Friday, 28 October 2016

KAZ Minerals Group production report for nine months and the third quarter ended 30 september 2016 and interim management statement

  • Copper cathode equivalent production1 in Q3 of 44.5 kt (Q2: 31.1 kt)

- Production growth continues as Bozshakol and Aktogay oxide ramp up

-Group guidance for 2016 maintained at 135-145 kt copper cathode equivalent (FY 2015: 81.1 kt)


  • Bozshakol more than doubles copper output in Q3 to 16.9 kt (Q2: 7.5 kt)

- Ore throughput has steadily increased in Q3

- Concentrator  has now  operated at  ore  throughput levels above 60%  for  three months, declared commercial today


  • Aktogay oxide increases copper cathode output by 69% to 6.6 kt in Q3 (Q2: 3.9 kt)

- Oxide production benefited from seasonally warmer conditions in the third quarter

- On track to produce around 15 kt in 2016, in line with guidance


  • By-product output on track to achieve full year guidance ranges

- Strong  Q3  gold output  of  40.9  koz  supported by  Bozymchak  operating consistently at design capacity and a temporarily high grade at Bozshakol

- Silver bar output 806 koz in Q3 (Q2: 679 koz) assisted by a release of work in progress

- Full year silver production expected to exceed top end of 2,500-2,750 koz guidance due to lower than expected grade decline in the East Region in 2016

- Zinc in concentrate output of 16.6 kt  in Q3,  56.2 kt in the  period to 30 September  2016, on track for full year guidance of 70-75 kt


  • Net debt of $2,590 million at 30 September 2016

- Gross liquid funds of $872 million


1 The Group’s finished goods “equivalent” production includes both finished metals produced and the finished metal equivalent of concentrate sold in the period.


Oleg Novachuk, Chief Executive, said: “KAZ Minerals continues to deliver sector-leading production growth,  with  our  copper  output  growing  by  66%  in  the  first  nine  months  of  this  year.  Given  the progress  made  in  ramping  up  Bozshakol,  our  first  major  growth  project,  we  have  declared  it  a commercially producing asset from today. We are also making good progress on the construction of the Aktogay sulphide project, which will deliver the next phase of our production growth in 2017.”


KAZ Minerals PLC  (“KAZ Minerals” or “the Group”)  is a high growth copper company focused on large scale, low cost, open pit mining in Kazakhstan. It operates four mines and three  concentrators in the East Region of Kazakhstan, the Bozymchak copper -gold mine in Kyrgyzstan,  the Bozshakol open pit copper mine in the Pavlodar region of Kazakhstan  and the  SX/EW plant at  Aktogay. In 2015, total copper cathode output from the East Region  and Bozymchak was 81 kt with by-products of 94 kt of zinc in concentrate, 3,135 koz of silver and 35 koz of gold bar.


The Group’s major growth projects at Bozshakol and Aktogay are expected to deliver one of the highest growth rates in the industry and transform KAZ Minerals into a company dominated by world class, open pit copper mines.


Bozshakol is a first quartile asset on the global cost curve and will have an annual ore processing capacity of 30 million tonnes when fully ramped up, with a mine life of 40 years at a copper grade of 0.36%. The mine and processing facilities will produce 100 kt of copper cathode equivalent and 120 koz of gold in concentrate per year over the first 10 years of operations.


The Aktogay project is a large scale, open pit development similar to Bozshakol, with a mine life of more than 50 years and average copper grades of 0.37% (oxide) and 0.33% (sulphide). Aktogay commenced production of copper cathode from oxide ore in December 2015, and the production of copper in concentrate from sulphide ore is expected to begin in the first half of 2017. The sulphide concentrator will have an annual ore processing capacity of 25 million tonnes when fully ramped up.


Aktogay is competitively positioned on the global cost curve and will produce an average of 90 kt of copper cathode equivalent from sulphide ore and 15 kt of copper cathode from oxide ore per year over the first 10 years of operations.


KAZ Minerals is listed on the London Stock Exchange, the Kazakhstan Stock Exchange and the Hong Kong Stock Exchange and employs around 12,000 people, principally in Kazakhstan.