CCJ Cameco Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

For the month of October, 2023

Cameco Corporation

(Commission file No. 1-14228)

2121-11th Street West

Saskatoon, Saskatchewan, Canada S7M 1J3

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☐    Form 40-F ☒

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐    No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 99.1

TSX: CCO				website: cameco.com
NYSE: CCJ				currency: Cdn (unless noted)

2121 – 11th Street West, Saskatoon, Saskatchewan, S7M 1J3 Canada

Tel: 306-956-6200 Fax: 306-956-6201

Cameco announces third quarter results; tier-one transition continues to drive gross profit improvement; amplified security of supply concerns benefit full-year revenue outlook; decade-high industry contracting volume achieved; dividend declared

Saskatoon, Saskatchewan, Canada, October 31, 2023 .. . . . . . . . . . . . . . . .

Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the third quarter ended September 30, 2023, in accordance with International Financial Reporting Standards (IFRS).

“Our third quarter financial performance continues to demonstrate the benefits of our strategic decisions and the significant, positive momentum we are experiencing in the nuclear energy industry. We have again increased our consolidated revenue outlook for 2023, which is driven by higher average realized prices as a result of substantial uranium spot price improvements. Gross profits have also improved as our uranium average unit cost of sales decreased from last year as we continue the transition back to our tier-one production cost structure,” said Tim Gitzel, Cameco’s president and CEO.

“I am pleased to announce that effective November 1, Dominic Kieran is joining Cameco’s executive group as Global Managing Director of our subsidiary in the United Kingdom. Dominic brings extensive international executive experience in the nuclear fuel, chemical and broader technology industries, which will enhance the skillset of our strong and experienced leadership group. His wide-ranging expertise will help facilitate Cameco’s growth across the nuclear value chain.

“The world’s desire for clean, secure and low-cost energy is creating a foundation of support for nuclear energy from across the public and political spectrum. This increase in support, coupled with the geopolitical uncertainty brought on by Russia’s invasion of Ukraine and a coup in Niger, has intensified supply concerns as future uranium supply and downstream processing is needed to balance the market. In the short term, supply chain issues and inflation risks are causing production challenges for current operators. Compared to previous price cycles, the market does not have the inventory or secondary supplies to absorb market shocks.

“We are seeing durable, full-cycle demand growth across the nuclear energy industry. These factors lead us to believe that we are experiencing the industry’s best ever market fundamentals. These dynamics have also led the World Nuclear Association (WNA) to increase its demand forecast in their latest Nuclear Fuel Report to an average annual growth rate of 3.6%, compared to 2.6% in the 2021 report. Furthermore, the WNA has issued a call to action to triple nuclear capacity by 2050 to help the global drive to net-zero greenhouse gas emissions.

“Our customers understand that we are a proven, reliable supplier operating across the nuclear fuel cycle and recognize our deep understanding of how nuclear fuel markets work. The important role we play in our industry is also being recognized on the international stage. In September, I had the honour of meeting Ukrainian President Zelenskyy and Prime Minister Trudeau in Toronto where the President thanked us for helping Ukraine in its efforts to regain energy independence and we renewed Cameco’s commitment to working with them. In October, reinforcing our commitment to Energoatom, I joined a Cameco delegation to visit our partners at their head offices in Ukraine.

“Also in September, Cameco was invited to participate in the OECD’s inaugural Roadmaps to New Nuclear conference. This conference of government and industry leaders met with the intention of building leadership and cooperation in nuclear energy. In November, we are participating in the International Atomic Energy Agency’s Standing Advisory Group on Nuclear Energy to advise the agency’s long-term nuclear power and nuclear fuel cycle activities. These are proud moments for us at Cameco that highlight the impact that our work is having around the world.

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“We are a responsible, commercial supplier with a strong balance sheet, long-lived, tier-one assets, and a proven operating track record, and are returning to our tier-one cost structure. We are invested across the nuclear fuel cycle and continue to work toward closing the Westinghouse acquisition with our partner Brookfield and its publicly listed affiliate Brookfield Renewable Partners and its institutional partners by the end of this year, at which time we look forward to being able to discuss the exciting prospects we see for that business. We will continue to do what we said we would do, executing on our strategy, and, consistent with our values, we will do so in a manner we believe will make our business sustainable over the long-term.”

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Consolidated financial results

The financial information presented for the three months and nine months ended September 30, 2022, and September 30, 2023, is unaudited.

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NET EARNINGS

The following table shows what contributed to the change in net earnings (losses) and adjusted net earnings (non-IFRS measure, see page 4) in the third quarter and first nine months of 2023, compared to the same periods in 2022.

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 measure). We use this measure as a meaningful way to compare our financial performance from period to period. Adjusted net earnings is our net earnings attributable to equity holders, adjusted to 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 in our 2022 annual MD&A).

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 in our 2022 annual MD&A for more information.

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We also adjust for changes to our reclamation provisions that flow directly through earnings. Every quarter we are required to update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 9 of our interim 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.

The following table reconciles adjusted net earnings with net earnings for the third quarter and first nine months of 2023 and compares it to the same periods in 2022.

Selected segmented highlights

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Management’s discussion and analysis (MD&A) and financial statements

The third quarter MD&A and unaudited condensed consolidated interim financial statements provide a detailed explanation of our operating results for the three and nine months ended September 30, 2023, as compared to the same periods last year. This news release should be read in conjunction with these documents, as well as our audited consolidated financial statements and notes for the year ended December 31, 2022, first quarter, second quarter and annual MD&A, and our most recent annual information form, all of which are available on our website at cameco.com, on SEDAR+ at sedarplus.ca, and on EDGAR at sec.gov/edgar.shtml.

Qualified persons

The technical and scientific information discussed in this document 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:

Caution about forward-looking information

This news release includes statements and information about our expectations for the future, which we refer to as forward-looking information. Forward-looking information is based on our current views, which can change significantly, and actual results and events may be significantly different from what we currently expect.

Examples of forward-looking information in this news release include: our expectation that amplified security of supply concerns will benefit our full-year revenue; our belief that we are experiencing significant positive momentum in the nuclear energy industry; our consolidated revenue outlook for 2023; our continuing transition to a tier-one production cost structure and the longevity of our tier-one assets; the creation of a foundation of support for nuclear energy; the intensification of supply concerns; our view that there is durable, full-cycle demand growth across the nuclear energy industry, and related third party demand and growth rate forecasts; our commitment to the Ukraine and Energoatom; our participation in building leadership and cooperation in nuclear energy; the expected timing of the closing of the Westinghouse acquisition and the prospects for that business; our intention to continue to execute our strategy in a manner we believe will make our business sustainable over the long term; our expectations regarding our long-term contract portfolio and pipeline of business, and our view that a new long-term contracting cycle is underway; the effective date of the appointment of the new Global Managing Director for Cameco UK Ltd.; the expected timing for the arrival of the first and second shipments of our 2023 share of Inkai’s production, the risk of further delays and our ability to draw on inventory, long-term purchase agreements and loan arrangements to mitigate that risk; our 2023 annual dividend payment date and the considerations relevant to future dividends; and the expected date for announcement of our 2023 fourth quarter and annual results.

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Material risks that could lead to different results include: unexpected changes in uranium supply, demand, long-term contracting, and prices; changes in consumer demand for nuclear power and uranium as a result of changing societal views and objectives regarding nuclear power, electrification and decarbonization; the risk that our views regarding nuclear power, its growth profile, and benefits, may prove to be incorrect; the risk that we may not be able to achieve planned production levels within the expected timeframes, or that the costs involved in doing so exceed our expectations; the risk that the production levels at Inkai may not be at expected levels or that it may not be able to deliver its production; the risk that we may not be able to meet sales commitments for any reason; the risk that the Westinghouse acquisition may be delayed or may not be completed on the terms in the acquisition agreement or at all; the risks to our business associated with potential production disruptions, including those related to global supply chain disruptions, global economic uncertainty, political volatility, labour relations issues, and operating risks; the risk that we may not be able to implement our business objectives in a manner consistent with our environmental, social, governance and other values; the risk that the strategy we are pursuing may prove unsuccessful, or that we may not be able to execute it successfully; the risk that we may be unsuccessful in our commitment to Ukraine and Energoatom, or our participation in building leadership and cooperation in nuclear energy; the risk that our newly-appointed executives may not begin to serve when expected; and the risk that we may be delayed in announcing our future financial results.

In presenting the forward-looking information, we have made material assumptions which may prove incorrect about: uranium demand, supply, consumption, long-term contracting, growth in the demand for and global public acceptance of nuclear energy, and prices; our production, purchases, sales, deliveries and costs; the market conditions and other factors upon which we have based our future plans and forecasts; our contract pipeline discussions; our ability to mitigate adverse consequences of delays in the shipment of our share of Inkai production; the success of our plans and strategies, including planned production; the expected timing of the closing of the Westinghouse acquisition; the absence of new and adverse government regulations, policies or decisions; that there will not be any significant adverse consequences to our business resulting from production disruptions, including those relating to supply disruptions, economic or political uncertainty and volatility, labour relation issues, and operating risks; our ability to support Ukraine, Energoatom and the building of leadership and cooperation in nuclear energy; the ability of our newly-appointed executives to begin to serve when expected; and our ability to announce future financial results when expected.

Please also review the discussion in our 2022 annual MD&A, our 2023 third quarter MD&A and our most recent annual information form for other material risks that could cause actual results to differ significantly from our current expectations, and other material assumptions we have made. Forward-looking information is designed to help you understand management’s current views of our near-term 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.

Conference call

We invite you to join our third quarter conference call on Tuesday, October 31, 2023, at 8:00 a.m. Eastern.

The call will be open to all investors and the media. To join the call, please dial (800) 319-4610 (Canada and US) or (604) 638-5340. An operator will put your call through. The slides and a live webcast of the conference call will be available from a link at cameco.com. See the link on our home page on the day of the call.

A recorded version of the proceedings will be available:

2023 fourth quarter and annual report release date

We plan to announce our 2023 fourth quarter and annual consolidated financial and operating results before markets open on February 8, 2024. Announcement dates are subject to change.

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Profile

Cameco is one of the largest global providers of the uranium fuel needed to energize a clean-air world. Our competitive position is based on our controlling ownership of the world’s largest high-grade reserves and low-cost operations. Utilities around the world rely on our nuclear fuel products to generate safe, reliable, carbon-free nuclear power. Our shares trade on the Toronto and New York stock exchanges. Our head office is in Saskatoon, Saskatchewan, Canada.

As used in this news release, the terms we, us, our, the Company and Cameco mean Cameco Corporation and its subsidiaries unless otherwise indicated.

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Investor inquiries:

Rachelle Girard

306-956-6403

rachelle_girard@cameco.com

Media inquiries:

Veronica Baker

306-385-5541

veronica_baker@cameco.com

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Exhibit 99.2

Management’s discussion and analysis

for the quarter ended September 30, 2023

This management’s discussion and analysis (MD&A) includes information that will help you understand management’s perspective of our unaudited condensed consolidated interim financial statements and notes for the quarter ended September 30, 2023 (interim financial statements). The information is based on what we knew as of October 30, 2023, and updates our first quarter, second quarter and annual MD&A included in our 2022 annual report.

As you review this MD&A, we encourage you to read our interim financial statements as well as our audited consolidated financial statements and notes for the year ended December 31, 2022, and annual MD&A. You can find more information about Cameco, including our audited consolidated financial statements and our most recent annual information form, on our website at cameco.com, on SEDAR+ at sedarplus.ca 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 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:

Third quarter market update

Ongoing geopolitical events, the global focus on the climate crisis, and energy security concerns have created what we believe are transformative tailwinds for the nuclear power industry, from both a demand and supply perspective.

In the third quarter of 2023, uranium prices reached levels not seen since 2011, driven primarily by growing security of supply concerns. Fuel buyers continued contracting to secure their long-term requirements for conversion and enrichment services and have returned their focus to the uranium required to feed into those services, as evidenced by higher prices across the fuel cycle and long-term contracting that continues to be on track to achieve the rate required to replace what is being consumed annually (replacement-rate contracting).

Some of the more significant developments affecting supply in the quarter and to date include:

According to the International Atomic Energy Agency, globally, there are currently 437 operable reactors and 58 reactors under construction. Demand-related developments continue to indicate growing support for the nuclear industry, including nations reaffirming their commitment to existing nuclear and/or reversing policies to phase out nuclear, non-nuclear countries emerging as candidates for new nuclear capacity, improvements in global sustainable financing policies to include nuclear energy, and opinion polls showing growing public support. With a number of reactor construction projects approved and many more planned, demand for uranium fuel continues to improve.

The more significant developments in the quarter affecting current and future demand include:

Caution about forward-looking information relating to the nuclear industry

This discussion of our expectations for the nuclear industry, including its growth profile, uranium supply and demand, and reactor growth 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.

Industry prices at quarter end

On the spot market, where purchases call for delivery within one year, the volume reported by UxC for the third quarter of 2023 was almost 13 million pounds U₃O₈ equivalent, compared to 9 million pounds U₃O₈ equivalent contracted in the third quarter of 2022. As of September 30, 2023, the average reported spot price was $71.58 (US) per pound, an increase of $15.48 (US) per pound from the previous quarter.

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-related prices, which reference spot and/or long-term indicators determined near the time of delivery. Long-term contracting reported by UxC for the first nine months of 2023 totaled about 144 million pounds U₃O₈ equivalent, up from about 80 million pounds U₃O₈ equivalent reported over the same period in 2022. Total long-term contracting volumes to date in 2023 has already exceeded the volume of each of the last 10 years, a strong indication that a new long-term contracting cycle is underway. The average reported long-term price at the end of the quarter was $61.50 (US) per pound U₃O₈ equivalent, an increase of $5.50 (US) per pound from the previous quarter.

With the increased demand for conversion services, pricing in both North America and Europe continues to be strong. As of the end of the third quarter, the average reported spot price reached a record high of $40.88 (US) per kilogram uranium (kgU) as UF₆, up $0.13 (US) from the previous quarter. Long-term UF₆ conversion prices for North America finished the quarter at $31.50 (US) per kgU, up $0.75 (US) from the previous quarter.

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 nuclear power and the uranium and fuel services needed to run the reactors. We believe nuclear energy must be a significant component of the world’s shift to a low-carbon, climate resilient economy. It is an option that can provide the necessary power in a reliable, safe and affordable manner, 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:

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.

Our vision – “Energizing a clean-air world” – recognizes that we have an important role to play in enabling the vast reductions in global greenhouse gas (GHG) emissions required to achieve a resilient net-zero carbon economy. We support climate action that is consistent with the ambitions of the Paris Agreement and the Canadian government’s commitment to the agreement, which seeks to limit global temperature rise to less than 2° Celsius, a target that climate scientists believe will require the world to reach net-zero emissions by 2050 or sooner. Our uranium and fuel services are 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 operating and delivering our products responsibly. Building on that strong foundation, we have set a new target to reduce our combined Scope 1 and Scope 2 GHG emissions by 30% by 2030, from our 2015 baseline as our first major milestone on the journey to achieve our ambition of being net-zero. We remain committed to our efforts to transform our own, already low, greenhouse gas footprint in our ambition to reach net-zero emissions, and identifying and addressing the environmental, social, and governance (ESG) risks and opportunities that we believe may have a significant impact on our ability to add long-term value for our stakeholders.

You can read more about our strategy in our 2022 annual MD&A and our approach to ESG in our 2022 ESG report.

Strategy in action

In September, we provided a production update reducing our 2023 uranium production outlook from 33 million pounds (20.3 million pounds our share) to up to 30.3 million pounds (up to 18.7 million pounds our share). See Uranium 2023 Q3 updates starting on page 27 for more information. This expected production shortfall further highlights the growing security of supply risk at a time when we believe the demand outlook is stronger and more durable than ever and where we believe the risk to uranium supply is greater than the risk to uranium demand. We expect the uncertainty about where nuclear fuel supplies will come from to satisfy growing demand will continue to drive a renewed focus on long-term contracting to ensure availability of 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 maintain our plans to increase uranium production to 36 million pounds (22.4 million pounds our share) starting in 2024. At Inkai, production will continue to follow the 20% reduction planned by Kazatomprom until the end of 2023. In addition to our uranium production plans, our Port Hope UF₆ conversion facility is working to increase annual production to 12,000 tonnes of UF₆ by 2024, in order to satisfy our book of long-term business and demand for conversion services, at a time when conversion prices are at historic highs.

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 tier-one expansion opportunities, our annual share of tier-one uranium supply could be about 32 million pounds (including our share of production from McArthur River/Key Lake and Cigar Lake, and Inkai purchases). However, we will continue to responsibly manage our supply in accordance with our contract portfolio and our customers’ needs.

With increasing supply risk caused by production challenges and heightened geopolitical uncertainty, utilities are evaluating their nuclear fuel supply chains. Our utility customers’ nuclear power plants continue to be part of the critical infrastructure needed to guarantee the availability of 24-hour electricity to run essential services. Our customers are going to need nuclear fuel to allow them to continue to provide carbon-free baseload electricity. As a reliable, commercial supplier, with nuclear fuel assets in geopolitically stable jurisdictions, we are focused on working with our customers to secure long-term commitments that will underpin the long-term operation of our productive capacity, while helping de-risk their nuclear fuel supply chains.

We are also focused on adding new markets to our global commercial portfolio. We are successfully competing for business in countries seeking to enhance their energy security, while affirming their commitment to carbon-free nuclear power in achieving their climate goals.

In recent years, the volumes we have placed under long-term agreements have exceeded our annual delivery volumes. With our contracting success, we are heavily committed under long-term contracts. As of September 30, 2023, we had commitments requiring delivery of an average of about 29 million pounds per year from 2023 through 2027, an increase from an average of about 28 million pounds per year at the end of June. Commitment levels in 2023 through 2025 are higher than the average and in 2026 and 2027 lower than the average. We also have contracts in our uranium and fuel services segments that have deliveries spanning more than a decade, and in our uranium segment, many of our contracts benefit from market-related pricing mechanisms. In addition, we have a large and growing pipeline of business under discussion, which we expect will help further build our long-term portfolio. With about 144 million pounds of long-term contracting industry-wide so far this year, we believe there is clear evidence that the broader uranium market is moving toward replacement-rate contracting reflecting security of supply concerns. This is the type of contracting necessary to promote the price discovery already seen in the enrichment and conversion markets and that will incentivize investments in the supply necessary to satisfy the growing long-term requirements. Therefore, we remain selective in committing our unencumbered, in-ground uranium inventory and UF₆ conversion capacity under long-term contracts to help maintain additional exposure to future improvements in the market.

We continue to meet our sales commitments through a combination of production, inventory, purchases and product loans. In the first nine months of 2023, we produced 11.9 million pounds of uranium (our share) and purchased 5 million pounds. The average unit cost of our purchases was $69.88 per pound ($51.58 per pound (US)). See Financial results by segment – Uranium starting on page 23 for more information.

Thanks to the disciplined execution of our strategy, our balance sheet is strong. As of September 30, 2023, we had $2.7 billion in cash and cash equivalents, and $1.0 billion in total debt. We also have a $1.0 billion undrawn credit facility. Our current cash balance is in excess of our normal working capital requirements and is expected to be used to help finance the pending acquisition of Westinghouse. See Pending acquisition of Westinghouse on page 30.

In October, pursuant to a cost award from the courts, we received a payment of approximately $12 million for disbursements from Canada Revenue Agency (CRA), which is in addition to the $10 million we received as reimbursement for legal fees in 2021. See Transfer pricing dispute on page 15 for more information.

We expect to maintain the financial strength and flexibility necessary to execute our strategy by being disciplined and planning production in coordination with contracting success and market opportunities, and by taking advantage of value-added growth opportunities, while continuing to navigate by our investment grade rating to self-manage risk, including risks related to global macro-economic uncertainty and volatility.

Financial results

This section of our MD&A discusses our performance, financial condition and outlook for the future.

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 is now 54.547%, which is 4.522% higher than it was prior to the transaction. Effective May 19, 2022, we have reflected our share of production and financial results based on this new ownership stake.

Consolidated financial results

NET EARNINGS

The following table shows what contributed to the change in net earnings and adjusted net earnings (non-IFRS measure, see page 13) in the third quarter and the first nine months of 2023, compared to the same periods in 2022.

See Financial results by segment on page 23 for more detailed discussion.

ADJUSTED NET EARNINGS (NON-IFRS MEASURE)

Adjusted net earnings (ANE) is a measure that does not have a standardized meaning or a consistent basis of calculation under IFRS (non-IFRS measure). We use this measure as a meaningful way to compare our financial performance from period to period. Adjusted net earnings is our net earnings attributable to equity holders, adjusted to 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 of our 2022 annual report).

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 17 for more information.

We also adjust for changes to our reclamation provisions that flow directly through earnings. Every quarter we are required to update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 9 of our interim 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.

The following table reconciles adjusted net earnings with net earnings for the third quarter and first nine months of 2023 and compares it to the same periods in 2022.

Quarterly trends

Key things to note:

The following table compares the net earnings and adjusted net earnings for the first quarter to the previous seven quarters.

Corporate expenses

ADMINISTRATION

Direct administration costs were $7 million higher for the third quarter of 2023 compared to the same period last year, and $32 million higher for the first nine months largely due to the impacts of inflation and higher costs as a result of digital initiatives. Stock-based compensation in the first nine months of 2023 was $16 million higher than 2022 due to the increase in our share price from the comparative period. See note 17 to the financial statements.

EXPLORATION AND RESEARCH & DEVELOPMENT

In the third quarter, uranium exploration expenses were $4 million, an increase of $1 million from the third quarter of 2022. Exploration expenses for the first nine months of the year increased by $6 million compared to 2022, to $14 million.

We also had research and development expenditures in the third quarter of $8 million, an increase of $5 million from the third quarter of 2022. Research and development expenses for the first nine months of the year increased by $8 million compared to 2022, to $17 million. These expenses are related to our investment in Global Laser Enrichment, LLC.

INCOME TAXES

We recorded an income tax expense of $41 million in the third quarter of 2023, compared to a recovery of $25 million in the third quarter of 2022.

In the first nine months of 2023, we recorded an expense of $100 million compared to no expense in 2022.

TRANSFER PRICING DISPUTE

Background

Since 2008, Canada Revenue Agency (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, remittances 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. In October, pursuant to a cost award from the courts, we received a payment of approximately $12 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. 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 the $780 million in cash and letters of credit we have paid or provided for those years. 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.

In March, CRA issued revised reassessments for the 2007 through 2013 tax years, which resulted in a refund of $297 million of the $780 million in cash and letters of credit held by CRA at the time. The refund consisted of cash in the amount of $86 million and letters of credit in the amount of $211 million, which were returned in the second quarter. CRA continues to hold $483 million ($209 million in cash and $274 million in letters of credit) that Cameco has remitted or secured to date.

The series of court decisions that were completely and unequivocally in our favour for the 2003, 2005 and 2006 tax years, determined that the income earned by our foreign subsidiary from the sale of non-Canadian produced uranium was not taxable in Canada. In accordance with these decisions, CRA issued reassessments reducing the proposed transfer pricing adjustment from $5.1 billion to $3.3 billion, resulting in a reduction of $1.8 billion in income taxable in Canada compared to the previous reassessments issued to us by CRA for the 2007 through 2013 tax years.

The remaining transfer pricing adjustment of $3.3 billion for the 2007 to 2013 tax years relates to the sale of Canadian-produced uranium by our foreign subsidiary. Cameco maintains that the clear and decisive court decisions described above apply, and that CRA should fully reverse the remaining transfer pricing adjustments for these years and return the cash and security being held.

In October 2021, due to a lack of significant progress on our points of contention, we filed a notice of appeal with the Tax Court for the years 2007 through 2013. We have asked the Tax Court to order the complete reversal of CRA’s transfer pricing adjustment for those years and the return of the remainder of our cash and letters of credit being held, with costs.

In 2020, CRA advanced an alternate reassessing position for the 2014 tax year in the event the basis for its original reassessment, noted above, is unsuccessful. 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 in March 2023, filed a notice of objection for 2016. CRA did not require additional security for the tax debts they considered owing for 2014, 2015 and 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.

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. While our product purchases are largely denominated in US dollars, 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 results are therefore affected by the movements in the exchange rate on our hedge portfolio, and on the unhedged portion of our net exposure.

Impact of hedging on IFRS earnings

We do not use hedge accounting under IFRS and we are therefore required to report gains and losses on economic 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 benefits 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 and 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 and 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 13.

For more information, see our 2022 annual MD&A.

At September 30, 2023:

For information on the impact of foreign exchange on our intercompany balances, see note 18 to the financial statements.

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 both Cigar Lake and at McArthur River/Key Lake in 2024, and to increase production at our Port Hope UF₆ conversion facility, we expect to see continued improvement in our financial performance.

From a cash perspective, we expect to generate strong cash flows. However, cash balances will be dependent on the timing and volume of production, the timing, magnitude and source of our purchasing activity, and the timing of the close of the Westinghouse acquisition.

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.

As a result of lower production expectations from Cigar Lake and from McArthur River/Key Lake, we now expect to produce up to 18.7 million pounds (our share) in 2023. Please see Uranium 2023 Q3 updates on page 27 for more information. Due to the continued upward movement in the uranium spot price, we have updated our outlook for the anticipated uranium average realized price to $65.50 per pound (previously $63.80 per pound). With the updates to sales price, we now expect uranium revenue to be between $2,040 million and $2,130 million (previously $1,990 million to $2,080 million) and expected consolidated revenue to between $2,430 million and $2,580 million (previously $2,380 million to $2,530 million).

The average unit cost of sales in our uranium segment is now expected to be between $52.00 and $53.00 per pound (previously $49.00 and $51.00 per pound) due to the lower production expectations and the impact of the uranium spot price on our purchasing activity.

2023 FINANCIAL OUTLOOK

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:

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 to the JV partners 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.

For more information on how changes in the exchange rate or uranium prices can impact our outlook see Revenue, adjusted net earnings, and cash flow sensitivity analysis below, and Foreign exchange on page 17.

REVENUE, ADJUSTED NET EARNINGS, AND CASH FLOW SENSITIVITY ANALYSIS

We have sensitivity to the uranium price through both our sales and purchase commitments. However, for the remainder of the year our sales commitments are less sensitive to an increase in the uranium price than a decrease, while our purchase commitments are equally sensitive to an increase or decrease.

PRICE SENSITIVITY ANALYSIS: URANIUM SEGMENT

As discussed under Long-term contracting on page 26 of our 2022 annual MD&A, our average realized price is based on pricing terms established in our portfolio of long-term contracts, which includes a mix of base-escalated and market-related contracts that are layered in over time. Each confidential contract is bilaterally negotiated with the customer and delivery generally does not begin until two years or more after signing.