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KAZ Minerals PLC - GROUP PRODUCTION REPORT FOR THE FOURTH QUARTER

RNS Number : 3558B
KAZ Minerals PLC
30 January 2020
 

 

 

30 January 2020

 

 

KAZ MINERALS GROUP Production Report for twelve months

and THE fourth QUARTER Ended 31 december 2019

 

§ Full year copper production1 above guidance of c.300 kt, owing to outperformance at Aktogay

§ Bozshakol and Aktogay sulphide concentrators both operated at design ore throughput capacity in 2019

§ Q4 copper production1 of 80.9 kt (Q3 2019: 82.9 kt) with strong output from all divisions

§ Full year gold production2 rose by 10% to 201.5 koz (FY 2018: 183.4 koz) due to high grades at Bozshakol and Bozymchak

  •    Aktogay

§ Full year copper production1 of 145.7 kt (FY 2018: 131.4 kt) exceeded guidance of 130-140 kt

§ Higher than expected ore throughput in Q4 of 6,378 kt (Q3 2019: 6,119 kt), as mill relining planned in the quarter was rescheduled to January 2020

§ Q4 copper production1 reduced to 34.3 kt (Q3 2019: 37.3 kt), due to seasonal impact on oxide volumes and lower grades

  •    Bozshakol

§ Full year copper production2 rose by 8% to 110.2 kt (FY 2018: 101.6 kt), in line with guidance of 105-115 kt

§ Copper production2 in Q4 of 31.0 kt (Q3 2019: 32.1 kt), as higher grades offset by scheduled maintenance

§ Gold production2 in 2019 of 144.8 koz (FY 2018: 127.8 koz) was above guidance of 130-140 koz due to sustained high grades

  •    East Region and Bozymchak

§ Full year copper production2 of 55.5 kt (FY 2018: 61.7 kt), in line with guidance of c.55 kt

§ Q4 copper production2 increased by 16% to 15.6 kt (Q3 2019: 13.5 kt) due to processing of stockpiled ore and higher average copper grade

§ 2019 gold and silver production2 both exceeded full year guidance, with output of 53.7 koz (FY 2018: 55.0 koz) and 2,024 koz (FY 2018: 2,356 koz) respectively

§ Zinc in concentrate production of 38.3 kt (FY 2018: 49.7 kt), below guidance of 40-45 kt due to difficult geological conditions restricting mining to low grade areas

 

Group production summary3

 

12m 2019

12m

2018

 

Q4 2019

Q3 2019

Q4 2018

Copper production1

kt

311.4

294.7

 

80.9

82.9

77.9

Aktogay

kt

145.7

131.4

 

34.3

37.3

36.0

Bozshakol

kt

110.2

101.6

 

31.0

32.1

26.6

East Region & Bozymchak

kt

55.5

61.7

 

15.6

13.5

15.3

Gold production2

koz

201.5

 183.4

 

55.3

58.5

48.4

Silver production2

koz

3,382

 3,511

 

886

944

933

Zinc in concentrate

kt

38.3

 49.7

 

9.4

10.5

11.4

1 Payable metal in concentrate and copper cathode from Aktogay oxide ore.

2 Payable metal in concentrate.

3 See appendix for metal production by asset.

Andrew Southam, Chief Executive Officer, said: "KAZ Minerals delivered strong operational results in the fourth quarter as our large scale, open pit assets in Kazakhstan achieved record levels of production. The main sulphide concentrators at both Bozshakol and Aktogay operated at design ore throughput in 2019 and full year copper and gold production were ahead of guidance, at 311 kt and 201 koz respectively. The Group continues to combine output growth with low unit costs and the expansion project at Aktogay will contribute additional volumes when completed in 2021."

 

For further information please contact:

KAZ Minerals PLC

 

 

Chris Bucknall

Investor Relations, London

Tel: +44 20 7901 7882

Anna Mallere

Investor Relations, London

Tel: +44 20 7901 7814

Maksut Zhapabayev

Corporate Communications, Almaty

Tel: +7 727 244 03 53

Brunswick Group

 

 

Carole Cable, Charlie Pretzlik

 

Tel: +44 20 7404 5959

 

REGISTERED OFFICE

6th Floor, Cardinal Place, 100 Victoria Street, London SW1E 5JL, United Kingdom.

NOTES TO EDITORS

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, Russia and Kyrgyzstan. It operates the Bozshakol and Aktogay open pit copper mines in the Pavlodar and East Region of Kazakhstan, three underground mines and associated concentrators in the East Region of Kazakhstan and the Bozymchak copper-gold mine in Kyrgyzstan. In 2019, total copper production was 311 kt with by-products of 38 kt of zinc in concentrate, 201 koz of gold and 3,382 koz of silver. The Group acquired the Baimskaya project in the Chukotka region of Russia in January 2019, one of the world's most significant undeveloped copper assets, with the potential to become a large scale, low cost, open pit copper mine.

The Group's new operations at Bozshakol and Aktogay have delivered industry leading production growth and transformed KAZ Minerals into a company dominated by world class, open pit copper mines.

Bozshakol is a first quartile asset on the global cost curve with an annual ore processing capacity of 30 million tonnes and a remaining mine life of c.40 years at an average copper grade of 0.37%. The mine and processing facilities commenced output in 2016 and will produce an average of 100 kt of copper cathode equivalent and 120 koz of gold in concentrate per year over the first 10 years of operations.

Aktogay is a large scale, open pit mine similar to Bozshakol, with a remaining mine life of around 25 years (including the expansion project) at an average copper grade of 0.36% (oxide) and 0.33% (sulphide). Aktogay commenced production of copper cathode from oxide ore in December 2015 and copper in concentrate from sulphide ore in February 2017. The operating sulphide concentrator has an annual ore processing capacity of 25 million tonnes and the sulphide processing capacity will be doubled to 50 million tonnes with the addition of a second concentrator by the end of 2021. Aktogay is competitively positioned on the global cost curve and will produce an average of 100 kt of copper per year from sulphide ore until 2021, increasing to 170 kt per year from 2022 to 2027, after the second concentrator commences operations. Copper production from oxide ore will be in the region of 20 kt per annum until 2024.

The Peschanka deposit within the Baimskaya licence area in Russia has JORC resources of 9.5 Mt of copper at an average grade of 0.43% and 16.5 Moz of gold at an average grade of 0.23 g/t. Average annual production over the first ten years of operations is expected to be 250 kt copper and 400 koz gold, or 330 kt Copper Equivalent Production, with a mine life of approximately 25 years and first quartile operating costs. The project is located in a region identified by the Russian Government as strategically important for economic development and will benefit from the construction of state-funded power and transport infrastructure and the provision of tax incentives. The estimated capital budget for construction is $5.5 billion and the project is currently at feasibility study stage. The Group expects the project to generate a significant NPV uplift and an attractive IRR at analyst consensus copper prices. The development of Baimskaya will enable the Group to continue its high growth trajectory, adding a large scale, long life asset to the Group's portfolio.

KAZ Minerals is listed on the London Stock Exchange and the Kazakhstan Stock Exchange and employs around 15,000 people, principally in Kazakhstan.

 

AKTOGAY

 

 

 

12m 2019

12m

2018

 

Q4 2019

Q3 2019

Q4 2018

Ore extraction

kt

 55,134

 41,911

 

 16,035

 14,883

 11,195

Oxide

kt

 19,403

 16,104

 

 5,598

 5,612

 3,146

Sulphide

kt

 35,731

 25,807

 

 10,437

 9,271

 8,049

 

 

 

 

 

 

 

 

Oxide

 

 

 

 

 

 

 

Oxide ore to leach pads

kt

 19,284

 16,104

 

 5,480

 5,612

 3,146

Grade

%

 0.32

 0.33

 

 0.29

 0.34

 0.37

Copper cathode

kt

 22.7

 25.7

 

 4.2

 6.7

 6.8

 

 

 

 

 

 

 

 

Sulphide

 

 

 

 

 

 

 

Sulphide ore processed

kt

 25,230

 20,766

 

 6,378

 6,119

 5,512

Average grade processed

%

 0.58

 0.61

 

 0.57

 0.60

 0.63

Recovery rate

%

 88.0

86.8

 

 87.0

 87.4

 87.6

Copper in concentrate

kt

 128.8

 110.6

 

 31.6

 32.0

 30.5

Copper production1

kt

 123.0

 105.7

 

 30.1

 30.6

 29.2

 

 

 

 

 

 

 

 

Total copper production

kt

145.7

131.4

 

34.3

37.3

36.0

 

 

 

 

 

 

 

 

Gold production1, 2

koz

 3.0

0.6

 

 0.6

 0.7

0.3

Silver production1

koz

 555

489

 

 139

 128

130

1 Payable metal in concentrate.

2 Minimal volume recovered from Aktogay material.

 

Ore extraction in Q4 increased to 16,035 kt (Q3 2019: 14,883 kt), as additional quantities of low grade sulphide ore were mined and stockpiled to access high grade areas for processing in the quarter.

Q4 sulphide ore processing volumes increased to 6,378 kt (Q3 2019: 6,119 kt), as mill maintenance scheduled to take place in the fourth quarter was deferred to January 2020. The average grade of sulphide ore processed in Q4 reduced to 0.57% (Q3 2019: 0.60%). Copper production from sulphide ore reduced by 2% to 30.1 kt in the quarter (Q3 2019: 30.6 kt)

Quick facts: KAZ Minerals PLC

Price: 485.6

Market: LSE
Market Cap: £2.29 billion
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