Cameco, Kazatomprom release half-year results

Kazatomprom's results for the quarter and half-year show production of 10,857 tU on a 100% basis (5797 tU on an attributable basis) for the year to date, a year-on-year increase of 6% for 100% production (7% attributable).

Cameco's share of production from its Canadian operations totalled 12.9 million pounds U3O8 (4962 tU). This is a year-on-year increase of 47%, but the company pointed out that in 2023 the Key Lake mill had not yet achieved its 18 million pound per year run rate, while Cigar Lake productivity was impacted by a transition to a new mining area.

When making year-on-year comparisons, both companies pointed out in their announcements that sales and delivery volumes can be affected by the timing of contractual deliveries.

Kazatomprom eyes production increase

Kazatomprom said it is increasing its 2024 full year production guidance on both a 100% and attributable basis "as the half year results show that the production rates with which the mining entities are now progressing will result in a higher than initially expected volumes." Previously, production guidance had been 21,000-22,500 tU on a 100% basis (10,900-11,900 tU attributable); this has now been increased to 22,500-23,500 tU on a 100% basis (11,600-12,600 tU attributable).

Sales guidance remains unchanged, and the company said the increased uranium production "will be used for replenishing the Company’s inventories." It reiterated that limited access to sulphuric acid and delays in the construction schedule at newly developed deposits could "unfavourably influence" its production plans for 2025. Any adjustments to the 2025 production plans are expected to be announced in its financial results later this month, the company said.

Cameco remains on track

Cameco CEO Tim Gitzel said the company's second quarter operational performance was strong, driving financial results that remain in line with the company's full-year outlook. The company's overall results continue to be impacted by the purchase accounting and other non-operational costs related to its 2023 acquisition of Westinghouse, he said.

Cameco also has interests in Kazakhstan, through its Inkai joint venture with Kazatomprom. "Production at our JV in Kazakhstan was lower for the quarter and the first half of 2024 due to challenges with sulphuric acid supply in the early part of the year," Gitzel said, adding that the joint venture "continues to experience procurement and supply chain issues". 2024 production expectation of 8.3 million pounds U3O8 (100% basis) for Inkai is "tentative and contingent upon receipt of sufficient volumes of sulfuric acid", he said.

Other procurement and supply chain issues, transportation challenges, construction delays and inflationary pressures on production costs are ongoing risks that will need to be successfully managed at JV Inkai, with the geopolitical situation continuing to cause transportation risks in the region, Cameco said. It continues to work closely with Kazatomprom to receive its share of production via the Trans-Caspian International Transport Route, which does not rely on Russian rail lines or ports, but warned that "further delays to our expected Inkai deliveries" could occur if transportation using this shipping route takes longer than anticipated. The company said it has inventory, long-term purchase agreements and loan arrangements in place that it can draw on to mitigate the risk of production shortfalls or transport delays.