Inkai

Production on a 100% basis was 1.6 million pounds for the quarter and 5.1 million pounds for the first nine months of the year, compared to 2.3 million pounds and 6 million pounds in the same periods last year. The decrease in production for both periods is due to the impact of the reduction in operational activities introduced to manage the risks posed by the COVID-19 pandemic.

On April 7, 2020, Kazatomprom announced a reduction to operational activities across all uranium mines in Kazakhstan for an expected period of three months due to the risks posed by the COVID-19 pandemic. It indicated that its decision would result in a lower level of wellfield development activity and, as a result, an estimated reduction of up to 17.5% in total planned uranium production in Kazakhstan for 2020. On July 6, 2020, Kazatomprom announced a one-month extension of the period of reduced operational activities with the impact on its revised production plan for 2020 expected to be immaterial. In August, 2020 the previously reduced operational activities, including wellfield development resumed at JV Inkai. Based on an adjustment to the 2016 JV Inkai restructuring agreement, we are entitled to purchase 59.4% of the operation’s planned production in 2020 and 2021.

Given the ongoing uncertainty caused by the COVID-19 pandemic in Kazakhstan, we will not be providing outlook for our expected purchases of Inkai’s planned production.

Due to equity accounting, our share of production is shown as a purchase at a discount to the spot price and included in inventory at this value at the time of delivery. Our share of the profits earned by JV Inkai on the sale of its production is included in “share of earnings from equity-accounted investee” on our consolidated statement of earnings.