KAP expects adjustments to its 2024 Production
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AIX: KAP, KAP.Y (GDR) LSE: KAP (GDR) Currency: KZT (₸), unless otherwise noted |
12 January 2024, Astana, Kazakhstan
Kazatomprom expects adjustments to its 2024 Production Plans
National Atomic Company "Kazatomprom" JSC ("Kazatomprom", "KAP" or "the Company") expects its 2024 production to be adjusted due to the challenges related to the availability of sulphuric acid, a critical operating material, as well as delays in completing construction works at the newly developed deposits, however remains committed to its 2024 delivery obligations.
In August 2022, Kazatomprom's Board of directors has approved the Company's intention to increase production volumes in 2024 to a 90% level relative to Subsoil Use Agreements. The decision to shift production from 80% in 2023 to approximately 90% in 2024 (against Subsoil Use Agreements) was based primarily on Kazatomprom's continued success in signing mid- and long-term contracts with new and existing customers.
In August 2022, the Company has also highlighted, and reiterated in its communications throughout 2023, the risks associated with increasing the production due to the challenges related to global supply chains and limited availability of certain key operating materials and reagents.
Kazatomprom has been putting its best efforts and is continuing to work on securing the supply of critical operating materials and reagents, however the challenging situation around sulphuric acid is evolving in Kazakhstan and in the region. Given the growing demand from agricultural and industrial enterprises and shortages on both domestic and foreign regional markets, preliminary agreements with suppliers resulted in securing lower than required volume of sulphuric acid for 2024.
While actively pursuing alternative sulphuric acid supplies, current projections indicate that the Company's intention to achieve 90% production volume as per Subsoil Use Agreements in 2024 may be challenging.
The exact impact on the Company's operational performance is now being assessed and will be detailed in the upcoming production guidance for 2024 as part of the Q4 2023 Trading Update, which is expected to be released no later than 1 February 2024.
Kazatomprom remains committed to fulfilling contractual obligations towards all existing customers throughout 2024. If limited access to sulphuric acid continues throughout this year, and should the Company not succeed in catching up with the construction works schedule at the newly developed deposits in 2024, Kazatomprom's 2025 production plan may also be affected, subject to considerable supply chain risks. Updated 2025 production plans are expected to be communicated around the H1 2024 results disclosure but successful return to a 100% of the Subsoil Use Agreements can be viewed as at risk.
The Company continues its efforts to solve the aforementioned issues and will update its stakeholders accordingly as the situation with the sulphuric acid availability and its impact on production continues to develop.
Uranium reserves remaining in the ground as a result of deviation from production schedules will be available for production as a source of revenue in the future, creating long-term value for our shareholders.
For further information, please contact:
Investor Relations Inquiries
Botagoz Muldagaliyeva, Director, Investor Relations
Tel.: +7 7172 45 81 80 / 69
Email: ir@kazatomprom.kz
Kazatomprom Public Relations and Media Inquiries
Askar Atagulin, Director, Public Relations
Tel.: +7 7172 45 80 63
Email: pr@kazatomprom.kz
A copy of this announcement is available at www.kazatomprom.kz.
About Kazatomprom
Kazatomprom is the world's largest producer of uranium, with the Company's attributable production representing approximately 22% of global primary uranium production in 2022. The Group benefits from the largest reserve base in the industry and operates, through its subsidiaries, JVs and Associates, 26 deposits grouped into 14 mining assets. All of the Company's mining operations are located in Kazakhstan and extract uranium using ISR technology with a focus on maintaining industry-leading health, safety and environment standards.
Kazatomprom securities are listed on the London Stock Exchange, Astana International Exchange, and Kazakhstan Stock Exchange. As the national atomic company in the Republic of Kazakhstan, the Group's primary customers are operators of nuclear generation capacity, and the principal export markets for the Group's products are China, South and Eastern Asia, Europe and North America. The Group sells uranium and uranium products under long-term contracts, short-term contracts, as well as in the spot market, directly from its headquarters in Astana, Kazakhstan, and through its Switzerland-based trading subsidiary, Trade House KazakAtom AG (THK).
For more information, please see the Company website at www.kazatomprom.kz
Forward-looking statements
All statements other than statements of historical fact included in this communication or document are forward-looking statements. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future. THE INFORMATION WITH RESPECT TO ANY PROJECTIONS PRESENTED HEREIN IS BASED ON A NUMBER OF ASSUMPTIONS ABOUT FUTURE EVENTS AND IS SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTY AND OTHER CONTINGENCIES, NONE OF WHICH CAN BE PREDICTED WITH ANY CERTAINTY AND SOME OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. THERE CAN BE NO ASSURANCES THAT THE PROJECTIONS WILL BE REALISED, AND ACTUAL RESULTS MAY BE HIGHER OR LOWER THAN THOSE INDICATED. NONE OF THE COMPANY NOR ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS OR AFFILIATES, OR ANY REPRESENTATIVES OR AFFILIATES OF THE FOREGOING, ASSUMES RESPONSIBILITY FOR THE ACCURACY OF THE PROJECTIONS PRESENTED HEREIN. The information contained in this communication or document, including but not limited to forward-looking statements, applies only as of the date hereof and is not intended to give any assurances as to future results. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to such information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the Information that may result from any change in the Company's expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date hereof.
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