Cameco announced that the first pounds of uranium ore from the McArthur River mine have now been milled and packaged at the Key Lake mill, marking the achievement of initial production as these facilities transition back into normal operations. Production was suspended at McArthur River and Key Lake for approximately four years beginning in January 2018 due to persistent weakness in the global uranium market. In February 2022, with a notable market improvement underway and an increase in long-term contracting activity adding significant volumes to portfolio, Cameco announced the next phase of supply discipline, which included the planned restart of both operations.

This initial production is a significant milestone for the operations and comes as the result of completing critical automation upgrades, maintenance readiness checks, and restaffing, recruitment and training for key positions at both facilities. There are now approximately 730 employees and long-term contractors working at the mine and mill - more than half being of Indigenous heritage - with additional hiring planned going forward. The sites will continue with final commissioning activities to ensure target production rates can be met and normal operating conditions are being achieved.

McArthur River/Key Lake are expected to produce up to 2 million pounds (100% basis) of uranium concentrate (U3O8) in 2022. Starting in 2024, Cameco plans to produce 15 million pounds of U3O8 (100% basis) per year from these operations, 40% below their annual licensed capacity, as part of ongoing strategy to align production decisions with customers' procurement needs. Cameco expects the return to production at McArthur River/Key Lake will lead to a significant improvement in future financial performance.

The company anticipates it will be positive for cash flow and will allow to source more of committed sales from lower-cost produced pounds. In addition, the company will no longer be required to expense care and maintenance costs directly to cost of sales. Until achieve a reasonable production rate, however, the company expects to incur between $15 million and $17 million per month in operational readiness costs, which will be expensed directly to cost of sales.

The COVID-19 pandemic and related supply chain challenges have the potential to impact the availability of materials, reagents and labour at McArthur River/Key Lake, which could not only impact 2022 production, but could also introduce additional risk in 2023. Cameco will continue to report on the progress of the production ramp-up at these operations moving forward.