ore as
expected
JV Inkai’s development, mining and production plans
succeed
the ability of JV Inkai to pay dividends
that care and maintenance costs and operational readiness
costs will be as expected
our and our contractors’ ability to comply with current and
future environmental, safety and other regulatory
requirements, and to obtain and maintain required regulatory
approvals
our operations are not significantly disrupted as a result of
political instability, nationalization, terrorism, sabotage,
blockades, civil unrest, breakdown, natural disasters,
outbreak of illness (such as a pandemic like COVID-19),
governmental or political actions, litigation or arbitration
proceedings, the unavailability of reagents, equipment,
operating parts and supplies critical to production, labour
shortages, labour relations issues, strikes or lockouts,
underground floods, cave-ins, ground movements, tailings
dam failure, lack of tailings capacity, transportation
disruptions or accidents, unanticipated consequences of our
cost reduction strategies, or other development or operating
risks
the regulatory, environmental and operational risks that
generally apply to all our operations and advanced uranium
projects that are discussed under the heading Managing the
risks beginning on page 58
Material assumptions
our expectations regarding sales and purchase volumes and
prices for uranium and fuel services, trade restrictions, and
that counterparties to our sales and purchase agreements
will honour their commitments
our expectations for the nuclear industry, including its growth
profile, market conditions and the demand for and supply of
uranium
the continuing pursuit of carbon reduction strategies by
governments and the role of nuclear in the pursuit of those
strategies
the assumptions discussed under the heading 2022
Financial Outlook
our expectations regarding spot prices and realized prices
for uranium, and other factors discussed under the heading
Price sensitivity analysis: uranium segment
that the construction of new nuclear power plants and the
relicensing of existing nuclear power plants will not be more
adversely affected than expected by changes in regulation or
in the public perception of the safety of nuclear power plants
our ability to continue to supply our products and services in
the expected quantities and at the expected times
our expected production levels for Cigar Lake, McArthur
River/Key Lake, JV Inkai and our fuel services operating
sites
our cost expectations, including production costs, operating
costs, operational readiness costs, capital costs, and the
success of our cost reduction strategies
our expectations regarding tax payments, royalty rates,
currency exchange rates and interest rates
our entitlement to and ability to receive expected refunds and
payments from CRA
in our dispute with CRA, that courts will reach consistent
decisions for other tax years that are based upon similar
positions and arguments
that CRA will not successfully advance different positions
and arguments that may lead to different outcomes for other
tax years
our expectation that we will recover all or substantially all of
the amounts paid or secured in respect of the CRA dispute
to date
4 CAMECO CORPORATION
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MANAGEMENT’S DISCUSSION AND ANALYSIS 5
6 CAMECO CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS 7
2021 performance highlights
Despite additional disruptions to our business in 2021, we continued to do what we said we would do, protecting the health
and safety of our employees and executing on all strategic fronts; operational, marketing and financial. In our uranium
segment, since the beginning of 2021, and including the volumes reported in our third quarter MD&A, we have been
successful in adding 70 million pounds to our portfolio of long-term uranium contracts, bringing the total volumes added since
2016 to about 185 million pounds. Nevertheless, we maintain leverage to higher prices with significant unencumbered future
productive capacity and a large and growing pipeline of uranium business under discussion. We are being strategically patient
in our discussions to capture as much value as possible in our contract portfolio. In addition to the off-market contracting
interest, there has been a re-emergence of on-market requests for proposals from utilities looking to secure their future
requirements.
In 2021, we were operating at about 75% below the productive capacity (100% basis) due to our planned supply discipline in
our uranium segment and the unplanned production suspension at Cigar Lake. Productive capacity includes licensed capacity
at Cigar Lake and McArthur River/Key Lake, and it includes planned production volumes at Rabbit Lake and our US
operations prior to curtailment in 2016. We proactively suspended production at Cigar Lake for a second time for about four
months starting in December 2020 due to the increased risks posed by the Coronavirus (COVID-19) pandemic at the time. As
well, through our investment in Inkai, we were impacted by the 20% supply reduction enacted by Kazatomprom (KAP) across
all uranium mines in Kazakhstan.
In addition to the proactive suspension of production at Cigar Lake, the COVID-19 safety protocols and measures we put in
place in 2020, and following the precautions and restrictions enacted by all levels of government where we operate we
proactively implemented additional measures and made a number of decisions to ensure a continued safe working
environment for all our workers, in 2021, we:
introduced a requirement that all employees, contractors and visitors be vaccinated across all our operations and offices
developed a hybrid work model for employees working from home that balances time in the office and remote working in
accordance with business needs
The proactive decisions we have made, and continue to make, to protect our workers and to help slow down the spread of the
COVID-19 virus are consistent with our values. Even while production was suspended, we kept and continued to pay all our
employees. The health and safety of our workers, their families and their communities continues to be the priority in all our
plans, which will align with the guidance of the relevant health authorities where we operate.
We delivered over 24 million pounds of uranium to our customers in alignment with our contract portfolio and profitable
opportunities in the market. We generated $458 million in cash from operations, with higher average realized prices in our fuel
services segment than in 2020. However, as a result of the unplanned precautionary production suspension at Cigar Lake due
to the COVID-19 pandemic, we incurred $40 million in care and maintenance costs for the operation and produced only 6.1
million pounds in our uranium segment, well below our committed sales. To manage risk we purchased 11.1 million pounds at
a unit cost significantly higher than the average production costs at Cigar Lake for 2021 and 2020. See 2021 financial results
by segment – Uranium starting on page 49 for more information. Partially offsetting these additional costs was the receipt of
about $21 million under the Canada Emergency Wage Subsidy program and volatility in foreign exchange rates that resulted
in foreign exchange gains.
Thanks to the disciplined execution of our strategy, our balance sheet is strong, and we expect it will enable us to see out our
strategy as well as self-manage risk, including from global macro-economic uncertainty and volatility. As of December 31,
2021, we had $1.3 billion in cash and cash equivalents and short-term investments with only $996 million in long-term debt. In
addition, we have a $1.0 billion undrawn credit facility.
8 CAMECO CORPORATION
In our transfer pricing dispute with Canada Revenue Agency (CRA), the Supreme Court of Canada (Supreme Court)
dismissed CRA’s application for leave to appeal the decision of the Federal Court of Appeal (Court of Appeal). As a result, the
dispute for the 2003 through 2006 tax years is fully and finally resolved in our favour. Furthermore, we are confident the courts
would reject any attempt by CRA to utilize the same or similar positions and arguments for the other tax years currently in
dispute (2007 through 2014) and believe CRA should return the $777 million in cash and letters of credit we have been
required to pay or otherwise secure for those years. As such, we have filed a notice of appeal with the Tax Court of Canada
(Tax Court), however timing of any further payments is uncertain. See Transfer pricing dispute on page 37 for more
information.
In 2021, the benefits of nuclear energy came clearly into focus with a durability that we believe has not previously been seen.
This durability is being driven by the accountability for achieving the net-zero carbon targets being set by countries and
companies around the world. There is increasing recognition that nuclear power, with its clean emissions profile, reliable and
secure baseload characteristics and low, levelized cost has a key role to play in achieving decarbonization goals. This is
leading to both traditional and non-traditional demand growth for nuclear power and resulting in increased demand for
uranium.
This increase in demand is occurring at a time when there is increasing uncertainty about uranium supply. The COVID-19
pandemic continued to disrupt global uranium production and introduced new risks including disruptions to global supply
chains and rising costs for some products and services, adding to the supply curtailments that have occurred in the uranium
industry for many years. The duration and extent of these disruptions are still not fully known. And, with the entrance of the
Sprott Asset Management LP (Sprott) Physical Uranium Trust additional significant demand for spot material has impacted
uranium prices. The uranium spot price increased significantly following the initial purchase activity in August, reaching a nine-
year high of about $50 (US) per pound. The average uranium spot price ended the year at $42.05 per pound (US) nearly 40%
higher than the average uranium spot price at the end of 2020. The thinning of material available in the spot market and the
resulting higher spot prices have also pressured long-term prices with an increase in on-market requests for proposals (RFPs)
and off-market negotiations. The long-term price was up 22% this year, ending the year at $42.75 per pound (US).
In the current environment, we believe the risk to uranium supply is greater than the risk to uranium demand and expect it will
create a renewed focus on ensuring availability of long-term supply to fuel nuclear reactors. With the improvements in the
market and the new long-term contracts we have put in place, it is time for us to proceed with the next phase of our supply
discipline strategy, which also includes a planned supply reduction at Cigar Lake. Starting in 2024, we plan for our share of
production to be about 45% below our productive capacity. In addition, at Inkai we will continue to follow the 20% reduction
until the end of 2023 as announced by KAP. This will remain our production plan until we see further improvements in the
uranium market and have made further progress in securing the appropriate homes for our unencumbered, in-ground
inventory under long-term contracts, once again demonstrating that we are a responsible supplier of uranium fuel. See Our
strategy starting on page 19 for more information.
We expect the investments we are making in digital and automation technologies will allow us to operate our assets with more
flexibility. This is key to our ability to continue to align our production decisions with our contract portfolio commitments and
opportunities. With a solid base of contracts to underpin our productive capacity, we will begin the process of preparing the
McArthur River mine and Key Lake mill for production to allow us to achieve our 2024 production plan. This plan will
significantly improve our financial performance by allowing us to source more of our committed sales from lower-cost produced
pounds and we will no longer be required to expense care and maintenance costs directly to cost of sales. However, until we
achieve a reasonable production rate, we expect to incur between $15 million to $17 million per month in operational
readiness costs, which will be expensed directly to cost of sales. Operational readiness costs include all of the costs
associated with care and maintenance in addition to the costs to complete critical projects, perform maintenance readiness
checks, and recruit and train sufficient mine and mill personnel before beginning operations. Throughout, we will continue to
focus on delivering our products safely and responsibly and addressing the environmental, social and governance (ESG) risks
and opportunities that we believe will make our business sustainable and will build long-term value.
MANAGEMENT’S DISCUSSION AND ANALYSIS 9
Financial performance
HIGHLIGHTS
DECEMBER 31 ($ MILLIONS EXCEPT WHERE INDICATED)
Revenue
Gross profit
Net loss attributable to equity holders
$ per common share (diluted)
Adjusted net loss (non-IFRS, see page 33)
$ per common share (adjusted and diluted)
Cash provided by operations
2021
1,475
2
(103)
(0.26)
(98)
(0.25)
458
2020
1,800
106
(53)
(0.13)
(66)
(0.17)
57
CHANGE
(18)%
(98)%
(94)%
(92)%
(48)%
(47)%
>100%
Net loss attributable to equity holders (net loss) and adjusted net loss were greater in 2021 compared to 2020. See 2021
consolidated financial results beginning on page 32 for more information. Of note:
generated $458 million in cash from operations
incurred $210 million in care and maintenance costs as a result of our strategic decisions, including $40 million due to the
precautionary suspension at Cigar Lake in 2021 to deal with the risks posed by the COVID-19 pandemic
received $21 million under the Canada Emergency Wage Subsidy program
recorded $27 million in the first quarter as a reduction to administration costs to reflect the amounts owing to us for legal
fees and disbursements for costs as awarded in our dispute with CRA. See Transfer pricing dispute on page 37 for more
information
filed notice of appeal to the Tax Court in our dispute with CRA to have $777 million in cash and letters of credit returned.
See Transfer pricing dispute on page 37 for more information.
Our segment updates
In our uranium segment, we continued to execute our strategy to preserve our tier-one assets and to ensure a safe working
environment for all our workers, which impacted our operations. Of note in 2021:
continued the production suspensions at McArthur River/Key Lake, Rabbit Lake and US ISR operations, keeping about 23
million pounds (100% basis) out of the market
resumed production at the Cigar Lake mine at the end of April following the second suspension that commenced in
December 2020 as a precaution due to the COVID-19 pandemic
annual production at Cigar Lake of 6.1 million pounds (our share) was 33% below licensed capacity due to the impacts of
the precautionary four-month suspension
purchased 11.1 million pounds of uranium, including our spot purchases, committed purchase volumes and JV Inkai
purchases
delivered on our sales commitments of over 24 million pounds in alignment with our contract portfolio and profitable market
opportunities and added 30 million pounds in long-term contracts to our portfolio. Since the beginning of 2022, we have
added another 40 million pounds, bringing the total added since the beginning of 2021 to 70 million pounds.
Production in 2021 from our fuel services segment was 3% higher than in 2020, as a result of production suspensions in 2020
due to the COVID-19 pandemic. Planned production was impacted by hydrogen supply issues in 2021. The hydrogen supply
constraint was resolved in the fourth quarter, however supply chain disruption remains a risk generally.
Additionally, we increased our interest in Global Laser Enrichment LLC (GLE) from 24% to 49% and signed a number of non-
binding arrangements to explore several areas of cooperation to advance the commercialization and deployment of small
modular reactors (SMRs) in Canada and around the world. This furthers our commitment to responsibly and sustainably
manage our business and increase our contributions to global climate change solutions by exploring other emerging and non-
traditional opportunities within the fuel cycle.
See Operations and projects beginning on page 57 for more information.
10 CAMECO CORPORATION
HIGHLIGHTS
Uranium
Production volume (million lbs)
Sales volume (million lbs)
Average realized price1
Revenue ($ millions)
Gross profit (loss) ($ millions)
($US/lb)
($Cdn/lb)
Fuel services
Production volume (million kgU)
Sales volume (million kgU)
Average realized price 2
($Cdn/kgU)
Revenue ($ millions)
Gross profit ($ millions)
2021
6.1
24.3
34.53
43.34
1,055
(108)
12.1
13.6
29.72
404
118
2020
5.0
30.7
34.39
46.13
1,416
18
11.7
13.5
27.89
377
96
CHANGE
22%
(21)%
-
(6)%
(25)%
(700)%
3%
1%
7%
7%
23%
1 Uranium average realized price is calculated as the revenue from sales of uranium concentrate, transportation and storage fees divided by the volume of uranium
concentrates sold.
2 Fuel services average realized price is calculated as revenue from the sale of conversion and fabrication services, including fuel bundles and reactor
components, transportation and storage fees divided by the volumes sold.
Industry prices
Uranium ($US/lb U3O8)1
Average annual spot market price
Average annual long-term price
Fuel services ($US/kgU as UF6)1
Average annual spot market price
North America
Europe
Average annual long-term price
North America
Europe
2021
2020
CHANGE
35.28
36.81
19.41
18.99
18.42
18.42
29.96
34.63
21.94
21.09
18.27
18.18
18%
6%
(12)%
(10)%
1%
1%
Note: the industry does not publish UO2 prices.
1 Average of prices reported by TradeTech and UxC, LLC (UxC)
On the spot market, where purchases call for delivery within one year, the volume reported by UxC for 2021 was the highest
annual total ever of approximately 102 million pounds U3O8 equivalent, compared to 95 million pounds U3O8 equivalent in
2020. Spot market volumes were significant in the second half of the year due to unplanned uranium demand from Sprott,
which contributed to the thinning of spot uranium supply. Total spot purchases by producers, junior uranium companies and
financial funds was approximately 50 million pounds U3O8 equivalent. At the end of 2021, the average reported spot price was
$42.05 (US) per pound, up $11.85 (US) per pound from the end of 2020. During the year, the uranium spot price ranged from
a month-end high of $45.75 (US) per pound to a low of $27.98 (US) per pound, averaging $35.28 (US) for the year.
Long-term contracts usually call for deliveries to begin more than two years after the contract is finalized, and use a number of
pricing formulas, including base-escalated (fixed prices escalated over the term of the contract), and market referenced prices
(spot and long-term indicators) quoted near the time of delivery. The volume of long-term contracting reported by UxC for 2021
was about 70 million pounds U3O8 equivalent, up from about 57 million pounds U3O8 equivalent in 2020. Higher volumes can
be attributed in part to utilities turning their attention to securing their long-term needs as demand from financial funds further
thinned the spot market and eliminated the ability for utilities to rely on carry trade activity. The average reported long-term
price at the end of the year was $42.75 (US) per pound, up $7.75 (US) from 2020. During the year, the uranium long-term
price ranged from a month-end high of $43.00 (US) per pound to a low of $33.50 (US) per pound, averaging $36.81 (US) for
the year.
Following the record highs for conversion prices in both the North American and European markets in 2020, the average
reported spot price for North American delivery at the end of 2021 was $16.10 (US) per kilogram uranium as UF6 (US/kgU as
MANAGEMENT’S DISCUSSION AND ANALYSIS 11
UF6), down $5.65 (US) from the end of 2020. Long-term UF6 conversion prices finished 2021 at $18.00 (US/kgU as UF6),
down $1.00 (US) from the end of 2020.
$60
$50
$40
$30
$20
$10
$0
2015
URANIUM (US$/lb U3O8) AND CONVERSION (US$/kgU UF6) PRICES
Spot uranium price
Long-term uranium price
Spot conversion price (North America)
Long-term conversion price (North America)
2016
2017
2018
2019
2020
2021
Source: Average of prices reported from TradeTech and UxC
12 CAMECO CORPORATION
Market overview and developments
A market in transition
In 2021, there was a significant improvement in uranium prices and market sentiment. Spot uranium prices for the year were
up nearly 40%, reaching their highest level in nine years. The uranium available in the spot market thinned driven by record
spot market purchases primarily by the Sprott Physical Uranium Trust, which has purchased approximately 26 million pounds
since its inception in 2021, but also including other financial funds, producers and junior uranium companies who have
indicated that the long-term fundamentals point to growing demand and supply uncertainty. The thinning of material available
in the spot market and rising spot uranium prices motivated some utilities to return to the term market both with on-market
RFPs as well as continued off-market contracting. As a result, the long-term price increased by 22%, ending the year at
$42.75 (US) per pound. Despite an increase in contracting in the long-term market, the volume of uranium executed under
long-term contracts remained well below annual consumption levels, continuing the inventory destocking that was already
underway in the industry and adding to the growing wedge of uncovered requirements that we believe will need to be filled at a
time when the availability of sufficient supply is not guaranteed. With a renewed focus on security of supply we believe we are
in the early stages of a market transition, with utilities turning to proven producers and assets to meet their uncovered
requirements.
Durable demand growth
The benefits of nuclear energy came clearly into focus with a durability we believe has not been previously seen, driven by the
accountability created by the net-zero carbon targets being set by countries and companies around the world. These targets
are turning attention to a triple challenge. First, is to lift one-third of the global population out of energy poverty by growing
clean and reliable baseload electricity. Second, is to replace 85% of the current global electricity grids that run on carbon-
emitting sources of thermal power with a clean, reliable alternative. And finally, is to grow global power grids by electrifying
industries, such as private and commercial transportation, home, and industrial heating, largely powered with carbon-emitting
sources of thermal energy today. Additionally, the energy crisis experienced in some parts of the world has amplified concerns
about energy security and highlighted the role of energy policy in balancing three main objectives: providing a clean emissions
profile; providing a reliable and secure baseload profile; and providing an affordable levelized cost profile. Too much focus on
one objective, has left some jurisdictions struggling with power shortages and spiking energy prices. There is increasing
recognition that nuclear power, with its clean emissions profile, reliable and secure baseload characteristics and low, levelized
cost has a key role to play in achieving decarbonization goals.
Demand and energy policy highlights
On behalf of the Sprott Physical Uranium Trust, Sprott issued an At-The-Market (ATM) program allowing it to sell
discretionary shares and use the proceeds to purchase U3O8. The initial limit was for up to $300 million (US), and on
September 9th, Sprott increased the ATM program limit to $1.3 billion (US) followed by another increase to $3.5 billion (US)
on November 23. As of February 7th, the fund had raised over $1.1 billion (US) and purchased approximately 26 million
pounds U3O8. In addition to its listing on the Toronto Stock Exchange, Sprott is obligated to seek a US listing for the trust.
In March, Yellow Cake PLC (YCA) raised $100 million (US) to exercise their option with KAP to purchase approximately 3.5
million pounds of U3O8 as well as an additional purchase of 440,000 pounds U3O8. Subsequently, YCA agreed to purchase
an additional 2 million pounds U3O8 from KAP. In October, YCA then raised approximately $150 million (US) and used the
proceeds to fund the purchase of 2 million pounds U3O8 from Curzon Uranium Limited and purchased an additional 1 million
pounds U3O8 from KAP. The net impact of other transactions in 2021 resulted in YCA acquiring an additional 0.6 million
pounds U3O8.
On October 18th, KAP announced their 48.5% initial investment into a privately-held physical uranium fund for $50 million
(US). The fund has a projected second stage of development to raise up to an additional $500 million (US), through either a
public or private offering.
Many countries, states, and utilities announced net-zero carbon targets in 2020 and 2021. Notable countries include China,
Japan, South Korea, United States (US), Canada, and France. While most of these targets are further out in the future,
many of the plans include an important role for nuclear.
MANAGEMENT’S DISCUSSION AND ANALYSIS 13
The International Atomic Energy Agency (IAEA) increased its projections for nuclear out to 2050 for the first time since the
Fukushima events in 2011. This includes nuclear generating capacity doubling to 792 GWe, from 393 GWe in 2020, which
represents a 10% rise over the prior forecast.
The 2021 World Nuclear Association Nuclear Fuel Report was released in September and includes numerous positive
developments for the industry. It highlights the prospects for nuclear growth and linkages to countries now targeting net-
zero carbon emissions. Improved growth in China makes the most notable impact to higher demand projections post 2030.
On the supply side, uranium production through 2025 declined significantly relative to the previous report in 2019,
demonstrating the growing need for more production out in time.
China’s 14th five-year plan and related policy documents covering the 2021 to 2025 period were published in March as part
of their plan to be carbon neutral by 2060. Nuclear received increased attention in the plan relative to the prior version. The
key objective stated was China targeting 70 GWe operating and 50 GWe under construction through 2025. Additionally,
China’s Nuclear Energy Association (CNEA) stated that by 2030, China could reach up to 120 GWe in operation.
In Japan, Kansai’s Mihama 3 restarted after over ten years and represents the first Japanese reactor in service over forty
years to be restarted. In October, Fumio Kishida of the Liberal Democratic Party, was confirmed as Japan’s 100th Prime
Minister. He has stated support for Japan’s energy policy which is targeting 20% to 22% nuclear by 2030 as part of its plan
for carbon neutrality by 2050.
Russia’s nuclear generation reached historic records in 2021 as Leningrad II-2 became the latest operating reactor. In
addition, Rosatom announced plans to build about 15 new 1,200 MWe Gen 3+ reactors by 2035, with most units being built
at existing sites where units that were built in the 1970s are to be decommissioned.
In the European Union (EU), on February 2nd, the European Commission approved in principle a Complementary Climate
Delegated Act (CDA), which includes specific nuclear and gas energy activities in the list of economic activities covered by
the EU Taxonomy. This defines certain nuclear energy projects as green and sustainable for access to low-cost financing.
The nuclear-related activities included are all advanced Generation IV nuclear technology with no expiry date, new
Generation III+ nuclear reactors until 2045, and lifetime extension to existing nuclear reactors until 2040, while
comprehensive nuclear safety and waste management requirements apply to all. The CDA now goes to the European
Parliament and Council for debate.
The Netherlands has recently elected a new government which has promised to build two new nuclear power reactors and
become climate neutral by 2050.
In France, President Emmanuel Macron announced planned new reactors, for the first time in decades, to meet its 2050
carbon neutral goal. Additionally, Électricité de France submitted a final plan to construct six EPR-2 reactors, with the
vendor yet to be finalized and also announced that 32 900 MWe reactors were approved for expanded life spans from 40
years to 50 years.
In the United Kingdom (UK), Prime Minster Boris Johnson confirmed plans for all UK electricity to come from low-carbon
sources including nuclear and renewables by 2035.
Germany closed three reactors at the end of 2021 and remains scheduled to close the last three operating reactors at the
end of 2022.
In the US, Exelon’s Byron and Dresden plants in Illinois were saved from early closure with the signing of the Climate and
Equitable Jobs Act. This comprehensive energy bill included nearly $700 million (US) in new state subsidies over the next
five years.
US President Biden signed the $1.2 trillion bipartisan infrastructure bill that includes $6 billion to support at-risk nuclear
plants and support for the US Department of Energy (DOE) with advanced reactors by 2030.
India’s first domestically designed 700 MWe pressurized heavy water reactor at Kakrapar is nearing commercial operation,
an important milestone for the country. Three more units of this design are expected to come online in the next few years.
The country is targeting an expansion to 22.5 GWe operating by 2031.
In South Korea, there will be federal elections in March of 2022. The leading presidential candidate, Yoon Seok-youl of the
Peoples Power Party is pro nuclear and wants to end the nuclear phase-out. In addition, in January 2022, the current
government announced plans to revise its green taxonomy and consider SMRs as eligible for state funding, reversing its
stance to drop nuclear projects.
During September and October Cameco announced signing several non-binding arrangements to evaluate and explore
possible opportunities to partner on the development and deployment of SMR and advanced reactor technologies and
evaluate opportunities to supply uranium, fuel services and other services.
14 CAMECO CORPORATION
According to the International Atomic Energy Agency there are currently 439 reactors operating globally and 52 reactors under
construction. Several nations are appreciating the clean energy benefits of nuclear power. They have reaffirmed their
commitment to it and are developing plans to support existing reactor units and are reviewing their policies to encourage more
nuclear capacity. Several other non-nuclear countries have emerged as candidates for new nuclear capacity. In the EU,
specific nuclear energy projects have been identified for inclusion under its sustainable financing taxonomy and therefore
eligible for access to low-cost financing. Even in countries with phase-out policies, there is growing debate about the role of
nuclear power, with public opinion polls showing growing support for it. The growth in demand is not just in the form of new
builds, it is medium-term demand in the form of reactor life extensions, and it is near-term growth as early reactor retirements
are prevented. And we are seeing momentum building for non-traditional commercial uses of nuclear power around the world
such as development of small modular reactors and advanced reactors, with numerous companies and countries pursuing
projects.
0
1
2
China
Asia
European Union
India
Africa & Middle East
Russia
Eastern Europe
Americas
US
CURRENTLY UNDER CONSTRUCTION
9
6
5
7
3
8
4
10
11
12
13
14
15
14
9
6
6
6
4
3
2
2
Number of reactors
Source: IAEA
WORLD OPERABLE REACTOR COUNT
447
448
451
447
443
439
2016
2017
2018
2019
2020
2021
Source: IAEA
s
r
o
t
c
a
e
r
f
o
r
e
b
m
u
N
400
300
200
100
0
MANAGEMENT’S DISCUSSION AND ANALYSIS 15
Supply uncertainty
Low uranium prices, government-driven trade policies, and the COVID-19 pandemic have had an impact on the security of
supply in our industry. Despite the recent increase in uranium prices, years of underinvestment in new capacity has shifted risk
from producers to utilities. In addition to the decisions many producers, including the lowest-cost producers, have made to
preserve long-term value by leaving uranium in the ground, there have been a number of unplanned supply disruptions related
to the impact of the COVID-19 pandemic and associated supply chain challenges on uranium mining and processing activities.
In addition, according to industry transport experts, there is a risk of transport disruptions for Class 7 nuclear material. Uranium
is a highly trade-dependent commodity. Adding to security of supply concerns is the role of commercial and state-owned
entities in the uranium market, and trade policies that highlight the disconnect between where uranium is produced and where
it is consumed. Over 80% of primary production is in the hands of state-owned enterprises, after taking into account the cuts to
primary production that have occurred over the last several years. Furthermore, nearly 90% of primary production comes from
countries that consume little-to-no uranium, and nearly 90% of uranium consumption occurs in countries that have little-to-no
primary production. As a result, government-driven trade policies can be particularly disruptive for the uranium market.
Supply and trade policy highlights
In early January 2022, Kazakhstan saw the most significant political instability since it became independent in 1991. The
events resulted in a state of emergency being declared across the country. With the assistance of the Collective Security
Treaty Organization (CSTO), the government restored the order and in the second half of January, the state of emergency
was gradually lifted and withdrawal of CSTO forces from Kazakhstan was completed. KAP reported that its operations have
been unaffected by these events.
In its 2021 fourth quarter operations and trading update, KAP confirmed its intent to maintain production levels at 20%
below those stipulated in its Sub Soil Use Agreements through 2023. For 2022, production is expected to be between 54.6
million pounds and 57.2 million pounds U3O8 (100% basis). It also noted that wellfield development, procurement and
supply chain challenges, including inflationary pressure on production materials and reagents, are expected to continue
throughout 2022. In addition, it indicated its costs could be impacted by potential changes to the tax code in Kazakhstan
and by possible local social funding requests.
On November 19th, KAP announced the approval of a plan to develop JV Budenovskoye LLP. The plan is for production at
Budenovskoye Blocks 6 and 7 of up to 6.5 million pounds U3O8 (100% basis) no earlier than 2024, ramping up to 15.6
million pounds U3O8 (100% basis) no earlier than 2026. It is owned 51% by KAP and 49% by Stepnogorsk Mining and
Chemical Plant LLP. KAP confirmed that the anticipated ramp up production from 2024-2026 is fully committed for
supplying Russia under an offtake contract.
China General Nuclear Power Group acquired a 49% stake in Ortalyk LLP. This KAP subsidiary holds the Central
Mynkuduk in situ recovery (ISR) mine with a capacity of about 5.2 million pounds U3O8 (100% basis) and the planned
Zhalpak ISR mine with capacity of about 2 million pounds U3O8 (100% basis).
Unplanned production disruptions at the Cigar Lake mine and the McClean Lake mill as a precaution due to the COVID-19
pandemic resulted in production for the year being about 6 million pounds (100% basis) below annual licensed capacity.
The Cigar Lake mine restarted in mid-April. On July 1 production at the mine was again temporarily suspended as a
precaution due to the proximity of a forest fire, but with the risk subsided and all infrastructure intact, operations resumed a
short time after.
ConverDyn’s parent, Honeywell, announced a 2023 restart of its UF6 conversion facility.
Supply from the Ranger mine ceased in January, as planned, after 40 years in operation. Ranger had been milling about 4
million pounds U3O8 per year in recent years.
Orano’s Cominak mine shut in March 2021, as expected, due to depletion of reserves. The mine had been producing about
3 million pounds U3O8 per year in recent years.
In August, the US DOE published a Request for Information to inform the establishment and procurement strategy of a
Strategic Uranium Reserve program. The $75 Million (US) appropriated for the program for 2021 was rolled into 2022.
16 CAMECO CORPORATION
LONG-TERM CONTRACTING CREATES FULL-CYCLE VALUE FOR PROVEN PRODUCTIVE ASSETS
Global population is on the rise, and there is a growing focus on electrification and decarbonization. With the world’s need for
safe, clean, reliable baseload energy, it is becoming increasingly clear that nuclear power will be an essential part of the clean-
energy transition. We remain confident in the future of the nuclear industry. Demand is increasing in the near, medium, and
long term with reactor restarts, cancellation of early reactor retirement decisions, life extensions, construction of new reactors,
and a growing focus on non-traditional uses of nuclear power.
Like other commodities, the demand for uranium is cyclical. However, unlike other commodities, uranium is not traded in
meaningful quantities on a commodity exchange. The uranium market is principally based on bilaterally negotiated long-term
contracts covering the annual run-rate requirements of nuclear power plants, with a small spot market to serve discretionary
demand. History demonstrates that in general, when prices are rising and high, uranium is perceived as scarce, and a lot of
contracting activity takes place with proven and reliable suppliers. The higher prices discovered during this contracting cycle
drive investment in higher-cost sources of production, which due to lengthy development timelines, tend to miss the
contracting cycle and ramp up after demand has already been captured by proven producers. The new uncommitted supply
exposed to the small, discretionary spot market becomes value destructive. The downward pressure on price creates the
perception that uranium is abundant, potentially resulting in a failure of long-term price signals. When prices are declining and
low, like we have seen over the past number of years, there is no perceived urgency to contract, and contracting activity and
investment in new supply drops off. After years of low prices, and a lack of investment in supply, and as the uncommitted
material available in the spot market begins to thin, as we are seeing currently, security-of-supply tends to overtake price
concerns. Utilities re-enter the long-term contracting market to ensure they have a reliable future supply of uranium to run their
reactors.
URANIUM CONTRACTING VOLUMES AND PRICE HISTORY
300
250
200
150
100
50
8
O
3
U
s
b
l
n
o
i
l
l
i
m
n
i
e
m
u
o
V
l
Spot market
Long-term market
$120.0
$100.0
Average Spot Price
$80.0
8
O
3
U
b
l
/
$
S
U
n
i
e
c
i
r
P
$60.0
$40.0
$20.0
$0.0
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
UxC reports that over the last five years approximately 400 million pounds U3O8 equivalent have been locked-up in the long-
term market, while approximately 810 million pounds U3O8 equivalent have been consumed in reactors. We remain confident
that utilities have a growing gap to fill.
We believe the current backlog of long-term contracting presents a substantial opportunity for commercially motivated
suppliers like us who are proven reliable suppliers with tier-one productive capacity and a record of honouring our supply
commitments. As a low-cost producer, we manage our operations to capture value throughout these price cycles.
Source: UxC estimates
MANAGEMENT’S DISCUSSION AND ANALYSIS 17
UTILITY UNCOVERED REQUIREMENTS
(2021 - 2035)
US Utilities
Non-US Utilities
8
O
3
U
s
b
l
n
o
i
l
l
i
m
200
150
100
50
0
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Source: UxC estimates - December 31, 2021
In our industry, customers do not come to the market right before they need to load nuclear fuel into their reactors. To operate
a reactor that could run for more than 60 years, natural uranium and the downstream services have to be purchased years in
advance, allowing time for a number of processing steps before a finished fuel bundle arrives at the power plant. At present,
we believe there is a significant amount of uranium that needs to be contracted to keep reactors running into the next decade.
UxC estimates that cumulative uncovered requirements are about 1.4 billion pounds to the end of 2035. With the lack of
investment over the past decade due to low uranium prices, there is growing uncertainty about where uranium will come from
to satisfy growing demand. In fact, utilities have started to secure supply under long-term contracts, which has resulted in a
22% increase in the long-term price of uranium over the past year.
As utilities’ uncovered requirements continue to grow, primary and secondary supplies decline, and as continued demand for
uranium from producers and other intermediaries leads to a thinning of the material available in the spot market, we expect
there will be increased competition to secure uranium under long-term contracts on terms that will ensure the availability of
reliable primary supply to meet growing demand.
Supply has become less certain as a result of low prices, production curtailments, lack of investment, end of reserve life,
unplanned production disruptions, supply chain challenges, shrinking secondary supplies and trade policy issues. As a result,
we believe we are starting to see a market transition that is shifting risk from the suppliers to the users of uranium fuel. We will
continue to take the actions we believe are necessary to position the company for long-term success. Therefore, we will
continue to align our production decisions with market signals and our contract portfolio. We will undertake contracting activity
which is intended to ensure we have adequate protection under our contract portfolio, while maintaining exposure to the
rewards that come from having uncommitted, low-cost supply to place into a strengthening market.
18 CAMECO CORPORATION
Our strategy
We are a pure-play nuclear fuel investment, focused on providing nuclear fuel products across the fuel cycle, on providing a
clean source of energy, and on taking advantage of the long-term growth we see coming in our industry. Our strategy is set
within the context of what we believe is a transitioning market environment, where increasing populations, and a growing focus
on electrification and decarbonization are expected to durably strengthen the long-term fundamentals for our industry. Nuclear
energy must be a central part of the solution to the world’s shift to a low-carbon, climate resilient economy. It is an option that
can provide the power needed, not only reliably, but also safely and affordably, and in a way that will help avoid some of the
worst consequences of climate change.
Our strategy is to capture full-cycle value by:
remaining disciplined in our contracting activity, building a balanced portfolio in accordance with our contracting framework
profitably producing from our tier-one assets and aligning our production decisions with our contract portfolio and market
signals
being financially disciplined to allow us to self-manage risk
exploring other emerging and non-traditional opportunities within the fuel cycle, which align with our commitment to
responsibly and sustainably manage our business and increase our contributions to global climate change solutions
We expect our strategy will allow us to increase long-term value, and we will execute it with an emphasis on safety, people
and the environment.
URANIUM
Uranium production is central to our strategy, as it is the biggest value driver of the nuclear fuel cycle and our business. We
have operating and idle tier-one assets that are licensed, permitted, long-lived, and are proven reliable and have expansion
capacity. These tier-one assets are backed up by idle tier-two assets and what we think is the best exploration portfolio that
leverages existing infrastructure.
We are focused on protecting and extending the value of our contract portfolio, on aligning our production decisions with our
contract portfolio and market opportunities thereby preserving the value of our lowest cost assets, on maintaining a strong
balance sheet, and on efficiently managing the company. We have undertaken a number of deliberate and disciplined actions,
including a focus on digitization and automation to allow us to operate our assets with more flexibility. In 2021, these actions
resulted in:
generation of $458 million in cash from operations
a year-end balance of $1.3 billion in cash and cash equivalents and short-term investments on our balance sheet
70 million pounds of uranium added to our long-term contract portfolio since the beginning of 2021
a more flexible asset base that allows us to continue to align our production with market conditions and our contract
portfolio
FUEL SERVICES
Our fuel services division is a source of profit and supports our uranium segment while allowing us to vertically integrate
across the fuel cycle.
We are focused on securing new long-term contracts that will allow us to continue to profitably produce and consistently
support the long-term needs of our customers.
In addition, we are pursuing non-traditional markets for our UO2 and fuel fabrication business and have been actively securing
new contracts for reactor components to support refurbishment of Canadian reactors.
Our focus will continue to be on maintaining and optimizing the profitability of this segment of our business.
OTHER FUEL CYCLE INVESTMENTS
We continue to explore other opportunities within the nuclear fuel cycle. In particular, we are interested in the second largest
value driver of the fuel cycle, enrichment. Having operational control of uranium production, conversion, and enrichment
facilities would offer operational synergies that could enhance profit margins.
MANAGEMENT’S DISCUSSION AND ANALYSIS 19
In January 2021, we increased our interest in Global Laser Enrichment LLC (GLE) from 24% to 49%. We are the commercial
lead for the project and have an option to attain a majority interest of up to 75% ownership. GLE is testing a third-generation
enrichment technology that, if successful, will use lasers to:
re-enrich depleted uranium tails left over as a by-product, aiding in the responsible clean-up of enrichment facilities no
longer in operation
produce high-assay low-enriched uranium (HALEU), the primary fuel stock for the majority of small modular reactors and
advanced reactor designs proceeding through development
produce low-enriched uranium for the world’s existing and future fleet of large-scale light-water reactors
Additionally, we signed a number of non-binding arrangements to explore several areas of cooperation to advance the
commercialization and deployment of small modular reactors in Canada and around the world.
Building a balanced portfolio
The purpose of our contracting framework is to deliver value. Our approach is to secure a solid base of earnings and cash flow
by maintaining a balanced contract portfolio that optimizes our realized price.
Contracting decisions need to consider the uranium market structure, the nature of our competitors, and the current market
environment. The vast majority of run-rate fuel requirements are procured under long-term contracts. The spot market is thinly-
traded where utilities pick-up small, discretionary volumes. This market structure is reflective of the baseload nature of nuclear
power and the relatively small proportion of the overall operating costs the fuel represents compared to other sources of
baseload electricity. Additionally, about half of the fuel supply is not sensitive to market prices and is typically supplied by
diversified mining companies that produce uranium as a by-product or state-owned entities with production volume strategies
or ambitions to serve state nuclear power ambitions with low-cost fuel supplies. We evaluate our strategy in the context of our
market environment and continue to adjust our actions in accordance with our contracting framework:
First, we will not produce from our tier-one assets to sell into an oversupplied spot market. We will not produce from these
assets unless we can deliver our tier-one pounds under long-term contracts that provide an acceptable rate of return.
Second, we do not intend to build an inventory of excess uranium. Excess inventory serves to contribute to the sense that
uranium is abundant and creates an overhang on the market, and it ties up working capital on our balance sheet.
Third, in addition to our committed sales, we will capture end-user demand in the market where we think we can obtain
value. We will take advantage of opportunities the market provides, where it makes sense from an economic, logistical and
strategic point of view. Those opportunities may come in the form of spot, mid-term or long-term demand, and will be
additive to our current committed sales.
Fourth, once we capture demand, we will decide how to best source material to satisfy that demand. Depending on the
timing and volume of our production, purchase commitments, and our inventory volumes, this means we may be active
buyers in the market in order to meet our demand obligations.
And finally, in general, if we choose to source material to meet demand by purchasing it, we expect the price of that
material will be more than offset by the leverage to market prices in our sales portfolio over the long-term.
In addition to this framework, our contracting decisions always factor in who the customer is, our desire for regional
diversification, the product form, and logistical factors.
Ultimately, our goal is to protect and extend the value of our contract portfolio on terms that recognize the value of our assets
and pricing mechanisms that provide adequate protection when prices go down and allow us to benefit when prices rise. We
believe using this framework will allow us to create long-term value. Our focus will continue to be on ensuring we have the
financial capacity to execute on our strategy and self-manage risk.
LONG-TERM CONTRACTING
Uranium is not traded in meaningful quantities on a commodity exchange. Utilities have historically bought the majority of their
uranium and fuel services products under long-term contracts that are bilaterally negotiated with suppliers, and they have met
the rest of their needs on the spot market. We sell uranium and fuel services directly to nuclear utilities around the world as
uranium concentrates, UO2 and UF6, conversion services, or fuel fabrication. We have a solid portfolio of long-term sales
contracts that reflect the long-term, trusting relationships we have with our customers.
20 CAMECO CORPORATION
In general, we are always active in the market, buying and selling uranium when it is beneficial for us and in support of our
long-term contract portfolio. We undertake activity in the spot and term markets prudently, looking at the prices and other
business factors to decide whether it is appropriate to purchase or sell into the spot or term market. Not only is this activity a
source of profit, it gives us insight into underlying market fundamentals.
We deliver large volumes of uranium every year, therefore our net earnings and operating cash flows are affected by changes
in the uranium price. Market prices are influenced by the fundamentals of supply and demand, market access and trade policy
issues, geopolitical events, disruptions in planned supply and demand, and other market factors.
The objectives of our contracting strategy are to:
maximize realized price while providing some certainty for our future earnings and cash flow
focus on meeting the nuclear industry’s growing annual uncovered requirements with our tier-one production
establish and grow market share with strategic customers
We have a portfolio of long-term contracts that have a mix of base-escalated pricing and market-related pricing mechanisms,
including provisions to protect us when the market price is declining and allow us to benefit when market prices go up. This is
a balanced and flexible approach that allows us to adapt to market conditions, put a floor on our average realized price and
deliver the best value over the long term.
This approach has allowed us to realize prices higher than the market prices during periods of weak uranium demand, and we
expect it will enable us to realize increases linked to higher market prices in the future.
Base-escalated (fixed prices escalated over the term of the contract) contracts for uranium: typically use a pricing
mechanism based on a term-price indicator at the time the contract is accepted and escalated over the term of the contract.
Market-related contracts for uranium: are different from base-escalated contracts in that the pricing mechanism may be
based on either the spot price or the long-term price, and that price is as quoted at the time of delivery rather than at the time
the contract is accepted. These contracts sometimes provide for discounts, and often include floor prices and/or ceiling prices,
which are usually escalated over the term of the contract.
Fuel services contracts: the majority of our fuel services contracts use a base-escalated mechanism per kgU and reflect the
market at the time the contract is accepted.
OPTIMIZING OUR CONTRACT PORTFOLIO
We work with our customers to optimize the value of our contract portfolio. With respect to new contracting activity, there is
often a lag from when contracting discussions begin and when contracts are executed. With our large pipeline of business
under negotiation in our uranium segment, and a value driven strategy, we continue to be strategically patient in considering
the commercial terms we are willing to accept. Much of our pending business is off-market but we are starting to see more on-
market activity emerge. We remain confident that we can add acceptable new sales commitments to our portfolio of long-term
contracts to underpin the long-term operation of our productive capacity and capture long-term value.
Given our view that uranium prices need to rise to ensure the availability of long-term supply to fuel growing demand for safe,
clean, reliable, carbon-free nuclear energy, our preference today is to sign long-term contracts with market-related pricing
mechanisms. Unsurprisingly, we believe our customers too expect prices to rise and prefer to lock-in today’s prices, with a
fixed-price mechanism. Our goal is to balance all these factors, along with our desire for customer and regional diversification,
with product form, and logistical factors to ensure we have adequate protection and will benefit from higher prices under our
contract portfolio, while maintaining exposure to the rewards that come from having low-cost supply to deliver into a
strengthening market.
With respect to our existing contracts, at times we may also look for opportunities to optimize the value of our portfolio. In
cases where a customer is seeking relief under an existing contract due to a challenging policy, operating, or economic
environment, or we deem the customer’s long-term demand to be at risk, we may consider options that are beneficial to us
and allow us to maintain our customer relationships.
CONTRACT PORTFOLIO STATUS
We have commitments to sell over 160 million pounds of U3O8 with 34 customers worldwide in our uranium segment, and over
48 million kilograms as UF6 conversion with 30 customers worldwide in our fuel services segment.
MANAGEMENT’S DISCUSSION AND ANALYSIS 21
Customers – U3O8:
Five largest customers account for 59% of commitments
COMMITTED U3O8 SALES BY REGION
Americas 64%
Customers – UF6 conversion:
Five largest customers account for 52% of commitments
COMMITTED UF6 SALES BY REGION
Americas 71%
Asia 18%
Europe 18%
Asia 9%
Europe 20%
MANAGING OUR CONTRACT COMMITMENTS
To meet our delivery commitments and to mitigate risk, we have access to a number of sources of supply, which includes
uranium obtained from:
our existing production
purchases under our JV Inkai agreement, under long-term agreements and in the spot market
our inventory in excess of our working requirements
product loans
We allow sales volumes to vary year-to-year depending on:
the level of sales commitments in our long-term contract portfolio
our production volumes
purchases under existing and/or new arrangements
discretionary use of inventories
market opportunities
22 CAMECO CORPORATION
Our supply discipline
As spot is not the fundamental market, true value is captured under a long-term contract portfolio and is measured over the full
commodity cycle. Therefore, we align our uranium production decisions with our contract commitments and market
opportunities to avoid creating an oversupply in a thinly-traded spot market or building an excess inventory. In accordance with
market conditions, and to mitigate risk, we evaluate the optimal mix of our production, inventory and purchases in order to
satisfy our contractual commitments and in order to return the best value possible over the entire commodity cycle. During a
prolonged period of uncertainty, this could mean leaving our uranium in the ground. As a result, since 2016, we have left
almost 115 million pounds of uranium in the ground (100% basis) through our supply curtailment activities. We have
purchased more than 55 million pounds in the spot market and in 2018 we drew down our inventory by almost 20 million
pounds. That totals about 190 million pounds (100% basis) of uranium that we have pulled out of the market.
Today we believe we are in the early stages of a uranium market transition, driven by the growing demand for nuclear energy
and the increasingly undeniable conclusion that it must be an essential part of the clean-energy transition. As the market
continues to transition, we expect to continue to place our uranium under long-term contracts and to meet rising demand with
production from our best margin operations. We will continue to adjust our actions based on market signals and our contract
portfolio with the intent of being able to self-manage risk, and to capture long-term value.
With the improvements in the market and the new long-term contracts we have put in place, it is time for us to proceed with the
next phase of our supply discipline strategy. Continuing with our indefinite supply discipline, starting in 2024, we plan to be
operating at about 40% below productive capacity (100% basis) compared to 75% below productive capacity (100% basis) in
2021. To achieve this, we will begin preparing McArthur River/Key Lake to ensure it is operationally ready to reach our 2024
production plan. A return to production at McArthur River/Key Lake will significantly improve our financial performance by
allowing us to source more of our committed sales from the lower-cost produced pounds and we will no longer be required to
expense care and maintenance costs directly to cost of sales. However, until we achieve a reasonable production rate, we
expect to incur between $15 million to $17 million per month in operational readiness costs, which will be expensed directly to
cost of sales. This is not an end to our supply discipline. Over the course of 2022 and 2023, we will undertake all of the
activities necessary to ensure we are operationally ready to achieve the 2024 production plan of 15 million pounds (100%
basis) per year, 40% below the annual licensed capacity of the operation. Once we reach the planned production at McArthur
River/Key Lake, starting in 2024, we plan to reduce production at Cigar Lake to 13.5 million pounds (100% basis) per year,
25% below its annual licensed capacity. Extending the mine life at Cigar Lake by aligning production with the market
opportunities and our contract portfolio is consistent with our tier-one strategy and is expected to allow more time to evaluate
the feasibility of extending the mine life beyond the current reserve base while continuing to supply ore to Orano’s McClean
Lake mill. This will remain our production plan until we see further improvements in the uranium market and contracting
progress, once again demonstrating that we are a responsible supplier of uranium fuel.
Managing our costs
PRODUCTION COSTS
In order to operate efficiently and cost-effectively, we manage operating costs and improve plant reliability by prudently
investing in production infrastructure, new technology, and business process improvements. Like all mining companies, our
uranium segment is affected by the cost of inputs such as labour and fuel.
MANAGEMENT’S DISCUSSION AND ANALYSIS 23
2021 URANIUM OPERATING COSTS BY CATEGORY
Production Supplies 24%
Labor 45%
Contracted Services 31%
* Production supplies include reagents, fuel and other items. Contracted services include utilities and camp costs, air charters, mining and maintenance
contractors and security and ground freight.
Over the last two years the annual cash cost of production at Cigar Lake has been slightly higher than the estimated life of
mine cost of between $15 and $16 per pound, as a result of the impacts of COVID-19. See 2021 financial results by segment
– Uranium starting on page 49 for more information. In 2022 and 2023, our cash production costs may continue to be affected
by the impacts of the COVID-19 pandemic, as well as timing and rate of production at the McArthur River/Key Lake operation.
Once we achieve 2024 planned production, the average unit operating costs at Cigar Lake may increase as production
declines.
Operating costs in our fuel services segment are mainly fixed. In 2021, labour accounted for about 51% of the total. The
largest variable operating cost is for zirconium, followed by anhydrous hydrogen fluoride, and energy (natural gas and
electricity).
We are currently undertaking a corporate-wide initiative to accelerate innovation and the adoption of advanced digital and
automation technologies to improve efficiency and operational flexibility, and to further reduce cost.
For example, we are implementing energy management information systems to understand where we use energy so we can
make changes to become more efficient. We have established a cross-functional working group to further study the transition
opportunities and risks to our operations. This working group is analyzing the costs and benefits of various potential projects to
achieve transformational reductions in emissions.
CARE AND MAINTENANCE COSTS AND OPERATIONAL READINESS COSTS
In 2022, we expect to incur between $50 million and $60 million in care and maintenance costs related to the suspension of
production at our Rabbit Lake mine and mill, and our US operations. These operations are higher-cost, and with plenty of idle
tier-one capacity and tier-one expansion capacity globally that can come back online relatively quickly, the restart horizon is
less certain. We continue to evaluate our options in order to minimize these costs.
At the McArthur River/Key Lake operation we expect to incur between $15 million and $17 million per month in operational
readiness costs which will be expensed directly to cost of sales until we achieve a reasonable production rate.
PURCHASES AND INVENTORY COSTS
Our costs are also affected by the purchases of uranium and conversion services we make under long-term contracts and on
the spot market.
To meet our delivery commitments, we make use of our mined production, inventories, purchases under long-term contracts,
purchases we make on the spot market and product loans. In 2022, the price for the majority of our purchases will be quoted
at the time of delivery.
The cost of purchased material may be higher or lower than our other sources of supply, depending on market conditions. The
cost of purchased material affects our cost of sales, which is determined by calculating the average of all of our sources of
supply, including opening inventory, production, and purchases, and adding royalties, selling costs, and care and maintenance
costs. If market prices exceed our cost of inventory, we expect the cost of sales may be impacted.
24 CAMECO CORPORATION
FINANCIAL IMPACT
As greater certainty returns to the uranium market, our view is that uranium prices will need to reflect the cost of bringing on
new primary production to meet growing demand.
The deliberate and disciplined actions we have taken to reduce supply and streamline operations have come with near-term
costs like care and maintenance costs and purchase costs higher than our production costs, but we believe the benefit over
the long term will far outweigh those costs.
We believe our actions have helped position the company to self-manage risk and will reward shareholders for their continued
patience and support of our strategy to build long-term value.
Capital allocation – focus on value
Delivering returns to our long-term shareholders is a top priority. While we navigate by our investment-grade rating, we
continually evaluate our investment options to ensure we allocate our capital in a way that we believe will:
sustain our assets and grow our business in a manner that we expect will create the greatest long-term value
maintain a strong balance sheet that will allow us to execute on our strategy and mitigate risk
allow us to sustainably execute on our dividend while considering the cyclical nature of our earnings and cash flow
To deliver value, free cash flow must be productively reinvested in the business or returned to shareholders, which requires
good execution and disciplined allocation. Our decisions are based on the run rate of our business, not one-time events. Cash
on our balance sheet that exceeds value-adding growth opportunities and/or is not needed to self-manage risk should be
returned to shareholders.
We start by determining how much cash we have to invest (investable capital), which is based on our expected cash flow from
operations minus expenses we consider to be a higher priority, such as dividends and financing costs, and could include
others. This investable capital can be reinvested in the company or returned to shareholders.
REINVESTMENT
We have a multidisciplinary capital allocation team that evaluates all possible uses of investable capital.
If a decision is made to reinvest capital in sustaining, capacity replacement, or growth, all opportunities are ranked and only
those that meet the required risk-adjusted return criteria are considered for investment. We also must identify, at the corporate
level, the expected impact on cash flow, earnings, and the balance sheet. All project risks must be identified, including the
risks of not investing. Allocation of capital only occurs once an investment has cleared these hurdles.
This may result in some opportunities being held back in favour of higher return investments and should allow us to generate
the best return on investment decisions when faced with multiple prospects, while also controlling our costs. If there are not
enough good investment prospects internally or externally, this may result in residual investable capital, which we would then
consider returning directly to shareholders.
RETURN
We believe in returning cash to shareholders but are also focused on protecting the company and rewarding those
shareholders who understand and support our strategy to build long-term value. If we have excess cash and determine the
best use is to return it to shareholders, we can do that through a share repurchase or dividend—an annual dividend, one-time
supplemental dividend or a progressive dividend. When deciding between these options, we consider a number of factors,
including the nature of the excess cash (one time or cash generated by our business operations), growth prospects for the
company, and growth prospects for the industry.
Share buyback: If we are at our tier-one run rate and are generating excess cash while there were few or no growth prospects
for the company or the industry, then a share buyback might make sense. However, our current view is that the long-term
fundamentals for Cameco and the industry remain strong.
Dividend: The amount and type of dividend paid, annual, progressive or one-time supplemental is evaluated by our board of
directors with careful consideration of our cash flow, financial position, strategy, and other relevant factors including
appropriate alignment with the cyclical nature of our earnings.
MANAGEMENT’S DISCUSSION AND ANALYSIS 25
IN ACTION
Until such time as we return to our tier-one cost structure, the objective of our capital allocation will be to ensure we have the
financial capacity to execute on our strategy, while navigating by our investment-grade rating through close management of
our balance sheet metrics.
In today’s transitioning uranium market environment, we are taking a cautious and prudent approach to capital allocation. We
are not yet at our tier-one run-rate, and, despite rulings from the courts in our favour, our dispute with CRA continues. With the
metrics that inform an investment-grade rating in mind, we have taken steps to allow us to deliver long-term value and self-
manage risk by:
responsibly managing our sources of supply by aligning our production decisions with market conditions and our contract
portfolio, and building a more flexible tier-one asset base
exercising strategic patience when contracting
restructuring our activities to reduce our operating, capital, and general and administrative spending
reducing our total debt and restructuring our debt maturity profile
aligning our dividend with the run-rate of our business and with consideration for the cyclical nature of our earnings and
cash flow
focusing on technology and its applications to improve efficiency and reduce costs across the organization, with a particular
focus on innovation and accelerating the adoption of advanced digital and automation technologies
As the market continues to transition, we will focus on improving operational effectiveness across our operations, including the
use of digital and automation technologies with a particular goal of reducing operating costs and increasing operational
flexibility. Any opportunities will be rigorously assessed before an investment decision is made. We will invest to ensure we are
able to meet our 2024 production plan.
If we get clarity on our CRA dispute without a continued and sustained market transition, which generates a one-time cash
infusion, we may focus on the debt portion of our ratings metrics. This may mean greater emphasis on reducing the debt on
our balance sheet. However, if the market continues to transition and higher uranium prices are flowing through our contract
portfolio, and we are able to increase our portfolio of long-term contracts with acceptable pricing mechanisms, the earnings
portion of our rating metrics are expected to improve. In that scenario, reducing debt would not be the priority. Our priorities
would be to invest in ramping up and expanding production at our tier-one assets, and if warranted leveraging our existing tier-
two assets and brownfield infrastructure, turning to value-adding growth opportunities including further vertical integration and
returning excess cash to shareholders.
SHARES AND STOCK OPTIONS OUTSTANDING
At February 7, 2022, we had:
398,289,260 common shares and one Class B share outstanding
3,228,006 stock options outstanding, with exercise prices ranging from $11.32 to $26.81
DIVIDEND
In 2021, our board of directors declared a dividend of $0.08 per common share, which was paid December 15, 2021.
As a result of our deliberate actions and conservative financial management we have been and continue to be resilient. With a
strong balance sheet, improving fundamentals for our business, a growing contract portfolio, and our decision to prepare
McArthur River/Key Lake to be operationally ready, we have line of sight to a significant improvement in our future earnings
and cash flow. Therefore, we are increasing our 2022 annual dividend by 50%.
An annual dividend of $0.12 per common share has been declared, payable on December 15, 2022 to shareholders of record
on November 30, 2022. The decision to declare an annual dividend by our board is reviewed regularly and will be based on
our cash flow, financial position, strategy and other relevant factors including appropriate alignment with the cyclical nature of
our earnings.
26 CAMECO CORPORATION
Our ESG principles and practices: A key part of our strategy, reflecting our values
We are committed to delivering our products responsibly. We integrate environmental, social and governance (ESG) principles
and practices into every aspect of our business, from our objectives and approach to compensation, to our overall corporate
strategy and day-to-day operations. We seek to be transparent with our stakeholders, keeping them updated on the risks and
opportunities that we believe may have a significant impact on our ability to add long-term value. We recognize the importance
of integrating certain ESG factors, such as safety performance, a clean environment and supportive communities, into our
executive compensation strategy as we see success in these areas as critical to the long-term success of the company.
Our 2020 ESG report, published in October of 2021, marked an evolution in our sustainability reporting. We adopted the
relevant ESG performance indicators issued by the Sustainability Accounting Standards Board (SASB) and have taken the
first steps towards addressing the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD),
which we expect to continue to progress. The report sets out our strategy and the policies and programs we use to govern and
manage ESG issues that are important to our stakeholders. In addition to SASB and TCFD, the report provides key ESG
performance indicator data based on the Global Reporting Initiative’s Sustainability Framework as well as some unique
corporate indicators, to measure and report our performance on environmental, social and economic impacts in the areas we
believe have a significant impact on our sustainability in the long-term. This is our ESG report card to our stakeholders. You
can find our report at cameco.com/about/sustainability.
Environment
We recognize and embrace our responsibility to manage our activities with care for the protection of environmental resources.
Protection of the environment is one of our highest corporate priorities during all stages of our activities from exploration
through development, operations, and decommissioning. Environmental stewardship is embedded in how we operate.
We are guided by our safety, health, environment and quality policy and associated programs that are designed to minimize
our impact on air, land, and water and to conserve the biodiversity of surrounding ecosystems. Across our operations, we
comply with strict regulations and have systems in place to monitor and mitigate our impacts. In addition to our own
environmental monitoring, we collaborate with local communities around our operations to give confidence to them that
traditionally harvested foods remain safe to eat, and water remains safe to drink.
Climate change: Nuclear power is part of the solution
We believe the reduction of carbon and greenhouse gas (GHG) emissions is important and necessary in Canada and around
the world, and that nuclear power must be a central part of the solution to the world’s shift to a low-carbon, climate-resilient
economy. As one of the world’s largest producers of the uranium needed to fuel nuclear reactors, we believe there is a
significant opportunity for us to be part of the solution to combat climate change. We are a constructive partner in the battle
against climate change. We enable vast emissions reductions that can be achieved through nuclear power and are committed
to transforming our own low GHG emissions footprint in our ambition to reach net-zero emissions while delivering significant
long-term business value.
We recognize that climate change, including shifts in temperature, precipitation and more frequent severe weather events
could affect our operations in a range of possible ways. We have established a working group composed of representatives
from across the organization to further study the climate-related opportunities and risks for our business. For example, this
working group has conducted a preliminary analysis of the increase in operating costs that could occur at our Canadian
facilities (in the short-, medium-, and long-term) as a result of increased GHG pricing and regulation. In addition, in 2022, we
are undertaking a physical climate risk assessment with a third-party expert.
Social
Our relationships with our workforce, Indigenous Peoples, and local communities are fundamental to our success. The safety
and protection of our workforce and the public is our top priority in our assessment of risk and planning for safe operations and
product transport. To deliver on our vision, we invest in programs to attract and retain a diverse and skilled workforce that
better reflects the communities in which we operate and to increase the participation of underrepresented groups in trades and
technical positions. We want to build a workforce that is dedicated to continuous improvement and shares our values.
The importance of our workers and Indigenous Peoples working and living near our operations is exemplified by our ongoing
commitment to help manage the impacts of the COVID-19 pandemic on our workforce, their families and their communities.
MANAGEMENT’S DISCUSSION AND ANALYSIS 27
Our response to the COVID-19 pandemic
We continue to closely monitor and adapt to the developments related to the outbreak of COVID-19. Throughout the
pandemic, our priority has been to protect the health and well-being of our workers, including employees and contractors, their
families, and their communities. Early in 2020, we activated our Corporate Crisis Management Plan, which includes our
Pandemic Plan, and our various Local and Corporate Business Continuity Plans.
Following the precautions and restrictions enacted by all levels of government where we operate, and, considering the unique
circumstances at each of our operating sites, we proactively implemented a number of measures and made a number of
decisions to ensure a safe working environment for all our workers. In addition to all the safety protocols and measures put in
place in 2020, in 2021 we:
suspended production at Cigar Lake for a second time for about four months starting in December 2020
introduced a requirement that all employees, contractors and visitors be vaccinated across all our operations and offices
developed a hybrid work model for employees working from home that balances time in the office and remote working in
accordance with business needs
The proactive decisions we have made, and continue to make, to protect our workers and to help slow down the spread of the
COVID-19 virus are necessary decisions that are consistent with our values. Even while production was suspended, we kept
and continued to pay all our employees. The health and safety of our workers, their families and their communities continues
to be the priority in all our plans, which will align with the guidance of the relevant health authorities where we operate.
Governance: Sound governance is the foundation for strong performance
We believe that sound governance is the foundation for strong corporate performance. Our diverse and independent board of
directors plays an important role in providing oversight of the management team and providing direction for our strategy and
business affairs, including the integration of ESG principles throughout the company. The board guides the company to
operate as a sustainable business, to optimize financial returns while effectively managing risk, and to conduct business in a
way that is transparent, independent, and ethical.
The board has formal governance guidelines that set out our approach to governance and the board’s governance role and
practices. The guidelines ensure we comply with all of the applicable governance rules and legislation in Canada and the
United States, conduct ourselves in the best interests of our stakeholders, and meet industry best practices. The guidelines
are reviewed and updated regularly.
Our corporate governance framework includes an established and recognized management system that describes the
policies, processes and procedures we use to help us fulfill all the tasks required to achieve our objectives and strategy. It sets
out our vision, values, and measures of success. It speaks to our strategic planning process, leadership alignment and
accountability, compliance and assessment, people and culture, process identification and work management, risk
management, communications and stakeholder support, knowledge and information management, change management,
problem identification and resolution, and continual improvement.
OUR VISION
Our vision – “Energizing a clean-air world” – recognizes that we have an important role to play in enabling the vast reductions
in global greenhouse gas emissions required to achieve a resilient net-zero carbon economy. We support climate action that is
consistent with the ambition of the Paris Agreement and the Canadian government’s commitment to the agreement to limit
global temperature rise to less than 2⁰C and we know that this means the world needs to reach net-zero emissions by 2050 or
sooner. The uranium we produce is used around the world in the generation of safe, carbon-free, affordable, base-load
nuclear power. As we seek to achieve our vision, we will do so in a manner that reflects our values. We believe we have the
right strategy to achieve our vision and are committed to our efforts to transform our own, already low, greenhouse gas
footprint in our ambition to reach net-zero emissions, while identifying and addressing the ESG risks and opportunities that we
believe may have a significant impact on our ability to add long-term value for our stakeholders.
COMMITTED TO OUR VALUES
Our values are discussed below and are at the core of everything we do and define who we are as a company. They are:
safety and environment
people
28 CAMECO CORPORATION
integrity
excellence
Safety and Environment
The safety of people and protection of the environment are the foundations of our work. All of us share in the responsibility of
continually improving the safety of our workplace and the quality of our environment.
We are committed to keeping people safe and conducting our business with respect and care for both the local and global
environment.
People
We value the contribution of every employee and we treat people fairly by demonstrating our respect for individual dignity,
creativity and cultural diversity. By being open and honest, we achieve the strong relationships we seek.
We are committed to developing and supporting a flexible, skilled, stable and diverse workforce, in an environment that:
attracts and retains talented people and inspires them to be fully productive and engaged
encourages relationships that build the trust, credibility and support we need to grow our business
Integrity
Through personal and professional integrity, we lead by example, earn trust, honour our commitments and conduct our
business ethically.
We are committed to acting with integrity in every area of our business, wherever we operate.
Excellence
We pursue excellence in all that we do. Through leadership, collaboration and innovation, we strive to achieve our full potential
and inspire others to reach theirs.
Risk and Risk Management
Our board of directors oversee management’s implementation of appropriate risk management processes and controls. We
have a Risk Policy that is supported by our formal Risk Management Program.
Our Risk Management Program involves a broad, systematic approach to identifying, assessing, monitoring, reporting and
managing the significant risks we face in our business and operations, including consideration of ESG and climate-related
risks that could impact our four measures of success. The program establishes clear accountabilities for employees
throughout the company to take ownership of risks specific to their area and to effectively manage those risks. The program is
reviewed annually to ensure that it continues to meet our needs.
We use a common risk matrix throughout the company. Any risk that has the potential to significantly affect our ability to
achieve our corporate objectives or strategic plan is considered an enterprise risk and is brought to the attention of senior
management and the board.
See Managing the risks, starting on page 58, for a discussion of the risks, that generally apply to all of our operations and
advanced uranium projects, and that could have a material impact on business in the near term. We also recommend you
review our most recent annual information form, which includes a discussion of other material risks that could have an impact
on our business.
MANAGEMENT’S DISCUSSION AND ANALYSIS 29
Measuring our results
TARGETS AND METRICS: THE LINK BETWEEN ESG FACTORS AND EXECUTIVE PAY
Each year, we set corporate objectives that are aligned with our strategic plan. These objectives fall under our four measures
of success: outstanding financial performance, safe, healthy and rewarding workplace, clean environment and supportive
communities. Performance against specific targets under these objectives forms the foundation for a portion of annual
employee and executive compensation. See our most recent management proxy circular for more information on how
executive compensation is determined.
Our targets for 2021 continue to reflect the operational strategic actions that we are taking. As such, we do not believe our
financial performance (earnings and cash flow) reflects our long-term run rate performance. Despite the impact on financial
results, we believe that the strategic actions we are taking will help to pave the way to stronger financial performance over
time, and we will not compromise our commitment to safety, people and our environment.
2021 OBJECTIVES1
TARGET
RESULTS
OUTSTANDING FINANCIAL PERFORMANCE
Earnings measure
Achieve targeted adjusted net earnings.
adjusted net earnings was below target
Cash flow measure
Achieve targeted cash flow from
operations (before working capital
changes).
SAFE, HEALTHY AND REWARDING WORKPLACE
Workplace safety
measure
Strive for no injuries at all Cameco-
operated sites. Maintain a long-term
downward trend in combined employee
and contractor total recordable injury
rate while achieving targets on specified
leading indicators.
cash flow from operations was slightly below target
a new performance record was set for the fourth year in
a row. TRIR improved significantly by about 25% relative
to 2020, exceeding the 2021 improvement target
performance of the leading indicators exceeded the
targets
CLEAN ENVIRONMENT
Environmental
performance
measures
Achieve divisional environmental aspect
improvement targets.
performance was within the targeted range
there were no significant environmental incidents in 2021
SUPPORTIVE COMMUNITIES
Stakeholder
support measure
Enhance the skill set of Residents of
Saskatchewan’s North for changing
industrial environments
performance exceeded the target
1 Detailed results for our 2021 corporate objectives and the related targets will be provided in our 2022 management proxy circular prior to our Annual Meeting of
Shareholders on May 10, 2022.
2022 objectives
OUTSTANDING FINANCIAL PERFORMANCE
Achieve targeted financial measures focused on controlling costs and generating cash.
SAFE, HEALTHY AND REWARDING WORKPLACE
Improve workplace safety performance at all sites.
CLEAN ENVIRONMENT
Improve environmental performance at all sites.
SUPPORTIVE COMMUNITIES
Build and sustain strong stakeholder support for our activities.
30 CAMECO CORPORATION
Financial results
This section of our MD&A discusses our performance, financial condition and outlook for the future.
32 2021 CONSOLIDATED FINANCIAL RESULTS
41 OUTLOOK FOR 2022
43 LIQUIDITY AND CAPITAL RESOURCES
49 2021 FINANCIAL RESULTS BY SEGMENT
49 ............... URANIUM
51 ............... FUEL SERVICES
52 FOURTH QUARTER FINANCIAL RESULTS
52 ............... CONSOLIDATED RESULTS
55 ............... URANIUM
56 ............... FUEL SERVICES
MANAGEMENT’S DISCUSSION AND ANALYSIS 31
2021 consolidated financial results
This section of our MD&A discusses our performance, financial condition and outlook for the future.
In the third quarter, we determined that NUKEM no longer meets the criteria for being considered a segment and concluded
that it was appropriate to include NUKEM’s results with our uranium and fuel services segments. The purchase and sale of
enriched uranium product and separative work units will continue to be reported in “other”. Comparative information has been
adjusted. See note 28 for more information.
HIGHLIGHTS
DECEMBER 31 ($ MILLIONS EXCEPT WHERE INDICATED)
Revenue
Gross profit
Net earnings (loss) attributable to equity holders
$ per common share (basic)
$ per common share (diluted)
Adjusted net earnings (loss) (non-IFRS, see page 33)
$ per common share (adjusted and diluted)
Cash provided by operations
Net earnings
2021
1,475
2
(103)
(0.26)
(0.26)
(98)
(0.25)
458
2020
1,800
106
(53)
(0.13)
(0.13)
(66)
(0.17)
57
CHANGE FROM
2019
2020 TO 2021
1,863
242
74
0.19
0.19
41
0.10
527
(18)%
(98)%
(94)%
(92)%
(92)%
(48)%
(47)%
>100%
The following table shows what contributed to the change in net earnings in 2021 compared to 2020 and 2019.
($ MILLIONS)
Net earnings (losses) - previous year
2021
(53)
2020
74
2019
166
Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A), net of hedging benefits)
Uranium
Lower sales volume
Higher (lower) realized prices ($US)
Foreign exchange impact on realized prices
Lower (higher) costs
change – uranium
Fuel services
Higher (lower) sales volume
Higher (lower) realized prices ($Cdn)
Lower (higher) costs
change – fuel services
Other changes
Lower (higher) administration expenditures
Lower exploration expenditures
Change in reclamation provisions
Change in gains or losses on derivatives
Change in foreign exchange gains or losses
Change in earnings from equity-accounted investments
Redemption of Series E debentures in 2020
Canadian Emergency Wage Subsidy
Arbitration award in 2019 related to TEPCO contract
Gain on sale of interest in Wheeler River Joint Venture in 2018
Gain on restructuring of JV Inkai in 2018
Gain on customer contract restructuring in 2018
Sale of exploration properties in 2018
Reversal of tax provision in 2018 related to CRA dispute
Change in income tax recovery or expense
Other
Net earnings (losses) - current year
32 CAMECO CORPORATION
(4)
5
(72)
(55)
(126)
1
23
(2)
22
17
3
32
(24)
(14)
32
24
(16)
-
-
-
-
-
-
15
(15)
(103)
(4)
25
14
(169)
(134)
(4)
21
(10)
7
(20)
3
(21)
5
33
(9)
(24)
37
(52)
-
-
-
-
-
47
1
(53)
(27)
(133)
35
9
(116)
13
(11)
28
30
17
6
57
113
(45)
13
-
-
52
(17)
(49)
(6)
(7)
(61)
(126)
47
74
Non-IFRS measures
ADJUSTED NET EARNINGS
Adjusted net earnings (ANE) is a measure that does not have a standardized meaning or a consistent basis of calculation
under IFRS (non-IFRS financial measure). We use this measure as a more meaningful way to compare our financial
performance from period to period. Adjusted net earnings is our net earnings attributable to equity holders, adjusted to better
reflect the underlying financial performance for the reporting period. We believe that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this information to evaluate our performance. Adjusted net earnings is
one of the targets that we measure to form the basis for a portion of annual employee and executive compensation (see
Measuring our results starting on page 30).
In calculating ANE we adjust for derivatives. We do not use hedge accounting under IFRS and, therefore, we are required to
report gains and losses on all hedging activity, both for contracts that close in the period and those that remain outstanding at
the end of the period. For the contracts that remain outstanding, we must treat them as though they were settled at the end of
the reporting period (mark-to-market). However, we do not believe the gains and losses that we are required to report under
IFRS appropriately reflect the intent of our hedging activities, so we make adjustments in calculating our ANE to better reflect
the impact of our hedging program in the applicable reporting period. See Foreign exchange starting on page 39 for more
information.
We also adjust for changes to our reclamation provisions that flow directly through earnings. Every quarter we are required to
update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This
normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets
of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the
adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 15 of our annual
financial statements for more information. This amount has been excluded from our ANE measure.
Adjusted net earnings is a non-IFRS financial measure and should not be considered in isolation or as a substitute for financial
information prepared according to accounting standards. Other companies may calculate this measure differently, so you may
not be able to make a direct comparison to similar measures presented by other companies.
MANAGEMENT’S DISCUSSION AND ANALYSIS 33
To facilitate a better understanding of these measures, the table below reconciles adjusted net earnings with our net earnings
for the years ended 2021, 2020 and 2019.
($ MILLIONS)
Net earnings (loss) attributable to equity holders
Adjustments
Adjustments on derivatives
Adjustments on other operating expense (income)
Income taxes on adjustments
Adjusted net earnings (loss)
2021
(103)
13
(8)
-
(98)
2020
(53)
(45)
24
8
(66)
2019
74
(49)
3
13
41
The following table shows what contributed to the change in adjusted net earnings (non-IFRS measure, see above) in 2021
compared to the same period in 2020 and 2019.
($ MILLIONS)
Adjusted net earnings (losses) - previous year
2021
(66)
2020
41
2019
211
Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A), net of hedging benefits)
Uranium
Lower sales volume
Higher (lower) realized prices ($US)
Foreign exchange impact on realized prices
Lower (higher) costs
change – uranium
Fuel services
Higher (lower) sales volume
Higher (lower) realized prices ($Cdn)
Lower (higher) costs
change – fuel services
Other changes
Lower (higher) administration expenditures
Lower (higher) exploration expenditures
Change in gains or losses on derivatives
Change in foreign exchange gains or losses
Change in earnings from equity-accounted investments
Redemption of Series E debentures in 2020
Canadian Emergency Wage Subsidy
Arbitration award in 2019 related to TEPCO contract
Gain on sale of interest in Wheeler River Joint Venture in 2018
Gain on customer contract restructuring in 2018
Sale of exploration properties in 2018
Reversal of tax provision in 2018 related to CRA dispute
Change in income tax recovery or expense
Other
Adjusted net earnings (losses) - current year
Average realized prices
Uranium1
$US/lb
$Cdn/lb
2021
34.53
43.34
Fuel services
1 Average realized foreign exchange rate ($US/$Cdn): 2021 – 1.26, 2020 – 1.34 and 2019 – 1.33.
$Cdn/kgU
29.72
(4)
5
(72)
(55)
(126)
1
23
(2)
22
17
3
34
(14)
32
24
(16)
-
-
-
-
-
7
(15)
(98)
2020
34.39
46.13
27.89
(4)
25
14
(169)
(134)
(4)
21
(10)
7
(20)
3
9
33
(9)
(24)
37
(52)
-
-
-
-
42
1
(66)
(27)
(133)
35
9
(116)
13
(11)
28
30
17
6
(1)
(45)
13
-
-
52
(17)
(6)
(7)
(61)
(82)
47
41
CHANGE FROM
2019
2020 TO 2021
33.77
44.85
26.21
-
(6)%
7%
34 CAMECO CORPORATION
Revenue
The following table shows what contributed to the change in revenue for 2021.
($ MILLIONS)
Revenue – 2020
Uranium
Lower sales volume
Lower realized prices ($Cdn)
Fuel services
Higher sales volume
Higher realized prices ($Cdn)
Other
Revenue – 2021
1,800
(293)
(68)
2
25
9
1,475
See 2021 Financial results by segment on page 49 for more detailed discussion.
THREE-YEAR TREND
In 2020, revenue decreased by 3% compared to 2019 due to a decrease in sales volume in the uranium segment that was
partially offset by an increase in the Canadian dollar average realized price. In our fuel services segment, revenue increased
by 2% as a result of the increase in average realized price partially offset by a decrease in sales volume.
In 2021, revenue decreased by 18% compared to 2020 due to a decrease in sales volume in the uranium segment and a
decrease in the Canadian dollar average realized price. In our fuel services segment, revenue increased by 10% as a result of
the increase in average realized price and sales volume. See notes 17 and 28 in our annual financial statements for more
information.
SALES DELIVERY OUTLOOK FOR 2022
For 2022 we have committed sales volumes in our uranium segment of between 23 to 25 million pounds. We will continue to
be active buying and selling uranium in the spot market if it makes sense for us.
In our uranium and fuel services segments, our customers choose when in the year to receive deliveries. As a result, our
quarterly delivery patterns and, therefore, our sales volumes and revenue can vary significantly. We expect the quarterly
distribution of uranium deliveries in 2022 to be fairly evenly distributed as shown below. However, not all delivery notices have
been received to date and the expected delivery pattern could change. Typically, we receive notices six months in advance of
the requested delivery date.
ANNUAL DELIVERY VOLUME DISTRIBUTION BY QUARTER
8
O
3
U
s
b
l
n
o
i
l
l
i
m
14
12
10
8
6
4
2
0
Q1
Q2
Q3
Q4
2016
2017
2018
2018
2019
2020
2021
2022 (est)
Source: Cameco reports and estimates
MANAGEMENT’S DISCUSSION AND ANALYSIS 35
Corporate expenses
ADMINISTRATION
($ MILLIONS)
Direct administration1
Stock-based compensation1
Recovery of fees related to CRA dispute
2021
111
44
(27)
2020
113
32
-
CHANGE
(2)%
38%
n/a
Total administration
1 Direct administration and stock-based compensation are supplementary financial measures. They are components of administration expense as shown on the
128
145
(12)%
statement of earnings and calculated according to IFRS.
Direct administration costs in 2021 decreased by $2 million from 2020. As a result of the Supreme Court’s dismissal of CRA’s
application for leave to appeal the June 26, 2020 decision of the Court of Appeal, we recorded $27 million as a reduction to
administration costs to reflect the amounts owing to us for legal fees and disbursements for costs as was awarded to us by the
Tax Court and nominal cost awards related to the Court of Appeal hearing and Supreme Court application.
We recorded $44 million in stock-based compensation expenses in 2021, $12 million higher compared to 2020 due to the
increase in our share price. See note 24 to the financial statements.
Administration outlook for 2022
We expect direct administration costs to be between $125 million to $135 million.
EXPLORATION
Our 2021 exploration activities were focused primarily on Canada. Our spending decreased from $11 million in 2020 to $8
million in 2021 due to lower planned expenditures.
Exploration outlook for 2022
We expect exploration expenses to be about $11 million in 2022. The focus for 2022 will be on our core projects in
Saskatchewan.
FINANCE COSTS
Finance costs were $77 million, a decrease from $96 million in 2020 due to the cost associated with the early redemption of
our Series E debentures in 2020. See note 19 to the financial statements.
FINANCE INCOME
Finance income was $7 million compared to $11 million in 2020 mainly due to lower interest rates.
GAINS AND LOSSES ON DERIVATIVES
In 2021, we recorded $13 million in gains on our derivatives compared to $37 million in gains in 2020. The decrease reflects
the strength in the Canadian dollar compared to the US dollar at the end of 2021 compared to 2020. See Foreign exchange on
page 39 and note 26 to the financial statements.
INCOME TAXES
We recorded an income tax recovery of $1 million in 2021 compared to an expense of $14 million in 2020. The increase in
recovery was primarily due to a change in the distribution of earnings among jurisdictions compared to 2020.
In 2021, we recorded earnings of $59 million in Canada compared to earnings of $73 million in 2020, while in foreign
jurisdictions, we recorded a loss of $162 million compared to a loss of $112 million in 2020. Differences between accounting
income and income for tax purposes resulted in lower taxes recorded in Canada.
36 CAMECO CORPORATION
($ MILLIONS)
Net earnings (loss) before income taxes
Canada
Foreign
Total net loss before income taxes
Income tax expense (recovery)
Canada
Foreign
Total income tax expense (recovery)
Effective tax rate
TRANSFER PRICING DISPUTE
Background
2021
2020
59
(162)
(103)
(2)
1
(1)
1%
73
(112)
(39)
9
5
14
(36)%
Since 2008, CRA has disputed our marketing and trading structure and the related transfer pricing methodology we used for
certain intercompany uranium sale and purchase agreements.
For the years 2003 to 2014, CRA shifted Cameco Europe Limited’s income (as recalculated by CRA) back to Canada and
applied statutory tax rates, interest and instalment penalties, and, from 2007 to 2011, transfer pricing penalties. In addition, for
2014 and 2015, CRA has advanced an alternate reassessing position, see Reassessments, remittance and next steps below
for more information.
In September 2018, the Tax Court ruled that our marketing and trading structure involving foreign subsidiaries, as well as the
related transfer pricing methodology used for certain intercompany uranium sales and purchasing agreements, were in full
compliance with Canadian law for the tax years in question (2003, 2005 and 2006). On June 26, 2020 the Court of Appeal
upheld the Tax Court’s decision.
Supreme Court of Canada decision
On February 18, 2021, the Supreme Court dismissed CRA’s application for leave to appeal the June 26, 2020 decision of the
Court of Appeal. The dismissal means that the dispute for the 2003, 2005 and 2006 tax years is fully and finally resolved in our
favour. Although not technically binding, there is nothing in the reasoning of the lower court decisions that should result in a
different outcome for the 2007 through 2014 tax years, which were reassessed on the same basis.
Refund and cost award
The total tax reassessed for the three tax years was $11 million, and we remitted 50%. The Minister of National Revenue has
issued new reassessments for the 2003 through 2006 tax years in accordance with the decision and in July we received
payments totaling $9 million, representing the refund of the $5.5 million we remitted plus interest.
On April 20, 2021, we received $10 million from CRA, which includes payment of the legal fees awarded by the Tax Court as
well as the cost awards related to the Court of Appeal and Supreme Court decisions.
In addition to the cost award for legal fees, in 2019, the Tax Court awarded us an amount for disbursements of up to $17
million. The actual amount of the award for disbursements will be determined by an officer of the Tax Court. We expect to
recover all, or substantially all, of the $17 million in disbursements.
We anticipate further direction on our award for disbursements from the Tax Court in the first quarter of this year.
Reassessments, remittances and next steps
The Canadian income tax rules include provisions that generally require larger companies like us to remit or otherwise secure
50% of the cash tax plus related interest and penalties at the time of reassessment. While we have received a refund for the
amounts remitted for the 2003 through 2006 reassessments as noted above, CRA continues to hold $777 million ($295 million
in cash and $482 million in letters of credit) we paid or secured for the years 2007 through 2013. For the 2014 and 2015
reassessments, CRA did not require additional security to secure the tax debts they considered owing.
MANAGEMENT’S DISCUSSION AND ANALYSIS 37
Following the Supreme Court’s dismissal of CRA’s application for leave to appeal, we wrote to CRA requesting reversal of
CRA’s transfer pricing adjustments for 2007 through 2013 and the return of our $777 million in cash and letters of credit. Given
the strength of the court decisions received, our request was made on the basis that the Tax Court would reject any attempt by
CRA to defend its reassessments for the 2007 through 2013 tax years applying the same or similar positions already denied
for previous years. Due to a lack of significant progress in response to our request, in October 2021, we filed a notice of
appeal with the Tax Court for the years 2007 through 2013. We are asking the Tax Court to order the reversal of the CRA’s
transfer pricing adjustment for those years and the return of our cash and letters of credit, with costs.
In 2020, CRA advanced an alternate reassessing position for the 2014 tax year in the event the basis for its original
reassessment, noted above, is unsuccessful. In late 2021, we received a reassessment for the 2015 tax year using this
alternative reassessing position. The new basis of reassessment is inconsistent with the methodology CRA has pursued for
prior years and we are disputing it separately. Our view is that this alternate methodology will not result in a materially different
outcome from our 2014 or 2015 filing positions.
We will not be in a position to determine the definitive outcome of this dispute for any tax year other than 2003 through 2006
until such time as all reassessments have been issued advancing CRA’s arguments and final resolution is reached for that tax
year. CRA may also advance alternative reassessment methodologies for years other than 2003 through 2006, such as the
alternative reassessing position advanced for 2014 and 2015.
Caution about forward-looking information relating to our CRA tax dispute
This discussion of our expectations relating to our tax dispute with CRA and future tax reassessments by CRA is forward-looking information
that is based upon the assumptions and subject to the material risks discussed under the heading Caution about forward-looking information
beginning on page 2 and also on the more specific assumptions and risks listed below. Actual outcomes may vary significantly.
Assumptions
our entitlement and ability to receive the expected refunds
and payments from CRA
the courts will reach consistent decisions for subsequent tax
years that are based on similar positions and arguments
CRA will not successfully advance different positions and
arguments that may lead to a different outcome for other tax
years
Material risks that could cause actual results to differ materially
we will not receive the expected refunds and payments from
CRA
the possibility the courts may accept the same, similar or
different positions and arguments advanced by CRA to reach
decisions that are adverse to us for other tax years
the possibility that we will not be successful in eliminating all
double taxation
the possibility that CRA does not agree that the court
decisions for the years that have been resolved in Cameco’s
favour should apply to subsequent tax years
the possibility CRA will not return all or substantially all of the
cash and security that has been paid or otherwise secured
by Cameco in a timely manner, or at all
the possibility of a materially different outcome in disputes for
other tax years
an unfavourable determination of the officer of the Tax Court
of the amount of our disbursements award
Tax outlook for 2022
Our consolidated tax rate is a blend of the statutory rates applicable to taxable income earned or tax losses incurred in
Canada and in our foreign subsidiaries. We have a global customer base and we have established a marketing and trading
structure involving foreign subsidiaries, which entered into various intercompany purchase and sale arrangements, as well as
uranium purchase and sale agreements with third parties. Cameco and its subsidiaries made reasonable efforts to put arm’s-
length transfer pricing arrangements in place, and these arrangements expose the parties to the risks and rewards accruing to
them under these contracts. The intercompany contract prices are generally comparable to those established in comparable
contracts between arm’s-length parties entered into at that time. In 2017, we changed our global marketing organization to
consolidate our international activities in Canada in order to achieve efficiencies. The existing purchase and sale
arrangements will continue to be in place until they expire. As the existing contracts expire, we anticipate that more income will
be earned in Canada.
38 CAMECO CORPORATION
We continue to expect our consolidated tax rate will trend toward the Canadian statutory rate in the longer term. The actual
effective tax rate will vary from year-to-year, primarily due to the actual distribution of earnings among jurisdictions and the
market conditions at the time transactions occur under both our intercompany and third-party purchase and sale
arrangements.
FOREIGN EXCHANGE
The exchange rate between the Canadian dollar and US dollar affects the financial results of our uranium and fuel services
segments.
We sell the majority of our uranium and fuel services products under long-term sales contracts, which are routinely
denominated in US dollars. Our product purchases are denominated in US dollars while our production costs are largely
denominated in Canadian dollars. To provide cash flow predictability we hedge a portion of our net US/Cdn exposure (e.g.
total US dollar sales less US dollar expenditures and product purchases) to manage shorter term exchange rate volatility.
Our risk management policy is based on a 60-month period and permits us to hedge 35% to 100% of our expected net
exposure in the first 12-month period. Our normal practice is to layer in hedge contracts over a three- to four-year period with
the hedge percentage being highest in the first 12 months and decreasing hedge percentages in subsequent years. The
portion of our net exposure that remains unhedged is subject to prevailing market exchange rates for the period. Therefore,
our results are affected by the movements in the exchange rate on our hedge portfolio (explained below), and on the
unhedged portion of our net exposure. A weakening Canadian dollar would have a positive effect on the unhedged exposure,
and a strengthening Canadian dollar would have a negative effect
Impact of hedging on IFRS earnings
We do not use hedge accounting under IFRS and, therefore, we are required to report gains and losses on all hedging activity,
both for contracts that close in the period and those that remain outstanding at the end of the period. For the contracts that
remain outstanding, we must treat them as though they were settled at the end of the reporting period (mark-to-market).
However, we do not believe the gains and losses that we are required to report under IFRS appropriately reflect the intent of
our hedging activities, so we make adjustments in calculating our ANE to better reflect the impact of our hedging program in
the applicable reporting period.
Impact of hedging on ANE
We designate contracts for use in particular periods, based on our expected net exposure in that period. Hedge contracts are
layered in over time based on this expected net exposure. The result is that our current hedge portfolio is made up of a
number of contracts which are currently designated to net exposures we expect in 2022 and future years and we will recognize
the gains or losses in ANE in those periods.
For the purposes of ANE, gains and losses on derivatives are reported based on the difference between the effective hedge
rate of the contracts designated for use in the particular period and the exchange rate at the time of settlement. This results in
an adjustment to current period IFRS earnings to effectively remove reported gains or losses on derivatives that arise from
contracts put in place for use in future periods. The effective hedge rate will lag the market in periods of rapid currency
movement. See Non-IFRS measures on page 33.
The table below provides a summary of our hedge portfolio at December 31, 2021. You can use this information to estimate
the expected gains or losses on derivatives for 2022 on an ANE basis. However, if we add contracts to the portfolio that are
designated for use in 2022 or if there are changes in the US/Cdn exchange rates in the year, those expected gains or losses
could change.
MANAGEMENT’S DISCUSSION AND ANALYSIS 39
HEDGE PORTFOLIO SUMMARY
DECEMBER 31, 2021
($ MILLIONS)
US dollar forward contracts
Average contract rate 1
US dollar option contracts
Average contract rate range1
Total US dollar hedge contracts
Average hedge rate range
($ millions)
(US/Cdn dollar)
($ millions)
(US/Cdn dollar)
($ millions)
2022
210
1.34
120
AFTER
2022
330
1.28
70
TOTAL
540
1.30
190
1.32 to 1.36
1.30 to 1.34
1.31 to 1.36
330
400
730
(US/Cdn dollar)
1.33 to 1.35
1.28 to 1.30
1.31 to 1.33
Hedge ratio2
1 The average contract rate is the weighted average of the rates stipulated in the outstanding contracts.
2 Hedge ratio is calculated by dividing the amount (in foreign currency) of outstanding derivative contracts by estimated future net exposures.
51%
9%
14%
At December 31, 2021:
The value of the US dollar relative to the Canadian dollar was $1.00 (US) for $1.26 (Cdn), down from $1.00 (US) for $1.27
(Cdn) at December 31, 2020. The exchange rate averaged $1.00 (US) for $1.25 (Cdn) over the year.
The mark-to-market position on all foreign exchange contracts was a $28 million gain compared to a $41 million gain at
December 31, 2020. The mark-to-market position is a component of gain on derivatives as shown on the statement of
earnings and calculated in accordance with IFRS.
We manage counterparty risk associated with hedging by dealing with highly rated counterparties and limiting our exposure. At
December 31, 2021, all of our hedging counterparties had a Standard & Poor’s (S&P) credit rating of A or better.
For information on the impact of foreign exchange on our intercompany balances, see note 26 to the financial statements.
40 CAMECO CORPORATION
Outlook for 2022
Our outlook for 2022 reflects the expenditures necessary to help us achieve our strategy, including the ramp-up to planned
production of 15 million pounds per year (100% basis) at McArthur River/Key Lake by 2024. As in prior years, we will incur
care and maintenance costs for the ongoing outage at our tier-two assets, which are expected to be between $50 million and
$60 million. We also expect to incur between $15 million and $17 million per month at McArthur River/Key Lake in operational
readiness costs which will be expensed directly to cost of sales until we achieve a reasonable production rate.
The production outlook reflects the expected impact of the delays and deferrals to development work at Cigar Lake in 2021
and the ongoing pandemic and supply chain challenges we are currently experiencing at all our operations. We will work to
mitigate and minimize any disruptions to our operations.
We expect our business to remain resilient. From a cash perspective, we expect to continue to maintain a significant cash
balance. We expect to continue to generate cash from operations. The amount of cash generated will be dependent on the
timing and volume of production at McArthur River, and the extent to which COVID-related disruptions including supply chain
challenges impact our operations and the resulting magnitude of our purchasing activity. Therefore, our cash balances may
fluctuate throughout the year.
See 2021 Financial results by segment on page 49 for details.
2021 outlook compared to actual
Our actual results were largely in-line with the outlook provided in our third quarter MD&A. In 2021 we started the year with
Cigar Lake suspended due to the uncertainty created by the COVID-19 pandemic. Based on the restart of the Cigar Lake mine
in April, we set a production target for Cigar Lake of up to 6 million pounds (our share). We achieved 6.1 million pounds
production at Cigar Lake in 2021.
Capital expenditures for 2021 were $99 million, lower than our outlook of $130 to $155 million, as a result of the deferral of
project work to 2022.
2022 FINANCIAL OUTLOOK
Production (owned and operated properties)
Purchases
Sales/delivery volume
Revenue
Average realized price
Average unit cost of sales (including D&A)
CONSOLIDATED
URANIUM
FUEL SERVICES
-
-
-
up to 11 million lbs
12.5 to 13.5 million kgU
11 to 13 million lbs
-
23 to 25 million lbs
10.5 to 11.5 million kgU
$1,500 to 1,650 million
$1,150 to 1,240 million
$340-370 million
-
-
$50.90/lb
-
$50.00-51.00/lb1
$21.50-22.50/kgU2
Direct administration costs
$125-135 million
-
Exploration costs
Capital expenditures
-
$11 million
$150-175 million
-
-
-
-
1 Uranium average unit cost of sales is calculated as the cash and non-cash costs of the product sold, royalties, care and maintenance and selling costs, divided
by the volume of uranium concentrates sold.
2 Fuel services average unit cost of sales is calculated as the cash and non-cash costs of the product sold, transportation and weighing and sampling costs, as
well as care and maintenance costs, divided by the volume of products sold.
We do not provide an outlook for the items in the table that are marked with a dash.
The following assumptions were used to prepare the outlook in the table above:
Production – we achieve 11 million pounds of production (our share) in our uranium segment. If we do not achieve 11
million pounds, the outlook for the uranium segment could vary.
MANAGEMENT’S DISCUSSION AND ANALYSIS 41
Purchases – are based on the volumes we currently have commitments to acquire under contract in 2022, including our JV
Inkai purchases, and it includes additional volumes we are required to purchase in order to meet the sales/delivery
commitments we have under contract in 2022 and maintain a working inventory. It does not include any purchases that we
may make as a result of the impact of any delays or disruptions to production for any reason, including disruptions caused
by the COVID-19 pandemic and related supply chain challenges.
Our 2022 outlook for sales/delivery volume does not include sales between our uranium and fuel services segments.
Sales/delivery volume is based on the volumes we currently have commitments to deliver under contract in 2022.
Uranium revenue and average realized price are based on a uranium spot price of $42.10 (US) per pound (the UxC spot
price as of December 31, 2021), a long-term price indicator of $40.50 (US) per pound (the UxC long-term indicator on
December 31, 2021) and an exchange rate of $1.00 (US) for $1.27 (Cdn)
Uranium average unit cost of sales (including D&A) is based on the expected unit cost of sales for produced material, the
planned purchases noted in the outlook at an anticipated average purchase price of about $48.80 (Cdn) per pound and
includes care and maintenance costs of between $50 million and $60 million, and operational readiness costs at McArthur
River and Key Lake operations of between $15 million and $17 million per month until a reasonable level of production is
achieved. We expect overall unit cost of sales could vary if there are changes in production and purchase volumes, uranium
spot prices, care and maintenance costs and/or operational readiness costs in 2022.
Our 2022 financial outlook is presented on the basis of equity accounting for our minority ownership interest in JV Inkai. Under
equity accounting, our share of the profits earned by JV Inkai on the sale of its production will be included in “income from
equity-accounted investees” on our consolidated statement of earnings. Our share of production will be purchased at a
discount to the spot price and included at this value in inventory. In addition, JV Inkai capital is not included in our outlook for
capital expenditures. Please see Inkai Planning for the future on pages 71 and 72 for more details.
The following table shows how changes in the exchange rate or uranium prices can impact our outlook. For more details on
the impact of exchange rates, also see Foreign exchange on page 39.
FOR 2022 ($ MILLIONS)
CHANGE
REVENUE
Uranium spot and long-term price1
Value of Canadian dollar vs US dollar
$5(US)/lb increase
$5(US)/lb decrease
One cent decrease in CAD
One cent increase in CAD
68
(76)
11
(11)
ANE
29
(35)
4
(4)
CASH FLOW
16
(24)
3
(3)
1 Assuming change both UxC spot price ($42.10 (US) per pound on December 27, 2021) and the UxC long-term price indicator ($40.50 (US) per pound on
IMPACT ON:
December 27, 2021).
PRICE SENSITIVITY ANALYSIS: URANIUM SEGMENT
As discussed under the Long-term contracting section on page 20, our portfolio of long-term contracts includes a mix of base-
escalated and market-related contracts. Each contract is bilaterally negotiated with the customer and is subject to terms of
confidentiality. Therefore, to help understand how the pricing under our current portfolio of commitments is expected to react at
various spot prices at December 31, 2021, we have constructed the table below.
The table is based on the pricing terms under the long-term commitments in our contract portfolio that have been fully
executed as at December 31, 2021. Based on the terms and volumes under those commitments, the table is designed to
indicate how our average realized price will react under various spot price assumptions at a point in time. At year-end, the
annual average sales commitments under our contract portfolio at December 31, 2021 are 18 million pounds per year, with
commitment levels in 2022, 2023 and 2024 higher than the average and in 2025 and 2026 lower than the average. As the
market improves, we expect to continue to layer in volumes capturing greater upside using market-related pricing
mechanisms. In this table, we do not consider the impact on our average realized price of volumes under negotiation and
those not yet committed under contract. In other words, the prices shown in the table would only be realized if the contract
portfolio remained exactly as it was on December 31, 2021, using the following assumptions:
The uranium price remains fixed at a given spot level for each annual period shown
Deliveries based on commitments under contracts include best estimates of the expected deliveries under contract terms
To reflect escalation mechanisms contained in existing contracts, the long-term US inflation rate of 2% is used, for modeling
purposes only
42 CAMECO CORPORATION
It is important to note, that the table is not a forecast of prices we expect to receive. The prices we actually realize will be
different from the prices shown in the table. We intend to update this table each quarter in our MD&A to reflect deliveries made
and changes to our contract portfolio. As a result, we expect the table to change from quarter to quarter.
Expected realized uranium price sensitivity under various spot price assumptions at December 31, 2021
(rounded to the nearest $1.00)
SPOT PRICES
($US/lb U3O8)
2022
2023
2024
2025
2026
$20
29
28
30
31
33
$40
39
39
39
40
40
$60
48
50
49
52
53
$80
55
57
54
60
61
$100
$120
$140
59
61
57
64
66
62
63
58
66
71
65
66
58
68
74
Liquidity and capital resources
Our financial objective is to ensure we have the cash and debt capacity to fund our operating activities, investments and other
financial obligations in order to execute our strategy and to allow us to self-manage risk. We have a number of alternatives to
fund future capital requirements, including using our operating cash flow, drawing on our existing credit facilities, entering new
credit facilities, and raising additional capital through debt or equity financings. We are always considering our financing
options so we can take advantage of favourable market conditions when they arise. In addition, due to the deliberate cost
reduction measures we have implemented, we have continued to have positive cash from operations and as a result, we have
significant cash balances.
At the end of 2021, we had cash and cash equivalents and short-term investments of $1.3 billion, while our total debt
amounted to $996 million.
We have large, creditworthy customers that continue to need uranium even during weak economic conditions, and we expect
the uranium contract portfolio we have built to continue to provide a solid revenue stream. From 2022 through 2026, we have
commitments to deliver an average of 18 million pounds per year, with commitment levels in 2022, 2023 and 2024 higher than
in 2025 and 2026.
The health and safety of our employees, their families and their communities is our priority as the COVID-19 pandemic
continues to bring uncertainty and could have an impact on both the sources and uses of liquidity.
We expect a return to production at McArthur River/Key Lake will be positive for cash flow. It will allow us to source more of
our committed sales from lower-cost produced pounds and we will no longer be required to expense care and maintenance
costs directly to cost of sales. Until we achieve a reasonable production rate, we expect to incur between $15 million to $17
million per month in operational readiness costs, which will be expensed directly to cost of sales. Therefore, cash flow from
operations for 2022 will be dependent on the timing and volume of McArthur River/Key Lake production, the timing and volume
of Cigar Lake production and the timing and magnitude of our purchasing activity, as a result cash balances may fluctuate
throughout the year. However, we expect our cash balances and operating cash flows to meet our capital requirements during
2022.
With the Supreme Court’s dismissal of CRA’s application for leave, the dispute of the 2003 through 2006 tax years are fully
and finally resolved in our favour. Furthermore, we are confident the courts would reject any attempt by CRA to utilize the
same or similar positions and arguments for the other tax years currently in dispute (2007 through 2014) and believe CRA
should return the $777 million in cash and letters of credit we have been required to pay or otherwise secure. As such, we
have filed notice of appeal to the Tax Court however, timing of any further payments is uncertain. See page 37 for more
information.
MANAGEMENT’S DISCUSSION AND ANALYSIS 43
FINANCIAL CONDITION
Cash position ($ millions)
(cash and cash equivalents and short-term investments)
Cash provided by operations ($ millions)
(net cash flow generated by our operating activities after changes in working capital)
Cash provided by operations/net debt1
(net debt is total consolidated debt, less cash position)
Net debt/total capitalization1
(total capitalization is net debt and equity)
1 As at December 31, 2021, Cameco was negative net debt due to our strong cash position.
CREDIT RATINGS
2021
1,332
458
2020
943
57
-136%
109%
-7%
1%
The credit ratings assigned by external ratings agencies are important as they impact our ability to raise capital at competitive
pricing to support our business operations and execute our strategy.
Third-party ratings for our commercial paper and senior debt as of February 8, 2022:
SECURITY
Commercial paper
Senior unsecured debentures
DBRS
R-2 (middle)
BBB
Stable1
S&P
A-3
BBB-
Negative2
Rating trend / rating outlook
1 On May 28, 2020, DBRS changed Cameco’s rating trend to stable. On June 3, 2021, DBRS confirmed the rating and outlook.
2 On March 11, 2020, S&P changed Cameco’s rating outlook to negative. On March 12, 2021, S&P affirmed the rating and outlook.
The rating agencies may revise or withdraw these ratings if they believe circumstances warrant. The rating trend/outlook
represents the rating agency’s assessment of the likelihood and direction that the rating could change in the future.
A change in our credit ratings could affect our cost of funding and our access to capital through the capital markets.
Liquidity
($ MILLIONS)
Cash and cash equivalents at beginning of year
Cash from operations
Investment activities
Additions to property, plant and equipment and acquisitions
Other investing activities
Financing activities
Change in debt
Interest paid
Other financing activities
Issue of shares
Dividends
Exchange rate on changes on foreign currency cash balances
Cash and cash equivalents and short-term investments at end of year
CASH FROM OPERATIONS
2021
943
458
(99)
79
-
(39)
(3)
27
(32)
(2)
1,332
2020
1,062
57
(77)
1
(2)
(66)
(3)
5
(32)
(2)
943
Cash from operations was higher than in 2020 due largely to the purchasing activity that was a result of the Cigar Lake
production suspension and higher sales commitments in 2020. Purchases in 2021 were 11.1 million pounds compared to 36.2
million pounds in 2020. Not including working capital requirements, our operating cash flows in the year were down $79
million. See note 23 to the financial statements.
INVESTING ACTIVITIES
Cash used in investing includes acquisitions and capital spending.
44 CAMECO CORPORATION
Capital spending
We classify capital spending as sustaining, capacity replacement or growth. As a mining company, sustaining capital is the
money we spend to keep our facilities running in their present state, which would follow a gradually decreasing production
curve, while capacity replacement capital is spent to maintain current production levels at those operations. Growth capital is
money we invest to generate incremental production, and for business development.
Capital expenditures for 2021 were $99 million, lower than our outlook of $130 million to $155 million, as a result of the
deferral of project work to 2022.
Outlook for investing activities
CAMECO’S SHARE ($ MILLIONS)
Total uranium & fuel services
Sustaining capital
Capacity replacement capital
Growth capital
2022 PLAN
2023 PLAN
2024 PLAN
150-175
110-125
40-50
-
100-150
100-150
75-105
25-45
-
75-105
25-45
-
Our 2022, 2023 and 2024 capital spending estimates assume that we engage in operational readiness activities at McArthur
River/Key Lake to reach our 2024 production plan and are able to mitigate the risks posed by the COVID-19 pandemic and
supply chain disruptions at all our operations.
Our estimate for capital spending in 2022 has been increased to between $150 million and $175 million (previously between
$50 million and $100 million) due to the capital required for operational readiness activities and the rescheduling of some
expenditures planned in 2021 to 2022.
Capital expenditures for JV Inkai are expected to be covered by JV Inkai cash flows in 2022 and are included in our overall
equity investment.
Major sustaining and capacity replacement expenditures in 2022 include:
Fuel services – continued work on our Vision in Motion project
Cigar Lake – underground development and necessary ground freezing infrastructure to meet production targets
McArthur River/Key Lake – capital required for operational readiness to reach the 2024 planned production of 15 million
pounds per year (100% basis)
Our investment in digital and automation technologies
This information regarding currently expected capital expenditures for future periods is forward-looking information and is
based upon the assumptions and subject to the material risks discussed on pages 3 and 4. Our actual capital expenditures for
future periods may be significantly different.
FINANCING ACTIVITIES
Cash from financing includes borrowing and repaying debt, and other financial transactions including paying dividends and
providing financial assurance.
MANAGEMENT’S DISCUSSION AND ANALYSIS 45
Long-term contractual obligations
2023 AND
2025 AND
DECEMBER 31 ($ MILLIONS)
Long-term debt
Interest on long-term debt
Provision for reclamation
Provision for waste disposal
Other liabilities
Capital commitments
Total
2022
-
38
45
1
4
53
141
2024
500
65
66
4
8
-
643
2026
-
34
71
3
2
-
2027 AND
BEYOND
500
93
918
-
85
-
TOTAL
1,000
230
1,100
8
99
53
110
1,596
2,490
We have contractual capital commitments of approximately $53 million at December 31, 2021. Certain of the contractual
commitments may contain cancellation clauses; however, we disclose the commitments based on management’s intent to fulfil
the contracts.
We have sufficient borrowing capacity with available unsecured lines of credit totalling about $2.7 billion, which include the
following:
A $1.0 billion unsecured revolving credit facility that matures October 1, 2025. Each calendar year, upon mutual agreement,
the facility can be extended for an additional year. We may increase the revolving credit facility above $1.0 billion, by
increments of no less than $50 million, up to a total of $1.25 billion. The facility ranks equally with all of our other senior
debt. At December 31, 2021, there were no amounts outstanding under this facility and we do not expect to need to draw
on this facility in 2022.
At December 31, 2021, we had approximately $1.6 billion outstanding in financial assurances provided by various financial
institutions. We use these facilities mainly to provide financial assurance for future decommissioning and reclamation of our
operating sites, for our obligations relating to the CRA dispute, and as overdraft protection.
In total we have $1.0 billion in senior unsecured debentures outstanding:
$500 million bearing interest at 4.19% per year, maturing on June 24, 2024
$400 million bearing interest at 2.95% per year, maturing on October 21, 2027
$100 million bearing interest at 5.09% per year, maturing on November 14, 2042
Debt covenants
Our revolving credit facility includes the following financial covenants:
our funded debt to tangible net worth ratio must be 1:1 or less
other customary covenants and events of default
Funded debt is total consolidated debt less non-recourse debt, $100 million in letters of credit, cash and cash equivalents and
short-term investments.
Not complying with any of these covenants could result in accelerated payment and termination of our revolving credit facility.
At December 31, 2021, we complied with all covenants, and we expect to continue to comply in 2022.
OFF-BALANCE SHEET ARRANGEMENTS
We had three kinds of off-balance sheet arrangements at the end of 2021:
purchase commitments
financial assurances
other arrangements
46 CAMECO CORPORATION
Purchase commitments
We make purchases under long-term contracts where it is beneficial for us to do so and in order to support our long-term
contract portfolio. The following table is based on our purchase commitments in our uranium and fuel services segments at
December 31, 20212 but does not include purchases of our share of Inkai production. These commitments include a mix of
fixed-price and market-related contracts. Actual payments will be different as a result of changes to our purchase
commitments and, in the case of contracts with market-related pricing, the market prices in effect at the time of delivery. We
will update this table as required in our MD&A to reflect material changes to our purchase commitments and changes in the
prices used to estimate our commitments under market-related contracts.
DECEMBER 31, 2021 ($ MILLIONS)
2022
2024
2026
BEYOND
TOTAL
2023 AND
2025 AND
2027 AND
Purchase commitments1,2
864
1 Denominated in US dollars and Japanese yen, converted from US dollars to Canadian dollars at the rate of 1.27 and from Japanese yen to Canadian dollars at
224
207
175
258
the rate of $0.01.
2 These amounts have been adjusted for any additional purchase commitments that we have entered into since December 31, 2021 but does not include
deliveries taken under contract since December 31, 2021.
We have commitments of $864 million (Cdn) for the following:
approximately 19 million pounds of U3O8 equivalent from 2022 to 2028
approximately 0.8 million kgU as UF6 in conversion services from 2022 to 2024
about 0.9 million Separative Work Units (SWU) of enrichment services to meet existing forward sales commitments under
agreements with a non-Western supplier
The suppliers do not have the right to terminate agreements other than pursuant to customary events of default provisions.
Financial assurances
We use standby letters of credit and surety bonds mainly to provide financial assurance for the decommissioning and
reclamation of our mining and conversion facilities as well as for our obligations relating to the CRA dispute. We are required
to provide financial assurances to various regulatory agencies until decommissioning and reclamation activities are complete.
We are also providing letters of credit until the CRA dispute is resolved. Our financial assurances renew automatically on an
annual basis, unless otherwise advised by the issuing institution. At December 31, 2021 our financial assurances totaled $1.6
billion, the same as at December 31, 2020.
Other arrangements
We have arranged for standby product loan facilities with various counterparties. The arrangements allow us to borrow up to
2.0 million kgU of UF6 conversion services and 2.6 million pounds of U3O8 over the period 2020 to 2023 with repayment in kind
up to December 31, 2023. Under the loan facilities, standby fees of up to 1% are payable based on the market value of the
facilities and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 1.6%. At December
31, 2021, we have 1.1 million kgU of UF6 conversion services drawn on the loans.
BALANCE SHEET
DECEMBER 31,
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
Inventory
Total assets
Total non-current liabilities
Dividends per common share
2021
410
7,518
2,258
0.08
2020
680
7,581
2,318
0.08
CHANGE
2019
2020 TO 2021
321
7,427
2,155
0.08
(40)%
(1)%
(3)%
-
Total product inventories decreased by 40% to $410 million this year as sales were higher than production and purchases
during the year. At December 31, 2021, our average cost for uranium was $38.30 per pound, up from $38.01 per pound at
December 31, 2020. As of December 31, 2021, we held an inventory of 8 million pounds of U3O8 equivalent (excluding broken
ore).
MANAGEMENT’S DISCUSSION AND ANALYSIS 47
At the end of 2021, our total assets amounted to $7.5 billion, a decrease of 1% compared to 2020, due mainly to lower
inventories which were largely offset by an increase in cash and investment balances. In 2020, the total asset balance
increased by $0.2 billion compared to 2019, due mainly to higher inventories.
The major components of long-term financial liabilities are long-term debt, the provision for reclamation, accrued pension and
post-retirement benefit liability, deferred sales and financial derivatives.
48 CAMECO CORPORATION
2021 financial results by segment
Uranium
HIGHLIGHTS
Production volume (million lbs)
Sales volume (million lbs)
Average spot price
Average long-term price
Average realized price
Average unit cost of sales (including D&A)
Revenue ($ millions)
Gross profit (loss) ($ millions)
Gross profit (loss) (%)
($US/lb)
($US/lb)
($US/lb)
($Cdn/lb)
($Cdn/lb)
2021
6.1
24.3
35.28
36.81
34.53
43.34
47.80
1,055
(108)
(10)
2020
5.0
30.7
29.96
34.63
34.39
46.13
45.53
1,416
18
1
CHANGE
22%
(21)%
18%
6%
-
(6)%
5%
(25)%
(700)%
(1100)%
Production volumes in 2021 increased by 22% compared to 2020. See Uranium – production overview on page 61 for more
information.
Uranium revenues this year were down 25% compared to 2020 due to a decrease in sales volumes of 21% and a decrease of
6% in the Canadian dollar average realized price. Although the spot price for uranium averaged $35.28 (US) per pound in
2021, an increase of 18% compared to the 2020 average price of $29.96 (US) per pound, the average realized price was 6%
lower compared to the same period in 2020 primarily due to the strengthening of the Canadian dollar compared to 2020.
Total cost of sales (including D&A) decreased by 17% ($1.16 billion compared to $1.40 billion in 2020) due to a decrease in
sales volume of 21% partially offset by a 5% increase in unit cost of sales. Unit cost of sales is higher than in the same period
in 2020 due to the higher cost of purchased material and the higher unit cost impact of fixed care and maintenance costs
resulting from lower sales volumes.
The net effect was a $126 million decrease in gross profit for the year.
The following table shows the costs of produced and purchased uranium incurred in the reporting periods (non-IFRS
measures, see below). These costs do not include care and maintenance costs, selling costs such as royalties, transportation
and commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.
($CDN/LB)
Produced
Cash cost
Non-cash cost
Total production cost 1
Quantity produced (million lbs)1
Purchased
Cash cost1
Quantity purchased (million lbs)1
Totals
Produced and purchased costs
2021
2020
CHANGE
16.17
17.18
33.35
6.1
42.30
11.1
16.24
15.10
31.34
5.0
39.66
36.2
-
14%
6%
22%
7%
(69)%
39.13
38.65
1%
(58)%
Quantities produced and purchased (million lbs)
1 Due to equity accounting for JV Inkai, our share of production is shown as a purchase at the time of delivery. JV Inkai purchases will fluctuate during the quarters
and timing of purchases will not match production. In 2021 we purchased 5.2 million pounds at a purchase price per pound of $45.31 ($36.03 (US)) (2020 – 4.0
million pounds at a purchase price per pound of $36.63 ($27.66 (US))).
17.2
41.2
Over the last two years the annual cash cost of production has averaged $16.21 per pound at Cigar Lake, slightly higher than
the estimated life of mine cost of between $15 and $16 per pound, as a result of the impacts of COVID-19. In 2022 and 2023,
our cash production costs may continue to be affected by the impacts of the COVID-19 pandemic, as well as timing and rate of
production at the McArthur River/Key Lake operation. Once we achieve the 2024 planned production, the average unit
operating costs at Cigar Lake may increase as production declines.
MANAGEMENT’S DISCUSSION AND ANALYSIS 49
The benefit of the estimated life-of-mine operating cost for Inkai’s production of between $6 and $7 per pound, is expected to
be reflected in the line item on our statement of earnings called “share of earnings from equity-accounted investee”.
Our purchases in 2021, totaled about $470 million, representing an average annual cost of $42.30 per pound, about $9.90 per
pound higher than the average production cost at Cigar Like for 2021 and 2020. Although purchased pounds are transacted in
US dollars, we account for the purchases in Canadian dollars. In the year, the average cash cost of purchased material was
$42.30 (Cdn), or $33.73 (US) per pound, compared to $39.66 (Cdn), or $29.17 (US) per pound in the same period in 2020.
Cash cost per pound, non-cash cost per pound and total cost per pound for produced and purchased uranium presented in the
above table are non-IFRS measures. These measures do not have a standardized meaning or a consistent basis of
calculation under IFRS. We use these measures in our assessment of the performance of our uranium business. We believe
that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate
our performance and ability to generate cash flow.
These measures are non-standard supplemental information and should not be considered in isolation or as a substitute for
measures of performance prepared according to accounting standards. These measures are not necessarily indicative of
operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures
differently, so you may not be able to make a direct comparison to similar measures presented by other companies.
To facilitate a better understanding of these measures, the following table presents a reconciliation of these measures to our
unit cost of sales for the years ended 2021 and 2020 as reported in our financial statements.
CASH AND TOTAL COST PER POUND RECONCILIATION
($ MILLIONS)
Cost of product sold
Add / (subtract)
Royalties
Other selling costs
Care and maintenance and severance costs
Change in inventories
Cash operating costs (a)
Add / (subtract)
Depreciation and amortization
Care and maintenance costs
Change in inventories
Total operating costs (b)
Uranium produced & purchased (million lbs) (c)
Cash costs per pound (a ÷ c)
Total costs per pound (b ÷ c)
ROYALTIES
2021
1,028.8
(15.2)
(4.6)
(156.7)
(284.1)
568.2
134.6
(52.9)
23.1
673.0
17.2
33.03
39.13
2020
1,243.3
(15.5)
(12.1)
(138.5)
439.7
1,516.9
154.6
(57.5)
(21.6)
1,592.4
41.2
36.82
38.65
We pay royalties on the sale of all uranium extracted at our mines in the province of Saskatchewan. Two types of royalties are
paid:
Basic royalty: calculated as 5% of gross sales of uranium, less the Saskatchewan resource credit of 0.75%.
Profit royalty: a 10% royalty is charged on profit up to and including $24.38/kg U3O8 ($11.06/lb) and a 15% royalty is
charged on profit in excess of $24.38/kg U3O8. Profit is determined as revenue less certain operating, exploration,
reclamation and capital costs. Both exploration and capital costs are deductible at the discretion of the producer.
As a resource corporation in Saskatchewan, we also pay a corporate resource surcharge of 3% of the value of resource sales.
URANIUM SEGMENT OUTLOOK
Based on the contracts we have in place, and not including sales between our segments, we expect to deliver between 23
million and 25 million pounds of U3O8 in 2022.
50 CAMECO CORPORATION
In addition, we expect to purchase between 11 million and 13 million pounds in 2022 to meet our sales commitments and
maintain a working inventory. This includes our spot market purchases and other purchase commitments, including from JV
Inkai.
Fuel services
(includes results for UF6, UO2, UO3 and fuel fabrication)
HIGHLIGHTS
Production volume (million kgU)
Sales volume (million kgU)
Average realized price
Average unit cost of sales (including D&A)
Revenue ($ millions)
Gross profit ($ millions)
Gross profit (%)
($Cdn/kgU)
($Cdn/kgU)
2021
12.1
13.6
29.72
21.02
404
118
29
2020
11.7
13.5
27.89
20.76
377
96
25
CHANGE
3%
1%
7%
1%
7%
23%
16%
Total revenue increased by 7% from 2020 due to a 7% increase in the realized price and a 1% increase in sales volume. The
increase in realized price was mainly the result of contracts that were entered into in an improved price environment.
Total cost of products and services sold (including D&A) increased 2% ($286 million compared to $281 million in 2020), due to
the 1% increase in sales volume and a 1% increase in average unit cost of sales compared to 2020 due to higher input costs.
The net effect was a $22 million increase in gross profit.
FUEL SERVICES SEGMENT OUTLOOK
In 2022, we plan to produce 12.5 million to 13.5 million kgU, and we expect sales volumes, not including intersegment sales,
to be 10.5 million to 11.5 million kgU. Overall revenue is expected to be between $340 million and $370 million, slightly lower
than 2021 due to lower committed sales volumes. We expect the average unit cost of sales (including D&A) to be between
$21.50/kgU and $22.50/kgU.
MANAGEMENT’S DISCUSSION AND ANALYSIS 51
Fourth quarter financial results
Consolidated results
HIGHLIGHTS
($ MILLIONS EXCEPT WHERE INDICATED)
Revenue
Gross profit
Net earnings attributable to equity holders
$ per common share (basic)
$ per common share (diluted)
Adjusted net earnings (non-IFRS, see page 33)
$ per common share (adjusted and diluted)
Cash provided by operations
NET EARNINGS
THREE MONTHS ENDED
DECEMBER 31
2021
465
56
11
0.03
0.03
23
0.06
59
2020
550
109
80
0.20
0.20
48
0.12
257
CHANGE
(15)%
(49)%
(86)%
(85)%
(85)%
(52)%
(50)%
(77)%
The following table shows what contributed to the change in net earnings and adjusted net earnings (non-IFRS measure, see
page 33) in the fourth quarter of 2021 compared to the same period in 2020.
($ MILLIONS)
Net earnings (losses) - 2020
IFRS
Adjusted
80
48
Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A), net of hedging benefits)
Uranium
Lower sales volume
Higher realized prices ($US)
Foreign exchange impact on realized prices
Fuel services
Higher costs
change – uranium
Higher sales volume
Higher realized prices ($Cdn)
change – fuel services
Other changes
Lower administration expenditures
Lower exploration expenditures
Change in reclamation provisions
Change in gains or losses on derivatives
Change in foreign exchange gains or losses
Change in earnings from equity-accounted investments
Redemption of Series E debentures in 2020
Canadian Emergency Wage Subsidy
Change in income tax recovery or expense
Other
Net earnings - 2021
ADJUSTED NET EARNINGS
(20)
10
(13)
(47)
(70)
4
11
15
8
1
(10)
(35)
7
16
24
(37)
19
(7)
11
(20)
10
(13)
(47)
(70)
4
11
15
8
1
-
13
7
16
24
(37)
5
(7)
23
We use adjusted net earnings, a non-IFRS measure, as a more meaningful way to compare our financial performance from
period to period. See page 33 for more information. The following table reconciles adjusted net earnings with our net earnings.
52 CAMECO CORPORATION
($ MILLIONS)
Net earnings attributable to equity holders
Adjustments
Adjustments on derivatives
Adjustments on other operating expense (income)
Income taxes on adjustments
Adjusted net earnings
ADMINISTRATION
($ MILLIONS)
Direct administration
Stock-based compensation
Total administration
THREE MONTHS ENDED
DECEMBER 31
2021
11
5
10
(3)
23
2020
80
(43)
-
11
48
THREE MONTHS ENDED
DECEMBER 31
2021
28
9
37
2020
CHANGE
31
14
45
(10)%
(36)%
(18)%
Direct administration costs were $28 million in the quarter, $3 million lower than the same period last year. Stock-based
compensation expenses were $5 million lower from the fourth quarter of 2020. See note 24 to the financial statements.
Quarterly trends
HIGHLIGHTS
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
Revenue
Net earnings (loss) attributable to equity holders
$ per common share (basic)
$ per common share (diluted)
Q4
465
11
Q3
361
(72)
Q2
359
(37)
2021
Q1
290
(5)
Q4
550
80
Q3
379
(61)
Q2
525
(53)
2020
Q1
346
(19)
0.03
(0.18)
(0.09)
(0.01)
0.20
(0.15)
(0.13)
(0.05)
0.03
(0.18)
(0.09)
(0.01)
0.20
(0.15)
(0.13)
(0.05)
Adjusted net earnings (loss) (non-IFRS, see page 33)
23
(54)
(38)
(29)
48
(78)
(65)
29
$ per common share (adjusted and diluted)
0.06
(0.14)
(0.10)
(0.07)
0.12
(0.20)
(0.16)
0.07
Cash provided by (used in) operations (after working
capital changes)
59
203
152
45
257
(66)
(316)
182
Key things to note:
The timing of customer requirements, which tends to vary from quarter to quarter, drives revenue in the uranium and fuel
services segments.
Net earnings do not trend directly with revenue due to unusual items and transactions that occur from time to time. We use
adjusted net earnings, a non-IFRS measure, as a more meaningful way to compare our results from period to period (see
page 33 for more information).
Cash from operations tends to fluctuate as a result of the timing of deliveries and product purchases in our uranium and fuel
services segments.
Quarterly results are not necessarily a good indication of annual results due to the variability in customer requirements
noted above.
MANAGEMENT’S DISCUSSION AND ANALYSIS 53
The table that follows presents the differences between net earnings and adjusted net earnings for the previous seven
quarters.
Q4
11
5
10
(3)
Q3
Q2
2021
Q1
(72)
(37)
(5)
Q3
Q2
2020
Q1
(61)
(53)
(19)
Q4
80
26
(2)
(6)
(9)
6
2
(9)
(22)
7
(43)
(31)
(41)
7
7
23
6
70
(6)
(16)
-
11
48
23
(54)
(38)
(29)
(78)
(65)
29
HIGHLIGHTS
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
Net earnings (loss) attributable to equity holders
Adjustments
Adjustments on derivatives
Adjustments on other operating expense (income)
Income taxes on adjustments
Adjusted net earnings (losses) (non-IFRS, see
page 33)
54 CAMECO CORPORATION
Fourth quarter financial results by segment
Uranium
HIGHLIGHTS
Production volume (million lbs)
Sales volume (million lbs)
Average spot price
Average long-term price
Average realized price
Average unit cost of sales (including D&A)
Revenue ($ millions)
Gross profit ($ millions)
Gross profit (%)
($US/lb)
($US/lb)
($US/lb)
($Cdn/lb)
($Cdn/lb)
THREE MONTHS ENDED
DECEMBER 31
2021
2.8
6.5
44.33
42.92
39.65
49.94
48.35
323
10
3
2020
2.8
8.6
29.86
35.00
38.43
50.40
41.09
436
80
18
CHANGE
-
(24)%
48%
23%
3%
(1)%
18%
(26)%
(88)%
(83)%
Production volumes this quarter were unchanged from the fourth quarter of 2020. See Uranium – production overview on page
61 for more information.
Uranium revenues were down 26% due to a 24% decrease in sales volume and a 1% decrease in the Canadian dollar
average realized price. While the average spot price for uranium increased by 48% compared to the same period in 2020, our
average realized price decreased by 1% as a result of lower prices on fixed-price contracts and the lagging effect of changes
in spot price on market related prices. In addition, the Canadian dollar was stronger compared to the same period last year,
$1.00 (US) for $1.26 (Cdn) compared to $1.00 (US) for $1.31 (Cdn) in the fourth quarter of 2020.
Total cost of sales (including D&A) decreased by 12% ($313 million compared to $355 million in 2020). This was primarily the
result of the 24% decrease in sales volume as the average unit cost of sales increased by 18% due to the higher cost of
purchased material and higher care and maintenance costs.
The net effect was a $70 million decrease in gross profit for the quarter.
The following table shows the costs of produced and purchased uranium incurred in the reporting periods. These costs do not
include care and maintenance costs, selling costs such as royalties, transportation and commissions, nor do they reflect the
impact of opening inventories on our reported cost of sales.
($/LB)
Produced
Cash cost
Non-cash cost
Total production cost 1
Quantity produced (million lbs)1
Purchased
Cash cost1
Quantity purchased (million lbs)1
Totals
Produced and purchased costs
THREE MONTHS ENDED
DECEMBER 31
2021
2020
CHANGE
14.01
17.10
31.11
2.8
52.73
3.3
13.48
14.62
28.10
2.8
38.24
5.7
4%
17%
11%
-
38%
(42)%
42.81
34.90
23%
Quantities produced and purchased (million lbs)
1 Due to equity accounting for JV Inkai, our share of production will be shown as a purchase at the time of delivery. JV Inkai purchases will fluctuate during the
quarters and timing of purchases will not match production. During the quarter, we purchased 2.2 million pounds at a purchase price per pound of $52.69
($41.79 (US)) (Q4 2020 – 2.7 million pounds at a purchase price per pound of $37.14 ($28.17 (US))).
6.1
8.5
(28)%
MANAGEMENT’S DISCUSSION AND ANALYSIS 55
Although purchased pounds are transacted in US dollars, we account for the purchases in Canadian dollars. In the fourth
quarter, the average cash cost of purchased material was $52.73 (Cdn) per pound, or $41.87 (US) per pound in US dollar
terms, compared to $38.24 (Cdn) per pound, or $29.21 (US) per pound in the fourth quarter of 2020.
Cash cost per pound, non-cash cost per pound and total cost per pound for produced and purchased uranium presented in the
above table are non-IFRS measures. See page 49 for more information.
To facilitate a better understanding of these measures, the following table presents a reconciliation of these measures to our
unit cost of sales for the fourth quarters of 2021 and 2020.
CASH AND TOTAL COST PER POUND RECONCILIATION
($ MILLIONS)
Cost of product sold
Add / (subtract)
Royalties
Other selling costs
Care and maintenance and severance costs
Change in inventories
Cash operating costs (a)
Add / (subtract)
Depreciation and amortization
Care and maintenance costs
Change in inventories
Total operating costs (b)
Uranium produced & purchased (million lbs) (c)
Cash costs per pound (a ÷ c)
Total costs per pound (b ÷ c)
Fuel services
(includes results for UF6, UO2, UO3 and fuel fabrication)
HIGHLIGHTS
Production volume (million kgU)
Sales volume (million kgU)
Average realized price
Average unit cost of sales (including D&A)
Revenue ($ millions)
Gross profit ($ millions)
Gross profit (%)
THREE MONTHS ENDED
DECEMBER 31
2021
278.9
(5.0)
(1.6)
(36.8)
(22.3)
213.2
34.2
(10.1)
23.8
261.1
6.1
34.95
42.81
2020
296.6
(7.8)
(1.3)
(29.5)
(2.5)
255.5
58.6
(11.4)
(6.1)
296.6
8.5
30.06
34.90
($Cdn/kgU)
($Cdn/kgU)
THREE MONTHS ENDED
DECEMBER 31
2021
3.1
4.9
28.80
19.45
140
46
33
2020
3.3
4.4
26.29
19.12
115
32
28
CHANGE
(6)%
11%
10%
2%
22%
44%
18%
Total revenue increased by 22% due to an 11% increase in sales volumes and a 10% increase in average realized price. The
increase in average realized price was mainly the result of contracts that were entered into in an improved price environment.
Total cost of sales (including D&A) increased by 14% to $95 million compared to the fourth quarter of 2020 due to the 11%
increase in sales volumes and an increase of 2% in the average unit cost of sales, due to higher input costs.
The net effect was a $14 million increase in gross profit.
56 CAMECO CORPORATION
Operations and projects
This section of our MD&A is an overview of the mining properties we operate or have an interest in, our curtailed operations
and our projects, what we accomplished this year, our plans for the future and how we manage risk.
58 MANAGING THE RISKS
61 URANIUM – PRODUCTION OVERVIEW
61 ............... PRODUCTION OUTLOOK
62 URANIUM – TIER-ONE OPERATIONS
62 ............... MCARTHUR RIVER MINE / KEY LAKE MILL
66 ............... CIGAR LAKE
70 ............... INKAI
73 URANIUM – TIER-TWO OPERATIONS
73 ............... RABBIT LAKE
74 ............... US ISR
75 URANIUM – ADVANCED PROJECTS
75 ............... MILLENNIUM
75 ............... YEELIRRIE
75 ............... KINTYRE
77 URANIUM – EXPLORATION
78 FUEL SERVICES
78 ............... BLIND RIVER REFINERY
79 ............... PORT HOPE CONVERSION SERVICES
79 ............... CAMECO FUEL MANUFACTURING INC. (CFM)
81 CORPORATE DEVELOPMENT
MANAGEMENT’S DISCUSSION AND ANALYSIS 57
Managing the risks
The nature of our operations means we face many potential risks and hazards that could have a significant impact on our
business.
Below we list the risks that generally apply to all of our operations and advanced projects. We also talk about how we manage
specific risks in each operation or project update. These risks could have a material impact on our business in the near term.
These risks, however, are not a complete list of the potential risks our operations and advanced projects face. There may be
others we are not aware of or risks we feel are not material today that could become material in the future.
We recommend you also review our annual information form, which includes a discussion of other material risks that could
have an impact on our business.
Regulatory risks
A significant part of our economic value depends on our ability to:
obtain and renew the licences and other approvals we need to restart, operate, to increase production at our mines and to
develop new mines. If we do not receive the regulatory approvals we need, or do not receive them at the right time, then we
may have to delay, modify or cancel a project, which could increase our costs and delay or prevent us from generating
revenue from the project. Regulatory review, including the review of environmental matters, is a long and complex process.
comply with the conditions in these licences and approvals. Our right to continue operating facilities, restart operations,
increase production at our mines and develop new mines depends on our compliance with these conditions.
comply with the extensive and complex laws and regulations that govern our activities. Environmental legislation imposes
strict standards and controls on almost every aspect of our operations and projects, and is not only introducing new
requirements, but also becoming more stringent. For example:
we must complete the environmental assessment process before we can begin developing a new mine or, in some
cases, make significant changes to our operations
we may need regulatory approval to make changes to our operational processes, which can take a significant amount
of time because it may require an extensive review of supporting technical information. The complexity of this process
can be further compounded when regulatory approvals are required from multiple agencies.
the federal government has introduced an Impact Assessment Act as well as a Canadian Navigable Waters Act along
with significant revisions to the federal Fisheries Act. This legislation could impact the scope, timeliness and cost of
approvals for projects and the revisions could impact existing operations.
Federal requirements stemming from the Species at Risk Act are introducing significant uncertainty into the
management of activities in northern Saskatchewan. One specific example includes the amended national recovery
strategy for woodland caribou, which contains strategic directions that have the potential to impact economic and social
development in northern Saskatchewan. As a requirement of this document, the province of Saskatchewan is
responsible for developing range plans that outline population and habitat protection measures for activities conducted
in northern Saskatchewan. Mitigation requirements, and other measures, could have an impact on Saskatchewan
operations and advanced projects in northern Saskatchewan.
A number of government or governmental bodies have introduced or are contemplating regulatory changes in response
to the potential impacts of climate change. While we have a relatively small carbon footprint, our Canadian facilities
could experience higher annual operating costs due to changes in GHG pricing and regulations, such as carbon
pricing, the Canadian Clean Fuel Standard, and/or other policy changes.
We use significant management and financial resources to manage our regulatory risks.
Environmental risks
We have the safety, health and environmental risks associated with any mining and chemical processing company. Our
uranium and fuel services segments also face unique risks associated with radiation.
58 CAMECO CORPORATION
Laws to protect the environment are becoming more stringent for members of the nuclear energy industry, including mining,
milling and processing facilities, and have inter-jurisdictional aspects (both federal and provincial/state regimes are applicable).
Once we have permanently stopped mining and processing activities at an operating site, we are required to decommission
the site to the satisfaction of the regulators. We have developed preliminary decommissioning plans for our operating sites and
use them to estimate our decommissioning costs. Regulators review and accept our preliminary decommissioning plans on a
regular basis. As the site approaches or goes into decommissioning, regulators review the detailed decommissioning plans.
This can result in further regulatory process, as well as additional requirements, costs and financial assurances.
We have submitted updates to all Saskatchewan operations’ Preliminary Decommissioning Plan (PDP) and Preliminary
Decommissioning Cost Estimate (PDCE) documents in accordance with the five-year timeline specified in the regulations.
Upon acceptance of the PDP and PDCE documents by the Saskatchewan Ministry of Environment and Canadian Nuclear
Safety Commission (CNSC) staff, a formal Commission proceeding will be required for final approval of the PDP and PDCE by
the Commission. All Saskatchewan mining operations have received the necessary approvals for the current PDP and PDCE
and all required financial assurances are in place.
At the end of 2021, our estimate of total decommissioning and reclamation costs was $1.11 billion. This is the undiscounted
value of the obligation and is based on our current operations. We had accounting provisions of $1.14 billion at the end of
2021 (the present value of the $1.11 billion). Regulatory approval is required prior to beginning decommissioning. Since we
expect to incur most of these expenditures at the end of the useful lives of the operations they relate to, and none of our
assets have approval for decommissioning, our expected costs for decommissioning and reclamation for the next five years
are not material.
We provide financial assurances for decommissioning and reclamation such as letters of credit or surety bonds to regulatory
authorities, as required. We had a total of about $1.01 billion in financial assurances supporting our reclamation liabilities at
the end of 2021. All of our North American operations have financial assurances in place in connection with our preliminary
plans for decommissioning of the sites.
Some of the sites we own or operate have been under ongoing investigation and/or remediation and planning as a result of
historic soil and groundwater conditions.
We use significant management and financial resources to manage our environmental risks.
We manage environmental risks through our safety, health, environment and quality (SHEQ) management system. Our chief
executive officer is responsible for ensuring that our SHEQ management system is implemented. Our board’s safety, health
and environment committee also oversees how we manage our SHEQ risks, including the use of our enterprise risk
management program.
A key cornerstone of our SHEQ management system is the continual improvement of process and physical infrastructure
supporting the management system. Proposed projects are evaluated and, if beneficial, included in our site’s life of asset plan.
Noteworthy projects expected to reduce SHEQ risks that were advanced in 2021 included:
The Vision in Motion project at the Port Hope conversion facility
the program to advance the assessment of innovation opportunities at the McArthur River mine and Key Lake mill
energy management improvements at our Saskatchewan operations
progressive decommissioning activities at our in-situ recovery operations in the United States
containment system upgrades at our operations.
Most of these projects are multi-year projects that are expected to continue into 2022 and beyond.
MANAGEMENT’S DISCUSSION AND ANALYSIS 59
Operational risks
Other risks and hazards generally applicable to our operations and advanced projects include:
environmental damage
industrial and transportation accidents
labour shortages, disputes or strikes
cost increases for labour, contracted or purchased
fires
blockades or other acts of social or political activism
climate change or natural phenomena, such as
inclement weather conditions, forest fires, floods and
earthquakes
materials, supplies and services
shortages of, or interruptions in the supply of, required
materials, supplies and equipment
transportation and delivery disruptions
interruptions in the supply of electricity, water, and other
utilities
equipment failures
cyberattacks
joint venture disputes or litigation
non-compliance with laws and licences
increased workforce health and safety or increased
regulatory burdens resulting from the COVID-19
pandemic or other causes
uncertain environment resulting from the COVID-19
pandemic and its related operational and safety risks
catastrophic accidents
outbreak of illness (such as a pandemic like COVID-19)
unusual, unexpected or adverse mining or geological
conditions
underground floods
ground movement or cave-ins
tailings pipeline or dam failures
technological failure of mining methods
unanticipated consequences of our cost reduction
strategies
We have insurance to cover some of these risks and hazards, but not all of them, and not to the full amount of losses or
liabilities that could potentially arise.
60 CAMECO CORPORATION
Uranium – production overview
Production in our uranium segment in the fourth quarter was 2.8 million pounds, no change compared to the same period in
2020, while production for the year was 6.1 million pounds, 22% higher than in 2020. The McArthur River/Key Lake and Rabbit
Lake operations remained in a safe and sustainable state of care and maintenance, and we are no longer developing new
wellfields at Crow Butte and Smith Ranch-Highland. See Uranium – Tier-one operations starting on page 62 and Uranium –
Tier-two operations beginning on page 73 for more information.
Uranium production
CAMECO SHARE
(MILLION LBS)
Cigar Lake
McArthur River/Key Lake
THREE MONTHS ENDED
DECEMBER 31
YEAR ENDED
DECEMBER 31
2021
2.8
-
2020
2.8
-
2021
6.1
-
2020
5.0
-
2021 PLAN1
up to 6.0
-
2022 PLAN
7.52
up to 3.53
Total
up to 11.0
1 A production target was not set in 2021 until after production at Cigar Lake resumed following the proactive four-month COVID-19-related suspension that started
up to 6.0
6.1
5.0
2.8
2.8
in December of 2020. A production target of up to 6.0 million pounds (our share) was provided in our 2021 second quarter MD&A.
2 At Cigar Lake, we expect production of 15 million pounds (100% basis) in 2022 due to the delays and deferrals to development work experienced in 2021 related
to the suspension of production noted above and the ongoing pandemic and supply chain challenges impacting the availability of construction materials,
equipment and labour.
3 Over the course of 2022 and 2023, we will undertake all the activities necessary to ramp up to the 2024 planned production of 15 million pounds per year (100%
basis) at McArthur River/Key Lake. As a result, in 2022, we could produce up to 5 million pounds (100% basis).
Production outlook
We remain focused on taking advantage of the long-term growth we see coming in our industry, while maintaining the ability to
respond to market conditions as they evolve. Our strategy includes a focus, in our uranium segment, on protecting and
extending the value of our contract portfolio, on aligning our production decisions with our contract portfolio and market
opportunities thereby preserving the value of our lowest cost assets in order to increase long-term value, and to do that with an
emphasis on safety, people and the environment.
Given the transition we are seeing in the uranium market, we plan to:
begin the work necessary at McArthur River/Key Lake to achieve our 2024 production plan, matching our production level
to our sales commitments and market opportunities
focus on technology and its applications to improve efficiency, reduce costs and improve operational effectiveness across
our operations, including the use of digital and automation technologies
We expect our share of production to be up to 11 million pounds in 2022 and we will work to minimize the impact of any
COVID-19 pandemic disruptions and supply chain challenges on the availability of materials, reagents and labour.
We expect total production from Inkai to be 8.3 million pounds in 2022 on a 100% basis, assuming no production disruptions
due to the COVID-19 pandemic, civil unrest, supply chain issues or other causes. Due to equity accounting, our share of
production is shown as a purchase. An adjustment to the production purchase entitlement allows us to purchase 4.2 million
pounds in 2022.
MANAGEMENT’S DISCUSSION AND ANALYSIS 61
Uranium – Tier-one operations
McArthur River mine / Key Lake mill
2021 Production (our share)
0.0M lbs
2022 Production Outlook (our share)
up to 3.5M lbs
Estimated Reserves (our share)
275.0M lbs
Estimated Mine Life
2048
McArthur River is the world’s largest, high-grade uranium mine, and Key Lake is the world’s largest uranium mill. Ore grades at
the McArthur River mine are 100 times the world average. We are the operator of both the mine and mill.
In 2018, a decision was made to suspend production and place the mine and mill in care and maintenance. With the
improvement in the uranium market and the success we have had in securing new long-term contracts, it is time to proceed
with the next phase of our supply discipline decisions. Therefore, continuing to align our production with market conditions and
our contract portfolio, our plan is to produce 15 million pounds (100% basis) per year by 2024 at McArthur River/Key Lake,
40% below its licensed capacity. This will remain our production plan until we see further improvements in the uranium market
and contracting progress, demonstrating that we continue to be a responsible supplier of uranium fuel.
McArthur River is considered a material uranium property for us. There is a technical report dated March 29, 2019 (effective
December 31, 2018) that can be downloaded from SEDAR (sedar.com) or from EDGAR (sec.gov).
Location
Ownership
Mine type
Mining methods
End product
Certification
Estimated reserves
Estimated resources
Licensed capacity
Licence term
Saskatchewan, Canada
McArthur River – 69.805%
Key Lake – 83.33%
Underground
Primary: blasthole stoping
Secondary: raiseboring
Uranium concentrate
ISO 14001 certified
275.0 million pounds (proven and probable), average grade U3O8: 6.58%
6.3 million pounds (measured and indicated), average grade U3O8: 2.46%
1.8 million pounds (inferred), average grade U3O8: 2.85%
Mine and mill: 25.0 million pounds per year
Through October, 2023
Total packaged production:
2000 to 2021 325.4 million pounds (McArthur River/Key Lake) (100% basis)
1983 to 2002 209.8 million pounds (Key Lake) (100% basis)
2021 production
0.0 million pounds (0.0 million pounds on 100% basis)
2022 production outlook
up to 3.5 million pounds (5.0 million pounds on 100% basis)
Estimated decommissioning cost
$42 million – McArthur River (100% basis)
All values shown, including reserves and resources, represent our share only, unless indicated.
$223 million – Key Lake (100% basis)
62 CAMECO CORPORATION
BACKGROUND
Mine description
The mineral reserves at McArthur River are contained within seven zones: Zones 1, 2, 3, 4, 4 South, A and B. Prior to care
and maintenance, there were two active mining zones and one where development was significantly advanced.
Zone 2 has been actively mined since production began in 1999. The ore zone was initially divided into three freeze panels. As
the freeze wall was expanded, the inner connecting freeze walls were decommissioned in order to recover the inaccessible
uranium around the active freeze pipes. Mining of zone 2 is almost complete. About 4.8 million pounds of mineral reserves
remain and we expect to recover them using a combination of raisebore and blasthole stope mining.
Zone 4 has been actively mined since 2010. The zone was divided into four freeze panels, and like in zone 2, as the freeze
wall was expanded, the inner connecting freeze walls were decommissioned. Zone 4 has 117.5 million pounds of mineral
reserves secured behind freeze walls and it will be the main source of production when mine production restarts. Raisebore
mining and blasthole stoping will be used to recover the mineral reserves.
Zone 1 is the next planned mine area to be brought into production. Freezehole drilling was 90% complete and brine
distribution construction was approximately 10% complete when work was suspended in 2018 as part of the production
suspension. Work remaining before production can begin includes completion of the freezehole drilling, brine distribution
construction, ground freezing and drill and extraction chamber development. Once complete, an additional 47.5 million pounds
of mineral reserves will be secured behind freeze walls. Blasthole stope mining is currently planned as the main extraction
method.
We have successfully extracted over 325 million pounds (100% basis) since we began mining in 1999.
Mining methods and techniques
The McArthur River deposit presents unique challenges that are not typical of traditional hard or soft rock mines. These
challenges are the result of mining in or near high pressure ground water in challenging ground conditions with significant
radiation concerns due to the high-grade uranium ore. Therefore, mine designs and mining methods are selected based on
their ability to mitigate hydrological, radiological and geotechnical risks.
There are three approved mining methods at McArthur River: raisebore mining, blasthole stope mining and boxhole mining.
However, only raisebore and blasthole stope mining remain in use. In addition, we use ground freezing to mine the McArthur
River deposit.
Ground freezing
All the mineralized areas discovered to date at McArthur River are in, or partially in, water-bearing ground with significant
pressure at mining depths. This high pressure water source is isolated from active development and production areas in order
to reduce the inherent risk of an inflow. To date, McArthur River has relied on pressure grouting and ground freezing to
successfully mitigate the risks of the high pressure ground water.
Chilled brine is circulated through freeze holes to form an impermeable freeze barrier around the area being mined. This
prevents water from entering the mine, and helps stabilize weak rock formations.
Blasthole stoping
Blasthole stoping began in 2011 and was the main extraction method prior to our production suspension. It is planned in areas
where blastholes can be accurately drilled and small stable stopes excavated without jeopardizing the freeze wall integrity.
The use of this method has allowed the site to improve operating costs by increasing overall extraction efficiency by reducing
underground development, concrete consumption, mineralized waste generation and improving extraction cycle time.
Raisebore mining
Raisebore mining is an innovative non-entry approach that we adapted to meet the unique challenges at McArthur River, and it
has been used since mining began in 1999. This method is favourable for mining the weaker rock mass areas of the deposit,
and is suitable for massive high-grade zones where there is access both above and below the ore zone.
MANAGEMENT’S DISCUSSION AND ANALYSIS 63
Initial processing
McArthur River produces two product streams, high grade slurry and low-grade mineralized rock. Both product streams are
shipped to Key Lake mill to produce uranium ore concentrate.
The high-grade material is ground and thickened into a slurry paste underground and then pumped to surface. The material is
then thickened and blended for grade control and shipped to Key Lake in slurry totes using haul trucks.
The low-grade mineralized material is hoisted to surface and shipped as a dry product to Key Lake using covered haul trucks.
Once at Key Lake, the material is ground, thickened and blended with the high-grade slurry to a nominal 5% U3O8 mill feed
grade. It is then processed into uranium ore concentrate and packaged in drums for further processing offsite.
Tailings capacity
Based on the current licence conditions, tailings capacity at Key Lake is sufficient to mill all the known McArthur River mineral
reserves and resources, should they be converted to reserves, with additional capacity to toll mill ore from other regional
deposits.
Licensed annual production capacity
The McArthur River mine and Key Lake mill are both licensed to produce up to 25 million pounds (100% basis) per year. To
achieve annual production at the licensed capacity, additional investment will be required.
2021 UPDATE
Production suspension
The facilities remained in a state of safe and sustainable care and maintenance throughout 2021.
Care and maintenance activities included mine dewatering, water treatment, freeze wall maintenance, and environmental
monitoring. In addition, preservation maintenance and monitoring of the critical facilities continued. These activities were
performed to ensure that the McArthur River and Key Lake operations are available to return to production in a timely manner.
Exploration
As a result of the production suspension, there was no exploration activity in 2021.
PLANNING FOR THE FUTURE
Production
Over the course of 2022 and 2023, we will undertake all the activities necessary to ramp up to the planned annual production
of 15 million pounds (100% basis) by 2024. As a result, in 2022, we could produce up to 5 million pounds (100% basis). This
plan will significantly improve our financial performance by allowing us to source more of our committed sales from lower-cost
produced pounds and we will no longer be required to expense care and maintenance costs directly to cost of sales. However,
until we achieve a reasonable production rate, we expect to incur between $15 million to $17 million per month in operational
readiness costs, which will be expensed directly to cost of sales. There is a potential for the COVID-19 pandemic and related
supply chain challenges to impact the availability of materials, reagents and labour, which could not only impact 2022
production but could also introduce risk to production in 2023.
Innovation
In 2020, we began a program to advance the assessment of innovation opportunities at the McArthur River mine and Key
Lake mill. We established a team of internal experts who have been tasked with assessing, designing and implementing
opportunities to improve operating efficiency. During the year, the team advanced a portfolio of projects focused on
improvement of the mine and mill through application of automation, digitization and optimization. In 2021, the projects that
met our investment criteria were advanced to implementation.
64 CAMECO CORPORATION
Optimizing production
The technical report dated March of 2019 is based on production of 18 million pounds (100% basis) per year, however, we
plan to align production with our contract portfolio and market signals once operations resume. Our current plan is to achieve
production of 15 million pounds (100% basis) per year by 2024. We expect that this paced approach will allow us to extract
maximum value from the operation.
MANAGING OUR RISKS
Production at McArthur River/Key Lake poses many challenges. These challenges include control of groundwater, weak rock
formations, radiation protection, water inflow, mine area transitioning, regulatory approvals, surface and underground fires and
other mining related challenges. Operational experience gained since the start of production has resulted in a significant
reduction in risk.
Mine and mill operational readiness
The operational changes we have made, including the suspension of production in 2018 and the accompanying workforce
reduction, carry with them the risks of a delay in achieving operational readiness and resuming production.
With the extended period of time the assets were on care and maintenance, there is increased uncertainty regarding the timing
of a successful rampup to planned production and the associated costs.
Labour relations
The collective agreement with the United Steelworkers local 8914 expires in December 2022. We plan to begin contract
negotiations prior to the expiration of the current agreement. There is a risk to the ramp up to planned production if we are
unable to reach agreement and there is a labour dispute.
Water inflow risk
Water inflows pose a significant risk to mine production. In 2003, a water inflow resulted in a three-month suspension of
production. We also had a small water inflow in 2008 that did not impact production but did cause significant development
delays.
The consequences of another water inflow at McArthur River would depend on its magnitude, location and timing, but could
include a significant interruption or reduction in production, a material increase in costs or a loss of mineral reserves.
We take significant steps and precautions to reduce the risk of inflows, but there is no guarantee that these will be successful.
In the event that an inflow does occur, we believe we have sufficient pumping, water treatment and surface storage capacity to
handle the estimated maximum sustained inflow.
We also manage the risks listed on pages 58 to 60.
MANAGEMENT’S DISCUSSION AND ANALYSIS 65
Uranium – Tier-one operations
Cigar Lake
2021 Production (our share)
6.1M lbs
2022 Production Outlook (our share)
7.5M lbs
Estimated Reserves (our share)
76.2M lbs
Estimated Mine Life
2032
Cigar Lake is the world’s highest grade uranium mine, with grades that are 100 times the world average. We are a 50% owner
and the mine operator. Cigar Lake uranium is milled at Orano’s (previously AREVA) McClean Lake mill.
Cigar Lake is considered a material uranium property for us. There is a technical report dated March 29, 2016 (effective
December 31, 2015) that can be downloaded from SEDAR (sedar.com) or from EDGAR (sec.gov).
Location
Ownership
Mine type
Mining method
End product
Certification
Estimated reserves
Estimated resources
Licensed capacity
Licence term
Saskatchewan, Canada
50.025%
Underground
Jet boring system
Uranium concentrate
ISO 14001 certified
76.2 million pounds (proven and probable), average grade U3O8: 15.41%
51.9 million pounds (measured and indicated), average grade U3O8: 13.83%
11.5 million pounds (inferred), average grade U3O8: 5.58%
18.0 million pounds per year (our share 9.0 million pounds per year)
Through June, 2031
Total packaged production: 2014 to 2021
105 million pounds (100% basis)
2021 production
6.1 million pounds (12.2 million pounds on 100% basis)
2022 production outlook
7.5 million pounds (15.0 million pounds on 100% basis)
Estimated decommissioning cost
$62 million (100% basis)
All values shown, including reserves and resources, represent our share only, unless otherwise indicated.
BACKGROUND
Development
We began developing the Cigar Lake underground mine in 2005, but development was delayed due to water inflows in 2006
and 2008. The underground workings were successfully remediated and secured in 2011 and, in October 2014 the McClean
Lake mill produced the first uranium concentrate from ore mined at the Cigar Lake operation. Commercial production was
declared in May 2015.
66 CAMECO CORPORATION
Mine description
Cigar Lake’s geological setting is similar to McArthur River’s: the permeable sandstone, which overlays the deposit and
basement rocks, contains large volumes of water at significant pressure. However, unlike McArthur River, the Cigar Lake
deposit has the shape of a flat- to cigar-shaped lens. As a result of these challenging geological conditions, we are unable to
utilize traditional mining methods that require access above the ore, necessitating the development of a non-entry mining
method specifically adapted for this deposit: the Jet Boring System (JBS).
Mine development is carried out uniquely in the basement rocks below the ore horizon. New mine development is required
throughout the mine life to gain access to the ore above.
Mining method
Bulk ground freezing
The sandstone that overlays the deposit and basement rocks is water-bearing, and to prevent water from entering the mine,
help stabilize weak rock formations, and meet our production schedule, we freeze the ground from surface. The ore zone and
surrounding ground in the area to be mined must meet specific ground freezing requirements before we begin jet boring.
Jet boring system (JBS) mining
After many years of test mining, we selected jet boring, a non-entry mining method, which we have developed and adapted
specifically for this deposit. This method involves:
drilling a pilot hole into the frozen orebody, inserting a high pressure water jet and cutting a cavity out of the frozen ore
collecting the ore and water mixture (slurry) from the cavity and pumping it to storage (sump storage), allowing it to settle
using a clamshell, transporting the ore from sump storage to an underground grinding and processing circuit
once mining is complete, filling each cavity in the orebody with concrete
starting the process again with the next cavity
We have divided the orebody into production panels and at least three production panels need to be frozen at one time to
achieve the annual production rate. One JBS machine is located below each frozen panel. Three JBS machines are currently
in operation. Two machines actively mine at any given time while the third is moving, setting up, or undergoing maintenance.
Initial processing
We carry out initial processing of the extracted ore at Cigar Lake:
the underground circuit grinds the ore and mixes it with water to form a slurry
the slurry is pumped 500 metres to the surface and stored in one of two ore slurry holding tanks
it is blended and thickened, removing excess water
the final slurry, at an average grade of approximately 15% U3O8, is pumped into transport truck containers and shipped to
McClean Lake mill on a 69 kilometre all-weather road
Water from this process, including water from underground operations, is treated on the surface. Any excess treated water is
released into the environment.
MANAGEMENT’S DISCUSSION AND ANALYSIS 67
Milling
All of Cigar Lake’s ore slurry is being processed at the McClean Lake mill, operated by Orano. Given the McClean Lake mill’s
capacity, it is able to:
process up to 18 million pounds U3O8 per year
process and package all of Cigar Lake’s current mineral reserves
Licensing annual production capacity
The Cigar Lake mine is licensed to produce up to 18 million pounds (100% basis) per year. Orano’s McClean Lake mill is
licensed to produce 24 million pounds annually.
2021 UPDATE
Production
Total packaged production from Cigar Lake in 2021 was 12.2 million pounds U3O8 (6.1 million pounds our share) compared to
10 million pounds U3O8 (5.0 million pounds our share) in 2020. Production was impacted by suspensions in the second and
third quarters of 2020 as a precautionary measure due to COVID-19. In December 2020, we safely suspended production at
the Cigar Lake mine a second time as a precaution. The mine remained suspended through the first quarter of 2021 until its
restart in mid-April. On July 1, all non-essential personnel from the Cigar Lake mine were evacuated and production was
temporarily suspended as a precaution due to the proximity of a forest fire. With the risk subsided and all infrastructure intact,
the workforce returned on July 4 and production resumed in the first week of July.
During the year, we:
executed planned ten-day annual maintenance activities in September
executed production activities from three production tunnels in the eastern part of the orebody
in alignment with our long-term production plans, we substantially completed optimizations of the underground water
handling system and header expansions, and expanded our ground freezing program to ensure continued frozen ore
inventory
Underground development
Underground mine development continued in 2021. A new production cross cut was completed in 2021 as well as
development work in the western portion of the orebody. However, as a result of the suspension in production, we have also
experienced delays and deferrals in project work, including lower capital expenditures, which have introduced risk to
production in 2022. Furthermore, the potential for supply chain impacts on construction materials, equipment and labour
remains uncertain and could further exacerbate production risk in 2022 and future years.
PLANNING FOR THE FUTURE
Production
At Cigar Lake, due to delays and deferrals to development work caused by the proactive COVID-19-related four-month
suspension of production in 2021 and the ongoing pandemic and supply chain challenges impacting the availability of
construction materials, equipment and labour, we expect production of 15 million pounds (100% basis) in 2022. We will work
to minimize the impacts of these disruptions.
In 2022, we plan to:
continue production activities focused on bringing one new production panel online and closing out a completed one
continue surface freeze drilling and complete construction and commissioning of freeze distribution infrastructure expansion
in support of future production
continue underground mine development on two new production tunnels as well as expand ventilation and access drifts in
alignment with the long-term mine plan
continue upgrades to process water handling circuits and the surface backfill batch plant to support ongoing operations
68 CAMECO CORPORATION
Optimizing production
Consistent with our strategy and the improving market conditions, we are proceeding with the next phase of our supply
discipline decisions. Continuing to align our production with the market conditions and our contract portfolio, starting in 2024,
we will target production from Cigar Lake that is 25% below the licensed capacity, or 13.5 million pounds (100% basis) per
year. Extending the mine life at Cigar Lake by aligning production with the market opportunities and our contract portfolio is
consistent with our tier-one strategy and is expected to allow more time to evaluate the feasibility of extending the mine life
beyond the current reserve base while continuing to supply ore to Orano’s McClean Lake mill. This will remain our production
plan until we see further improvements in the uranium market and contracting progress, demonstrating that we continue to be
a responsible supplier of uranium fuel.
MANAGING OUR RISKS
Cigar Lake is a challenging deposit to develop and mine. These challenges include control of groundwater, weak rock
formations, radiation protection, chemical ore characteristics, performance of the water treatment system, water inflow,
regulatory approvals, surface and underground fires and other mining-related challenges. To reduce this risk, we are applying
our operational experience and the lessons we have learned about water inflows at McArthur River and Cigar Lake.
Transition to new mining areas
In order to successfully achieve the planned production schedule, we must continue to successfully transition into new mining
areas, which includes mine development and investment in critical support infrastructure.
Ground freezing
To manage our risks and meet our production schedule, the areas being mined must meet specific ground freezing
requirements before we begin jet boring. We have identified greater variation of the freeze rates of different geological
formations encountered in the mine, based on information obtained through surface freeze drilling. As a mitigation measure,
we have increased the site freeze capacity to facilitate the mining of ore cavities as planned.
Environmental performance
The Cigar Lake orebody contains elements of concern with respect to the water quality and the receiving environment. The
distribution of elements such as arsenic, molybdenum, selenium and others is non-uniform throughout the orebody, and this
can present challenges in attaining and maintaining the required effluent concentrations.
There have been ongoing efforts to optimize the current water treatment process and water handling systems to ensure
acceptable environmental performance, which is expected to avoid the need for additional capital upgrades and potential
deferral of production.
Water inflow risk
A significant risk to development and production is from water inflows. The 2006 and 2008 water inflows were significant
setbacks.
The consequences of another water inflow at Cigar Lake would depend on its magnitude, location and timing, but could
include a significant delay or disruption in Cigar Lake production, a material increase in costs or a loss of mineral reserves.
We take the following steps to reduce the risk of inflows, but there is no guarantee that these will be successful:
Bulk freezing: Two of the primary challenges in mining the deposit are control of groundwater and ground support. Bulk
freezing reduces but does not completely eliminate the risk of water inflows.
Mine development: We plan for our mine development to take place away from known groundwater sources whenever
possible. In addition, we assess all planned mine development for relative risk and apply extensive additional technical and
operating controls for all higher risk development.
Pumping capacity and treatment limits: We have pumping capacity to meet our standard for this operation of at least one
and a half times the estimated maximum inflow.
We believe we have sufficient pumping, water treatment and surface storage capacity to handle the estimated maximum
inflow.
We also manage the risks listed on pages 58 to 60.
MANAGEMENT’S DISCUSSION AND ANALYSIS 69
Uranium – Tier-one operations
Inkai
2021 Production (100% basis)
9.0M lbs
2022 Production Outlook (100% basis)
8.3M lbs
Estimated Reserves (our share)
112.5M lbs
Estimated Mine Life
2045 (based on licence term)
Inkai is a very significant uranium deposit, located in Kazakhstan. The operator is JV Inkai limited liability partnership, which
we jointly own (40%) with Kazatomprom (60%)1.
Inkai is considered a material uranium property for us. There is a technical report dated January 25, 2018 (effective January 1,
2018) that can be downloaded from SEDAR (sedar.com) or from EDGAR (sec.gov).
Location
Ownership
Mine type
End product
Certifications
Estimated reserves
Estimated resources
South Kazakhstan
40%1
In situ recovery (ISR)
Uranium concentrate
BSI OHSAS 18001
ISO 14001 certified
112.5 million pounds (proven and probable), average grade U3O8: 0.04%
35.6 million pounds (measured and indicated), average grade U3O8: 0.03%
9.6 million pounds (inferred), average grade U3O8: 0.03%
Licensed capacity (wellfields)
10.4 million pounds per year (our share 4.2 million pounds per year)1
Licence term
Through July 2045
Total packaged production: 2009 to 2021
73 million pounds (100% basis)
2021 production
2022 production outlook
9.0 million pounds (100% basis)1
8.3 million pounds (100% basis)1
Estimated decommissioning cost (100% basis)
$20 million (US) (100% basis) (this estimate is currently under review)
All values shown, including reserves and resources, represent our share only, unless indicated.
1 Our ownership interest in the joint venture is 40% and we equity account for our investment. As such, our share of production is shown as a purchase.
70 CAMECO CORPORATION
BACKGROUND
Mine description
The Inkai uranium deposit is a roll-front type orebody within permeable sandstones. The more porous and permeable units
host several stacked and relatively continuous, sinuous “roll-fronts” of low-grade uranium forming a regional system.
Superimposed over this regional system are several uranium projects and active mines.
Inkai’s mineralization ranges in depths from about 260 metres to 530 metres. The deposit has a surface projection of about 40
kilometres in length, and the width ranges from 40 to 1600 metres. The deposit has hydrogeological and mineralization
conditions favourable for use of in-situ recovery (ISR) technology.
Mining and milling method
JV Inkai uses conventional, well-established, and very efficient ISR technology, developed after extensive test work and
operational experience. The process involves five major steps:
leach the uranium in-situ by circulating an acid-based solution through the host formation
recover it from solution with ion exchange resin (takes place at both main and satellite processing plants)
precipitate the uranium with hydrogen peroxide
thicken, dewater, and dry it
package the uranium peroxide product in drums
Production
Total 2021 production from Inkai was 9.0 million pounds (100% basis), an increase of 28% from 2020. The increase in
production is due to the impact of the reduction in operational activities introduced to manage the risks posed by the COVID-
19 pandemic in 2020.
Production purchase entitlements
Under the terms of a restructuring agreement signed with our partner Kazatomprom in 2016, our ownership interest in JV Inkai
is 40% and Kazatomprom’s share is 60%. However, during production rampup to the licensed limit of 10.4 million pounds, we
are entitled to purchase 57.5% of the first 5.2 million pounds of annual production, and as annual production increases over
5.2 million pounds, we are entitled to purchase 22.5% of such incremental production, to the maximum annual share of 4.2
million pounds. Once the rampup to 10.4 million pounds annually is complete, we will be entitled to purchase 40% of such
annual production, matching our ownership interest.
Based on an adjustment to the production purchase entitlement under the 2016 JV Inkai restructuring agreement, in 2021 we
were entitled to purchase 5.3 million pounds, or 59.4% of JV Inkai’s 2021 production of 9.0 million pounds.
Cash distribution
Excess cash, net of working capital requirements, will be distributed to the partners as dividends. In 2021, we received
dividend payments from JV Inkai totaling $40 million (US). Our share of dividends follows our production purchase
entitlements as described above.
PLANNING FOR THE FUTURE
Production
On July 2, 2021, Kazatomprom announced that it plans to maintain 2023 production at a similar level to 2022, which is
expected to be 20% lower than the planned volumes under its Subsoil Use Contracts.
Based on an adjustment to the production purchase entitlement under the 2016 JV Inkai restructuring agreement described
above, we are entitled to purchase 4.2 million pounds, or 50% of JV Inkai’s planned 2022 production of 8.3 million pounds,
assuming no production disruptions due to the COVID-19 pandemic, supply chain disruptions, civil unrest or other causes.
MANAGEMENT’S DISCUSSION AND ANALYSIS 71
Presently, JV Inkai is experiencing wellfield development, procurement and supply chain issues, including inflationary pressure
on production materials and reagents, which are expected to continue and could pose a risk to JV Inkai’s 2022 production
volume, impacting its costs. In addition, JV Inkai’s costs could be impacted by potential changes to the tax code in Kazakhstan
and by possible increased financial contributions to social and other state causes, although these risks cannot be quantified or
estimated at this time.
Our share of production is purchased at a discount to the spot price and included at this value in inventory. In addition, JV
Inkai capital is not included in our outlook for capital expenditures.
MANAGING OUR RISKS
2022 production forecast risk
Achievement of JV Inkai’s 2022 production forecast requires it to successfully manage its operating and other risks including
the current uncertain environment resulting from civil unrest and from the COVID-19 pandemic, including the risk of significant
disruption to JV Inkai’s operations, workforce, required supplies or services, and its ability to produce uranium.
Political risk
Kazakhstan declared itself independent in 1991 after the dissolution of the Soviet Union. Our investment in JV Inkai is subject
to the greater risks associated with doing business in developing countries, which have significant potential for social,
economic, political, legal and fiscal instability. Kazakh laws and regulations are complex and still developing and their
application can be difficult to predict. The other owner of JV Inkai is Kazatomprom, an entity majority owned by the
government of Kazakhstan. We have entered into agreements with JV Inkai and Kazatomprom intended to mitigate political
risk. This risk includes the imposition of governmental laws or policies that could restrict or hinder JV Inkai paying us
dividends, or selling us our share of JV Inkai production, or that impose discriminatory taxes or currency controls on these
transactions. The restructuring of JV Inkai, which took effect January 1, 2018, was undertaken with the objective to better align
the interests of Cameco and Kazatomprom and includes a governance framework that provides for protection for us as a
minority owner of JV Inkai.
In early January 2022, Kazakhstan saw the most significant political instability since it became independent in 1991. The
events resulted in a state of emergency being declared across the country. With the assistance of the Collective Security
Treaty Organization (CSTO), the government restored the order and in the second half of January, the state of emergency
was gradually lifted and withdrawal of CSTO forces from Kazakhstan was completed. The early outcome of those events was
a number of political and economic reforms declared by the government. While the exact impact of those reforms is unclear at
this time, they could potentially impact JV Inkai’s operations and costs.
For more details on this risk, please see our most recent annual information form under the heading political risks.
JV Inkai manages risks listed on pages 58 to 60.
72 CAMECO CORPORATION
Uranium – Tier-two operations
Rabbit Lake
Located in Saskatchewan, Canada, our 100% owned Rabbit Lake operation opened in 1975, and has the second largest
uranium mill in the world. Due to market conditions, we suspended production at Rabbit Lake during the second quarter of
2016.
Location
Ownership
End product
ISO certification
Mine type
Estimated reserves
Estimated resources
Mining methods
Licensed capacity
Licence term
Total production: 1975 to 2021
2021 production
2022 production outlook
Estimated decommissioning cost
PRODUCTION SUSPENSION
Saskatchewan, Canada
100%
Uranium concentrates
ISO 14001 certified
Underground
-
38.6 million pounds (indicated), average grade U3O8: 0.95%
33.7 million pounds (inferred), average grade U3O8: 0.62%
Vertical blasthole stoping
Mill: maximum 16.9 million pounds per year; currently 11 million
Through October, 2023
202.2 million pounds
0 million pounds
0 million pounds
$213 million
The facilities remained in a state of safe and sustainable care and maintenance throughout 2021.
While in standby, we continue to evaluate our options in order to minimize care and maintenance costs. We expect care and
maintenance costs to range between $27 million and $32 million annually.
MANAGING OUR RISKS
We also manage the risks listed on pages 58 to 60.
MANAGEMENT’S DISCUSSION AND ANALYSIS 73
US ISR Operations
Located in Nebraska and Wyoming in the US, the Crow Butte and Smith Ranch-Highland (including the North Butte satellite)
operations began production in 1991 and 1975. Each operation has its own processing facility. Due to market conditions, we
curtailed production and deferred all wellfield development at these operations during the second quarter of 2016.
Ownership
End product
ISO certification
Estimated reserves
Smith Ranch-Highland:
North Butte-Brown Ranch:
Crow Butte:
100%
Uranium concentrates
ISO 14001 certified
-
-
-
Estimated resources
Smith Ranch-Highland:
24.9 million pounds (measured and indicated), average grade U3O8: 0.06%
7.7 million pounds (inferred), average grade U3O8: 0.05%
North Butte-Brown Ranch: 9.5 million pounds (measured and indicated), average grade U3O8: 0.07%
0.4 million pounds (inferred), average grade U3O8: 0.07%
Crow Butte:
13.9 million pounds (measured and indicated), average grade U3O8: 0.25%
1.8 million pounds (inferred), average grade U3O8: 0.16%
Mining methods
In situ recovery (ISR)
Licensed capacity
Smith Ranch-Highland:1
Wellfields: 3 million pounds per year; processing plants: 5.5 million pounds per year
Crow Butte:
Processing plants and wellfields: 2 million pounds per year
Licence term
Smith Ranch-Highland:
Through September, 2028
Crow Butte:
Through October, 2024
Total production: 2002 to 2021
2021 production
2022 production outlook
33.0 million pounds
0 million pounds
0 million pounds
Estimated decommissioning cost
Smith Ranch-Highland: $219 million (US), including North Butte
Crow Butte: $56 million (US)
1 Including Highland mill
PRODUCTION CURTAILMENT
As a result of our 2016 decision, production at the US operations ceased in 2018. We expect ongoing cash and non-cash care
and maintenance costs to range between $17 million (US) and $19 million (US) for 2022.
FUTURE PRODUCTION
We do not expect any production in 2022.
MANAGING OUR RISKS
We manage the risks listed on pages 58 to 60.
74 CAMECO CORPORATION
Uranium – advanced projects
Work on our advanced projects has been scaled back and will continue at a pace aligned with market signals.
Millennium
Location
Ownership
End product
Potential mine type
Saskatchewan, Canada
69.9%
Uranium concentrates
Underground
Estimated resources (our share)
53.0 million pounds (indicated), average grade U3O8: 2.39%
20.2 million pounds (inferred), average grade U3O8: 3.19%
BACKGROUND
The Millennium deposit was discovered in 2000, and was delineated through geophysical survey and surface drilling work
between 2000 and 2013.
Yeelirrie
Location
Ownership
End product
Potential mine type
Estimated resources
BACKGROUND
Western Australia
100%
Uranium concentrates
Open pit
128.1 million pounds (measured and indicated), average grade U3O8: 0.15%
The deposit was discovered in 1972 and is a near-surface calcrete-style deposit that is amenable to open pit mining
techniques. It is one of Australia’s largest undeveloped uranium deposits.
Kintyre
Location
Ownership
End product
Potential mine type
Estimated resources
BACKGROUND
Western Australia
100%
Uranium concentrates
Open pit
53.5 million pounds (indicated), average grade U3O8: 0.62%
6.0 million pounds (inferred), average grade U3O8: 0.53%
The Kintyre deposit was discovered in 1985 and is amenable to open pit mining techniques.
2021 PROJECT UPDATES
We believe that we have some of the best undeveloped uranium projects in the world. However, in the current market
environment these assets are not required to meet near-term demand. We continue to await a signal from the market that
additional production is needed prior to making any new development decisions.
PLANNING FOR THE FUTURE
2022 Planned activity
No work is planned at Millennium, Yeelirrie or Kintyre.
Further progress towards a development decision on any of these projects is not expected until the market fully transitions and
supply is incented by prices that reflect production economics.
MANAGEMENT’S DISCUSSION AND ANALYSIS 75
MANAGING THE RISKS
Project approval
The approval for the Yeelirrie project, received from the prior state government, required substantial commencement of the
project by January 2022 unless an extension is granted by the state government. The Minister for Environment; Climate Action
for the state government has indicated that it will not consider our request for an extension at this time. In the future we can
again apply for an extension of time to achieve substantial commencement of the project. If granted by a future government
we could commence the Yeelirrie project, provided we have all other required regulatory approvals. Approval for the Yeelirrie
project at the federal level was granted in 2019 and extends until 2043.
For all of our advanced projects, we manage the risks listed on pages 58 to 60.
76 CAMECO CORPORATION
Uranium – exploration
Our exploration program is directed at replacing mineral reserves as they are depleted by our production and is key to
sustaining our business. However, as we are preserving our tier-one assets and have ample idled production capacity, we
have reduced our spending to focus only on exploration near our existing operations where we have established infrastructure
and capacity to expand. Globally, we have land with exploration and development prospects that are among the best in the
world, mainly in Canada, Australia and the US. Our land holdings total about 0.85 million hectares (2.1 million acres). In
northern Saskatchewan alone, we have direct interests in about 0.75 million hectares (1.9 million acres) of land covering many
of the most prospective exploration areas of the Athabasca Basin.
EXPLORATION AND EVALUATION SPENDING
n
o
i
l
l
i
m
$
$80
$70
$60
$50
$40
$30
$20
$10
$-
$43
$30
$20
2016
2017
2018
$14
2019
$11
2020
$8
2021
$11
2022E
2021 UPDATE
Brownfield exploration
Brownfield exploration is uranium exploration near our existing operations and includes expenses for advanced exploration on
the evaluation of projects where uranium mineralization is being defined.
In 2021, we spent about $3 million on brownfields and advanced uranium projects in Saskatchewan and Australia. At the US
operations we spent $1 million.
Regional exploration
We spent about $4 million on regional exploration programs (including support costs), primarily in Saskatchewan’s Athabasca
Basin.
PLANNING FOR THE FUTURE
We will continue to focus on our core projects in Saskatchewan under our long-term exploration strategy. Long-term, we look
for properties that meet our investment criteria. We may partner with other companies through strategic alliances, equity
holdings and traditional joint venture arrangements. Our leadership position and industry expertise in both exploration and
corporate social responsibility make us a partner of choice.
MANAGEMENT’S DISCUSSION AND ANALYSIS 77
Fuel services
Refining, conversion and fuel manufacturing
We have about 21% of world UF6 primary conversion capacity and are a supplier of natural UO2. Our focus is on cost-
competitiveness and operational efficiency.
Our fuel services segment is strategically important because it helps support the growth of the uranium segment. Offering a
range of products and services to customers helps us broaden our business relationships and expand our uranium market
share.
Blind River Refinery
Licensed Capacity
24.0M kgU as UO3
Licence renewal in
February, 2022
Blind River is the world’s largest commercial uranium refinery, refining uranium concentrates from mines around the world into
UO3.
Location
Ownership
End product
ISO certification
Licensed capacity
Ontario, Canada
100%
UO3
ISO 14001 certified
18.0 million kgU as UO3 per year, approved to 24.0 million subject to the completion
of certain equipment upgrades (advancement depends on market conditions)
Licence term
Through February, 2022
Estimated decommissioning cost
$48 million
78 CAMECO CORPORATION
Port Hope Conversion Services
Licensed Capacity
12.5M kgU as UF6
2.8M kgU as UO2
Licence renewal in
February, 2027
Port Hope is the only uranium conversion facility in Canada and a supplier of UO2 for Canadian-made CANDU reactors.
Location
Ownership
End product
ISO certification
Licensed capacity
Licence term
Ontario, Canada
100%
UF6, UO2
ISO 14001 certified
12.5 million kgU as UF6 per year
2.8 million kgU as UO2 per year
Through February, 2027
Estimated decommissioning cost
$129 million
Cameco Fuel Manufacturing Inc. (CFM)
Licensed Capacity
1.2M kgU as UO2 fuel pellets
Licence renewal in
February, 2022
CFM produces fuel bundles and reactor components for CANDU reactors.
Location
Ownership
End product
ISO certification
Licensed capacity
Licence term
Ontario, Canada
100%
CANDU fuel bundles and components
ISO 9001 certified, ISO 14001 certified
1.2 million kgU as UO2 fuel pellets
Through February, 2022
Estimated decommissioning cost
$21 million
MANAGEMENT’S DISCUSSION AND ANALYSIS 79
2021 UPDATE
Production
Fuel services produced 12.1 million kgU, 3% higher than 2020 due to production suspensions in 2020 as a precaution due to
the COVID-19 pandemic. Planned production was impacted by hydrogen supply issues in 2021. The hydrogen supply
constraint was resolved in the fourth quarter, however supply chain disruption remains a risk generally.
Port Hope conversion facility cleanup and modernization (Vision in Motion)
Vision in Motion is a unique opportunity that demonstrates our continued commitment to a clean environment. It has been
made possible by the opening of a long-term waste management facility by the government of Canada’s Port Hope Area
Initiative project. There is a limited opportunity during the life of this project to engage in clean-up and renewal activities that
address legacy waste at the Port Hope Conversion facility inherited from historic operations. While there were some targeted
activities throughout the year, significant progress on the Vision in Motion project was limited due to the COVID-19 pandemic
and actions taken by the Ontario government to limit all non-essential construction activity.
PLANNING FOR THE FUTURE
Production
We plan to produce between 12.5 million and 13.5 million kgU in 2022, assuming no production disruptions due to the COVID-
19 pandemic or other causes.
In addition, in conjunction with our initiative intended to provide a greater focus on technology and its applications to improve
efficiency and reduce costs across the organization, we will continue to look for opportunities to improve operational
effectiveness, including the use of digital and automation technologies.
MANAGING OUR RISKS
2022 production forecast risk
Achievement of our 2022 forecast for fuel services production requires us to successfully manage our operating and other
risks, including the current uncertain environment resulting from the COVID-19 pandemic and its related operational risks,
such as the risk of significant disruption to our workforce, required supplies or services, and our ability to produce product.
Labour relations
The current collective bargaining agreement with the unionized employees at Port Hope Conversion Facility expires on July 1,
2022. There is a risk to our production if we are unable to reach an agreement and there is a labour disruption.
Licensing
The current operating licence from the CNSC for both the Blind River refinery and CFM expire in February 2022. The
relicensing process for both sites took place in the fourth quarter of 2021 and a decision from the CNSC is expected in early
2022. We do not expect any interruption or significant risks from this process.
We also manage the risks listed on pages 58 to 60.
80 CAMECO CORPORATION
Corporate development
INVESTMENT PROGRAM
Currently, with our extensive portfolio of reserves and resources and our belief that we have ample idle production capacity for
a market that is transitioning, our focus is on navigating by our investment-grade rating and continuing to preserve the value of
our tier-one assets by aligning our tier-one production with our delivery commitments and market opportunities. We expect that
these assets will allow us to meet rising uranium demand with increased production from our best margin operations and will
help to mitigate risk in the event of prolonged uncertainty.
Additionally, we are exploring other emerging and non-traditional opportunities within the fuel cycle, which align well with our
commitment to responsibly and sustainably manage our business and increase our contributions to global climate change
solutions, such as our investment in Global Laser Enrichment LLC and the non-binding arrangements we signed to explore
several areas of cooperation to advance the commercialization and deployment of small modular reactors in Canada and
around the world.
We continually evaluate investment opportunities within the nuclear fuel cycle that could add to our future supply options,
support our sales activities, and complement and enhance our business in the nuclear industry. We will make an investment
decision when an opportunity is available at the right time and the right price. We strive to pursue corporate development
initiatives that will leave us and our shareholders in a fundamentally stronger position. As such, an investment opportunity is
never assessed in isolation. Investments must compete for investment capital with our own internal growth opportunities. They
are subject to our capital allocation process described under Our strategy, starting on page 19.
MANAGEMENT’S DISCUSSION AND ANALYSIS 81
Mineral reserves and resources
Our mineral reserves and resources are the foundation of our company and fundamental to our success.
We have interests in a number of uranium properties. The tables in this section show the estimates of the proven and probable
mineral reserves, and measured, indicated, and inferred mineral resources at those properties. However, only three of the
properties listed in those tables are material uranium properties for us: McArthur River/Key Lake, Cigar Lake and Inkai. Mineral
reserves and resources are all reported as of December 31, 2021.
We estimate and disclose mineral reserves and resources in five categories, using the definition standards adopted by the
Canadian Institute of Mining, Metallurgy and Petroleum Council, and in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (NI 43-101), developed by the Canadian Securities Administrators. You can find
out more about these categories at www.cim.org.
About mineral resources
Mineral resources do not have to demonstrate economic viability but have reasonable prospects for eventual economic
extraction. They fall into three categories: measured, indicated and inferred. Our reported mineral resources are exclusive of
mineral reserves.
Measured and indicated mineral resources can be estimated with sufficient confidence to allow the appropriate application
of technical, economic, marketing, legal, environmental, social and governmental factors to support evaluation of the
economic viability of the deposit.
measured resources: we can confirm both geological and grade continuity to support detailed mine planning
indicated resources: we can reasonably assume geological and grade continuity to support mine planning
Inferred mineral resources are estimated using limited geological evidence and sampling information. We do not have
enough confidence to evaluate their economic viability in a meaningful way. You should not assume that all or any part of
an inferred mineral resource will be upgraded to an indicated or measured mineral resource, but it is reasonably expected
that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.
Our share of uranium in the following mineral resource tables is based on our respective ownership interests. Reported
mineral resources have not demonstrated economic viability.
About mineral reserves
Mineral reserves are the economically mineable part of measured and/or indicated mineral resources demonstrated by at least
a preliminary feasibility study. The reference point at which mineral reserves are defined is the point where the ore is delivered
to the processing plant, except for ISR operations where the reference point is where the mineralization occurs under the
existing or planned wellfield patterns. Mineral reserves fall into two categories:
proven reserves: the economically mineable part of a measured resource for which at least a preliminary feasibility study
demonstrates that, at the time of reporting, economic extraction could be reasonably justified with a high degree of
confidence
probable reserves: the economically mineable part of a measured and/or indicated resource for which at least a preliminary
feasibility study demonstrates that, at the time of reporting, economic extraction could be reasonably justified with a degree
of confidence lower than that applying to proven reserves
For properties where we are the operator, we use current geological models, an average uranium price of $50 (US) per pound
U3O8, and current or projected operating costs and mine plans to report our mineral reserves, allowing for dilution and mining
losses. We apply our standard data verification process for every estimate. For properties in which Cameco has an interest but
is not the operator, we will take reasonable steps to ensure that the reserve and resource estimates that we report are reliable.
Our share of uranium in the mineral reserves table below is based on our respective ownership interests.
82 CAMECO CORPORATION
PROVEN AND PROBABLE (P&P) RESERVES, MEASURED AND INDICATED (M&I)
RESOURCES, INFERRED RESOURCES (SHOWING CHANGE FROM 2020)
at December 31, 2021
P&P Reserves 464
M lbs (+9 M lbs)
Inferred Resources
154 M lbs (‐20 M
lbs)
M&I Resources 447
M lbs (+21 M lbs)
Changes this year
Our share of proven and probable mineral reserves increased from 455 million pounds U3O8 at the end of 2020, to 464 million
pounds at the end of 2021. The change was primarily the result of:
a mineral resource and reserve estimate update at Inkai which added 19.0 million pounds to proven and probable reserves
based on the infill drilling program completed in the Sat-1 area in 2018-2019. This update also resulted in increased
confidence and consequent upgrading to the underlying mineral resource categories.
partially offset by:
production at Cigar Lake and Inkai, which removed 10.5 million pounds from our mineral inventory
The remaining changes are attributable to mineral resource and reserve estimate updates at Cigar Lake and McArthur River.
Our share of measured and indicated mineral resources increased from 426 million pounds U3O8 at the end of 2020, to 447
million pounds at the end of 2021. Our share of inferred mineral resources is 154 million pounds U3O8, a decrease of 20 million
pounds from the end of 2020. The variance in mineral resources was primarily the result of the Inkai mineral resource estimate
update.
MANAGEMENT’S DISCUSSION AND ANALYSIS 83
Qualified persons
The technical and scientific information discussed in this MD&A for our material properties (McArthur River/Key Lake, Cigar
Lake and Inkai) was approved by the following individuals who are qualified persons for the purposes of NI 43-101:
MCARTHUR RIVER/KEY LAKE
Biman Bharadwaj, principal metallurgist, technical
Greg Murdock, general manager, McArthur River/Key
services, Cameco
Lake, Cameco
Alain D. Renaud, chief geologist, technical services,
Cameco
Biman Bharadwaj, principal metallurgist, technical
services, Cameco
CIGAR LAKE
Lloyd Rowson, general manager, Cigar Lake, Cameco
Scott Bishop, director, technical services, Cameco
Alain D. Renaud, chief geologist, technical services,
Cameco
INKAI
Alain D. Renaud, chief geologist, technical services,
Cameco
Scott Bishop, director, technical services, Cameco
Biman Bharadwaj, principal metallurgist, technical
services, Cameco
Sergey Ivanov, deputy director general, technical
services, Cameco Kazakhstan LLP
Important information about mineral reserve and resource estimates
Although we have carefully prepared and verified the mineral reserve and resource figures in this document, the figures are
estimates, based in part on forward-looking information.
Estimates are based on knowledge, mining experience, analysis of drilling results, the quality of available data and
management’s best judgment. They are, however, imprecise by nature, may change over time, and include many variables
and assumptions, including:
geological interpretation
extraction plans
commodity prices and currency exchange rates
recovery rates
operating and capital costs
There is no assurance that the indicated levels of uranium will be produced, and we may have to re-estimate our mineral
reserves based on actual production experience. Changes in the price of uranium, production costs or recovery rates could
make it unprofitable for us to operate or develop a particular site or sites for a period of time. See page 2 for information about
forward-looking information.
Please see our mineral reserves and resources section of our most recent annual information form for the specific
assumptions, parameters and methods used for McArthur River, Inkai and Cigar Lake mineral reserve and resource estimates.
Important information for US investors
We present information about mineralization, mineral reserves and resources as required by National Instrument 43-101 –
Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (NI 43-101), in accordance with
applicable Canadian securities laws. As a foreign private issuer filing reports with the US Securities and Exchange
Commission (SEC) under the Multijurisdictional Disclosure System, we are not required to comply with the SEC’s disclosure
requirements relating to mining properties. Investors in the United States should be aware that the disclosure requirements of
NI 43-101 are different from those under applicable SEC rules, and the information that we present concerning mineralization,
mineral reserves and resources may not be comparable to information made public by companies that comply with the SEC’s
reporting and disclosure requirements for mining companies.
84 CAMECO CORPORATION
Mineral reserves
As of December 31, 2021 (100% – only the shaded column shows our share)
PROVEN AND PROBABLE
(tonnes in thousands; pounds in millions)
PROVEN
PROBABLE
TOTAL MINERAL RESERVES
RESERVES
OUR
SHARE
PROPERTY
Cigar Lake
Key Lake
McArthur River
Inkai
Total
MINING
METHOD
TONNES % U3O8
GRADE CONTENT
(LBS U3O8)
TONNES % U3O8
GRADE CONTENT
(LBS U3O8)
TONNES
GRADE CONTENT CONTENT METALLURGICAL
% U3O8
(LBS U3O8)
(LBS U3O8)
RECOVERY (%)
UG
OP
UG
ISR
271.0
15.90
61.1
2,139.6
264,001.7
0.52
6.97
0.04
95.0
0.7
-
-
-
61.1
328.9
575.1
5.13
65.1
2,714.7
226.9
80,459.5
0.03
54.3
344,461.2
177.5
14.67
57.4
448.5
15.41
152.4
0.52
6.58
0.04
0.7
393.9
281.2
828.2
76.2
0.6
275.0
112.5
464.3
98.5
95
99
85
-
266,473.4
-
651.5
81,212.1
-
176.8
347,685.5
-
(UG – underground, OP – open pit, ISR – in situ recovery)
Note that the estimates in the above table:
use a constant dollar average uranium price of approximately $50 (US) per pound U3O8 except Inkai, where an average uranium price of approximately
$35 (US) per pound U3O8 was used by JV Inkai
are based on exchange rates of $1.00 US=$1.25 Cdn and $1.00 US=425 Kazakhstan Tenge
Our estimate of mineral reserves and mineral resources may be positively or negatively affected by the occurrence of one or
more of the material risks discussed under the heading Caution about forward-looking information beginning on page 2, as
well as certain property-specific risks. See Uranium – Tier-one operations starting on page 62.
Metallurgical recovery
We report mineral reserves as the quantity of contained ore supporting our mining plans and provide an estimate of the
metallurgical recovery for each uranium property. The estimate of the amount of valuable product that can be physically
recovered by the metallurgical extraction process is obtained by multiplying the quantity of contained metal (content) by the
planned metallurgical recovery percentage. The content and our share of uranium in the table above are before accounting for
estimated metallurgical recovery.
MANAGEMENT’S DISCUSSION AND ANALYSIS 85
Inkai
87,192.7
0.03
56.1
65,236.0
0.02
36,165.2
0.03
23.9
Mineral resources
As of December 31, 2021 (100% – only the shaded columns show our share)
MEASURED, INDICATED AND INFERRED
(tonnes in thousands; pounds in millions)
MEASURED RESOURCES (M)
INDICATED RESOURCES (I)
OUR
SHARE
INFERRED RESOURCES
OUR
SHARE
TONNES % U3O8
GRADE CONTENT
(LBS U3O8)
TONNES
TOTAL M+I TOTAL M+I
GRADE CONTENT CONTENT CONTENT
(LBS U3O8)
% U3O8
(LBS U3O8)
(LBS U3O8)
INFERRED
GRADE CONTENT CONTENT
(LBS U3O8)
% U3O8 (LBS U3O8)
TONNES
26.8
7.55
4.5
313.3 14.37
99.3
103.7
51.9
186.4
5.58
PROPERTY
Cigar Lake
Fox Lake
Kintyre
Millennium
Rabbit Lake
Tamarack
Yeelirrie
Crow Butte
McArthur River
91.7
2.63
5.3
74.5
2.26
-
-
-
-
-
-
-
-
3,897.7
0.62
-
-
-
-
-
-
-
-
-
1,442.6
2.39
1,836.5
0.95
183.8
4.42
27,172.9
0.16
95.9
12,178.3
0.12
Gas Hills - Peach
687.2
0.11
1,558.1
0.19
6.6
1.7
939.3
0.35
3,626.1
0.15
North Butte - Brown
Ranch
Ruby Ranch
Shirley Basin
621.3
0.08
-
-
89.2
0.16
Smith Ranch - Highland
3,703.5
0.10
1.1
-
0.3
7.9
5,530.3
0.07
2,215.3
0.08
1,638.2
0.11
-
53.5
3.7
75.9
38.6
17.9
32.2
7.3
11.6
32.9
8.4
4.1
4.1
-
53.5
9.0
75.9
38.6
17.9
-
386.7
7.99
53.5
6.3
53.0
38.6
10.3
517.1
0.53
41.0
2.85
412.4
3.19
2,460.9
0.62
45.6
1.02
128.1
128.1
-
-
13.9
13.3
89.1
9.5
4.1
4.4
13.9
13.3
35.6
9.5
4.1
4.4
531.4
0.16
3,307.5
0.08
294.5
0.07
56.2
0.14
508.0
0.10
22.9
68.1
6.0
2.6
29.0
33.7
1.0
-
1.8
6.0
0.4
0.2
1.1
7.7
11.5
53.3
6.0
1.8
20.2
33.7
0.6
-
1.8
6.0
9.6
0.4
0.2
1.1
7.7
14,372.3
0.05
17.0
24.9
24.9
6,861.0
0.05
Total
121,143.4
-
179.4
113,484.3
-
406.4
585.9
447.4
51,774.0
-
204.5
153.9
Note that mineral resources:
do not include amounts that have been identified as mineral reserves
do not have demonstrated economic viability
totals may not add due to rounding
86 CAMECO CORPORATION
Additional information
Due to the nature of our business, we are required to make estimates that affect the amount of assets and liabilities, revenues
and expenses, commitments and contingencies we report. We base our estimates on our experience, our best judgment,
guidelines established by the Canadian Institute of Mining, Metallurgy and Petroleum and on assumptions we believe are
reasonable.
We believe the following critical accounting estimates reflect the more significant judgments used in the preparation of our
financial statements. These estimates affect all of our segments, unless otherwise noted.
Decommissioning and reclamation
In our uranium and fuel services segments, we are required to estimate the cost of decommissioning and reclamation for each
operation, but we normally do not incur these costs until an asset is nearing the end of its useful life. Regulatory requirements
and decommissioning methods could change during that time, making our actual costs different from our estimates. A
significant change in these costs or in our mineral reserves could have a material impact on our net earnings and financial
position. See note 15 to the financial statements.
Property, plant and equipment
We depreciate property, plant and equipment primarily using the unit-of-production method, where the carrying value is
reduced as resources are depleted. A change in our mineral reserves would change our depreciation expenses, and such a
change could have a material impact on amounts charged to earnings.
We assess the carrying values of property, plant and equipment and goodwill every year, or more often if necessary. If we
determine that we cannot recover the carrying value of an asset or goodwill, we write off the unrecoverable amount against
current earnings. We base our assessment of recoverability on assumptions and judgments we make about future prices,
production costs, our requirements for sustaining capital and our ability to economically recover mineral reserves. A material
change in any of these assumptions could have a significant impact on the potential impairment of these assets.
In performing impairment assessments of long-lived assets, assets that cannot be assessed individually are grouped together
into the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets
or groups of assets. Management is required to exercise judgment in identifying these cash generating units.
Taxes
When we are preparing our financial statements, we estimate taxes in each jurisdiction we operate in, taking into consideration
different tax rates, non-deductible expenses, valuation of deferred tax assets, changes in tax laws and our expectations for
future results.
We base our estimates of deferred income taxes on temporary differences between the assets and liabilities we report in our
financial statements, and the assets and liabilities determined by the tax laws in the various countries we operate in. We
record deferred income taxes in our financial statements based on our estimated future cash flows, which includes estimates
of non-deductible expenses, future market conditions, production levels and intercompany sales. If these estimates are not
accurate, there could be a material impact on our net earnings and financial position.
Controls and procedures
We have evaluated the effectiveness of our disclosure controls and procedures and internal control over financial reporting as
of December 31, 2021, as required by the rules of the US Securities and Exchange Commission and the Canadian Securities
Administrators.
MANAGEMENT’S DISCUSSION AND ANALYSIS 87
Management, including our Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), supervised and participated
in the evaluation, and concluded that our disclosure controls and procedures are effective to provide a reasonable level of
assurance that the information we are required to disclose in reports we file or submit under securities laws is recorded,
processed, summarized and reported accurately, and within the time periods specified. It should be noted that, while the CEO
and CFO believe that our disclosure controls and procedures provide a reasonable level of assurance that they are effective,
they do not expect the disclosure controls and procedures or internal control over financial reporting to be capable of
preventing all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met.
Management, including our CEO and our CFO, is responsible for establishing and maintaining internal control over financial
reporting and conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of
December 31, 2021.
There have been no changes in our internal control over financial reporting during the year that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
New standards adopted
A number of amendments to existing standards became effective January 1, 2021 but they did not have an effect on the
Company’s financial statements.
The following amendment to an existing standard is not yet effective for the year ended December 31, 2021 and has not been
applied in preparing these consolidated financial statements. Cameco does not intend to early adopt the amendment.
In May 2021, the International Accounting Standards Board issued Deferred Tax related to Assets and Liabilities arising from a
Single Transaction, which amended IAS 12, Income Taxes (IAS 12). The amendments are effective for periods beginning on
or after January 1, 2023, with early adoption permitted. The amendments narrowed the scope of the recognition exemption in
paragraphs 15 and 24 of IAS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition,
give rise to equal taxable and deductible temporary differences, such as leases and decommissioning liabilities. Cameco does
not expect adoption of the standard to have a material impact on the financial statements.
88 CAMECO CORPORATION
Cameco Corporation
2021 consolidated financial statements
February 8, 2022
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 89
Report of management’s accountability
The accompanying consolidated financial statements have been prepared by management in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board. Management is responsible for
ensuring that these statements, which include amounts based upon estimates and judgments, are consistent with other
information and operating data contained in the annual financial review and reflect the corporation's business transactions and
financial position.
Management is also responsible for the information disclosed in the management’s discussion and analysis including
responsibility for the existence of appropriate information systems, procedures and controls to ensure that the information
used internally by management and disclosed externally is complete and reliable in all material respects.
In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial
reporting. The internal control system includes an internal audit function and a code of conduct and ethics, which is
communicated to all levels in the organization and requires all employees to maintain high standards in their conduct of the
Company's affairs. Such systems are designed to provide reasonable assurance that the financial information is relevant,
reliable and accurate and that the Company’s assets are appropriately accounted for and adequately safeguarded.
Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on
the criteria established in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s system of
internal control over financial reporting was effective as at December 31, 2021.
KPMG LLP has audited the consolidated financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States).
The board of directors annually appoints an audit and finance committee comprised of directors who are not employees of the
corporation. This committee meets regularly with management, the internal auditor and the shareholders' auditors to review
significant accounting, reporting and internal control matters. Both the internal and shareholders' auditors have unrestricted
access to the audit and finance committee. The audit and finance committee reviews the consolidated financial statements,
the report of the shareholders' auditors, and management’s discussion and analysis and submits its report to the board of
directors for formal approval.
Original signed by Tim S. Gitzel
President and Chief Executive Officer
February 8, 2022
Original signed by Grant E. Isaac
Senior Vice-President and Chief Financial Officer
February 8, 2022
90 CAMECO CORPORATION
Report of independent registered public accounting firm
To the Shareholders and Board of Directors of Cameco Corporation
Opinion on the consolidated financial statements
We have audited the accompanying consolidated statements of financial position of Cameco Corporation (the “Company”) as
of December 31, 2021 and 2020, the related consolidated statements of earnings, comprehensive income, changes in equity
and cash flows for the years then ended, and the related notes (collectively, the “consolidated financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as
of December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended, in conformity with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO), and our report dated February 8, 2022 expressed an unqualified opinion on the effectiveness of the
Company’s internal control over financial reporting.
Basis for opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that
our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit and finance committee and that: (1) relates to
accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of recoverability of deferred tax assets
As discussed in note 21 to the consolidated financial statements, as of December 31, 2021 the Company has recorded a
deferred tax asset of $937,579,000. The realization of this deferred tax asset is dependent on the generation of future taxable
income in certain jurisdictions during the periods in which the Company’s deferred tax assets are available. Based on
projections of future taxable income over the periods in which the deferred tax assets are available, realization of these
deferred tax assets is probable. As discussed in note 5D, the calculation of income taxes requires the use of judgment and
estimates. The determination of the recoverability of deferred tax assets is dependent on assumptions and judgments
regarding future market conditions, production rates and intercompany sales, which can materially impact estimated future
taxable income.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 91
We identified the assessment of the recoverability of the deferred tax asset as a critical audit matter due to the high degree of
judgment required in assessing the significant assumptions and judgments that are reflected in the projections of future
taxable income.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and
tested the operating effectiveness of certain internal controls related to the Company’s assessment of the recoverability of the
deferred tax asset, including controls related to the assumptions and judgments used in the projections of future taxable
income. To assess the Company’s ability to estimate future taxable income, we compared the Company’s previous forecasts
to actual results. To assess the Company’s estimate of future taxable income, we evaluated certain significant assumptions in
the model. We compared future market conditions of forecast uranium sales prices to published views of independent market
participants. We compared forecast sales, including intercompany sales, to historical trends, board approved budgets and
committed sales volumes, including to a selection of committed sales contracts. We compared forecast production rates to
historical data, board approved budgets and life of mine plans. We involved income tax professionals with specialized skills
and knowledge to assist in assessing the Company’s application of the tax regulations in relevant jurisdictions.
Original signed by KPMG LLP
Chartered Professional Accountants
We have served as the Company’s auditor since 1988.
Saskatoon, Canada
February 8, 2022
92 CAMECO CORPORATION
Report of independent registered public accounting firm
To the Shareholders and Board of Directors of Cameco Corporation
Opinion on internal control over financial reporting
We have audited Cameco Corporation’s (the “Company”) internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated statements of financial position of the Company as of December 31, 2021 and 2020, the related
consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years then ended, and
the related notes (collectively, the "consolidated financial statements") and our report dated February 8, 2022 expressed an
unqualified opinion on those consolidated financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of
management’s accountability. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 93
Original signed by KPMG LLP
Chartered Professional Accountants
Saskatoon, Canada
February 8, 2022
94 CAMECO CORPORATION
Consolidated statements of earnings
For the years ended December 31
($Cdn thousands, except per share amounts)
Revenue from products and services
Cost of products and services sold
Depreciation and amortization
Cost of sales
Gross profit
Administration
Exploration
Research and development
Other operating expense (income)
Loss on disposal of assets
Loss from operations
Finance costs
Gain on derivatives
Finance income
Share of earnings from equity-accounted investee
Other income
Loss before income taxes
Income tax expense (recovery)
Net loss
Net loss attributable to:
Equity holders
Non-controlling interest
Net loss
Loss per common share attributable to equity holders:
Basic
Diluted
See accompanying notes to consolidated financial statements.
Note
2021
2020
17
$ 1,474,984 $ 1,800,073
1,282,635
190,415
1,484,962
208,662
28
1,473,050
1,693,624
15
19
26
11
20
21
1,934
127,566
8,016
7,168
(8,407)
3,803
(136,212)
(76,612)
12,529
6,804
68,283
21,353
(103,855)
(1,201)
106,449
145,344
10,873
3,965
23,921
1,072
(78,726)
(96,133)
36,577
10,835
36,476
51,440
(39,531)
13,666
$
(102,654) $
(53,197)
(102,577)
(77)
(53,169)
(28)
$
(102,654) $
(53,197)
22
22
$
$
(0.26) $
(0.26) $
(0.13)
(0.13)
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 95
Consolidated statements of comprehensive income
For the years ended December 31
($Cdn thousands)
Net loss
Other comprehensive income (loss), net of taxes:
Items that will not be reclassified to net earnings:
Remeasurements of defined benefit liability1
Equity investments at FVOCI - net change in fair value2
Equity investments at FVOCI - net change in fair value -
equity-accounted investee
Items that are or may be reclassified to net earnings:
Exchange differences on translation of foreign operations
Other comprehensive income (loss), net of taxes
Total comprehensive loss
Other comprehensive income (loss) attributable to:
Equity holders
Non-controlling interest
Other comprehensive income (loss) for the year
Total comprehensive loss attributable to:
Equity holders
Non-controlling interest
Total comprehensive loss for the year
1 Net of tax (2021 - $(1,274); 2020 - $1,463)
2 Net of tax (2021 - $(3,267); 2020 - $(2,469))
See accompanying notes to consolidated financial statements.
Note
2021
2020
$
(102,654) $
(53,197)
25
3,897
22,059
(4,959)
16,986
-
(39)
(30,384)
(4,428)
26,807
38,795
$
(107,082) $
(14,402)
$
$
(4,426) $
(2)
38,799
(4)
(4,428) $
38,795
$
(107,003) $
(79)
(14,370)
(32)
$
(107,082) $
(14,402)
96 CAMECO CORPORATION
Consolidated statements of financial position
As at December 31
($Cdn thousands)
Assets
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable
Current tax assets
Inventories
Supplies and prepaid expenses
Current portion of long-term receivables, investments and other
Total current assets
Property, plant and equipment
Intangible assets
Long-term receivables, investments and other
Investment in equity-accounted investee
Deferred tax assets
Total non-current assets
Total assets
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities
Current tax liabilities
Current portion of other liabilities
Current portion of provisions
Total current liabilities
Long-term debt
Other liabilities
Provisions
Total non-current liabilities
Shareholders' equity
Share capital
Contributed surplus
Retained earnings
Other components of equity
Total shareholders' equity attributable to equity holders
Non-controlling interest
Total shareholders' equity
Note
2021
2020
6
7
10
8
9
10
11
21
$ 1,247,447 $
84,906
276,139
4,966
409,521
95,341
23,232
2,141,552
918,382
24,985
204,980
8,184
680,369
89,428
18,716
1,945,044
3,576,599
51,247
577,527
233,240
937,579
5,376,192
3,771,557
55,822
652,042
219,688
936,678
5,635,787
$ 7,517,744 $ 7,580,831
12
$
14
15
13
14
15
340,458 $
4,129
22,791
46,365
413,743
996,250
171,774
1,090,009
2,258,033
1,903,357
230,039
2,639,650
72,795
4,845,841
127
4,845,968
233,649
1,480
26,119
42,535
303,783
995,541
166,559
1,156,387
2,318,487
1,869,710
237,358
2,735,830
115,457
4,958,355
206
4,958,561
Total liabilities and shareholders' equity
$ 7,517,744 $ 7,580,831
Commitments and contingencies [notes 8, 15, 21]
See accompanying notes to consolidated financial statements.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 97
Consolidated statements of changes in equity
($Cdn thousands)
capital
surplus
earnings
translation
at FVOCI
Total
interest
Attributable to equity holders
Foreign
Equity
Share Contributed
Retained
currency investments
Non-
controlling
Total
equity
Balance at January 1, 2021
$ 1,869,710 $
237,358 $ 2,735,830 $ 103,925 $
11,532 $ 4,958,355 $
206 $ 4,958,561
Net loss
Other comprehensive
income (loss)
Total comprehensive
income (loss)
Share-based compensation
Stock options exercised
Restricted share units
released
Dividends
Transfer to retained
earnings [note 26]
-
-
-
-
33,647
-
-
-
-
-
-
(102,577)
-
-
(102,577)
(77)
(102,654)
3,897
(30,382)
22,059
(4,426)
(2)
(4,428)
(98,680)
(30,382)
22,059
(107,003)
(79)
(107,082)
4,536
(6,876)
(4,979)
-
-
-
-
(31,839)
-
34,339
-
-
-
-
-
-
-
-
-
4,536
26,771
(4,979)
(31,839)
(34,339)
-
-
-
-
-
-
4,536
26,771
(4,979)
(31,839)
-
Balance at December 31, 2021
$ 1,903,357 $
230,039 $ 2,639,650 $
73,543 $
(748) $ 4,845,841 $
127 $ 4,845,968
Balance at January 1, 2020
$ 1,862,749 $
234,681 $ 2,825,596 $
77,114 $
(5,415) $ 4,994,725 $
238 $ 4,994,963
Net loss
Other comprehensive
income (loss)
Total comprehensive
income (loss)
Share-based compensation
Stock options exercised
Restricted share units
released
Dividends
-
-
-
-
6,961
-
-
-
-
-
(53,169)
-
-
(53,169)
(28)
(53,197)
(4,959)
26,811
16,947
38,799
(4)
38,795
(58,128)
26,811
16,947
(14,370)
(32)
(14,402)
6,564
(1,586)
(2,301)
-
-
-
-
(31,638)
-
-
-
-
-
-
-
-
6,564
5,375
(2,301)
(31,638)
-
-
-
-
6,564
5,375
(2,301)
(31,638)
Balance at December 31, 2020
$ 1,869,710 $
237,358 $ 2,735,830 $ 103,925 $
11,532 $ 4,958,355 $
206 $ 4,958,561
See accompanying notes to consolidated financial statements.
98 CAMECO CORPORATION
Consolidated statements of cash flows
For the years ended December 31
($Cdn thousands)
Operating activities
Net loss
Adjustments for:
Depreciation and amortization
Deferred charges
Unrealized loss (gain) on derivatives
Share-based compensation
Loss on disposal of assets
Finance costs
Finance income
Share of earnings from equity-accounted investee
Other income
Other operating expense (income)
Income tax expense (recovery)
Interest received
Income taxes received (paid)
Dividends from equity-accounted investee
Other operating items
Net cash provided by operations
Investing activities
Additions to property, plant and equipment
Increase in short-term investments
Decrease in long-term receivables, investments and other
Proceeds from sale of property, plant and equipment
Net cash used in investing
Financing activities
Increase in long-term debt
Decrease in long-term debt
Interest paid
Proceeds from issuance of shares, stock option plan
Lease principal payments
Dividends paid
Net cash used in financing
Increase (decrease) in cash and cash equivalents, during the year
Exchange rate changes on foreign currency cash balances
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Cash and cash equivalents is comprised of:
Cash
Cash equivalents
Cash and cash equivalents
See accompanying notes to consolidated financial statements.
Note
2021
2020
$
(102,654) $
(53,197)
24
19
11
20
15
21
31
23
190,415
608
13,771
4,536
3,803
76,612
(6,804)
(68,283)
(446)
(8,407)
(1,201)
9,374
9,583
50,128
287,253
458,288
(98,784)
(59,921)
73,050
5,357
(80,298)
-
-
(38,977)
26,771
(2,727)
(31,839)
(46,772)
208,662
(2,945)
(42,892)
6,564
1,072
96,133
(10,835)
(36,476)
(13,891)
23,921
13,666
9,994
(4,374)
54,404
(192,917)
56,889
(77,462)
(24,985)
907
511
(101,029)
397,539
(400,000)
(65,547)
5,375
(3,716)
(31,638)
(97,987)
331,218
(2,153)
918,382
$ 1,247,447 $
(142,127)
(1,922)
1,062,431
918,382
$
604,557 $
642,890
$ 1,247,447 $
503,496
414,886
918,382
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 99
Notes to consolidated financial statements
For the years ended December 31, 2021 and 2020
1. Cameco Corporation
Cameco Corporation is incorporated under the Canada Business Corporations Act. The address of its registered office is 2121
11th Street West, Saskatoon, Saskatchewan, S7M 1J3. The consolidated financial statements as at and for the year ended
December 31, 2021 comprise Cameco Corporation and its subsidiaries (collectively, the Company or Cameco) and the
Company’s interests in associates and joint arrangements.
Cameco is one of the world’s largest providers of the uranium needed to generate clean, reliable baseload electricity around
the globe. The Company has mines in northern Saskatchewan and the United States, as well as a 40% interest in Joint
Venture Inkai LLP (JV Inkai), a joint arrangement with Joint Stock Company National Atomic Company Kazatomprom
(Kazatomprom), located in Kazakhstan. JV Inkai is accounted for on an equity basis (see note 11).
Cameco’s Cigar Lake mine was placed in a temporary state of care and maintenance in March of 2020 due to the global
COVID-19 pandemic. While production resumed in September, the mine returned to a temporary state of care and
maintenance in January 2021 as a result of the pandemic. Production once again resumed in April 2021. Cameco also has
two other operations in northern Saskatchewan which are in care and maintenance. Rabbit Lake was placed in care and
maintenance in the second quarter of 2016 while operations at McArthur River/Key Lake were suspended indefinitely in the
third quarter of 2018. Cameco’s operations in the United States, Crow Butte and Smith Ranch-Highland, are also not currently
producing as the decision was made in 2016 to curtail production and defer all wellfield development. See note 28 for the
financial statement impact.
The Company is also a leading provider of nuclear fuel processing services, supplying much of the world’s reactor fleet with
the fuel to generate one of the cleanest sources of electricity available today. It operates the world’s largest commercial
refinery in Blind River, Ontario, controls a significant portion of the world UF6 primary conversion capacity in Port Hope,
Ontario and is a leading manufacturer of fuel assemblies and reactor components for CANDU reactors at facilities in Port
Hope and Cobourg, Ontario. Also a result of the COVID-19 pandemic, production was temporarily suspended at the Port Hope
UF6 conversion plant and at the Blind River refinery for approximately four weeks in the second quarter of 2020. See note 28
for the financial statement impact.
2. Significant accounting policies
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
These consolidated financial statements were authorized for issuance by the Company’s board of directors on February 8,
2022.
These consolidated financial statements are presented in Canadian dollars, which is the Company’s functional currency. All
financial information is presented in Canadian dollars, unless otherwise noted. Amounts presented in tabular format have been
rounded to the nearest thousand except per share amounts and where otherwise noted.
The consolidated financial statements have been prepared on the historical cost basis except for the following material items
which are measured on an alternative basis at each reporting date:
100 CAMECO CORPORATION
Derivative financial instruments
Equity investments
Liabilities for cash-settled share-based payment arrangements
Net defined benefit liability
Fair value through profit or loss (FVTPL)
Fair value through other comprehensive income
(FVOCI)
FVTPL
Fair value of plan assets less the present value of the
defined benefit obligation
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
revenue and expenses. Actual results may vary from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in note 5.
This summary of significant accounting policies is a description of the accounting methods and practices that have been used
in the preparation of these consolidated financial statements and is presented to assist the reader in interpreting the
statements contained herein. These accounting policies have been applied consistently to all entities within the consolidated
group.
i. Business combinations
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Company. The Company
measures goodwill at the acquisition date as the fair value of the consideration transferred, including the recognized amount of
any non-controlling interests in the acquiree, less the net recognized amount (generally fair value) of the identifiable assets
acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase
gain is recognized immediately in earnings. In a business combination achieved in stages, the acquisition date fair value of the
Company’s previously held equity interest in the acquiree is also considered in computing goodwill.
Consideration transferred includes the fair values of the assets transferred, liabilities incurred and equity interests issued by
the Company. Consideration also includes the fair value of any contingent consideration and share-based compensation
awards that are replaced mandatorily in a business combination.
The Company elects on a transaction-by-transaction basis whether to measure any non-controlling interest at fair value, or at
their proportionate share of the recognized amount of the identifiable net assets of the acquiree, at the acquisition date.
Acquisition-related costs are expensed as incurred, except for those costs related to the issue of debt or equity instruments.
ii. Subsidiaries
The consolidated financial statements include the accounts of Cameco and its subsidiaries. Subsidiaries are entities over
which the Company has control. Subsidiaries are fully consolidated from the date on which control is acquired by the Company
and are deconsolidated from the date that control ceases.
iii. Investments in equity-accounted investees
Cameco’s investments in equity-accounted investees include investments in associates.
Associates are those entities over which the Company has significant influence, but not control or joint control, over the
financial and operating policies. Significant influence is presumed to exist when the Company holds between 20% and 50% of
the voting power of another entity, but can also arise where the Company holds less than 20% if it has the power to be actively
involved and influential in policy decisions affecting the entity.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 101
Investments in associates are accounted for using the equity method. The equity method involves the recording of the initial
investment at cost and the subsequent adjusting of the carrying value of the investment for Cameco’s proportionate share of
the earnings or loss and any other changes in the associates’ net assets, such as dividends. The cost of the investment
includes transaction costs.
Adjustments are made to align the accounting policies of the associate with those of the Company before applying the equity
method. When the Company’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of
that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Company has
incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports
profits, Cameco resumes recognizing its share of those profits only after its share of the profits equals the share of losses not
recognized.
iv. Joint arrangements
A joint arrangement can take the form of a joint operation or joint venture. All joint arrangements involve a contractual
arrangement that establishes joint control.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. A joint operation may or may not be structured through a
separate vehicle. These arrangements involve joint control of one or more of the assets acquired or contributed for the
purpose of the joint operation. The consolidated financial statements of the Company include its share of the assets in such
joint operations, together with its share of the liabilities, revenues and expenses arising jointly or otherwise from those
operations. All such amounts are measured in accordance with the terms of each arrangement.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. A joint venture is always structured through a separate vehicle. It operates in the same way as
other entities, controlling the assets of the joint venture, earning its own revenue and incurring its own liabilities and expenses.
Interests in joint ventures are accounted for using the equity method of accounting, whereby the Company’s proportionate
interest in the assets, liabilities, revenues and expenses of jointly controlled entities are recognized on a single line in the
consolidated statements of financial position and consolidated statements of earnings. The share of joint ventures results is
recognized in the Company’s consolidated financial statements from the date that joint control commences until the date at
which it ceases.
v. Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted
investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are
eliminated in the same manner as unrealized gains, but only to the extent that there is no evidence of impairment.
Items included in the financial statements of each of Cameco’s subsidiaries, associates and joint arrangements are measured
using their functional currency, which is the currency of the primary economic environment in which the entity operates. The
consolidated financial statements are presented in Canadian dollars, which is Cameco’s functional and presentation currency.
102 CAMECO CORPORATION
i. Foreign currency transactions
Foreign currency transactions are translated into the respective functional currency of the Company and its entities using the
exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in
foreign currencies are translated to the functional currency at the exchange rate at that date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
The applicable exchange gains and losses arising on these transactions are reflected in earnings with the exception of foreign
exchange gains or losses on provisions for decommissioning and reclamation activities that are in a foreign currency, which
are capitalized in property, plant and equipment.
ii. Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are
translated to Canadian dollars at exchange rates at the reporting dates. The revenues and expenses of foreign operations are
translated to Canadian dollars at exchange rates at the dates of the transactions.
Foreign currency differences are recognized in other comprehensive income. When a foreign operation is disposed of, in
whole, the relevant amount in the foreign currency translation account is transferred to earnings as part of the gain or loss on
disposal.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the
foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of the
net investment in a foreign operation, and are recognized in other comprehensive income and presented within equity in the
foreign currency translation account.
Cash and cash equivalents consists of balances with financial institutions and investments in money market instruments,
which have a term to maturity of three months or less at the time of purchase and are measured at amortized cost.
F. Short-term investments
Short-term investments are comprised of money market instruments with terms to maturity between three and 12 months and
are measured at amortized cost.
Inventories of broken ore, uranium concentrates, and refined and converted products are measured at the lower of cost and
net realizable value.
Cost includes direct materials, direct labour, operational overhead expenses and depreciation. Net realizable value is the
estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Consumable supplies and spares are valued at the lower of cost or replacement value.
i. Buildings, plant and equipment and other
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment charges. The cost
of self-constructed assets includes the cost of materials and direct labour, borrowing costs and any other costs directly
attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner
intended by management, including the initial estimate of the cost of dismantling and removing the items and restoring the site
on which they are located.
When components of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items of property, plant and equipment and depreciated separately.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 103
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment, and are recognized in earnings.
ii. Mineral properties and mine development costs
The decision to develop a mine property within a project area is based on an assessment of the commercial viability of the
property, the availability of financing and the existence of markets for the product. Once the decision to proceed to
development is made, development and other expenditures relating to the project area are deferred as part of assets under
construction and disclosed as a component of property, plant and equipment with the intention that these will be depreciated
by charges against earnings from future mining operations. No depreciation is charged against the property until the
production stage commences. After a mine property has been brought into the production stage, costs of any additional work
on that property are expensed as incurred, except for large development programs, which will be deferred and depreciated
over the remaining life of the related assets.
The production stage is reached when a mine property is in the condition necessary for it to be capable of operating in the
manner intended by management. The criteria used to assess the start date of the production stage are determined based on
the nature of each mine construction project, including the complexity of a mine site. A range of factors is considered when
determining whether the production stage has been reached, which includes, but is not limited to, the demonstration of
sustainable production at or near the level intended (such as the demonstration of continuous throughput levels at or above a
target percentage of the design capacity).
iii. Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of the asset less its residual value. Assets which are
unrelated to production are depreciated according to the straight-line method based on estimated useful lives as follows:
Land
Buildings
Plant and equipment
Furniture and fixtures
Other
Not depreciated
15 - 25 years
3 - 15 years
3 - 10 years
3 - 5 years
Mining properties and certain mining and conversion assets for which the economic benefits from the asset are consumed in a
pattern which is linked to the production level are depreciated according to the unit-of-production method. For conversion
assets, the amount of depreciation is measured by the portion of the facilities' total estimated lifetime production that is
produced in that period. For mining assets and properties, the amount of depreciation or depletion is measured by the portion
of the mines' proven and probable mineral reserves recovered during the period.
Depreciation methods, useful lives and residual values are reviewed at each reporting period and are adjusted if appropriate.
iv. Borrowing costs
Borrowing costs on funds directly attributable to finance the acquisition, production or construction of a qualifying asset are
capitalized until such time as substantially all the activities necessary to prepare the qualifying asset for its intended use are
complete. A qualifying asset is one that takes a substantial period of time to prepare for its intended use. Capitalization is
discontinued when the asset enters the production stage or development ceases. Where the funds used to finance a project
form part of general borrowings, interest is capitalized based on the weighted average interest rate applicable to the general
borrowings outstanding during the period of construction.
v. Repairs and maintenance
The cost of replacing a component of property, plant and equipment is capitalized if it is probable that future economic benefits
embodied within the component will flow to the Company. The carrying amount of the replaced component is derecognized.
Costs of routine maintenance and repair are charged to products and services sold.
104 CAMECO CORPORATION
Goodwill arising from the acquisition of subsidiaries is initially recognized at cost, measured as the excess of the fair value of
the consideration paid over the fair value of the identifiable net assets acquired. At the date of acquisition, goodwill is allocated
to the cash generating unit (CGU), or group of CGUs that is expected to receive the economic benefits of the business
combination. Goodwill is subsequently measured at cost, less accumulated impairment losses.
Intangible assets acquired individually or as part of a group of assets are initially recognized at cost and measured
subsequently at cost less accumulated amortization and impairment losses. Subsequent expenditure is capitalized only when
it increases the future economic benefits embodied in the specific asset to which it relates. The cost of a group of intangible
assets acquired in a transaction, including those acquired in a business combination that meet the specified criteria for
recognition apart from goodwill, is allocated to the individual assets acquired based on their relative fair values.
Intangible assets that have finite useful lives are amortized over their estimated remaining useful lives. Amortization methods
and useful lives are reviewed at each reporting period and are adjusted if appropriate.
Cameco recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which is the initial amount of the lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred, less any lease incentives received, and subsequently at cost
less any accumulated depreciation and impairment losses. The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the lease term, unless the cost of the right-of-use asset
reflects that the Company will exercise a purchase option, in which case the right-of-use asset will be depreciated on the same
basis as that of property, plant and equipment.
The lease liability is measured at amortized cost using the effective interest method. It is initially measured at the present value
of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or,
if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, Cameco uses its incremental
borrowing rate as the discount rate. Current borrowing rates available for classes of leased assets are compared with the rates
of Cameco’s existing debt facilities to ensure that use of the Company’s incremental borrowing rate is reasonable.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the
estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the
assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised.
Cameco uses judgement in determining the lease term for some lease contracts that include renewal options. The assessment
of whether the Company is reasonably certain to exercise such options impacts the lease term, which affects the amount of
lease liabilities and right-of-use assets recognized.
The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases that have a lease term of 12 months or less. The lease payments associated with these leases are recognized as
an expense on a straight-line basis over the lease term.
Finance income comprises interest income on funds invested. Interest income and interest expense are recognized in
earnings as they accrue, using the effective interest method. Finance costs comprise interest and fees on borrowings,
unwinding of the discount on provisions and costs incurred on redemption of debentures.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
expensed in the period incurred.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 105
Expenditures on research are charged against earnings when incurred. Development costs are recognized as assets when the
Company can demonstrate technical feasibility and that the asset will generate probable future economic benefits.
i. Non-derivative financial assets
Cameco recognizes loss allowances for expected credit losses (ECLs) on financial assets measured at amortized cost, debt
investments measured at FVOCI, and contract assets. It measures loss allowances at an amount equal to lifetime ECLs,
except for debt securities that are determined to have low credit risk at the reporting date and other debt securities, loans
advanced and bank balances for which credit risk has not increased significantly since initial recognition. For these, loss
allowances are measured equal to 12-month ECLs.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument while 12-
month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting
date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when
estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of the difference
between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to
receive. ECLs are discounted at the effective interest rate of the financial asset.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical
experience and informed credit assessment and including forward-looking information.
The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations in full,
without recourse by Cameco to actions such as realizing security (if any is held).
The Company considers a debt security to have low credit risk when it is at least an A (low) DBRS or A- S&P rating.
Financial assets carried at amortized cost and debt securities at FVOCI are assessed at each reporting date to determine
whether they are ‘credit-impaired’. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental effect
on the estimated future cash flows of the financial asset have occurred. Evidence can include significant financial difficulty of
the borrower or issuer, a breach of contract, restructuring of an amount due to the Company on terms that the Company would
not consider otherwise, indications that a debtor or issuer will enter bankruptcy or other financial reorganization, or the
disappearance of an active market for a security.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.
For debt securities at FVOCI, the loss allowance is charged to earnings and is recognized in OCI. The gross carrying amount
of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its
entirety or a portion thereof.
ii. Non-financial assets
The carrying amounts of Cameco’s non-financial assets are reviewed throughout the year to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested
annually for impairment.
106 CAMECO CORPORATION
For impairment testing, assets are grouped together into CGUs which are the smallest group of assets that generate cash
inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a
business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the
combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is
based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU. Fair value is determined as the
amount that would be obtained from the sale of the asset or CGU in an arm’s-length transaction between knowledgeable and
willing parties. For exploration properties, fair value is based on the implied fair value of the resources in place using
comparable market transaction metrics.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment
losses are recognized in earnings. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
Impairment losses recognized in prior periods are assessed throughout the year, whenever events or changes in
circumstances indicate that the impairment may have reversed. If the impairment has reversed, the carrying amount of the
asset is increased to its recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized. A reversal of an impairment loss is recognized immediately in earnings. An impairment
loss in respect of goodwill is not reversed.
Exploration and evaluation expenditures are those expenditures incurred by the Company in connection with the exploration
for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource
are demonstrable. These expenditures include researching and analyzing existing exploration data, conducting geological
studies, exploratory drilling and sampling, and compiling prefeasibility and feasibility studies. Exploration and evaluation
expenditures are charged against earnings as incurred, except when there is a high degree of confidence in the viability of the
project and it is probable that these costs will be recovered through future development and exploitation.
The technical feasibility and commercial viability of extracting a resource is considered to be determinable based on several
factors, including the existence of proven and probable reserves and the demonstration that future economic benefits are
probable. When an area is determined to be technically feasible and commercially viable, the exploration and evaluation
assets attributable to that area are first tested for impairment and then transferred to property, plant and equipment.
Exploration and evaluation costs that have been acquired in a business combination or asset acquisition are capitalized under
the scope of IFRS 6, Exploration for and Evaluation of Mineral Resources, and are reported as part of property, plant and
equipment.
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the risk-adjusted expected future cash flows at a pre-tax risk-free rate that reflects current
market assessments of the time value of money. The unwinding of the discount is recognized as a finance cost.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 107
i. Environmental restoration
The mining, extraction and processing activities of the Company normally give rise to obligations for site closure and
environmental restoration. Closure and restoration can include facility decommissioning and dismantling, removal or treatment
of waste materials, as well as site and land restoration. The Company provides for the closure, reclamation and
decommissioning of its operating sites in the financial period when the related environmental disturbance occurs, based on the
estimated future costs using information available at the reporting date. Costs included in the provision comprise all closure
and restoration activity expected to occur gradually over the life of the operation and at the time of closure. Routine operating
costs that may impact the ultimate closure and restoration activities, such as waste material handling conducted as a normal
part of a mining or production process, are not included in the provision.
The timing of the actual closure and restoration expenditure is dependent upon a number of factors such as the life and nature
of the asset, the operating licence conditions and the environment in which the mine operates. Closure and restoration
provisions are measured at the expected value of future cash flows, discounted to their present value using a current pre-tax
risk-free rate. Significant judgments and estimates are involved in deriving the expectations of future activities and the amount
and timing of the associated cash flows.
At the time a provision is initially recognized, to the extent that it is probable that future economic benefits associated with the
reclamation, decommissioning and restoration expenditure will flow to the Company, the corresponding cost is capitalized as
an asset. The capitalized cost of closure and restoration activities is recognized in property, plant and equipment and
depreciated on a unit-of-production basis. The value of the provision is gradually increased over time as the effect of
discounting unwinds. The unwinding of the discount is an expense recognized in finance costs.
Closure and rehabilitation provisions are also adjusted for changes in estimates. The provision is reviewed at each reporting
date for changes to obligations, legislation or discount rates that effect change in cost estimates or life of operations. The cost
of the related asset is adjusted for changes in the provision resulting from changes in estimated cash flows or discount rates,
and the adjusted cost of the asset is depreciated prospectively.
ii. Waste disposal
The refining, conversion and manufacturing processes generate certain uranium-contaminated waste. The Company has
established strict procedures to ensure this waste is disposed of safely. A provision for waste disposal costs in respect of
these materials is recognized when they are generated. Costs associated with the disposal, the timing of cash flows and
discount rates are estimated both at initial recognition and subsequent measurement.
i. Pension obligations
The Company accrues its obligations under employee benefit plans. The Company has both defined benefit and defined
contribution plans. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a
separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined
benefit plan is a pension plan other than a defined contribution plan. Typically, defined benefit plans define an amount of
pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of
service and compensation.
108 CAMECO CORPORATION
The liability recognized in the consolidated statements of financial position in respect of defined benefit pension plans is the
present value of the defined benefit obligation at the reporting date less the fair value of plan assets. The defined benefit
obligation is calculated annually, by qualified independent actuaries using the projected unit credit method prorated on service
and management's best estimate of expected plan investment performance, salary escalation, retirement ages of employees
and expected health care costs. The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the
benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.
The Company recognizes all actuarial gains and losses arising from defined benefit plans in other comprehensive income, and
reports them in retained earnings. When the benefits of a plan are improved, the portion of the increased benefit relating to
past service by employees is recognized immediately in earnings.
For defined contribution plans, the contributions are recognized as employee benefit expense in earnings in the periods during
which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund
or a reduction in future payments is available.
ii. Other post-retirement benefit plans
The Company provides certain post-retirement health care benefits to its retirees. The entitlement to these benefits is usually
conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The
expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used
for defined benefit pension plans. Actuarial gains and losses are recognized in other comprehensive income in the period in
which they arise. These obligations are valued annually by independent qualified actuaries.
iii. Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognized for the amount expected to be paid under short-term cash bonus plans if the Company has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the
obligation can be measured reliably.
iv. Termination benefits
Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or
whenever an employee accepts an entity’s offer of benefits in exchange for termination of employment. Cameco recognizes
termination benefits as an expense at the earlier of when the Company can no longer withdraw the offer of those benefits and
when the Company recognizes costs for a restructuring. If benefits are payable more than 12 months after the reporting
period, they are discounted to their present value.
v. Share-based compensation
For equity-settled plans, the grant date fair value of share-based compensation awards granted to employees is recognized as
an employee benefit expense, with a corresponding increase in equity, over the period that the employees unconditionally
become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which
the related service and vesting conditions are expected to be met, such that the amount ultimately recognized as an expense
is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.
For cash-settled plans, the fair value of the amount payable to employees is recognized as an expense, with a corresponding
increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is re-
measured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognized as
employee benefit expense in earnings.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 109
When the terms and conditions of equity-settled plans at the time they were granted are subsequently modified, the fair value
of the share-based payment under the original terms and conditions and under the modified terms and conditions are both
determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over
the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based
payment expense is not adjusted if the modified fair value is less than the original fair value.
Cameco’s contributions under the employee share ownership plan are expensed during the year of contribution. Shares
purchased with Company contributions and with dividends paid on such shares become unrestricted on January 1 of the
second plan year following the date on which such shares were purchased.
Cameco supplies uranium concentrates, uranium conversion services, fabrication services and other services. Revenue is
measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it
transfers control, as described below, over a good or service to a customer. Customers do not have the right to return
products.
Cameco’s sales arrangements with its customers are pursuant to enforceable contracts that indicate the nature and timing of
satisfaction of performance obligations, including significant payment terms, where payment is usually due in 30 days. Each
delivery is considered a separate performance obligation under the contract.
Uranium supply
In a uranium supply arrangement, Cameco is contractually obligated to provide uranium concentrates to its customers.
Cameco-owned uranium may be physically delivered to either the customer or to conversion facilities (Converters).
For deliveries to customers, terms in the sales contract specify the location of delivery. Revenue is recognized when the
uranium has been delivered and accepted by the customer at that location.
When uranium is delivered to Converters, the Converter will credit Cameco’s account for the volume of accepted uranium.
Based on delivery terms in the sales contract with its customer, Cameco instructs the Converter to transfer title of a
contractually specified quantity of uranium to the customer’s account at the Converter’s facility. At this point, control has been
transferred and Cameco recognizes revenue for the uranium supply.
Toll conversion services
In a toll conversion arrangement, Cameco is contractually obligated to convert customer-owned uranium to a chemical state
suitable for enrichment. Based on delivery terms in a sales contract with its customer, Cameco either (i) physically delivers
converted uranium to enrichment facilities (Enrichers) where it instructs the Enricher to transfer title of a contractually specified
quantity of converted uranium to the customer’s account at the Enricher’s facility, or (ii) transfers title of a contractually
specified quantity of converted uranium to either an Enricher’s account or the customer’s account at Cameco’s Port Hope
conversion facility. At this point, the customer obtains control and Cameco recognizes revenue for the toll conversion services.
Conversion supply
A conversion supply arrangement is a combination of uranium supply and toll conversion services. Cameco is contractually
obligated to provide converted uranium to its customers. Based on delivery terms in the sales contract, Cameco either (i)
physically delivers converted uranium to the Enricher where it instructs the Enricher to transfer title of a contractually specified
quantity of converted uranium to the customer’s account at the Enricher’s facility, or (ii) transfers title of a contractually
specified quantity of converted uranium to either an Enricher’s account or a customer’s account at Cameco’s Port Hope
conversion facility. At this point, the customer obtains control and Cameco recognizes revenue for both the uranium supplied
and the conversion service provided.
110 CAMECO CORPORATION
Fabrication services
In a fabrication services arrangement, Cameco is contractually obligated to provide fuel bundles or reactor components to its
customers. In a contract for fuel bundles, the bundles are inspected and accepted by the customer at Cameco’s Port Hope
fabrication facility or another location based on delivery terms in the sales contract. At this point, the customer obtains control
and Cameco recognizes revenue for the fabrication services.
In some contracts for reactor components, the components are made to a customer’s specification and if a contract is
terminated by the customer, Cameco is entitled to reimbursement of the costs incurred to date, including a reasonable margin.
Since the customer controls all of the work in progress as the products are being manufactured, revenue and associated costs
are recognized over time, before the goods are delivered to the customer’s premises. Revenue is recognized on the basis of
units produced as the contracts reflect a per unit basis. Revenue from these contracts represents an insignificant portion of
Cameco’s total revenue. In other contracts where the reactor components are not made to a specific customer’s specification,
when the components are delivered to the location specified in the contract, the customer obtains control and Cameco
recognizes revenue for the services.
Other services
Uranium concentrates and converted uranium are regulated products and can only be stored at regulated facilities. In a
storage arrangement, Cameco is contractually obligated to store uranium products at its facilities on behalf of the customer.
Cameco invoices the customer in accordance with the contract terms and recognizes revenue on a monthly basis.
Cameco also provides customers with transportation of its uranium products. In the contractual arrangements where Cameco
is acting as the principal, revenue is recognized as the product is delivered.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another.
Trade receivables and debt securities are initially recognized when they are originated. All other financial assets and liabilities
are initially recognized when the company becomes a party to the contractual provisions of the instrument. A financial asset
(unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value
plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue.
A trade receivable without a significant financing component is initially measured at the transaction price.
i. Financial assets
On initial recognition, financial assets are classified as measured at: amortized cost, fair value through other comprehensive
income, or fair value through profit or loss based on the Company’s business model for managing its financial assets and their
cash flow characteristics. Classifications are not changed subsequent to initial recognition unless the Company changes its
business model for managing its financial assets, in which case all affected financial assets are reclassified on the first day of
the first reporting period following the change in business model.
Amortized cost
A financial asset is measured at amortized cost if it is not designated as at fair value through profit or loss, is held within a
business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise to cash
flows on specified dates that are solely payments of principal and interest on the principal amount outstanding. Assets in this
category are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss, as is
any gain or loss on derecognition.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 111
Fair value through other comprehensive income (FVOCI)
A debt investment is measured at FVOCI if it is not designated as at fair value through profit or loss, is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling financial assets and its contractual
terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount
outstanding. These assets are subsequently measured at fair value. Interest income calculated using the effective interest
method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are
recognized in other comprehensive income (OCI). On derecognition, gains and losses accumulated in OCI are reclassified to
profit or loss.
On initial recognition of an equity investment that is not held for trading, Cameco may irrevocably elect to present subsequent
changes in the investments fair value in OCI. This election is made on an investment by investment basis. These assets are
subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly
represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never
reclassified to profit or loss.
Fair value through profit or loss (FVTPL)
All financial assets not classified as measured at amortized cost or FVOCI are measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise. These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in profit or loss.
Derecognition of financial assets
Cameco derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which it neither transfers or retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
If the Company enters into a transaction whereby it transfers assets recognized in its statement of financial position, but
retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets would not be
derecognized.
ii. Financial liabilities
On initial recognition, financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified
as FVTPL if it is classified as held-for-trading, is a derivative or is designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.
Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognized in profit or loss as is any gain or loss on derecognition.
A financial liability is derecognized when its contractual obligations are discharged or cancelled, or expire. The Company also
derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially
different, in which case a new financial liability based on the modified terms is recognized at fair value. On derecognition of a
financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash
assets transferred or liabilities assumed) is recognized in profit or loss.
iii. Derivative financial instruments
The Company holds derivative financial instruments to reduce exposure to fluctuations in foreign currency exchange rates and
interest rates. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is
not a financial asset and certain criteria are met.
112 CAMECO CORPORATION
Derivative financial instruments are initially measured at fair value in the consolidated statements of financial position, with any
directly attributable transaction costs recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are
measured at fair value, and changes in fair value are recognized in profit or loss.
The purpose of hedging transactions is to modify the Company’s exposure to one or more risks by creating an offset between
changes in the fair value of, or the cash flows attributable to, the hedged item and the hedging item. When hedge accounting
is appropriate, the hedging relationship is designated as a fair value hedge, a cash flow hedge, or a foreign currency risk
hedge related to a net investment in a foreign operation. The Company does not have any instruments that have been
designated as hedge transactions at December 31, 2021 and 2020.
Income tax expense is comprised of current and deferred taxes. Current tax and deferred tax are recognized in earnings
except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive
income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantially enacted at the reporting date, and any adjustments to tax payable in respect of previous years. Current tax
assets and liabilities are measured at the amount expected to be paid or recovered from the taxation authorities.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. In addition, deferred tax is not recognized for taxable
temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted
by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it
is probable that future taxable income will be available against which they can be utilized. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The Company’s exposure to uncertain tax positions is evaluated and a provision is made where it is probable that this
exposure will materialize.
Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized
as a reduction of equity, net of any tax effects.
The Company presents basic and diluted earnings per share data for its common shares. Earnings per share is calculated by
dividing the net earnings attributable to equity holders of the Company by the weighted average number of common shares
outstanding.
Diluted earnings per share is determined by adjusting the net earnings attributable to equity holders of the Company and the
weighted average number of common shares outstanding, for the effects of all dilutive potential common shares. The
calculation of diluted earnings per share assumes that outstanding options which are dilutive to earnings per share are
exercised and the proceeds are used to repurchase shares of the Company at the average market price of the shares for the
period. The effect is to increase the number of shares used to calculate diluted earnings per share.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 113
An operating segment is a component of the Company that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other segments.
To be classified as a segment, discrete financial information must be available and operating results must be regularly
reviewed by the Company’s executive team.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and
intangible assets other than goodwill.
Government grants are recognized when there is reasonable assurance that the Company has complied with the relevant
conditions of the grant and that the grant will be received. Grants that compensate the Company for expenses incurred are
recognized in profit or loss as other income on a systematic basis in the periods in which the expenses have been recognized.
3. Accounting standards
A number of amendments to existing standards became effective January 1, 2021 but they did not have an effect on the
Company’s financial statements.
A new amendment to an existing standard is not yet effective for the year ended December 31, 2021 and has not been applied
in preparing these consolidated financial statements. Cameco does not intend to early adopt the following amendment.
i. Income tax
In May 2021, the International Accounting Standards Board issued Deferred Tax related to Assets and Liabilities arising from a
Single Transaction, which amended IAS 12, Income Taxes (IAS 12). The amendments are effective for periods beginning on
or after January 1, 2023, with early adoption permitted. The amendments narrowed the scope of the recognition exemption in
paragraphs 15 and 24 of IAS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition,
give rise to equal taxable and deductible temporary differences, such as leases and decommissioning liabilities. Cameco does
not expect adoption of the standard to have a material impact on the financial statements.
4. Determination of fair values
A number of the Company’s accounting policies and disclosures require the measurement of fair value, for both financial and
non-financial assets and liabilities.
The fair value of an asset or liability is generally estimated as the amount that would be received on sale of an asset, or paid to
transfer a liability in an orderly transaction between market participants at the reporting date. Fair values of assets and
liabilities traded in an active market are determined by reference to last quoted prices, in the principal market for the asset or
liability. In the absence of an active market for an asset or liability, fair values are determined based on market quotes for
assets or liabilities with similar characteristics and risk profiles, or through other valuation techniques. Fair values determined
using valuation techniques require the use of inputs, which are obtained from external, readily observable market data when
available. In some circumstances, inputs that are not based on observable data must be used. In these cases, the estimated
fair values may be adjusted in order to account for valuation uncertainty, or to reflect the assumptions that market participants
would use in pricing the asset or liability.
All fair value measurements are categorized into one of three hierarchy levels, described below, for disclosure purposes. Each
level is based on the transparency of the inputs used to measure the fair values of assets and liabilities:
114 CAMECO CORPORATION
Level 1 – Values based on unadjusted quoted prices in active markets that are accessible at the reporting date for identical
assets or liabilities.
Level 2 – Values based on quoted prices in markets that are not active or model inputs that are observable either directly or
indirectly for substantially the full term of the asset or liability.
Level 3 – Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the
overall fair value measurement.
When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the fair value
measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.
Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period during which the transfer
occurred. There were no transfers between level 1, level 2, or level 3 during the period. Cameco does not have any recurring
fair value measurements that are categorized as level 3 as of the reporting date.
Further information about the techniques and assumptions used to measure fair values is included in the following notes:
Note 24 - Share-based compensation plans
Note 26 - Financial instruments and risk management
5. Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
revenues and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised and in any future period affected.
Information about critical judgments in applying the accounting policies that have the most significant effect on the amounts
recognized in the consolidated financial statements is discussed below. Further details of the nature of these judgments,
estimates and assumptions may be found in the relevant notes to the consolidated financial statements.
Cameco assesses the carrying values of property, plant and equipment, and intangible assets when there is an indication of
possible impairment. If it is determined that carrying values of assets or goodwill cannot be recovered, the unrecoverable
amounts are charged against current earnings. Recoverability is dependent upon assumptions and judgments regarding
market conditions, costs of production, sustaining capital requirements and mineral reserves. Other assumptions used in the
calculation of recoverable amounts are discount rates, future cash flows and profit margins. A material change in assumptions
may significantly impact the potential impairment of these assets.
In performing impairment assessments of long-lived assets, assets that cannot be assessed individually are grouped together
into the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets
or groups of assets. Management is required to exercise judgment in identifying these CGUs.
Significant decommissioning and reclamation activities are often not undertaken until near the end of the useful lives of the
productive assets. Regulatory requirements and alternatives with respect to these activities are subject to change over time. A
significant change to either the estimated costs, timing of the cash flows or mineral reserves may result in a material change in
the amount charged to earnings.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 115
Cameco operates in a number of tax jurisdictions and is, therefore, required to estimate its income taxes in each of these tax
jurisdictions in preparing its consolidated financial statements. In calculating income taxes, consideration is given to factors
such as tax rates in the different jurisdictions, non-deductible expenses, changes in tax law and management’s expectations of
future operating results. Cameco estimates deferred income taxes based on temporary differences between the income and
losses reported in its consolidated financial statements and its taxable income and losses as determined under the applicable
tax laws. The tax effect of these temporary differences is recorded as deferred tax assets or liabilities in the consolidated
financial statements. The calculation of income taxes requires the use of judgment and estimates. The determination of the
recoverability of deferred tax assets is dependent on assumptions and judgments regarding future market conditions,
production rates and intercompany sales, which can materially impact estimated future taxable income. If these judgments and
estimates prove to be inaccurate, future earnings may be materially impacted.
Depreciation on property, plant and equipment is primarily calculated using the unit-of-production method. This method
allocates the cost of an asset to each period based on current period production as a portion of total lifetime production or a
portion of estimated mineral reserves. Estimates of life-of-mine and amounts of mineral reserves are updated annually and are
subject to judgment and significant change over time. If actual mineral reserves prove to be significantly different than the
estimates, there could be a material impact on the amounts of depreciation charged to earnings.
6. Accounts receivable
Trade receivables
GST/VAT receivables
Other receivables
Total
2021
2020
$
271,015 $
3,919
1,205
166,054
38,192
734
$
276,139 $
204,980
The Company’s exposure to credit and currency risks as well as credit losses related to trade and other receivables, excluding
goods and services tax (GST)/value added tax (VAT) receivables, is disclosed in note 26.
7. Inventories
Uranium
Concentrate
Broken ore
Fuel services
Other
Total
2021
2020
$
319,257 $
46,324
365,581
579,653
45,387
625,040
43,549
52,273
391
3,056
$
409,521 $
680,369
Cameco expensed $1,218,000,000 of inventory as cost of sales during 2021 (2020 - $1,435,000,000).
116 CAMECO CORPORATION
8. Property, plant and equipment
At December 31, 2021
Land
and
buildings
Plant
and
equipment
Furniture
and
fixtures
Under
construction
Exploration
and
evaluation
Total
Cost
Beginning of year
Additions
Transfers
Change in reclamation provision [note 15]
Disposals
Effect of movements in exchange rates
$ 5,224,333 $ 2,699,844 $
78,911
$
139,051 $ 1,125,483 $ 9,267,622
1,520
17,145
(62,427)
(23,075)
(5,287)
8,807
31,243
-
(6,019)
(1,314)
700
5,130
-
(345)
(30)
87,637
(52,797)
-
(6,691)
120
-
-
-
-
(52,364)
98,784
721
(62,427)
(36,130)
(58,995)
End of year
5,152,209
2,732,561
84,366
167,200
1,073,239
9,209,575
Accumulated depreciation and impairment
Beginning of year
Depreciation charge
Change in reclamation provision [note 15](a)
Disposals
Effect of movements in exchange rates
3,031,292
1,876,336
104,641
92,670
(8,407)
(20,999)
(4,787)
-
(5,623)
(1,155)
74,246
4,246
-
(345)
(28)
36,798
483,663
5,502,335
-
-
-
-
-
-
-
(25,416)
201,557
(8,407)
(26,967)
(31,386)
End of year
3,101,740
1,962,228
78,119
36,798
458,247
5,637,132
Right-of-use assets
Beginning of year
Additions
Depreciation charge
Transfers
End of year
1,806
-
(875)
-
2,322
477
(494)
(721)
2,142
-
(501)
-
931
1,584
1,641
-
-
-
-
-
-
-
-
-
-
6,270
477
(1,870)
(721)
4,156
Net book value at December 31, 2021
$ 2,051,400 $
771,917 $
7,888
$
130,402 $
614,992 $ 3,576,599
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 117
At December 31, 2020
Land
and
buildings
Plant
and
equipment
Furniture
and
fixtures
Under
construction
Exploration
and
evaluation
Total
Cost
Beginning of year
Additions
Transfers
Change in reclamation provision
Disposals
Effect of movements in exchange rates
$ 5,050,115 $ 2,678,165 $
80,869 $
132,457 $ 1,071,840 $ 9,013,446
2,030
37,971
151,558
(1,678)
(15,663)
7,097
855
21,405
2,554
-
(3,385)
(3,438)
-
(5,299)
(68)
67,477
(60,391)
-
(492)
3
-
-
(99)
-
53,739
77,462
1,539
151,558
(10,953)
34,570
End of year
5,224,333
2,699,844
78,911
139,051
1,125,483
9,267,622
Accumulated depreciation and impairment
Beginning of year
2,936,088
1,793,049
76,601
36,799
458,386
5,300,923
Depreciation charge
Change in reclamation provision(a)
Disposals
Effect of movements in exchange rates
84,261
23,921
(903)
(12,075)
89,550
3,010
-
(2,997)
(3,266)
-
(5,299)
(66)
-
-
(1)
-
-
-
(150)
25,427
176,821
23,921
(9,350)
10,020
End of year
3,031,292
1,876,336
74,246
36,798
483,663
5,502,335
Right-of-use assets
Beginning of year
Additions
Disposals
Depreciation charge
Transfers
End of year
2,646
5,084
75
(40)
(875)
22
(747)
(498)
-
(1,539)
419
2,124
-
(401)
-
1,806
2,322
2,142
-
-
-
-
-
-
-
-
-
-
-
-
8,149
2,221
(787)
(1,774)
(1,539)
6,270
Net book value at December 31, 2020
$ 2,194,847 $
825,830 $
6,807 $
102,253 $
641,820 $ 3,771,557
Cameco has contractual capital commitments of approximately $53,000,000 at December 31, 2021. Certain of the contractual
commitments may contain cancellation clauses, however the Company discloses the commitments based on management’s
intent to fulfill the contract. The majority of this amount is expected to be incurred in 2022.
(a) Asset retirement obligation assets are adjusted when the Company updates its reclamation provisions due to new cash
flow estimates or changes in discount and inflation rates. When the assets of an operation have been written off due to an
impairment, as is the case with our Rabbit Lake operation and some of our operations in the United States, the adjustment is
recorded directly to the statement of earnings as other operating expense or income.
118 CAMECO CORPORATION
9. Intangible assets
At December 31, 2021
Cost
Beginning of year
Effect of movements in exchange rates
End of year
Accumulated amortization and impairment
Beginning of year
Amortization charge
Effect of movements in exchange rates
End of year
Contracts
Intellectual
property
Total
$
111,388 $
(770)
118,819 $
-
230,207
(770)
110,618
118,819
229,437
109,663
975
(752)
64,722
3,582
-
174,385
4,557
(752)
109,886
68,304
178,190
Net book value at December 31, 2021
$
732 $
50,515 $
51,247
At December 31, 2020
Cost
Beginning of year
Effect of movements in exchange rates
End of year
Accumulated amortization and impairment
Beginning of year
Amortization charge
Effect of movements in exchange rates
End of year
Intellectual
Contracts
property
Total
$
113,707 $
(2,319)
118,819 $
-
232,526
(2,319)
111,388
118,819
230,207
111,094
1,008
(2,439)
61,022
3,700
-
172,116
4,708
(2,439)
109,663
64,722
174,385
Net book value at December 31, 2020
$
1,725 $
54,097 $
55,822
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 119
The intangible asset values relate to intellectual property acquired with Cameco Fuel Manufacturing Inc. (CFM) and purchase
and sales contracts acquired with NUKEM. The CFM intellectual property is being amortized on a unit-of-production basis over
its remaining life. Amortization is allocated to the cost of inventory and is recognized in cost of products and services sold as
inventory is sold. The purchase and sales contracts will be amortized to earnings over the remaining terms of the underlying
contracts, which extend to 2022. Amortization of the purchase contracts is allocated to the cost of inventory and is included in
cost of products and services sold as inventory is sold. Sales contracts are amortized to revenue.
10. Long-term receivables, investments and other
Investments in equity securities [note 26](a)
Derivatives [note 26]
Investment tax credits
Amounts receivable related to tax dispute [note 21](b)
Product loan(c)
Other
Less current portion
Net
2021
2020
$
-
32,098
95,722
295,221
176,904
814
600,759
(23,232)
$
43,873
45,605
95,642
303,222
176,904
5,512
670,758
(18,716)
$
577,527
$
652,042
(a) Cameco designated the investments shown below as equity securities at FVOCI because these equity securities
represented investments that the Company intended to hold for the long term for strategic purposes. During the year, Cameco
divested of these securities since holding them no longer added value in terms of its strategic plan. There were no dividends
recognized on any of these investments during the year.
Investment in Denison Mines Corp.
Investment in UEX Corporation
Investment in ISO Energy Ltd.
Investment in GoviEx
Other
2021
2020
-
-
-
-
-
-
$
20,677
13,005
6,923
2,875
393
$
43,873
$
$
(b) Cameco was required to remit or otherwise secure 50% of the cash taxes and transfer pricing penalties, plus related
interest and instalment penalties assessed, in relation to its dispute with Canada Revenue Agency (CRA) (see note 21). In
light of our view of the likely outcome of the case, Cameco expects to recover the amounts remitted to CRA, including cash
taxes, interest and penalties totalling $295,221,000 already paid as at December 31, 2021 (December 31, 2020 -
$303,222,000) (note 21).
(c) During 2018, as a result of the decision to temporarily suspend production at the McArthur River mine, Cameco loaned
5,400,000 pounds of uranium concentrate to its joint venture partner, Orano Canada Inc., (Orano). Orano is obligated to repay
us in kind with uranium concentrate no later than December 31, 2023. The loan was recorded at Cameco’s weighted average
cost of inventory.
120 CAMECO CORPORATION
11. Equity-accounted investee
JV Inkai is the operator of the Inkai uranium deposit located in Kazakhstan. Cameco holds a 40% interest and Kazatomprom
holds a 60% interest in JV Inkai. Cameco does not have joint control over the joint venture and as a result, Cameco accounts
for JV Inkai on an equity basis.
JV Inkai is a uranium mining and milling operation that utilizes in-situ recovery (ISR) technology to extract uranium. The
participants in JV Inkai purchase uranium from Inkai and, in turn, derive revenue directly from the sale of such product to third-
party customers.
The following tables summarize the financial information of JV Inkai (100%):
Cash and cash equivalents
Other current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Revenue from products and services
Cost of products and services sold
Depreciation and amortization
Finance income
Finance costs
Other expense
Income tax expense
Net earnings
Other comprehensive loss
Total comprehensive income
$
2021
12,893
301,589
328,469
(32,774)
(38,635)
$
2020
47,539
115,647
343,767
(26,397)
(39,991)
$
571,542
$
440,565
$
2021
387,319
(55,397)
(25,300)
349
(796)
(16,636)
(60,357)
229,182
-
$
2020
252,764
(57,358)
(24,081)
367
(825)
(12,305)
(44,804)
113,758
(97)
$
229,182
$
113,661
The following table reconciles the summarized financial information to the carrying amount of Cameco’s interest in JV Inkai:
Opening net assets
Total comprehensive income
Dividends declared
Impact of foreign exchange
Closing net assets
Cameco's share of net assets
Consolidating adjustments(a)
Fair value increment(b)
Dividends in excess of ownership percentage(c)
Impact of foreign exchange
$
2021
440,565
229,182
(85,198)
(13,007)
571,542
228,617
(60,348)
85,976
(22,085)
1,080
$
2020
442,074
113,661
(64,456)
(50,714)
440,565
176,226
(38,975)
89,184
(9,669)
2,922
Carrying amount in the statement of financial position
$
233,240
$
219,688
(a) Cameco records certain consolidating adjustments to eliminate unrealized profit and amortize historical differences in
accounting policies. This amount is amortized to earnings over units of production.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 121
(b) Upon restructuring, Cameco assigned fair values to the assets and liabilities of JV Inkai. This increment is amortized to
earnings over units of production.
(c) Cameco’s share of dividends follows its production purchase entitlements which is currently higher than its ownership
interest.
12. Accounts payable and accrued liabilities
Trade payables
Non-trade payables
Payables due to related parties [note 24]
Total
2021
2020
$
213,377
66,048
61,033
$
137,190
58,105
38,354
$
340,458
$
233,649
The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 26.
13. Long-term debt
Unsecured debentures
Series F - 5.09% debentures due November 14, 2042
Series G - 4.19% debentures due June 24, 2024
Series H - 2.95% debentures due October 21, 2027
Total
2021
2020
99,336
499,010
397,904
99,319
498,630
397,592
$
996,250
$
995,541
On October 21, 2020, Cameco issued $400,000,000 of Series H debentures which bear interest at a rate of 2.95% per annum.
The net proceeds of the issue after deducting expenses were approximately $397,500,000. The debentures mature on
October 21, 2027 and are being amortized at an effective interest rate of 3.05%. In conjunction with the issuance of the Series
H debentures, on November 20, 2020, the $400,000,000 principal amount of the Series E debentures was redeemed. Cameco
recognized $24,439,000 of finance costs in relation to the early redemption of these debentures (note 19).
Cameco has a $1,000,000,000 unsecured revolving credit facility that is available until October 1, 2025. Upon mutual
agreement, the facility can be extended for an additional year on the anniversary date. In addition to direct borrowings under
the facility, up to $100,000,000 can be used for the issuance of letters of credit and, to the extent necessary, it may be used to
provide liquidity support for the Company’s commercial paper program. The agreement also provides the ability to increase the
revolving credit facility above $1,000,000,000 by increments no less than $50,000,000, to a total of $1,250,000,000. The
facility ranks equally with all of Cameco’s other senior debt. As of December 31, 2021 and 2020, there were no amounts
outstanding under this facility.
Cameco has $1,696,041,000 (2020 - $1,698,340,000) in letter of credit facilities. Outstanding and committed letters of credit at
December 31, 2021 amounted to $1,573,873,000 (2020 - $1,596,488,000), the majority of which relate to future
decommissioning and reclamation liabilities (note 15).
Cameco is bound by a covenant in its revolving credit facility. The covenant requires a funded debt to tangible net worth ratio
equal to or less than 1:1. Non-compliance with this covenant could result in accelerated payment and termination of the
revolving credit facility. At December 31, 2021, Cameco was in compliance with the covenant and does not expect its
operating and investing activities in 2022 to be constrained by it.
122 CAMECO CORPORATION
The table below represents currently scheduled maturities of long-term debt:
2022
2023
2024
$
-
-
499,010
2025
-
2026
Thereafter
Total
-
497,240 $
996,250
14. Other liabilities
Deferred sales [note 17]
Derivatives [note 26]
Accrued pension and post-retirement benefit liability [note 25]
Lease obligation
Product loan(a)
Other
Less: current portion
Net
$
2021
23,316
4,997
89,002
4,872
15,763
56,615
194,565
(22,791)
$
2020
14,382
4,733
91,729
7,951
6,045
67,838
192,678
(26,119)
$
171,774
$
166,559
Expenses related to short-term leases and leases of low-value assets were insignificant during 2021.
(a) The Company has standby product loan facilities with various counterparties. The arrangements allow it to borrow up to
1,977,000 kgU of UF6 conversion services and 2,606,000 pounds of U3O8 over the period 2020 to 2023 with repayment in kind
up to December 31, 2023. Under the facilities, standby fees of up to 1% are payable based on the market value of the facilities
and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 1.6%. At December 31, 2021,
we have 1,103,000 kgU of UF6 conversion services drawn on the loans with repayment no later than December 31, 2022. The
loan is recorded at Cameco’s weighted average cost of inventory.
15. Provisions
Beginning of year
Changes in estimates and discount rates [note 8]
Capitalized in property, plant and equipment
Recognized in earnings [note 8]
Provisions used during the period
Unwinding of discount [note 19]
Effect of movements in exchange rates
End of period
Current
Non-current
Reclamation Waste disposal
Total
$ 1,189,600
$
9,322
$ 1,198,922
(54,020)
(8,407)
(19,024)
21,347
(2,527)
-
503
(518)
98
-
(54,020)
(7,904)
(19,542)
21,445
(2,527)
$ 1,126,969
$
45,013
1,081,956
$ 1,126,969
$
$
$
9,405
$ 1,136,374
1,352
8,053
$
46,365
1,090,009
9,405
$ 1,136,374
Cameco's estimates of future decommissioning obligations are based on reclamation standards that satisfy regulatory
requirements. Elements of uncertainty in estimating these amounts include potential changes in regulatory requirements,
decommissioning and reclamation alternatives and amounts to be recovered from other parties.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 123
Cameco estimates total undiscounted future decommissioning and reclamation costs for its existing operating assets to be
$1,100,378,000 (2020 - $1,130,495,000). The expected timing of these outflows is based on life-of-mine plans with the
majority of expenditures expected to occur after 2027. These estimates are reviewed by Cameco technical personnel as
required by regulatory agencies or more frequently as circumstances warrant. In connection with future decommissioning and
reclamation costs, Cameco has provided financial assurances of $1,007,009,000 (2020 - $1,021,142,000) in the form of letters
of credit to satisfy current regulatory requirements.
The reclamation provision relates to the following segments:
Uranium
Fuel services
Total
2021
2020
$
900,482
226,487
$
937,992
251,608
$ 1,126,969
$ 1,189,600
The fuel services segment consists of the Blind River refinery, Port Hope conversion facility and Cameco Fuel Manufacturing
Inc.. The refining, conversion and manufacturing processes generate certain uranium contaminated waste. These include
contaminated combustible material (paper, rags, gloves, etc.) and contaminated non-combustible material (metal parts, soil
from excavations, building and roofing materials, spent uranium concentrate drums, etc.). These materials can in some
instances be recycled or reprocessed. A provision for waste disposal costs in respect of these materials is recognized when
they are generated.
Cameco estimates total undiscounted future costs related to existing waste disposal to be $8,169,000 (2020 - $8,044,000).
The majority of these expenditures are expected to occur within the next four years.
16. Share capital
Authorized share capital:
Unlimited number of first preferred shares
Unlimited number of second preferred shares
Unlimited number of voting common shares, no stated par value, not convertible or redeemable, and
One Class B share
Number issued (number of shares)
Beginning of year
Issued:
Stock option plan [note 24]
End of year
2021
2020
396,262,741
395,797,732
1,796,524
465,009
398,059,265
396,262,741
All issued shares are fully paid. Holders of the common shares are entitled to exercise one vote per share at meetings of
shareholders, are entitled to receive dividends if, as and when declared by our Board of Directors and are entitled to
participate in any distribution of remaining assets following a liquidation.
The shares of Cameco are widely held and no shareholder, resident in Canada, is allowed to own more than 25% of the
Company’s outstanding common shares, either individually or together with associates. A non-resident of Canada is not
allowed to own more than 15%. In addition, no more than 25% of total shareholder votes cast may be cast by non-resident
shareholders.
124 CAMECO CORPORATION
One Class B share issued during 1988 and assigned $1 of share capital entitles the shareholder to vote separately as a class
in respect of any proposal to locate the head office of Cameco to a place not in the province of Saskatchewan.
Dividends on Cameco Corporation common shares are declared in Canadian dollars. For the year ended December 31, 2021,
the dividend declared per share was $0.08 (December 31, 2020 - $0.08).
17. Revenue
Cameco’s sales contracts with customers contain both fixed and market-related pricing. Fixed-price contracts are typically
based on a term-price indicator at the time the contract is accepted and escalated over the term of the contract. Market-related
contracts are based on either the spot price or long-term price, and the price is quoted at the time of delivery rather than at the
time the contract is accepted. These contracts often include a floor and/or ceiling prices, which are usually escalated over the
term of the contract. Escalation is generally based on a consumer price index. The Company’s contracts contain either one of
these pricing mechanisms or a combination of the two. There is no variable consideration in the contracts and therefore no
revenue is considered constrained at the time of delivery. Cameco expenses the incremental costs of obtaining a contract as
incurred as the amortization period is less than a year.
The following table summarizes Cameco’s sales disaggregated by geographical region and contract type and includes a
reconciliation to the Company’s reportable segments (note 28):
For the year ended December 31, 2021
Customer geographical region
Americas
Europe
Asia
Contract type
Fixed-price
Market-related
For the year ended December 31, 2020
Customer geographical region
Americas
Europe
Asia
Contract type
Fixed-price
Market-related
Uranium
Fuel services
Other
Total
$
547,257
218,879
288,857
$
287,802
77,110
39,365
$
12,769
2,945
-
$
847,828
298,934
328,222
$ 1,054,993
$
404,277
$
15,714
$ 1,474,984
$
307,858
747,135
$
384,065
20,212
$ 1,054,993
$
404,277
$
$
11,421
4,293
$
703,344
771,640
15,714
$ 1,474,984
Uranium
Fuel services
Other
Total
$
593,182
323,565
499,378
$
206,011
123,864
47,421
$
$ 1,416,125
$
377,296
$
$
410,376
1,005,749
$
355,552
21,744
$ 1,416,125
$
377,296
$
$
3,321
3,331
-
6,652
3,331
3,321
6,652
$
802,514
450,760
546,799
$ 1,800,073
$
769,259
1,030,814
$ 1,800,073
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 125
Deferred sales
The following table provides information about contract liabilities (note 14) from contracts with customers:
Beginning of year
Additions
Recognized in revenue
Effect of movements in exchange rates
End of year
2021
2020
$
$
14,382
16,531
(7,596)
(1)
17,418
6,994
(10,026)
(4)
$
23,316
$
14,382
Deferred sales primarily relates to advance consideration received from customers for future conversion deliveries and fuel
fabrication services as well as revenue related to the storage of uranium and converted uranium held at Cameco facilities. The
revenue related to the fuel fabrication services and storage is recognized over time while the revenue related to future
conversion deliveries is expected to be recognized between 2024 and 2030.
Cameco recognized an increase of revenue of $383,000 (2020 - reduction of revenue of $268,000) during 2021 from
performance obligations satisfied (or partially satisfied) in previous periods. This is due to the difference between actual pricing
indices and the estimates at the time of invoicing.
Future sales commitments
Cameco’s sales portfolio consists of short and long-term sales commitments. The contracts can be executed well in advance
of a delivery and include both fixed and market-related pricing. The following table summarizes the expected future revenue,
by segment, related to only fixed-price contracts with remaining future deliveries as follows:
2022
2023
2024
2025
2026 Thereafter
Total
Uranium
Fuel services
Total
$ 298,355 $ 273,739 $ 332,247 $ 219,546 $ 108,004 $ 527,366 $ 1,759,257
1,799,959
248,395
181,707
560,458
241,940
269,227
298,232
$ 596,587 $ 522,134 $ 601,474 $ 461,486 $ 289,711 $ 1,087,824 $ 3,559,216
The sales contracts are denominated largely in US dollars and converted from US to Canadian dollars at a rate of $1.27.
The amounts in the table represent the consideration the Company will be entitled to receive when it satisfies the remaining
performance obligations in the contracts. The amounts include assumptions about volumes for contracts that have volume
flexibility. Cameco’s total revenue that will be earned will also include revenue from contracts with market-related pricing. The
Company has elected to exclude these amounts from the table as the transaction price will not be known until the time of
delivery. Contracts with an original duration of one year or less have been included in the table.
126 CAMECO CORPORATION
18. Employee benefit expense
The following employee benefit expenses are included in cost of products and services sold, administration, exploration,
research and development and property, plant and equipment:
Wages and salaries
Statutory and company benefits
Expenses related to defined benefit plans [note 25]
Expenses related to defined contribution plans [note 25]
Equity-settled share-based compensation [note 24]
Cash-settled share-based compensation [note 24]
Total
19. Finance costs
Interest on long-term debt
Unwinding of discount on provisions [note 15]
Redemption of Series E debentures [note 13]
Other charges
Total
No borrowing costs were determined to be eligible for capitalization during the year.
20. Other income (expense)
Foreign exchange gains
Government assistance(a)
Other
Total
2021
2020
$
236,181
43,870
5,350
12,939
7,837
41,839
$
226,725
41,299
5,256
12,410
9,738
27,241
$
348,016
$
322,669
2021
2020
$
39,266
21,445
-
15,901
$
43,340
14,403
24,439
13,951
$
76,612
$
96,133
2021
446
21,209
(302)
2020
13,891
37,347
202
$
21,353
$
51,440
(a) In response to the negative economic impact of COVID-19, the Government of Canada announced the Canada
Emergency Wage Subsidy program (CEWS). CEWS provides a subsidy on eligible remuneration based on certain criteria. In
2020, the Company qualified for the subsidy for the periods April through December and in 2021, for the periods January
through June. There are no unfulfilled conditions and other contingencies attached to this government assistance. Given the
current eligibility criteria, Cameco has determined that it will not apply for the CEWS in subsequent application periods.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 127
21. Income taxes
Assets
Property, plant and equipment
Provision for reclamation
Inventories
Foreign exploration and development
Income tax losses (gains)
Defined benefit plan actuarial losses
Long-term investments and other
Deferred tax assets
Liabilities
Inventories
Deferred tax liabilities
Recognized in earnings
2021
2020
As at December 31
2021
2020
$
82,677
(14,509)
2,489
(812)
(80,802)
-
16,405
5,448
-
-
$
(38,389)
28,628
4,071
2
(7,629)
-
(5,678)
(18,995)
(301)
(301)
$
363,468
207,633
6,559
4,457
301,910
8,126
45,426
937,579
-
-
$
280,798
222,142
4,071
5,269
382,712
9,410
32,276
936,678
-
-
Net deferred tax asset (liability)
$
5,448
$
(18,694)
$
937,579
$
936,678
Deferred tax allocated as
Deferred tax assets
Deferred tax liabilities
Net deferred tax asset
2021
$
937,579
$
-
2020
936,678
-
$
937,579
$
936,678
Cameco has recorded a deferred tax asset of $937,579,000 (2020 - $936,678,000). The realization of this deferred tax asset is
dependent upon the generation of future taxable income in certain jurisdictions during the periods in which the Company’s
deferred tax assets are available. The Company considers whether it is probable that all or a portion of the deferred tax assets
will not be realized. In making this assessment, management considers all available evidence, including recent financial
operations, projected future taxable income and tax planning strategies. Based on projections of future taxable income over
the periods in which the deferred tax assets are available, realization of these deferred tax assets is probable and
consequently the deferred tax assets have been recorded.
128 CAMECO CORPORATION
Deferred tax asset at beginning of year
Recovery (expense) for the year in net earnings
Expense for the year in other comprehensive income
Effect of movements in exchange rates
End of year
Income tax losses
Property, plant and equipment
Provision for reclamation
Long-term investments and other
Total
2021
2020
$
936,678
5,448
(4,541)
(6)
$
956,376
(18,694)
(1,006)
2
$
937,579
$
936,678
2021
2020
$
288,637
2,209
66,573
58,330
$
271,163
2,204
75,219
60,223
$
415,749
$
408,809
The provision for income taxes differs from the amount computed by applying the combined expected federal and provincial
income tax rate to earnings before income taxes. The reasons for these differences are as follows:
2021
2020
Loss before income taxes and non-controlling interest
Combined federal and provincial tax rate
$
(103,855)
26.9%
$
Computed income tax recovery
Increase (decrease) in taxes resulting from:
Difference between Canadian rates and rates
applicable to subsidiaries in other countries
Change in unrecognized deferred tax assets
Share-based compensation plans
Change in legislation
Income in equity-accounted investee
Change in uncertain tax positions
Other permanent differences
Income tax expense (recovery)
(39,531)
26.9%
(10,634)
42,028
(7,766)
398
(1,978)
(12,155)
2,455
1,318
(27,937)
28,690
22,068
-
-
(24,481)
1,099
(640)
$
(1,201)
$
13,666
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 129
Earnings (loss) before income taxes
Canada
Foreign
Current income taxes (recovery)
Canada
Foreign
Deferred income taxes (recovery)
Canada
Foreign
Income tax expense (recovery)
2021
2020
$
58,624
(162,479)
$
(103,855)
$
$
$
$
$
2,257
1,990
4,247
(3,937)
(1,511)
(5,448)
(1,201)
$
$
$
$
$
$
$
72,809
(112,340)
(39,531)
(394)
(4,634)
(5,028)
9,122
9,572
18,694
13,666
On February 18, 2021, the Supreme Court of Canada (Supreme Court) dismissed Canada Revenue Agency’s (CRA)
application for leave to appeal the June 26, 2020 decision of the Federal Court of Appeal (Court of Appeal). The dismissal
means that the dispute for the 2003, 2005 and 2006 tax years is fully and finally resolved in the Company’s favour.
In September 2018, the Tax Court of Canada (Tax Court) ruled that the marketing and trading structure involving foreign
subsidiaries, as well as the related transfer pricing methodology used for certain intercompany uranium sales and purchasing
agreements, were in full compliance with Canadian law for the tax years in question. Management believes the principles in
the decision apply to all subsequent tax years, and that the ultimate resolution of those years will not be material to Cameco’s
financial position, results of operations or liquidity in the year(s) of resolution.
The total tax reassessed for the three tax years was $11,000,000, and Cameco remitted 50%. Cameco has received refunds
totaling about $5,500,000 plus interest.
In addition, on April 30, 2019, the Tax Court awarded Cameco $10,300,000 for legal fees incurred, plus an amount for
disbursements of up to $16,700,000. The amount of the award was recognized as a reduction of administration expense in the
first quarter of 2021.
If CRA continues to pursue reassessments for tax years subsequent to 2006, Cameco will continue to utilize its appeal rights
under Canadian federal and provincial tax rules.
130 CAMECO CORPORATION
At December 31, 2021, income tax losses carried forward of $2,177,025,000 (2020 - $2,399,647,000) are available to reduce
taxable income. These losses expire as follows:
Date of expiry
Canada
US
Other
Total
2026
2027
2028
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
No expiry
$
$
-
-
-
47
-
272
-
169,934
372,376
210,591
27
2,813
6,424
3,110
31
-
-
-
-
-
20,295
21,858
33,595
15,593
7,106
43,466
32,558
35,112
27,159
52,001
38,666
-
$
13,724
228
59
-
-
-
-
4,484
7,167
5,646
2,958
320
-
-
-
1,049,405
$
13,724
228
59
47
20,295
22,130
33,595
190,011
386,649
259,703
35,543
38,245
33,583
55,111
38,697
1,049,405
$
765,625
$
327,409
$ 1,083,991
$ 2,177,025
Included in the table above is $1,083,848,000 (2020 - $1,013,730,000) of temporary differences related to loss carry forwards
where no future benefit has been recognized.
22. Per share amounts
Per share amounts have been calculated based on the weighted average number of common shares outstanding during the
period. The weighted average number of paid shares outstanding in 2021 was 397,630,947 (2020 - 395,829,380,).
Basic loss per share computation
Net loss attributable to equity holders
Weighted average common shares outstanding
Basic loss per common share
Diluted loss per share computation
Net loss attributable to equity holders
Weighted average common shares outstanding
Dilutive effect of stock options
Weighted average common shares outstanding, assuming dilution
Diluted loss per common share
2021
2020
$
(102,577)
$
(53,169)
397,631
395,829
$
(0.26)
$
(0.13)
$
(102,577)
$
(53,169)
397,631
-
397,631
395,829
-
395,829
$
(0.26)
$
(0.13)
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 131
23. Supplemental cash flow information
Other operating items included in the statements of cash flows are as follows:
Changes in non-cash working capital:
Accounts receivable
Inventories
Supplies and prepaid expenses
Accounts payable and accrued liabilities
Reclamation payments
Other
Total
2021
2020
$
(75,678)
300,307
(5,908)
91,757
(19,542)
(3,683)
$
143,717
(376,908)
(3,999)
36,514
(17,640)
25,399
$
287,253
$
(192,917)
The changes arising from financing activities were as follows:
Long-term
debt
Interest
payable
Lease
obligation
Dividends
payable
Share
capital
Total
Balance at January 1, 2021
$
995,541 $
3,978 $
7,951 $
- $ 1,869,710 $ 2,877,180
Changes from financing cash flows:
Dividends paid
Interest paid
Lease principal payments
Shares issued, stock option plan
Total cash changes
Non-cash changes:
-
-
-
-
-
(38,789)
-
-
-
(31,839)
(188)
(2,727)
-
-
-
-
-
-
-
26,771
(31,839)
(38,977)
(2,727)
26,771
-
(38,789)
(2,915)
(31,839)
26,771
(46,772)
Amortization of issue costs
709
Dividends declared
Interest expense
Right-of-use asset additions
Other
Shares issued, stock option plan
Foreign exchange
-
-
-
-
-
-
-
-
38,369
-
-
-
-
Total non-cash changes
709
38,369
-
-
188
477
(783)
-
(46)
(164)
-
31,839
-
-
-
-
-
-
-
-
-
-
6,876
-
709
31,839
38,557
477
(783)
6,876
(46)
31,839
6,876
77,629
Balance at December 31, 2021
$
996,250 $
3,558 $
4,872 $
- $ 1,903,357 $ 2,908,037
24. Share-based compensation plans
The Company has the following plans:
The Company has established a stock option plan under which options to purchase common shares may be granted to
employees of Cameco. Options granted under the stock option plan have an exercise price of not less than the closing price
quoted on the Toronto Stock Exchange (TSX) for the common shares of Cameco on the trading day prior to the date on which
the option is granted. The options carry vesting periods of one to three years, and expire eight years from the date granted.
The aggregate number of common shares that may be issued pursuant to the Cameco stock option plan shall not exceed
43,017,198 of which 30,136,822 shares have been issued.
132 CAMECO CORPORATION
Stock option transactions for the respective years were as follows:
(Number of options)
Beginning of year
Options granted
Options forfeited
Options expired
Options exercised [note 16]
End of year
Exercisable
Weighted average share prices were as follows:
Beginning of year
Options granted
Options forfeited
Options expired
Options exercised
End of year
Exercisable
2021
2020
6,158,539
-
(18,005)
(886,009)
(1,796,524)
8,617,097
-
(81,991)
(1,911,558)
(465,009)
3,458,001
6,158,539
3,162,415
5,076,226
2021
2020
$16.98
-
26.08
22.05
14.90
$16.72
$16.85
$17.44
-
22.22
20.14
11.56
$16.98
$17.73
The weighted average share price at the dates of exercise during 2021 was $22.09 per share (2020 - $14.58).
Total options outstanding and exercisable at December 31, 2021 were as follows:
Option price per share
Number
$11.32 - 15.83
$15.84 - 26.81
1,833,572
1,624,429
3,458,001
Options outstanding
Options exercisable
Weighted
average
remaining
life
Weighted
average
exercisable
price
4.2
1.5
$14.56
$19.15
Weighted
average
exercisable
price
$14.43
$19.15
Number
1,537,986
1,624,429
3,162,415
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 133
The Company has established a PSU plan whereby it provides each plan participant an annual grant of PSUs in an amount
determined by the board. Each PSU represents one phantom common share that entitles the participant to a payment of one
Cameco common share purchased on the open market, or cash with an equivalent market value, at the participant’s discretion
(prior to the fourth quarter of 2019 it was at the board’s discretion) provided they have met their ownership requirements, at the
end of each three-year period if certain performance and vesting criteria have been met. The final value of the PSUs will be
based on the value of Cameco common shares at the end of the three-year period and the number of PSUs that ultimately
vest. During the vesting period, dividend equivalents accrue to the participants in the form of additional share units as of each
normal cash dividend payment date of Cameco’s common shares. Vesting of PSUs at the end of the three-year period is
based on Cameco’s ability to meet its annual operating targets and whether the participating executive remains employed by
Cameco at the end of the three-year vesting period. Prior to 2020, total shareholder return over three years was also a vesting
condition. If the participant elects a cash payout, the redemption amount will be based on the volume-weighted average
trading price of Cameco’s common shares on March 1 or, if March 1 is not a trading day, on the first trading day following
March 1. As of December 31, 2021, the total number of PSUs held by the participants, after adjusting for forfeitures on
retirement, was 1,495,709 (2020 - 1,720,636).
C
The Company has established an RSU plan whereby it provides each plan participant an annual grant of RSUs in an amount
determined by the board. Each RSU represents one phantom common share that entitles the participant to a payment of one
Cameco common share purchased on the open market, or cash with an equivalent market value, at the board’s discretion.
The RSUs carry vesting periods of one to three years, and the final value of the units will be based on the value of Cameco
common shares at the end of the vesting periods. In addition, certain eligible participants have a single vesting date on the
third anniversary of the date of the grant. These same participants, if they have met or are not subject to share ownership
requirements, may elect to have their award paid as a lump sum cash amount. During the vesting period, dividend equivalents
accrue to the participants in the form of additional share units as of each normal cash dividend payment date of Cameco’s
common shares. As of December 31, 2021, the total number of RSUs held by the participants was 1,081,783, (2020 -
927,462).
The Company has established a phantom stock option plan for eligible non-North American employees. Employees receive
the equivalent value of shares in cash when exercised. Options granted under the phantom stock option plan have an award
value equal to the closing price quoted on the TSX for the common shares of Cameco on the trading day prior to the date on
which the option is granted. The options vest over three years and expire eight years from the date granted. As of December
31, 2021, the number of options held by participating employees was 173,835 (2020 - 422,291) with exercise prices ranging
from $11.32 to $26.81 per share (2020 - $11.32 to $26.81) and a weighted average exercise price of $13.88 (2020 - $15.66).
During the year, the Company established a PRSU plan whereby it provides non-North American employees an annual grant
of PRSUs in an amount determined by the board. Each PRSU represents one phantom common share that entitles the
participant to a payment of cash with an equivalent market value. The PRSUs carry vesting periods of one to three years, and
the final value of the units will be based on the value of Cameco common shares at the end of the vesting periods. In addition,
certain eligible participants have a single vesting date on the third anniversary of the date of the grant. During the vesting
period, dividend equivalents accrue to the participants in the form of additional share units as of each normal cash dividend
payment date of Cameco’s common shares. As of December 31, 2021, the total number of PRSUs held by the participants
was 16,027.
134 CAMECO CORPORATION
Cameco also has an employee share ownership plan, whereby both employee and Company contributions are used to
purchase shares on the open market for employees. The Company’s contributions are expensed during the year of
contribution. Under the plan, employees have the opportunity to participate in the program to a maximum of 6% of eligible
earnings each year with Cameco matching the first 3% of employee-paid shares by 50%. Cameco contributes $1,000 of
shares annually to each employee that is enrolled in the plan. Shares purchased with Company contributions and with
dividends paid on such shares become unrestricted 12 months from the date on which such shares were purchased. At
December 31, 2021, there were 2,301 participants in the plan (2020 - 2,257). The total number of shares purchased in 2021
with Company contributions was 149,822 (2020 - 248,837). In 2021, the Company’s contributions totaled $3,301,000 (2020 -
$3,174,000).
Cameco offers a DSU plan to non-employee directors. A DSU is a notional unit that reflects the market value of a single
common share of Cameco. 60% of each director’s annual retainer is paid in DSUs. In addition, on an annual basis, directors
can elect to receive 25%, 50%, 75% or 100% of the remaining 40% of their annual retainer and any additional fees in the form
of DSUs. If a director meets their ownership requirements, the director may elect to take 25%, 50%, 75% or 100% of their
annual retainer and any fees in cash, with the balance, if any, to be paid in DSUs. Each DSU fully vests upon award. Dividend
equivalents accrue to the participants in the form of additional share units as of each normal cash dividend payment date of
Cameco’s common shares. The DSUs will be redeemed for cash upon a director leaving the board. The redemption amount
will be based upon the weighted average of the closing prices of the common shares of Cameco on the TSX for the last 20
trading days prior to the redemption date multiplied by the number of DSUs held by the director. As of December 31, 2021, the
total number of DSUs held by participating directors was 579,362 (2020 - 541,827).
Cameco records compensation expense under its equity-settled plans with an offsetting credit to contributed surplus, to reflect
the estimated fair value of units granted to employees. During the year, the Company recognized the following expenses
under these plans:
Employee share ownership plan
Restricted share unit plan
Performance share unit plan
Stock option plan
Total
$
2021
3,301
2,933
1,237
366
$
$
7,837
$
2020
3,174
2,903
2,650
1,011
9,738
Fair value measurement of equity-settled plans
The fair value of RSUs granted was determined based on their intrinsic value on the date of grant. Expected volatility was
estimated by considering historic average share price volatility.
The inputs used in the measurement of the fair values at grant date of the equity-settled RSU plan were as follows:
Number of options granted
Average strike price
Expected forfeitures
Weighted average grant date fair values
Grant date
Mar 1/21
168,496
$20.25
11%
$20.25
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 135
Cameco has recognized the following expenses under its cash-settled plans:
Performance share unit plan
Restricted share unit plan
Deferred share unit plan
Phantom stock option plan
Phantom restricted share unit plan
Total
2021
2020
$
$
25,784
6,890
6,741
2,261
163
20,287
1,849
3,765
1,340
-
$
41,839
$
27,241
At December 31, 2021, a liability of $61,030,000 (2020 - $38,354,000) was included in the consolidated statement of financial
position to recognize accrued but unpaid expenses for cash-settled plans.
Fair value measurement of cash-settled plans
The fair value of the units granted through the PSU plan was determined based on Monte Carlo simulation and projections of
the non-market criteria. The fair value of RSUs and PRSUs granted was determined based on their intrinsic value on the date
of grant. The phantom stock option plan was measured based on the Black-Scholes option-pricing model. Expected volatility is
estimated by considering historic average share price volatility.
The inputs used in the measurement of the fair values of the cash-settled share-based payment plans at the March 1, 2021
grant date were as follows:
Number of units
Expected vesting
Expected dividend
Expected life of option
Expected forfeitures
Weighted average measurement date fair values
PSU
RSU
369,110
72%
-
3.0 years
10%
$14.56
245,530
-
-
3.0 years
10%
$20.25
Phantom
RSU
15,980
-
$0.08
3.0 years
7%
$20.25
The inputs used in the measurement of the fair values of the cash-settled share-based payment plans at the reporting date
were as follows:
Phantom
stock options
PSU
RSU
Phantom
RSU
Number of units
Expected vesting
Average strike price
Expected dividend
Expected volatility
Risk-free interest rate
Expected life of option
Expected forfeitures
Weighted average measurement date fair values
173,835
-
$13.88
$0.08
50%
1.0%
2.0 years
7%
$15.14
1,495,709
114%
-
-
-
-
0.9 years
3%
$31.44
672,675
-
-
-
-
-
1.5 years
10%
$27.58
16,027
-
-
$0.08
-
-
2.2 years
7%
$27.58
In addition to these inputs, other features of the PSU grant were incorporated into the measurement of fair value. The non-
market criteria relating to realized selling prices and operating targets have been incorporated into the valuation at both grant
and reporting date by reviewing prior history and corporate budgets.
136 CAMECO CORPORATION
25. Pension and other post-retirement benefits
Cameco maintains both defined benefit and defined contribution plans providing pension benefits to substantially all of its
employees. All regular and temporary employees participate in a registered defined contribution plan. This plan is registered
under the Pension Benefits Standard Act, 1985. In addition, all Canadian-based executives participate in a non-registered
supplemental executive pension plan which is a defined benefit plan.
Under the supplemental executive pension plan (SEPP), Cameco provides a lump sum benefit equal to the present value of a
lifetime pension benefit based on the executive’s length of service and final average earnings. The plan provides for
unreduced benefits to be paid at the normal retirement age of 65, however unreduced benefits could be paid if the executive
was at least 60 years of age and had 20 years of service at retirement. This program provides for a benefit determined by a
formula based on earnings and service, reduced by the benefits payable under the registered base plan. Security is provided
for the SEPP benefits through a letter of credit held by the plan’s trustee. The face amount of the letter of credit is determined
each year based on the wind-up liabilities of the supplemental plan, less any plan assets currently held with the trustee. A
valuation is required annually to determine the letter of credit amount. Benefits will continue to be paid from plan assets until
the fund is exhausted, at which time Cameco will begin paying benefits from corporate assets.
Cameco also maintains non-pension post-retirement plans (“other benefit plans”) which are defined benefit plans that cover
such benefits as group life insurance and supplemental health and dental coverage to eligible employees and their
dependents. The costs related to these plans are charged to earnings in the period during which the employment services are
rendered. These plans are funded by Cameco as benefit claims are made.
The board of directors of Cameco has final responsibility and accountability for the Cameco retirement programs. The board is
ultimately responsible for managing the programs to comply with applicable legislation, providing oversight over the general
functions and setting certain policies.
Cameco expects to pay $1,505,000 in contributions and letter of credit fees to its defined benefit plans in 2022.
The post-retirement plans expose Cameco to actuarial risks, such as longevity risk, market risk, interest rate risk, liquidity risk
and foreign currency risk. The other benefit plans expose Cameco to risks of higher supplemental health and dental utilization
than expected. However, the other benefit plans have limits on Cameco’s annual benefits payable.
The effective date of the most recent valuation for funding purposes on the registered defined benefit pension plans is January
1, 2021. The next planned effective date for valuations is January 1, 2024.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 137
Cameco has more than one defined benefit plan and has generally provided aggregated disclosures in respect of these plans,
on the basis that these plans are not exposed to materially different risks. Information relating to Cameco’s defined benefit
plans is shown in the following table:
Pension benefit plans
2021
2020
Other benefit plans
2021
2020
Fair value of plan assets, beginning of year
Interest income on plan assets
Return on assets excluding interest income
Employer contributions
Benefits paid
Administrative costs paid
Fair value of plan assets, end of year
Defined benefit obligation, beginning of year
Current service cost
Interest cost
Actuarial loss (gain) arising from:
- demographic assumptions
- financial assumptions
- experience adjustment
Benefits paid
Foreign exchange
Defined benefit obligation, end of year
Defined benefit liability [note 14]
$
6,217
$
6,806
$
144
172
67
(903)
(4)
5,693
72,119
2,332
1,550
-
(1,996)
(903)
(1,741)
(1,363)
69,998
(64,305)
$
$
$
$
197
130
-
(915)
(1)
6,217
62,588
1,977
1,673
-
6,323
350
(1,765)
973
72,119
(65,902)
$
$
$
$
$
$
$
$
-
-
-
-
-
-
-
25,827
956
652
-
(1,403)
(697)
(638)
-
24,697
(24,697)
$
$
$
$
$
-
-
-
-
-
-
-
24,955
1,010
792
102
2,013
(2,236)
(809)
-
25,827
(25,827)
The percentages of the total fair value of assets in the pension plans for each asset category at December 31 were as follows:
Asset category(a)
Canadian equity securities
U.S. equity securities
Global equity securities
Canadian fixed income
Other(b)
Total
Pension benefit plans
2021
2020
13%
21%
12%
50%
4%
100%
8%
12%
8%
31%
41%
100%
(a) The defined benefit plan assets contain no material amounts of related party assets at December 31, 2021 and 2020
respectively.
(b) Relates mainly to the value of the refundable tax account held by the Canada Revenue Agency. The refundable total is
approximately equal to half of the sum of the realized investment income plus employer contributions less half of the benefits
paid by the plan.
138 CAMECO CORPORATION
The following represents the components of net pension and other benefit expense included primarily as part of administration.
Current service cost
Net interest cost
Administration cost
Defined benefit expense [note 18]
Defined contribution pension expense [note 18]
Pension benefit plans
Other benefit plans
2021
2020
$
$
$
2,332
1,406
4
3,742
12,939
1,977
1,476
1
3,454
12,410
$
2021
956
652
-
1,608
-
Net pension and other benefit expense
$
16,681
$
15,864
$
1,608
$
The total amount of actuarial losses (gains) recognized in other comprehensive income is:
2020
1,010
792
-
1,802
-
1,802
Actuarial loss (gain)
Return on plan assets excluding
interest income
Pension benefit plans
Other benefit plans
2021
2020
2021
2020
$
(2,899)
$
6,673
$
(2,100)
$
(121)
(172)
(130)
-
-
$
(3,071)
$
6,543
$
(2,100)
$
(121)
The assumptions used to determine the Company’s defined benefit obligation and net pension and other benefit expense
were as follows at December 31 (expressed as weighted averages):
Discount rate - obligation
Discount rate - expense
Rate of compensation increase
Health care cost trend rate
Dental care cost trend rate
Pension benefit plans
Other benefit plans
2021
2.3%
2.4%
3.0%
-
-
2020
2.4%
3.0%
2.9%
-
-
2021
2.9%
2.5%
-
5.0%
4.5%
2020
2.5%
3.1%
-
5.0%
4.5%
At December 31, 2021, the weighted average duration of the defined benefit obligation for the pension plans was 20.0 years
(2020 - 20.5 years) and for the other benefit plans was 13.6 years (2020 - 14.2 years).
A 1% change at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would
have affected the defined benefit obligation by the following:
Pension benefit plans
Increase
Decrease
Other benefit plans
Increase
Decrease
Discount rate
Rate of compensation increase
$
(9,593)
1,024
$
12,380
(984)
$
(3,003)
n/a
$
3,769
n/a
A 1% change in any of the other assumptions would not have a significant impact on the defined benefit obligation.
The methods and assumptions used in preparing the sensitivity analyses are the same as the methods and assumptions used
in determining the financial position of Cameco’s plans as at December 31, 2021. The sensitivity analyses are determined by
varying the sensitivity assumption and leaving all other assumptions unchanged. Therefore, the sensitivity analyses do not
recognize any interdependence in the assumptions. The methods and assumptions used in determining the above sensitivity
are consistent with the methods and assumptions used in the previous year.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 139
In addition, an increase of one year in the expected lifetime of plan participants in the pension benefit plans would increase the
defined benefit obligation by $2,032,000.
To measure the longevity risk for these plans, the mortality rates were reduced such that the average life expectancy for all
members increased by one year. The reduced mortality rates were subsequently used to re-measure the defined benefit
obligation of the entire plan.
26. Financial instruments and related risk management
Cameco is exposed in varying degrees to a variety of risks from its use of financial instruments. Management and the board of
directors, both separately and together, discuss the principal risks of our businesses. The board sets policies for the
implementation of systems to manage, monitor and mitigate identifiable risks. Cameco’s risk management objective in relation
to these instruments is to protect and minimize volatility in cash flow. The types of risks Cameco is exposed to, the source of
risk exposure and how each is managed is outlined below.
Market risk
Market risk is the risk that changes in market prices, such as commodity prices, foreign currency exchange rates and interest
rates, will affect the Company’s earnings or the fair value of its financial instruments. Cameco engages in various business
activities which expose the Company to market risk. As part of its overall risk management strategy, Cameco uses derivatives
to manage some of its exposures to market risk that result from these activities.
Derivative instruments may include financial and physical forward contracts. Such contracts may be used to establish a fixed
price for a commodity, an interest-bearing obligation or a cash flow denominated in a foreign currency. Market risks are
monitored regularly against defined risk limits and tolerances.
Cameco’s actual exposure to these market risks is constantly changing as the Company’s portfolios of foreign currency,
interest rate and commodity contracts change.
The types of market risk exposure and the way in which such exposure is managed are as follows:
As a significant producer and supplier of uranium and nuclear fuel processing services, Cameco bears significant exposure to
changes in prices for these products. A substantial change in prices will affect the Company’s net earnings and operating cash
flows. Prices for Cameco’s products are volatile and are influenced by numerous factors beyond the Company’s control, such
as supply and demand fundamentals and geopolitical events.
Cameco’s sales contracting strategy focuses on reducing the volatility in future earnings and cash flow, while providing both
protection against decreases in market price and retention of exposure to future market price increases. To mitigate the risks
associated with the fluctuations in the market price for uranium products, Cameco seeks to maintain a portfolio of uranium
product sales contracts with a variety of delivery dates and pricing mechanisms that provide a degree of protection from
pricing volatility.
The relationship between the Canadian and US dollar affects financial results of the uranium business as well as the fuel
services business. Sales of uranium product, conversion and fuel manufacturing services are routinely denominated in US
dollars while production costs are largely denominated in Canadian dollars.
Cameco attempts to provide some protection against exchange rate fluctuations by planned hedging activity designed to
smooth volatility. To mitigate risks associated with foreign currency, Cameco enters into forward sales and option contracts to
establish a price for future delivery of the foreign currency. These foreign currency contracts are not designated as hedges and
are recorded at fair value with changes in fair value recognized in earnings. Cameco also has a natural hedge against US
currency fluctuations because a portion of its annual cash outlays, including purchases of uranium and conversion services, is
denominated in US dollars.
140 CAMECO CORPORATION
Cameco holds a number of financial instruments denominated in foreign currencies that expose the Company to foreign
exchange risk. Cameco measures its exposure to foreign exchange risk on financial instruments as the change in carrying
values that would occur as a result of reasonably possible changes in foreign exchange rates, holding all other variables
constant. As of the reporting date, the Company has determined its pre-tax exposure to foreign currency exchange risk on
financial instruments to be as follows based on a 5% weakening of the Canadian dollar:
Cash and cash equivalents
Accounts receivable
Accounts payable and accrued liabilities
Net foreign currency derivatives
Currency
Carrying value
(Cdn)
Gain (loss)
$
USD
USD
USD
USD
$
28,006
226,153
(152,412)
27,774
1,400
11,308
(7,620)
(45,177)
A 5% strengthening of the Canadian dollar against the currencies above at December 31, 2021 would have had an equal but
opposite effect on the amounts shown above, assuming all other variables remained constant.
The Company has a strategy of minimizing its exposure to interest rate risk by maintaining target levels of fixed and variable
rate borrowings. The proportions of outstanding debt carrying fixed and variable interest rates are reviewed by senior
management to ensure that these levels are within approved policy limits. At December 31, 2021, the proportion of Cameco’s
outstanding debt that carries fixed interest rates is 92% (2020 - 100%).
Cameco was exposed to interest rate risk during the year through its interest rate swap contracts whereby fixed rate payments
on a notional amount of $75,000,000 of the Series H senior unsecured debentures were swapped for variable rate payments.
Under the terms of the swap, Cameco makes interest payments based on the three-month Canada Dealer Offered Rate plus
an average margin of 1.3% and receives fixed interest payments of 2.95%.
In addition, the Series E senior unsecured debentures that were retired on November 16, 2020 were also subject to interest
rate swap contracts. A notional amount of $150,000,000 of the Series E senior unsecured debentures had been swapped for
variable rate payments. Under the terms of these swaps, Cameco made interest payments based on the three-month Canada
Dealer Offered Rate plus an average margin of 1.2% and received fixed interest payments of 3.75%. At the time of the
termination of the Series E swaps, the fair value of the interest rate swap net asset was $7,330,000. At December 31, 2021,
the fair value of Cameco’s interest rate swap net asset was $673,000 (2020 - $nil).
Counterparty credit risk
Counterparty credit risk is associated with the ability of counterparties to satisfy their contractual obligations to Cameco,
including both payment and performance. The maximum exposure to credit risk, as represented by the carrying amount of the
financial assets, at December 31 was:
Cash and cash equivalents
Short-term investments
Accounts receivable [note 6]
Derivative assets [note 10]
2021
2020
$
$ 1,247,447
84,906
272,220
32,098
918,382
24,985
166,788
45,605
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 141
Cash and cash equivalents
Cameco held cash and cash equivalents of $1,247,000,000 at December 31, 2021 (2020 - $918,000,000). Cameco mitigates
its credit risk by ensuring that balances are held with counterparties with high credit ratings. The Company monitors the credit
rating of its counterparties on a monthly basis and has controls in place to ensure prescribed exposure limits with each
counterparty are adhered to.
Impairment on cash and cash equivalents has been measured on a 12-month ECL basis and reflects the short maturities of
the exposures. The Company considers that its cash and cash equivalents have low credit risk based on the external credit
ratings of the counterparties. Cameco has assessed its counterparty credit risk on cash and cash equivalents by applying
historic global default rates to outstanding cash balances based on S&P rating. The conclusion of this assessment is that the
loss allowance is insignificant.
Accounts receivable
Cameco’s sales of uranium product, conversion and fuel manufacturing services expose the Company to the risk of non-
payment. Cameco manages the risk of non-payment by monitoring the credit-worthiness of its customers and seeking pre-
payment or other forms of payment security from customers with an unacceptable level of credit risk.
A summary of the Company’s exposure to credit risk for trade receivables is as follows:
Investment grade credit rating
Non-investment grade credit rating
Total gross carrying amount
Loss allowance
Net
Carrying
value
$ 259,683
11,332
$ 271,015
-
$ 271,015
At December 31, 2021, there were no significant concentrations of credit risk and no amounts were held as collateral.
Historically, Cameco has experienced minimal customer defaults and, as a result, considers the credit quality of its accounts
receivable to be high.
Cameco uses customer credit rating data, historic default rates and aged receivable analysis to measure the ECLs of trade
receivables from corporate customers, which comprise a small number of large balances. Since the Company has not
experienced customer defaults in the past, applying historic default rates in calculating ECLs, as well as considering forward-
looking information, resulted in an insignificant allowance for losses.
The following table provides information about Cameco’s aged trade receivables as at December 31, 2021:
Current (not past due)
1-30 days past due
More than 30 days past due
Total
Liquidity risk
Corporate
customers
Other
customers
$
$
269,474
334
58
423
62
664
$
269,866
$
1,149
Total
269,897
396
722
271,015
Financial liquidity represents Cameco’s ability to fund future operating activities and investments. Cameco ensures that there
is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and
the Company’s holdings of cash and cash equivalents. The Company believes that these sources will be sufficient to cover the
likely short-term and long-term cash requirements.
142 CAMECO CORPORATION
The table below outlines the Company’s available debt facilities at December 31, 2021:
Outstanding and
Total amount
committed
Amount available
Unsecured revolving credit facility [note 13]
Letter of credit facilities [note 13]
$
1,000,000
1,696,041
$
-
1,573,873
$
1,000,000
122,168
The tables below present a maturity analysis of Cameco’s financial liabilities, including principal and interest, based on the
expected cash flows from the reporting date to the contractual maturity date:
Carrying
amount
Contractual
cash flows
less than Due in 1-3 Due in 3-5 Due after 5
1 year
years
years
years
Due in
Accounts payable and accrued liabilities $ 340,458 $ 340,458 $ 340,458 $
Long-term debt
Foreign currency contracts
Interest rate contracts
Lease obligation [note 14]
1,000,000
3,760
1,237
5,174
996,250
3,760
1,237
4,872
-
378
-
2,736
- $
500,000
3,382
585
2,381
- $
-
-
490
57
-
500,000
-
162
-
Total contractual repayments
$ 1,346,577 $ 1,350,629 $ 343,572 $ 506,348 $
547 $ 500,162
Total interest payments on long-term debt
$ 230,065 $ 37,840 $ 65,205 $ 33,780 $
93,240
Due in
less than Due in 1-3 Due in 3-5 Due after 5
Total
1 year
years
years
years
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 143
Measurement of fair values
The following tables summarize the carrying amounts and accounting classifications of Cameco’s financial instruments at the
reporting date:
At December 31, 2021
Financial assets
Cash and cash equivalents
Short-term investments
Accounts receivable [note 6]
Derivative assets [note 10]
Foreign currency contracts
Interest rate contracts
Financial liabilities
Accounts payable and accrued liabilities [note 12]
Lease obligation [note 14]
Derivative liabilities [note 14]
Foreign currency contracts
Interest rate contracts
Long-term debt [note 13]
FVTPL
Amortized
cost
FVOCI -
designated
Total
$
$
$
- $ 1,247,447 $
-
-
84,906
276,139
31,534
564
-
-
- $ 1,247,447
84,906
-
276,139
-
-
-
31,534
564
32,098 $ 1,608,492 $
- $ 1,640,590
- $
-
340,458 $
4,872
- $
-
340,458
4,872
3,760
1,237
-
4,997
-
-
996,250
1,341,580
-
-
-
-
3,760
1,237
996,250
1,346,577
Net
$
27,101 $
266,912 $
- $
294,013
At December 31, 2020
Financial assets
Cash and cash equivalents
Short-term investments
Accounts receivable [note 6]
Derivative assets [note 10]
Foreign currency contracts
Investments in equity securities [note 10]
Financial liabilities
Accounts payable and accrued liabilities [note 12]
Lease obligation [note 14]
Derivative liabilities [note 14]
Foreign currency contracts
Long-term debt [note 13]
FVTPL
Amortized
cost
FVOCI -
designated
Total
$
$
$
- $
-
-
918,382 $
24,985
204,980
- $
-
-
918,382
24,985
204,980
45,605
-
-
-
-
43,873
45,605
43,873
45,605 $ 1,148,347 $
43,873 $ 1,237,825
- $
-
233,649 $
7,951
- $
-
233,649
7,951
4,733
-
4,733
-
995,541
1,237,141
-
-
-
4,733
995,541
1,241,874
Net
$
40,872 $
(88,794) $
43,873 $
(4,049)
144 CAMECO CORPORATION
Cameco has pledged $233,257,000 of cash as security against certain of its letter of credit facilities. This cash is being used
as collateral for an interest rate reduction on the letter of credit facilities. The collateral account has a term of five years
effective July 1, 2018. Cameco retains full access to this cash.
During the year, Cameco divested of its investments in equity securities. The fair value at the date of derecognition and the
cumulative gain or loss on disposal for the year ended December 31, 2021 were as follows:
Investment in Denison Mines Corp.
Investment in UEX Corporation
Investment in ISO Energy Ltd.
Investment in GoviEx
Other
Fair Value
Gain (loss)
$
34,827
19,605
10,756
3,558
265
$
15,257
8,758
8,078
2,996
(750)
$
69,011
$
34,339
The gains are presented net of tax. Cameco has elected to transfer these cumulative net gains from equity investments at
FVOCI to retained earnings in the statement of changes in equity.
Cameco has not irrevocably designated a financial asset that would otherwise meet the requirements to be measured at
amortized cost at FVOCI or FVTPL to eliminate or significantly reduce an accounting mismatch that would otherwise arise.
The following tables summarize the carrying amounts and fair values of Cameco’s financial instruments, including their levels
in the fair value hierarchy:
As at December 31, 2021
Derivative assets [note 10]
Foreign currency contracts
Interest rate contracts
Derivative liabilities [note 14]
Foreign currency contracts
Interest rate contracts
Long-term debt [note 13]
Net
Carrying value
Level 1
Level 2
Total
Fair value
$
31,534
564
$
(3,760)
(1,237)
(996,250)
$
(969,149)
$
-
-
-
-
-
-
$
31,534
564
$
31,534
564
(3,760)
(1,237)
(1,103,978)
(3,760)
(1,237)
(1,103,978)
$ (1,076,877)
$ (1,076,877)
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 145
As at December 31, 2020
Derivative assets [note 10]
Foreign currency contracts
Investments in equity securities [note 10]
Derivative liabilities [note 14]
Foreign currency contracts
Long-term debt [note 13]
Carrying value
Level 1
Level 2
Total
Fair value
$
45,605
43,873
$
-
$
45,605
$
43,873
-
45,605
43,873
(4,733)
(995,541)
-
-
(4,733)
(1,173,280)
(4,733)
(1,173,280)
Net
$
(910,796)
$
43,873
$ (1,132,408)
$ (1,088,535)
The preceding tables exclude fair value information for financial instruments whose carrying amounts are a reasonable
approximation of fair value. The carrying values of Cameco’s cash and cash equivalents, short-term investments, accounts
receivable, and accounts payable and accrued liabilities approximate their fair values as a result of the short-term nature of the
instruments.
There were no transfers between level 1 and level 2 during the period. Cameco does not have any financial instruments that
are classified as level 3 as of the reporting date.
Cameco measures its derivative financial instruments, material investments in equity securities and long-term debt at fair
value. Investments in publicly held equity securities are classified as a recurring level 1 fair value measurement while
derivative financial instruments and long-term debt are classified as a recurring level 2 fair value measurement.
The fair value of investments in equity securities is determined using quoted share prices observed in the principal market for
the securities as of the reporting date. The fair value of Cameco’s long-term debt is determined using quoted market yields as
of the reporting date, which ranged from 1.1% to 1.7% (2020 - 0.3% to 1.1%).
Foreign currency derivatives consist of foreign currency forward contracts, options and swaps. The fair value of foreign
currency options is measured based on the Black Scholes option-pricing model. The fair value of foreign currency forward
contracts and swaps is measured using a market approach, based on the difference between contracted foreign exchange
rates and quoted forward exchange rates as of the reporting date.
Interest rate derivatives consist of interest rate swap contracts. The fair value of interest rate swaps is determined by
discounting expected future cash flows from the contracts. The future cash flows are determined by measuring the difference
between fixed interest payments to be received and floating interest payments to be made to the counterparty based on
Canada Dealer Offer Rate forward interest rate curves.
Where applicable, the fair value of the derivatives reflects the credit risk of the instrument and includes adjustments to take
into account the credit risk of the Company and counterparty. These adjustments are based on credit ratings and yield curves
observed in active markets at the reporting date.
146 CAMECO CORPORATION
Derivatives
The following table summarizes the fair value of derivatives and classification on the consolidated statements of financial
position:
Non-hedge derivatives:
Foreign currency contracts
Interest rate contracts
Net
Classification:
Current portion of long-term receivables, investments and other [note 10]
Long-term receivables, investments and other [note 10]
Current portion of other liabilities [note 14]
Other liabilities [note 14]
Net
2021
2020
$
$
$
27,774
(673)
$
40,872
-
27,101
$
40,872
$
22,652
9,446
(378)
(4,619)
16,466
29,139
(1,658)
(3,075)
$
27,101
$
40,872
The following table summarizes the different components of the gains (losses) on derivatives included in net earnings:
Non-hedge derivatives:
Foreign currency contracts
Interest rate contracts
Net
27. Capital management
2021
2020
$
$
13,202
(673)
$
30,600
5,977
12,529
$
36,577
Cameco’s management considers its capital structure to consist of bank overdrafts, long-term debt, short-term debt (net of
cash and cash equivalents and short-term investments), non-controlling interest and shareholders’ equity.
Despite the impacts of COVID-19 on the global economy, Cameco’s approach to capital management has remained
consistent. Cameco’s capital structure reflects its strategy and the environment in which it operates. Delivering returns to long-
term shareholders is a top priority. The Company’s objective is to maximize cash flow while maintaining its investment grade
rating through close capital management of our balance sheet metrics. Capital resources are managed to allow it to support
achievement of its goals while managing financial risks such as the continued weakness in the market, litigation risk and
refinancing risk. The overall objectives for managing capital in 2021 reflect the environment that the Company is operating in,
similar to the prior comparative period.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 147
The capital structure at December 31 was as follows:
Long-term debt [note 13]
Cash and cash equivalents
Short-term investments
Net debt
Non-controlling interest
Shareholders' equity
Total equity
Total capital
2021
2020
996,250
(1,247,447)
(84,906)
995,541
(918,382)
(24,985)
(336,103)
52,174
127
4,845,841
206
4,958,355
4,845,968
4,958,561
$ 4,509,865
$ 5,010,735
Cameco is bound by certain covenants in its general credit facilities. These covenants place restrictions on total debt, including
guarantees and set minimum levels for net worth. As of December 31, 2021, Cameco met these requirements.
28. Segmented information
Cameco has two reportable segments: uranium and fuel services. Cameco's reportable segments are strategic business units
with different products, processes and marketing strategies. The uranium segment involves the exploration for, mining, milling,
purchase and sale of uranium concentrate. The fuel services segment involves the refining, conversion and fabrication of
uranium concentrate and the purchase and sale of conversion services.
During the year, Cameco determined that NUKEM no longer meets the criteria for being considered a segment and concluded
that it was appropriate to include NUKEM’s results with its uranium and fuel services segments. NUKEM’s purchase and sale
of uranium concentrate and conversion services are now being reported internally as part of its uranium and fuel services
businesses and should therefore be included with those businesses for segment reporting. The purchase and sale of enriched
uranium product and separative work units will continue to be reported in “other”. Comparative information has been adjusted.
Cost of sales in the uranium segment includes care and maintenance costs for our operations that have had production
suspensions. Cameco expensed $209,556,000 (2020 - $195,972,000) of care and maintenance costs during the year.
Included in this amount in 2021 is $40,359,000 (2020 - $45,988,000) relating to care and maintenance costs for operations
suspended as a result of COVID-19. Also included in cost of sales, because of the Cigar Lake production suspension, is the
impact of increased purchasing activity at a higher cost than produced pounds.
Cost of sales in the fuel services segment also includes care and maintenance costs for our operations that have had
production suspensions as a result of COVID-19. Cameco expensed $8,992,000 in 2020 due to the suspension.
Accounting policies used in each segment are consistent with the policies outlined in the summary of significant accounting
policies. Segment revenues, expenses and results include transactions between segments incurred in the ordinary course of
business. These transactions are priced on an arm’s length basis, are eliminated on consolidation and are reflected in the
“other” column.
148 CAMECO CORPORATION
A. Business segments - 2021
For the year ended December 31, 2021
Revenue
$ 1,054,993
$
404,277
$
15,714
$ 1,474,984
Uranium
Fuel
services
Other
Total
Expenses
Cost of products and services sold
Depreciation and amortization
Cost of sales
Gross profit (loss)
Administration
Exploration
Research and development
Other operating income
(Gain) loss on disposal of assets
Finance costs
Gain on derivatives
Finance income
Share of earnings from equity-accounted investee
Other expense (income)
1,028,816
134,629
1,163,445
242,574
43,344
285,918
11,245
12,442
1,282,635
190,415
23,687
1,473,050
(108,452)
118,359
(7,973)
1,934
-
8,016
-
(8,407)
(2,886)
-
-
-
(68,283)
-
-
-
-
-
6,689
-
-
-
-
301
127,566
-
7,168
-
-
76,612
(12,529)
(6,804)
-
(21,654)
127,566
8,016
7,168
(8,407)
3,803
76,612
(12,529)
(6,804)
(68,283)
(21,353)
(103,855)
(1,201)
(102,654)
Earnings (loss) before income taxes
(36,892)
111,369
(178,332)
Income tax recovery
Net loss
Capital expenditures for the year
$
72,786
$
22,792
$
3,206
$
98,784
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 149
For the year ended December 31, 2020
Revenue
$ 1,416,125
$
377,296
$
6,652
$ 1,800,073
Uranium
Fuel
services
Other
Total
Expenses
Cost of products and services sold
Depreciation and amortization
Cost of sales
Gross profit (loss)
Administration
Exploration
Research and development
Other operating expense
Loss on disposal of assets
Finance costs
Gain on derivatives
Finance income
Share of earnings from equity-accounted investee
Other income
Earnings (loss) before income taxes
Income tax expense
Net loss
1,243,311
154,560
1,397,871
237,656
43,190
280,846
3,995
10,912
1,484,962
208,662
14,907
1,693,624
18,254
96,450
(8,255)
106,449
-
10,873
-
23,921
667
-
-
-
(36,476)
(202)
19,471
-
-
-
-
405
-
-
-
-
-
145,344
-
3,965
-
-
96,133
(36,577)
(10,835)
-
(51,238)
96,045
(155,047)
145,344
10,873
3,965
23,921
1,072
96,133
(36,577)
(10,835)
(36,476)
(51,440)
(39,531)
13,666
(53,197)
Capital expenditures for the year
$
46,697
$
30,760
$
5
$
77,462
Revenue is attributed to the geographic location based on the location of the entity providing the services. The Company’s
revenue from external customers is as follows:
United States
Canada
2021
2020
$
770,265
704,719
$ 1,177,756
622,317
$ 1,474,984
$ 1,800,073
The Company’s non-current assets, excluding deferred tax assets and financial instruments, by geographic location
are as follows:
Canada
Australia
United States
Kazakhstan
Germany
150 CAMECO CORPORATION
2021
2020
$ 3,100,285
395,223
131,683
46
11
$ 3,260,144
421,836
145,328
55
16
$ 3,627,248
$ 3,827,379
Cameco relies on a small number of customers to purchase a significant portion of its uranium concentrates and uranium
conversion services. During 2021, revenues from two customers of Cameco’s uranium and fuel services segments
represented approximately $166,068,000 (2020 - $457,560,000), approximately 11% (2020 - 25%) of Cameco’s total revenues
from these segments. As customers are relatively few in number, accounts receivable from any individual customer may
periodically exceed 10% of accounts receivable depending on delivery schedule.
29. Group entities
The following are the principal subsidiaries and associates of the Company:
Subsidiaries:
Cameco Fuel Manufacturing Inc.
Cameco Marketing Inc.
Cameco Inc.
Power Resources, Inc.
Crow Butte Resources, Inc.
Cameco Australia Pty. Ltd.
Cameco Europe Ltd.
Associates:
JV Inkai
Principal place
of business
Ownership interest
2021
2020
Canada
Canada
US
US
US
Australia
Switzerland
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Kazakhstan
40%
40%
30. Joint operations
Cameco conducts a portion of its exploration, development, mining and milling activities through joint operations located
around the world. Operations are governed by agreements that provide for joint control of the strategic operating, investing
and financing activities among the partners. These agreements were considered in the determination of joint control.
Cameco’s significant Canadian uranium joint operation interests are McArthur River, Key Lake and Cigar Lake. The Canadian
uranium joint operations allocate uranium production to each joint operation participant and the joint operation participant
derives revenue directly from the sale of such product. Mining and milling expenses incurred by joint operations are included in
the cost of inventory.
2021 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 151
Cameco reflects its proportionate interest in these assets and liabilities as follows:
Total assets
McArthur River
Key Lake
Cigar Lake
Total liabilities
McArthur River
Key Lake
Cigar Lake
31. Related parties
Principal place
of business
Ownership
2021
2020
Canada
Canada
Canada
69.81%
83.33%
50.03%
$ 1,010,956
549,051
1,294,333
$ 1,027,617
560,845
1,327,956
$ 2,854,340
$ 2,916,418
$
69.81%
83.33%
50.03%
36,697
267,579
45,503
$
34,597
278,331
46,604
$
349,779
$
359,532
Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling
the activities of the Company, directly or indirectly. Key management personnel of the Company include executive officers,
vice-presidents, other senior managers and members of the board of directors.
In addition to their salaries, Cameco also provides non-cash benefits to executive officers and vice-presidents and contributes
to pension plans on their behalf (note 25). Senior management and directors also participate in the Company’s share-based
compensation plans (note 24).
Executive officers are subject to terms of notice ranging from three to six months. Upon resignation at the Company’s request,
they are entitled to termination benefits of up to the lesser of 18 to 24 months or the period remaining until age 65. The
termination benefits include gross salary plus the target short-term incentive bonus for the year in which termination occurs.
Compensation for key management personnel was comprised of:
Short-term employee benefits
Share-based compensation(a)
Post-employment benefits
Termination benefits
Total
2021
2020
$
$
20,663
34,639
6,188
161
21,676
26,230
6,041
430
$
61,651
$
54,377
(a) Excludes deferred share units held by directors (see note 24).
B. Other related party transactions
Cameco purchases uranium concentrates from JV Inkai. For the year ended December 31, 2021, Cameco had purchases of
$233,621,000 ($185,763,000 (US)) (2020 - $148,169,000 ($111,886,000 (US))). Cameco received a cash dividend from JV
Inkai of $50,128,000 ($40,286,000 (US)) (2020 - $54,404,000 ($40,621,000 (US))).
32. Comparative Figures
Certain prior year balances have been reclassified to conform to the current financial statement presentation.
152 CAMECO CORPORATION
Investor Information
Common Shares
Toronto (CCO) | New York (CCJ)
Transfer Agents and Registrars
The registrar and transfer agent for Cameco’s common shares is TSX Trust Company. For information on common shareholdings,
dividend cheques, lost share certificates and address changes, contact:
Canada
TSX Trust Company
P.O. Box 700, Station B
Montreal, Quebec H3B 3K3
1-800-387-0825 or
1-416-682-3860 (outside of North America)
www.tsxtrust.com
USA
American Stock Transfer &
Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Energizing a
clean-air world
Annual Meeting
The annual meeting of shareholders of Cameco Corporation is
scheduled to be held on May 10, 2022 at Cameco’s head office
in Saskatoon, Saskatchewan.
Inquiries
Dividends
Cameco Corporation
2121 - 11th Street West
Saskatoon, Saskatchewan S7M 1J3
Phone:
306-956-6200
Fax:
306-956-6201
For comprehensive financial information, visit:
cameco.com
In 2021, our board of directors declared a dividend of $0.08 per
common share, which was paid December 15, 2021.
A dividend of $0.12 per common share has been declared for
2022, payable on December 15, 2022 to shareholders of record on
November 30, 2022. The decision to declare an annual dividend
by our board is reviewed regularly and will be based on our cash
flow, financial position, strategy and other relevant factors including
appropriate alignment with the cyclical nature of our earnings.
2021 Annual Report