Grant Isaac: Yeah. Of course, I do too. I just can’t resist. Brian, it was…
Tim Gitzel: I’m sure.
Grant Isaac: Brian, it’s a good question. And I would echo Tim’s comment on all of the above, and maybe just highlight a few things. And we like to, first of all, just talk about how strong that team is. It’s a great team at Westinghouse and they are executing very well on their strategy. We like to think about them as core. So in the core of the business, you’re seeing the pickup of new customers, Central and Eastern Europe. You’re seeing the pickup of existing customers who are saving reactors that we thought were going to shut down and existing customers that are extending the life of reactors that we thought were probably going to retire after the end of their operating license and those are big deals. When a reactor goes through a life extension, you’re adding another 20 years of operation to it.
That’s a substantial tail of business that really wasn’t part of the model. And it’s just part of just the enthusiasm for nuclear. Springfield, Greg just asked about Springfield, the conversion market is at historic pricing. The Springfield plant has a conversion line, that would be in the core. And that would just be additional opportunity within the core of the business because it’s part of that nuclear fuel and nuclear fuel supply. And then, of course, all the wraparound services, reactors that are being saved, reactors that are being extended typically need more services wrapped around them. So the core is performing very well, and we’re quite happy about it. But I just would echo Tim’s comment on new build. New build is the area where I think the potential is very, very significant.
Now Obviously, we wait until projects are at final investment decision stage before we count them in a meaningful way in the business plan. You get the first initial pickup of front-end engineering and design projects, but final investment decision is really what’s required. But having said that, the quality of the conversation around new nuclear far exceeds our highest case assumption even 12 months ago. And what I mean there is just the reality of how much power is actually required for industrial onshoring for onshoring of manufacturing, for generative AI and the whole investment in digital technologies. When you think about all of that effort that’s going on in Western countries and all of the support that’s being given for that. The critical path item is electricity.
That is the critical path item to seeing all of those investments succeed. And the critical path item is very well served by a technology that is secure, dispatchable, reliable 99% to time. So nuclear is getting a lot of attention. But if nuclear is part of the critical path item, then the nuclear fuel is part of the critical path. So it’s that combination of saying, we get to participate in the uplift on nuclear fuel. We now get to participate in the new build for that reliable electricity. And then that long tail of servicing it. It’s a pretty exciting outlook. You have to forgive us for being as excited as we are, but there were a lot of lean years. So this is a pretty good opportunity for Cameco for Westinghouse potentially our GLE investment.
This is a constructive market, the likes of which we haven’t seen before, Brian.
Brian MacArthur: Sorry, maybe one quick follow-up. Just on Springfield. I mean, a year ago, it sort of sounded like when you talked, this maybe excess capacity in UF6 in the market in the West. So maybe that market didn’t look at positive. It sounds now that maybe you’re more positive on the U.S. outlook as you look forward to Springfield. Is that fair or are you thinking of using it for something else?
Tim Gitzel: Grant?
Grant Isaac: Sorry, Brian, I didn’t catch which markets looking more positive?
Brian MacArthur: Sorry, a year ago, UF6, you might have been a little more cautious given there was excess capacity, but now sort of Springfield sounds a little more positive.
Grant Isaac: Yeah. If you look at the breakdown of potential Western supply, it’s very different for conversion than it is for uranium and enrichment. In the West, we need to see more investment in new uranium production, the need for greenfield like we’ve talked about, and we need to see more investment in Western enrichment, in order for uranium and enrichment to match Western demand. The conversion space is actually a little bit different. What we really need is the four conversion plants to be running at full capacity plus perhaps the addition of our Global Laser Enrichment project, producing a UF6 product, so it’s already converted. Then you actually see a little more balance between Western demand and Western supply. And one of those four facilities is Springfield.
So we’re ramping up that port hope production. You’re seeing ConverDyn come back in the U.S. to 7,000 tons of conversion, you’ve got the plant in France running it, we think about 12 or 12.5 out of a potential 15. And that does require the Springfield plant to come back in order to kind of balance that western market. So the need is definitely there, and that’s reflected in the very tight front end of the UF6 market and the historic pricing. But UF6 is like uranium. You don’t start a UF6 plant and then knock on people’s doors and say, do you want to buy UF6 because they don’t have in your demand for UF6. It’s got to be part of a committed sales portfolio built out over time than you call for the additional production. So for us, it’s about combining that solid marketing strategy with then the right production decisions.
Brian MacArthur: Thank you very much. Appreciate it.
Tim Gitzel: Thanks, Brian.
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Tim Gitzel for any closing remarks.
Tim Gitzel: Yeah. Thanks very much, Ariel, and thanks to everybody who joined us today. You can probably sense our excitement in not only the market and where it’s at, how our company is positioned in that market. It’s pretty exciting times for us at Cameco. So we didn’t get quite through the queue today. So as Rachelle noted, if you have any detailed follow-up questions related to the first quarter results or any questions that we didn’t get to today on the call. Please contact us or we’ll contact you and we’re happy to address them directly. As always, we’re a responsible commercial supplier with a strong balance sheet, long-lived Tier 1 assets and a proven operating track record. We’re invested across the nuclear fuel and reactor life cycles, and we believe we have the right strategy to achieve our vision of energizing a Clean Air world, and we will do so in a manner that reflects our values.
Embedded in all our decisions is a commitment to address the risks and opportunities that we believe will make our business sustainable over the long term. So thanks again very much for joining us today. Stay safe and healthy, and have a great day. Thank you.
Operator: This brings an end to today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
