JSC National Atomic Company “Kazatomprom” (“Kazatomprom” or “the Company”) announces the following update related to the Company’s 2014, 2015 and 2016 agreements (“agreements”) for expanding cooperation in the nuclear industry with China General Nuclear Power Corporation (“CGNPC”) and its subsidiaries, CGNPC Uranium Resources Company Limited (“CGNPC-URC”) and CGN Mining Company Limited (“CGN Mining”). Please see the Company’s 2018 IPO Prospectus for further information regarding the specific agreements.
Pursuant to the agreements, the parties created a joint venture, Ulba-FA LLP, for the construction of a fuel assembly plant (“Ulba-FA plant”) with an annual nameplate capacity of 200 tonnes of uranium metal content equivalent in the form of fuel assemblies (“UME”), located at the Ulba Metallurgical Plant in the East Kazakhstan Region. In accordance with the agreements, CGNPC-URC committed to procure 200 tonnes of UME annually from the Ulba-FA plant within 20 years (4,000 tonnes UME in total). The Company and CGNPC agreed that subject to Ulba-FA receiving the first fuel assembly contract from CGNPC-URC, the Company would sell to CGNPC or its affiliates up to a 49% interest in its wholly owned subsidiary, Ortalyk LLP, on market terms determined by a third-party valuation (which is underway).
Despite COVID-19-related delays in the final commissioning stages of the Ulba-FA plant, work has resumed, with commissioning and required licensing being completed in 2020. Under the current ramp-up and product qualification plan, and assuming no further delays, the first production from the Ulba-FA plant is expected near the end of 2021, with first delivery of finished, certified fuel assemblies to the customer in 2022. With respect to the purchase commitment from CGNPC-URC, the first five-year contract for the procurement of fuel assemblies was signed between Ulba-FA LLP and CGNPC-URC in December 2020, subject to approval by appropriate competent authorities. The subsequent transfer of a 49% interest in Ortalyk LLP to CGNPC is expected to be completed by 30 June 2021 (subject to corporate and governmental approvals).
Upon completing the sale of an interest in Ortalyk LLP, Kazatomprom will retain a 51% interest and CGNPC or its affiliates will acquire a 49% interest, with each partner purchasing a proportionate share of uranium production from the operation according to interest.
For further information, please contact:
Kazatomprom Investor Relations Inquiries
Cory Kos, Director of Investor and Public Relations
Tel: +7 (8) 7172 45 81 80
Kazatomprom Public Relations and Media Inquiries
Torgyn Mukayeva, Deputy Director of Investor and Public Relations
Tel: +7 (8) 7172 45 80 63
Kazatomprom is the world's largest producer of uranium, with the company’s attributable production representing approximately 24% of global primary uranium production in 2019. 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 mined using ISR technology with a focus on maintaining industry-leading health, safety and environment standards.
Kazatomprom securities are listed on the London Stock Exchange and Astana International 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 Nur-Sultan, Kazakhstan, and through its Switzerland-based trading subsidiary, Trade House KazakAtom AG (THK).
For more information, please see the Company’s website at http://www.kazatomprom.kz
About China General Nuclear Power Corporation
CGNPC and its affiliates provide professional services for key components in the nuclear power industrial chain, including nuclear fuel, engineering design, technology research and development, engineering construction, and daily operations. As of the end of 2019, CGNPC was the largest nuclear plant operator in China, among the top five operators internationally, and the largest nuclear power constructor in the world. The company’s listed entity, CGN Power (01816.HK), is the world’s sole listed company purely dedicated to nuclear power generation.
About Ortalyk LLP
A wholly-owned subsidiary of Kazatomprom, the Ortalyk Limited Liability Partnership owns a 100% interest in the Central Mynkuduk Deposit and fulfilled exploration and trial production at the Zhalpak Deposit, which contain JORC-compliant aggregate mineral resources of approximately 40,413 tonnes of uranium (at 31 December 2019). The Mynkuduk Deposit has a designed capacity and subsoil use agreement in place to produce 2,000 tons of uranium per year (currently operating 20% below permitted capacity, as per the Company’s market-centric strategy). The production capacity of the Zhalpak Deposit will be determined through subsoil use contract negotiations with the Government of the Republic of Kazakhstan.
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.