Management’s discussion and analysis
February 9, 2023
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MARKET OVERVIEW AND DEVELOPMENTS
2022 PERFORMANCE HIGHLIGHTS
OUR VISION, VALUES AND STRATEGY
OUR ESG PRINCIPLES AND PRACTICES
MEASURING OUR RESULTS
FINANCIAL RESULTS
OPERATIONS AND PROJECTS
MINERAL RESERVES AND RESOURCES
ADDITIONAL INFORMATION
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2022 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,
2022. The information is based on what we knew as of February 8, 2023.
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:
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It typically includes words and phrases about the future, such as: anticipate, believe, estimate, expect, plan, will, intend, goal, target,
forecast, project, vision, 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 5, 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 4. 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
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our view that we have the strengths to take advantage of the
world’s rising demand for safe, reliable, affordable and
carbon-free energy, and our vision to energize a clean-air
world
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 2023 and future global uranium
supply, consumption, contracting, demand, geopolitical
issues and the market including the discussion under the
heading Market overview and developments
our expectations for the future of the nuclear industry and the
potential for new enrichment technology, 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 and the Port Hope UF6 conversion facility
the discussion under the heading Our ESG principles and
practices 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
2 CAMECO CORPORATION
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the anticipated timing for the finalization of the SE NNEGC
Energoatom (Energoatom) supply contract, volume
requirements under the contract and our expectation that
Cameco will provide sufficient volumes of UF6 under it to
meet Ukraine’s full nuclear fuel needs through 2035
our intentions regarding future dividend payments
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, our
plan to file a notice of objection for 2016 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 2023, including
expected business resiliency, expectations for 2023 average
unit cost of sales, average purchase price per pound,
deliveries and production, 2023 financial outlook, our
revenue, expectations for 2023 cash balances, tax rates,
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 2023
obligations and our expectations for our uranium contract
portfolio to provide a solid revenue stream
our expectation that the uranium contract portfolio we have
built will continue to provide a solid revenue stream, and our
portfolio management strategy, including our inventory
strategy and the extent of our spot market purchases
our expectation that our cash balances and operating cash
flows will meet our anticipated 2023 capital requirements
our expectations for future capital expenditures
our expectation that in 2023 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,
McArthur River/Key Lake and JV Inkai operations
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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, pace of advancement and
expansion capacity, carbon reduction targets and mine life,
and that our core growth is expected to come from our
existing tier-one mining and fuel services assets
our expectations related to care and maintenance costs
our mineral reserve and resource estimates
our decommissioning estimates
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the discussion of our expectations relating to our acquisition
of a 49% interest in Westinghouse Electric Company
(Westinghouse), including the sources and uses of financing
for the acquisition, the timeline of the acquisition, including
the anticipated closing thereof, and the acquisition
organizational structure, equity accounting for our
investment, generation of new revenue opportunities, the
potential to generate additional revenue in the year following
the acquisition closing, our expectation that the acquisition
will be accretive to our cash flow after closing,
Westinghouse's ability to generate cash flow to fund its
approved annual operating budget and provide quarterly
distributions to the partners after closing, the acquisition
expanding our participation in the nuclear fuel value chain,
and providing a platform for further growth, our intention in
respect of not issuing additional equity to fund our portion of
the purchase price for the Westinghouse acquisition and
various factors and drivers for Westinghouse’s business
segment
MANAGEMENT’S DISCUSSION AND ANALYSIS 3
Material risks
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actual sales volumes or market prices for any of our products
or services are lower than we expect, or cost of sales is
higher than we expect, for any reason, including changes in
market prices, loss of market share to a competitor, trade
restrictions, geopolitical issues or the impact of the COVID-
19 pandemic
we are adversely affected by changes in currency exchange
rates, interest rates, royalty rates, tax rates, or inflation
our production costs are higher than planned, or necessary
supplies are not available, or not available on commercially
reasonable terms
our strategies may change, be unsuccessful or have
unanticipated consequences, or we may not be able to
achieve anticipated operational flexibility and efficiency
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
the Westinghouse acquisition may be delayed or may not be
completed on the terms in the acquisition agreement or at all
consummation of the Westinghouse acquisition is subject to
the satisfaction of closing conditions and regulatory
approvals that may not be satisfied on a timely basis or at all
that we may not realize the expected benefits from the
Westinghouse acquisition
after closing the acquisition, Westinghouse fails to generate
sufficient cash flow to fund its approved annual operating
budget or make quarterly distributions to the partners
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 rulings 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
4 CAMECO CORPORATION
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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 early-2022,
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, aging
infrastructure 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
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
our production plans for our Port Hope UF6 conversion
facility 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 and
McArthur River/Key Lake operations
JV Inkai’s development, mining or production plans are
delayed or do not succeed for any reason, or JV Inkai is
unable to transport and deliver its production
we may be unsuccessful in pursuing innovation or
implementing advanced technologies, including the risk that
the commercialization and deployment of SMRs or new
enrichment technology may incur unanticipated delays or
expenses, or ultimately prove to be unsuccessful
our expectations relating to care and maintenance costs
prove to be inaccurate
the risk that we may become unable to pay future dividends
at the expected rate
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we are affected by natural phenomena, including inclement
weather, fire, flood and earthquakes
the risks that generally apply to all our operations and
advanced uranium projects that are discussed under the
heading Managing the risks beginning on page 67
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 73, under the
heading Cigar Lake – Managing Our Risks beginning on
page 76, and under the heading Inkai – Managing Our Risks
beginning on page 80
Material assumptions
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our expectations regarding sales and purchase volumes and
prices for uranium and fuel services, cost of sales, trade
restrictions, inflation 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, geopolitical issues 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 2023
Financial Outlook
our expectations regarding spot prices and realized prices
for uranium, and other factors discussed under the heading
Price sensitivity analysis: uranium segment
the Westinghouse acquisition is closed on the anticipated
timeline and on the terms of the acquisition agreement
• Westinghouse’s ability to generate cash flow and fund its
approved annual operating budget and make quarterly
distributions to the partners after closing of the acquisition
our ability to compete for additional business opportunities
so as to generate additional revenue for us in the year after
closing the Westinghouse acquisition
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• market conditions and other factors upon which we based
the Westinghouse acquisition and our related forecasts will
be as expected
the success of our plans and strategies relating to the
Westinghouse acquisition
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, and capital costs
our expectations regarding tax payments, tax rates, royalty
rates, currency exchange rates and interest rates
our entitlement to and ability to receive expected refunds and
payments from CRA
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risks relating to the Energoatom supply contract, including
the risk that it will not be finalized within the time or on the
terms expected, our ability to supply UF6 under the contract,
that the option for us to supply the Zaporizhzhya nuclear
power plant, if exercised, may not result in the delivery
volumes expected and that the continuation or outcome of
the conflict between the Ukraine and Russia may prevent
Cameco from realizing its expected benefits
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
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 and McArthur River development, mining and
production plans succeed
our Key Lake mill production plan succeeds
the McClean Lake mill is able to process Cigar Lake ore as
expected
our production plans for our Port Hope UF6 conversion
facility succeed
JV Inkai’s development, mining and production plans
succeed, and that JV Inkai will be able to transport and
deliver its production
the ability of JV Inkai to pay dividends
that care and maintenance 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, aging infrastructure or other
development or operating risks
MANAGEMENT’S DISCUSSION AND ANALYSIS 5
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assumptions regarding the Energoatom supply contract,
including that we will reach agreement on final terms within
the time and on the terms expected, delivery volumes, our
ability to supply UF6 under the contract, and that we will not
be prevented from realizing the expected benefits of the
contract because of the continuation or outcome of the
conflict between Ukraine and Russia
6 CAMECO CORPORATION
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MANAGEMENT’S DISCUSSION AND ANALYSIS 7
Market overview and developments
A market in transition
In 2022, geopolitical events coupled with the ongoing focus on the climate crisis created what we believe are transformative
tailwinds for the nuclear power industry from both a demand and supply perspective. Uranium prices continued to rise,
reaching levels not seen since 2011 driven by a tightened uranium market and growing security of supply concerns. In early-
January, unrest in Kazakhstan raised concerns about the more than 40% of global uranium supply that originates from
Kazakhstan. However, it was the Russian invasion of Ukraine in late-February that was the most transformative event for our
industry. We believe it has set in motion a geopolitical realignment in energy markets that is highlighting the increasingly
important role for nuclear power not just in providing clean energy, but also providing secure and affordable energy. And, with
the global nuclear industry reliant on Russian supplies for approximately 14% of uranium concentrates, 27% of conversion and
39% of enrichment, it is highlighting the security of supply risk associated with the growing primary supply gap and shrinking
secondary supplies and increasing the focus on origin of supply.
With the heightened supply risk caused by geopolitical uncertainty, utilities are evaluating their nuclear fuel supply chains.
Utilities continue to be focused on ensuring they have the conversion and enrichment services they require secured under
long-term contracts and are now beginning to return their focus to uranium. The uncertainty about where nuclear fuel supplies
will come from to satisfy growing demand led to increased long-term contracting activity in 2022. This contracting activity
resulted in a 22% increase in the long-term price of uranium over the past year, conversion prices that are at historic highs,
and enrichment prices that have increased over 210% since the start of the invasion of Ukraine. Notably, utilities are now
approaching replacement rate contracting for the first time in over a decade. Therefore, we expect there will be continued
competition to secure uranium, conversion and enrichment services under long-term contracts with proven producers and
assets in geopolitically attractive jurisdictions, with strong environmental, social and governance (ESG) performance and on
terms that will ensure the availability of reliable supply to satisfy demand.
DURABLE DEMAND GROWTH
The benefits of nuclear energy have come clearly into focus with a durability we believe has not been previously seen. The
durability is being driven not only by accountability for achieving the net-zero carbon targets set by countries and companies
around the world, but also by a geopolitical realignment that is causing countries to reexamine how they approach their energy
needs. Net-zero carbon 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 Russian invasion of Ukraine has deepened
the energy crisis experienced in some parts of the world and amplified concerns about energy security, highlighting 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. There is increasing recognition that nuclear power meets these
objectives and has a key role to play in achieving decarbonization goals. The growth in demand is not just long-term 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 new markets continue to emerge. 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.
Demand and energy policy highlights
• China announced plans to accelerate new nuclear projects to combat future electricity shortages, indicating it could raise
the number of new reactor construction approvals to ten or more per year. In 2022, there were ten approvals.
10 CAMECO CORPORATION
• In December, Japan announced a new plan to maximize nuclear power by restarting as many existing reactors as possible,
prolonging the operating lives of aging reactors beyond a 60-year limit, and building new reactors. This followed an earlier
pledge by Japan’s Prime Minister Kishida to have up to 17 reactors restarted by the summer of 2023. Additionally, the
government set a target for nuclear to make up 20% to 22% of the country’s energy mix by the end of the decade, and
under the new policy will push for the development and construction of “next-generation innovative reactors” to replace
about 20 reactors now set for decommissioning.
• South Korea finalized their 10th Basic Plan for Electricity Supply and Demand in January 2023. The plan aims to maintain
30% of the country’s 2030 energy mix as nuclear power, resume construction on Units 3 and 4 at the Shin Hanul nuclear
plant, and sets a goal of exporting 10 nuclear power plants by 2030, as well as the development of a Korean small modular
reactor (SMR). This positive news builds from the earlier 2022 announcements that included nuclear power in South
Korea’s green taxonomy and reversed the previous administration’s anti-nuclear stance.
• In July 2022, the European Parliament voted to keep nuclear power in the European Union’s sustainable finance taxonomy
as a transitional “green” investment. The Complimentary Delegated Act from this vote was entered into application on
January 1, 2023. Including nuclear power in the “transitional” category indicates that it will help mitigate climate change but
cannot yet be replaced by economically and technologically feasible low-carbon alternatives.
• Following the Russian invasion, numerous European countries announced their intention to reduce reliance on Russian-
supplied nuclear fuel under long-term contracts. For example, on June 2nd, Ukraine’s state-owned utility, Energoatom,
signed an agreement with Westinghouse to supply all its nuclear fuel and increase the number of planned AP1000 reactor
new builds from five to nine. Numerous other countries have also taken steps to diversify their nuclear fuel supply.
• In Sweden, a newly elected coalition majority government immediately updated the country’s energy policy to be more pro-
nuclear. They cited a significant shift away from the previous focus on renewables, changing the previous goal of "100%
renewable" electricity by 2040 to "100% fossil free electricity", and have put forward legislation to allow for the construction
of more reactors.
• Belgium shut down its Doel-3 nuclear reactor in September, but in January announced 10-year life extensions for their two
newest reactors, Doel 4 and Tihange 3. These reactors were set to close in 2025 but will now restart in November 2026
after the necessary preparation and will continue operating for 10 years.
• Chancellor Olaf Scholz has ordered the life extension of Germany’s three remaining reactors until mid-April 2023, keeping
them on stand-by due to energy concerns.
• In November 2022, the United Kingdom (UK) announced that it would take a joint stake alongside French partner Électricité
de France (EDF) in the construction of its new Sizewell C nuclear power station, replacing China General Nuclear’s 20%
stake. The UK will invest £700 million in the project, which will be matched by EDF.
• In France, the government and regulator are working on conditions to extend the operating lives of existing reactors and are
planning an “industrial build” program with the start of construction around 2028 for the first two of six new EPR reactors
and with plans for eight additional EPRs in the future. In addition, the French state is finalizing increased ownership in EDF
from 84% to 100% to provide a smooth energy transition, ensure sovereignty in the face of war and firm up the company’s
diminished financial situation.
• In Finland, Teollisuuden Voima Oyj announced Olkiluoto 3, the 1,600 MWe EPR, resumed test electricity production in
December following a few months delay with regular electricity production now scheduled to start in March 2023.
• Poland confirmed its intent to build nuclear power capacity for the first time and is progressing plans with both
Westinghouse for AP1000 PWR’s and Korea Hydro & Nuclear Power (KHNP) for APR 1400’s.
• Egypt began construction on the first two of four Russian built VVER 1200 reactors at the El-Dabaa Power Plant as the
government looks to accelerate the project. Additionally, in December, Egypt announced plans to start mining uranium in
2024 as part of the country's rapidly developing program for peaceful use of nuclear energy.
• India’s first domestically designed 700 MWe pressurized heavy water reactor at Kakrapar is now in 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 have 22.5 GWe operating by 2031.
MANAGEMENT’S DISCUSSION AND ANALYSIS 11
• In August 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law. Through $369 billion (US) in tax
incentives and other investments, IRA is a major federal legislative initiative enacted to address climate change. The IRA
includes significant support for nuclear power with the establishment of a Production Tax Credit to support existing nuclear
reactors and provides $700 million (US) to incentivize the development of domestic sources of high-assay low-enriched
uranium. Additionally, in December, the International Nuclear Energy Act passed a US Senate Committee vote and is
expected to be reintroduced to Congress. The bill seeks to promote engagement with partner and ally nations to develop a
civil nuclear export strategy, establish financing relationships, standardize licensing frameworks, and is designed to offset
the influence of Russia and China in the international nuclear market. This support comes in addition to ongoing work at
various levels of the US government to eliminate US dependence on nuclear fuel imports from Russia.
• In California, Governor Newsom signed a bill seeking to extend operations at the Diablo Canyon Power Plant for five years
beyond its current licence, which expires in 2025.
• Southern Company announced fuel loading began in October 2022 for Vogtle unit 3, the first of two 1,250 MWe AP1000’s
under construction in Georgia. The company also confirmed its plans to apply to have the operating licences for its Farley
and Hatch reactors extended to 80 years. This followed similar announced extensions for Tennessee Valley Authority’s
Browns Ferry reactor, Xcel Energy’s Monticello reactor, and Dominion Energy’s Virgil C. Summer reactor.
• Mexico's Laguna Verde nuclear plant has been granted 30-year operating life extensions for its two units.
• Ontario Power Generation (OPG) announced plans to extend the life of the Pickering nuclear power plant until at least 2026
and potentially up to 30 years. In addition, OPG signed an agreement with X-energy to examine deploying their Xe-100
SMR. Finally, OPG issued a $300 million Green Bond, a first-of-its-kind for the company and part of its commitment to be
net zero by 2040. The funds are to be used to finance the refurbishment activities at its Darlington site, where life
extensions to four units are in progress, as well as for maintenance of existing nuclear facilities.
• In October 2022, OPG completed a significant project milestone by submitting an application for a Licence to Construct to
the Canadian Nuclear Safety Commission (CNSC). This licence application is the next step in the deployment of a SMR at
the Darlington site. The submission comes after the beginning of site preparation activities earlier in 2022, which was
another significant milestone.
• In late 2022, Bruce Power achieved a major milestone in the refurbishment of Unit 6, as project teams successfully installed
the CANDU reactor’s fuel channel assembly, which puts the project on track to return to operation in 2023. Additionally, the
Unit 3 refurbishment campaign is scheduled to begin in March 2023.
• Sprott Physical Uranium Trust (SPUT) purchased about 17 million pounds U3O8 in 2022, bringing total purchases since
inception to over 41 million pounds U3O8. The challenging equity markets in recent months have contributed to SPUT
shares trading at a discount to net asset value, impacting its ability to raise funds to purchase uranium.
According to the International Atomic Energy Agency, globally there are currently 439 operable reactors and 57 reactors under
construction. Several nations are appreciating the clean energy and energy security 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 where phase-out policies were in place, there have been
policy reversals and decisions to, at a minimum, temporarily keep reactors running, with public opinion polls showing growing
support for it. With a number of reactor construction projects recently approved, and many more planned, the demand for
uranium continues to improve. There is growing recognition of the role nuclear must play in providing safe, affordable, carbon-
free baseload electricity that achieves a low-carbon economy while being a reliable energy source to help countries diversify
away from Russian energy supply.
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12
13
14
15
16
17
18
19
18
0
1
2
3
CURRENTLY UNDER CONSTRUCTION
4
10
9
8
6
7
5
China
India
Africa & Middle East
Asia
Russia
European Union
Eastern Europe
Americas
US
UK
4
3
3
2
2
2
8
8
7
Number of reactors
Source: IAEA
WORLD OPERABLE REACTOR COUNT
448
451
447
443
439
439
s
r
o
t
c
a
e
r
f
o
r
e
b
m
u
N
400
300
200
100
0
2017
2018
2019
2020
2021
2022
Source: IAEA
SUPPLY UNCERTAINTY
In addition to low uranium prices, government-driven trade policies, the COVID-19 pandemic, and ongoing supply chain
challenges, the most notable factor impacting security of supply in 2022 was geopolitical uncertainty. The geopolitical
uncertainty, driven by the Russian invasion of Ukraine, has led many governments and utilities to re-examine supply chains
and procurement strategies that are reliant on nuclear fuel supplies coming out of Russia. In addition, sanctions on Russia,
government restrictions, and restrictions on and cancellations of some cargo insurance coverage are creating transportation
and further supply chain risks for fuel supplies coming out of Central Asia. Despite the recent increase in uranium prices, years
of underinvestment in new capacity and the deepening geopolitical uncertainty has shifted risk from producers to utilities.
Supply and trade policy highlights
• In November 2022, Cameco announced that the first pounds of uranium ore from the McArthur River mine had been milled
and packaged at the Key Lake mill, marking the achievement of initial production as the facilities transition back into normal
operations.
• 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. Order was restored in the second half of
January, and the state of emergency was gradually lifted. In November 2022, President Tokayev was re-elected for a new
7-year term.
MANAGEMENT’S DISCUSSION AND ANALYSIS 13
• Kazatomprom (KAP) announced in August 2022 its plan to produce 10% below its total Subsoil Use Contracts level in
2024. This plan was expected to result in increased production in Kazakhstan of about 5 million to 8 million pounds U3O8
compared to the current 20% reduction, bringing total expected annual uranium production to about 65 million pounds in
2024. KAP stated the decision was based on its contracting progress but that it may still face significant challenges to
increase above current production levels due to the state of global supply chains. In January 2023, KAP’s operational
update showed lower expected production in 2023 due to wellfield development, procurement and supply chain issues,
resulting in forecasted production of between 53.3 million and 55.9 million pounds, compared to between 58.5 million and
59.8 million pounds previously.
• KATCO, the joint venture between Orano Mining and KAP, was granted a new mining permit for a parcel of the Muyunkum
uranium deposit bringing total estimated uranium reserves to about 120 million pounds U3O8. The full production level of
about 10.4 million pounds U3O8 is planned for 2026 at the earliest.
• Orano announced plans to increase its enrichment production capacity by 30%, which could involve an expansion of the
Georges-Besse II plant located in Tricastin. The cost of the project is estimated at $970M (US) and could increase the
capacity at its Georges Besse II plant to 11 million separative work units (SWU) from 7.5 million SWU.
• GLE made progress with the first full-scale laser system module, successfully completing eight months of testing in
Australia. The system, which was developed by Silex Systems Ltd for deployment in GLE’s commercial pilot demonstration
facility has been delivered to GLE's facility in the US. Additionally, GLE signed letters of intent (LOI) to collaborate with two
major US utilities to help diversify a portion of the US nuclear fuel supply chain, including measures to support its
deployment of laser enrichment technology in the US.
• In June, Boss Energy Limited (Boss) finalized their decision to develop the Honeymoon Uranium Project in South Australia.
Boss intends to accelerate construction and is projecting Honeymoon will have first production in the fourth quarter of 2023,
ramping up to 2.45 million pounds U3O8 production per year within three years.
• ConverDyn’s parent, Honeywell, is planning for a 2023 restart of its UF6 conversion facility.
Long-term contracting creates full-cycle value for proven productive assets
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 more
contracting activity takes place with proven and reliable suppliers. The higher demand 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 won by proven producers. The new uncommitted supply
exposed to the small, discretionary spot market puts downward pressure on price and can create the perception that uranium
is abundant, potentially resulting in a failure of long-term price signals. When prices are declining and low, there is no
perceived urgency to contract, and contracting activity and investment in new supply dramatically decreases. 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,
security-of-supply tends to overtake price concerns. Utilities typically re-enter the long-term contracting market to ensure they
have a reliable future supply of uranium to run their reactors.
14 CAMECO CORPORATION
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
URANIUM CONTRACTING VOLUMES AND PRICE HISTORY
Spot market
Long-term market
$120.00
$100.00
Average Spot Price
$80.00
8
O
3
U
b
l
/
$
S
U
n
i
e
c
i
r
P
$60.00
$40.00
$20.00
$0.00
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
UxC reports that over the last five years approximately 430 million pounds U3O8 equivalent have been locked-up in the long-
term market, while approximately 775 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 proven and reliable suppliers
with tier-one productive capacity and a record of honoring supply commitments. As a low-cost producer, we manage our
operations to increase value throughout these price cycles.
Source: UxC estimates
UTILITY UNCOVERED REQUIREMENTS
(2022 - 2040)
US Utilities
Non-US Utilities
8
O
3
U
s
b
l
n
o
i
l
l
i
m
250
200
150
100
50
0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Source: UxC estimates - December 31, 2022
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 2.3 billion pounds to the end of 2040. With the lack of
investment over the past decade, there is growing uncertainty about where uranium will come from to satisfy growing demand,
and utilities are becoming increasingly concerned about the availability of material to meet their long-term needs. In addition,
secondary supplies have diminished, and the material available in the spot market has thinned as producers and financial
funds continue to purchase material. Furthermore, the Russian invasion of Ukraine in February has given rise to a geopolitical
realignment in energy markets that is causing some utilities to seek nuclear fuel suppliers whose values are aligned with their
own or whose origin of supply better protects them from potential interruptions, including from transportation challenges or the
possible imposition of formal sanctions.
MANAGEMENT’S DISCUSSION AND ANALYSIS 15
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 our customers’ needs under our contract portfolio. We will undertake
contracting activity which is intended to ensure we have adequate protection while maintaining exposure to the benefits that
come from having uncommitted, low-cost supply to place into a strengthening market.
16 CAMECO CORPORATION
2022 performance highlights
It was another positive year for the nuclear energy industry. Demand for nuclear power, including support for existing reactors,
continues to grow, catalyzed by the increasing recognition by policy makers and major industries that nuclear energy must
play an important role in achieving the objectives of providing clean, secure, reliable and affordable energy. Geopolitical unrest
highlighted the importance of energy policy decisions on national security. With nuclear energy clearly back in durable growth
mode, we are also back in durable growth mode. Growth that will be sought in the same manner as we approach all aspects of
our business; strategic, deliberate, disciplined and responsible and with a focus on generating full-cycle value.
In our uranium segment, in 2022, we added 80 million pounds to our portfolio of long-term uranium contracts; about 58 million
of which are finalized and 22 million accepted with key commercial terms, such as pricing mechanism, volume and tenor
having been agreed to, but still awaiting contract finalization; and we have a large and growing pipeline of uranium business
under discussion. Our focus continues to be on obtaining market-related pricing mechanisms, while also providing adequate
downside protection. We continue to be strategically patient in our discussions to maximize value in our contract portfolio and
to maintain exposure to higher prices with unencumbered future productive capacity. In addition, with strong demand in the
UF6 conversion market, we were successful in adding long-term contracts that we expect will profitably underpin that operation
for years to come. We finalized contracts for almost 12 million kgU of UF6 conversion in 2022 and have another almost 5
million kgU that have been accepted and are awaiting contract finalization.
In 2022, we operated at about 60% below the productive capacity (100% basis) in our uranium segment due to the impact of
our planned supply discipline decisions, including to transition McArthur River/Key Lake back to production after five years on
care and maintenance. Productive capacity includes licensed capacity at Cigar Lake of 18 million pounds (100% basis) per
year and McArthur River/Key Lake of 25 million pounds (100% basis) per year, and it includes planned production volumes at
Rabbit Lake and our US operations prior to curtailment in 2016. We produced 18 million pounds (100% basis) from the Cigar
Lake mine and began the restart of production at our McArthur River mine and Key Lake mill, producing 1.1 million pounds
(100% basis) in 2022. Through our investment in Inkai, we were impacted by the 20% supply reduction enacted by
Kazatomprom (KAP) across all uranium mines in Kazakhstan and the continued supply chain challenges it has faced.
Kazatomprom has the ability to flex production 20% above or below planned production levels (8.3 million to 12.5 million
pounds per year). As well, delivery of our share of 2022 production from JV Inkai was delayed due to the challenges of
transporting uranium via an alternate route that does not rely on Russian rail lines or ports. The first shipment, containing 2.6
million pounds of our share of Inkai’s 2022 production, arrived at a Canadian port in late December. A second shipment
containing the majority of our remaining share of 2022 production is currently in transit.
We delivered over 25 million pounds of uranium and 11 million kgU in our fuel services segment to our customers in alignment
with our contract portfolio and profitable opportunities in the market. We generated $305 million in cash from operations, with
higher sales volumes in our uranium segment and higher average realized prices in both our uranium and fuel services
segments than in 2021. With some delays in commissioning at the Key Lake mill, operational readiness costs were $169
million for the year and production from the mill was lower than originally anticipated. To meet our sales commitments and
maintain a working inventory we purchased 18.3 million pounds of uranium at an average cost of $39.45 (US) per pound.
While the unit cost of our purchases is significantly higher than the average production costs at Cigar Lake in 2022, the
average cost was moderated by our ability to pull forward some of the long-term fixed-price purchase arrangements that were
put in place in a much lower price environment. See 2022 financial results by segment – Uranium starting on page 57 for more
information.
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,
2022, we had $2.3 billion in cash and cash equivalents and short-term investments with only $997 million in long-term debt. In
addition, we have a $1.0 billion undrawn credit facility. The strength of our balance sheet allowed us to take advantage of two
opportunities that we believe will add significant long-term value for Cameco.
In May 2022, we announced the acquisition of a greater share in the Cigar Lake mine for $107 million, increasing our
ownership to 54.5% (from 50%). Cigar Lake is a proven, permitted and fully licensed tier-one mine in a safe and stable
jurisdiction that we operate with the tremendous participation and support of our neighbouring Indigenous partner
communities.
MANAGEMENT’S DISCUSSION AND ANALYSIS 17
In October 2022, we announced we had entered a strategic partnership with Brookfield Renewable Partners and its
institutional partners (Brookfield Renewable) to acquire 100% of Westinghouse Electric Company (Westinghouse), a global
provider of mission‐critical and specialized technologies, products and services across most phases of the nuclear power
sector. The acquisition is expected to close in the second half of 2023 and is subject to customary closing conditions and
certain regulatory approvals. Once the transaction closes, Brookfield Renewable, will beneficially own a 51% interest in
Westinghouse and we will beneficially own 49%. We believe bringing together our expertise in the nuclear industry with
Brookfield Renewable’s expertise in clean energy positions nuclear power at the heart of the clean energy transition and
creates a powerful platform for strategic growth across the nuclear sector.
The total enterprise purchase price for the acquisition is $7.875 billion (US), which includes an assumption of an estimated
$3.4 billion (US) of debt which will remain with Westinghouse, and which is subject to customary purchase price adjustments.
The remainder of the purchase price will be paid by approximately $4.5 billion (US) of aggregate cash contributions, our share
of which will be approximately $2.2 billion (US). Following the announcement, we undertook a $650 million (US) bought deal
offering of common shares, with an underwriter option to purchase additional shares. The offering closed on October 17, 2022,
with gross proceeds to us of approximately $747.6 million (US), including the exercise in full of the underwriters’ option to
purchase additional common shares. Net proceeds from the issuance were received in October 2022 and the US dollar cash
and cash equivalents and short-term investments are included on our balance sheet. The final financing is not required until
close of the acquisition and will be determined based on market conditions and the expected run rate of our business at that
time. We expect a permanent financing mix of capital sources, including cash, debt and equity, designed to preserve our
balance sheet and ratings strength, while maintaining healthy liquidity. See Proposed acquisition of Westinghouse beginning
on page 89 for more information on the proposed acquisition.
With nuclear power’s clean emissions profile, reliable and secure baseload characteristics and low, levelized cost there was an
intensified focus on preventing early reactor retirements, pursuing 10- and 20-year life extensions for the existing fleets in
several countries, and the construction of new reactors, both traditional large-scale reactors and small and advanced nuclear
reactors. 2022 brought further support for nuclear power as the Russian invasion of Ukraine deepened the energy crisis
impacting many regions of the world and highlighted the need for energy security and affordability. Energy security concerns in
regions such as Central and Eastern Europe have resulted in demand from new markets for Western nuclear fuel supplies. In
addition, utilities globally are evaluating their sources of supply with a focus on origin. The increased nuclear fuel demand for
Western supply of products and services, supply that established producers like we and like Westinghouse can offer, presents
itself in the near, medium and long term.
Increased demand is occurring at a time when there is considerable growing uncertainty about nuclear fuel supplies. Macro
uncertainty including the COVID-19 pandemic, supply chain disruptions, inflationary pressures and rapidly rising interest rates,
and geopolitical unrest have accelerated this uncertainty. Low prices have led to supply concentration by origin, and a growing
primary supply gap. Secondary supplies that have played a crucial role in our industry have been drawn out of the market.
And, with the global nuclear industry reliant on Russian supplies for approximately 14% of uranium concentrates, 27% of
conversion, and 39% of enrichment, utilities are now considering and planning for a variety of potential scenarios ranging from
an abrupt end to Russian supplies to a gradual phase-out in nuclear fuel supply chains. As a result, we are seeing some
utilities beginning to pivot towards procurement strategies that more carefully weigh the origin risk, and which supports
producers with assets in geopolitically favourable jurisdictions.
18 CAMECO CORPORATION
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, the new long-term contracts we have put in place, and a pipeline of contracting discussions, we have decided to adjust
our production plan for McArthur River/Key Lake to produce 18 million pounds per year (100% basis) starting in 2024, and we
plan to continue to operate Cigar Lake at 18 million pounds per year (100% basis) in 2024. At Inkai, production will continue to
follow the 20% reduction planned by KAP until the end of 2023. With annual licensed capacity of 25 million pounds at
McArthur River/Key Lake, we continue to have the ability to expand production from our existing assets, however some
additional investment would be required. If we took advantage of all of the tier-one expansion opportunities, our annual share
of tier-one supply could be about 32 million pounds. However, any decision to expand production will be dependent on further
improvements in the uranium market and our ability to secure the appropriate long-term contract homes for our
unencumbered, in-ground inventory, demonstrating that we continue to responsibly manage our supply in accordance with our
customers’ needs. In addition to our plans to expand uranium production, at our Port Hope UF6 conversion facility we are
working on increasing annual production to 12,000 tonnes by 2024 to satisfy our book of long-term business and demand for
conversion services, at a time when conversion prices are at historic highs. See Our vision, values and strategy starting on
page 23 for more information.
We expect the investments we have and will continue to make 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, and a growing contracting
pipeline we are beginning to return to our tier-one cost structure, which we expect will significantly improve our financial
performance.
As we execute on our strategy, we will continue to focus on protecting the health and safety of our employees, delivering our
products safely and responsibly and addressing the ESG risks and opportunities that we believe will make our business
sustainable and will build long-term value.
Financial performance
HIGHLIGHTS
DECEMBER 31 ($ MILLIONS EXCEPT WHERE INDICATED)
Revenue
Gross profit
Net earnings (loss) attributable to equity holders
$ per common share (diluted)
Adjusted net earnings (loss) (non-IFRS, see page 40)
$ per common share (adjusted and diluted)
Cash provided by operations
2022
1,868
233
89
0.22
135
0.33
305
2021
1,475
2
(103)
(0.26)
(98)
(0.25)
458
CHANGE
27%
>100%
>100%
>100%
>100%
>100%
(33)%
Net earnings attributable to equity holders (net earnings) and adjusted net earnings in 2022 significantly outperformed 2021
when we had a net loss for the year. See 2022 consolidated financial results beginning on page 39 for more information. Of
note:
• generated $305 million in cash from operations
• incurred $218 million in care and maintenance costs and operational readiness costs as a result of our strategic decisions
Our segment updates and other fuel cycle investment updates
In our uranium segment, we continued to execute our strategy to preserve our tier-one assets which impacted our operations.
Of note in 2022, we:
• produced 18 million pounds (100% basis) at Cigar Lake and increased our ownership to 54.5%
• began the restart of production at McArthur River/Key Lake, producing 1.1 million pounds (100% basis). Production was
impacted by commissioning challenges at the mill.
• maintained Rabbit Lake and US ISR operations on care and maintenance
• purchased 18.3 million pounds of uranium, including our spot purchases, committed purchase volumes (including JV Inkai
purchases), and advancing some long-term purchases
MANAGEMENT’S DISCUSSION AND ANALYSIS 19
• delivered on our sales commitments of over 25 million pounds in alignment with our contract portfolio and profitable market
opportunities
• added a record number of contracts with 80 million pounds added to our portfolio (58 million pounds finalized and 22 million
pounds accepted and awaiting contract finalization).
In 2022, in our fuel services segment, we:
• produced 13.0 million kgU, which included an annual UF6 production record of over 10.6 million kgU
• delivered 11.1 million kgU under contract
• with UF6 conversion prices at historic highs, we finalized contracts for 12 million kgU as UF6 and have another almost 5
million kgU as UF6 that have been accepted, awaiting contract finalization.
See Operations and projects beginning on page 66 for more information.
Other investment updates from 2022:
• GLE delivered the first full-scale laser system module to its facility in the US after successfully completing eight months of
testing in Australia
• In October, we announced the proposed acquisition of Westinghouse
See Global Laser Enrichment and Proposed acquisition of Westinghouse beginning on page 89 for more information.
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)
2022
10.4
25.6
44.73
57.85
1,480
121
13.0
11.1
32.92
365
117
2021
6.1
24.3
34.53
43.34
1,055
(108)
12.1
13.6
29.72
404
118
CHANGE
70%
5%
30%
33%
40%
>100%
7%
(18)%
11%
(10)%
(1)%
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.
Also of note, subsequent update
As announced in February 2023, we have reached agreement on commercial terms for a major supply contract to provide
sufficient volumes of natural uranium hexafluoride (UF6) (consisting of uranium and conversion services) to SE NNEGC
Energoatom (Energoatom) to meet Ukraine’s full nuclear fuel needs through 2035. Key commercial terms, such as pricing
mechanism, volume and tenor, have been agreed to, but the contract is subject to finalization, which is anticipated in the first
quarter of 2023.
The agreement will run from 2024 through 2035 and contract amounts are subject to customary volume flexibility provisions
commonly contained in supply agreements. Additionally, the agreement will contain a required degree of flexibility, given
present circumstances in Ukraine. The agreement will be for 100% of Energoatom’s UF6 requirements (consisting of uranium
and conversion services) for the nine nuclear reactors at its Rivne, Khmelnytskyy and South Ukraine nuclear power plants for
the duration of the contract. These plants have combined requirements over the contract term of approximately 15.3 million
KgU as UF6 (the equivalent of about 40.1 million pounds of uranium concentrate, or U3O8).
20 CAMECO CORPORATION
The contract will also contain an option for us to supply up to 100% of the fuel requirements for the six reactors at the
Zaporizhzhya nuclear power plant, currently under Russian control, should it return to Energoatom’s operation. If the option
was exercised in 2024, the Zaporizhzhya plant would require roughly 10.4 million KgU as UF6 (the equivalent of approximately
27.2 million pounds of U3O8) over the contract period.
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
2022
2021
CHANGE
49.81
49.75
31.96
31.96
24.75
24.94
35.28
36.81
19.41
18.99
18.42
18.42
41%
35%
65%
68%
34%
35%
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 2022 dropped
significantly to 61 million pounds U3O8 equivalent, compared to 2021’s record breaking 102 million pounds U3O8 equivalent.
Spot market volumes were significant in 2021 due to unplanned uranium demand from the Sprott Physical Uranium Trust,
which contributed to the thinning of spot uranium supply. In 2022, total spot purchases by producers, junior uranium
companies and financial funds was approximately 25 million pounds U3O8 equivalent, compared to approximately 53 million
pounds U3O8 equivalent in 2021; these purchases in 2022 represented over 40% of spot market purchases compared to over
50% in 2021. At the end of 2022, the average reported spot price was $47.68 (US) per pound, up $5.63 (US) per pound from
the end of 2021. During the year, the uranium spot price ranged from a month-end low of $43.08 (US) per pound to a month-
end high of $58.20 (US) per pound, averaging $49.81 (US) for the year.
Long-term contracts generally call for deliveries to begin more than two years after the contract is finalized, and use a number
of pricing formulas, including base-escalated prices set at time of contracting and escalated over the term of the contract, and
market referenced prices (spot and long-term indicators) determined near the time of delivery. The volume of long-term
contracting reported by UxC for 2022 was about 113 million pounds U3O8 equivalent, up from about 72 million pounds U3O8
equivalent in 2021. 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, in combination with higher interest rates, greatly reduced
the ability for utilities to rely on carry trade activity, as well as heightened geopolitical tensions. The average reported long-term
price at the end of the year was $52.00 (US) per pound, up $9.25 (US) from 2021. During the year, the uranium long-term
price steadily increased from a month-end low of $42.88 (US) per pound in January to a high of $52.00 (US) per pound in
November, averaging $49.75 (US) for the year.
With the Russian invasion of Ukraine in February 2022, conversion prices in both the North American and European markets
set record highs. The average reported spot price for North American delivery at the end of 2022 was $40.00 (US) per
kilogram uranium as UF6 (US/kgU as UF6), up $23.90 (US) from the end of 2021. Long-term UF6 conversion prices for North
American delivery finished 2022 at $27.25 (US/kgU as UF6), up $9.25 (US) from the end of 2021.
MANAGEMENT’S DISCUSSION AND ANALYSIS 21
URANIUM (US$/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)
$70
$60
$50
$40
$30
$20
$10
$0
2016
2017
2018
2019
2020
2021
2022
Source: Average of prices reported from TradeTech and UxC
22 CAMECO CORPORATION
Our vision, values and strategy
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 GHG 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 believe 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.
We believe we have the right strategy to achieve our vision and we will do so in a manner that reflects our values. For over 30
years, we have been delivering our products responsibly. Building on that strong foundation, we remain 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. They define who we are as a company and are at the core of everything we do and help to
embed ESG principles and practices as we execute on our strategy in pursuit of our vision. They are:
• safety and environment
• people
• 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 23
Our strategy
We are a pure-play investment in the growing demand for nuclear energy. We are focused on providing nuclear fuel products
and services across the fuel cycle to support the generation of clean, reliable, secure and affordable energy, and we are
focused 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, a growing focus on electrification and
decarbonization, and concerns about energy security and affordability 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 in all segments of our business with our
contract portfolio and customer needs
• being financially disciplined to allow us to execute on our strategy, take advantage of strategic opportunities and 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, contribute to the mitigation of global climate change, and help to provide
energy security and affordability
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 tier-one assets that are licensed, permitted, long-lived, and are proven reliable with capacity to expand. 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 optimizing the value of our lowest cost assets. We also prioritize
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.
FUEL SERVICES
Our fuel services segment is a source of profit and supports our uranium segment, providing our customers with access to
refining and conversion services for both heavy-water and light-water reactors, and CANDU fuel and reactor component
manufacturing for heavy-water reactors.
As in our uranium segment, we are focused on securing new long-term contracts and on aligning our production decisions with
our contract portfolio 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.
OTHER NUCLEAR FUEL CYCLE INVESTMENTS
We continue to explore other opportunities across the nuclear fuel cycle. Expanding our participation in the fuel cycle is
expected to complement our tier-one uranium assets and fuel services, creating new revenue opportunities and enhancing our
ability to meet the increasing needs of existing and new customers for secure, reliable nuclear fuel supplies and services.
24 CAMECO CORPORATION
In particular, we are interested in the second largest value driver of the fuel cycle, enrichment, and have a 49% interest in
Global Laser Enrichment LLC (GLE). GLE is the exclusive licensee of the proprietary SILEX laser enrichment technology, a
third-generation uranium enrichment technology. We are the commercial lead for the GLE project with a 49% interest and
starting in 2023, an option to attain a majority interest of up to 75% ownership. See Global Laser Enrichment starting on page
89 for more information.
In addition, in October 2022, we announced the planned acquisition of a 49% interest in Westinghouse, a global provider of
mission‐critical and specialized technologies, products and services for light-water reactors across most phases of the nuclear
power sector, in a strategic partnership with Brookfield Renewable. See Proposed acquisition of Westinghouse starting on
page 89 for more information on Westinghouse.
Additionally, we have 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 in all segments of our business need to consider the nuclear fuel 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 buy 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 typically comes from diversified
mining companies that produce uranium as a by-product, or by 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 build a long-term contract portfolio by layering in volumes over time. In addition to our committed sales, we will
compete for end-user demand in the market where we think we can obtain value and, in general, as part of longer-term
contracts. We will take advantage of opportunities the market provides, where it makes sense from an economic, logistical,
diversification 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.
• Once we have built a portfolio of long-term contracts, we decide how to best source material to satisfy that demand,
planning our production in accordance with our contract portfolio and other available sources of supply. We will not produce
from our tier-one assets to sell into an oversupplied spot market.
• 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.
• 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 annual delivery commitments. Historically, prior to the
supply curtailments that we began in 2016, we have generally planned our annual delivery commitments to slightly
exceed the annual supply we expect to come from our annual production and our purchase commitments and have
therefore relied on the spot market to meet a small portion of our delivery commitments. In general, if we choose to
purchase material to meet demand, we expect the cost of that material will be more than offset by the volume of
commitments in our sales portfolio that are exposed to market prices at the time of delivery 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 exposure to rising prices. 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 25
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. The spot market is
discretionary and typically used for one-time volumes, not to satisfy annual demand. We sell uranium and fuel products and
services directly to nuclear utilities around the world as uranium concentrates, UO2 and UF6, conversion services, or fuel
fabrication and reactor components for CANDU heavy water reactors. We have a solid portfolio of long-term sales contracts
that reflect our reputation as a proven, reliable supplier of geographically stable supply, and the long-term relationships we
have built with our customers.
In general, we are 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, but it also gives us insight into underlying market fundamentals.
We deliver the majority of our uranium under long-term contracts each year, some of which are tied to market-related pricing
mechanisms quoted at time of delivery. 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:
• optimize realized price by balancing exposure to future market prices 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 and regionally diverse customers
We have a portfolio of long-term contracts, each bilaterally negotiated with customers, that have a mix of base-escalated
pricing and market-related pricing mechanisms, including provisions that provide exposure to rising market prices and also
protect us when the market price is declining. 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 our realized price to outperform the market 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 contracts for uranium (price at time of acceptance escalated over the term): use a pricing mechanism
based on a term-price indicator at the time the contract is accepted and escalated to time of each delivery 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 may provide for discounts, and typically include floor prices and/or ceiling prices,
which are fixed at time of contract acceptance and usually escalate 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. We layer in contracts over time, with higher commitments in the near term and
declining over time in accordance with utilities growing uncovered requirements. 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 ongoing operation of our productive capacity and capture
long-term value.
26 CAMECO CORPORATION
Given our view that additional long-term supply will need to be incented to meet the 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 have exposure to rising market prices
under our contract portfolio, while maintaining the benefits 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 there is a changing policy, operating, or economic environment, we may consider options that allow us to
maintain our customer relationships and are mutually beneficial.
CONTRACT PORTFOLIO STATUS
We have commitments to sell approximately 180 million pounds of U3O8 with 34 customers worldwide in our uranium segment,
and over 55 million kilograms as UF6 conversion with 31 customers worldwide in our fuel services segment.
Customers – U3O8:
Five largest customers account for 56% of commitments
COMMITTED U3O8 SALES BY REGION
Americas 64%
Customers – UF6 conversion:
Five largest customers account for 59% of commitments
COMMITTED UF6 SALES BY REGION
Asia 19%
Europe 17%
Asia 7%
Americas 74%
Europe 19%
MANAGEMENT’S DISCUSSION AND ANALYSIS 27
MANAGING OUR CONTRACT COMMITMENTS
We allow sales volumes to vary year-to-year depending on:
• the level of sales commitments in our long-term contract portfolio
• market opportunities
• our sources of supply
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 productive capacity
• 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
OUR SUPPLY DISCIPLINE
As spot is not the fundamental market, true value is built 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 carrying excess inventory or having to sell into an oversupplied spot market. 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 realize the best return over the entire commodity cycle. During a prolonged period of
uncertainty, this could mean leaving our uranium in the ground. For the years 2016 through 2022, we left more than 130
million pounds of uranium in the ground (100% basis) by curtailing our production. We purchased more than 60 million pounds
including spot and long-term purchases and in 2018 we drew down our inventory by almost 20 million pounds. That totals over
210 million pounds (100% basis) of uranium that were not available to the market.
However, 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 is essential to the clean-energy transition and to energy
security. In 2022 we secured 80 million pounds under long-term uranium contracts alone and 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.
With the improvements in the market, the new long-term contracts we have put in place, and a pipeline of contracting
discussions, we have decided to adjust our production plan for McArthur River/Key Lake to produce 18 million pounds (100%
basis) starting in 2024, and we plan to continue to operate Cigar Lake at its licensed capacity of 18 million pounds per year
(100% basis) in 2024. At Inkai, production will continue to follow the 20% reduction planned by KAP until the end of 2023.
With annual licensed capacity of 25 million pounds (100% basis) at McArthur River/Key Lake, we continue to have the ability
to expand production from our existing assets, however some additional investment would be required. Any decision to
expand production will be dependent on further improvements in the uranium market and our ability to secure the appropriate
long-term contract homes for our unencumbered, in-ground inventory, demonstrating that we continue to responsibly manage
our assets in accordance with our customers’ needs. In addition to our plans to expand uranium production, at our Port Hope
UF6 conversion facility we are working on increasing production to 12,000 tonnes by 2024 to satisfy our book of long-term
business for conversion services and customer demand, at a time when conversion prices are at historic highs.
Our adjusted production plans for McArthur River/Key Lake and Cigar Lake are expected to 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 or operational readiness costs related to McArthur River/Key Lake to cost of
sales. In addition, with conversion demand elevated, we have been successful in securing long-term sales commitments that
will support increased UF6 production at Port Hope, which is expected to further improve its contribution to our financial
results. Over the course of 2023, we will undertake all of the activities necessary to ensure we are operationally ready to
achieve the 2024 production plan. However, this is not an end to our supply discipline. We expect to continue to adjust our
production in accordance with our contract portfolio. 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 fuel supplier.
28 CAMECO CORPORATION
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.
2022 URANIUM OPERATING COSTS BY CATEGORY
Production Supplies 28%
Labor 41%
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 number of years, the annual cash cost of production reflected the operating cost of mining and milling our share
of Cigar Lake as this was our only operating site. With the restart of the McArthur River/Key Lake operations the annual cost of
production will reflect a combined cost of all our operating uranium assets. See 2022 financial results by segment – Uranium
starting on page 57 for more information. In 2023, our cash production costs may continue to be affected by inflation, the
availability of personnel with the necessary skills and experience, supply chain challenges impacting the availability of
materials and reagents, and our ability to ramp up to planned production at McArthur River/Key Lake.
Operating costs in our fuel services segment are mainly fixed. In 2022, 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 continue to look to adopt innovative and advanced digital and automation technologies to improve efficiency and
operational flexibility, and to further reduce cost.
Care and maintenance costs
In 2023, 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 a restart is less
certain. We continue to evaluate our options in order to minimize these costs.
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 2023, 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. Our cost of sales could be impacted if we do not achieve our annual production plan, or we are unable to source
uranium as planned, and we are required to purchase uranium at prices that differ from our cost of inventory.
MANAGEMENT’S DISCUSSION AND ANALYSIS 29
Financial impact
The growing demand for nuclear power due to its safety, clean energy, reliability, security and affordability attributes has
contributed to increased demand for nuclear fuel products and services. As a result, we have seen price increases across the
nuclear fuel value chain, which reflect the need for capacity increases to satisfy the projected growth.
The deliberate and disciplined actions we took to curtail production and streamline operations over the past decade came with
near-term costs like care and maintenance costs, operational readiness costs, and purchase costs higher than our production
costs. However, we considered these costs as investments in our future.
Today, thanks to our investments, and with our continued ability to secure new long-term sales commitments we believe we
are well-positioned for growth. Our core growth is expected to come from our existing tier-one mining and fuel services assets.
We do not have to build new capacity to pursue new opportunities. We have sufficient productive capacity to expand, a
position we have not enjoyed in previous price cycles.
And, with the planned joint acquisition of Westinghouse, we expect to be able to expand our growth profile by extending our
reach in the nuclear fuel cycle at a time when there are tremendous tailwinds for the nuclear power industry. We are extending
our reach with an investment in assets, that like ours, are strategic, proven, licensed and permitted, that are located in
geopolitically favourable jurisdictions, and that we expect will be able to grow from their existing footprint. These assets are
also expected to provide new opportunities for our existing suite of uranium and fuel services assets.
We believe our actions and investments have helped position the company to self-manage risk and as we make the transition
back to a tier-one run rate, we expect our financial performance to significantly improve, allowing us to execute on our strategy
while rewarding our stakeholders for their continued patience and support of our strategy to build long-term value.
CAPITAL ALLOCATION – FOCUS ON VALUE
Delivering long-term value 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 core business in a manner that we expect will create sustainable long-term value
• maintain a strong balance sheet that will allow us to execute on our strategy, take advantage of strategic opportunities and
self-manage 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, when appropriate, returned to
shareholders, which requires good execution and disciplined allocation. Our decisions are based on the run rate of our
business and other factors that we consider to be in the best interests of our stakeholders, not one-time events. Cash on our
balance sheet that exceeds value-adding growth opportunities and/or is not needed to self-manage risk or for other reasons
could 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 used to take advantage of new strategic opportunities in line with our corporate
development objectives and long-term strategy, reinvested in the core business of the company including managing the
physical and transition risks and opportunities associated with changing climate conditions, or returned to shareholders.
Reinvestment
We have a multidisciplinary capital allocation committee that evaluates 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 to shareholders.
30 CAMECO CORPORATION
Return
We believe in returning cash to shareholders under appropriate circumstances 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. The decision to return capital and the type of return 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.
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, including achieving production at McArthur River/Key Lake in accordance with
our plan and the proposed acquisition of Westinghouse. We will continue to navigate by our investment-grade rating through
close management of our balance sheet metrics, maintaining sufficient liquidity to meet our risk-mitigated working cash target
and that allows us to pursue other value-adding opportunities.
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 by our capital allocation committee before an investment decision is
made. We will invest to allow us to execute our 2024 production plan.
If we get clarity on our CRA dispute, which generates a one-time cash infusion, we may focus on the debt portion of our
ratings metrics, depending on market opportunities. This may mean greater emphasis on reducing the debt on our balance
sheet, including the additional debt contemplated with the proposed acquisition of Westinghouse. However, if we are able to
continue increasing our portfolio of long-term contracts with acceptable pricing mechanisms, our priorities would be to invest in
expanding production at our tier-one assets, and if warranted taking advantage of our existing tier-two assets and brownfield
infrastructure, turning to value-adding growth opportunities including further investment in the nuclear fuel value chain and
returning excess cash to shareholders.
Shares and stock options outstanding
At February 7, 2023, we had:
• 432,717,980 common shares and one Class B share outstanding
• 2,854,061 stock options outstanding, with exercise prices ranging from $11.32 to $19.30
As announced on October 17, 2022, our $747.6 million (US) bought deal offering of common shares closed. The offering,
including the exercise, in full, of the underwriters’ option to purchase additional common shares, increased our outstanding
shares by 34,057,250. See Proposed acquisition of Westinghouse beginning on page 89 for more information.
Dividend
In 2022, our board of directors declared a dividend of $0.12 per common share, which was paid December 15, 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 31
Our ESG principles and practices
A key part of our strategy, reflecting our values
We are committed to delivering our products responsibly. We integrate ESG principles and practices into every aspect of our
business, from our corporate objectives and approach to compensation, to our overall corporate strategy, risk management,
and day-to-day operations, and they align with our values. 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 achieve our strategic
plan and 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 board of directors holds the highest level of oversight for our business strategy and strategic risks, including ESG matters
and climate-related risks. Oversight of ESG and climate-related reporting and disclosure has been delegated by the board to
the Safety, Health and Environment (SHE) committee of the board. We also have a multi-disciplinary ESG steering committee,
chaired by our senior vice-president and chief corporate officer that includes representatives from across the organization
whose role is to review our ESG governance and reporting, and our current approach to sustainability, against evolving trends.
Additional information about our governance of ESG matters is included in our most recent ESG report.
In an effort to continually evolve the robustness of our sustainability commitments and communications, starting in 2020, we
aligned our ESG performance indicators with the ones recommended by the Sustainability Accounting Standards Board
(SASB). In addition, we began addressing the recommendations of the Task Force on Climate-Related Financial Disclosures
(TCFD) in our ESG report. In 2022, we continued to progress our work, conducting a gap analysis to identify how we could
better align to TCFD recommendations. Findings from this work identified the need to undertake scenario analysis (physical
and transition) to develop a robust evidence base for our climate strategy and pursue opportunities to financially quantify
identified climate-related risks and opportunities where possible. See the discussion below regarding our climate change
scenario analysis for more information.
In July 2022, we published our 2021 ESG report. 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 and that are important to our stakeholders.
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 potential impacts. In addition to our own
environmental monitoring, we collaborate with local communities in northern Saskatchewan around our operations to give
confidence to them that traditionally harvested foods remain safe to eat, and water remains safe to drink.
32 CAMECO CORPORATION
Climate change: Nuclear power is part of the solution
We recognize the critical nature of the fight against climate change, and want our employees, customers, investors, and
community partners near our operations to know we are committed to being an active and constructive partner in addressing
this challenge. The reduction of carbon and greenhouse gas (GHG) emissions is important and necessary in Canada and
around the world. 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 enable vast emissions reductions that
can be achieved through nuclear power and are committed to transforming our already low GHG emissions footprint to
achieve our ambition of having net-zero emissions while delivering significant long-term business value.
In accordance with our 2022 compensable corporate objectives, we undertook a planning process to outline our overarching
low-carbon transition strategy. We identified the practical and achievable actions that we expect to take to decarbonize our
operations and manage climate-related risks. In doing so, we are demonstrating our alignment with the ambitions of the Paris
Agreement to, “limit global temperature rise to well below 2 degrees Celsius (°C), above pre-industrial levels, and to pursue
efforts to limit global temperature rise even further to 1.5°C”. By extension, we are demonstrating our alignment with the
Government of Canada’s commitment to the Paris Agreement in accordance with the Net Zero Accountability Act and resulting
2030 Emissions Reduction Plan.
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. As part of our low-carbon transition planning, we completed a climate
change scenario analysis to understand how projected long-term changing climate conditions could impact our employees,
assets, and operations in northern Saskatchewan. We leveraged internal subject matter expertise with help from a third-party
expert to complete the assessment.
The physical risk assessment study was undertaken to deliver an initial forward-looking physical climate risk assessment
across our four sites in northern Saskatchewan and identify possible risk management and adaptation options. The next steps
for the northern Saskatchewan physical risk assessment are to embed the physical climate risk findings into Cameco’s internal
risk processes and develop an adaptation action plan for each site in the study. We are targeting the completion of similar
assessments for all our majority owned and operated facilities over the next five years. In 2023, we will focus our physical
climate risk assessment efforts on our Ontario operations.
We will continue to explore climate change projections for the areas where we operate and those critical to moving supplies
and products through our value chain. We will use this information to identify where our existing climate-related acute and
chronic risk management practices are expected to remain sufficient in the years to come and where adaptation and other
enhancements may be required.
When it comes to climate change, we have tracked and reported our GHG emissions for more than two decades. A summary
of our activities to understand and mitigate the risks associated with climate change scenarios is reported to the board of
directors on a regular basis in accordance with our Enterprise Risk Management program, including the mitigating controls and
management actions taken to reduce these risks.
In 2022, we developed the Energy and GHG Emissions Reductions Ideas Box that allows all employees to submit ideas to
support us in reducing operational emissions. The Ideas Box also provides employees the opportunity to see key details from
all decarbonization projects under investigation today.
We have also enjoyed some significant success in our efforts to reduce our energy use and GHG emissions to date. For
example, at our Port Hope conversion facility, we have achieved a 28% reduction to peak power demand and more than $2.1
million in annual energy savings with projects such as HVAC and compressed air system upgrades and lighting efficiency
retrofits. At our northern Saskatchewan mining and milling operations, recent efforts have focused on the implementation of an
Energy Management Information System (EMIS) in alignment with our larger digital transformation efforts. The EMIS improves
our ability to visualize, monitor, and manage our energy use and emissions profile in real time. Ultimately, EMIS gives those
operations the ability to identify where our highest impact emissions reduction opportunities exist and assurance that the
actions we have taken are maintained over time.
MANAGEMENT’S DISCUSSION AND ANALYSIS 33
Beyond these projects and initiatives, we have completed work to profile our emissions, enabling the identification of multiple
high impact energy efficiency and emissions reductions opportunities including lighting retrofits, building envelope
improvements, heat recovery projects, and the ability to explore alternative energy sources. Through these and other
innovative decarbonization actions across efficiency, electrification, waste to value, carbon economy, and fuel switching
themes – we expect to achieve a 30% absolute reduction from our total Scope 1 and 2 emissions level by 2030 from our 2015
baseline as our first major milestone on the journey to achieve our ambition of being net zero. For our Scope 2 emissions
(purchased power), achieving this target will largely be dependent on the success of SaskPower in decarbonizing its grid in
accordance with its current plans.
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.
Our response to the COVID-19 pandemic
We continue to closely monitor and adapt to the developments related to 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.
The proactive decisions we made, and our ongoing efforts to monitor and manage the risk of COVID-19, to help ensure our
workers are safe are consistent with our values. 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
We believe that sound governance is the foundation for strong corporate performance. Our diverse and independent board of
directors’ primary role is to provide strategic direction and risk oversight in order to help the company achieve its vision of
“energizing a clean-air world”. 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 US,
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.
Risk and Risk Management
Our board of directors oversees management’s implementation of appropriate risk management processes and controls. We
have a Risk Policy that is supported by our formal Risk Management Program.
34 CAMECO CORPORATION
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 is based on the ISO 31000 Risk Management guidelines.
ISO 31000 provides guidance on risk management activities with internationally recognized practices and provides sound
principles for effective management and governance of risks. Our program applies to all risks facing the company, including
climate-related risks. 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. We continually update our risk profile by performing regular monitoring of risks across the
organization. Regular monitoring helps us to properly manage risks and identify any new risks. Detailed risk reporting is
provided on a quarterly basis to senior management and the board and its committees on the status of the mitigating and/or
monitoring plans for each of the enterprise risks. Management also reviews monthly updates on the company’s progress in
managing these risks.
In addition to considering the other information in this MD&A, you should carefully consider the material risks discussed
starting on page 4, under the heading Managing the risks, starting on page 67, and the specific risks discussed under each
operation, advanced project, and other fuel cycle investment update in this document. These risks, however, are not a
complete list of the potential risks our operations, advanced projects, or other investments 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 35
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 2022 continue to reflect the operational strategic actions that we have taken. While we saw a significant
improvement in our financial performance (earnings and cash flow) as our tier-one production increases and our average
realized price reflects the improving market, our results still do not reflect our expected long-term run rate performance. As our
long-term contract portfolio continues to grow and our tier-one production continues to ramp up, we believe that the strategic
actions we have taken have helped to pave the way to stronger financial performance over time. Additionally, we will not
compromise our commitment to safety, people and our environment.
2022 OBJECTIVES1
TARGET
RESULTS
OUTSTANDING FINANCIAL PERFORMANCE
Earnings measure
Achieve targeted adjusted net earnings.
• adjusted net earnings was above the target
Cash flow measure
Achieve targeted cash flow from
operations (before working capital
changes).
SAFE, HEALTHY AND REWARDING WORKPLACE
Workplace safety
measure
CLEAN ENVIRONMENT
Environmental
performance
measures
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.
Achieve divisional environmental aspect
improvement targets.
Complete initial planning to outline our
overarching low-carbon transition
strategy
SUPPORTIVE COMMUNITIES
Stakeholder
support measure
Enhance the skill set of Residents of
Saskatchewan’s North (RSN) for
changing industrial environments
• cash flow from operations was above the target
• we did not achieve our target for TRIR
• performance of the leading indicators was within the
target range
• performance on divisional environmental targets was
below the targeted range
• Completed initial planning and identified the practical
and achievable actions that we expect to take to reduce
carbon emissions at our operations and manage climate-
related risks
• a RSN work placement program was developed and
implemented with 50% female participation with support
from external agencies, achieving results above the
target
1 Detailed results for our 2022 corporate objectives and the related targets will be provided in our 2023 management proxy circular prior to our Annual Meeting of
Shareholders on May 10, 2023.
36 CAMECO CORPORATION
2023 objectives
OUTSTANDING FINANCIAL PERFORMANCE
•
Achieve targeted financial measures.
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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 37
Financial results
This section of our MD&A discusses our performance, financial condition and outlook for the future.
39 2022 CONSOLIDATED FINANCIAL RESULTS
48 OUTLOOK FOR 2023
50 LIQUIDITY AND CAPITAL RESOURCES
57 2022 FINANCIAL RESULTS BY SEGMENT
57 ............... URANIUM
59 ............... FUEL SERVICES
60 FOURTH QUARTER FINANCIAL RESULTS
60 ............... CONSOLIDATED RESULTS
63 ............... URANIUM
64 ............... FUEL SERVICES
38 CAMECO CORPORATION
2022 consolidated financial results
In the second quarter of 2022, we along with Orano acquired Idemitsu Canada Resources Ltd.’s 7.875% participating interest
in the Cigar Lake Joint Venture. Our ownership stake in Cigar Lake now stands at 54.547%, 4.522 percentage points higher
than it was prior to the transaction. Effective May 19, 2022, we have reflected our share or production and financial results
based on this new ownership stake.
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 40)
$ per common share (adjusted and diluted)
Cash provided by operations
Net earnings
2022
1,868
233
89
0.22
0.22
135
0.33
305
2021
1,475
2
(103)
(0.26)
(0.26)
(98)
(0.25)
458
CHANGE FROM
2020
2021 TO 2022
1,800
106
(53)
(0.13)
(0.13)
(66)
(0.17)
57
27%
>100%
>100%
>100%
>100%
>100%
>100%
(33)%
The following table shows what contributed to the change in net earnings in 2022 compared to 2021 and 2020.
($ MILLIONS)
Net earnings (losses) - previous year
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)
2022
(103)
2021
(53)
2020
74
Uranium
Fuel services
Impact from sales volume changes
Higher realized prices ($US)
Foreign exchange impact on realized prices
Higher costs
change – uranium
Impact from sales volume changes
Higher realized prices ($Cdn)
Higher costs
change – fuel services
Other changes
Lower (higher) administration expenditures
Lower (higher) 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
Bargain purchase gain on CLJV ownership interest increase
Higher (lower) finance income
Change in income tax recovery or expense
Other
Net earnings (losses) - current year
(6)
328
44
(137)
229
(21)
33
(13)
(1)
(44)
(3)
(31)
(86)
74
26
-
(21)
-
23
30
3
(7)
89
(4)
5
(72)
(55)
(126)
1
23
(2)
22
17
3
32
(24)
(14)
32
24
(16)
-
-
(4)
15
(11)
(103)
(4)
25
14
(169)
(134)
(4)
21
(10)
7
(20)
3
(21)
5
33
(9)
(24)
37
(52)
-
(19)
47
20
(53)
MANAGEMENT’S DISCUSSION AND ANALYSIS 39
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 36).
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 46 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 our asset retirement obligation 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 16 of our annual
financial statements for more information. This amount has been excluded from our ANE measure.
The bargain purchase gain that was recognized when we acquired our pro-rata share of Idemitsu Canada Resources Ltd.’s
7.875% participating interest in the Cigar Lake Joint Venture has also been removed in calculating ANE since it is non-cash,
non-operating and outside of the normal course of our business. The gain was recorded in the statement of earnings as part of
“other income (expense)”.
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.
40 CAMECO CORPORATION
To facilitate a better understanding of these measures, the table below reconciles adjusted net earnings with our net earnings
for the years ended 2022, 2021 and 2020.
($ MILLIONS)
Net earnings (loss) attributable to equity holders
Adjustments
Adjustments on derivatives
Adjustments on other operating expense (income)
Adjustment to other income
Income taxes on adjustments
Adjusted net earnings (loss)
2022
89
76
26
(23)
(33)
135
2021
(103)
13
(8)
-
-
(98)
2020
(53)
(45)
24
-
8
(66)
The following table shows what contributed to the change in adjusted net earnings (non-IFRS measure, see above) in 2022
compared to the same period in 2021 and 2020.
($ MILLIONS)
Adjusted net earnings (losses) - previous year
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)
2022
(98)
2021
(66)
2020
41
Uranium
Fuel services
Impact from sales volume changes
Higher realized prices ($US)
Foreign exchange impact on realized prices
Higher costs
change – uranium
Impact from sales volume changes
Higher realized prices ($Cdn)
Higher costs
change – fuel services
Other changes
Lower (higher) administration expenditures
Lower (higher) 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
Higher (lower) finance income
Change in income tax recovery or expense
Other
Adjusted net earnings (losses) - current year
Average realized prices
Uranium1
$US/lb
$Cdn/lb
2022
44.73
57.85
Fuel services
1 Average realized foreign exchange rate ($US/$Cdn): 2022 – 1.29, 2021 – 1.26 and 2020 – 1.34.
$Cdn/kgU
32.92
(6)
328
44
(137)
229
(21)
33
(13)
(1)
(44)
(3)
3
(23)
74
26
-
(21)
-
30
(30)
(7)
135
2021
34.53
43.34
29.72
(4)
5
(72)
(55)
(126)
1
23
(2)
22
17
3
-
34
(14)
32
24
(16)
-
(4)
7
(11)
(98)
(4)
25
14
(169)
(134)
(4)
21
(10)
7
(20)
3
-
9
33
(9)
(24)
37
(52)
(19)
42
20
(66)
CHANGE FROM
2020
2021 TO 2022
34.39
46.13
27.89
30%
33%
11%
MANAGEMENT’S DISCUSSION AND ANALYSIS 41
Revenue
The following table shows what contributed to the change in revenue for 2022.
($ MILLIONS)
Revenue – 2021
Uranium
Higher sales volume
Higher realized prices ($Cdn)
Fuel services
Lower sales volume
Higher realized prices ($Cdn)
Other
Revenue – 2022
1,475
53
372
(72)
33
7
1,868
See 2022 Financial results by segment on page 57 for more detailed discussion.
THREE-YEAR TREND
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.
In 2022, revenue increased by 27% compared to 2021 due to an increase in the average realized price and sales volume in
the uranium segment. In our fuel services segment, revenue decreased by 10% as a result of a decrease in sales volume
partially offset by an increase in average realized price. See notes 18 and 29 in our annual financial statements for more
information.
SALES DELIVERY OUTLOOK FOR 2023
For 2023 we have committed sales volumes in our uranium segment of between 29 and 31 million pounds. In general, we are
active in the market, buying and selling uranium when it is beneficial for us and in support of our long-term contract portfolio.
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 2023 to be more heavily weighted to the first and fourth quarters 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
2018
2019
2020
2021
2022
2023 (est)
Source: Cameco reports and estimates
42 CAMECO CORPORATION
Corporate expenses
ADMINISTRATION
($ MILLIONS)
Direct administration1
Stock-based compensation1
Reversal (recovery) of fees related to CRA dispute
2022
143
25
4
2021
111
44
(27)
CHANGE
29%
(43)%
115%
Total administration
1 Direct administration and stock-based compensation are supplementary financial measures. They are components of administration expense as shown on the
128
172
34%
statement of earnings and calculated according to IFRS.
Direct administration costs in 2022 were $32 million higher than in 2021 largely due to costs related to digital initiatives.
Increased activities associated with the restart of operations at McArthur River and Key Lake, increased business travel and
work associated with other business activities also resulted in increased costs.
We recorded $25 million in stock-based compensation expenses in 2022, $19 million lower compared to 2021 due primarily to
a reduction in the expense related to the executive performance share units as a result of a change in assumptions for vesting
criteria. See note 25 to the financial statements.
In 2021, we recorded $27 million as a reduction to administration costs to reflect the amounts owing to us for the recovery of
costs as was awarded to us on the successful outcome in our transfer pricing dispute with Canada Revenue Agency (CRA). In
2022, we adjusted this amount by $4 million to reflect the actual recovery for costs. See Transfer pricing dispute on page 44
for more information.
Administration outlook for 2023
We expect direct administration costs to be between $160 million to $170 million.
EXPLORATION
Our 2022 exploration activities were focused primarily on Canada. Our spending increased from $8 million in 2021 to $11
million in 2022 reflects higher planned expenditures.
Exploration outlook for 2023
We expect exploration expenses to be about $18 million in 2023. The focus for 2023 will be on our core projects in
Saskatchewan.
FINANCE COSTS
Finance costs were $86 million, an increase from $77 million in 2021 due to higher costs related to the unwinding of the
discount on our reclamation provisions. See note 20 to the financial statements.
FINANCE INCOME
Finance income was $37 million compared to $7 million in 2021 mainly due to higher interest rates and higher balances for
cash and cash equivalents and short-term investments in 2022.
GAINS AND LOSSES ON DERIVATIVES
In 2022, we recorded $73 million in losses on our derivatives compared to $13 million in gains in 2021. The increased losses
reflect a weaker Canadian dollar compared to the US dollar in 2022 compared to 2021. See Foreign exchange on page 46 and
note 27 to the financial statements.
INCOME TAXES
We recorded an income tax recovery of $4 million in 2022 compared to a recovery of $1 million in 2021 as a result of an
income tax recovery in Canada that was offset by an expense in foreign jurisdictions. Equity accounted investees are included
in Canadian earnings net of tax paid in the jurisdiction in which they operate. Foreign earnings include losses in some
jurisdictions for which no future tax benefit has been recognized.
In 2022, we recorded earnings of $100 million in Canada compared to earnings of $59 million in 2021, while in foreign
jurisdictions, we recorded a loss of $15 million compared to a loss of $162 million in 2021.
MANAGEMENT’S DISCUSSION AND ANALYSIS 43
($ MILLIONS)
Net earnings (loss) before income taxes
Canada
Foreign
Total net earnings (loss) before income taxes
Income tax expense (recovery)
Canada
Foreign
Total income tax recovery
Effective tax rate
TRANSFER PRICING DISPUTE
Background
2022
100
(15)
85
(8)
4
(4)
(5)%
2021
59
(162)
(103)
(2)
1
(1)
1%
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 to 2016, CRA has advanced an alternate reassessing position, see Reassessments, remittance and next steps below for
more information.
In September 2018, the Tax Court of Canada (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 Federal Court of Appeal (Court of Appeal) upheld the Tax Court’s decision.
On February 18, 2021, the Supreme Court of Canada (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 Minister of National Revenue issued new reassessments for the 2003 through 2006 tax years in accordance with the
decision and in July 2021, refunded the tax paid for those years. Pursuant to a cost award from the courts, we are expecting a
payment of approximately $13 million for disbursements which is in addition to the $10 million we received from CRA in April
2021 as reimbursement for legal fees.
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 $778 million ($295 million
in cash and $483 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. We have requested the
same treatment with respect to the 2016 reassessment.
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 $778 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.
44 CAMECO CORPORATION
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. Subsequent to this, in 2021, we received a reassessment for the 2015 tax year
and in late 2022, we received a reassessment for the 2016 tax year, both 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 to 2016
filing positions. On October 12, 2022, we filed an appeal with the Tax Court for the years 2014 and 2015, and plan to file a
notice of objection for 2016.
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 through 2016.
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 2023
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. Since 2017, our global marketing organization has been mainly consolidated in
Canada in order to achieve efficiencies, resulting in more income earned in Canada. In addition, equity accounted investees
are included in Canadian earnings net of tax paid in the jurisdiction in which they operate. 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 differences between accounting earnings and income for tax purposes. In addition, the Organization for Economic Co-
operation and Development has proposed the introduction of rules that would impose a global minimum tax rate of 15%. The
European Union has unanimously agreed to implement these rules and impose them into each country’s national law by the
end of 2023, and we expect Canada to follow suit. If these tax laws are enacted or substantively enacted in any jurisdiction in
which we operate, we may be subject to a minimum rate of 15% in that jurisdiction.
MANAGEMENT’S DISCUSSION AND ANALYSIS 45
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 2023 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 40.
The table below provides a summary of our hedge portfolio at December 31, 2022. You can use this information to estimate
the expected gains or losses on derivatives for 2023 on an ANE basis. However, due to the uncertainty around timing of
closing of the proposed Westinghouse acquisition, we have not included the associated debt financing and cash outflows as
part of the net US exposure for 2023, however our current USD cash position (which includes the equity issuance proceeds) is
included. Additionally, if we add contracts to the portfolio that are designated for use in 2023 or if there are changes in the
US/Cdn exchange rates in the year, those expected gains or losses could change.
46 CAMECO CORPORATION
Hedge portfolio summary
DECEMBER 31, 2022
($ 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)
2023
330
1.29
60
AFTER
2023
710
1.31
10
TOTAL
1,040
1.30
70
1.32 to 1.36
1.20 to 1.24
1.30 to 1.34
390
720
1.31
1,110
1.30
(US/Cdn dollar)
1.29 to 1.30
Hedge ratio2,3
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.
3 Due to the uncertainty around timing of closing of the proposed Westinghouse acquisition, our hedge ratio is below our minimum as we have not included the
financing or closing costs as part of the net US exposure.
21%
13%
19%
At December 31, 2022:
• The value of the US dollar relative to the Canadian dollar was $1.00 (US) for $1.36 (Cdn), up from $1.00 (US) for $1.26
(Cdn) at December 31, 2021. The exchange rate averaged $1.00 (US) for $1.30 (Cdn) over the year.
• The mark-to-market position on all foreign exchange contracts was a $48 million loss compared to a $28 million gain at
December 31, 2021. 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, 2022, 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 27 to the financial statements.
MANAGEMENT’S DISCUSSION AND ANALYSIS 47
Outlook for 2023
Our outlook for 2023 is beginning to reflect the transition of our cost structure back to a tier-one run rate, as we plan our
production to satisfy the growing long-term commitments under our contract portfolio. With our plan to produce 18 million
pounds per year (100% basis) at Cigar Lake, 18 million pounds per year (100% basis) at McArthur River/Key Lake beginning
in 2024, and increase UF6 production at our Port Hope conversion facility, we expect to see continued improvement in our
financial performance.
From a cash perspective, we expect to generate strong cash flows. The amount of cash generated will be dependent on the
timing and volume of production and the timing and magnitude of our purchasing activity. Therefore, our cash balances may
fluctuate throughout the year.
As in prior years, we will incur care and maintenance costs for the ongoing curtailment of our tier-two assets, which are
expected to be between $50 million and $60 million.
2022 outlook compared to actual
Our actual results were largely in-line with the outlook provided in our third quarter MD&A. In 2022 we announced the restart of
McArthur River/Key Lake. Throughout 2022, the operations transitioned to production. Based on the restart schedule, we set a
production target for up to 1.4 million pounds (our share) for McArthur River/Key Lake. We achieved 0.8 million pounds (our
share) production at McArthur River/Key Lake as we worked through some normal commissioning issues at the mill. At Cigar
Lake, we achieved 9.6 million pounds production (our share), in line with expectations.
As a result of the lower production from McArthur River/Key Lake and deferral and uncertainty related to the timing of receipt
of our deliveries from JV Inkai, additional purchases were made.
Capital expenditures for 2022 were $143 million, lower than our outlook of $150 to $175 million, as a result of the deferral of
project work to 2023.
See 2022 Financial results by segment on page 57 for details.
2023 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
-
-
-
20.3 million lbs
13 to 14 million kgU
9 to 11 million lbs
-
29 to 31 million lbs
11.5 to 12.5 million kgU
$2,120 to 2,270 million
$1,730 to 1,820 million
$390-420 million
-
-
$58.90/lb
-
$46.00-47.00/lb1
$23.50-24.50/kgU2
Direct administration costs
$160-170 million
-
Exploration costs
Capital expenditures
-
$18 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 20.3 million pounds of production (our share) in our uranium segment. If we do not achieve 20.3
million pounds, the outlook for the uranium segment could vary.
48 CAMECO CORPORATION
• Purchases – are based on the volumes we currently have commitments to acquire under contract in 2023, 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 2023 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 supply chain or transportation issues, or other challenges.
• Our 2023 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 2023.
• Uranium revenue and average realized price are based on a uranium spot price of $47.75 (US) per pound (the UxC spot
price on December 26, 2022), a long-term price indicator of $51.00 (US) per pound (the UxC long-term indicator on
December 26, 2022) and an exchange rate of $1.00 (US) for $1.30 (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 $56.20 (Cdn) per pound and
includes care and maintenance costs of between $50 million and $60 million. We expect overall unit cost of sales could
vary if there are changes in production and purchase volumes or the mix between spot and long-term purchases, uranium
spot prices, and/or care and maintenance costs in 2023.
Our 2023 financial outlook is presented on the basis of equity accounting for our minority ownership interest in JV Inkai. Under
equity accounting, our share of the profits earned by JV Inkai on the sale of its production will be included in “income from
equity-accounted investees” on our consolidated statement of earnings. Our share of production will be purchased at a
discount to the spot price and included at this value in inventory. In addition, JV Inkai capital is not included in our outlook for
capital expenditures. Please see Inkai Planning for the future on pages 79 and 80 for more details.
The following table shows how changes in the exchange rate or uranium prices can impact our outlook. We currently are
holding excess USD, largely from the proceeds of the October 2022 share issuance, to partially finance the proposed
acquisition of Westinghouse, as such our adjusted net earnings will have a higher sensitivity to exchange rate movements. For
more details on the impact of exchange rates, also see Foreign exchange on page 46.
FOR 2023 ($ MILLIONS)
Uranium spot and long-term price1
Value of Canadian dollar vs US dollar
CHANGE
$5(US)/lb increase
$5(US)/lb decrease
One cent decrease in CAD
One cent increase in CAD
REVENUE
63
(77)
15
(15)
ANE
41
(51)
14
(14)
CASH FLOW
8
(21)
7
(7)
1 Assuming change both UxC spot price $47.75 (US) per pound on December 26, 2022 and the UxC long-term price indicator $51.00 (US) per pound on
IMPACT ON:
December 26, 2022.
Price sensitivity analysis: uranium segment
As discussed under the Long-term contracting section on page 26, 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, 2022, 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 finalized as
at December 31, 2022, it does not include the contracts that have been accepted but are still subject to contract finalization.
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, 2022 are 21 million pounds per year, with commitment levels in 2023 through 2025
higher than the average and in 2026 and 2027 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 finalized 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, 2022, using the
following assumptions:
• The uranium price remains fixed at a given spot level for each annual period shown
MANAGEMENT’S DISCUSSION AND ANALYSIS 49
• Deliveries based on commitments under finalized 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
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, 2022
(rounded to the nearest $1.00)
SPOT PRICES
($US/lb U3O8)
2023
2024
2025
2026
2027
$20
35
33
35
36
37
$40
41
40
42
42
43
$60
49
49
52
54
55
$80
53
54
58
62
65
$100
56
57
61
66
70
$120
58
58
63
70
73
$140
59
59
64
73
76
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 which has added to our
cash balance. And with the proceeds from the October share issuance, which are expected to help finance the proposed
acquisition of Westinghouse, we have significant cash balances.
As announced on October 11, 2022, we have entered into a strategic partnership with Brookfield Renewable and its
institutional partners to acquire Westinghouse. Permanent financing is expected to be a mix of capital sources (cash, debt and
equity), designed to preserve the company’s balance sheet and ratings strength while maintaining our liquidity. Closing is
anticipated in the second half of 2023. Please see Proposed acquisition of Westinghouse starting on page 89 for further
details.
Following the announcement, we undertook a $650 million (US) bought deal offering of common shares, with an underwriter
option to purchase additional shares. The offering closed on October 17, 2022 with gross proceeds to us of approximately
$747.6 million (US), including the exercise in full of the underwriters’ option to purchase additional common shares.
Concurrently with the execution of the acquisition agreement, we secured commitments for a $1 billion (US) bridge loan facility
and $600 million (US) in term loans. As of the closing of the bought deal offering, the bridge loan facility was reduced to $280
million (US) by the net proceeds received from the offering. The facilities will remain undrawn until closing of the acquisition.
The bridge facility, if funded, will mature 364 days after the acquisition closing date, and the term loans consisting of two
tranches $300 million (US) each, are expected to mature two years and three years after the acquisition closing.
At the end of 2022, we had cash and cash equivalents and short-term investments of $2.3 billion, while our total debt
amounted to $997 million. Our cash balances are expected to be largely utilized for the close of the proposed acquisition of
Westinghouse. Depending on the timing of the close, expected in the second half of 2023, cash balances could be lower or
higher than expected.
50 CAMECO CORPORATION
We have large, creditworthy customers that continue to need our nuclear fuel products and services even during weak
economic conditions, and we expect the contract portfolio we have built to continue to provide a solid revenue stream. In our
uranium segment, from 2023 through 2027, we have commitments to deliver an average of 21 million pounds per year, with
commitment levels in 2023 through 2025 higher than the average and in 2026 and 2027 lower than the average.
We expect increased 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 operational readiness costs
directly to cost of sales. However, cash flow from operations for 2023 will be dependent on the timing and volume of
production and the timing and magnitude of our purchasing activity.
We expect our cash balances and operating cash flows to meet our capital requirements during 2023. Depending on the
timing of the close of the Westinghouse transaction, and the final financing mix of capital sources, cash balances could be
lower or higher than expected.
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 $778 million in cash and letters of credit we have been required to pay or otherwise secure. As such, we
have filed notice of appeal to the Tax Court however, timing of any further payments is uncertain. See page 44 for more
information.
Financial condition
Cash position ($ 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, 2022, Cameco was negative net debt due to our large cash position.
Credit ratings
2022
2,282
305
-24%
-28%
2021
1332
458
-136%
-7%
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, 2023:
SECURITY
Commercial paper
Senior unsecured debentures
DBRS
R-2 (middle)
BBB
S&P
A-3
BBB-
Rating trend / rating outlook
1 On May 28, 2020, DBRS changed Cameco’s rating trend to stable. On May 26, 2021 and May 27, 2022, DBRS confirmed the rating and outlook. Currently our
Stable1
Stable2
rating is under review following the announcement of the proposed acquisition of Westinghouse
2 On February 16, 2022, S&P revised Cameco’s rating outlook to stable and affirmed the rating.
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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 51
Liquidity
($ MILLIONS)
Cash and cash equivalents and short-term investments at beginning of year
Cash from operations
Investment activities
Additions to property, plant and equipment and acquisitions
Other investing activities
Financing activities
Interest paid
Issue of shares
Dividends
Other financing activities
Exchange rate on changes on foreign currency cash balances
Cash and cash equivalents and short-term investments at end of year
CASH FROM OPERATIONS
2022
1,332
305
(245)
8
(39)
963
(52)
(3)
13
2,282
2021
943
458
(99)
79
(39)
27
(32)
(3)
(2)
1,332
Cash from operations was lower than in 2021 due largely to an increase in working capital requirements which was the result
of increased purchasing activity. Purchases in 2022 were 18.3 million pounds compared to 11.1 million pounds in 2021. Not
including working capital requirements, our operating cash flows in the year were up $253 million. See note 24 to the financial
statements.
INVESTING ACTIVITIES
Cash used in investing includes acquisitions and capital spending.
Capital spending
We classify capital spending as sustaining, capacity replacement or growth. As a mining company, sustaining capital is the
money we spend to keep our facilities running in their present state, which would follow a gradually decreasing production
curve, while capacity replacement capital is spent to maintain current production levels at those operations. Growth capital is
money we invest to generate incremental production, and for business development. We have a capital allocation process to
approve our capital spend. See Capital Allocation beginning on page 30 for more information.
2022 ACTUAL
2023 PLAN
62
39
2
103
40
-
40
-
-
-
143
55-60
40-45
5-10
100-115
40-50
-
40-50
0-5
5-10
5-15
150-175
CAMECO’S SHARE ($ MILLIONS)
Sustaining capital
Uranium
Fuel services
Other
Total sustaining capital
Capacity replacement capital
Uranium
Fuel services
Total capacity replacement capital
Growth capital
Uranium
Fuel services
Total growth capital
Total sustaining, capital and growth
52 CAMECO CORPORATION
Outlook for investing activities
CAMECO’S SHARE ($ MILLIONS)
Total uranium & fuel services
Sustaining capital
Capacity replacement capital
Growth capital
2023 PLAN
2024 PLAN
2025 PLAN
150-175
105-115
40-50
5-10
150-200
120-140
25-45
5-15
100-150
70-90
25-45
5-15
Our 2023, 2024 and 2025 capital spending estimates assume that in 2024, we begin producing 18 million pounds (100%
basis) per year at McArthur River/Key Lake, continue producing 18 million pounds (100% basis) per year at Cigar Lake, and
increase annual production at our UF6 conversion facility to 12,000 tonnes per year.
Our estimate for capital spending in 2023 has been increased to between $150 million and $175 million (previously between
$100 million and $150 million) due to the capital required to meet production targets and the rescheduling of some
expenditures planned in 2022 to 2023.
Capital expenditures for JV Inkai are expected to be covered by JV Inkai cash flows in 2023 and are included in our overall
equity investment.
Major capital expenditures in 2023 include:
• Fuel services – capital required to increase production at our UF6 conversion facility and continued work on our Vision in
Motion project
• Cigar Lake – underground development and necessary ground freezing infrastructure to meet production targets
• McArthur River/Key Lake – capital required to produce 18 million pounds per year (100% basis) starting in 2024
• Our investment in digital and automation technologies
This information regarding currently expected capital expenditures for future periods is forward-looking information and is
based upon the assumptions and subject to the material risks discussed on pages 4 to 6. Our actual capital expenditures for
future periods may be significantly different.
FINANCING ACTIVITIES
Cash from financing includes borrowing and repaying debt, and other financial transactions including paying dividends and
providing financial assurance.
Long-term contractual obligations
DECEMBER 31 ($ MILLIONS)
Long-term debt
Interest on long-term debt
Provision for reclamation
Provision for waste disposal
Other liabilities
Capital commitments
Total
2023
-
38
47
2
29
57
173
2024 AND
2026 AND
2028 AND
2025
500
44
69
4
36
-
653
2027
400
34
95
3
6
-
538
BEYOND
100
76
1,145
-
64
-
1,385
TOTAL
1,000
192
1,356
9
135
57
2,749
We have contractual capital commitments of approximately $57 million at December 31, 2022. 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, 2026. 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, 2022, there were no amounts outstanding under this facility.
MANAGEMENT’S DISCUSSION AND ANALYSIS 53
• At December 31, 2022, 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
We have secured $600 million (US) in term loan facilities and $280 million (US) under a bridge loan facility to help finance the
proposed acquisition of Westinghouse. The debt facilities will remain undrawn until closing of the acquisition. The bridge
facility, if funded, will mature 364 days after the acquisition closing date, and the term loans consisting of two tranches of $300
million (US) each, are expected to mature two years and three years after the acquisition closes. Please see Proposed
acquisition of Westinghouse on page 89 for more information. These facilities have not been included in the long-term
contractual obligation table due to the uncertainty around timing of the close of the acquisition and how much will be funded
under these facilities when it closes.
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, $100 million in letters of credit, cash and cash equivalents and
short-term investments.
Not complying with any of these covenants could result in accelerated payment and termination of our revolving credit facility.
At December 31, 2022, we complied with all covenants, and we expect to continue to comply in 2023.
OFF-BALANCE SHEET ARRANGEMENTS
We had three kinds of off-balance sheet arrangements at the end of 2022:
• purchase commitments
• financial assurances
• other arrangements
Purchase commitments
We make purchases under long-term contracts where it is beneficial for us to do so and to support our long-term contract
portfolio. The following table is based on our purchase commitments in our uranium and fuel services segments at December
31, 20222 but does not include purchases of our share of Inkai production. These commitments include a mix of fixed-price
and market-related contracts. Actual payments will be different as a result of changes to our purchase commitments and, in
the case of contracts with market-related pricing, the market prices in effect at the time of delivery. We will update this table as
required in our MD&A to reflect material changes to our purchase commitments and changes in the prices used to estimate
our commitments under market-related contracts.
DECEMBER 31, 2022 ($ MILLIONS)
2023
2025
2027
BEYOND
TOTAL
2024 AND
2026 AND
2028 AND
Purchase commitments1,2
501
1 Denominated in US dollars and Japanese yen, converted from US dollars to Canadian dollars at the rate of 1.30 and from Japanese yen to Canadian dollars at
154
232
98
17
the rate of $0.01.
2 These amounts have been adjusted for any additional purchase commitments that we have entered into since December 31, 2022 but does not include
deliveries taken under contract since December 31, 2022.
We have commitments of $501 million (Cdn) for the following:
• approximately 9.2 million pounds of U3O8 equivalent from 2023 to 2028
• approximately 0.4 million kgU as UF6 in conversion services from 2023 to 2024
54 CAMECO CORPORATION
• about 0.6 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
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.
The PDP and PDCE for the Blind River refinery were revised in 2020. The CNSC approved the PDCE in February 2022 and
the financial assurance was updated in March 2022. The Cameco Fuel Manufacturing PDP and PDCE were revised in 2021,
and the revised PDCE was approved by the Commission in February 2022 and the financial assurance was updated in March
2022. The PDP and PDCE for the Port Hope conversion facility were revised in 2022 and submitted to CNSC staff in
September 2022 and are currently under review by CNSC staff. Once accepted by staff, the PDCE will be considered by the
Commission, after which the financial assurance will be updated.
For Smith Ranch-Highland, the 2022 surety was approved and the credit instruments are being reviewed by the State of
Wyoming. For Crow Butte, the 2022 annual update was submitted to the federal Nuclear Regulatory Commission and
Nebraska Department of Environmental Quality in September 2022. This most recent surety has been approved by the state
and is still waiting for approval from the NRC.
At the end of 2022, our estimate of total decommissioning and reclamation costs was $1.36 billion. This is the undiscounted
value of the obligation and is based on our current operations. We had accounting provisions of $1.06 billion at the end of
2022 (the present value of the $1.36 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 had a total of about $1.04 billion in financial assurances supporting our reclamation liabilities at the end of 2022. All of our
North American operations have financial assurances in place in connection with our preliminary plans for decommissioning of
the sites.
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, 2022 our financial assurances totaled $1.6 billion, the same as at December 31, 2021.
Other arrangements
We have arranged for standby product loan facilities with various counterparties. The arrangements allow us to borrow up to
2.4 million kgU of UF6 conversion services and 2.8 million pounds of U3O8 over the period 2020 to 2026 with repayment in kind
up to December 31, 2026. Under the loan facilities, standby fees of up to 1% are payable based on the market value of the
facilities and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 2.0%. At December
31, 2022, we have 1.0 million kgU of UF6 conversion services and 630,000 pounds of U3O8 drawn on the loans.
MANAGEMENT’S DISCUSSION AND ANALYSIS 55
BALANCE SHEET
DECEMBER 31,
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
Inventory
Total assets
Total non-current liabilities
Dividends per common share
2022
665
8,633
2,236
0.12
2021
410
7,518
2,258
0.08
2020
680
7,581
2,318
0.08
CHANGE
2021 TO 2022
62%
15%
(1)%
50%
Total product inventories increased by 62% to $665 million this year as production and purchases were higher than sales
during the year. At December 31, 2022, our average cost for uranium was $43.45 per pound, up from $38.30 per pound at
December 31, 2021. As of December 31, 2022, we held an inventory of 12 million pounds of U3O8 equivalent (excluding
broken ore).
At the end of 2022, our total assets amounted to $8.6 billion, an increase of 15% compared to 2021, due mainly to an increase
in investment balances resulting from the October 2022 issuance of common shares in preparation for the closing of the
Westinghouse transaction as well as higher inventories. In 2021, the total asset balance decreased by $0.1 billion compared to
2020, due mainly to lower inventories which was largely offset by an increase in cash and investment balances.
56 CAMECO CORPORATION
2022 financial results by segment
Uranium
HIGHLIGHTS
Production volume (million lbs)
Sales volume (million lbs)
Average spot price
Average long-term price
Average realized price
Average unit cost of sales (including D&A)
Revenue ($ millions)
Gross profit (loss) ($ millions)
Gross profit (loss) (%)
($US/lb)
($US/lb)
($US/lb)
($Cdn/lb)
($Cdn/lb)
2022
10.4
25.6
49.81
49.75
44.73
57.85
53.13
1,480
121
8
2021
6.1
24.3
35.28
36.81
34.53
43.34
47.80
1,055
(108)
(10)
CHANGE
70%
5%
41%
35%
30%
33%
11%
40%
>100%
>100%
Production volumes in 2022 increased by 70% compared to 2021. See Uranium – production overview on page 69 for more
information.
Uranium revenues this year were up 40% compared to 2021 due to an increase in sales volumes of 5% and an increase of
33% in the Canadian dollar average realized price due to an increase in the spot price. While the spot price for uranium
averaged $49.81 (US) per pound in 2022, an increase of 41% compared to the 2021 average of $35.28 (US) per pound, the
US dollar average realized price only increased by 30% due to the impact of fixed price contracts on the portfolio.
Total cost of sales (including D&A) increased by 17% ($1.36 billion compared to $1.16 billion in 2021) due to an increase in
sales volume of 5% and an 11% increase in unit cost of sales. Unit cost of sales is higher than in the same period in 2021 due
to the higher cost of purchased material and the higher operational readiness costs at McArthur River/Key Lake operations.
This was offset by the impact of care and maintenance costs at Cigar Lake in 2021 due to the temporary suspension of
operations due to COVID-19.
The net effect was a $229 million increase in gross profit for the year.
The following table shows the costs of produced and purchased uranium incurred in the reporting periods (non-IFRS
measures, see below). These costs do not include care and maintenance costs, operational readiness costs, selling costs
such as royalties, transportation and commissions, nor do they reflect the impact of opening inventories on our reported cost of
sales.
($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
2022
2021
CHANGE
19.24
15.72
34.96
10.4
51.36
18.3
16.00
17.17
33.17
6.1
42.30
11.1
20%
(8)%
5%
70%
21%
65%
Produced and purchased costs
16%
Quantities produced and purchased (million lbs)
67%
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 2022 we purchased 3.3 million pounds at a purchase price per pound of $62.78 ($47.33 (US)) (2021 – 5.2
million pounds at a purchase price per pound of $45.31 ($36.03 (US))).
45.42
28.7
39.06
17.2
MANAGEMENT’S DISCUSSION AND ANALYSIS 57
The average cash cost of production was 20% higher compared to 2021. Cash cost was higher due to inflationary pressures,
labour shortages and supply chain challenges. In addition, with the restart of McArthur River/Key Lake operations the cash
cost of production will reflect a combined cost of all our operating uranium assets going forward.
In 2023, with McArthur River/Key Lake ramping up production, and the impact of inflationary pressures, the availability of
personnel with the necessary skills and experience, and supply chain challenges on the availability of materials and reagents,
our average annual unit cash cost of production is expected to be higher than the average unit life of mine operating costs
reflected in our most recent annual information form: approximately $16 per pound at McArthur River/Key Lake; approximately
$18 per pound at Cigar Lake.
We also expect the Inkai unit cash cost of production in 2023 to be higher than the average unit life of mine operating costs
reflected in our most recent annual information form (between $8 and $9 per pound) due to the current supply chain
challenges and inflationary pressures experienced in Kazakhstan. The benefit of the estimated life-of-mine operating cost for
JV Inkai’s production is expected to be reflected in the line item on our statement of earnings called, “share of earnings from
equity-accounted investee”. The current geopolitical and economic uncertainty could continue to impact JV Inkai’s operating
costs.
Our purchases in 2022, totaled about $940 million, representing an average annual cost of $51.36 per pound, about $16.00
per pound higher than our total unit production cost for the year. Although purchased pounds are transacted in US dollars, we
account for the purchases in Canadian dollars. The average cost of purchased material in Canadian dollar terms increased by
21% this year compared to 2021. The average cash cost of purchased material was $51.36 (Cdn), or $39.45 (US) per pound,
compared to $42.30 (Cdn), or $33.73 (US) per pound in the same period in 2021.
Cash cost per pound, non-cash cost per pound and total cost per pound for produced and purchased uranium presented in the
above table are non-IFRS measures. These measures do not have a standardized meaning or a consistent basis of
calculation under IFRS. We use these measures in our assessment of the performance of our uranium business. We believe
that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate
our performance and ability to generate cash flow.
These measures are non-standard supplemental information and should not be considered in isolation or as a substitute for
measures of performance prepared according to accounting standards. These measures are not necessarily indicative of
operating profit or cash flow from operations as determined under IFRS. Other companies may calculate these measures
differently, so you may not be able to make a direct comparison to similar measures presented by other companies.
To facilitate a better understanding of these measures, the following table presents a reconciliation of these measures to our
unit cost of sales for the years ended 2022 and 2021 as reported in our financial statements.
58 CAMECO CORPORATION
CASH AND TOTAL COST PER POUND RECONCILIATION
($ MILLIONS)
Cost of product sold
Add / (subtract)
Royalties
Other selling costs
Care and maintenance and operational readiness costs
Change in inventories
Cash operating costs (a)
Add / (subtract)
Depreciation and amortization
Care and maintenance and operational readiness 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
2022
1,223.6
(23.4)
(5.9)
(178.5)
124.2
1,140.0
135.8
(39.9)
67.6
1,303.5
28.7
39.72
45.42
2021
1,028.8
(15.2)
(4.6)
(156.7)
(285.2)
567.1
134.6
(52.9)
23.0
671.8
17.2
32.97
39.06
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 $26.268/kg U3O8 ($11.91/lb) and a 15% royalty is
charged on profit in excess of $26.268/kg U3O8. Profit is determined as revenue less certain operating, exploration,
reclamation and capital costs. Both exploration and capital costs are deductible at the discretion of the producer.
As a resource corporation in Saskatchewan, we also pay a corporate resource surcharge of 3% of the value of resource sales.
Fuel services
(includes results for UF6, UO2, UO3 and fuel fabrication)
HIGHLIGHTS
Production volume (million kgU)
Sales volume (million kgU)
Average realized price
Average unit cost of sales (including D&A)
Revenue ($ millions)
Gross profit ($ millions)
Gross profit (%)
($Cdn/kgU)
($Cdn/kgU)
2022
13.0
11.1
32.92
22.39
365
117
32
2021
12.1
13.6
29.72
21.02
404
118
29
CHANGE
7%
(18)%
11%
7%
(10)%
(1)%
10%
Total revenue decreased by 10% from 2021 due to an 18% decrease in sales volume partially offset by an 11% increase in the
realized price. The increase in realized price was mainly the result of increased prices due to market conditions.
Total cost of products and services sold (including D&A) decreased 13% ($248 million compared to $286 million in 2021), due
to the 18% decrease in sales volume partially offset by a 7% increase in average unit cost of sales compared to 2021 due to
higher input costs.
The net effect was a $1 million decrease in gross profit.
MANAGEMENT’S DISCUSSION AND ANALYSIS 59
Fourth quarter financial results
Consolidated results
HIGHLIGHTS
($ 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 (non-IFRS, see page 40)
$ per common share (adjusted and diluted)
Cash provided by operations
NET EARNINGS
THREE MONTHS ENDED
DECEMBER 31
2022
524
65
(15)
(0.04)
(0.04)
36
0.09
77
2021
465
56
11
0.03
0.03
23
0.06
59
CHANGE
13%
16%
>100%
>100%
>100%
57%
50%
31%
The following table shows what contributed to the change in net earnings and adjusted net earnings (non-IFRS measure, see
page 40) in the fourth quarter of 2022 compared to the same period in 2021.
($ MILLIONS)
IFRS
Adjusted
Net earnings - 2021
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)
11
23
Uranium
Fuel services
Impact from sales volume changes
Higher realized prices ($US)
Foreign exchange impact on realized prices
Higher costs
change – uranium
Impact from sales volume changes
Higher realized prices ($Cdn)
Lower costs
change – fuel services
Other changes
Lower administration 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
Higher finance income
Change in income tax recovery or expense
Other
Net earnings (losses) - 2022
ADJUSTED NET EARNINGS
1
29
25
(41)
14
(10)
4
1
(5)
8
(78)
12
6
(19)
21
13
2
(15)
1
29
25
(41)
14
(10)
4
1
(5)
8
-
(12)
6
(19)
21
(2)
2
36
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 40 for more information. The following table reconciles adjusted net earnings with our net earnings.
60 CAMECO CORPORATION
($ 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
ADMINISTRATION
($ MILLIONS)
Direct administration
Stock-based compensation
Total administration
THREE MONTHS ENDED
DECEMBER 31
2022
(15)
(19)
88
(18)
36
2021
11
5
10
(3)
23
THREE MONTHS ENDED
DECEMBER 31
2022
37
(8)
29
2021
28
9
37
CHANGE
32%
(189)%
(22)%
Direct administration costs were $37 million in the quarter, $9 million higher than the same period last year. Stock-based
compensation expenses were $17 million lower from the fourth quarter of 2021 because of a large decrease in share price in
the current quarter compared to a very small increase in the same period last year. In addition, the impact of the share price
changes was offset by a change in assumptions for vesting criteria related to the executive performance share units. In the
current quarter this was a recovery while in 2021 it was an expense.
Quarterly trends
HIGHLIGHTS
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
Revenue
Net earnings (loss) attributable to equity holders
$ per common share (basic)
$ per common share (diluted)
Q4
524
(15)
Q3
389
(20)
(0.04)
(0.05)
(0.04)
(0.05)
Adjusted net earnings (loss) (non-IFRS, see page 40)
36
10
Q2
558
84
0.21
0.21
72
2022
Q1
398
40
0.10
0.10
17
Q3
361
(72)
Q2
359
(37)
2021
Q1
290
(5)
(0.18)
(0.09)
(0.01)
(0.18)
(0.09)
(0.01)
(54)
(38)
(29)
Q4
465
11
0.03
0.03
23
$ per common share (adjusted and diluted)
Cash provided by (used in) operations (after working
capital changes)
0.09
0.03
0.18
0.04
0.06
(0.14)
(0.10)
(0.07)
77
(47)
102
172
59
203
152
45
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 40 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 61
The table that follows presents the differences between net earnings and adjusted net earnings for the previous seven
quarters.
HIGHLIGHTS
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
Net earnings (loss) attributable to equity holders
Adjustments
Adjustments on derivatives
Adjustments on other operating expense (income)
Adjustment to other income
Income taxes on adjustments
Adjusted net earnings (losses) (non-IFRS, see
page 40)
Q4
(15)
(19)
88
-
(18)
Q3
(20)
75
(24)
-
(21)
Q2
84
31
(19)
(23)
(1)
2022
Q1
40
(11)
(19)
-
7
36
10
72
17
Q4
11
5
10
-
(3)
23
Q3
(72)
Q2
(37)
26
(2)
-
(6)
(9)
6
-
2
2021
Q1
(5)
(9)
(22)
-
7
(54)
(38)
(29)
62 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
2022
3.7
6.9
49.94
51.67
43.05
57.87
54.37
397
24
6
2021
2.8
6.5
44.33
42.92
39.65
49.94
48.35
323
10
3
CHANGE
32%
6%
13%
20%
9%
16%
12%
23%
>100%
100%
Production volumes this quarter increased by 32% compared to the fourth quarter of 2021. See Uranium – production
overview on page 69 for more information.
Uranium revenues were up 23% due to a 6% increase in sales volume and a 16% increase in the Canadian dollar average
realized price which was a result of an increase in the average spot price for uranium. While the average US dollar spot price
for uranium increased by 13% compared to the same period in 2021, the US dollar average realized price only increased by
9% as a result of lower prices on fixed-price contracts. In addition, the Canadian dollar was weaker compared to the same
period last year, $1.00 (US) for $1.34 (Cdn) compared to $1.00 (US) for $1.26 (Cdn) in the fourth quarter of 2021.
Total cost of sales (including D&A) increased by 19% ($373 million compared to $313 million in 2021). This was primarily the
result of the 6% increase in sales volume as well as the increase of 12% in the average unit cost of sales which was due to the
higher cost of purchased material.
The net effect was a $14 million increase in gross profit for the quarter.
The following table shows the costs of produced and purchased uranium incurred in the reporting periods. These costs do not
include care and maintenance costs, operational readiness costs, selling costs such as royalties, transportation and
commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.
($/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
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 2.6 million pounds at a purchase price per pound of $61.27
($45.60 (US)) (Q4 2021 – 2.2 million pounds at a purchase price per pound of $52.69 ($41.79 (US))).
THREE MONTHS ENDED
DECEMBER 31
2022
2021
CHANGE
19.50
13.76
33.26
3.7
57.02
5.8
13.67
17.10
30.77
2.8
52.73
3.3
43%
(20)%
8%
32%
8%
76%
47.77
9.5
42.65
6.1
12%
56%
MANAGEMENT’S DISCUSSION AND ANALYSIS 63
The average cash cost of production for the fourth quarter was 47% higher compared to the same period in the prior year.
Cash cost was higher due to the effect of supply chain challenges and inflationary pressures, as well as the decreased
production rate for Cigar Lake compared to 2021. Effective May 19, our ownership stake and share of production from Cigar
Lake stands at 54.547%, compared to 50.025% in 2021. In addition, the unit production costs for the fourth quarter of 2022
include production costs from McArthur River/Key Lake operations as they ramp up production.
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 $57.02 (Cdn) per pound, or $42.18 (US) per pound in US dollar
terms, compared to $52.73 (Cdn) per pound, or $41.87 (US) per pound in the fourth quarter of 2021.
Cash cost per pound, non-cash cost per pound and total cost per pound for produced and purchased uranium presented in the
above table are non-IFRS measures. See page 57 for more information.
To facilitate a better understanding of these measures, the following table presents a reconciliation of these measures to our
unit cost of sales for the fourth quarters of 2022 and 2021.
CASH AND TOTAL COST PER POUND RECONCILIATION
($ MILLIONS)
Cost of product sold
Add / (subtract)
Royalties
Other selling costs
Care and maintenance and operational readiness costs
Change in inventories
Cash operating costs (a)
Depreciation and amortization
Care and maintenance and operational readiness 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
2022
355.1
(2.1)
(2.0)
(35.5)
87.4
402.9
18.2
(7.5)
40.2
453.8
9.5
42.41
47.77
2021
278.9
(5.0)
(1.6)
(36.8)
(23.2)
212.3
34.2
(10.1)
23.8
260.2
6.1
34.80
42.65
($Cdn/kgU)
($Cdn/kgU)
THREE MONTHS ENDED
DECEMBER 31
2022
3.7
3.8
30.11
19.33
115
41
36
2021
3.1
4.9
28.80
19.45
140
46
33
CHANGE
19%
(22)%
5%
(1)%
(18)%
(11)%
9%
Total revenue decreased by 18% due to a 22% decrease in sales volumes which was partially offset by a 5% increase in
average realized price. The increase in average realized price was mainly the result of the mix of products sold, as well as
contracts that were entered into in an improved price environment.
64 CAMECO CORPORATION
Total cost of sales (including D&A) decreased by 22% to $74 million compared to the fourth quarter of 2021 due to the 22%
decrease in sales volumes and a decrease of 1% in the average unit cost of sales.
The net effect was a $5 million decrease in gross profit.
MANAGEMENT’S DISCUSSION AND ANALYSIS 65
Operations, projects and other fuel cycle
investments
This section of our MD&A is an overview of the mining, milling and processing facilities we operate or have an interest in, our
curtailed operations and our advanced uranium projects, what we accomplished this year, our plans for the future and how we
manage risk. It also includes an overview of our other investments in the nuclear fuel cycle, and our approach to corporate
development.
67 MANAGING THE RISKS
69 URANIUM – PRODUCTION OVERVIEW
69 ............... PRODUCTION OUTLOOK
70 URANIUM – TIER-ONE OPERATIONS
70 ............... MCARTHUR RIVER MINE / KEY LAKE MILL
74 ............... CIGAR LAKE
78 ............... INKAI
81 URANIUM – TIER-TWO OPERATIONS
81 ............... RABBIT LAKE
82 ............... US ISR
83 URANIUM – ADVANCED PROJECTS
83 ............... MILLENNIUM
83 ............... YEELIRRIE
83 ............... KINTYRE
85 URANIUM – EXPLORATION
86 FUEL SERVICES
86 ............... BLIND RIVER REFINERY
87 ............... PORT HOPE CONVERSION SERVICES
87 ............... CAMECO FUEL MANUFACTURING INC. (CFM)
89 OTHER NUCLEAR FUEL CYCLE INVESTMENTS
89 ............... GLOBAL LASER ENRICHMENT (GLE)
89 ............... PROPOSED ACQUISITION OF WESTINGHOUSE
93 CORPORATE DEVELOPMENT
66 CAMECO CORPORATION
Managing the risks
The nature of our business means we face many kinds of potential risks and hazards – some that relate to the nuclear energy
industry in general, safety, health and environmental risks associated with any mining and chemical processing company and
others that apply to specific properties, operations, planned operations or investments. Our uranium and fuel services
segments also face unique risks associated with radiation. These risks could have a significant impact on our business,
earnings, cash flows, financial condition, results of operations or prospects, which may result in a significant decrease in the
market price of our common shares.
Risks and hazards generally applicable to the mining, milling and processing facilities we operate, and advanced projects
include:
• catastrophic accidents resulting in large-scale releases
of hazardous chemicals, or a tailings facility failure,
which could pose a significant risk to the environment,
and to employee and public safety
increased regulatory burdens resulting from the COVID-
19 pandemic or other causes
• increased workforce health and safety risks or
• industrial safety accidents
• transportation incidents
• labour shortages, disputes or strikes
• cost increases for labour, contracted or purchased
materials, supplies and services
• fires
• blockades or other acts of social or political activism
• uncertain impact of changing regulations or policy
leading to higher annual operating costs, including
GHG pricing and regulations (e.g., carbon pricing, the
Canadian Clean Fuel Standard)
• shortages of, or interruptions in the supply of, required
• natural phenomena, such as forest fires, floods and
earthquakes as well as shifts in temperature,
precipitation, and the impact of more frequent severe
weather conditions on our operations as a result of
climate change
• outbreak of illness (such as a pandemic like COVID-19)
• unusual, unexpected or adverse mining or geological
conditions
• underground water inflows at our mining operations
• ground movement or cave-ins at our mining operations
materials, supplies and equipment
• transportation and delivery disruptions
• interruptions in the supply of electricity, water, and other
utilities or infrastructure
• inability of our innovation initiatives to achieve the
expected cost saving and operational flexibility
objectives
• equipment failures
• cyberattacks
• joint venture disputes or litigation
• non-compliance with legal requirements, including
exceedances of applicable air or water limits
• subsurface contamination from current or legacy
operations
• inability to obtain and renew the licences and other
approvals needed to restart, operate, and to increase
production at our mines, mills, and processing facilities,
or to develop new mines
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. For more information about our risk management program see the Risk
and Risk Management section in this MD&A, as well as our most recent ESG Report at cameco.com.
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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 67
In addition to considering the other information in this MD&A and the risks noted above, you should carefully consider the
material risks discussed starting on page 4, and the specific risks discussed under the update for each operation, advanced
project, and other nuclear fuel cycle investment in this section. These risks, however, are not a complete list of the potential
risks our operations, advanced projects, or other investments 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.
68 CAMECO CORPORATION
Uranium – production overview
Production in our uranium segment in the fourth quarter was 3.7 million pounds, 32% higher compared to the same period in
2021, while production for the year was 10.4 million pounds, 70% higher than in 2021. Cigar Lake production was higher in
2022 as production was impacted in 2021 by the proactive four-month suspension related to the COVID-19 pandemic. The
McArthur River/Key Lake operations transitioned to production in 2022, producing 1.1 million pounds (100% basis) during the
year. The Rabbit Lake operation 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 70
and Uranium – Tier-two operations beginning on page 81 for more information.
Uranium production
CAMECO SHARE
(MILLION LBS)
Cigar Lake
THREE MONTHS ENDED
DECEMBER 31
YEAR ENDED
DECEMBER 31
2022
2.9
2021
2.8
2022
9.6
2021
6.1
2023 PLAN
9.8
2022 PLAN1
9.5
up to 1.4
up to 10.9
McArthur River/Key Lake
Total
1 Cigar Lake was successful in catching up on development work that had been deferred from 2021, and the production target was updated to 9.5 million pounds
(our share) in our 2022 second quarter MD&A. The increase also reflected our increase in ownership at Cigar Lake. A production target of up to 1.4 million
pounds (our share) from McArthur River/Key Lake was provided in our 2022 second quarter MD&A due to commissioning delays at the mill.
0.8
10.4
0.8
3.7
6.1
2.8
10.5
20.3
-
-
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.
In 2023, we are planning production of 20.3 million pounds (our share).
Due to equity accounting, our share of production from Inkai is shown as a purchase. We expect total production from Inkai to
be 8.3 million pounds (100% basis) in 2023. An adjustment to the production purchase entitlement allows us to purchase 4.2
million pounds in 2023. In addition, we expect to purchase the remaining share of our 2022 production entitlement, the majority
of which is currently in transit.
MANAGEMENT’S DISCUSSION AND ANALYSIS 69
Uranium – Tier-one operations
McArthur River mine / Key Lake mill
2022 Production (our share)
0.8M lbs
2023 Production Outlook (our share)
10.5M lbs
Estimated Reserves (our share)
275.0M lbs
Estimated Mine Life
2044
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.
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
Blasthole stoping and raiseboring
Uranium concentrate
ISO 14001 certified
275.0 million pounds (proven and probable), average grade U3O8: 6.70%
4.7 million pounds (measured and indicated), average grade U3O8: 2.23%
1.7 million pounds (inferred), average grade U3O8: 2.89%
Mine and mill: 25.0 million pounds per year
Through October, 2023
Total packaged production:
2000 to 2022 326.5 million pounds (McArthur River/Key Lake) (100% basis)
1983 to 2002 209.8 million pounds (Key Lake) (100% basis)
2022 production
0.8 million pounds (1.1 million pounds on 100% basis)
2023 production outlook
10.5 million pounds (15.0 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)
70 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 4.7 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 116.6 million pounds of mineral
reserves secured behind freeze walls and it will be the main source of production for the next several years. 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. Work is expected to resume in zone 1 in 2024.
Once complete, an additional 48.0 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
All the mineralized areas discovered to date at McArthur River are in, or partially in, water-bearing ground with significant
pressure at mining depths.
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. Before we begin mining an area, we freeze the ground
around it by circulating chilled brine through freezeholes to form an impermeable freeze barrier.
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.
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 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 71
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.
2022 UPDATE
Production
The McArthur River and Key Lake operation was in a state of safe care and maintenance from 2018 through 2021 due to weak
market conditions. Through most of 2022, we undertook the necessary operational readiness activities prior to restarting
production. In November 2022, we announced that the first pounds of uranium ore from the McArthur River mine had been
milled and packaged at the Key Lake mill, marking the achievement of initial production as these facilities transition back into
normal operations.
Total packaged production from McArthur River and Key Lake in 2022 was 1.1 million pounds (0.8 million pounds our share)
as the mine and mill resumed production.
Operational readiness activities consisted of recruitment, training, infrastructure upgrades and commissioning as well as
reactivation of mobile equipment previously stored for care and maintenance. Operational activities included mine dewatering,
water treatment, freeze wall maintenance, and environmental monitoring.
In 2022, production forecasts were revised as we worked through normal commissioning issues to integrate the existing and
new assets with upgraded operational technology which caused some delays to schedule at the mill. During the year we
expensed operational readiness costs of approximately $169 million directly to cost of sales. With the restart of production, in
2023 we will no longer expense monthly operational readiness costs.
Exploration
There was no exploration activity in 2022, as we focused on the restart of production.
PLANNING FOR THE FUTURE
Production
We plan to produce 15 million pounds (100% basis) in 2023 and 18 million pounds (100% basis) in 2024.
With the improvement in the uranium market and the success we have had in securing new long-term contracts, we have
updated our 2024 production plan to achieve 18 million pounds (100% basis) per year starting in 2024. 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.
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. We continue to advance the projects that meet our investment criteria.
72 CAMECO CORPORATION
MANAGING OUR RISKS
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. We take significant steps and precautions to reduce the risks. Mine designs
and mining methods are selected based on their ability to mitigate hydrological, radiological and geotechnical risks.
Operational experience gained since the start of production has resulted in a significant reduction in risk. However, there is no
guarantee that our efforts to mitigate risk will be successful.
In addition to the risks listed on pages 67 to 68, in 2023 we are focused on the management of the following risks:
Mine and mill ramp up
With the extended period of time the assets were on care and maintenance, the operational changes made, and
commissioning issues that we have worked through at the mill, which caused delays to the production schedule in 2022, there
is continued uncertainty regarding the timing of a successful ramp up to planned production and the associated costs. In
addition, inflation, the availability of personnel with the necessary skills and experience, and the potential impact of supply
chain challenges on the availability of materials and reagents carry with them the risks of not achieving our production plans,
production delays and increased costs.
Labour relations
The collective agreement with the United Steelworkers local 8914 expired in December 2022. As in the past negotiations, work
continues under the terms of the expired collective agreement while negotiations to reach a new agreement proceeded. There
is a risk to the production plan if we are unable to reach an agreement and there is a labour dispute.
Licensing risk
The current operating licence from the CNSC for both Key Lake and McArthur River expire in October 2023. The relicensing
process is under way for both sites, and we expect a decision from the CNSC later in 2023. We do not expect any interruption
or significant risks from this process.
Water inflow risk
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. McArthur River relies on pressure grouting and ground freezing, and sufficient
pumping, water treatment and above ground storage capacity to mitigate the risks of the high-pressure ground water.
McArthur River has not experienced a significant disruption to its mining or development activities resulting from a water inflow
since 2008. 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 73
Uranium – Tier-one operations
Cigar Lake
2022 Production (our share)
9.6M lbs
2023 Production Outlook (our share)
9.8M lbs
Estimated Reserves (our share)
84.4M lbs
Estimated Mine Life
2031
Cigar Lake is the world’s highest grade uranium mine, with grades that are 100 times the world average. We are a 54.5%
owner and the mine operator. Cigar Lake uranium is milled at Orano’s 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
54.547%
Underground
Jet boring system
Uranium concentrate
ISO 14001 certified
84.4 million pounds (proven and probable), average grade U3O8: 17.21%
57.5 million pounds (measured and indicated), average grade U3O8: 13.19%
12.0 million pounds (inferred), average grade U3O8: 5.62%
18.0 million pounds per year (our share 9.8 million pounds per year)
Through June, 2031
Total packaged production: 2014 to 2022
123 million pounds (100% basis)
2022 production
9.6 million pounds (18.0 million pounds on 100% basis)
2023 production outlook
9.8 million pounds (18.0 million pounds on 100% basis)
Estimated decommissioning cost
All values shown, including reserves and resources, represent our share only, unless otherwise indicated.
$62 million (100% basis)
BACKGROUND
Mine description
Cigar Lake’s geological setting is similar to McArthur River’s. However, unlike McArthur River, the Cigar Lake deposit has the
shape of a flat- to cigar-shaped lens.
Mine development is carried out 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
At Cigar Lake, the permeable sandstone which overlays the deposit and basement rocks, contains large volumes of water at
significant pressure. Before we begin mining, we freeze the ore zone and surrounding ground in the area to be mined to meet
certain specifications. We use a jet boring mining method to extract the ore.
74 CAMECO CORPORATION
Jet boring system (JBS) mining
As a result of the unique geological conditions at Cigar Lake, we are unable to utilize traditional mining methods that require
access above the ore, which necessitated the development of a non-entry mining method specifically adapted for this deposit.
After many years of test mining, we selected jet boring, and it has been used since mining began in 2014.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 a storage sump, allowing it to settle
• using a clamshell, transporting the ore from the storage sump 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.
We have successfully extracted approximately 123 million pounds (100% basis) since we began mining in 2014.
Initial processing
We carry out initial processing of the extracted ore at Cigar Lake before shipping it to McClean Lake. To accomplish this, we:
• grind the ore and mix it with water to form a slurry in our underground circuit
• pump the slurry 500 metres to the surface and store it in one of two ore slurry holding tanks, where it is blended and
thickened to remove 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.
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.
2022 UPDATE
As announced in May, we along with Orano acquired Idemitsu Canada Resources Ltd.’s 7.875% participating interest in the
Cigar Lake Joint Venture. Our ownership stake in Cigar Lake now stands at 54.547%, 4.522 percentage points higher than it
was prior to the transaction.
Production
Total packaged production from Cigar Lake in 2022 was 18 million pounds U3O8 (9.6 million pounds our share) compared to
12.2 million pounds U3O8 (6.1 million pounds our share) in 2021. 2021 production was impacted by suspensions, which were a
precautionary measure due to the COVID-19 pandemic. In 2022, we were successful in catching up on development work that
had been deferred from 2021. Our share of production for 2022 has been updated to reflect the ownership increase effective
May 19, 2022.
During the year, we:
• executed planned 21-day annual maintenance activities in July
• executed production activities from four production tunnels in the eastern part of the orebody
MANAGEMENT’S DISCUSSION AND ANALYSIS 75
• in alignment with our long-term production planning, brought one new panel online as another production panel was
depleted
• continued underground header construction activities and expanded our ground freezing program to ensure continued
frozen ore inventory
Underground development
Underground mine development continued in 2022. We completed the first production crosscut in the western portion of the
orebody in preparation for ore mining starting in the second quarter of 2023.
PLANNING FOR THE FUTURE
Production
In 2023, we expect to produce 18 million pounds (100% basis) at Cigar Lake; our share is approximately 9.8 million pounds.
In 2023, we plan to:
• continue production activities focused on bringing two new production panels online
• complete 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
• execute a surface delineation drilling program and underground geotechnical drilling program
Consistent with our strategy to align our production decisions with our contract portfolio and market opportunities, we have
updated our 2024 production plan. We expect to maintain production at the licensed rate of 18 million pounds (100% basis)
per year based on our contracting success and the improved outlook for the uranium market compared to our previous plan of
13.5 million pounds (100% basis) per year in 2024.
MANAGING OUR RISKS
The Cigar Lake 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 and elements of concern in the orebody with respect to water quality. We take
significant steps and precautions to reduce the risks. Mine designs and the mining method are selected based on their ability
to mitigate hydrological, radiological, and geotechnical risks. Operational experience gained since the start of production has
resulted in a significant reduction in risk. However, there is no guarantee that our efforts to mitigate risk will be successful.
In addition to the risks listed on pages 67 to 68, in 2023 we are focused on the management of the following risks:
Inflation, labour shortages, and supply chain challenges
Inflation, the availability of personnel with the necessary skills and experience, and the impact of supply chain challenges on
the availability of materials and reagents carry with them the risk of not achieving our production plans, production delays and
increased costs in 2023 and future years.
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. If development work is delayed for
any reason, including availability of storage capacity for waste rock, our ability to meet our future production plans may be
impacted.
Water inflow risk
The sandstone that overlays the Cigar Lake deposit and basement rocks is water-bearing 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. Cigar Lake relies on ground freezing and sufficient pumping, water treatment and above ground
storage capacity to mitigate the risks of the high-pressure ground water.
76 CAMECO CORPORATION
Cigar Lake has not experienced a significant disruption resulting from a water inflow since 2008. The consequences of another
water inflow at Cigar Lake 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS 77
Uranium – Tier-one operations
Inkai
2022 Production (100% basis)
8.3M lbs
2023 Production Outlook (100% basis)
8.3M lbs
Estimated Reserves (our share)
108.7M 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%)1 with Kazatomprom (60%).
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
108.7 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 2022
81 million pounds (100% basis)
2022 production
2023 production outlook
8.3 million pounds (100% basis)1
8.3 million pounds (100% basis)1
Estimated decommissioning cost (100% basis)
All values shown, including reserves and resources, represent our share only, unless indicated.
$20 million (US) (100% basis) (this estimate is currently under review)
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.
78 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 2022 production from Inkai was 8.3 million pounds (100% basis) as planned, a decrease of 7% from 2021. In 2022, Inkai
experienced a number of operational issues related to interruptions in reagent delivery and wellfield drilling. While the issues
have been partially mitigated, their impact on production and inflationary pressure on production supplies pose a risk to JV
Inkai’s 2023 production volume and its costs.
The first shipment of our share of JV Inkai’s 2022 production via the Trans-Caspian route arrived at a Canadian port in
December 2022. This was the first shipment of our share of finished product from JV Inkai that did not rely on Russian rail
lines or ports. However, the geopolitical situation continues to cause transportation risks in the region. Our 2022 share of
earnings from this equity-accounted investee were impacted due to the timing of delivery of our share of 2022 production.
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, for 2022 we
were entitled to purchase 4.2 million pounds, or 50% of JV Inkai’s 2022 production of 8.3 million pounds. Timing of our JV
Inkai purchases will fluctuate during the quarters and may not match production, and, in particular, in 2022, timing was
impacted by shipping delays. Total purchases in 2022 were 3.3 million pounds, of which 2.6 million pounds were related to our
2022 entitlement. In 2023, we expect to purchase our remaining 2022 entitlement once it is delivered to our Blind River
refinery. A second shipment containing the majority of the remaining 2022 production is currently in transit.
Cash distribution
Excess cash, net of working capital requirements, will be distributed to the partners as dividends. In 2022, we received
dividend payments from JV Inkai totaling $92.4 million (US). Our share of dividends follows our production purchase
entitlements as described above.
MANAGEMENT’S DISCUSSION AND ANALYSIS 79
PLANNING FOR THE FUTURE
Production
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 2023 production of 8.3 million pounds.
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.
In August 2022, Kazatomprom announced its plan to produce 10% below the planned volumes under its Subsoil Use
Contracts in 2024.
MANAGING OUR RISKS
In addition to the risks listed on pages 67 to 68, JV Inkai also manages the following risks:
2023 production forecast
Presently, JV Inkai is experiencing wellfield development, procurement and supply chain issues, and inflationary pressures on
its production materials and reagents. Achievement of its 2023 production forecast requires it to successfully manage these
risks. If there is a significant disruption to JV Inkai’s operations for any reason, it may not achieve its production plans, there
may be a delay in production, and it may experience increased costs to produce uranium. 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.
Transportation
The geopolitical situation continues to cause transportation risks in the region. We could continue to experience delays in our
expected Inkai deliveries from 2022 and for 2023. To mitigate this risk, we have inventory, long-term purchase agreements
and loan arrangements in place we can draw on. Depending on when we receive shipments of our share of Inkai’s production,
our share of earnings from this equity-accounted investee and the timing of the receipt of our share of dividends from the joint
venture may be impacted.
Political
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. Kazakhstan 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. Order was restored in the second half of January,
and the state of emergency was gradually lifted. In November 2022, President Tokayev was re-elected for a new 7-year term.
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 67 to 68.
80 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 2022
2022 production
2023 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 2022.
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.
FUTURE PRODUCTION
We do not expect any production from Rabbit Lake in 2023.
MANAGING OUR RISKS
The current operating licence from the CNSC for Rabbit Lake expires in October 2023. The relicensing process is under way,
and we expect a decision from the CNSC later in 2023.
We also manage the risks listed on pages 67 to 68.
MANAGEMENT’S DISCUSSION AND ANALYSIS 81
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:
Estimated resources
Smith Ranch-Highland:
100%
Uranium concentrates
ISO 14001 certified
-
-
-
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: 9.4 million pounds (measured and indicated), average grade U3O8: 0.07%
Crow Butte:
Mining methods
0.4 million pounds (inferred), average grade U3O8: 0.06%
13.9 million pounds (measured and indicated), average grade U3O8: 0.25%
1.8 million pounds (inferred), average grade U3O8: 0.16%
In situ recovery (ISR)
Licensed capacity
Smith Ranch-Highland:1
Wellfields: 3 million pounds per year; processing plants: 5.5 million pounds per year
Licence term
Smith Ranch-Highland:
Through September, 2028
Crow Butte:
Processing plants and wellfields: 2 million pounds per year
Crow Butte:
Total production: 2002 to 2022
2022 production
2023 production outlook
Estimated decommissioning cost
1 Including Highland mill
PRODUCTION CURTAILMENT
Through October, 2024
33.0 million pounds
0 million pounds
0 million pounds
Smith Ranch-Highland: $219 million (US), including North Butte
Crow Butte: $56 million (US)
As a result of our 2016 decision, commercial production at the US operations ceased in 2018. We expect ongoing cash and
non-cash care and maintenance costs to range between $12 million (US) and $14 million (US) for 2023.
FUTURE PRODUCTION
We do not expect any production in 2023.
MANAGING OUR RISKS
We manage the risks listed on pages 67 to 68.
82 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
Estimated resources (our share)
BACKGROUND
Saskatchewan, Canada
69.9%
Uranium concentrates
Underground
53.0 million pounds (indicated), average grade U3O8: 2.39%
20.2 million pounds (inferred), average grade U3O8: 3.19%
The Millennium deposit was discovered in 2000 and was delineated through geophysical surveys 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.
2022 PROJECT UPDATES
We believe that we have some of the best undeveloped uranium projects in the world. However, in the current market
environment our primary focus is on producing from our tier-one uranium assets at a pace aligned with our contract portfolio
and market opportunities. We continue to await a signal from our customers that additional production is needed prior to
making any new development decisions.
PLANNING FOR THE FUTURE
2023 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 83
MANAGING THE RISKS
Project approval
The approval received for Kintyre from the prior state government required substantial commencement of the project by March
2020, being within five years of the grant of the approval, and this was not achieved. The current government declined to grant
us an extension to achieve it. In the future, we can apply for an extension of time to achieve substantial commencement of the
project. If granted by a future government we could commence the Kintyre project, provided we have all other required
regulatory approvals.
The approval for the Yeelirrie project, received from the prior state government, required substantial commencement of the
project by January 2022, and this was not achieved. The current government declined to grant us an extension to achieve it. 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 67 to 68.
84 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. We are focused 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 0.78 million hectares (1.9 million acres). In
northern Saskatchewan alone, we have direct interests in about 0.68 million hectares (1.7 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
$-
$30
$20
2017
2018
$14
2019
$11
2020
$8
2021
$11
2022
$18
2023E
2022 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 2022, we spent about $2 million on brownfields and advanced uranium projects in Saskatchewan and Australia. At the US
operations we spent $1 million.
Regional exploration
We spent about $8 million on regional exploration programs (including support costs), primarily in Saskatchewan’s Athabasca
Basin.
PLANNING FOR THE FUTURE
We will maintain an active uranium exploration program and 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 industry expertise in
both exploration and corporate social responsibility make us a partner of choice.
MANAGEMENT’S DISCUSSION AND ANALYSIS 85
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, as well as increasing our production of UF6 in line with our contract portfolio and
market opportunities.
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 meet customer needs.
Blind River Refinery
Licensed Capacity
24.0M kgU as UO3
Licence renewal in
February 2032
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 2032
Estimated decommissioning cost
$58 million
86 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 heavy-water
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
1.65M kgU as UO2 fuel pellets
Licence renewal in
February 2043
CFM produces fuel bundles and reactor components for CANDU heavy-water 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
1.65 million kgU as UO2 fuel pellets
Through February 2043
Estimated decommissioning cost
$10.8 million
MANAGEMENT’S DISCUSSION AND ANALYSIS 87
2022 UPDATE
Production
Fuel services produced 13.0 million kgU, 7% higher than 2021 due to an increase in demand in 2022.
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. Progress was made over the past
year to facilitate the removal of some old buildings and structures, which will be the focus in the year ahead.
PLANNING FOR THE FUTURE
Production
We plan to produce between 13 million and 14 million kgU in 2023. In addition, at our Port Hope UF6 conversion facility we are
working on increasing annual production to 12,000 tonnes in 2024 to satisfy our book of long-term business and demand for
conversion services.
Also, 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.
Licensing
In January 2023, the CNSC granted a 20-year renewal to the licence for CFM. The licence renewal also grants CFM’s request
for a slight production increase to 1,650 tonnes as UO2 fuel pellets.
MANAGING OUR RISKS
We take significant steps and precautions to reduce risk. However, there is no guarantee that our efforts to mitigate risk will be
successful.
In addition to the risks listed on pages 67 to 68, in 2023 we are focused on the management of the following risk:
Production plans
Inflation, the availability of personnel with the necessary skills and experience, aging infrastructure, and the potential impact of
supply chain challenges on the availability of materials and reagents carry the risk of not achieving our production plans,
production delays, and increased costs in 2023 and future years.
88 CAMECO CORPORATION
Other Nuclear Fuel Cycle Investments
Global Laser Enrichment
Global Laser Enrichment LLC (GLE) is the exclusive licensee of the proprietary Separation of Isotopes by Laser Excitation
(SILEX) laser enrichment technology, a third-generation uranium enrichment technology. We are the commercial lead for the
GLE project with a 49% interest and starting in February 2023, an option to attain a majority interest of up to 75% ownership.
Subject to completion of the technology development program, and its progression through to commercialization, GLE has the
potential to offer a variety of advantages to the global nuclear energy sector over the long-term, which include:
• re-enriching depleted uranium tails leftover as a by-product of previous-generation enrichment technologies, repurposing
legacy waste into a commercial source of uranium and conversion products to fuel nuclear reactors and aiding in the
responsible clean-up of enrichment facilities no longer in operation, as per GLE’s agreement with the U.S. Department of
Energy
• producing commercial low-enriched uranium (LEU) fuel for the world’s existing and future fleet of large-scale light-water
reactors with greater efficiency and flexibility than current enrichment technologies
• producing high-assay low-enriched uranium (HALEU), the primary fuel stock for the majority of small modular reactor
(SMR) and advanced reactor designs that are proceeding through the development stage and continuing toward
commercial readiness
In 2022, GLE made progress with the first full-scale laser system module, successfully completing eight months of testing in
Australia, and the system was delivered to GLE’s commercial pilot demonstration facility in the US. In addition, GLE signed
letters of intent to collaborate with two major US utilities to help diversify the US nuclear fuel supply chain, including measures
to support its deployment of laser enrichment technology in the US.
The development timeline for GLE will be dependent on several factors, including market fundamentals, securing government
funding, support for HALEU availability in the US and GLE’s ability to secure long-term contracts to underpin the deployment
of a commercial facility.
MANAGING OUR RISKS
GLE is subject to the risks relating to the nuclear industry discussed under the heading Caution about forward-looking
information beginning on page 2.
Proposed acquisition of Westinghouse
As announced on October 11, 2022, we entered into a strategic partnership with Brookfield Renewable and its institutional
partners to acquire Westinghouse Electric Company (Westinghouse), a global provider of mission‐critical and specialized
technologies, products and services across most phases of the nuclear power sector. Brookfield Renewable will beneficially
own a 51% interest in Westinghouse and Cameco will beneficially own 49%. Bringing together Cameco’s expertise in the
nuclear industry with Brookfield Renewable’s expertise in clean energy positions nuclear power at the heart of the energy
transition and creates a powerful platform for strategic growth across the nuclear sector.
Westinghouse’s history in the energy industry stretches back over a century, during which time the company became a
pioneer in nuclear energy.
Westinghouse is organized in three business segments:
• Operating Plant Services: Long‐term contracting for the manufacturing and installation of fuel assemblies and other
ancillary equipment across multiple light water reactor technologies. Westinghouse provides recurring services for outages
and maintenance, engineering solutions, and replacement components and parts.
• Energy Systems: Designing, engineering and supporting the development of new nuclear reactors.
• Environmental Services: Services to government and commercial customers that support nuclear sustainability,
environmental stewardship and remediation.
MANAGEMENT’S DISCUSSION AND ANALYSIS 89
The largest business segment is Operating Plant Services, which accounted for approximately $2.7 billion (US) or about 81%
of Westinghouse’s total 2021 revenue of approximately $3.3 billion (US). This segment is built on long-term customer
relationships. These customers seek solutions to ensure their reactors operate efficiently and reliably and therefore results in
predictable revenue streams.
The acquisition of Westinghouse will be through a strategic partnership with Brookfield Renewable in the form of a limited
partnership that will allow each of us to further participate in and support the growing momentum for nuclear energy. The
board of directors of the general partner of the limited partnership will consist of six directors, three appointed by Cameco and
three appointed by Brookfield Renewable. Decision-making by the board of the general partnership will correspond to
percentage ownership interests in the limited partnership (51% Brookfield Renewable and 49% Cameco). There are a number
of significant decisions that require the presence and support of both Cameco and Brookfield Renewable appointees to the
board as long as certain ownership thresholds are met. These “reserved” matters will include decisions such as the approval
of the annual budget, entering into material contracts, the making of significant investments, entering into new lines of
business and related-party transactions. We expect to account for our share of the investment using the equity method.
We expect the acquisition to:
• expand our participation in the nuclear fuel value chain. The acquisition is expected to complement our high-quality, tier-one
uranium assets and fuel services, including CANDU fuel manufacturing for heavy water reactors with Westinghouse’s
global nuclear fuel and plant services platform for light water reactors, which we expect will augment and expand our ability
to meet the growing demand for nuclear fuel supplies and services that are reliable and secure;
• be accretive to our cash flow after the closing, and prior to considering new revenue opportunities and to complement our
existing business. Based on Westinghouse’s strong long-term customer relationships, the service type model of the
Operating Plant Services segment and resulting reliable revenue streams we expect it to generate stable cash flow, to fund
its approved annual operating budget and provide quarterly distributions to the partners after the closing;
• create new revenue opportunities for us by expanding our ability to satisfy existing and new customer needs. In addition to
Westinghouse’s contribution to our financial results, the acquisition is expected to result in up to $50 million in additional
revenue for Cameco in the year following the closing of the transaction and to result in additional revenue opportunities for
us in the future from new customers and existing customers seeking a fully fabricated fuel supply option; and
• maintain our strong balance sheet through a disciplined funding strategy designed to enhance our financial strength. At the
same time, we expect to continue to execute on our strategy and provide a platform for further growth, expanding our reach
in an industry that has historically performed well during varying macroeconomic environments due to the baseload nature
of nuclear power and its strong customer base.
MANAGING OUR RISKS
The proposed acquisition of a beneficial ownership interest in Westinghouse is subject to the risks that are discussed under
the heading Caution about forward-looking information beginning on page 2. For a further description of the material risks
relating to the acquisition, please refer to Risk Factors -- Risks Related to the Acquisition in our October 12, 2022, prospectus
supplement filed with the U.S. Securities and Exchange Commission and Canadian securities administrators. It is available at
www.sec.gov and www.sedar.com.
WESTINGHOUSE NON-GAAP MEASURES
When we announced the proposed acquisition, we had derived the following summary financial information from
Westinghouse’s annual and interim consolidated financial statements, which are reported in US dollars and prepared in
accordance with US generally accepted accounting principles (GAAP). Since the transaction has not closed and ownership
has not transferred, we are unable to update this information. The Westinghouse financial information is not predictive of
actual future results. Additionally, the financial information for Westinghouse does not take into account any circumstances or
geopolitical or other events occurring after the date it was prepared. We will evaluate the appropriate and required disclosures
when the acquisition closes, assuming all regulatory and other approvals are received.
90 CAMECO CORPORATION
Adjusted EBITDA, adjusted free cash flow, adjusted EBITDA margin and adjusted free cash flow margin are measures that do
not have a standardized meaning or a consistent basis of calculation under GAAP (non-GAAP measure). These measures are
used by Cameco and other users, including our lenders and investors, to assess Westinghouse’s results of operations from a
management perspective without regard to its capital structure. We believe that these measures are useful to management,
lenders, and investors in assessing the underlying performance of Westinghouse’s ongoing operations and its ability to
generate cash flows to fund its cash requirements.
Westinghouse’s adjusted EBITDA is defined as its net income, adjusted for the impact of certain expenses, costs, charges or
benefits incurred in such period which are either not indicative of underlying business performance or that impact the ability to
assess the operating performance of its business. Westinghouse may realize similar gains or incur similar expenditures in the
future. The other measures are defined in the table below.
Adjusted EBITDA, adjusted free cash flow, adjusted EBITDA margin and adjusted free cash flow margin are specified financial
measures and should not be considered in isolation or as a substitute for financial information prepared according to GAAP.
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.
The following financial information of Westinghouse was prepared by us at the time of the announced acquisition and was
derived from (i) Westinghouse’s annual consolidated financial statements as at and for the years ended December 31, 2019,
2020 and 2021 and (ii) Westinghouse’s interim consolidated financial statements as at and for the six-months ended June 30,
2021 and 2022 which are reported in US dollars and prepared in accordance with US GAAP. The following table provides a
reconciliation of Westinghouse’s net income to adjusted EBITDA, adjusted free cash flow, adjusted EBITDA margin and
adjusted free cash flow margin for the years ended December 31, 2019, 2020 and 2021 and for the twelve-month period
ended June 30, 2022:
($US MILLIONS)
Net income
Depreciation and amortization
Interest costs (net, including accretion)
Income tax (recovery)
Restructuring and acquisition related expenses
Gain (loss) on disposal of fixed assets
Non-operating income
Impact of derivative instruments
Other non-operating items
Adjusted EBITDA
Capital expenditures
Revenue
Adjusted free cash flow (adjusted EBITDA - capital expenditures)
Adjusted EBITDA margin (adjusted EBITDA/revenue)
Adjusted free cash flow margin (adjusted free cash flow/adjusted
EBITDA)
Calculations may not compute due to rounding
LTM ENDED
JUNE 30, 2022
559
299
183
(433)
89
(1)
(1)
12
(7)
701
145
3,273
556
21%
79%
2021
126
303
186
(17)
67
7
-
2
21
695
154
3,286
541
21%
78%
2020
42
289
221
15
70
5
(3)
(20)
28
646
133
3,275
513
20%
79%
2019
26
284
243
(6)
97
(9)
(36)
-
13
613
138
3,350
475
18%
78%
The total enterprise purchase price for the acquisition is $7.875 billion (US), which includes an assumption of an estimated
$3.4 billion (US) of debt which will remain with Westinghouse, and which is subject to customary purchase price adjustments.
The remainder of the purchase price will be paid by approximately $4.5 billion (US) of aggregate cash contributions, our share
of which will be approximately $2.2 billion (US).
MANAGEMENT’S DISCUSSION AND ANALYSIS 91
Concurrently with the execution of the acquisition agreement, we secured commitments that provide for a $1 billion (US)
bridge loan facility and $600 million (US) in term loans. Following the announcement, we undertook a $650 million (US) bought
deal offering of common shares, with an underwriter option to purchase additional shares. The offering closed on October 17,
2022, providing us with gross proceeds of approximately $747.6 million (US) including the underwriters’ exercise of the option
to purchase additional shares in full. With the proceeds from the closing of the offering and based on current uncertainty in the
global macroeconomic environment and the success we are having in adding new long-term business, at this time, we do not
intend to issue additional equity to fund our portion of the purchase price for the Westinghouse acquisition. As of the closing of
the bought deal offering, the bridge loan facility was reduced to $280 million (US). The debt facilities will remain undrawn until
closing of the acquisition. The bridge facility, if funded, will mature 364 days after the acquisition closing date, and the term
loans consisting of two tranches of $300 million (US) each, are expected to mature two years and three years after the
acquisition closes.
The acquisition is expected to close in the second half of 2023 and continues to be subject to customary closing conditions
and certain regulatory approvals. The final financing is not required until close of the acquisition and will be determined based
on market conditions and the expected run rate of our business at that time. We expect a permanent financing mix of capital
sources, including cash, debt and equity, designed to preserve our balance sheet and ratings strength, while maintaining
healthy liquidity.
___________________
Caution about forward-looking information relating to the Westinghouse acquisition
This discussion of our expectations for the Westinghouse acquisition, including sources and uses of financing for the acquisition, timeline for the acquisition,
including anticipated closing date, expected benefits, and our intention in respect of not issuing additional equity to fund our portion of the purchase price for the
Westinghouse acquisition is forward-looking information that is based upon the assumptions and subject to the material risks discussed under the headings
Caution about forward-looking information beginning on page 2, and in our October 18, 2022 material change report. The material change report is available at
www.sedar.com and www.sec.gov. Actual results and events may be significantly different from what we currently expect.
92 CAMECO CORPORATION
Corporate development
Investment program
Currently, with our extensive portfolio of mineral reserves and resources and our belief that we have ample productive capacity
with the ability to expand as the demand for nuclear energy and nuclear fuels grows, our focus is on navigating by our
investment-grade rating and returning to our tier-one run rate while 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 opportunities across 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. These opportunities
include investments such as our recently announced plans to acquire a 49% interest in Westinghouse Electric Company, as
well as emerging opportunities such as our investment in Global Laser Enrichment LLC. It also includes the non-binding
arrangements we have 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 customer’s needs, 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 stakeholders 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 vision, values and strategy, starting on
page 23.
MANAGEMENT’S DISCUSSION AND ANALYSIS 93
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, 2022.
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 $53 (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.
94 CAMECO CORPORATION
PROVEN AND PROBABLE (P&P) RESERVES, MEASURED AND INDICATED (M&I)
RESOURCES, INFERRED RESOURCES (SHOWING CHANGE FROM 2021)
at December 31, 2022
P&P Reserves 469
M lbs (+5 M lbs)
Inferred Resources
154 M lbs (no
change)
M&I Resources 451
M lbs (+4 M lbs)
Changes this year
Our share of proven and probable mineral reserves increased from 464 million pounds U3O8 at the end of 2021, to 469 million
pounds at the end of 2022. The change was primarily the result of:
• a mineral resource and reserve estimate update at Cigar Lake which added 9 million pounds to proven and probable
reserves based on ongoing surface freeze drilling results.
• increased ownership stake at Cigar Lake which added 7 million pounds
partially offset by:
• production at Cigar Lake, Inkai and McArthur River, which removed 14 million pounds from our mineral inventory
The remaining changes are attributable to other adjustments based on the mineral resource and reserve estimate updates at
Cigar Lake and McArthur River.
Our share of measured and indicated mineral resources increased from 447 million pounds U3O8 at the end of 2021, to 451
million pounds at the end of 2022. Our share of inferred mineral resources remains unchanged at 154 million pounds U3O8.
MANAGEMENT’S DISCUSSION AND ANALYSIS 95
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:
INKAI
• Alain D. Renaud, principal resource 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
MCARTHUR RIVER/KEY LAKE
• Greg Murdock, general manager, McArthur River,
Cameco
• Daley McIntyre, general manager, Key Lake, Cameco
• Alain D. Renaud, principal resource 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, principal resource geologist, technical
services, Cameco
• Biman Bharadwaj, principal metallurgist, technical
services, Cameco
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.
96 CAMECO CORPORATION
Mineral reserves
As of December 31, 2022 (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
UG
OP
UG
ISR
TONNES % U3O8
16.25
308.9
GRADE CONTENT
(LBS U3O8)
110.7
TONNES % U3O8
20.19
GRADE CONTENT
(LBS U3O8)
44.1
99.1
61.1
2,138.3
253,647.2
256,155.6
0.52
7.00
0.04
-
0.7
329.9
218.3
659.7
-
530.7
71,803.1
72,432.9
-
5.47
0.03
-
64.0
53.5
TONNES
408.0
61.1
2,669.0
325,450.3
GRADE CONTENT CONTENT METALLURGICAL
% U3O8
17.21
RECOVERY (%)
98.8
(LBS U3O8)
84.4
(LBS U3O8)
154.8
0.52
6.70
0.04
-
0.7
394.0
271.8
821.3
0.6
275.0
108.7
468.8
95
99
85
-
-
161.6
328,588.5
(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 $53 (US) per pound U3O8
are based on exchange rates of $1.00 US=$1.26 Cdn and $1.00 US=490 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 70.
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 97
Mineral resources
As of December 31, 2022 (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
PROPERTY
Cigar Lake
Fox Lake
Kintyre
TONNES % U3O8
6.06
48.0
GRADE CONTENT
(LBS U3O8)
6.4
-
-
-
-
-
-
McArthur River
74.9
2.23
3.7
TONNES
TOTAL M+I TOTAL M+I
GRADE CONTENT CONTENT CONTENT
(LBS U3O8)
% U3O8
57.5
314.1 14.28
(LBS U3O8)
105.3
(LBS U3O8)
98.9
INFERRED
GRADE CONTENT CONTENT
(LBS U3O8)
% U3O8
12.0
5.62
(LBS U3O8)
22.1
-
3,897.7
63.0
1,442.6
1,836.5
183.8
-
-
-
-
-
-
-
-
-
27,172.9
1,558.1
687.2
87,192.7
0.16
0.19
0.11
0.03
604.2
0.08
-
89.2
-
0.15
0.10
95.9
12,178.3
6.6
1.7
939.3
3,626.1
56.1
65,236.0
1.1
-
0.3
7.9
5,530.3
0.07
2,215.3
1,638.2
14,372.3
-
0.62
2.23
2.39
0.95
4.42
0.12
0.35
0.15
0.02
0.08
0.11
0.05
-
-
53.5
3.1
75.9
38.6
17.9
32.2
7.3
11.6
32.9
8.4
4.1
4.1
-
53.5
6.8
75.9
38.6
17.9
-
53.5
4.7
53.0
38.6
10.3
128.1
128.1
13.9
13.3
89.1
9.4
4.1
4.4
13.9
13.3
35.6
9.4
4.1
4.4
TONNES
178.2
386.7
517.1
38.9
412.4
2,460.9
45.6
-
531.4
3,307.5
36,165.2
7.99
0.53
2.89
3.19
0.62
1.02
-
0.16
0.08
0.03
0.13
0.10
0.05
68.1
6.0
2.5
29.0
33.7
1.0
-
1.8
6.0
23.9
0.4
0.2
1.1
7.7
53.3
6.0
1.7
20.2
33.7
0.6
-
1.8
6.0
9.6
0.4
0.2
1.1
7.7
294.5
0.06
56.2
508.0
17.0
405.5
24.9
585.2
24.9
451.4
6,861.0
51,763.7
-
203.5
154.4
Millennium
Rabbit Lake
Tamarack
Yeelirrie
Crow Butte
Gas Hills - Peach
Inkai
North Butte - Brown
Ranch
Ruby Ranch
Shirley Basin
Smith Ranch - Highland
3,703.5
Total
121,130.7
-
179.7
113,473.7
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
98 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 16 to the financial statements.
Carrying value of assets
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, intangibles and investments in associates and joint ventures
every year, or more often if necessary. If we determine that we cannot recover the carrying value of an asset, 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, our ability to economically recover mineral
reserves and the impact of geopolitical events. 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, 2022, as required by the rules of the US Securities and Exchange Commission and the Canadian Securities
Administrators.
MANAGEMENT’S DISCUSSION AND ANALYSIS 99
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, 2022.
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, 2022, but they did not have an effect on our
financial statements.
A number of amendments to existing standards are not yet effective for the year ended December 31, 2022, and have not
been applied in preparing these consolidated financial statements. We do not intend to early adopt any of the amendments
and do not expect them to have a material impact on our financial statements.
100 CAMECO CORPORATION
Cameco Corporation
2022 consolidated financial statements
February 8, 2023
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 101
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 of December 31, 2022.
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, 2023
Original signed by Grant E. Isaac
Senior Vice-President and Chief Financial Officer
February 8, 2023
102 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, 2022 and 2021, the related consolidated statements of earnings, comprehensive income, changes in equity
and cash flows for each of the years in the two-year period ended December 31, 2022, 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, 2022 and 2021, and its financial performance and its cash
flows for each of the years in the two-year period ended December 31, 2022, 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, 2022, 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, 2023 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 a 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 22 to the consolidated financial statements, as of December 31, 2022 the Company has recorded a
deferred tax asset of $984,071,000. 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 and production rates, which can materially impact estimated future taxable income.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 103
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 projections. We compared future market conditions of forecast uranium sales prices to published views of independent
market participants. We compared forecast 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, 2023
104 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, 2022,
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, 2022, 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, 2022 and 2021, the related
consolidated statements of earnings, comprehensive income, changes in equity and cash flows for each of the years in the
two-year period ended December 31, 2022, and the related notes (collectively, the "consolidated financial statements") and
our report dated February 8, 2023 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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 105
Original signed by KPMG LLP
Chartered Professional Accountants
Saskatoon, Canada
February 8, 2023
106 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
Earnings (loss) from operations
Finance costs
Gain (loss) on derivatives
Finance income
Share of earnings from equity-accounted investee
Other income
Earnings (loss) before income taxes
Income tax recovery
Net earnings (loss)
Net earnings (loss) attributable to:
Equity holders
Non-controlling interest
Net earnings (loss)
Earnings (loss) per common share attributable to equity holders:
Basic
Diluted
See accompanying notes to consolidated financial statements.
Note
2022
2021
18
$ 1,868,003 $ 1,474,984
1,457,336
177,376
1,282,635
190,415
29
1,634,712
1,473,050
16
20
27
12
21
22
233,291
172,029
10,578
12,175
22,944
514
15,051
(85,728)
(72,949)
37,499
93,988
96,934
84,795
(4,469)
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)
$
89,264 $
(102,654)
89,382
(118)
(102,577)
(77)
$
89,264 $
(102,654)
23
23
$
$
0.22 $
0.22 $
(0.26)
(0.26)
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 107
Consolidated statements of comprehensive income
For the years ended December 31
($Cdn thousands)
Net earnings (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
Items that are or may be reclassified to net earnings:
Exchange differences on translation of foreign operations
Other comprehensive loss, net of taxes
Total comprehensive income (loss)
Other comprehensive income (loss) attributable to:
Equity holders
Non-controlling interest
Other comprehensive loss for the year
Total comprehensive income (loss) attributable to:
Equity holders
Non-controlling interest
Total comprehensive income (loss) for the year
1 Net of tax (2022 - $(5,440); 2021 - $(1,274))
2 Net of tax (2022 - $0; 2021 - $(3,267))
See accompanying notes to consolidated financial statements.
Note
2022
2021
$
89,264 $
(102,654)
26
19,242
-
3,897
22,059
(38,141)
(18,899)
(30,384)
(4,428)
70,365 $
(107,082)
(18,901) $
2
(4,426)
(2)
(18,899) $
(4,428)
70,481 $
(116)
(107,003)
(79)
70,365 $
(107,082)
$
$
$
$
$
108 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
2022
2021
7
8
11
9
10
11
12
22
$ 1,143,674 $ 1,247,447
84,906
276,139
4,966
409,521
95,341
23,232
2,141,552
1,138,174
183,944
1,056
664,698
157,910
32,180
3,321,636
3,473,490
47,117
595,507
210,972
984,071
5,311,157
3,576,599
51,247
577,527
233,240
937,579
5,376,192
$ 8,632,793 $ 7,517,744
13
$
15
16
14
15
16
374,714 $
6,498
131,324
48,305
560,841
997,000
216,162
1,022,725
2,235,887
2,880,336
224,687
2,696,379
34,652
5,836,054
11
5,836,065
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
Total liabilities and shareholders' equity
$ 8,632,793 $ 7,517,744
Commitments and contingencies [notes 9, 16, 22, 33]
See accompanying notes to consolidated financial statements.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 109
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, 2022
$ 1,903,357 $
230,039 $ 2,639,650 $
73,543 $
(748) $ 4,845,841 $
127 $ 4,845,968
Net earnings (loss)
Other comprehensive
income (loss)
Total comprehensive
income (loss)
Share-based compensation
Stock options exercised
Restricted share units
released
Dividends
Equity issuance [note 17]
-
-
-
-
12,101
-
-
964,878
-
-
-
89,382
-
19,242
(38,143)
108,624
(38,143)
3,318
(2,469)
(6,201)
-
-
-
-
-
(51,895)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
89,382
(118)
89,264
(18,901)
2
(18,899)
70,481
(116)
70,365
3,318
9,632
(6,201)
(51,895)
964,878
-
-
-
-
-
3,318
9,632
(6,201)
(51,895)
964,878
Balance at December 31, 2022
$ 2,880,336 $
224,687 $ 2,696,379 $
35,400 $
(748) $ 5,836,054 $
11 $ 5,836,065
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 27]
-
-
-
-
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
See accompanying notes to consolidated financial statements.
110 CAMECO CORPORATION
Consolidated statements of cash flows
For the years ended December 31
($Cdn thousands)
Operating activities
Net earnings (loss)
Adjustments for:
Depreciation and amortization
Deferred sales
Unrealized loss 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 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
Acquisition
Increase in short-term investments
Decrease (increase) in long-term receivables, investments and other
Proceeds from sale of property, plant and equipment
Net cash used in investing
Financing activities
Interest paid
Proceeds from issuance of shares, stock option plan
Proceeds from issuance of shares, net of issue costs
Lease principal payments
Dividends paid
Net cash provided by (used in) financing
Note
2022
2021
$
89,264 $
(102,654)
25
20
12
21
16
22
32
24
9
6
17
177,376
43,528
82,636
3,318
514
85,728
(37,499)
(93,988)
(96,934)
22,944
(4,469)
35,443
(1,521)
117,698
(119,431)
304,607
(143,448)
(101,681)
(1,044,473)
(2,000)
780
(1,290,822)
(38,856)
9,632
953,285
(2,908)
(51,895)
869,258
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)
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
(116,957)
13,184
1,247,447
331,218
(2,153)
918,382
$ 1,143,674 $ 1,247,447
Cash and cash equivalents is comprised of:
Cash
Cash equivalents
Cash and cash equivalents
See accompanying notes to consolidated financial statements.
$
701,818 $
441,856
604,557
642,890
$ 1,143,674 $ 1,247,447
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 111
Notes to consolidated financial statements
For the years ended December 31, 2022 and 2021
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, 2022 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 12).
Cameco’s Cigar Lake mine in northern Saskatchewan had been placed in a temporary state of care and maintenance
periodically throughout 2020 and 2021 due to the global COVID-19 pandemic. The mine was in a temporary state of care and
maintenance in January 2021 and production resumed in April 2021. Operations at McArthur River/Key Lake, which had been
suspended in 2018, resumed in November of 2022. The Rabbit Lake operation was placed in care and maintenance in 2016.
Cameco’s operations in the United States, Crow Butte and Smith Ranch-Highland, are not currently producing as the decision
was made in 2016 to curtail production and defer all wellfield development. See note 29 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.
2. Significant accounting policies
A. Statement of compliance
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,
2023.
B. Basis of presentation
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:
112 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.
C. Consolidation principles
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 113
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.
When acquiring an additional interest in a joint arrangement, previously held interests are not remeasured at fair value. In an
acquisition of an asset or group of assets that does not constitute a business, the directly attributable transaction costs are
included in the cost of the asset or group of assets.
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.
D. Foreign currency translation
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.
114 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.
E. Cash and cash equivalents
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.
G. Inventories
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.
H. Property, plant and equipment
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 115
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.
116 CAMECO CORPORATION
I. Goodwill and intangible assets
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.
J. Leases
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.
K. Finance income and finance costs
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 117
L. Research and development costs
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.
M. Impairment
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.
118 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.
N. Exploration and evaluation expenditures
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.
O. Provisions
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 119
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.
P. Employee future benefits
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.
120 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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 121
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.
Q. Revenue recognition
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, except in limited circumstances.
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.
122 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.
R. Financial instruments
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 123
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.
124 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, 2022 and 2021.
S. Income tax
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
substantively 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.
T. Share capital
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.
U. Earnings per share
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 125
V. Segment reporting
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.
W. Government assistance
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. Changes in accounting policy
A number of amendments to existing standards became effective January 1, 2022 but they did not have an effect on the
Company’s financial statements.
B. New standards and interpretations not yet adopted
A number of amendments to existing standards are not yet effective for the year ended December 31, 2022 and have not been
applied in preparing these consolidated financial statements. Cameco does not intend to early adopt any of the amendments
and does not expect them to have a material impact on its 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:
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.
126 CAMECO CORPORATION
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 6 - Acquisition of additional interest in Cigar Lake Joint Venture (CLJV)
Note 25 - Share-based compensation plans
Note 27 - 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.
A. Recoverability of long-lived and intangible assets and investments
Cameco assesses the carrying values of property, plant and equipment, intangible assets and investments in associates and
joint ventures when there is an indication of possible impairment. If it is determined that carrying values of assets 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, mineral reserves and the
impact of geopolitical events. 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.
B. Cash generating units
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.
C. Provisions for decommissioning and reclamation of assets
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 127
D. Income taxes
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 and
production rates, which can materially impact estimated future taxable income. If these judgments and estimates prove to be
inaccurate, future earnings may be materially impacted.
E. Mineral reserves
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. Acquisition of additional interest in Cigar Lake Joint Venture (CLJV)
On May 19, 2022, Cameco and Orano Canada Inc. (Orano) completed the acquisition of Idemitsu Canada Resources Ltd.’s
(Idemitsu) 7.875% participating interest in the CLJV by acquiring their pro rata shares through an asset purchase. Cameco’s
ownership stake in the Cigar Lake uranium mine in northern Saskatchewan is now 54.547% (previously 50.025%). The
primary reason for the business combination was to increase our ownership interest.
Cash consideration of $101,681,000 was paid for the additional 4.522% interest. At December 31, 2022, $3,000,000 remained
in escrow, to be paid upon finalization of closing adjustments. While Cameco received the economic benefit of owning the
additional interest as of January 1, 2022, the additional interest has been proportionately consolidated with the results of
Cameco commencing on May 19, 2022.
CLJV allocates 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. As such, there is no revenue or profit or loss of the acquiree included in the consolidated statements of earnings. If
the acquisition had occurred at the beginning of the year, Cameco’s share of production would have included an additional
296,000 pounds. The impact to the financial statements would not have been material.
Acquisition costs of $1,495,000 have been included in administration expense in the consolidated statements of earnings for
the year ended December 31, 2022.
128 CAMECO CORPORATION
Included in the identifiable assets and liabilities acquired at the date of acquisition are inputs, production processes and
outputs. Therefore, Cameco has determined that together the acquired set is a business. In accordance with the acquisition
method of accounting, the purchase price was allocated to the underlying assets and liabilities assumed based on their fair
values at the date of acquisition. Fair values were determined based on discounted cash flows and quoted market prices. The
values assigned to the net assets acquired were as follows:
Property, plant and equipment
Deferred tax asset(a)
Inventory
Working capital
Reclamation provision
Sales contracts
Net assts acquired
Cash paid
Bargain purchase gain(b)
$
$
$
97,930
28,196
9,909
(24)
(2,528)
(9,000)
124,483
101,681
22,802
(a) The deferred tax asset has been measured provisionally, pending further review of the income tax attributes of the
acquisition.
(b) The preliminary bargain purchase gain resulted from applying the measurement requirements under IFRS 3, Business
Combinations. This standard requires the measurement of tax attributes that were acquired as part of the transaction be in
accordance with IAS 12, Income Taxes, rather than at fair value. The measured amount of these attributes exceeded the
amount paid for them and the resulting gain is included in other income (expense) in the consolidated statement of earnings.
The accounting for the acquisition will be revised if, within one year of the acquisition date, new information is obtained about
facts and circumstances that existed at the date of acquisition. Revision will occur if this new information identifies adjustments
to the above amounts, or any additional provisions that existed at the date of acquisition.
7. Accounts receivable
Trade receivables
GST/VAT receivables
Other receivables
Total
2022
2021
$
167,688 $
5,856
10,400
271,015
3,919
1,205
$
183,944 $
276,139
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 27.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 129
8. Inventories
Uranium
Concentrate
Broken ore
Fuel services
Other
Total
2022
2021
$
537,426 $
46,703
584,129
319,257
46,324
365,581
80,144
43,549
425
391
$
664,698 $
409,521
Cameco expensed $1,359,000,000 of inventory as cost of sales during 2022 (2021 - $1,218,000,000).
9. Property, plant and equipment
At December 31, 2022
Land
and
buildings
Plant
and
equipment
Furniture
and
fixtures
Under
construction
Exploration
and
evaluation
Total
Cost
Beginning of year
Acquisitions [note 6]
Additions
Transfers
Change in reclamation provision [note 16]
Disposals
Effect of movements in exchange rates
$ 5,152,209 $ 2,732,561 $
84,366
$
167,200 $ 1,073,239 $ 9,209,575
67,998
4,385
25,023
(93,451)
(4,885)
45,859
27,646
8,927
39,091
-
(8,423)
12,507
70
209
(167)
-
(650)
252
2,216
129,734
(63,518)
-
(1,046)
-
193
-
-
-
4
14,802
97,930
143,448
429
(93,451)
(15,004)
73,424
End of year
5,197,138
2,812,309
84,080
234,590
1,088,234
9,416,351
Accumulated depreciation and impairment
Beginning of year
Depreciation charge
Change in reclamation provision [note 16](a)
Disposals
Effect of movements in exchange rates
3,101,740
1,962,228
137,543
101,923
22,944
(4,851)
43,493
-
(8,201)
12,049
78,119
1,857
-
(649)
249
36,798
458,247
5,637,132
-
-
-
-
-
-
-
8,824
241,323
22,944
(13,701)
64,615
End of year
3,300,869
2,067,999
79,576
36,798
467,071
5,952,313
Right-of-use assets
Beginning of year
Additions
Disposals
Depreciation charge
Transfers
End of year
931
5,917
-
(870)
(19)
1,584
1,330
(11)
(560)
(778)
1,641
606
-
(687)
368
5,959
1,565
1,928
-
-
-
-
-
-
-
-
-
-
-
-
4,156
7,853
(11)
(2,117)
(429)
9,452
Net book value at December 31, 2022
$ 1,902,228 $
745,875 $
6,432
$
197,792 $
621,163 $ 3,473,490
130 CAMECO CORPORATION
At December 31, 2021
Cost
Beginning of year
Additions
Transfers
Change in reclamation provision
Disposals
Effect of movements in exchange rates
Land
and
buildings
Plant
and
equipment
Furniture
and
fixtures
Under
construction
Exploration
and
evaluation
Total
$ 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
700
31,243
5,130
-
(6,019)
(1,314)
-
(345)
(30)
87,637
(52,797)
-
(6,691)
120
98,784
-
-
-
721
(62,427)
(36,130)
(58,995)
-
(52,364)
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
3,031,292
1,876,336
74,246
36,798
483,663
5,502,335
Depreciation charge
Change in reclamation provision(a)
Disposals
Effect of movements in exchange rates
104,641
92,670
4,246
(8,407)
(20,999)
(4,787)
-
(5,623)
(1,155)
-
(345)
(28)
-
-
-
-
-
-
-
(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
2,322
2,142
-
(875)
-
477
(494)
(721)
-
(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
Cameco has contractual capital commitments of approximately $56,500,000 at December 31, 2022. 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 2023.
(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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 131
10. Intangible assets
A. Reconciliation of carrying amount
At December 31, 2022
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
$
110,618 $
8,027
118,819 $
-
229,437
8,027
118,645
118,819
237,464
109,886
739
7,964
68,304
3,454
-
178,190
4,193
7,964
118,589
71,758
190,347
Net book value at December 31, 2022
$
56 $
47,061 $
47,117
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
Intellectual
Contracts
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
B. Amortization
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 was sold. The purchase and sales contracts were amortized to earnings over the terms of the underlying contracts.
Amortization of the purchase contracts was allocated to the cost of inventory and included in cost of products and services
sold as inventory was sold. Sales contracts were amortized to revenue.
132 CAMECO CORPORATION
11. Long-term receivables, investments and other
Deferred charges
Derivatives [note 27]
Investment tax credits
Amounts receivable related to tax dispute [note 22](a)
Product loan(b)
Other
Less current portion
Net
2022
2021
$
29,585
2,807
95,812
295,221
200,998
3,264
627,687
(32,180)
$
-
32,098
95,722
295,221
176,904
814
600,759
(23,232)
$
595,507
$
577,527
(a) 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 22). 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, 2022 (December 31, 2021 -
$295,221,000) (note 22).
(b) Cameco loaned 5,400,000 pounds of uranium concentrate to its joint venture partner, Orano Canada Inc., (Orano). Orano
was obligated to repay the Company in kind with uranium concentrate no later than December 31, 2023. During the first
quarter of 2022, the repayment terms were extended to December 31, 2028. During 2022, 1,828,999 pounds were returned as
repayment on this loan.
Cameco also agreed to lend to Orano up to 1,148,200 kgU of conversion supply and up to an additional 1,200,000 pounds of
uranium concentrate over the period 2022 to 2024. Repayment to Cameco is to be made in kind with U3O8 quantities drawn
being repaid by December 31, 2027 and quantities of UF6 drawn by December 31, 2035.
As at December 31, 2022, 3,571,001 pounds of U3O8 and 700,000 kgU of UF6 conversion supply were drawn on the loans and
are recorded at Cameco’s weighted average cost of inventory.
12. 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
$
2022
14,950
373,868
334,954
(34,606)
(37,644)
$
2021
12,893
301,589
328,469
(32,774)
(38,635)
$
651,522
$
571,542
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 133
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
Total comprehensive income
$
2022
476,354
(66,119)
(24,749)
1,341
(2,635)
(30,770)
(74,763)
278,659
$
2021
387,319
(55,397)
(25,300)
349
(796)
(16,636)
(60,357)
229,182
$
278,659
$
229,182
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
2022
2021
$
571,542
278,659
(195,865)
(2,814)
651,522
260,609
(82,275)
83,675
(48,641)
(2,396)
$
440,565
229,182
(85,198)
(13,007)
571,542
228,617
(60,348)
85,976
(22,085)
1,080
Carrying amount in the statement of financial position
$
210,972
$
233,240
(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.
(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.
13. Accounts payable and accrued liabilities
Trade payables
Non-trade payables
Payables due to related parties [note 25]
Total
2022
2021
$
249,962
65,182
59,570
$
213,377
66,048
61,033
$
374,714
$
340,458
The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 27.
134 CAMECO CORPORATION
14. 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
2022
2021
99,355
499,407
398,238
99,336
499,010
397,904
$
997,000
$
996,250
Cameco has a $1,000,000,000 unsecured revolving credit facility that is available until October 1, 2026. 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, 2022 and 2021, there were no amounts
outstanding under this facility.
Cameco has $1,756,754,000 (2021 - $1,696,041,000) in letter of credit facilities. Outstanding and committed letters of credit at
December 31, 2022 amounted to $1,593,379,000 (2021 - $1,573,873,000), the majority of which relate to future
decommissioning and reclamation liabilities (note 16).
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, 2022, Cameco was in compliance with the covenant and does not expect its
operating and investing activities in 2023 to be constrained by it.
The table below represents currently scheduled maturities of long-term debt:
2023
2024
$
-
499,407
2025
-
2026
2027
Thereafter
Total
-
398,238
99,355 $
997,000
15. Other liabilities
Deferred sales [note 18]
Derivatives [note 27]
Accrued pension and post-retirement benefit liability [note 26]
Lease obligation
Product loan(a)
Sales contracts [note 6]
Other
Less: current portion
Net
$
2022
66,845
58,342
66,180
9,287
78,094
9,000
59,738
347,486
(131,324)
$
2021
23,316
4,997
89,002
4,872
15,763
-
56,615
194,565
(22,791)
$
216,162
$
171,774
Expenses related to short-term leases and leases of low-value assets were insignificant during 2022.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 135
(a) The Company has standby product loan facilities with various counterparties. The arrangements allow it to borrow up to
2,438,000 kgU of UF6 conversion services and 2,817,000 pounds of U3O8 by September 30, 2026 with repayment in kind up to
December 31, 2026. 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 2.0%. At December 31, 2022, we
have 1,529,000 kgU of UF6 conversion services drawn on the loans with repayment by December 31 of the following years:
2023
2024
2025
2026
Total
kgU of UF6
331,000
-
287,000
911,000
1,529,000
We also have 1,393,000 pounds of U3O8 drawn with repayment due no later than December 31, 2023 of the following years:
lbs of U3O8
1,150,000
2023
2024
-
2025
2026
Total
-
243,000
1,393,000
The loans are recorded at Cameco’s weighted average cost of inventory.
16. Provisions
Beginning of year
Changes in estimates and discount rates [note 9]
Capitalized in property, plant and equipment
Recognized in earnings [note 9]
Acquisitions [note 6]
Provisions used during the period
Unwinding of discount [note 20]
Effect of movements in exchange rates
End of period
Current
Non-current
Reclamation Waste disposal
Total
$ 1,126,969
$
9,405
$ 1,136,374
(116,395)
22,944
2,528
(27,159)
28,681
23,528
-
1,564
-
(1,333)
298
-
(116,395)
24,508
2,528
(28,492)
28,979
23,528
$ 1,061,096
$
46,004
1,015,092
$ 1,061,096
$
$
$
9,934
$ 1,071,030
2,301
7,633
$
48,305
1,022,725
9,934
$ 1,071,030
The reclamation provision decreased by $90,923,000 due largely to an increase in risk-free nominal and implied inflation rates
during the year.
A. Reclamation provision
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.
Cameco estimates total undiscounted future decommissioning and reclamation costs for its existing operating assets to be
$1,356,092,000 (2021 - $1,100,378,000). The expected timing of these outflows is based on life-of-mine plans with the
majority of expenditures expected to occur after 2028. 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 $1,035,348,000 (2021 - $1,007,009,000) in the form of letters
of credit to satisfy current regulatory requirements.
136 CAMECO CORPORATION
The reclamation provision relates to the following segments:
Uranium
Fuel services
Total
B. Waste disposal
2022
2021
$
870,877
190,219
$
900,482
226,487
$ 1,061,096
$ 1,126,969
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 $8,919,000 (2021 - $8,169,000).
The majority of these expenditures are expected to occur within the next four years.
17. 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
A. Common Shares
Number issued (number of shares)
Beginning of year
Issued:
Stock option plan [note 25]
Equity issuance(a)
End of year
2022
2021
398,059,265
396,262,741
401,955
34,057,250
1,796,524
-
432,518,470
398,059,265
(a) On October 17, 2022, Cameco issued 34,057,250 common shares pursuant to a public offering for a total consideration of
$996,867,000. The proceeds of the issue after deducting expenses were $964,878,000. Excluding the deferred tax recoveries,
the net cash proceeds amounted to $953,285,000.
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 137
B. Class B share
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.
C. Dividends
Dividends on Cameco Corporation common shares are declared in Canadian dollars. For the year ended December 31, 2022,
the dividend declared per share was $0.12 (December 31, 2021 - $0.08).
18. 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 29):
For the year ended December 31, 2022
Uranium
Fuel services
Other
Total
$
806,915
284,602
388,629
$
289,028
52,112
23,923
$
20,025
2,769
-
$ 1,115,968
339,483
412,552
$ 1,480,146
$
365,063
$
22,794
$ 1,868,003
$
478,552
1,001,594
$
355,479
9,584
$ 1,480,146
$
365,063
$
$
22,794
-
$
856,825
1,011,178
22,794
$ 1,868,003
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
Customer geographical region
Americas
Europe
Asia
Contract type
Fixed-price
Market-related
For the year ended December 31, 2021
Customer geographical region
Americas
Europe
Asia
Contract type
Fixed-price
Market-related
138 CAMECO CORPORATION
Deferred sales
The following table provides information about contract liabilities (note 15) from contracts with customers:
Beginning of year
Additions
Recognized in revenue
Effect of movements in exchange rates
End of year
2022
2021
$
$
23,316
45,978
(2,463)
14
14,382
16,531
(7,596)
(1)
$
66,845
$
23,316
Deferred sales primarily relates to advance consideration received from customers for future uranium and conversion
deliveries as well as revenue related to the storage of uranium and converted uranium held at Cameco facilities. The revenue
related to storage is recognized over time while the revenue related to future uranium and conversion deliveries is expected to
be recognized between 2023 and 2030.
Cameco recognized a decrease of revenue of $194,000 (2021 - increase of revenue of $383,000) during 2022 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:
2023
2024
2025
2026
2027 Thereafter
Total
Uranium
Fuel services
Total
$ 556,122 $ 629,675 $ 627,534 $ 237,052 $ 238,354 $ 622,034 $ 2,910,771
2,519,918
1,016,232
329,091
235,089
244,236
339,355
355,915
$ 895,477 $ 985,590 $ 956,625 $ 481,288 $ 473,443 $ 1,638,266 $ 5,430,689
The sales contracts are denominated largely in US dollars and converted from US to Canadian dollars at a rate of $1.30.
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 139
19. 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 26]
Expenses related to defined contribution plans [note 26]
Equity-settled share-based compensation [note 25]
Cash-settled share-based compensation [note 25]
Total
20. Finance costs
Interest on long-term debt
Unwinding of discount on provisions [note 16]
Other charges
Total
No borrowing costs were determined to be eligible for capitalization during the year.
21. Other income (expense)
Foreign exchange gains
Government assistance(a)
Bargain purchase gain [note 6]
Other
Total
2022
2021
$
278,980
52,247
5,656
15,189
6,859
24,369
$
236,181
43,870
5,350
12,939
7,837
41,839
$
383,300
$
348,016
2022
2021
$
40,059
28,979
16,690
$
39,266
21,445
15,901
$
85,728
$
76,612
2022
74,132
-
22,802
-
2021
446
21,209
-
(302)
$
96,934
$
21,353
(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
2021, the Company qualified for the subsidy for the periods January through June. There were no unfulfilled conditions and
other contingencies attached to this government assistance.
140 CAMECO CORPORATION
22. Income taxes
A. Significant components of deferred tax assets and liabilities
Recognized in earnings
2022
2021
As at December 31
2022
2021
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
Property, plant and equipment
Inventories
Deferred tax liabilities
$
84,668
(3,817)
1,689
(1,816)
(66,227)
-
(2,355)
12,142
-
-
-
$
$
82,677
(14,509)
2,489
(812)
(80,802)
-
16,405
5,448
$
448,136
203,816
8,248
2,641
235,683
2,698
82,849
984,071
-
-
-
-
-
-
363,468
207,633
6,559
4,457
301,910
8,126
45,426
937,579
-
-
-
Net deferred tax asset
$
12,142
$
5,448
$
984,071
$
937,579
Deferred tax allocated as
Deferred tax assets
Deferred tax liabilities
Net deferred tax asset
2022
$
984,071
$
-
2021
937,579
-
$
984,071
$
937,579
Cameco has recorded a deferred tax asset of $984,071,000 (2021 - $937,579,000). 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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 141
B. Movement in net deferred tax assets and liabilities
Deferred tax asset at beginning of year
Recovery for the year in net earnings
Recovery for the year in equity
Recovery for the year in purchase price equation
Expense for the year in other comprehensive income
Effect of movements in exchange rates
End of year
C. Significant components of unrecognized deferred tax assets
Income tax losses
Property, plant and equipment
Provision for reclamation
Long-term investments and other
Total
D. Tax rate reconciliation
2022
2021
$
937,579
12,142
11,593
28,196
(5,440)
1
$
936,678
5,448
-
-
(4,541)
(6)
$
984,071
$
937,579
2022
2021
$
337,749
2,297
78,336
18,628
$
288,637
2,209
66,573
58,330
$
437,010
$
415,749
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:
Earnings (loss) before income taxes and non-controlling interest
Combined federal and provincial tax rate
$
2022
84,795
26.9%
22,810
8,986
1,234
(25,264)
(6,282)
(6,129)
176
2021
$
(103,855)
26.9%
(27,937)
28,690
22,068
(24,481)
1,099
-
(640)
$
(4,469)
$
(1,201)
Computed income tax expense (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
Income in equity-accounted investee
Change in uncertain tax positions
Bargain purchase gain
Other permanent differences
Income tax recovery
142 CAMECO CORPORATION
E. Earnings and income taxes by jurisdiction
Earnings (loss) before income taxes
Canada
Foreign
Current income taxes
Canada
Foreign
Deferred income tax recovery
Canada
Foreign
Income tax recovery
F. Reassessments
Canada
2022
2021
99,944
(15,149)
$
58,624
(162,479)
84,795
$
(103,855)
2,260
5,413
7,673
(10,178)
(1,964)
(12,142)
(4,469)
$
$
$
$
$
2,257
1,990
4,247
(3,937)
(1,511)
(5,448)
(1,201)
$
$
$
$
$
$
$
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%. In 2021, Cameco received
refunds totaling about $5,500,000 plus interest.
In addition, on April 30, 2019, the Tax Court had awarded Cameco $10,300,000 for legal fees incurred, plus an amount for
disbursements of up to $16,700,000. As a result of additional information provided by the Tax Court, $12,200,000 for
disbursements was recognized as a reduction of administration expense in 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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 143
G. Income tax losses
At December 31, 2022, income tax losses carried forward of $2,171,825,000 (2021 - $2,177,025,000) are available to reduce
taxable income. These losses expire as follows:
Date of expiry
Canada
US
Other
Total
2026
2027
2028
2029
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
No expiry
$
$
-
-
-
47
-
272
-
-
282,522
210,591
27
500
6,423
3,110
77
49
-
-
-
-
-
21,768
23,444
36,033
16,724
7,622
46,621
34,921
37,660
29,130
55,775
229,464
22,577
-
$
14,720
243
63
12,625
-
-
-
4,526
7,233
5,698
2,985
320
335
-
-
-
1,057,720
$
14,720
243
63
12,672
21,768
23,716
36,033
21,250
297,377
262,910
37,933
38,480
35,888
58,885
229,541
22,626
1,057,720
$
503,618
$
561,739
$ 1,106,468
$ 2,171,825
Included in the table above is $1,329,261,000 (2021 - $1,083,848,000) of temporary differences related to loss carry forwards
where no future benefit has been recognized.
23. 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 2022 was 405,494,353 (2021 - 397,630,947).
Basic earnings (loss) per share computation
Net earnings (loss) attributable to equity holders
Weighted average common shares outstanding
Basic earnings (loss) per common share
Diluted earnings (loss) per share computation
2022
2021
$
89,382
$
(102,577)
405,494
397,631
$
0.22
$
(0.26)
Net earnings (loss) attributable to equity holders
$
89,382
$
(102,577)
Weighted average common shares outstanding
Dilutive effect of stock options
Weighted average common shares outstanding, assuming dilution
405,494
1,641
407,135
397,631
-
397,631
Diluted earnings (loss) per common share
$
0.22
$
(0.26)
In 2022, there were no options excluded from the diluted weighted average number of common shares because their inclusion
would have been anti-dilutive (2021 - 1,802).
144 CAMECO CORPORATION
24. 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
The changes arising from financing activities were as follows:
2022
2021
$
99,601
(162,858)
(63,500)
16,401
(28,492)
19,417
$
(75,678)
300,307
(5,908)
91,757
(19,542)
(3,683)
$
(119,431)
$
287,253
Long-term
debt
Interest
payable
Lease
obligation
Dividends
payable
Share
capital
Total
$
996,250 $
3,558 $
4,872 $
- $ 1,903,357 $ 2,908,037
Balance at January 1, 2022
Changes from financing cash flows:
Dividends paid
Interest paid
Lease principal payments
Shares issued, stock option plan
Issuance of shares [note 17]
-
-
-
-
-
-
(38,531)
-
-
-
Total cash changes
-
(38,531)
Non-cash changes:
Amortization of issue costs
Dividends declared
Interest expense
Right-of-use asset additions
Other
Shares issued, stock option plan
Issuance of shares, deferred tax [note 17]
Foreign exchange
Total non-cash changes
750
-
-
-
-
-
-
-
750
-
-
38,984
-
-
-
-
-
38,984
-
(325)
(2,908)
-
-
(3,233)
-
-
325
7,853
(523)
-
-
(7)
7,648
(51,895)
-
-
-
-
-
-
-
9,632
953,285
(51,895)
(38,856)
(2,908)
9,632
953,285
(51,895)
962,917
869,258
-
51,895
-
-
-
-
-
-
-
-
-
-
-
2,469
11,593
-
750
51,895
39,309
7,853
(523)
2,469
11,593
(7)
51,895
14,062
113,339
Balance at December 31, 2022
$
997,000 $
4,011 $
9,287 $
- $ 2,880,336 $ 3,890,634
25. Share-based compensation plans
The Company has the following plans:
A. Stock option plan
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 145
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 30,538,777 shares have been issued.
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 17]
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
2022
2021
3,458,001
-
-
(2,475)
(401,955)
6,158,539
-
(18,005)
(886,009)
(1,796,524)
3,053,571
3,458,001
3,053,571
3,162,415
2022
2021
$16.72
-
-
26.81
23.96
$15.75
$15.75
$16.98
-
26.08
22.05
14.90
$16.72
$16.85
The weighted average share price at the dates of exercise during 2022 was $23.96 per share (2021 - $22.09).
Total options outstanding and exercisable at December 31, 2022 were as follows:
Option price per share
Number
$11.32 - 15.83
$15.84 - 19.30
1,772,271
1,281,300
3,053,571
Options outstanding
Options exercisable
Weighted
average
remaining
life
Weighted
average
exercisable
price
3.2
0.8
$14.57
$17.39
Weighted
average
exercisable
price
$14.57
$17.39
Number
1,772,271
1,281,300
3,053,571
The foregoing options have expiry dates ranging from March 1, 2023 to February 28, 2027.
146 CAMECO CORPORATION
B. Executive performance share unit (PSU)
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
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. 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,
2022, the total number of PSUs held by the participants, after adjusting for forfeitures on retirement, was 1,255,255 (2021 -
1,495,709).
C. Restricted share unit (RSU)
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, 2022, the total number of RSUs held by the participants was 1,131,493 (2021 -
1,081,783).
D. Phantom stock option
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, 2022, the number of options held by participating employees was 94,135 (2021 - 173,835) with exercise prices
ranging from $11.32 to $19.30 per share (2021 - $11.32 to $26.81) and a weighted average exercise price of $12.55 (2021 -
$13.88).
E. Phantom restricted share unit (PRSU)
The Company has 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, 2022, the total number of PRSUs held by the participants was 21,148 (2021 -
16,027).
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 147
F. Employee share ownership plan
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, 2022, there were 2,603 participants in the plan (2021 - 2,301). The total number of shares purchased in 2022
with Company contributions was 116,530 (2021 - 149,822). In 2022, the Company’s contributions totaled $3,541,000 (2021 -
$3,301,000).
G. Deferred share unit (DSU)
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, 2022, the
total number of DSUs held by participating directors was 547,304 (2021 - 579,362).
Equity-settled plans
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(a)
Stock option plan
Total
$
2022
3,541
3,273
-
45
$
$
6,859
$
2021
3,301
2,933
1,237
366
7,837
(a) There are no remaining PSUs whereby it is at the board’s discretion whether shares will be purchased on the open market
or redeemed for cash with an equivalent market value.
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.
148 CAMECO CORPORATION
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
Cash-settled plans
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
Grant date
Mar 1/22
129,910
$31.17
10%
$31.17
2022
2021
$
$
11,221
9,342
2,811
751
244
25,784
6,890
6,741
2,261
163
$
24,369
$
41,839
At December 31, 2022, a liability of $59,577,000 (2021 - $61,030,000) 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, 2022
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
238,610
92%
-
3.0 years
9%
$31.17
159,140
-
-
3.0 years
9%
$31.17
Phantom
RSU
10,142
-
$0.08
3.0 years
7%
$31.17
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 149
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
94,135
-
$12.55
$0.12
53%
3.8%
3.0 years
7%
$20.22
1,255,255
72%
-
-
-
-
0.7 years
2%
$30.69
815,098
-
-
-
-
-
0.8 years
8%
$30.69
21,148
-
-
$0.12
-
-
1.4 years
8%
$30.69
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.
26. 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 $1,675,000 in contributions and letter of credit fees to its defined benefit plans in 2023.
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.
150 CAMECO CORPORATION
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
2022
2021
Other benefit plans
2022
2021
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:
- financial assumptions
- experience adjustment
Benefits paid
Foreign exchange
Defined benefit obligation, end of year
Defined benefit liability [note 15]
$
5,693
$
6,217
$
157
(555)
-
(890)
(3)
4,402
69,998
2,302
1,867
(20,913)
1,396
(3,666)
234
51,218
(46,816)
$
$
$
$
144
172
67
(903)
(4)
5,693
72,119
2,332
1,550
(1,996)
(903)
(1,741)
(1,363)
69,998
(64,305)
$
$
$
$
$
$
$
$
-
-
-
-
-
-
-
24,697
915
726
(5,881)
161
(1,254)
-
19,364
(19,364)
$
$
$
$
$
-
-
-
-
-
-
-
25,827
956
652
(1,403)
(697)
(638)
-
24,697
(24,697)
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
2022
2021
6%
11%
6%
28%
49%
100%
8%
13%
8%
32%
39%
100%
(a) The defined benefit plan assets contain no material amounts of related party assets at December 31, 2022 and 2021
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 151
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 19]
Defined contribution pension expense [note 19]
Pension benefit plans
Other benefit plans
2022
2021
$
$
$
2,302
1,710
3
4,015
15,189
2,332
1,406
4
3,742
12,939
$
2022
915
726
-
1,641
-
Net pension and other benefit expense
$
19,204
$
16,681
$
1,641
$
The total amount of actuarial gains recognized in other comprehensive income is:
2021
956
652
-
1,608
-
1,608
Actuarial gains
Return on plan assets excluding
interest income
Pension benefit plans
Other benefit plans
2022
2021
2022
2021
$
(19,517)
$
(2,899)
$
(5,720)
$
(2,100)
555
(172)
-
-
$
(18,962)
$
(3,071)
$
(5,720)
$
(2,100)
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
2022
4.5%
2.3%
3.0%
-
-
2021
2.3%
2.4%
3.0%
-
-
2022
5.1%
2.9%
-
5.0%
4.5%
2021
2.9%
2.5%
-
5.0%
4.5%
At December 31, 2022, the weighted average duration of the defined benefit obligation for the pension plans was 17.1 years
(2021 - 20.0 years) and for the other benefit plans was 11.3 years (2021 - 13.6 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
$
(6,148)
$
7,737
$
(2,366)
$
2,975
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, 2022. 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.
152 CAMECO CORPORATION
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 $1,236,000.
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.
27. 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 and
interest rate contracts change.
The types of market risk exposure and the way in which such exposure is managed are as follows:
A. Commodity price risk
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.
B. Foreign exchange risk
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 153
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.
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
Short-term investments
Accounts receivable
Accounts payable and accrued liabilities
Net foreign currency derivatives
Currency
Carrying value
(Cdn)
Gain (loss)
$
USD
USD
USD
USD
USD
$
414,683
886,020
136,246
(176,746)
(48,251)
20,734
44,301
6,812
(8,837)
(71,836)
A 5% strengthening of the Canadian dollar against the currencies above at December 31, 2022 would have had an equal but
opposite effect on the amounts shown above, assuming all other variables remained constant.
C. Interest rate risk
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, 2022, the proportion of Cameco’s
outstanding debt that carries fixed interest rates is 92% (2021 - 92%).
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%. At December 31, 2022, the fair value of Cameco’s
interest rate swap net liability was $7,284,000 (2021 - $673,000).
Cameco measures its exposure to interest rate risk as the change in cash flows that would occur as a result of reasonably
possible changes in interest rates, holding all other variables constant. As of the reporting date, the Company has determined
the impact on earnings of a 1% increase in interest rate on its interest rate contracts to be a loss of $766,000.
154 CAMECO CORPORATION
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 7]
Derivative assets [note 11]
Cash and cash equivalents
2022
2021
$ 1,143,674
1,138,174
178,088
2,807
$ 1,247,447
84,906
272,220
32,098
Cameco held cash and cash equivalents of $1,143,674,000 at December 31, 2022 (2021 - $1,247,447,000). 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.
Short-term investments
Cameco held short-term investments of $1,138,174,000 at December 31, 2022 (2021 - $84,906,000). The Company mitigates
its credit risk by requiring that the issuer/guarantor of the investment have a minimum short-term credit rating and/or a long-
term debt rating at the time of purchase, according to the investment credit ratings as issued by DBRS or S&P, or the
equivalent of the DBRS or S&P rating at another reputable rating agency.
In addition to the credit-rating requirement, Cameco also mitigates risk by prescribing limits by counterparty and types of
investment products.
Cameco has assessed its counterparty credit risk related to short-term investments by applying historic default rates to
outstanding investment 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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 155
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
$ 139,708
27,980
$ 167,688
-
$ 167,688
At December 31, 2022, 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, 2022:
Current (not past due)
1-30 days past due
More than 30 days past due
Total
Liquidity risk
Corporate
customers
Other
customers
$
$
166,361
639
99
$
167,099
$
398
171
20
589
Total
166,759
810
119
167,688
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.
The table below outlines the Company’s available debt facilities at December 31, 2022:
Outstanding and
Total amount
committed
Amount available
Unsecured revolving credit facility [note 14]
Letter of credit facilities [note 14]
$
1,000,000
1,756,754
$
-
1,593,379
$
1,000,000
163,375
156 CAMECO CORPORATION
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 $ 374,714 $ 374,714 $ 374,714 $
Long-term debt
Foreign currency contracts
Interest rate contracts
Lease obligation [note 15]
1,000,000
51,058
7,284
10,314
997,000
51,058
7,284
9,287
-
23,476
2,437
2,681
- $
- $
500,000
27,582
2,987
2,595
400,000
-
1,860
1,718
-
100,000
-
-
3,320
Total contractual repayments
$ 1,439,343 $ 1,443,370 $ 403,308 $ 533,164 $ 403,578 $ 103,320
Due in
less than Due in 1-3 Due in 3-5 Due after 5
Total
1 year
years
years
years
Total interest payments on long-term debt
$ 192,225 $ 37,840 $ 44,255 $ 33,780 $
76,350
Measurement of fair values
A. Accounting classifications and fair values
The following tables summarize the carrying amounts and accounting classifications of Cameco’s financial instruments at the
reporting date:
At December 31, 2022
Financial assets
Cash and cash equivalents
Short-term investments
Accounts receivable [note 7]
Derivative assets [note 11]
Foreign currency contracts
Financial liabilities
Accounts payable and accrued liabilities [note 13]
Lease obligation [note 15]
Derivative liabilities [note 15]
Foreign currency contracts
Interest rate contracts
Long-term debt [note 14]
FVTPL
Amortized
cost
Total
$
$
$
- $ 1,143,674 $ 1,143,674
1,138,174
-
183,944
-
1,138,174
183,944
2,807
-
2,807
2,807 $ 2,465,792 $ 2,468,599
- $
-
374,714 $
9,287
374,714
9,287
51,058
7,284
-
-
-
997,000
51,058
7,284
997,000
58,342
1,381,001
1,439,343
Net
$
(55,535) $ 1,084,791 $ 1,029,256
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 157
At December 31, 2021
Financial assets
Cash and cash equivalents
Short-term investments
Accounts receivable [note 7]
Derivative assets [note 11]
Foreign currency contracts
Interest rate contracts
Financial liabilities
Accounts payable and accrued liabilities [note 13]
Lease obligation [note 15]
Derivative liabilities [note 15]
Foreign currency contracts
Interest rate contracts
Long-term debt [note 14]
FVTPL
Amortized
cost
Total
$
$
$
- $ 1,247,447 $ 1,247,447
84,906
-
276,139
-
84,906
276,139
31,534
564
-
-
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
3,760
1,237
996,250
1,341,580
1,346,577
Net
$
27,101 $
266,912 $
294,013
Cameco has pledged $239,000,000 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.
Cameco has issued guarantees to certain banks in respect of the credit facilities granted to various subsidiaries. These
facilities consist of daily overdraft limits and credit lines. At December 31, 2022 the Company has issued guarantees of up to
$179,700,000 ($132,600,000 (US)), which is the maximum amount the Company could be exposed to at any point in time.
During 2021, 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 were presented net of tax. Cameco 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.
158 CAMECO CORPORATION
The following tables summarize the carrying amounts and level 2 fair value measurements of Cameco’s financial instruments:
As at December 31, 2022
Derivative assets [note 11]
Foreign currency contracts
Derivative liabilities [note 15]
Foreign currency contracts
Interest rate contracts
Long-term debt [note 14]
Net
As at December 31, 2021
Derivative assets [note 11]
Foreign currency contracts
Interest rate contracts
Derivative liabilities [note 15]
Foreign currency contracts
Interest rate contracts
Long-term debt [note 14]
Net
Carrying value
Fair value
$
2,807
$
2,807
(51,058)
(7,284)
(997,000)
(51,058)
(7,284)
(1,014,010)
$ (1,052,535)
$ (1,069,545)
Carrying value
Fair value
$
31,534
$
564
31,534
564
(3,760)
(1,237)
(996,250)
(3,760)
(1,237)
(1,103,978)
$
(969,149)
$ (1,076,877)
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.
B. Financial instruments measured at fair value
Cameco measures its derivative financial instruments and long-term debt at fair value. Derivative financial instruments and
long-term debt are classified as a recurring level 2 fair value measurement.
The fair value of Cameco’s long-term debt is determined using quoted market yields as of the reporting date, which ranged
from 3.3% to 4.2% (2021 - 1.1% to 1.7%).
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.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 159
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.
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 11]
Long-term receivables, investments and other [note 11]
Current portion of other liabilities [note 15]
Other liabilities [note 15]
Net
2022
2021
$
$
$
(48,251)
(7,284)
$
27,774
(673)
(55,535)
$
27,101
$
1,331
1,476
(25,913)
(32,429)
22,652
9,446
(378)
(4,619)
$
(55,535)
$
27,101
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
28. Capital management
2022
2021
$
$
(66,360)
(6,589)
$
13,202
(673)
(72,949)
$
12,529
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 weakness in the market, litigation risk and refinancing risk.
The overall objectives for managing capital in 2022 reflect the environment that the Company is operating in, similar to the
prior comparative period.
160 CAMECO CORPORATION
The capital structure at December 31 was as follows:
Long-term debt [note 14]
Cash and cash equivalents
Short-term investments
Net debt
Non-controlling interest
Shareholders' equity
Total equity
Total capital
2022
2021
997,000
(1,143,674)
(1,138,174)
996,250
(1,247,447)
(84,906)
(1,284,848)
(336,103)
11
5,836,054
127
4,845,841
5,836,065
4,845,968
$ 4,551,217
$ 4,509,865
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, 2022, Cameco met these requirements.
29. 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.
Cost of sales in the uranium segment includes care and maintenance costs for our operations that have had production
suspensions as well as operational readiness costs for our operations that are resuming operations. Operational readiness
costs include costs to complete critical projects, perform maintenance readiness checks, and recruit and train sufficient mine
and mill personnel before beginning operations. Cameco expensed $218,439,000 of care and maintenance and operational
readiness costs during the year (2021 - $209,556,000 of care and maintenance costs). Included in this amount in 2021 is
$40,359,000 relating to care and maintenance costs for operations suspended as a result of COVID-19 and the related impact
of increased purchasing activity at a higher cost than produced pounds. This had a negative impact on gross profit in the
uranium segment.
Accounting policies used in each segment are consistent with the policies outlined in the summary of significant accounting
policies.
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 161
A. Business segments - 2022
For the year ended December 31, 2022
Revenue
$ 1,480,146
$
365,063
$
22,794
$ 1,868,003
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 (income)
(Gain) loss on disposal of assets
Finance costs
Loss on derivatives
Finance income
Share of earnings from equity-accounted investee
Other income
1,223,558
135,800
1,359,358
215,660
32,618
248,278
18,118
8,958
1,457,336
177,376
27,076
1,634,712
120,788
116,785
(4,282)
233,291
-
10,578
-
25,845
726
-
-
-
(93,988)
(22,802)
-
-
-
(2,901)
(212)
-
-
-
-
-
172,029
-
12,175
-
-
85,728
72,949
(37,499)
-
(74,132)
172,029
10,578
12,175
22,944
514
85,728
72,949
(37,499)
(93,988)
(96,934)
84,795
(4,469)
89,264
Earnings (loss) before income taxes
200,429
119,898
(235,532)
Income tax recovery
Net earnings
Capital expenditures for the year
$
101,547
$
39,736
$
2,198
$
143,481
162 CAMECO CORPORATION
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
B. Geographic segments
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:
Canada
United States
2022
2021
$
994,534
873,469
$
704,719
770,265
$ 1,868,003
$ 1,474,984
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
2022
2021
$ 3,042,533
397,678
80,352
38
6
$ 3,100,285
395,223
131,683
46
11
$ 3,520,607
$ 3,627,248
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 163
C. Major customers
Cameco relies on a small number of customers to purchase a significant portion of its uranium concentrates and uranium
conversion services. During 2022, revenues from one customer of Cameco’s uranium and fuel services segments represented
approximately $227,846,000 (2021 - $166,068,000), approximately 12% (2021 - 11%) 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.
30. 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
2022
2021
Canada
Canada
US
US
US
Australia
Switzerland
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Kazakhstan
40%
40%
31. Joint operations
Cameco conducts a portion of its exploration, development, mining and milling activities through joint operations. 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.
164 CAMECO CORPORATION
Cameco reflects its proportionate interest in these assets and liabilities as follows:
Total assets
McArthur River
Key Lake
Cigar Lake(a)
Total liabilities
McArthur River
Key Lake
Cigar Lake(a)
Principal place
of business
Ownership
2022
2021
Canada
Canada
Canada
69.81%
83.33%
54.55%
$
998,368
527,841
1,219,036
$ 1,010,956
549,051
1,294,333
$ 2,745,245
$ 2,854,340
$
69.81%
83.33%
54.55%
37,881
240,487
50,362
$
36,697
267,579
45,503
$
328,730
$
349,779
(a) Cameco’s ownership stake in the Cigar Lake uranium mine in northern Saskatchewan was previously 50.025%. On May
19, 2022, Cameco and Orano completed the acquisition of Idemitsu’s 7.875% participating interest in the CLJV by acquiring
their pro rata shares through an asset purchase (note 6).
32. Related parties
A. Transactions with key management personnel
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 26). Senior management and directors also participate in the Company’s share-based
compensation plans (note 25).
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
2022
2021
$
$
23,557
21,149
6,532
-
20,663
34,639
6,188
161
$
51,238
$
61,651
(a) Excludes deferred share units held by directors (see note 25).
B. Other related party transactions
Cameco purchases uranium concentrates from JV Inkai. For the year ended December 31, 2022, Cameco had purchases of
$206,818,000 ($155,937,000 (US)) (2021 - $233,621,000 ($185,763,000 (US))). Cameco received a cash dividend from JV
Inkai of $117,698,000 ($92,425,000 (US)) (2021 - $50,128,000 ($40,286,000 (US))).
2022 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 165
33. Commitments
On October 11, 2022, Cameco announced that it had entered into a strategic partnership with Brookfield Renewable Partners
(Brookfield Renewable) and its institutional partners to acquire Westinghouse Electric Company (Westinghouse), one of the
world’s largest nuclear services businesses. Brookfield Renewable, with its institutional partners, will own a 51% interest in
Westinghouse and Cameco will own 49%.
Cameco’s share of the purchase price will be funded with a combination of cash, debt and equity. The Company secured a
bridge loan facility of $280,000,000 (US) as well as $600,000,000 (US) in term loans. The bridge facility, if funded, will mature
364 days after the acquisition closing date and the term loans, which consist of two $300,000,000 (US) tranches, are expected
to mature two and three years after the closing of the acquisition. In addition, as disclosed in note 17, Cameco issued
34,057,250 common shares pursuant to a public offering.
Transaction costs of $41,227,000 have been included in supplies and prepaid expenses in the consolidated statement of
financial position as of the year ended December 31, 2022. Under the terms of the agreement, if the transaction does not
close, Cameco is entitled to recover a portion of these costs.
166 CAMECO CORPORATION