Completed: 11 March 2025 20:30EDT Disseminated: 11 March 2025 20:30EDT Madison Tapscott , Associate Vice President | (416) 941-6791 | mtapscott@stifel.com Ralph M. Profiti , Managing Director, CFA | (416) 943-6102 | rprofiti@stifel.com Fanming Zeng | (416) 943-6639 | fzeng@stifel.com March 11, 2025 Canada - Metals & Mining INITIATION OF COVERAGE Uranium’s Bright Future: Supply Risks, Policy Shifts and the Future of Nuclear Energy Summary Is a Nuclear Renaissance on the Horizon? With a backdrop of growing demands on global electrical grids, we believe nuclear energy generation is poised for a second renaissance. Our thesis is informed by a combination of factors that may be individually understood by the market but not fully appreciated as to their combined impact. These include: 1) the sustained developing-market urbanization and changing developed-market consumption trends, 2) nuclear power’s unique characteristics within the global demand equation and 3) uranium’s relatively limited and tightly controlled supply within a geopolitically changing environment. In this report, we build a constructive thesis for uranium demand and initiate coverage of Cameco Corp. (CCO), Kazatomprom (KAP-LON), NexGen Energy (NXE) and Uranium Energy Corp. (UEC). Key Points Electricity demand is surging. According to the IEA, electricity demand is anticipated to nearly double by 2050. The global super-trend of increasing urbanization remains the key demand driver with a well-understood impact on per capita energy consumption. However, it is the changing profile of electricity demand, particularly within developed countries, that we believe is less appreciated in its impact. In our view, the previous advanced economies phase of “energy consumption reversal” will be challenged by the continued uptake of EVs – and to a lesser extent – the increasing electricity demand for AI. Nuclear power is in the right place at the right time. The market may have recently shifted to a lighter ESG sentiment but that doesn’t mean clean energy is no longer in demand. We detail several tech industry examples of power diversification strategies targeted at nuclear. The fact is that nuclear power has the highest capacity factor and is one of the few clean energy sources that is baseload or dispatchable. Stable baseload is necessary for critical infrastructure like EV and AI and in our view, nuclear will play an outsized role in meeting demand for solutions requiring long-term environmental considerations. Stifel’s proprietary uranium demand model differentiates this report. Taking into account electricity demand projections, public policies regarding nuclear energy goals and EV demand growth, we have detailed global projections for nuclear power plants currently operating, in construction, or soon to be constructed, to inform our demand analysis. Our base case scenario is that global nuclear generating capacity will increase 1.5x by 2040e, with an annual average increase (net of retirements) of ~12GW per year through 2040, with China, India and Japan the biggest movers for global nuclear energy growth. This translates to a 54% increase of U 3 O 8 (+95mmlb) required by 2040. Uranium supply is relatively limited and tightly controlled. Production is primarily sourced from four countries including Kazakhstan, Canada, Namibia, and Australia, representing 79% of total global production. Additionally, two companies are responsible for 35% of global production (Kazatomprom and Cameco). This presents an interesting pricing dynamic in a fragmented geopolitical environment. Also, new projects are required to avoid a significant supply deficit by 2040. We have analyzed all publicly available uranium projects globally to build our supply model and estimate primary uranium production growth of 3-5%, which still results in a significant supply deficit of ~80mmlbs U 3 O 8 in 2040. Geopolitical headwinds can further fragment supply-demand dynamics, forcing countries to focus on domestic growth of uranium projects for supply chain security, which is quite supportive for uranium exploration and development companies further down the line. Initiating on four uranium companies: Cameco Corp, NexGen Energy Ltd, Kazatomprom, and Uranium Energy Corp. Initiating coverage of Cameco Corp (CCO-TSX) with a BUY rating . A dominant market position in uranium production and the nuclear fuel value chain best- positions CCO against a backdrop of rising uranium price forecasts and the benefits of opportunities amid vertical integration in the Fuel Services businesses through its 49% stake in the Westinghouse Electric Co. – which we view as a fundamentally undervalued part of the business. In our view, improving financial performance, an accretive uranium contract book, high industry barriers to entry, and lack of investment alternatives amid investor positioning is expected to drive valuations to the high-end of historical ranges. Initiating coverage of NexGen Energy Ltd. (NXE-TSX) with a BUY rating. In our view, NXE’s Rook 1 project holds strategic significance as a construction- ready (once fully permitted), high-margin, long-life, technically de-risked asset in a premier mining jurisdiction that should attract M&A interest and command a premium valuation in the market. Initiating coverage of Uranium Energy Corp. (UEC-NYSE) with a BUY rating. With the largest production capacity in the United States, we see UEC set to capitalize on the growing need for domestically sourced uranium. We believe UEC is well positioned to execute on production growth from its US portfolio while offering sector-leading trading liquidity, in addition, UEC's 100% unhedged portfolio of uranium assets offers significant exposure to uranium price upside opportunities. Initiating coverage of NAC Kazatomprom JSE (KAP-LSE) with a BUY rating. We believe KAP will maintain its global market leadership as consensus estimates continue to absorb the impacts of production capability rates and the Kazakhstan’s Mineral Extraction Tax (MET). We believe the shares offer a compelling risk:reward tradeoff and the potential for outsized dividends in 2025 and 2026. Prepared by Stifel Nicolaus Canada Inc. Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. All relevant disclosures and certifications appear on pages 90 to 93 of this report. Table of Contents 1.) Setting the stage - global demand for energy is surging ......................................................3 a. Urbanization Mega - trend in - tact; Increasing global energy consumption + GDP growth b. Advanced economies portray a different narrative with energy consumption c. Global energy + electricity consumption is on the rise d. Increasing Electricity Demand – Setting the Stage for a Nuclear Renaissance 2.) Demand a. The changing profile of demand...........................................................................4 i. The ICE - EV transition ii. Artificial Intelligence 3.) Uranium Demand 101: Nuclear share of energy generation................................................10 4.) Global Demand Outlook: Stifel Research........................................................................13 a. Base Case Scenario b. Upside Scenario c. Downside Scenario d. Uranium contracting 5.) Supply – Uranium Market Overview...............................................................................20 a. Uranium and the shortfall of supply 6.) Global Supply Outlook: Stifel Research..........................................................................25 7.) Aligning supply and demand: A positive outlook for uranium prices in the decade ahead...........26 8.) Geopolitical uncertainty: Evolving risk factors could positively support uranium prices..............28 9.) Cameco Corporation (CCO)..........................................................................................32 10.) NexGen Energy Ltd (NXE)..........................................................................................43 11.) Kazatomprom (KAP - LON)..........................................................................................54 12.) Uranium Energy Corporation (UEC)...............................................................................65 13.) Appendix 9: Policy and environmentalists shifting to support nuclear........................ ..........82 14.) Appendix 10: The enrichment problem...........................................................................85 15.) Appendix 11: What is In - Situ Recovery (ISR) Mining?...................................................................87 Initiation of Coverage March 11, 2025 2 1) Setting the stage – global demand for energy is surging Urbanization Mega - trend intact, increasing global energy consumption + GDP growth: before diving into our nuclear energy thesis, it is important to understand the global context for energy requirements with energy consumption + GDP growth on the upswing. We argue that the global super - trend of increasing urbanization is still intact with the UN forecasting the urban proportion of the population to represent approximately 68% by 2050 (currently ~57%). As emerging market and developing countries move up the GDP curve (and become more urban), per capita energy consumption follows suit and we see this trend of increasing economic growth echoed by India, Brazil, Mexico and Chile all moving up the energy consumption curve with economic growth. China has been the poster child for this mega - trend, moving up the GDP curve over the course of the last 30+ years with an explosion of urbanization alongside its per capita energy consumption increasing nearly 4x from 1992 to 2023 while GDP per capita increased 10x. As urbanization continues to increase globally, we expect energy consumption to also increase in emerging market and developing economies. Figure 1: GDP vs Energy consumption per capita (1992 - 2023) Sources: IEA (International Energy Assocation), World Bank, Our World in Data (2024), Ember(2024), Energy Institute (2024), UN World Population Prospects (2024), Stifel Research Advanced economies portray a different narrative with energy consumption... The US has entered the phase of what we like to call energy ‘consumption reversal’ , with decreasing energy consumption relative to economic growth over the past 30 years. This reversal in energy consumption in the United States is attributable to advances in energy efficiency + equipment efficiency standards increasing overtime, ultimately lowering per capita energy consumption. Yet...global energy + electricity consumption is on the rise: despite some countries entering into a phase of energy ‘consumption reversal’ on the global stage, global energy consumption is anticipated to Will energy efficiency combat increasing energy demand requirements ? Initiation of Coverage March 11, 2025 3 increase by nearly 19% by 2050 in the current stated policies scenario (STEPS) according to the IEA. Emerging markets and developing countries are responsible for the majority of demand growth over the next 25 years. Electricity demand is also anticipated to nearly double by 2050, under the STEPS scenario, with urbanization and the uptake of EV’s in China contributing to this ballooning demand. Increasing electricity demand – setting the stage for a nuclear renaissance: it is readily apparent that population growth, increasing GDP and the global urbanization mega - trend will drive increasing electricity demand in emerging markets and developing countries over the next 25 years. However, we believe that advanced economies’ phase of “energy consumption reversal” will be challenged by the continued uptake of EV’s and the increasing electricity demand for AI and is setting the stage for a nuclear renaissance. We call this the changing profile of demand. 2.) The changing profile of demand The global ecosystem for energy production has expanded to meet demand from growing developing country economies. For the most part, this demand has been met through coal and fossil fuel sources, particularly in India and China. With that said, we have also seen an increasing role of nuclear and renewable energy sources contributing to the energy consumption curve over the last 15 - 20 years. Figure 2: Energy consumption by source 1980 - 2022 (India) (China) Source: EIA, Stifel Research However, when we look at developed world energy consumption, two recent dramatic shifts have begun to challenge the ‘consumption reversal trend’ in a way that the market may not yet fully appreciate: I. the ICE - EV transition is expected to continue, and electric vehicle (EV) growth comes with a significant need for stable baseload energy. II. although less significant relative to EV demand, Artificial Intelligence needs a massive amount of energy and that demand is rapidly growing. We believe the rapid growth of these two industries will transform the way we look at our global energy requirements. In short, global support for a transition to clean energy is occurring in conjunction with Initiation of Coverage March 11, 2025 4 these demand shifts and we believe nuclear power generation is well positioned to meet the challenge as a clean, reliable and stable baseload production solution. Electric Vehicles Electricity Demand from EV’s is increasing Figure 3: Electric Vehicle Demand Outlook vs. Electricity Demand of EV’s Source: IEA Global EV Data Explorer, Stifel Research Electricity demand from EVs is anticipated to grow at a 25% CAGR over the next 12 - years according to the IEA and we believe nuclear power generation is well suited to meet the rising demand of increasing energy requirements from EVs EVs currently only account for a minimal amount of global electricity consumption, a total of 0.5% of global consumption in 2023 (China and Europe, representing ~1% in 2023). Under the current STEPS scenario, EVs electricity consumption is anticipated to increase to ~8.1% (~16x) of total global electricity consumption by 2035. If we are more optimistic about countries reaching climate targets, this increases to 9.8% by 2035 under the Announced pledges scenario. These are both ambitious goals for EV demand growth and we recognize that it has taken longer than anticipated for EVs to increase penetration within the market over the last five years. However, we believe that EV demand growth is unavoidable as various government programs around the world continue to provide consumer incentive programs and support for the expansion of EV charging infrastructure, coupled with the introduction of new industrial policies. Additionally, clear electrification targets have been set by the 10 - largest automakers and while some have scaled back near - term targets, electrification targets in the longer term continue to favour significant growth in EV sales. Even if EV growth is longer dated than current estimates, recent and growing uptake of EV’s in the market will require grid design adjustments in the near term, with an increasing need for stable baseload energy to meet these changing requirements. - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 - 100,000 200,000 300,000 400,000 500,000 600,000 2020 2021 2022 2023 2025 2030 2035 Electricity Demand (GWh) - line Electric Vehicles (000's) - shaded BEV FCEV PHEV Electricity demand (RHS) Today’s EV market is a warmup lap – tomorrow, its full throttle Initiation of Coverage March 11, 2025 5 Figure 4: Share of EV electricity demand of total electricity demand Source: IEA Global EV outlook 2024, Stifel Research Nuclear Power is the most reliable form of energy generation and well suited for the task of increasing EV requirements. Nuclear power was deemed America’s most reliable energy source by the DOE in 2022. Renewable sources of energy generation (solar, wind, hydro) are considered to be intermittent or variable sources of energy, meaning that if there is no fuel (sun, wind, water) they, for the most part, cannot produce energy. Nuclear had the highest capacity factor of 92.5% in 2020, meaning that nuclear power plants were producing maximum power 92.5% of the time over the course of the year; nearly 3x more than that of wind and solar plants. We recognize that renewable sources of energy are needed to cover the growing demand of energy, however they cannot fuel the transition on their own and need to be paired with baseload energy generation to ensure continuity of electricity to the grid. In our opinion, nuclear power generation is the best suited for this task. Figure 5: Capacity factor of various energy sources in 2020 Source: US Energy Information Administration, Stifel Research Artificial Intelligence While the impact may be modest, artificial Intelligence + data centres provide another potential catalyst for uranium demand: Artificial Intelligence (AI) is transforming our relationship with technology, offering unprecedented access to information, increasing workforce productivity and has revolutionized our approaches to many aspects of our day to day lives. Artificial Intelligence requires AI accelerators (also known as AI chips) that are specifically designed for the processing of AI workloads and companies are spending tens of billions on these chips as data centres continue to increase in scale and compute 0% 20% 40% 60% 80% 100% Nuclear Geothermal Natural Gas Hydropower Coal Wind Solar Capacity Factor (%) When it comes to reliability, nuclear run s laps around the competition Initiation of Coverage March 11, 2025 6 power. This unprecedented growth resulted in a soaring demand for energy, with power consumption per chip a key focus as tech companies scale up data centres. New entrants in AI may complicate the AI energy demand picture: until recently, NVIDIA (NVDA - US, covered by our colleague Ruben Roy) has been the dominant player for the AI industry as a supplier of chips to the market. That is until the recent announcement of a new entrant into the space turned some heads in January 2025 when Chinese Artificial Intelligence company DeepSeek entered the AI Scene showcasing open - source models that rivalled that of ChatGPT. DeepSeek’s open - source models have produced similar results to that of its peers, with the kicker being they reportedly use less expensive chips at a fraction of the energy usage of NVIDIA’s. For context, NVIDIA’s next generation Blackwell B200 AI chip uses up to 1200W of power, which is up 300% in one generation of GPU’s. Before DeepSeek turned how we look at AI on its head, GPU clusters in data centres (groups of computers with a GPU on every node) were also growing at a rapid scale from tens of thousands of GPU’s per cluster to hundreds of thousands. Until DeepSeek, it was anticipated that as each new generation of GPU becomes more powerful to support larger and larger language models and increasing compute power requirements, this would also translate to increasing power requirements. The last six months have demonstrated how rapid paced and dynamic the world of Artificial Intelligence can be, with technological advancements driving changes to processing requirements and efficiency seemingly overnight – making it incredibly difficult to forecast trends regarding future energy requirements from Artificial Intelligence. Data centres driving electricity demand growth? According to the IEA, there are 11,000+ data centres globally, collectively consuming 1 - 2% of overall global energy, which as a reminder is more than current global EV electricity demand (2023 ~0.5%). Before DeepSeek hit the market, electricity demand growth from data centres was anticipated to grow at a rapid rate over the next few years. In the US alone, the DOE had previously estimated that electricity consumption from data centres would represent 6.70 - 12% of total electricity in the US by 2028 (vs 4.4% in 2023). Additionally, McKinsey had estimated that demand for data centres in the United States would grow 3x from current consumption, accounting for nearly 12% of demand by 2030 (vs ~4% in 2023), which would translate to an 11% CAGR in the low range scenario and 22% CAGR under the high range scenario. For context, the US has ~40% of the global data centres in operation. Initiation of Coverage March 11, 2025 7 Figure 6: US Electricity consumption: DOE estimates Source: US Department of Energy (DOE), Stifel Research Our thoughts on global energy demand from data centres: globally data centre demand was approximately 340TWh in 2023 and looking forward to 2035, there are a broad range of estimates out there regarding data centre growth on the global stage. With the recent DeepSeek advancement also ruffling feathers in the chip space, we concede that it is difficult to forecast trends in this sector given the rapid pace of new and future developments. With that being said, we’ve looked at three scenarios: a low, medium and high case for electricity demand from data centres growing at a 5%,10% and 15% CAGR respectively. If DeepSeek’s energy consumption advancements prove to be adopted more broadly, we see global data centre electricity demand skewing to the lower end of the respective range. Putting this into context, our low, medium and high case scenarios for data centre electricity demand would only represent a modest 2%, 3% and 6% of Global Electricity consumption estimates by 2035 (refer to Figure 7). Initiation of Coverage March 11, 2025 8 Figure 7: Global data centre electricity demand Source: IEA, Stifel Research, Company reports Tech companies are gravitating to nuclear energy: Mark Zuckerberg said “ Energy, not compute, will be the #1 bottleneck to AI progress” and he’s not the only one who thinks this. Individual companies are taking a harder look at where they are sourcing power for their increasing energy requirements (refer to Figure 8). Figure 8: Recent tech announcements regarding nuclear energy Source: Corporate news releases compiled by Stifel Research With multiple private companies jumping on the nuclear energy bandwagon, we believe that there will be continued interest and transactions in nuclear energy by the tech space for increasing energy needs driven by AI, with energy a determining factor for AI growth and development. In our opinion, the stability of nuclear as baseload power, alongside the relatively low GHG emission profile of nuclear energy are key drivers for the tech industry’s continued interest in nuclear energy as a power sourcing option. Combined, we believe AI and EV could represent 10 - 14% of global electricity consumption by 2035. Under the IEA’s STEPs scenario, EV electricity consumption is anticipated to increase by ~16x by 2035, representing 8.1% of global electricity consumption. While data centre energy consumption represents a small portion of total global consumption in isolation (2,4 and 6% of global consumption by 2035e), consistent baseload power is required, which in the absence of a scalable solution for energy Ticker Company Date Details AMZN-US Amazon Oct-24 AWS signed agreements with multiple energy and utility companies to enable the development of SMR's including Energy Northwest in Washington, Dominion Energy in Virginia, and X-Energy. GOOGL-US Google Oct-24 Google signed an agreement to purchase nuclear energy from multiple SMR's to be developed by Kairos Power. MSFT-US Microsoft Sep-24 Constellation Energy announced that the Three Mile Island Nuclear Plant would be restarted, pending regulatory approval, to supply 100% of its power to Microsoft's data center's over a 20- year PPA (power purchase agreement). ORCL-US Oracle Sep-24 Oracle announces a plan to build a gigawatt scale data center powered by 3 SMR's. If Deepseek ’s energy consumption benefits are adopted more broadly – we see energy demand from AI skewing to the low to mid case end of the range Initiation of Coverage March 11, 2025 9 storage cannot be powered by solely wind and solar In the case of EV’s , solar and wind could provide some optionality during periods of off - peak demand – if consumers were to embrace an “optimized” charging schedule . This may provide some optionality in theory but in practice juggling charging times for ~8% of global energy consumption might be a tough nut to crack. Bottom line, we believe that nuclear could play an outsized role in meeting the growing demand of energy consumption requirements in this space as companies look to invest in solutions to stabilize the grid with baseload power generation (refer to Figure 5). 3.) Uranium Demand 101: nuclear share of energy generation Electricity generation: nuclear reactors drive enduring global uranium demand. Globally, there are 439 operating nuclear reactors, comprising approximately 9% of total energy generation. The US leads the world on the total number of nuclear reactors in operation with 94 currently in operation, or 18.5% of total US energy generation. Followed by China and France with 56 reactors in operation. However, France leads the world when it comes to nuclear share of energy generation, with nuclear power comprising approximately 65% in 2023. Each nuclear reactor added to the grid provides long - term sticky demand for uranium. Figure 9: Operating reactors vs nuclear share of energy generation in 2023 *Reported as of December 31 st , 2023 ** Nuclear share of energy not reported for Ukraine in 2023 Source: International Atomic Energy Agency (IAEA), Stifel Research The 1970’s set a precident for nuclear energy growth: in the past, we saw significant global investment into nuclear power from 1960 to 1970. This resulted in a period of heightened uranium prices with nuclear energy generation increasing by over 6x between 1970 - 1990. During that period, the world increased nuclear power capacity by ~300GW (net of retirements). Investment in the nuclear sector slowed in the early 80’s with slowing electric demand growth, waining public sentiment as a result of the Three Mile Island accident in 1979 and increased costs and lengthened permitting schedules that followed. This phase of growth in the 60’s - 70’s means that many reactors currently in operation have been in operating for well over 50 years. Initiation of Coverage March 11, 2025 10 Figure 10: Historical evolution of nuclear power Source: World Nuclear Association, Stifel Research Growth from the 70’s has not been replicated, leading to an aging nuclear fleet: as a result of the large influx of reactors being added to the grid during the 1970’s and subsequent relative drop off in new reactors being built, a large portion of the global nuclear fleet is entering into their senior years. This is apparent when looking at the average age of nuclear reactors over time, where the average age of nuclear reactors in the 1990’s was ~11 years and the current global average age is now ~31 years. While there has been increased development of nuclear reactors over the past 20 years, this has not been enough to prevent a marked increase in the average age of the global fleet. Figure 11: Average age of operating nuclear reactors in 2022 Source: IAEA Power Reactor Information System, compiled by Stifel Research 0 50 100 150 200 250 300 350 400 1950 1960 1970 1980 1990 2000 2010 2020 2030 Nuclear Capacity (GW) 0 5 10 15 20 25 30 35 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 Number of reactors Reactor Age (years) Most reactors are closer to retirement than in their prime Initiation of Coverage March 11, 2025 11 Figure 12: Median construction time vs number of new reactors Source: IAEA, compiled by Stifel Research While nuclear power plants are finding life beyond retirement... Nuclear power plants generally are designed with operating lifetimes of between 20 and 40 years In the United States, operating licences are generally issued for up to 40 years of commerical power operation by the Nuclear Regulatory Commission (NRC). Nuclear power plant operators can apply for an extension to their operating licences for an additional 20 years for each renewal term. However, it is important to note that the average age of nuclear reactors in the United States is already beyond the initial design life - span , averaging 41 years. We believe new investment is needed to replace aging reactors + meet growing energy demand. Aknowledging there is the potential for advances in technology to continue to extend the lifetimes of nuclear reactors well beyond their intended lifespans, we believe significant new investment will be required for the world to achieve climate targets. ...China is leading the world in nuclear reactors under construction and has set its sights on nuclear power to fill the massive demand of increasing energy requirements, while also curbing carbon emmissions. While the US may lead the world in operating reactors, China is significantly ahead in terms of developing new reactors, with 24 reactors currently in construction. China has seen the most significant growth in nuclear power over the last 20 years, increasing their operable nuclear power capacity by over 7x with 54.3GWe of capacity in 2024. Initiation of Coverage March 11, 2025 12 Figure 13: Global reactors in operation + reactors under construction *Reported as of December 31 st , 2023 Source: International Atomic Energy Agency (IAEA), Stifel Research 4.) Global demand outlook: Stifel Research We believe that the growing demand for baseload energy needs, alongside geopolitical tension driving the need for securing self - reliant sources of energy, as well as countries shifting their focus to decarbonization of current energy sources will serve as a catalyst for the development of new nuclear power plants. We have developed our own proprietary uranium demand model forecasting nuclear energy growth over the next 15 - year period. We have separated this into three scenarios: a base case, an upside case that sees increased nuclear capacity largely beyond 2030 and a downside case that accounts for subdued interest and delays in construction/execution. Under our base case scenario Global nuclear capacity increases 1.5x by 2040e. Under our base case scenario, we forecast global nuclear generating capacity to grow at a 2.6% CAGR to 2040e, driven by global population growth, increasing GDP and the global urbanization mega - trend favouring clean baseload electricity uptake. Growth in our model is largely driven by reactors already under construction or in the later stages of planning and financing, with China and India the largest growth drivers of our global forecasts. ...and expanding the markets that are targeting nuclear as an energy solution Initiation of Coverage March 11, 2025 13 Figure 14: Stifel gross nuclear capacity outlook – base case Source: Stifel Estimates, WNA, IAEA, World Nuclear News, Company reports Our base case scenario assumes an annual average increase (net of retirements) of ~12GW per year through 2040. As a comparison, during the last nuclear renaissance between 1970 - 1990, nuclear electrical generating capacity (net of retirements) increased by ~15GW per year, which drove a dramatic increase in uranium prices. More recently, our forecast is over 12x that of 2000 - 2020, which saw an average increase of 1GW per year. We expect more reactor operating licence extensions: under our base case scenario, we have made the assumption that many of the currently operating reactors that have applied for operating life extensions of reactors are granted, based on the precident set in other countries and reactor type. For reference the average lifespan of a nuclear reactor is 30 - 40 years but many countries, including the United States, have been granting operating licence extensions up to a total reactor life of 60 years. Refer to Table 1 for more information. China, India and Japan are the biggest movers in our base case scenario, with China adding a colossal amount (+125Gw) of nuclear capacity between now and 2040. China has been extremely vocal on its plans for increasing nuclear capacity, targeting a total of 200GW by 2035 (2023a: ~57Gw). While China is serious about its nuclear plans, our base case scenario is slightly conservative, adding an average of ~7.25 reactors per year to 2040. India also has big goals for nuclear, with plans to increase nuclear capacity to 22.5Gw by 2031 - 2032 (current gross capacity: 6.8GW). Also on the conservative side of the outlook for India, we forecast an additional +10.8Gw by 2040 with eight reactors currently under construction, four currently planned reactors and two additional reactors. While Japan has had a difficult past with nuclear energy, sentiment for nuclear is improving with Japan’s cabinet approving a policy to allow new nuclear power reactors to be constructed and operating licences to be extended to 60 years (previously 40). In Initiation of Coverage March 11, 2025 14 our base case, we assume two nuclear reactors will complete construction (paused post - Fukishima) and five reactors will be restarted, which have already been approved by the NRA. By 2040, we see an additional 95Mlbs of U 3 O 8 required to service nuclear capacity: while reactor requirements, burn - up, enrichment and fuel consumption varies per reactor, over the last 10 years, global nuclear reactors have required on average 464lbs of yellowcake (U 3 O 8 ) per MW of annual energy production. This uranium demand is inelastic and enduring, as retiring a nuclear reactor is costly and time intensive and generally avoided if there are no operating issues with a reactor (aside from natural disasters and changes in policy). Generally, with nuclear power plants operating lifetime reaching beyond 40 years in some countries, most incremental uranium demand, net of plant retirements, can be expected to remain for years to come. Our base case scenario assumes an additional ~190Gw of nuclear capacity added globally, which would equate to a 54% increase of U 3 O 8 required in 2040 from current reactor demand (~175mlbs/year 2023). Initiation of Coverage March 11, 2025 15 Table 1: Stifel base case scenario – nuclear power plant additions and retirements Source: Stifel Estimates, WNA, IAEA, World Nuclear News, Company reports Benchmarking our base case forecasts with those of the IAEA, which has set out two scenarios for the growing demand for nuclear power, a high and low case, our base case represents an intermediate case that is slightly skewed towards the upper end of the two cases. 2023a 2040e ∆ Country Assuming operating extensions granted? Gw Gw(+/-) (%) Argentina Yes 1.8 +1.1 62% Brazil No 2.0 +1.4 71% Mexico Yes 1.6 - 0% USA Yes 101.2 +2.2 2% Canada Yes 14.6 +3.6 25% Belgium No 4.1 (1.9) -47% Finland Yes 4.6 - 0% France Yes 64.0 +8.3 13% Germany No 0.0 - 0% Italy No 0.0 - 0% Netherlands Yes 0.5 +1.0 194% Spain No 7.4 (7.4) -100% Sweden No 7.2 +2.4 33% Switzerland No 3.1 (0.8) -25% UK Yes (1/9) 6.5 +1.5 23% Russia Yes 29.6 +7.4 25% Armenia Yes 0.4 - 0% Belarus Yes 2.4 - 0% Bulgaria No 2.1 - 0% Czech Rep. Yes 4.2 +2.4 58% Hungary Yes 2.0 +2.5 125% Romania Yes 1.4 +1.4 100% Slovakia Yes 2.5 +0.5 19% Slovenia Yes 0.7 - 0% Lithuania No 0.0 - 0% Ukraine Yes 13.8 (0.7) -5% Iran No 1.0 +1.1 106% Pakistan No 3.5 +1.2 34% Egypt No 0.0 +4.8 na UAE No 5.7 +2.8 50% China Yes 56.9 +124.9 219% Japan Yes 11.6 +8.2 71% India Yes 6.8 +10.8 158% South Korea Yes 27.1 +5.5 20% Turkiye No 0.0 +4.8 na Taiwan No 0.9 (0.9) -100% South Africa Yes 1.9 - 0% Bangladesh No 0.0 +2.4 na Kazakhstan No 0.0 - 0% Total 393.4 +190.4 48% Additions Retirements CAREM 25,+ 1 HPR-1000 rea ctor - Angra 3 - - - 3 SMR'S + 2 AP1000 rea ctors - +4.8GW a ddi ti ona l ca pa ci ty a t Bruce Power Pi ckeri ng 1,4 (2024) - DOEL 1,2,4, Ti ha nge 1,3 - - Fl a ma nvi l l e 3, +4 a ddi ti ona l rea ctors - - - - - +1 new rea ctor - - As co 1,2, Al ma ra z 1,2,Cofrentes ,Vedel l os 2, Tri l l o 1 +2 new 1200Mw rea ctors - - Bezna u 1, 2 Hi nkl ey Poi nt C1, C2 Heys ha m 1A, 1B, 2A,2B, Tornes s 1, 2 BREST-OD-300 a nd Kurs k 2-1, 2-2, 2-3, 2-4, Leni ngra d 2-4, 2-3, Kol a 1,2, Smol ens k 3, Bel oya rs k 5, Centra l 1,2, Ba s hki r 1,2, Kol a 2-2, South Ura l s 1 Kurs k 2, 3, 4,Bi l bi no 2-4, Smol ens k 1, 2, Leni ngra d 3, 4, Kol a 3, 4, NOVOVORONEZH-4 - - - - - - +2 new nucl ea r rea ctors - Ohma a nd Shi ma ne 3 , +5 res ta rts PAKS 5, 6 Cerna voda 3,4 Mochovce 4 - - Khmel ni ts ki 3,4 Bus hehr 2 CHASNUP 5 El Da ba a 1,2,3,4 +2 new AP1000 rea ctors + 7.25 rea ctors per yea r - - - - - - South Ukra i ne 1,2,Ri ni vi e 1,2 - - - Ka kra pa r-4, PFBR, Ra ja s ta n 7, 8, Kunda nkul a m 3,4,5,6, Gora khpur 1,2,Ka i ga 5,6 Sa uel 3, 4, Shi n-Ha nul 3,4 Akkuyu 1,2,3,4 - - Rooppur 1,2 Ma a ns ha n 2 - - - - - - - Initiation of Coverage March 11, 2025 16 Figure 15: World total nuclear electrical generating capacity: IAEA high and low case vs Stifel base case estimates Source: IAEA, Stifel Research Under our upside scenario We forecast global nuclear generating capacity to grow at a 3.3% CAGR: including the steady growth from our base case, in our upside scenario we see more countries approach but for the most part do not fully meet their nuclear targets by 2040. In our model, we see significant growth coming from China in particular – reaching nearly 200GW by 2040, five years behind their current target of 200GW by 2035. In Spain, Italy, Switzerland and Taiwan, we see policy reversals resulting in restarts, suspended phase - out plans and new reactor builds. Refer to Figure 16 for our upside estimates. We expect new entrants in nuclear energy: the glow of nuclear energy has been enticing for both emerging economies as a stable source of baseload energy, as well as countries further up the development curve that have been slow to adopt the technology. According to the WNA, there are currently around 30 countries considering or starting nuclear power programs. Of those, we have included Kazakhstan, Lithuania and Poland in our outlook as new entrants to the space. Our upside scenario comes with an additional 30Mlbs of U 3 O 8 demand by 2040, relative to our base case , or a 10% increase by 2040. Compared to current reactor demand, this represents a 70% increase (2023: ~175mlbs/yr) or an additional annual demand of 122mmlbs. Initiation of Coverage March 11, 2025 17 Country Gross Nuclear Capacity (Gwe) Armenia 0.4 Slovenia 0.7 Netherlands 1.5 Mexico 1.6 South Africa 1.9 Iran 2.1 Bulgaria 2.1 Switzerland 2.3 Belarus 2.4 Bangladesh 2.4 Romania 2.8 Argentina 2.9 Slovakia 2.9 Brazil 3.4 Hungary 4.6 Finland 4.6 Pakistan 4.7 Egypt 4.8 Turkiye 4.8 Czech Rep. 6.6 UK 8.0 UAE 8.5 Sweden 9.6 Ukraine 13.2 India 17.6 Canada 18.2 Japan 19.8 South Korea 32.6 Russia 37.0 France 72.3 USA 103.4 China 181.8 Total 582 Figure 16: Stifel nuclear capacity estimates by 2040e Source: Stifel Research Estimates, WNA, IAEA, World Nuclear News, Company reports Under our downside scenario Although slightly muted relative to our base case, we see nuclear uptake growing at a steady ~2% CAGR to 2040: on the downside, we see delays in financing, construction and regulation resulting in a slower uptake of nuclear energy. Relative to our base case, we forecast a ~50Gw reduction by 2040, however this still comes as a 36% increase relative to current nuclear capacity. Our downside scenario assumes an additional 140GW of global capacity relative to current levels, the equivalent of 112 new AP1000 reactors (gross capacity) added globally over the ~15 - year period. Refer to Figure 16 for our downside estimates. Under our downside scenario, we take a more conservative approach to climate goals and publicly announced targets. Under this scenario, we have eliminated new entrants to the space, anticipating delays in developme