Kazakhmys sees Q3 copper production rise, de-merger imminent
Oct 30. ShareCast
Kazakhmys, the Kazakhstan-focused copper miner, said its de-merger is expected to complete any time now as it reported an increase in copper cathode production in the third quarter.
Copper cathode output totalled 59,000 tonnes in the nine months to 30 September, up 10% on the previous year.
Third-quarter production alone was 18,300 tonnes, up 1% year-on-year but 8% below the second quarter. This was due to an increase in work in progress at the Balkhash smelter in September, as well as a 2% fall in copper concentrate production.
Kazkahmys announced in February that it planned to restructure the business to improve profitability and cash returns. These plans involve transferring certain mature assets in the Zhezkazgan and Central Regions to a private company owned by two of its shareholders, Vladimir Kim and Eduard Ogay.
This transaction has now been approved by shareholders and regulatory consents have been received.
Upon completion, which Kazakhmys expected to happen “imminently”, the group will own assets in the East Region and the Bozymchak mine in Kyrgyzstan, as well as major growth projects Bozshakol, Aktogay and Koksay. The company will be renamed KAZ Minerals.
The company said it “remains on target” to hit 2014 guidance of 80,000-85,000 tonnes of copper cathode production from the assets it is keeping.
In a separate statement, Kazakhmys said it has signed an amendment to its existing pre-export finance debt facility in light of its restructuring. The facilities have been increased from $334m to a maximum of $500m.
Chief financial officer Andrew Southam said the changes will provide the company with “additional flexibility and liquidity as we continue to deliver our strategy”.
The stock was down 1.6% at 223.3p by 08:31 on Thursday.