KAZ Minerals PLC Aktogay Expansion Project Approved (0032A)
21 December 2017 - 6:00PM
UK Regulatory
TIDMKAZ
RNS Number : 0032A
KAZ Minerals PLC
21 December 2017
KAZ MINERALS
PLC
6(TH) FLOOR
CARDINAL PLACE
100 VICTORIA
STREET
LONDON SW1E 5JL
Tel: +44 (0)
20 7901 7800
==================
21 December 2017
AKTOGAY expansion PROJECT APPROVED
-- $1.2 billion expansion project approved to double sulphide
ore processing capacity at Aktogay from 2021
-- Annual copper production from sulphide ore to increase to 170
kt from 2022 to 2027 and 130 kt thereafter
-- Net cash cost guidance to 2027 maintained at 100-120 USc/lb
-- Capital investment supported by strong cash flows from Bozshakol and Aktogay
KAZ Minerals PLC ("KAZ Minerals" or "the Group") announces a
planned expansion of its processing facilities at the Aktogay
copper mine in the East Region of Kazakhstan. Following the
achievement of commercial production at the Aktogay sulphide
concentrator in October 2017, the Board has approved the
construction of a second concentrator which will double the current
sulphide ore processing capacity from 25 million to 50 million
tonnes per annum.
The expansion represents a low risk growth project, being a
duplicate of the sulphide processing facilities successfully
commissioned at Bozshakol and Aktogay. Construction will be managed
by the KAZ Minerals projects division which delivered the original
project, with contracts to be tendered in 2018. The capital budget
for the expansion project is expected to be in the region of $1.2
billion with approximately $200 million to be invested in 2018. The
remaining expenditure will be incurred from 2019 to 2021. The
mining fleet will be upgraded to support the higher ore
throughput.
Output from the new concentrator is expected to commence in the
second half of 2021 with the facility ramping up during 2022.
Copper production from sulphide ore at Aktogay will increase by 80
kt to an average of around 170 kt per annum from 2022 to 2027,
supported by higher copper grades. Over the remaining life of the
mine, when copper grades will be in line with the average resource
grade of 0.34%, the Aktogay expansion will add 60 kt per annum,
increasing annual production to around 130 kt. Due to higher
processing volumes the life of the sulphide ore body will reduce
from over 50 years to approximately 28 years. Copper cathode
production from oxide ore at Aktogay will be unchanged at the
current level of around 20 kt per annum for the remaining eight
year life of the oxide deposit.
Net cash cost guidance to 2027 following the expansion is
unchanged at 100-120 USc/lb in 2017 US dollar terms with efficiency
gains from larger scale mining operations offsetting the effect of
accelerated grade decline as processing volumes are brought
forward. Sustaining capital expenditure will increase from $30-$40
million to $50-$60 million per annum from 2022 onwards. The
expansion is expected to generate a return in excess of the Group's
cost of capital in the analyst consensus copper price scenario.
Oleg Novachuk, Chief Executive, said: "I am pleased to announce
the planned expansion of our second major growth project, Aktogay,
which will double its processing capacity from 2021. This expansion
represents an opportunity for our proven project team to deliver a
strong return on investment from an asset we know well by
replicating the existing sulphide plant. Our outlook for copper
remains positive and this development will help us to continue to
grow in a tightening market. The capital expenditure over the
period to 2021 for the expansion will be supported by strong cash
flows from our new, low cost operations at Bozshakol and
Aktogay."
A call for analysts will be held at 10:00am UK time. To
participate in the call in listen-only mode please use the
following dial-in details:
Conference call dial in: +44 (0) 20 3003 2666
Password: KAZ Minerals
Webcast: http://view-w.tv/834-1089-19140/en
Presentation download: http://www.kazminerals.com/investors/presentation-library/
For further information please contact:
KAZ Minerals
PLC
==================== ========================== =================
Chris Bucknall Investor Relations, Tel: +44 20 7901
London 7882
Investor Relations, Tel: +44 20 7901
Anna Mallere London 7814
Maksut Zhapabayev Corporate Communications, Tel: +7 727 244
Almaty 03 53
==================== ========================== =================
Instinctif Partners
==================== ========================== =================
Tel: +44 20 7457
David Simonson 2020
==================== ========================== =================
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. It operates the Bozshakol and Aktogay open
pit copper mines in the Pavlodar and East regions of Kazakhstan,
three underground mines and associated concentrators in the East
Region of Kazakhstan and the Bozymchak copper-gold mine in
Kyrgyzstan. 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 new operations at Bozshakol and Aktogay are
delivering one of the highest growth rates in the industry and
transforming 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 and a mine life of 40 years at a copper grade
of 0.36%. The mine and processing facilities 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 average copper grades of 0.36% (oxide) and 0.34% (sulphide).
Following the expansion project announced in December 2017, the
life of the project is expected to be approximately 28 years based
on current mineral resources. 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 first sulphide concentrator will have an annual ore
processing capacity of 25 million tonnes when fully ramped up which
will be doubled to 50 million tonnes when the second concentrator
commences production, in the second half of 2021. Aktogay is
competitively positioned on the global cost curve and will produce
an average of 90 kt of copper from sulphide ore and in the region
of 20 kt of copper from oxide ore per year until 2021, with
combined output from sulphide ore then rising to a total of
approximately 170 kt per annum from 2022 to 2027 as the Aktogay
expansion project ramps up.
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.
This announcement contains inside information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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