Rachelle Girard - Director, Investor Relations Tim Gitzel - President and CEO Grant Isaac - Senior Vice President and CFO Alice Wong - Senior Vice President and CCO Sean Quinn - Senior Vice President, Chief Legal Officer and Corporate Secretary

Andrew Quail - Goldman Sachs Orest Wowkodaw - Scotia Bank Steve Bristo - RBC Capital Markets Edward Sterck - BMO Greg Barnes - TD Securities Oscar Cabrera - Bank of America Merrill Lynch Daniel Rohr - Morningstar Chelsea Laskowski - Missinipi Broadcast Fai Lee - Odlum Brown David Snow - Energy Equity, Inc. Graham Tanaka - Tanaka Capital John Tumazos - John Tumazos Very Independent Research

Please standby, your conference is ready to begin. Good day, ladies and gentlemen. And welcome to the Cameco Corporation Third Quarter Results Conference Call. I would now like to turn the meeting over to Ms. Rachelle Girard, Director of Investor Relations. Please go ahead, Ms. Girard.

Thank you, Melanie, and good morning, everyone. Thanks for joining us. Welcome to Cameco's 2015 third quarter conference call to discuss the financial results. With us on the call today are Tim Gitzel, President and CEO; Grant Isaac, Senior Vice President and Chief Financial Officer; Alice Wong, Senior Vice President and Chief Corporate Officer; and Sean Quinn, Senior Vice President, Chief Legal Officer and Corporate Secretary. Tim and Grant will begin with comments on our financial results, the updates to our CRA case and the industry. Then we'll open it up for your questions. Today's conference call is open to all members of the investment community, including the media. During the Q&A session, please limit yourself to two questions and then return to the queue. Please note that this conference call will include forward-looking information, which is based on a number of assumptions and that actual results could differ materially. Please refer to our annual information form and MD&A for more information about the factors that could cause these different results and the assumptions we have made. With that, I will turn it over to Tim.

Well, thank you, Rachelle. And welcome to everyone who has joined us on the call today to discuss Cameco's third quarter results. We appreciate you taking the time to join us today. I think the most important news for Cameco this quarter is just how well Cigar Lake is performing. As you all know, this is a project that was a long time in the making and the challenges to bringing in on have been significant. We also know that the challenges don’t end with startup. Since beginning production in 2014 we have had to continue learning and adjusting, and most of all, proving that our mine plant and mining technology work. I think we can now say with confidence that they do. This quarter and year-to-date the operation has performed even better than expected, as of the end of October the operation has produced over 8 million pounds of packaged uranium, which was the upper end of our annual forecast. We revised our target upward as a result of this success and now expect 10 million packaged pounds from the McClean Lake mill and possibly more, if current production rates continue. Half of this is our share and overall, we remained firmly on track to achieve 18 million pounds by 2018. The rest of our operations have also performed well in the third quarter and throughout the year, McArthur River, Key Lake, Rabbit Lake and Inkai were up compared to last year and our U.S. operations have continued to produce according to their mine plants. I am going to take a pause here for a moment and turn things over to Grant to give you a brief update on the CRA case. Grant?

Yeah. Thanks, Tim. I just wanted to make a few brief remarks about the updated disclosure on our CRA tax case this quarter. First of all, a court date has been set for our 2003, 2005 and 2006 tax reassessment, and we expect the trial will start the week of September 26, 2016. We expect it will last about four months with a decision six to 18 months after the trial is complete. Why not 2004 you may ask or what about 2007, 2008 and 2009. While 2004 is not included, as the CRA has not responded to our notice of objection for that year and therefore, the appeal with the tax court has not been filed. In other words, this year is not before the court at this time. For taxation years 2007 to 2009, we have not yet filed an appeal with the tax court. We expect that the decision for the 2003, 2005 and 2006 years will apply to subsequent years. The other development this quarter is the notice we received from the CRA that they are just allowing the use of tax loss carry-back for any transfer pricing adjustments starting with the 2008 tax year. This does not change the amount we expect to remit to the CRA while in dispute. To remind you that is 50% to the reassessed amount. However, it does shift the timing of payment. As a result, we have provided an updated schedule of potential payments in our third quarter MD&A. To some extent, this schedule is dependent on receiving the 2010 reassessment in the fourth quarter, which we fully expect will be the case. You will see that we expect to remit these amounts sooner than previously anticipated. However, you will note that we now expect to be able to use letter of credit to secure a portion of the 50% we are required to remit while in dispute, which diminishes the cash we will have to put on account with the CRA. If we are successful in our case since we believe we will be, we expect to recover all amounts for embedded to the CRA on account in this case. It’s important to note that there have been no changes to our view of the case since we first disclose the issue in 2008. I should also point out that the expected payments and timing our estimates only, since actual amounts will depend on the income reassessed in each year, the availability of elected deductions, our ability to use letters of credit as anticipated and the timing of reassessments. We remained confident that we will be successful in our case, but if taken accumulative tax provision of $92 million for 2003 to September 30, 2015. I want to emphasis that we do not believe the ultimate resolution of this matter will be material to our financial position, results of operations and cash flows in the years of resolution And with that, I will turn it back to Tim.

Well, thanks, Grant. So, overall, we continue to focus on executing our strategy to remain a competitive low cost producer. We are on track to deliver on our sales guidance for the year and thanks to the better than expected ramp of Cigar, our overall production guidance is higher as well. However, it’s still a challenging time for any uranium producer today. The market has continued to be flat throughout the first nine months of the year. If we look to the catalyst we are watching for, there has not been a lot movement. Uranium price is continued to remain flat and we believe fuel buyers’ requirements remained generally well-covered for the moment. Following on from that there has not been a significant return to long-term contracting and supply continues to perform well. The one piece we have been watching that has returned some good news is reactor restarts in Japan. Kysuhu Sendai reactors started up in the second half of the year, which was a milestone as we were very happy to see. And another reactor is expected to startup in early 2016, Shikoku’s Ikata 3 reactor. Of course, there needs to be more restarts to move sentiment in the markets, so we haven’t seen the needle move much in reaction to those events. But in another three units have made it through the nuclear regulatory agencies safety review and 20 more reactors have applied for restart. The utilities who own those reactors have invested billions of dollars and safety upgrades required to get their reactors restarted, so we are confident we will see many of Japan’s reactors back online though the process continues to be slow. And we know, of course, that the long-term outlook for nuclear and uranium remains strong. As the world population continues to rise, as energy demand continues to increase, as more nuclear reactors come online and as uranium demand increases, at the time when supply will be diminishing. So we continue to plan with that impending positive future in mind. And we have a lot of advantages going for us, some of the best uranium assets in the world, solid contract portfolio, strong long-term relationship with customers and the strategy that sees as focusing on our Tier 1 properties. Ramping Cigar Lake is key to that strategy. So when the market does turn we expect to be more than just a price play. To position ourselves, to have strong operating leverage and we plan meet rising prices when they happen, with increasing production from our best margin assets, Cigar Lake, McArthur River and Inkai. So, with that, I am happy -- we are happy, I have team to answer any questions you might have and I am going to turn it back over to Melanie.

Thank you. [Operator Instructions] Our first question is from Andrew Quail of Goldman Sachs. Please go ahead.

Yes. Morning, Tim. And Tim thanks very much for the update. Just got a couple of questions, just on the cash balance, obviously, it felt to around $60 million this quarter, I understand that’s due to timing issues with [indiscernible] production? Is there an increase in working capital? Is there a label of cash that you guys are comfortable with operating the business?

Andrew, let me flip that over to Grant to comment. Grant do you want to comment?

Yeah. It’s a great question, Andrew, and you did see it fall and accurately diagnosed the challenge. And that is our customers determine when they would like deliveries and we’ve seen, I think, four years in a row now that deliveries have been more weighted to the fourth quarter and so as we have been spending on capital programs and everything through the summer months in Northern Saskatchewan, but not having the corresponding sales under the contract portfolio, we have drawn down that cash balance. We do expect it to recover as we fulfill those Q4 deliveries, and of course, that cash falls about a quarter behind when those deliveries come in, so we do expect it to build back up. In terms of a run rate, cash amount, I mean, we look at the main feature being the lumpiness of deliveries. We look at that working capital swings that we would have. I would say that there are times where you can have too much cash but there are times when you can have too little sitting on the balance sheet. And I think a $200 million is a comfortable number. I look at it from the point of view that as long as the treasure, it’s getting a good night sleep four nights out of seven. That’s probably a good cash balance. If you’re sleeping sound seven nights of the week then we’re probably running a little too heavy so. 63 is not where we wanted to be but because of just the delivery pattern, we’re not concerned. And as I said earlier, it’s four years in a row now we’ve seen this kind of back end waiting.

Okay. Thanks. And then as far as -- obviously, the highlight was Cigar Lake in the ramp-up looks what it couldn’t expected and you are on track for this year you might got. When we look forward to sort of the ultimate goal of where you guys have said to target sort of 80 million pounds for 2018. Do you think that as we head into 2016 that sort of target could be put forward?

Andrew, it’s Tim. We’re trying to be prudent on this. We’re obviously delighted with the way Cigar Lake has performed this year 2015. But I don’t have to go back very far, in fact 2014 when I think our total production for the year was 40,000 ounce. And we took some positives there during the year to fix some tanks underground. The mill had some additional equipments that had to be put on it. We were really testing the mining machine at that time. So to go from 400,000 pounds last year to we’re at 48 million this year looking toward 10. We’re quite delighted with that. So it’s a bit of a game changer for us, the partners of Cigar Lake in fact that we had budgeted $6 million to $8 million far this year and not $3 million to $4 million our share. It’s going to be more than that. I can tell you we’ll take pounds from those tier 1 asset like Cigar Lake everyday because every incremental pound that comes out of air is a good pound for Cameco and our partners. Are we going to be more aggressive going forward? I think we’ll at the end of this year take a look at where we end up. Our goal -- stated goal is still 18 by ‘18, 18 million pounds by 2018. As we can move that along we will but right now, I’d say we’re just going to get through 2015. We’ll take stock of how things are performing in the mine, the mill, the jet boring machines and then you’ll hear from us probably next quarter with an estimate for 2016.

Right. And quickly just last one. I don’t want to waste time to have others. Really good improvement at Rabbit Lake. Is that production rate we can expect going forward?

Well, I’ll tell you that’s -- we give a lot of credit to the other facilities, the big ones, McArthur, the Keys, the Cigars. The actual hardcore miners are those folks at Rabbit that don’t have the grades and the orebodies if you like. So they’ve done a good job. I think they are running at a rate. I think I can’t remember what our numbers for the years, 3.9 or something pounds for this year. We’re on track for that and having a good year this year. Thanks Scott.

Thank you. The following question is from Orest Wowkodaw of Scotia Bank. Please go ahead.

Hi. Good morning. Question for Grant, just back to the CRA payments, when do you expect to find out whether you will be able to use letters of credit to post it rather than cash and lose some of these payments?

Yeah. Great question and sorry for not being a little more clear on that. We have to wait for the 2010 reassessment to actually arrive and then put the letter of credit against that reassessment so that’s the process that we’re waiting on. We don’t anticipate any difficulties but obviously we have to have that reassessment in our hands before we can then proceed with putting letter of credit against some element of it.

And if that doesn’t arrive by the end of the year, do I understand correctly that you have to post -- you only posted $17 million in cash this year versus your guidance here updated at kind of $295 million to $320 million that you’ll have to post something in the order of $280 million to $300 million in cash in the fourth quarter if this letter of assessment doesn’t come true?

So we do expect the letter of assessment to come true because if doesn’t there would be a statute barring to go back. I mean they only have five years. So we do fully expect it. So I don’t want to speculate on not arriving because that is absolutely not my expectations. So what we’ve done in the liquidity table is to try to give you an idea assuming that 2010 reassessment comes in, just how we play out between cash and letters of credit.

So in terms of your confidence level then if you expect the assessment, what’s your confidence level that you’re actually able to use the letters of credit?

Well, it is -- we are allowed to. Under the rules, we follow those rules and so we just think it should be just be a procedural step here.

Okay. Thank you very much.

Thanks Orest.

Thank you. The following question is from Steve Bristo of RBC Capital Markets. Please go ahead.

Hi. Good morning and thanks for taking my question. Just had a couple here. First, are your $1 billion letters of credit part of the $2.4 billion lines of credit, reducing $12 million available now on the lines of credit?

Yes, Steve.

Yeah.

Yeah. I’ll start with [balance fee] [ph] the $2.4 billion includes all our letter of credits which also includes the amounts that are putting against decommissioning for example. The one we often highlight is the revolving credit facility which we just renewed for $1.25 billion. It has accordion feature to go up to $1.75 billion. That one is undrawn.

So how much do you actually have available under all your lines -- letters of credit -- sorry lines of credit right now?

But probably, the one you want to think about is the $1.25 billion undrawn revolving credit facility because as I mentioned the other letters of credit pertain to decommissioning obligations.

Okay. And would you be possible to share the covenants you have on those credit lines?

Yeah but we can follow up on that. I mean, there is a lot of detail in there. Nothing surprising actually but -- rather than take a time here, why don’t we follow up on that Steve.

Okay. And then just on the CRA payments, why for 2016 and 2017, are those not all using letters of credit? You stole some cash from those years.

Yeah. Because the letters of credit only apply to the income tax reassessment as well as the interest payments. The transfer pricing penalties you cannot deter with those letter of credit and that’s just a function of the rules.

Thank you.

Thanks Steve.

The following question is from Edward Sterck of BMO. Please go ahead.

Good morning gentlemen. Thanks. A couple of questions. Firstly on Cigar Lake, is the performance the best than expected performance driven more by this mine level of operation or is it the mill that’s exceeding expectations here. And can you comment on the great reconciliation to the reserve model?

So Ed, I would say the performance is very good in both the mine. I know you’ve visited and others have visited that you’ve seen the jet boring machines with some modifications that have been going on throughout the year. They are just performing better and better, so easily able to keep up with the mill that itself has been performing extremely well. So I think last month, we’ve had about 1.5 million on month at the mill and mine easily able to keep up. So good performance from both. Great reconciliation. I’m not sure I have that right now. We’ll certainly in the next quarter at the end of the year be putting that information out to show how we made up for 2015. Obviously, it’s bit of a game changer for us going from relatively few pounds in ‘14 to think will be somewhere around the 10 million mark. So yeah, we’ll do that reconciliation and put it out.

Okay. Thank you. And then just a follow-up question. I’m sorry, going back to the CRA again. How long after receiving the 2010 reassessment do you have to make the payments?

Yeah. Ed, sorry -- I should have the detail. Is it 10 days? Is it 20 days? It’s something like that. It’s a quick turnaround time. I’m sorry, I can get the exact number and get back to you. Suffices to say we’re prepared obviously whatever that window is.

Okay. That’s great. I’ll let someone in. Thank you.

Nice Ed.

Thank you. The following question is from Greg Barnes of TD Securities. Please go ahead.

Yes. Thank you. I guess, Tim, with the mine performing as well as it is and the mill. Are cost of Cigar Lake tracking the way you’d expect them to be at this point, operating cost and then CapEx?

Sorry Greg. Yeah they are. And with each incremental foundry producer, it just gets better. And so those big tier 1 assets like that, you want to run in that full speed. You’ve seen our technical report that set out sometime ago that we could do it at full production under $20 cash unit cost and we think we can get there. So that’s -- yeah, it’s tracking to what we thought, Greg.

Okay. Good. And secondly on the CRA, Grant, given you now have a date for the court hearing. Is there any suggestion or any discussions underway about settling ahead of that or do you think that can even happen?

Well, not at the moment, Greg. One of the challenges and I think we've been really clear about this from day one is that we just reject this view that there is something wrong with our overall governance structure, our overall intercompany structure. So, we just challenged that notion. And as long as we are facing that kind of argument, it makes it difficult to figure out where there might be a softening. If we see a softening of that argument, if we see a migration over to more of a classic transfer pricing challenge like the IRS is presented to us, then I think it increases the chances. We can have that kind of constructive conversation. But right now, it just looks like a difficult prospect and we believe it in our case and we think our case is very strong. We would obviously welcome an opportunity to have that kind of conversation, but we just don’t see it’s before us at the moment.

Okay. Thank you.

Thank you. The following question is from Oscar Cabrera of Bank of America Merrill Lynch. Please go ahead.

Thank you, Operator. Good morning, everyone. I’m still wondering if the change in federal government has any positive impact on the CRE and I’m not going to ask you any question that. And I most curious about your….

Thanks, Oscar.

On your CapEx disclosure for this quarter, reducing from $405 million to $385 million, these comments here that some of it has to do with timing. Can you provide more color on that because when we were in Cigar Lake, there were comments about there is still spending to be done at McClean Lake? I’m just wondering how should we think about the capital expenditures going forward for that and for McArthur.

Yeah. Oscar, with respect to McLean Lake, we've been talking about, I think since Q2, the requirement for a bit more capital to be spend at McLean Lake in 2016 to complete the mill. But what’s interesting is the point that Tim made earlier that the run rate for McLean Lake in October was 1.5 million pounds in that months. So that’s an 18 million pound production rate on an annualized basis. So, obviously, the goods folks at the river are doing the work to figure out exactly what capital would be required for ’16 because the mill is performing very well. So, I hate to put it in such a context but we are just still waiting for them to do that evaluation, given the great performance of the mill. The timing issues, as they pertain to McArthur just around some of the work that’s going on there for circuits freeze plant for example, hitting milestones. Everything’s working to our plan. It’s just -- we are now at a phase now where some of that work and flip to an indoor mode. We’ve got -- the shell of the building is ready to go and so some of that activity is just going to flip into the next year but it’s not a critical path or anything, just part of the overall spend at McArthur so. So, no real notable pieces in there in that CapEx change other than it’s just come off a bit.

Okay. Great. Thank you. And then could you provide color on the long-term contracting markets for uranium after the start of both, the first nuclear reactor in Japan? Have you seen any changes in behavior from utility source, so looking at and wait and see from their part?

It’s a bit early. Obviously, as we said, as I said in the opening comments, when I look back a year or even six months, we’ve talked about Japan restarting their reactors since -- probably since they put down in 2011, 2012 and so they have the first Sendai unit come on and then the second was good news. But I think we need to see more. We’ve got another one coming. Looks like just in the New Year, a couple more group that are in legal. We are more us right now and hopefully, we will get out 20 more lined up after that going through the end of the year versus. So that’s going to take some time. So, we didn’t see a big needle move if you like after that but that’s just one piece of it. We needed that to happen. We need utilities to get a little bit less comfortable with the supply that’s out there. And just staying kind of at bottom prices for near-term comps and start thinking about the longer term because I can tell you, when you start looking at that it’s a bit of a different story, bit of a different movie. We know there is 60, 465 reactors under construction today that are going to be coming on at a regular pace over the next year in addition to what’s going now. On the supply side, I still think that’s the story and it’s going to be going forward as that -- yes to South where Chinese are moving out of hit but after that not a whole lot. And so we look out into the future and see 10 years from now, a need for 230 million pounds a year. Maybe we are wrong, maybe it’s 220, 210, maybe it’s a little bit more, I don’t know. But that’s more than today and I can tell you that not all of the producing properties that are producing today are going to be producing them. So that’s what gets us up. I think as Grand says, that’s what get us up in the morning and brings us in here saying we can see the supply-demand fundamentals of this business are good, going out of ways, the other type now but they look pretty good going forward.

Great. Thank you, guys.

Thanks, Oscar.

Thank you. The following question is from Daniel Rohr of Morningstar. Please go ahead.

Good morning. How do you expect the uranium segment’s purchase volumes to trend over the next several years? Should we expect any trend, or would it be wholly dependent on sort of what market opportunities might present themselves to you?

Maybe I will ask Grant to answer it. Grant, do you want to?

Yeah. It’s really your latter point. We are very opportunistic with any purchase opportunities. We like to sell uranium when the price is high. We like to actually buy a little uranium when the price is low. When you could look at uranium price such that material that’s already been explored for already mined, already milled, sitting in a can somewhere in the mid 30s U.S. dollar, that’s quite attractive. It’s quite attractive relative to tier 2 and tier 3 cost of production. But we always look at it opportunistically. We look at it in the context of our sales commitments. So to say that there is a forecast number out there, I wouldn’t go that far, obviously having Cigar Lake performing so well. 6 million to 8 million pounds was our guidance at the outset of the year and it is 10 and 10 now and so that’s a change for us as well. We replaced purchases perhaps with those tier 1 pounds. So that’s a very attractive for us. So, we are just going to watch that and it’s just all part of this tier 1 strategy that we have to bring pounds from the best market assets.

Great. And then could you refresh us a bit on your free cash flow priorities over the medium term as we see Cigar Lake ramp and hopefully, we see some recovery in the uranium price? What are the priorities for cash?

Yeah. The priorities are kind of set out in that, opening strategy statement that we have at the beginning of every MD&A. I mean, we talk about ensuring our continued reliable low cost production for McArthur River, Key Lake. And keep in mind we have the ability now to take McArthur River up to 25 million pounds a year on a 100% basis. So, of course that remains an investing priority for us, when we think about our free cash flow. We also want to ensure our continued reliable production at Inkai, not so much from a point of view of pushing that Kazakh asset for higher production but making sure it’s positioned for win. The Kazakhs themselves recognized that there is new production that needs to come to the market and being part of that game. Obviously, the ramp up at Cigar Lake still consume some of our time, some of our intention and probably some of our investment to optimize, to make sure that mine is really producing as well as it could be. Then after that, we are very patient with our capital. We’ve parked a number of projects in what we call the bullpen. We are waiting for market signals to tell us that it’s time to invest. It’s kept us in a mode where we are living within our means. We are being very disciplined, trying on one-hand to be prudent to make it through this fall at Fukushima as we’ve called it. But on the other hand, position ourselves for the operating leverage that Tim was describing. And we just look at it very simply, as that operating leverage is best coming from leveraging our brownfield infrastructure and those are those tier 1 assets. And those are our priorities.

Yeah. I’m familiar with the language at the front of the MD&A. Those are largely, as I read them investing priorities or is there anything you could offer on disbursement priorities stated to shareholders, anything along those lines?

Yeah. So, the capital allocation approach we’ve taken for the last few years have been to say. Our contract portfolio gives us really good line of sight to our revenues, that line of sight to our revenue. As long as we are managing our costs, it gives us pretty good idea of where those cash from operations are going to be. We then back out a couple of items. We’ve got a dividend commitment to our shareholders and we have some interests that gets paid on our long-term debt. That leaves us with a residual amount of investable capital. What I was describing is the priorities for that investable capital. To date, you’ve seen that those priorities have really consumed that amount. If we found ourselves in a position where focusing on those tier 1 projects didn’t consume that investable residual capital then we would be having a conversation about what to do with that. Because let’s face it, those types of excess funds can only go in one or two directions. They can go into investing in our portfolio or back to our owners. We have frameworks that we have for the Board to look at the best way to disburse. We haven’t had to invoke them yet obviously. But it would require an analysis to talk about an increase to a dividend perhaps, or what that sustainable dividend increase might look like, or whether you go down the path of special one dividend or whether you actually turn a bit and do a shareholder buyback. All of that up for negotiation when we find ourselves at that point, but right now we are convinced that investing in our Tier 1 assets has been a very good wise decision for us. And quietly frankly, we are starting to see a payoff.

Thank you. The following question is from Chelsea Laskowski of Missinipi Broadcast. Please go ahead.

Hi. I am wondering on, the effect of wildfire was solid in the last quarter. It was not seen as I guess a big impact on the operations. I am just wondering if there is anything that’s come up in the time since kind of residual, that’s affected anything, erases mines in the Northern Saskatchewan area.

Hi, Chelsea. Nice to hear from you. Yeah, you were there. You know, what we went through, say, we, as a province here, especially the northern and companies through the end of June and almost to the end of July, I can tell you with those players we were having here at our office right in this room in fact emergency response meetings everyday 9 a.m., 3 p.m. to deal with it, so just a great effort with the government of Saskatchewan with the northern leaders. So nothing new since then, we are through it obviously now, and obviously there are some costs to us, but certainly we cost that we needed to incur. What was more important was the way the community came together, our employees were -- of course 50% of our employees are from northern communities, most of which were evacuated, so they were all over the place and to be able to get them to work and keep the mines running. Roads blocked because there were fires on both sides of the road, couldn’t get trucks up. We had convoys, 20 trucks seating just waiting for dream -- I think to go through the fire is quite production here, but no we are through it now and we’re very grateful that it wasn’t even worse and it was bad, but it could have been worse, communities could have been taken down. And so there is some more rebuilding to do, but we are through it and we’re grateful for the great cooperation here in Saskatchewan.

And I am wondering with the review -- wildfire review that the province is doing, how much of a stake do you guys have in that?

We certainly have people involved, but it’s being driven by the province. And so I am sure they will be consulting with us and we will provide whatever added value we can to the process.

Sorry I just had one follow-up on that. With the -- I guess what as a company would you want to see the province possibly change to make things more effective on your guys end?

You know what the province responded very well for us. We were in contact everyday with them, whether it was the highways, department, whether it was the northern affairs group, just to -- we were fortunate in the sense that our mining facilities weren’t as directly affected by the fires as the northern communities, the fires were quite some distance most times from our assets. And so it was more of the northern communities, so it is what it is in Northern Saskatchewan. There are fires, I thought the province responded very well, cooperated well, because I am sure the communities would have some input into how that went, but from our point of view the province responded well and we would tell them not given the chance.

All right. Thank you very much.

Thank you.

Thank you. The following question is from Fai Lee of Odlum Brown. Please go ahead.

Hi. It’s Fai here. Regarding the inventories and the increase this quarter, I am just wondering how should we view it in terms of like whether it would be -- some of that increase would be reversing in the fourth quarter or how much of it is related to the ramp up of Cigar Lake?

Grant, do you want to take that?

Yeah, well, the inventory has built and I think you hit on some good reasons. Production has been solid. Cigar Lake has been a theme this morning that we talked about and certainly that contributes to it. The other thing about the inventory too is remember that it’s measured in Canadian dollars. And so when we made some purchases in US dollars, value it, and this is a value of the inventory, you see that FX effect. But we do have a busy fourth quarter coming up. We have a lot of deliveries to fulfill as we deliver into those contracts. We do expect the inventory come back down to a more typical level that you become accustom to with Cameco. So a bit of bulge, but I think what makes it a big notable this quarter is that there is an FX effect glaring on. So I said a bit earlier having deliveries heavily weighted to the fourth quarter has been common for four years in a row, but this time we’re also seeing an FX effect on top of that, bit more production coming in from Cigar Lake as we discussed.

Okay. And just a follow-up, Grant on your commentary about 2004, I didn’t quite get to what was going there, maybe can you, maybe just explain?

With respect to the CRA dispute?

Yes.

Yeah, well, I wouldn’t be the expert. I mean look across the table to our Chief Legal Officer, Sean Quinn on that. Just the point I made was that there was a Notice of Objection that needed to be filed by us. We’ve done that. We typically wait for response from the CRA. We didn’t receive that. And I would just say that 2004 sits in a bit of a legal limbo. And I am just going to ask Sean to add a bit more color to that?

Sure. And I really don’t have too much color to add. We did follow our Notice of Objection. We are waiting for response. It’s held up in a couple procedural issues within the CRA. And so with that year, it’s simply not before the courts right now.

So is there like drop that day before or after the respond or is it possible may not even where they can’t proceed anymore?

That possibility is out there, but we expect that ultimately the crown will care its position on that.

Okay. Great. Thanks.

Thanks a lot.

Thank you. The following question is from David Snow of Energy Equity, Inc. Please go ahead.

Good morning. Thanks. Suppliers are holding up well, but that they will be coming down over time. And I am wondering ballpark how many pounds were there be down in 10 years if you saw the current price structure continue for the duration?

Yeah, so we have -- sorry it’s Grant. We have some disclosure out there. We do provide a bit of a 10-year market balance for you. Our view is that with the demand that it’s actually quite certain and actually quite predictable right now. You’ve got reactors under construction, of course that is part of today’s problem under construction, they are not consuming uranium, but they will be -- 65 of them under construction, they will be conditioning and firing up through this 10-year period. We see annual consumption going to about 230 million pounds. We see production a lot differently. As Tim mentioned earlier, we are in an environment where today’s prices are not incenting future production. So we simply look at the production that’s going on around the world. We say if it continues to face only sustaining capital and we continue to see a lack of replacement or growth capital, we see production actually trailing off, not hitting 230 million pounds a year, but actually trailing off to around 140 million pounds a year. It’s quite a bit deficit, that’s a 10 years out 90 million pounds of uranium and we talked a lot about Cigar Lake, so let’s think about it in Cigar Lake terms. The world would need to explore for discover, ramp up to full production, 4.5 new Cigar Lakes. And so we ask ourselves do we where is that work being done, who is making those investments? And we look around and we don’t see that happening. That’s part of what Tim said earlier gets us really excited. We see a difficult spot market. We see a challenging mid-term market, but we see a fundamental, that’s really favorable and really encourages us to focus on these Tier 1 assets like we’ve been doing.

Well, some of that 140 million pounds versus 230 is supplied by secondary sources, what is production now versus the 140 you just referenced?

Yeah, so that graph that we have in there is just primary production, absolutely there will be secondary supplies, but of course one thing about the nature of secondary supplies is they are finite, they only come to the market once and what we have actually seen over the years is a drawdown of those big volume. So for example, we no longer have the [ATU] [ph] material in the market that when we think about it in mine terms, mine life was up in 2013. We do have material we know coming out of strategic inventories, for example the US Department of Energy, but they are working through what are their more fungible materials that come to the market and they are secondary supplies beyond that really require them to either down blend some highly enriched uranium, so additional processing or to re-enrich tail so additional reprocessing. So we see some challenges to those secondary supplies, they really come down to at what price you think they will be in the market. So certainly, we model secondary supplies going forward, you’ve seen that in our investor presentations, but we still have a gap. There is still a gap there beyond primary production and in some secondary supplies that we think will be there. You still have a gap that we just don’t see being filled today because of today’s price environment.

Okay. Okay. That has charter in your best of presentation.

They are, yeah.

Yeah. Okay. Thanks.

Thank you.

Thank you. The following question is from Graham Tanaka of Tanaka Capital. Please go ahead.

Yeah, guys. Thank you. I am wondering what’s your estimates are on the Japan overhang? That seems to be a lingering problem especially with their some of the delayed restarts? What -- how many millions of pounds are really out there? I -- we can’t seem you could answer? Thanks.

Yeah. Thanks, Graham. It is hard to tell, because we don’t have the exact number that keep that pretty close. But we knew, we’ve been dealing with the Japanese for a long time and when things are good they’re back before March 2011. They would hold probably three to four years of inventory at an annual consumption rate of 20 million pounds would be the 60 million to 80 million pound range. We think since then they probably added the couple years. They kept taking deliveries even through. The post Fukushima years, now those would be diminishing. Obviously, we aren’t signing any new contracts with them, but they keep taking deliveries. So they -- we said somewhere in the neighborhood of 100 million pounds, something like that, probably wouldn’t be far off. The good news is we haven’t seen those pounds come back to the market and we’ve said on previous calls and when we talked to you that Japanese are clearly behaving like they’re going to bring the units back on and now we see solid evidence of that. We see two units, couple more coming. They’ve spent billions, 10s of billions on getting the fleet ready to come back on. There is 20 plus five, so 25 in the queue, I guess 23 in the queue for restart now. So, yeah, there is a healthy inventory there. I don’t think they’ll be coming back to the market anytime too soon. But the restart, you can just take the question, there is a big overhang if you like over the last few years has been, will the Japanese put inventory on the market and so far they haven’t.

The other thing that we’ve been trying to estimate its hard to do either, of course, have much better resources on that is the -- so the cheap incremental production coming from Kazakhstan, [indiscernible] what do you think that that supply is and how long can they keep it up at the kind of cheap production?

Well, they’ve, of course, they build up our production has been astounding over the last 10 years, 10 to 12 years going from basically nothing to -- they’re in the 22,000 tonne range now, that certainly capable of incremental production. We think they can get to kind of 25,000 tonne maybe by in the next couple years, ‘16, ’17. But then, it’s not obvious that they can double that. First, you’ve got the depleting resources at some of the better ore bodies. We’re in good one. Our other friends, French and Japanese and Chinese and others are in other one. It’s a continuous drilling program. And so, secondly, I think, we have -- the better ore bodies are already being worked. And so, can they increase production, I think, they can to some extent, but it’s not obviously will be a dramatic increase. So we see that and, I mean, the other piece is, they’re very savvy, we just met with them last week, very savvy marketers on the market, now have 10, 15 years of experience in the market. And so, they’ve held their production at the 22,000, 23,000 tonne range and I don’t have any reason to think they wouldn’t do that going forward.

Just curious why Cameco increased purchasing, it look like an incremental cost of $47 tonne? Is that likely to continue that -- purchasing level and in terms of volume and at price, because it seems to be above market? Thanks.

Yeah. Hi, Graham, it’s Grant. Just with respect, first of all, to the volume. Our purchase program was set out driven by obviously opportunity. We got -- we are seeing at a market that actually had some pretty cheap pounds in it, but also at a time when we were guiding on 100% base to 6 million to 8 million pounds from Cigar Lake. So, with that in mind, we set out on some purchases and of course, Cigar Lakes performing very well, which will often our need to make purchases. But also there’s a bit of uphold problem if you will, when you think about those purchases. We make those purchases in U.S. dollars, we hold them in Canadian dollars and we’re going to sell them in U.S. dollars. But what you're seeing is the Canadian dollar value of those purchases. It’s just an FX effect. We’re not buying at $10, $12 above the market. I can assure you of that.

Thank you. The following question is from John Tumazos of John Tumazos Very Independent Research. Please go ahead.

Do you anticipate changing your long run uranium prices assumptions that you might use for discount rates and evaluating projects, or in terms of reserves, your balance sheet? It’s notable on the last quarter or so, here in New Jersey, the federal government auction 343,000 acres per 3,400 megawatt wind farm on South Jersey shore, seven miles offshore. In West Texas, there is a 1,200 megawatt wind farm of First Solar. Therefore, it’s stocked in over 400,000 panels by one company with three, or four or five other companies studying. Three weeks ago, Toyota proposed phasing out their gasoline engines prior to 2015 where there is all these renewable climate change environmental actions even though natural gas is almost $2, coal is almost $3, et cetera. Difficult time to plan with all this climate change philosophic stuff, even though it should play into nuclear and these other forms of energy, sun and wind game, et cetera.

Yeah. John, thanks for the question and it’s a real good one because that is something we watch closely. Clearly, in the U.S, I’d say gas is probably the biggest competitor to nuclear. $2, $3 gas is that we can bring on electricity production in less time, less upfront capital for sure. So that we’ve seen over the past year or two, lots of electricity generating facilities based on gas being built a little bit cleaner than coal, doesn’t emit quite as much as CO2. And of course, everyone is on the solar and wind search parade if you like. That is intermittent power that operates normally at about 30% of the time, which you can’t run a hospital or school as we’ve said on that. So, you got a back-up power for that. And in U.S. that seems to be gas and coal and others. For us going forward, the U.S. remains a big customer. I think they have 99 or 100 plants, still operating there, looking at closures of maybe five or six, but also five big new ones under construction and coming on, so pretty flat right now in the U.S. The game for us and the game for the nuclear industry is certainly over in the Middle East and Far East now. China, India, South Korea, United Arab Emirates, massive population growth, massive needs for electricity, not sure they can answer that with some of the renewables, wind and solar. And so turning to nuclear, we see in China country 10 years ago had basically no nuclear to date. 50 plants either operating or under construction and lots more to come. And so, yeah, it’s really, it’s a dependent on your situation. If you got lots of options like America, I’d say America including us here in Canada held up. You can make choices like other countries don’t have the suite of choices and opportunity that North America might have. We saw $20 million gas in Japan, not long ago and in Asia. So, that’s little trickier economics on that. So, our focus and you see where the reactors are being built. Countries like I say with large growing population, they all want bridges and air conditioning and stoves and iPads and iPods like the rest have and that requires a lot of power and governments have to provide that and that’s where we see the market being going forward.

Thank you very much.

Thank you.

Thank you. The following question is from Steve Bristo of RBC Capital Markets. Please go ahead.

Yeah. Thanks for taking my follow-up question. Just on the Cigar Lake target of 80 million pounds by 2018. Should we look for production in your 20-teen to be that full 80 million pounds, or is that like a run rates that’s going to be reached by the end of 2018.

I think the plan would be 18 million pounds produced during the calendar year 2018. So yeah, you can put that on your book step.

Okay. And then just a quick follow-up on cost. The top end of your guidance in the uranium segment points to cost of $30.10 a pound Canadian. Your currently running at $39 of pound with cost in the last two quarters being in the 40s due to Cigar Lake. Are you still comfortable with that annual guidance, which requires substantially lower cost in Q4?

Yes, we are.

Okay. That’s it for me. Thank you.

Thank you.

Thank you. The following question is from Orest Wowkodaw of Scotia Bank. Please go ahead.

Hi. Thanks for taking my follow-up as well. Just given your comments on focusing on your big assets, has there been any thought about curtailing some of your smaller assets, say the ones in the U.S. that would not benefit from currency devaluation to kind of support the uranium market just given. It’s great that Cigar Lake is ramping up ahead of schedule but last thing that market needs short term is more uranium pounds. Just curious on your thoughts?

Yeah. Obviously, this management team is looking at the sitting around the table, couple of years ago, said we need to have flexibility in our operation. Flexibility can be up or down. So 2015 has been a bit of a game changer for us in the sense that is one year ago for sitting at this time. We had almost no production as to go away and didn’t know what the future look like. Today, we have 8 million pound up, our per share looking at them. And so when you have a contract portfolio in place that looks at 31 million to 33 million pounds in sales a year and your production is 25 or 24 overall numbers was this year prior to revising in. Then you need production from a lot of sources and you need some of these pounds purchase that we are talking about today. We are reevaluating almost daily or weekly now as Cigar to continues to ramp up. We want those pounds in our portfolio. We want obviously the Inkai and McArthur foundry below those pounds. We need Rabbit. We need the U.S. at this point. But it is something we evaluate the clearly on a continuous basis. And as I said, we need flexibility up and down. We are watching the market to see when the improvement is coming, when the return for long-term contracting is coming and then we will make decision on our assets.

All right. This is a follow-up, all the mines, free cash flow or breakeven are better at kind of today’s price and currency environment including sustaining capital?

Orest, it’s Grant. Keep in mind, we would do that analysis from our average realized price not today’s market prices. And when we do that analysis, we still see good performance. We still see room for those pounds. But as Tim was saying that with Cigar Lake performing so well, there is a bit of displacement opportunity there and it accelerate the competition and analysis around flexibility. And I think Tim used the term game changer earlier. I don’t think it’s an understatement. I think the focus on the tier 1 strategy is really starting to pay off at the Cameco.

Thanks very much.

Thank you. The following question is from Greg Barnes of TD Securities. Please go ahead.

Thank you. Is your view on when uncovered requirements thought to become more pressing to the utilities? I know its always been unlike a three year rolling view. Is that to getting the stretch out? Some numbers are recently I guess was from U.S. about the inventories held at utility level, they seem to be expanding quite significantly?

Greg, I guess, there’s being a few factor. I know you get the sense that it is a rolling out. I think we’ve that sense too. And the reason for it I think is Japan. We probably overestimated how quickly Japan are underestimated to how long it will take to bring Japanese units back on. Yes, one benchmark that we used and I think we’ve talked to you and others before about it is our own portfolio of contracts that we have in place where we see we are heavily committed through ‘18. But then it opens up. After that we’ve decided to build approx that the utilities would be and since we were involved with most of them would be a similar shape. And then there is some uncovered requirements other than the ‘17, ‘18 and going forward period. And so that’s where we see it now. We continue to read the daily to watch Japan as I say we can kind of freeze that situation and move at the side. There is some good construction going on, new retractors coming on monthly or quarterly at least that are going to be requiring uranium in addition to the existing fleet. So we see demand going up. And so at some point, I think there is going to be a switch from discomfort in the short-term market to spot or even this mid-term market to where utilities that want to run their machinery for the next one, three years or saying what they are looking at security supply going forward because if chemical is right in 2024 and the consumption is 240 million pounds and there is only something significantly less and that is coming on and we better lock up some pounds. So we wait for that day to come. I wish I knew when that date was, but I think it’s not too far out in the future.

Okay. I just look at some of your numbers, you certainly hold 41 months of inventory according to these numbers, and that’s well above the 24 to 30 months they previously held, in the U.S. also 30 months, above 12 to 18 they normally hold. So are those numbers that you would agree with?

Grant, do you want to speak to that?

Yeah. Greg, we obviously look at that a lot. I mean, it really is consistent with the message that we’ve been giving for sometime now which is it’s the discretionary market. We have an opportunity -- utilities have an opportunity here. They feel well covered over the next couple of years, they go into the spot market when they think they see cheap uranium, and they buy a bit. And if it starts to put some price pressure on, they back out of the market.

Right.

And all along they are just tucking a little bit more of that finite spot material. But really what matters for us is where that run rate volume is coming from, not that inventory numbers, but where’s your annual supply of uranium coming from, that’s what derived from the uncommitted requirements line that U.S. consulting and others put out. We think that really starts to open up in the 20-20 window. You should have a world that’s consuming somewhere between 180 and 200 million pounds of uranium. And only about 60% of that is currently contracted for according to the U.S. own numbers. Those are big volumes and they’re not going to be satisfied by a couple million pounds here and there that you’ve tucked into your inventory, it’s that look that gets us pretty excited. We look at our contract portfolio and we say we can wait it out, we can wait for that return to term fundamental term contracts at a real placement rate, I mean we haven’t seen that since Fukushima. So the spot market is just consistent with that message we’ve been delivering, that is near-term, it is a buyer’s market, it’s a discretionary market and we just see that continuing.

Okay. Good. Thanks very much.

Thanks, Greg.

Thank you. This will conclude the questions from the telephone lines. I would like to turn the meeting back over to Mr. Tim Gitzel for his closing remarks.

Thank you, Operator. I have to say that as excited as we are to see the good progress we made in Cigar Lake. We are also excited to see dates for the CRA litigations being fixed now so that we have some perhaps end inside. I am looking at Sean Quinn to the CRA litigation. We look to put that behind us. So, thank you, Operator. I will just close by noting that we are patiently waiting for the industry to recover, but that doesn’t mean that we are being complacent. We remain focused on keeping our cost down and running our operations safely and efficiently in order to maintain the flexibility needed to respond quickly when the market improves. Our strong production and continued success are indicative of our ability to continue to achieve those goals. So with that, I will say thank you to all of you for your continued interest in Cameco. And have a great day.

Thank you. The Cameco Corporation third quarter results conference call has now ended. Please disconnect your lines at this time. We thank you for your participation and have a great day.