And the first is, those utilities stepping into the market and looking for run rate requirements, you know, now for the next three years. Now for the next five years and they put that demand in the market looking for term material and then oftentimes you’ll see that demand, also show some demand show up in the spot market in the form of restoring some inventory targets that, had been drawn down. Now that is a, you know kind of in the next five-year window Ralph. And so that that is a really helpful demand with respect to price formation, because what it effectively does when you see those announcements, is those who might have, say, uncommitted primary production or an offtake agreement with perhaps a state-owned enterprise that, is continuing to produce without a home.
Those types of folks might step back, from selling material in the spot market in anticipation of that demand to show up. So, it tends to be very constructive. That’s a little distinct, I would say, from that medium term demand that Tim referred to, which is really around life extensions. The US fleet pioneered life extensions, but now with a clean energy and an energy security crisis going on, a lot of jurisdictions are considering running their reactors for a lot longer. And then that starts to extend the tenor of the term contracting. And so, for example, we are now seeing term contracting, pushed through the end of this decade and into the early part of the 2030s in a fairly significant way. So, we often think of that near and the midterm demand quite distinctly.
Ralph Profiti: Got you. Yes, very helpful. In the production update in September, your team cited equipment reliability issues, availability of skilled labor and supply chain challenges. Just wondering, are you seeing these as temporary and transitory and how you tackling that, how you tackling these issues?
Tim Gitzel: Yes Ralph, we’re working through those issues you know when you’re down for four or five years like we were at McArthur and Key nothing’s that simple and we put in a lot of automation, and robotics that we have to fine tune. So, I think we’re coming around now. I’ve seen some numbers in the last little while and our production, is running nicely and we hope, to get it just at a steady state. So, we’re working through those issues that we mentioned, I think it was in early September, 3rd of September, and at both McArthur, Key and Cigar. And so, we want to get back to steady state. Our plan is to get back up to 18 million pounds a year at both of those sites next year and that’s, what we’re going to do.
Ralph Profiti: Excellent to hear. Thanks Tim. Thanks Grant.
Tim Gitzel: Thanks.
Operator: Our next question comes from Lawson Winder of Bank of America. Please go ahead.
Lawson Winder: Yes, thank you, operator. And good morning, Tim, Grant and Rochelle as well. Nice to hear from you all. Thank you for the update. I would like to ask about Westinghouse. And first of all, just ask if you could confirm that the U.K., is the final remaining competition authority approval that is needed. And maybe if you could please comment, on why the process has taken a little longer than expected?
Tim Gitzel: Yes, so it’s Tim. I think we’ve worked our way through about 40 or 40 plus approvals so far. We do have the U.K. left to go. And so, we’re still expecting to close the deal, by the end of the year. So, I think everything’s on track for that. Nothing too new there. We’re super excited about closing the deal when that day comes. We think we’ve got the right partner, the right target, and the right timing. So more to come on that as soon as we get all the approvals in place.
Lawson Winder: So the U.K. definitely is just the last one? Sorry, I just wanted to be totally clear on that?
Tim Gitzel: Yes, that’s correct.
Lawson Winder: Okay. Yes, fantastic. Well, that’s exciting. And then the follow-up on that question would just be, in terms of financing the US$2.2 billion required on closure, the MD&A spoke about funding mix of cash debt and equity. And I just wanted to ask whether the equity proportion refers to the equity offering already completed in 2022, or is there some consideration, for an additional equity raise on close?
Tim Gitzel: It was the one we already did, but I’ll ask our CFO maybe just to give a little bit of detail of how we’re going to end up paying for our acquisition, Grant.
Grant Isaac: Yes, the good news is, Lawson, it’s already in place, the financing. This is the action that we took last October 11. The equity that we raised is the only equity we intend to raise for this transaction. We also put in place two syndicated term loans, one of a two-year tenor and one of a three-year tenor, both US$300 million. Those are in place to be drawn at time of closing. And then, of course, we would just work really quickly to pay those down. This is all occurring while the cash flow, as you see, is building in the uranium segment as well as the conversion segment. And of course the financial contribution of Westinghouse will be added to it. So, we’re in a terrific position and can absolutely confirm there’s no additional equity required.
Lawson Winder: That’s fantastic. I look forward to that deal closing. Good luck, guys.
Tim Gitzel: Thanks, Lawson. So do we.
Operator: Our next question comes from Gordon Johnson of GLJ Research. Please go ahead.
