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Top uranium producer Kazatomprom's net profit up 115% in 2022 on higher uranium prices

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(Kitco News) - Kazakhstan's Kazatomprom (LSE: KAP), the world's largest uranium producer, announced today that the company produced 11,373 tonnes of uranium (as U3O8) in 2022 on an attributable basis, which is 4.1% lower than in 2021 (11,858 tonnes) and within the updated guidance.

According to a company press-release, overall, uranium production in Kazakhstan (100% of KAP and its partners' production) was 21,227 tonnes in 2022, down 2.7% over 2021 (21,819 tonnes).

The company said that production volumes on a 100% basis and attributable basis in 2022 were slightly lower compared to 2021, as the COVID-19 pandemic had an impact on wellfield development in 2021. Additionally, KAP's attributable production was impacted by the sale of a 49% share of “Ortalyk” LLP to CGN Mining UK Limited in July 2021.

Compared to 2021, in 2022 C1 cash cost (attributable) increased by 16% mainly due to a payroll increase of production personnel and an increase in the cost of materials driven by inflationary pressure.

All-in-sustaining cash costs (attributable C1 + capital cost) increased by 28% in USD equivalent in 2022 due to an increase in capital expenditures of mining companies. The results were within the guidance ranges provided for 2022.

The group's average realized price in KZT in 2022 was KZT 52,051 per kg (43.44 USD/lb), an increase of 42% compared to 2021 due to an increase in the average spot price for uranium products, and the weakening of the KZT against the USD.

The group's consolidated revenue was KZT 1,001,171 million in 2022 (~$2.2 billion), an increase of 45% compared to 2021, primarily due to an increase in the average realized price associated with an increase in the spot price for U3O8 and the weakening of KZT against USD in 2022, whereas U3O8 sales volume was comparable to 2021.

Operating profit in 2022 was KZT 455,962 million (~$995 million), an increase of 91% compared to 2021. The increase was mainly due to an increase in average realized price of uranium sold.

Net profit in 2022 was KZT 472,963 million (~$1 billion), an increase of 115% compared to 2021 and the percentage increase is consistent with the increase in the operating profit in 2022. Adjusted net profit for 2022 was KZT 465,292 million, an increase of 111% compared to 2021.

In 2023, the company expects to produce between 20,500 and 21,500 tonnes U on a 100% basis and between 10,600 and 11,200 tonnes U on an attributable basis.

The company explained that the decrease in production guidance for 2023 in comparison to 2022 is mainly due to continued delays and/or limited access to certain key materials, including sulfuric acid, and equipment impacting the wellfield commissioning schedule in 2022.

"Amidst the unprecedented global economic uncertainty and significant geopolitical developments in 2022, Kazatomprom is well-positioned to benefit from the improving market dynamics and maximize the value for our stakeholders through continued production and sales discipline more than ever," the company said in a statement.

Kazatomprom is the world's largest producer of uranium, with the company's attributable production representing approximately 24% of global primary uranium production in 2021.

The company benefits from the largest reserve base in the industry and operates - through its subsidiaries, JVs and Associates - 26 deposits, located in Kazakhstan, grouped into 14 mining assets. All of the company's mining operations are located in Kazakhstan and extract uranium using in-situ recovery technology.

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