All quantities in Canadian {dollars} except specified in any other case
Cameco Company (TSX: CCO; NYSE: CCJ) at the moment introduced that it, together with Brookfield Asset Administration (Brookfield), has entered right into a binding time period sheet with the US Division of Commerce (US Authorities) to ascertain a strategic partnership, which is anticipated to speed up the worldwide deployment of Westinghouse Electrical Firm’s (Westinghouse) nuclear reactor applied sciences and reinvigorate provide chains and the nuclear energy industrial base within the US and overseas.
The settlement supplies for the US Authorities to rearrange financing and facilitate the allowing and approvals for brand new Westinghouse nuclear reactors to be constructed within the US, with an mixture funding worth of a minimum of US$80 billion, together with near-term financing of lengthy lead time objects. As soon as constructed, the reactors are anticipated to generate dependable and safe energy for the American grid, together with powering vital information heart and compute capability to drive development in synthetic intelligence in the US.
“We’re happy to see the US authorities make this dedication to increasing nuclear energy capability utilizing Westinghouse’s confirmed know-how. We anticipate that our extremely profitable partnership with Brookfield as homeowners of Westinghouse might be additional strengthened by this strategic collaboration with the US Authorities,” stated Tim Gitzel, CEO of Cameco. “On the heart of this new partnership is worth creation. When coupled with the Could 23, 2025 Government Orders, we consider the US Authorities’s participation within the partnership creates the best incentives to deploy its full suite of instruments behind the development of Westinghouse reactors, together with monetary, regulatory, coverage and diplomatic assist. That assist is anticipated to drive further worth for the partnership and the various stakeholders who’re anticipated to profit from enhanced power, nationwide and local weather safety around the globe.
“We anticipate that the brand new construct commitments from the US will bolster broader confidence within the sturdy development profile for nuclear energy, and assist elevated demand for Westinghouse’s and Cameco’s merchandise, companies and applied sciences. This new partnership highlights the function that Westinghouse’s reactor applied sciences, primarily based on absolutely designed, licensed and working reactors, are anticipated to play within the deliberate enlargement of nuclear capability and diversification of worldwide nuclear provide chains. Cameco stays effectively positioned as a safe and dependable provider that may gasoline the long-term dependable operation of Westinghouse’s know-how within the US and globally.”
The launch of a nuclear energy plant development program is anticipated to speed up development in Westinghouse’s power techniques phase in the course of the development part, together with its core gasoline fabrication and reactor companies enterprise for the lifetime of the reactors. Upon closing of the transaction and with financing facilitated by the US Authorities, Westinghouse plans to begin challenge execution and provoke orders for crucial tools with lengthy lead instances, which is anticipated to leverage the nuclear trade provide chains that had been established in the course of the development of Vogtle models 3 and 4.
Cameco, as one of many world’s largest and most dependable suppliers of uranium and nuclear gasoline companies and parts, is well-positioned with what is anticipated to be large upside optionality to profit from the continued enlargement of nuclear energy within the US and globally, by the anticipated acceleration of nuclear gasoline demand development because of this partnership.
Partnership Construction
Below the brand new strategic partnership, the US Authorities might be granted a participation curiosity (Participation Curiosity), which, as soon as vested, will entitle it to obtain 20% of any money distributions in extra of US$17.5 billion made by Westinghouse after the granting of the Participation Curiosity. For the Participation Curiosity to vest, the US Authorities should make a ultimate funding resolution and enter into definitive agreements to finish the development of latest Westinghouse nuclear reactors within the US with an mixture worth of a minimum of US$80 billion.
Moreover, in recognition of the anticipated acceleration of long-term worth creation that the US Authorities is anticipated to assist unlock by deploying its monetary, regulatory, coverage and diplomatic instruments to assist the targets of the partnership, if, on or previous to January 2029 the Participation Curiosity has vested, and if the valuation in an preliminary public providing (IPO) of Westinghouse is anticipated to be US$30 billion or extra at the moment, the US Authorities might be entitled to require an IPO. Instantly previous to, or in reference to the IPO, the Participation Curiosity will immediately or not directly convert right into a warrant, with a five-year time period, to buy fairness securities equal to twenty% of the general public worth of the IPO entity on the time of train after deducting US$17.5 billion from the general public worth.
Brookfield and Cameco acquired Westinghouse in November 2023. The partnership introduced collectively Cameco’s experience within the nuclear gasoline provide chain with Brookfield’s acknowledged place as one of many world’s largest buyers in power era applied sciences.
The transactions and different issues contemplated by the time period sheet with the US Authorities are topic to, amongst different dangers, the components mentioned under beneath Ahead Trying Data. The expectation is that the US Authorities, Brookfield, Cameco and Westinghouse will negotiate and enter into definitive agreements changing the binding time period sheet, however, within the occasion such agreements should not reached, the time period sheet will stay efficient. The transactions are topic to acquiring required regulatory approvals and the satisfaction of different customary circumstances.
Ahead Trying Data
This information launch contains statements and details about Cameco’s expectations for the longer term, which we consult with as forward-looking info. Ahead-looking info is info that’s not a historic truth. Phrases resembling “steerage,” “anticipate,” “will,” “might,” “anticipate,” “plan,” “estimate,” “challenge,” “intend,” “ought to,” “can,” “seemingly,” “might,” “outlook” and comparable expressions are meant to establish forward-looking info. Ahead-looking info relies on Cameco’s present views, which might change considerably, and precise outcomes and occasions could also be considerably totally different from what we presently anticipate. Examples of forward-looking info on this information launch embody: expectations concerning the acceleration of the worldwide deployment of Westinghouse’s nuclear reactor applied sciences and reinvigoration of provide chains and the nuclear energy industrial base within the US and overseas; expectations concerning the era by the reactors of dependable and safe energy for the American grid, together with for information heart and compute capability; expectations concerning the US Authorities’s participation within the strategic partnership as a driver of further worth, together with with respect to enhanced power, nationwide and local weather safety around the globe; expectations concerning elevated demand for Westinghouse’s and Cameco’s merchandise; Cameco’s means to gasoline the long-term dependable operation of Westinghouse’s know-how within the US and globally; expectations concerning the impression of the launch of a nuclear energy plant development program on the acceleration of development in Westinghouse’s power techniques phase, core gasoline fabrication and reactor companies enterprise; expectations concerning Westinghouse’s deliberate graduation of challenge execution; the anticipated acceleration of nuclear gasoline demand development because of the strategic partnership; expectations regarding the deliberate quantity of funding within the development of nuclear energy reactors in the US utilizing Westinghouse nuclear know-how; and expectations concerning the revenue sharing mechanism concerned within the strategic partnership and participation therein.
Materials dangers that might result in totally different outcomes embody: dangers associated to growing and deploying the Westinghouse nuclear reactors; the anticipated timing of the strategic partnership, together with any failure to acquire the required governmental clearances or third get together consents required to shut the strategic partnership or implement the revenue sharing mechanism or the imposition of fabric circumstances as part of acquiring such clearances or consents and any failure of every other circumstances to the strategic partnership or the implementation of the revenue sharing mechanism; the lack of Westinghouse and the US Authorities to enter into definitive agreements referring to the strategic transaction or to impact their future obligations associated to the transactions contemplated by the strategic partnership; the potential reliance on unrelated third events for the location of orders or different obligations associated to the development and deployment of the Westinghouse nuclear reactors; the potential reliance by the US authorities on unconventional funding mechanisms to impact any future commitments to buy Westinghouse nuclear reactor know-how; the provision of presidency funding and assist for the transactions contemplated by the strategic partnership, together with the flexibility of the manager department of the US Authorities to acquire funding and assist by way of the appropriations course of or from different sources; the provision of further or substitute funding for the nuclear reactor tasks and operations, if wanted; following the execution of definitive transaction paperwork by the events, the willpower by the legislative, judicial or government branches of the federal or any state authorities that any future funding commitments or different side of the transactions contemplated by the strategic partnership was or isn’t in compliance with legislation; the monetary, tax and accounting evaluation and remedy of the varied obligations and commitments beneath the strategic partnership documentation, as soon as executed; the continued demand for nuclear power and the markets for nuclear power extra typically; future demand for nuclear power; litigation, Congressional investigations, or investigations by different US or non-US authorities, associated to the strategic transaction or in any other case; challenges related to figuring out alternate places, gross sales channels and prospects for the extremely specialised nuclear merchandise contemplated by the strategic transactions ought to the strategic partnership be altered or terminated; Cameco’s means to successfully understand the anticipated advantages of the strategic transaction; the events’ means to adjust to the broader authorized and regulatory necessities and heightened scrutiny related to authorities partnerships and contracts; modifications in power, synthetic intelligence and different insurance policies and priorities in US and overseas governments; fluctuations, variations and uncertainty in demand and pricing out there for nuclear power and synthetic intelligence; potential opposed reactions or modifications to enterprise relationships ensuing from the announcement, negotiation or execution of the strategic transaction; the complexities and uncertainties in growing and implementing new nuclear tasks; macroeconomic circumstances and geopolitical tensions and conflicts; dangers related to Westinghouse’s complicated provide chain supporting its nuclear reactors, together with from disruptions, delays, commerce tensions and conflicts or shortages; volatility and uncertainty with respect to worldwide commerce insurance policies; dangers associated to the event and use of the Westinghouse nuclear reactors, together with product defects; potential safety vulnerabilities within the Westinghouse nuclear reactors; and the danger of disputes between the events to the strategic transaction.
In presenting the forward-looking info, Cameco has made materials assumptions which can show incorrect about: the success of the Westinghouse nuclear reactor know-how and Westinghouse’s means to assemble and begin business operations at new large-scale nuclear energy vegetation; the flexibility of Westinghouse and the US Authorities to enter into definitive agreements to impact their future obligations associated to the transactions contemplated by the strategic partnership, together with with respect to commitments to buy Westinghouse nuclear reactor know-how and to impact the revenue sharing mechanic; the provision of presidency funding and assist for the transactions contemplated by the strategic partnership, together with any future commitments to buy Westinghouse nuclear reactor know-how; the provision of further or substitute funding for the nuclear reactor tasks and operations, if wanted; the monetary, tax and accounting evaluation and remedy of the varied obligations and commitments beneath the strategic partnership documentation the continued demand for nuclear power, and the expansion of the markets for nuclear power extra typically; future demand for nuclear power; the estimates and forecasts of Cameco’s money place, outcomes of operations and different monetary and operational efficiency metrics; Westinghouse’s means to make distributions to its companions; Westinghouse’s means to mitigate working dangers and any disruptions, delays, commerce tensions, conflicts or shortages; that there won’t be any vital opposed penalties to the strategic partnership ensuing from enterprise disruptions or financial or political uncertainty; that the events will adjust to their obligations beneath the strategic partnership; and that Westinghouse will preserve protections towards legal responsibility for nuclear injury.
Please additionally assessment the dialogue in Cameco’s 2024 annual MD&A, 2025 second quarter MD&A and most up-to-date annual info kind for different materials dangers that might trigger precise outcomes to vary considerably from Cameco’s present expectations, and different materials assumptions we’ve got made. We won’t essentially replace this info except we’re required to by securities legal guidelines.
Profile
Cameco is without doubt one of the largest international suppliers of the uranium gasoline wanted to energy a safe power future. Our aggressive place relies on our controlling possession of the world’s largest high-grade reserves and low-cost operations, in addition to vital investments throughout the nuclear gasoline cycle, together with possession pursuits in Westinghouse Electrical Firm and International Laser Enrichment. Utilities around the globe depend on Cameco to offer international nuclear gasoline options for the era of protected, dependable, carbon-free nuclear energy. Our shares commerce on the Toronto and New York inventory exchanges. Our head workplace is in Saskatoon, Saskatchewan, Canada.
As used on this information launch, the phrases we, us, our, the Firm and Cameco imply Cameco Company and its subsidiaries except in any other case indicated.
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Investor inquiries
Cory Kos
306-716-6782
cory_kos@cameco.com
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