Completion of Koksay Project Investment By NFC
3 July 2019
COmPLETION OF KOKSAY PROJECT INVESTMENT BY NFC
KAZ Minerals PLC ("KAZ Minerals" or the "Group") confirms that the transaction announced on 8 June 2018 with China Nonferrous Metal Industry's Foreign Engineering and Construction Company Ltd ("NFC") has completed. Accordingly, NFC has invested $70 million for a 19.4% stake in the Group's Koksay project.
For further information please contact:
KAZ Minerals PLC
Investor Relations, London
Tel: +44 20 7901 7882
Investor Relations, London
Tel: +44 20 7901 7814
Corporate Communications, Almaty
Tel: +7 727 244 03 53
Carole Cable, Charlie Pretzlik
Tel: +44 20 7404 5959
6th Floor, Cardinal Place, 100 Victoria Street, London SW1E 5JL, United Kingdom.
NOTES TO EDITORS
KAZ Minerals PLC is a high growth copper company focused on large scale, low cost, open pit mining in Kazakhstan, Kyrgyzstan and Russia. 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 2018, total copper production was 295 kt with by-products of 50 kt of zinc in concentrate, 183 koz of gold and 3,511 koz of silver.
The Group's new operations at Bozshakol and Aktogay have delivered one of the highest growth rates in the industry 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 38 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 27 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 90 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 2025.
In January 2019, the Group acquired the Baimskaya copper project in the Chukotka region of Russia. Baimskaya is 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 Peschanka deposit within the Baimskaya licence area 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 the construction of the project is $5.5 billion. 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 14,000 people, principally in Kazakhstan.
China Nonferrous Metal Industry's Foreign Engineering and Construction Company Ltd ("NFC") is a state-controlled listed company on the Shenzhen Stock Exchange involved in international project contracting and nonferrous metal resource development. NFC was the first Chinese company to invest in nonferrous metal mining assets outside China, with business operations in more than 20 countries including a number of nonferrous metal mines both inside and outside China.
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