Brian MacArthur: Good morning. I just want to follow-up on the mix of sales. For your new guidance where you’ve increased your revenue forecast this year. You also talked about two-thirds of Inkai shipments coming this year. Is two-thirds reflected in your forecast this year, or how should we start to think about this? As you mentioned, you have a large number of sources?
Tim Gitzel: Grant yes.
Grant Isaac: Yes Brian, sorry Tim. Brian, there’s obviously a bit of a lag. Remember that our production out of Inkai, we equity account for. So obviously when we take delivery of that material this year we will pay for it. And remember we have the right to buy it from the joint venture at a discount to market and so that financial commitment of purchasing it will be booked this year. But then the big reward, of course, is the dividend that gets paid out from Inkai to its owners. And of course, we’re one of them, which is the difference between what you can produce for and what the material was sold for to its owners. And that will flow in next year. So, there is a bit of a timing lag where we’ll have dollars out the door, to purchase the material, but the dividend will come usually in that April, May window of next year. And so just a bit of a timing issue, but make no mistake, the economic value of that really good Tier 1 asset is always ours.
Brian MacArthur: No, I get that. But just in your cost of goods sales, do you not have to make some assumption about what you’re going to get?
Grant Isaac: Yes, absolutely. So in the cost of goods will be the purchase of the material that arrives this year. So that will be reflected in there.
Brian MacArthur: Right. So at the beginning of the year, it would have been 100%, and now it’s two-thirds. Is that fair? Is that the way you do it?
Heidi Shake: It’s Heidi here. So I guess really, Inkai shows in our cost of sales as a spot purchase. And so, we kind of, you know, whether it’s a purchase that we do through our long-term purchase commitments or through the spot or it’s Inkai, we have a, we work into our cost of sales the amount that we need to purchase. So Inkai would be reflected as part of the 11 million pounds that – we plan to purchase this year.
Brian MacArthur: Right. This was a 5% discount on that amount when you got it?
Grant Isaac: Yes.
Heidi Shake: Yes, correct.
Brian MacArthur: Perfect. Thank you very much.
Tim Gitzel: Thank you, Brian.
Operator: Our next question comes from Alex MacPherson of allSaskatchewan. Please go ahead.
Alex MacPherson: Hi everyone. Good morning. Thanks for taking my call. One of the previous callers asked about Northern Saskatchewan, but I was hoping you might be able to provide a bit more color on the specific challenges you faced in terms of the announcement in September and sort of what steps you’re taking and working on to resolve those issues? Thanks very much.
Tim Gitzel: Yes, thanks Alex. Nice to hear from you. I think we detailed in previous, when we put out our press release in September, that we were having some short-term issues regarding, I think at Cigar Lake, we were moving to the core zone and that’s never easy. And so, we just had to adapt to that. We were having a few issues getting some skilled labor. We’re fixing that up. So the reliability of equipment was another piece that we had to work on, but those are – those are that’s our business, that’s what we do. Those are things we can fix. As I said in the last, I’ve been watching, obviously we get updates from Brian every day, every week on how production’s going. And I’m happy to say it’s going a lot better. And so, we haven’t changed our guidance that we put out from September.
And our goal, Alex, as you know, is to get back to a run rate of 18 million pounds per year on 100% basis at both McArthur, Key and Cigar. And then we’ll see what the future brings. If there’s demand for our product that shows up in the form of long-term contracts from good customers, we’ll see if we can increase our production.
Alex MacPherson: Perfect. Thank you very much.
Tim Gitzel: Thanks, Alex.
Operator: Our next question comes from Grace Symes of Energy Intelligence. Please go ahead.
Grace Symes: Good morning. My question is just if there are – is there any update on efforts to build a calciner at JV Inkai?
Tim Gitzel: I’m going to ask Sean Quinn who looks after our Kazakh interests to answer that one. Sean?
Sean Quinn: Sure. Yes, the project continues great. It is moving slowly, but we’re hoping to get construction completed, I would say, in the first half of next year now with conditioning to follow. So it is well – it is behind schedule from significant plans. But the project is continuing and is still viewed as a very important objective for our Inkai joint venture so that we can have a fully calcined product coming out of that operation.
Grace Symes: Okay. And just to follow up, once that calciner is commissioned would Cameco plan to transport material directly from Inkai to China to fulfill some of its Chinese contracts?
Grant Isaac: We might say that we’re looking to complete the calciner burner because it will create that sort of optionality for the production out of JV Inkai.
Grace Symes: All right. Thank you very much.
Tim Gitzel: Thanks, Grace.
Operator: Our next question comes from Richard Hatch of Berenberg. Please go ahead.
Richard Hatch: Thanks very much. Thanks, Tim and team, and good morning. Just a question on the purchase commitment. I see in ’24 and ’25 that’s increased up to 117 million pounds from 102 in the previous quarter. I think you kind of answered the question to an extent I think a bit earlier, but just to kind of add a little bit more meat to the bones, is that just a function of the fact that you’re seeing more interest on those term contracts, particularly over the next couple of years and therefore you’re just covering yourself from a supply standpoint if the mines perhaps can’t ramp up as quick as you want them to or just to give yourself a little bit of extra flexibility because you’re seeing more demand over those next couple of years. Thanks.
Tim Gitzel: Yes, do you want to take that –
Grant Isaac: I would just maybe characterize it a little different. We don’t sell into the spot market, we don’t sell into the sort of the trader churn that goes on in that market. But occasionally we’ll have a customer that say we’re in a long-term contract discussion with who wants pounds out in a classic term window and says, oh, but can you find some material in the near term as well? And occasionally for the right customer in the right circumstance, we will do that. And so as a result, you might see our requirements to purchase material tick up in that near-term window. But I just, I want to go back to a comment I made to Gordon’s question, which is, we didn’t design this market, but we know how it works when Cameco comes to purchase, those who have material to sell hang on to it.
