Premier Uranium Company Post Strong Q2 / 21 Sales and Production Pace

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Kazatomprom’s quarterly outperformance and numbers were analyzed in a BMO Capital Markets report.

In an August 2 research note, BMO Capital Markets analyst Alexander Pearce said Kazatomprom (KAP: LSE) “performed Q2 / 21 overall better than expected.”

Specifically, Pearce said, both production and sales of the uranium major were battered in Q2 / 21. He addressed them both.

As for the production attributable to Q2 / 21, it was 8,000,000 pounds (8 Mlb), 8% more than BMO’s estimate and 10% more than the production of Q1 / 21. Overall production totaled 14.4 Mlb, beating BMO’s forecast by 12.9 Mlb.

“Production continued to improve after the impact of lower wellfield activity in the middle of last year,” Pearce wrote.

As for the group’s sales in Q2 / 21, they amounted to 12.9 Mlb U3O8, 71% more than BMO’s projection of 7.5 Mlb U3O8. Pearce pointed out, however, that such variability is typical, as “the timing of customer deliveries can vary significantly from quarter to quarter and is generally weighted by H2.” He added that deliveries will likely balance out during the remainder of 2021.

Pearce mentioned the only negative point in Kazatomprom’s Q2 / 21 results, which is its average realized price of uranium. It was US $ 29.60 a pound, 6% below BMO’s forecast.

The analyst presented Kazatomprom’s reiterated forecast and BMO’s expectations, both for the year 2021. The production forecast is 32.6 to 33.3 Mlb U3O8; BMO’s estimate is just below the lower end of that range, at 32.5 Mlb U3O8. All-inclusive sustaining cost forecast is $ 12-13 per pound; BMO’s estimate of US $ 12.24 per pound falls within this range. Group sales forecasts are 40.3 to 40.6 Mlb; BMO’s expectation is slightly higher at 40.9 Mlb U3O8.

BMO has an outperformance rating and target price of C $ 33 per share on Kazatomprom, its top choice in uranium. Kazatomprom stock closed today at C $ 25.30 per share.

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