Refinancing of PXF Facility – KAZ Minerals PLC

KAZ Minerals Approves USD1.2 Billion Kazakh Copper Expansion

Copper miner KAZ Minerals PLC on Friday said it has amended and extended its pre-export finance loan facility and increased the size of the facility to USD600 million.

The company, predominantly operating in Kazakhstan, said the new pre-export facility has extended the maturity of the existing facility by two-and-half years, pushing its maturity to June 2021 from December 2018.

Under the revised repayment profile, principal repayments will commence in July 2018 and then continue in equal monthly instalments over a three-year period until final maturity in June 2021.

The facility has been increased to USD600 million, “reflecting strong support from the market during syndication”, the miner said. The size has jumped from the USD224 million that was outstanding at the end of May.

The facility will carry the same interest rate as the old facility, with a variable margin of between 3.0% and 4.5% above LIBOR, dependent on the ratio of net debt to earnings before interest, tax, depreciation and amortisation. That will be tested on a semi-annual basis.

Financial covenants have been revised in the new facility to increase headroom as the company’s new mines at Bozshakol and Aktogay continue to ramp up production.

KAZ remains subject to temporary restrictions relating to its total debt, dividends, acquisitions and capital expenditure outside the scope of existing operating mines and major growth projects for as long as net debt is at least 3.5 times higher than annual Ebitda.

“We are pleased to announce the signing of the amendment and extension of the PXF facility with an enlarged syndicate of 12 banks participating. The amended facility demonstrates continuing support for the group from its lenders, with all existing banks maintaining or increasing their participation and four new banks joining the syndicate. The new PXF will enhance our financial flexibility as we complete the ramp up of output from our new mines at Bozshakol and Aktogay,” said Chief Financial Officer Andrew Southam.

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 three 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 Aktogay open pit copper mine in the East Region of Kazakhstan. In 2016, total copper cathode equivalent output was 140 kt with by-products of 75 kt of zinc in concentrate, 120 koz of gold bar equivalent and 3,103 koz of silver bar equivalent.

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.

Aktogay is a large scale, open pit mine 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 copper in concentrate production from sulphide ore commenced in February 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 c.20 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 13,000 people, principally in Kazakhstan.