I've extracted a few points of interest from Kazatomprom 4Q23...

I've extracted a few points of interest from Kazatomprom 4Q23 Operations and Trading Update and for context the previous 2024 guidance was 24,500-25,500tU.

"Kazatomprom’s 2024 uranium production volumes are expected to be in the range of 21,000 – 22,500 tonnes on a 100% basis and in the range of 10,900 – 11,900 tonnes on an attributable basis. Adjustments to the previously announced production intentions are due to challenges related to the availability of sulphuric acid and construction delays at the newly developed deposits, as highlighted in the Company’s announcement on 12 January 2024."

"The Company anticipates that the production volume for the majority of its uranium mining operations will be approximately 20% below the levels stipulated in the Subsoil Use Agreements. Nonetheless, the Company projects a modest annual growth in production for the year 2024. The Company will use all reasonable efforts to ensure it complies with its production volume obligations under the Subsoil Use Agreements. Concurrently, entities engaged in mining operations at newly established deposits face the potential challenge of descending beneath the threshold of minus 20% (in relation to the stipulations of the Subsoil Use Agreements). This risk is primarily attributed to delays in the construction of surface facilities and infrastructure. These delays, in turn, are a consequence of the extended timelines required for the development and subsequent approval of project design documentation."

"As of 12 months 2023, Kazatomprom’s weighted average cost of sulphuric acid increased by 33.6% to KZT 40,445 per tonne from KZT 30,263 per tonne in 2022. The 2022 year-on-year increase was 33%."

"Kazatomprom remains committed to its 2024 contractual obligations to all existing clients. The Company has a comfortable level of inventories to fulfil its existing contractual commitments in 2024 and will persist in ensuring the availability of essential inventory levels, thereby ensuring its capability to fulfil delivery commitments while optimising resource utilisation. Additionally, we usually reserve a segment of our annual production as uncommitted. This approach enables us to capitalize on emerging opportunities and adapt to fluctuations in the market landscape. This strategic approach enables the Company to mitigate risks effectively and uphold our contractual obligations to clients, even amidst production-related challenges."

"If the limited access to sulphuric acid continues throughout the current year and the Company does not succeed in reducing the delay in the construction schedule at the newly developed deposits in 2024, this could unfavourably influence Kazatomprom’s production plans for 2025. Should there be any adjustments to the 2025 production plans, these are expected to be announced in the report of the Company’s financial results for the first half of 2024. However, a swift return to a 100% production volume level relative to Subsoil Use Agreements may be at risk."

So in summary:

• Their 2024 production volumes have been revised down the realm of 20%
• Kazatomprom accounts for 22% of global primary uranium production - so that's 4.5% of 2024 anticipated global supply gone
• There Sulphuric acid costs have increased 33.6% and they still cannot get enough of the stuff
• They have a pretty full contract book with most of their customers opting to flex up their annual delivery quantities
• It is probable their contractual obligations now exceed supply based on them commenting that they have "comfortable level of inventories to fulfil its existing contractual commitments in 2024"... but does this take into account their customers opting to flex up?
• They are already flagging potential production issues in 2025

I can't see this as anything but good news for PEN.