Kazatomprom has announced a delay in the commencement of production at the TQZ LLP facility, which is intended to produce the sulphuric acid necessary for uranium production, pushing the timeline from 2026 to 2027. This delay is attributed to restructuring procedures and approval delays for project design documentation.
“Considering the restructuring procedures, as well as delays in the timing of approval of project design documentation, the Company expects the completion of the construction and the start of production at the TQZ LLP to be postponed from 2026 to 2027,” the company said in its Q1 2024 operations update.
In the first quarter of 2024, Kazatomprom reported a slight increase in production compared to the same period in 2023. This growth is attributed to higher subsoil use agreement requirements and the resumption of drilling works in 2023.
However, sales volumes were lower in the first quarter of 2024 compared to 2023. This decrease is primarily due to the timing of customer-scheduled deliveries and revised sales guidance for 2024.
Despite lower sales volumes, Kazatomprom observed higher average realized prices in the first quarter of 2024, driven by an increase in the uranium spot price. Nevertheless, the growth in average realized prices lagged behind the increases in the spot market price for uranium during the same period.
Key financial metrics for the first quarter of 2024, including production volume, sales volume, and average realized price, are summarized in the table below:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| U3O8 Production volume (100% basis) | 5,077 | 4,744 | +7% |
| U3O8 Production volume (attributable basis) | 2,761 | 2,517 | +10% |
| Group U3O8 sales volume | 2,752 | 6,142 | -55% |
| KAP U3O8 sales volume (incl. in Group) | 2,321 | 6,142 | -62% |
| Group average realized price (USD/lb U3O8) | $62.53 | $46.75 | +34% |
| KAP average realized price (USD/lb U3O8) | $56.15 | $46.75 | +20% |
| Average month-end spot price (USD/lb U3O8) | $94.33 | $50.68 | +86% |
Despite these challenges, Kazatomprom maintains its 2024 guidance metrics. However, the company acknowledges that revenue, C1 cash cost, and All-in Sustaining cash cost may vary depending on factors such as the USD/KZT exchange rate and uranium spot price fluctuations.
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