Half-Yearly Results 2016

Kaz minerals PLC HALF-YEARLY REPORT

FOR THE PERIOD ENDED 30 June 2016

OPERATIONAL HIGHLIGHTS

• Group copper cathode equivalent production increased by 43% in H1 2016 to 52.6 kt (H1 2015: 36.7 kt)
• Bozshakol ramping up with over 60% of ore throughput capacity achieved in August to date
• On track to achieve commercial production in H2 2016
• Group copper guidance narrowed to 135-145 kt and gold to 95-115 koz
• Commissioning works in Q2 limited output, full year Bozshakol copper output now expected to be 45-55 kt
• Strong copper and gold output in H1 from East Region and Bozymchak
• Silver guidance increased to 2,500-2,750 koz, as Bozshakol achieves payable silver grade during ramp up

 FINANCIAL HIGHLIGHTS

• EBITDA $115 million (H1 2015: $88 million)
• Gross EBITDA of $147 million (H1 2015: $94 million)
• Includes $28 million of capitalised EBITDA from Bozshakol and $4 million from Aktogay oxide
• Operating profit of $68 million (H1 2015: $15 million)
• East Region and Bozymchak net cash cost of 72 USc/lb (H1 2015: 121 USc/lb)
• Gross cash cost falls 34% to 178 USc/lb (H1 2015: 270 USc/lb)
• Impact of devaluation of tenge and cost measures
• Gross cash cost guidance for 2016 reduced to 190-210 USc/lb
• Bozshakol gross cash cost guidance for 2016 reduced to 140-160 USc/lb
• Gross funds of $1,056 million as at 30 June 2016, net debt $2,531 million
• Financing outlook improved by ramp up at Bozshakol and reduced capital budget at Aktogay

 MAJOR GROWTH PROJECTS

• Aktogay sulphide to commence production in H1 2017
• Capital budget reduced by $100 million to $2.2 billion
• Oxide project declared commercial from 1 July 2016
• Bozshakol clay plant to be commissioned later in 2016

 OUTLOOK

• Copper production growth to continue in second half as Bozshakol ramps up
• Final construction of Aktogay sulphide ahead of commissioning in H1 2017

¹    Revenues for the six months ended 30 June 2015 include $22 million of cathode (3.6 kt) that was purchased to compensate for variances in monthly cathode output.

²   EBITDA (excluding special items) is earnings before interest, taxation, the non-cash component of the disability benefits obligation, depreciation, depletion, amortisation, mineral extraction tax and royalties, adjusted for special items and excluding the performance of assets in pre-commercial production.

³   Reconciliation of EPS based on Underlying Profit is found in note 9.

⁴   Net cash flow from operating activities before capital expenditure and non-current VAT associated with expansionary and new projects, less sustaining capital expenditure.

⁵   East Region and Bozymchak cash operating costs, excluding mineral extraction tax and royalties and purchased cathode, divided by the volume of own copper cathode sales. East Region’s standalone gross cash cost was 270 USc/lb in the first half of 2015.

⁶   East Region and Bozymchak cash operating costs, excluding mineral extraction tax and royalties and purchased cathode, less by-product revenues, divided by the volume of own copper cathode equivalent sales. East Region’s standalone net cash cost was 125 USc/lb in the first half of 2015.

Oleg Novachuk, Chief Executive, said: “We have continued to deliver on our strategy of high growth, low-cost copper in the first half of 2016 with production increasing by 43%, including the first significant contributions from Bozshakol and Aktogay. We have also been able to further reduce our operating costs with 34% lower gross cash costs in the East Region and Bozymchak supporting an improved EBITDA despite weaker commodity prices. Our growth is set to accelerate as Bozshakol continues its ramp up in the second half of the year followed by the commissioning of Aktogay sulphide in the first half of 2017.”

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