Kaz Minerals takes a hit despite securing $70m investment for major project (KAZ)

By Richard Mason


Kaz Minerals (LSE:KAZ) dipped 6.8pc to 1005p today following the news that one of its projects has received $70m worth of investment from a state-backed Chinese mining firm. Non-Ferrous China (NFC), a Shenzhen Stock Exchange-listed business involved in international project contracting and nonferrous metal resource development, will invest $70m into Kaz’s Koksay project in Kazakhstan.

Following the investment, which is subject to the meeting of certain conditions and regulatory approvals in both Kazakhstan and China, NFC will hold a 19.4pc stake in Koksay. The project is a potential open pit copper mine development project with a mineral resource of 736Mt at an average copper grade of 0.42pc, with contained copper of 3.1Mt.

The $70m will be ring-fenced for Koksay’s development, including a feasibility study aimed at determining the detailed design for mining and processing operations and the associated capital budget. Kaz’s board will review the results of the feasibility study to assess how and when to proceed with the project.

The company’s chief executive Oleg Novachuk said: ‘We are pleased to welcome NFC as a partner in the Koksay project. We worked successfully with NFC in the construction of Bozshakol and Aktogay and we are looking forward to developing our relationship further as we assess this opportunity in Kazakhstan.’

Bozshakol and Aktogay are open pit copper mines in the Pavlodar and East Region of Kazakhstan.

Bozshakol has an annual ore processing capacity of 30MMts and a remaining mine life of 39 years at an average copper grade of 0.35pc. The mine and processing facilities will produce an average of 100kt of copper cathode equivalent and 120koz of gold in concentrate per year over the first ten years of operations.

Aktogay is a large-scale, open pit mine like Bozshakol with a remaining mine life of 28 years at an average copper grade of 0.36pc (oxide) and 0.33pc (sulphide). According to Kaz, it will produce an average of 90kt of copper per year from sulphide ore until 2021, increasing to 170kt per year from 2022 to 2027, after the second concentrator commences operations. Copper production from oxide ore will be in the region of 20kt per annum until 2025.

Last year, the two operations helped total copper production reach 259kt with by-products of 58kt of zinc in concentrate, 179koz of gold and 3,506koz of silver. 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.


Author: Daniel Flynn

The author of this piece does not hold a position in the company covered in this article


Author: Richard Mason

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.