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At the General Meeting of KAZ Minerals PLC (the ‘Company’) held today, all the resolutions put to shareholders were duly passed on a poll. The poll results showing the number of votes received for and against each resolution are shown below. Resolutions 1 and 2 were proposed as special resolutions and Resolutions 3 and 4 were proposed as ordinary resolutions. The poll results represent approximately 95.81% of the total number of 473,290,296 Ordinary Shares in issue which carry voting rights of one vote per share. The Company currently holds 7,433,681 Ordinary Shares in treasury which do not carry voting rights.

Andrew Southam, Chief Executive Officer, chaired the meeting and in line with the announcement released by the Company on 26 April 2021 and in accordance with the roadmap for easing the national lockdown restrictions announced on 22 February 2021 by the UK Government, he and another senior employee of the Company, each of whom being a shareholder or a proxy appointed by a shareholder of the Company, formed the quorum for the General Meeting and were the only two persons present throughout. Each of the resolutions set out in the notice of meeting was put to a vote on a poll and the meeting was then closed.

*‘Vote Withheld’ is not a vote in law and is not counted in the calculation of the proportion of the votes ‘For’ and ‘Against’ a resolution.

Capitalised terms used in this announcement but not otherwise defined herein shall have the same meanings given in the Notice of General Meeting.

For further information please contact:

Susanna Freeman

Company Secretary

Tel: + 44 (0)20 7901 7800

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

4 May 2021

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

Despatch of formal compulsory acquisition notices and closure of the Final Increased Offer

1. Introduction

On 9 April 2021, Nova Resources B.V. (“Bidco“) announced that its recommended increased cash offer for the entire issued and to be issued share capital of KAZ Minerals PLC (“KAZ Minerals“) (other than the KAZ Minerals Shares already owned or controlled by members of the Consortium) (the “Final Increased Offer“) had been declared unconditional in all respects. The full terms and conditions of the Final Increased Offer were set out in the original offer document dated 8 February 2021, as revised by the final increased offer document published on 26 March 2021 (the “Final Offer Document“).

Bidco is pleased to announce that as at 3.00 p.m. (London time) on 30 April 2021, it had received valid acceptances of the Final Increased Offer, in respect of a total of 268,342,043 KAZ Minerals Shares, representing approximately 56.70 per cent. of the issued share capital of KAZ Minerals and approximately 93.43 per cent. of the issued share capital of KAZ Minerals Shares to which the Final Increased Offer relates.

2. Compulsory acquisition

Further to Bidco’s announcement on 26 April 2021 that it had received valid acceptances under the Final Increased Offer in respect of more than 90 per cent in value of the KAZ Minerals Shares to which the Final Increased Offer relates and the voting rights carried by those shares, Bidco is now pleased to announce today the despatch of formal compulsory acquisition notices under sections 979 and 980 of the Companies Act 2006 (the “Act“) (the “Compulsory Acquisition Notices“) to KAZ Minerals Shareholders who have not yet accepted the Final Increased Offer. These notices set out Bidco’s intention to apply the provisions of section 979 of the Act to acquire compulsorily any remaining KAZ Minerals Shares in respect of which the Final Increased Offer has not been accepted on the same terms as the Final Increased Offer.

If any of the KAZ Minerals Shareholders have not accepted the Final Increased Offer and have not applied to the court in respect of all their holding of KAZ Minerals Shares by 1.00 p.m. (London time) on 15 June 2021 (being six weeks from the date of the Compulsory Acquisition Notices), the  KAZ Minerals  Shares  held  by  those  KAZ Minerals  Shareholders  who  have not accepted the Final Increased Offer will be acquired compulsorily by Bidco on the same terms as the Final Increased Offer. The consideration  to  which  those  KAZ Minerals Shareholders  will  be entitled  will  be  held  by  KAZ Minerals as a trustee on their behalf and they will be requested to claim their consideration by writing to KAZ Minerals at the end of the six-week period.

3. Close of Final Increased Offer and procedure for acceptance

Bidco also announces that the closing date of the Final Increased Offer, which remains subject to the terms and conditions set out in the Final Offer Document and, in respect of KAZ Minerals Shares in certificated form, the Forms of Acceptance, is 15 June 2021 (being six weeks from the date of the Compulsory Acquisition Notices).

KAZ Minerals Shareholders who have not yet accepted the Final Increased Offer are urged to do so as soon as possible, as follows:

• if you hold your KAZ Minerals Shares, or any of them, in certificated form (that is, not in CREST), you should complete, sign and return a Form of Acceptance (witnessed, where relevant) (together with your share certificate(s) and/or other document(s) of title) by post as soon as possible and in any event so as to be received by the Receiving Agent, Computershare; or
• if you hold your KAZ Minerals Shares, or any of them, in uncertificated form (that is, in CREST) you should NOT complete, sign and return any Form of Acceptance but instead follow the procedure for Electronic Acceptance through CREST so that the TTE instruction settles as soon as possible. If you hold your KAZ Minerals Shares as a CREST sponsored member, acceptance of the Final Increased Offer should be referred to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details of the procedure to accept the Final Increased Offer are set out in paragraph 14 of Part 2 of the Final Offer Document and, in respect of certificated KAZ Minerals Shares, in either of the Forms of Acceptance. The Final Offer Document is available, subject to certain restrictions to persons resident in a Restricted Jurisdiction, on Bidco’s website at http://www.novaresourcesbv.com/Announcements.html and on KAZ Minerals’ website at https://www.kazminerals.com/investors/announcement/details/.

KAZ Minerals Shareholders with any questions relating to the completion and return of any Form of Acceptance or the making of an Electronic Acceptance (as the case may be) should contact the Receiving Agent, Computershare, between 8.30 a.m. and 5.30 p.m. Monday to Friday (except UK public holidays) on (0) 370 707 1100 (if calling from within the UK) or +44 (0) 370 707 1100 (if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Final Increased Offer nor give any financial, legal or tax advice.

4. Settlement of the Final Increased Offer

While the Final Increased Offer remains open for acceptances, settlement of consideration to which any accepting KAZ Minerals Shareholder (or the first-named shareholder in the case of joint holders) is entitled under the Final Increased Offer shall be effected within 14 calendar days of the date of receipt of such acceptance, which is valid and complete in all respects, in the manner described in paragraph 15 of Part 2 of the Final Offer Document.

Non-assenting KAZ Minerals Shareholders who do not accept the Final Increased Offer will not receive payment until after the compulsory acquisition has been implemented. Therefore accepting the Final Increased Offer should enable you to receive your payment more promptly than if the compulsory acquisition procedure is followed.

5. General

The percentages of KAZ Minerals Shares referred to in this announcement are based on a figure of 473,290,296 KAZ Minerals Shares in issue, excluding shares held in treasury, on 30 April 2021 (being the last Business Day prior to the date of this announcement).

The definitions set out in the Final Offer Document have the same meanings in this announcement.

Enquiries

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

9 April 2021

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

Final Increased Offer declared unconditional as to acceptances and unconditional in all respects

1. Level of acceptances

As at 1.00 p.m. (London time) on 9 April 2021, being the Closing Date of the Final Increased Offer, Bidco had received valid acceptances of the Final Increased Offer in respect of a total of 235,400,834 KAZ Minerals Shares (representing approximately 49.80 per cent. of the existing issued share capital of KAZ Minerals and approximately 82.14 per cent. of the KAZ Minerals Shares to which the Final Increased Offer relates), which Bidco may count towards satisfaction of the acceptance condition of the Final Increased Offer, as set out in paragraph 1(a) of Part A of Appendix I to the Original Offer Document (as amended by Appendix I to the Final Offer Document dated 26 March 2021) (the “Acceptance Condition“).

Accordingly, the Acceptance Condition under the Final Increased Offer has been satisfied and Bidco now declares the Final Increased Offer unconditional as to acceptances.

Of those acceptances, acceptances have been received in respect of a total of 65,236,644 KAZ Minerals Shares, representing in aggregate, approximately 13.80 per cent. of the existing issued share capital of KAZ Minerals, which were subject to irrevocable undertakings or letters of intent given by members of the Independent Committee and other KAZ Minerals Shareholders. Bidco has no outstanding irrevocable undertakings or letters of intent.

The total number of acceptances set out above also includes acceptances in respect of 669,129 KAZ Minerals Shares, representing approximately 0.14 per cent. of the existing issued share capital of KAZ Minerals, which were received from persons who are considered to be acting in concert with members of the Consortium for the purposes of the Takeover Code.

In addition to these acceptances, in accordance with the Share Exchange Agreement, Bidco or wholly-owned subsidiaries of Bidco have now acquired the 186,079,209 KAZ Minerals Shares, representing approximately 39.37 per cent. of the existing issued share capital of KAZ Minerals, in which members of the Consortium were already interested.

Accordingly, as at 1.00 p.m. (London time) on 9 April 2021, Bidco and its wholly-owned subsidiaries owned or had received valid acceptances in respect of a total of  421,480,043 KAZ Minerals Shares, representing approximately 89.17 per cent. of the existing issued share capital of KAZ Minerals.

Commenting on today’s announcement, Oleg Novachuk, Chairman of Bidco, said:

“Mr Kim and I are pleased with the level of acceptances the Final Increased Offer has received, which represents a strong endorsement from the market of our commitment to offer KAZ Minerals Shareholders the opportunity to realise an attractive valuation for their shares. 

KAZ Minerals has delivered attractive shareholder returns as a listed entity on the London Stock Exchange. The London capital markets are a strong and dynamic environment for companies and they have supported KAZ Minerals through many phases in its long-term development and we appreciate the positive input that this has had on KAZ Minerals and its corporate governance practices. 

As KAZ Minerals enters this next phase of large scale development, one in which it is, Mr Kim and I believe, better suited to being held as a private company, we look forward to continuing to work with the KAZ Minerals Group’s employees and wider stakeholders to realise the strategic goals and development milestones that we must now focus on for the coming few years.“

2. Final Increased Offer unconditional in all respects

All of the remaining Conditions to the Final Increased Offer have been satisfied (or, where applicable, waived). Bidco is therefore pleased to announce that the Final Increased Offer is now unconditional in all respects.

The Final Increased Offer will remain open for acceptances until further notice. KAZ Minerals Shareholders who have not yet accepted the Final Increased Offer are urged to do so as soon as possible and should follow the procedures for acceptance of the Final Increased Offer set out below and in the Final Offer Document.

3. Delisting and cancellation of trading and re-registration

As previously set out in the Final Offer Document, as the Final Increased Offer is now unconditional in all respects and Bidco now holds not less than 75 per cent. of the issued share capital of KAZ Minerals, KAZ Minerals will apply to the London Stock Exchange and the FCA respectively to cancel trading in KAZ Minerals Shares on the London Stock Exchange’s market for listed securities and the listing of the KAZ Minerals Shares on the Official List. Pursuant to Listing Rule 5.2.11R, KAZ Minerals announces that the cancellation notice period has now commenced and cancellation is expected to take effect from 8.00am (London time) on 11 May 2021.

It is also intended that KAZ Minerals will be re-registered as a private limited company.

As also previously set out in the Final Offer Document, in connection with the delisting and cancellation of trading in London, the Kazakhstan Stock Exchange will be requested to cancel trading in KAZ Minerals Shares for listed securities and the listing of the KAZ Minerals Shares on the official list on the Kazakhstan Stock Exchange.

Such cancellations and re-registration will significantly reduce the liquidity and marketability of any KAZ Minerals Shares in respect of which the Final Increased Offer has not been accepted at that time and their value may be affected as a consequence.

Once such cancellations and re-registration are effected, any remaining KAZ Minerals Shareholders will become minority shareholders in a majority-controlled, private company and may therefore be unable to sell their KAZ Minerals Shares. There can be no certainty that KAZ Minerals will pay any further dividends or other distributions or that such minority KAZ Minerals Shareholders will again be offered an opportunity to sell their KAZ Minerals Shares on terms which are equivalent to or no less advantageous than those under the Final Increased Offer.

4. Independent Committee Recommendation

The Final Offer Document contained the unanimous recommendation of the members of the Independent Committee that KAZ Minerals Shareholders accept, or procure acceptance of, the Final Increased Offer, as the members of the Independent Committee who hold KAZ Minerals Shares have already done in respect of their own beneficial holdings.

The Independent Committee of KAZ Minerals recommends that KAZ Minerals Shareholders who have not yet done so accept the Final Increased Offer and, in light of the risks of becoming a minority shareholder in a majority-controlled, private company as outlined above, urges such shareholders to do so immediately, by following the procedure set out below.

5. Procedure for acceptance of the Final Increased Offer

KAZ Minerals Shareholders who have not yet accepted the Final Increased Offer are urged to do so as soon as possible:

• if you hold your KAZ Minerals Shares, or any of them, in certificated form (that is, not in CREST), you should complete, sign and return a Form of Acceptance (witnessed, where relevant) (together with your share certificate(s) and/or other document(s) of title) by post as soon as possible and in any event so as to be received by the Receiving Agent, Computershare; or
• if you hold your KAZ Minerals Shares, or any of them, in uncertificated form (that is, in CREST) you should NOT complete, sign and return any Form of Acceptance but instead follow the procedure for Electronic Acceptance through CREST so that the TTE instruction settles as soon as possible. If you hold your KAZ Minerals Shares as a CREST sponsored member, acceptance of the Final Increased Offer should be referred to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details of the procedure to accept the Final Increased Offer are set out in paragraph 14 of Part 2 of the Final Offer Document and, in respect of certificated KAZ Minerals Shares, in either of the Forms of Acceptance.

KAZ Minerals Shareholders with any questions relating to the completion and return of any Form of Acceptance or the making of an Electronic Acceptance (as the case may be) should contact the Receiving Agent, Computershare, between 8.30 a.m. and 5.30 p.m. Monday to Friday (except UK public holidays) on (0) 370 707 1100 (if calling from within the UK) or +44 (0) 370 707 1100 (if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Final Increased Offer nor give any financial, legal or tax advice.

6. Settlement of Final Increased Offer and Payment of the Special Dividend

Settlement of consideration to which any accepting KAZ Minerals Shareholder (or the first-named shareholder in the case of joint holders) is entitled under the Final Increased Offer shall be effected: (i) in the case of acceptances received and complete in all respects by 1.00 p.m. on the date of this announcement, within 14 calendar days; or (ii) in the case of acceptances received and complete in all respects and received after 1.00 p.m. on the date of this announcement but while the Final Increased Offer remains open for acceptance, within 14 calendar days of such receipt, in each case in the manner described in paragraph 15 of Part 2 of the Final Offer Document.

In the Final Offer Document, KAZ Minerals stated that it would, subject to the Final Increased Offer being declared unconditional in all respects, pay the Special Dividend of 27 US cents in cash (or, where a KAZ Minerals Shareholder has so elected, the equivalent pounds sterling amount converted at the Dividend Conversion Rate). The Special Dividend will therefore be paid on 23 April 2021 to all KAZ Minerals Shareholders who are on the register of members of KAZ Minerals at 6.00 p.m. (London time) on the date of this announcement. KAZ Minerals Shares will be marked “ex-dividend” in respect of the Special Dividend by the London Stock Exchange with effect from the commencement of trading on 13 April 2021.

Unless the counterparties specifically agree otherwise, a buyer of KAZ Minerals Shares on the London Stock Exchange ahead of the ex-dividend date will assume the benefit of the Special Dividend, and the seller would need to pass the benefit to the buyer, even if the seller is the recorded owner at the record date.

Settlement of payment of the Special Dividend to which any KAZ Minerals Shareholder who is on the register of members of KAZ Minerals at 6.00 p.m. (London time) on the date of this announcement (or the first-named shareholder in the case of joint holders) is entitled shall be effected by the issue of cheques or wire payments (in the case of those KAZ Minerals Shareholders that have provided a valid bank mandate to KAZ Minerals), whether the relevant KAZ Minerals Shares are held in uncertificated form (i.e. in CREST) or in certificated form. Settlement of the Special Dividend shall be in USD unless a valid dividend currency election has previously been made by the relevant KAZ Minerals Shareholder or the relevant KAZ Minerals Shareholder sent an election form or a CREST message to the KAZ Minerals’ registrar, Computershare Investor Services PLC, that arrived by no later than 6.00 p.m. on the date of this announcement, in which case settlement of the Special Dividend shall be in pounds sterling.

7. Interests in relevant securities of KAZ Minerals

The interests, rights to subscribe and short positions in respect of relevant securities of KAZ Minerals held by members of the Consortium, Bidco, each of their close relatives and related trusts and companies, and persons acting in concert with Bidco, as at the close of business on 8 April 2021 (being the last Business Day prior to the date of this announcement), are set out below.

Neither Bidco, nor any person acting in concert with Bidco, has borrowed or lent any KAZ Minerals relevant securities (including any financial collateral arrangements), save for any borrowed shares which have been either on-lent or sold.

Members of the Consortium

Persons acting in concert with Bidco

* Beneficially owned by Stansbury International Ltd., a company limited by shares and incorporated under the laws of the British Virgin Islands, registered with company number 689940 (“Stansbury“).  As set out in the Original Offer Document, Stansbury is owned by a family member of Eduard Ogay, who is considered to be acting in concert with Vladimir Kim for the purposes of the Takeover Code. Bidco has received valid acceptances in respect of all of these shares, as noted in paragraph 1 above.

8. General

The percentages of KAZ Minerals Shares referred to in this announcement are based on a figure of 472,670,698 KAZ Minerals Shares in issue, excluding shares held in treasury, on 8 April 2021 (being the last Business Day prior to the date of this announcement).

Unless otherwise stated, the terms used in this announcement have the same meanings as given to them in the Final Offer Document.

Enquiries

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

Linklaters LLP is acting as legal adviser to KAZ Minerals.

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

26 March 2021

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

FINAL INCREASED CASH OFFER

   1. Final Increased Offer

On 28 October 2020 the board of Nova Resources B.V. (“Bidco“) and the Independent Committee of KAZ Minerals PLC (“KAZ Minerals“) announced the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of KAZ Minerals (other than the KAZ Minerals Shares already owned or controlled by members of the Consortium) (the “2.7 Announcement“). On 7 December 2020, Bidco announced that the Acquisition was to be implemented by way of a recommended takeover offer (the “Original Offer“).

On 4 February 2021, Bidco and the Independent Committee announced the terms of a significantly increased recommended cash offer comprising 780 pence in cash (the “Original Increased Offer Price“) for each KAZ Minerals Share (other than the KAZ Minerals Shares already owned or controlled by either member of the Consortium) (the “Original Increased Offer“). On 8 February 2021, Bidco published an offer document (the “Original Offer Document“) setting out the full terms and conditions of the Original Increased Offer.

Bidco and the Independent Committee are pleased to announce the terms of a further increased and final offer comprising 850 pence in cash payable by Bidco for each KAZ Minerals Share (other than the KAZ Minerals Shares already owned or controlled by either member of the Consortium) (the “Final Increased Offer”), together with a special dividend equal to 27 US cents per KAZ Minerals Share payable by KAZ Minerals subject to the Final Increased Offer becoming or being declared unconditional in all respects, to all KAZ Minerals Shareholders who are on the register of members of KAZ Minerals at 6.00 p.m. (London time) on the day that the Final Increased Offer becomes or is declared unconditional in all respects (the “Special Dividend”). The Final Increased Offer and the Special Dividend in aggregate have a value of 869 pence in cash per KAZ Minerals Share, on the basis of the Dividend Conversion Rate.  The Final Increased Offer has been unanimously recommended by the Independent Committee.

   2. Summary of terms of the Final Increased Offer and Special Dividend

Under the terms of the Final Increased Offer, KAZ Minerals Shareholders will be entitled to receive, for each KAZ Minerals Share, 850 pence in cash.

In addition, in connection with the Final Increased Offer, KAZ Minerals will pay the Special Dividend of 27 US cents per KAZ Minerals Share. The payment of the Special Dividend is conditional upon the Final Increased Offer becoming or being declared unconditional in all respects. Subject to the Final Increased Offer becoming or being declared unconditional in all respects, KAZ Minerals Shareholders who are on the register of members of KAZ Minerals at 6.00 p.m. (London time) on the day that the Final Increased Offer becomes or is declared unconditional in all respects will receive the Special Dividend. The Special Dividend will be paid at or around the same time as settlement of consideration payable by Bidco under the Final Increased Offer to those KAZ Minerals Shareholders who have validly accepted the Final Increased Offer before it becomes or is declared unconditional in all respects.

Accordingly, under the terms of the Final Increased Offer, when taken together with the Special Dividend, KAZ Minerals Shareholders will be entitled to receive:

The terms of the Final Increased Offer, when taken together with the Special Dividend, value the entire issued and to be issued share capital of KAZ Minerals at approximately £4.1 billion, based on the Dividend Conversion Rate.

The Final Increased Offer Value represents a premium of approximately:

• 35.9 per cent. to the Original Offer Price of 640 pence in cash for each KAZ Minerals Share;
• 11.5 per cent. to the Original Increased Offer Price of 780 pence in cash for each KAZ Minerals Share;
• 69.7 per cent. to the Closing Price of 512.4 pence per KAZ Minerals Share on 2 October 2020 (being the last Business Day prior to agreement in respect of the Original Offer having been reached with the Independent Committee);
• 52.3 per cent. to the Closing Price of 570.8 pence per KAZ Minerals Share on 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement);
• 58.3 per cent. to the volume-weighted average price of 549.2 pence per KAZ Minerals Share for the one-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement); and
• 71.9 per cent. to the volume-weighted average price of 505.8 pence per KAZ Minerals Share for the six-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement).

The financial terms of the Final Increased Offer are final and will not be increased.

The revised offer document, which contains the full terms and conditions of the Final Increased Offer and the procedures for acceptance of the Final Increased Offer (the “Final Offer Document“), has been posted to KAZ Minerals Shareholders today, together with the related Second Form of Acceptance. For information purposes only, the Final Offer Document will also be sent, or made available, to persons with information rights and participants in the KAZ Minerals Share Plans.

The Final Increased Offer will remain open for acceptances until 1.00 p.m. (London time) on 9 April 2021. KAZ Minerals Shareholders are urged to accept the Final Increased Offer as soon as possible and, in any event, by no later than this deadline.

KAZ Minerals Shareholders who have previously validly accepted the Original Increased Offer (and have not validly withdrawn their acceptance) will automatically be deemed to have accepted the terms of the Final Increased Offer by virtue of their prior acceptances, and therefore need not take any further action to accept the Final Increased Offer. Subject to the Final Increased Offer becoming or being declared unconditional in all respects, all KAZ Minerals Shareholders that have validly accepted the Original Increased Offer will receive the Final Increased Offer Price in respect of their KAZ Minerals Shares.

Commenting on the Final Increased Offer, Oleg Novachuk, Chairman of Bidco, said:

“Bidco is pleased to announce this Final Increased Offer for KAZ Minerals that is recommended by the Independent Committee. Mr. Kim and I are proud of the progress KAZ Minerals has made since its listing in 2005, during which time it has demonstrated strong governance and delivered significant shareholder returns. However, KAZ Minerals must now focus on the execution of a higher risk, capital intensive strategy to deliver the Baimskaya project, the associated implementation risks of which are substantial. In this context, KAZ Minerals’ long term interests are best served as a private organisation. 

We have listened to market constituents and remain committed to offering KAZ Minerals Shareholders the opportunity to realise in cash the value of their investment at an attractive valuation. Copper market dynamics have evolved since the announcement of the Original Offer in October 2020, and the Final Increased Offer fully reflects this change.  We remain convinced that the Final Increased Offer represents a highly attractive return for KAZ Minerals Shareholders.“

Commenting on the Final Increased Offer, Michael Lynch-Bell, Chair of the Independent Committee, said:

“Following improved market conditions in recent months and further negotiations with Bidco, the Independent Committee is pleased to announce a Final Increased Offer together with the Special Dividend worth in total 869 pence per share. The Independent Committee unanimously recommends that KAZ Minerals Shareholders accept this Final Increased Offer as we believe it reflects the long term fair value of KAZ Minerals, and strikes a fair balance between the strength of KAZ Minerals’ operating assets and development portfolio and the increased risk profile of the Baimskaya project.“

Unless otherwise stated, the terms used in this announcement have the same meanings as given to them in the Final Offer Document.

   3. Level of acceptances

As at 1.00 p.m. (London time) on 25 March 2021, being the last Business Day prior to the date of this announcement, Bidco had received valid acceptances of the Original Increased Offer in respect of 94,119,370 KAZ Minerals Shares representing approximately 19.91 per cent. of the existing issued share capital of KAZ Minerals as at close of business on the Latest Practicable Date, which Bidco may count towards the acceptance condition of the Final Increased Offer.

The aggregate of those KAZ Minerals Shares in respect of which Bidco has received acceptances (as set out above) and the KAZ Minerals Shares in which the Consortium is already interested represents approximately 59.28 per cent. of the existing issued share capital of KAZ Minerals as at close of business on the Latest Practicable Date.

Of the total number of acceptances set out above, acceptances have been received in respect of a total of 50,233,953 KAZ Minerals Shares, representing in aggregate, approximately 10.63 per cent. of the existing issued share capital of KAZ Minerals, which were subject to irrevocable undertakings given by members of the Independent Committee and other KAZ Minerals Shareholders. Bidco confirms that it has received acceptances in respect of all KAZ Minerals Shares which are subject to an irrevocable undertaking.

The total number of acceptances set out above includes acceptances in respect of 669,129 KAZ Minerals Shares, representing approximately 0.14 per cent. of the existing issued share capital of KAZ Minerals, which were received from persons who are considered to be acting in concert with members of the Consortium for the purposes of the Takeover Code.

In addition, Bidco has now received non-binding letters of intent from Samson Rock Capital LLP and Alpine Associates Management Inc. to accept, or use best efforts to procure the acceptance of, the Final Increased Offer in respect of a total of 15,002,691 KAZ Minerals Shares, representing approximately 3.17 per cent. of the existing issued share capital of KAZ Minerals as at the close of business on the Latest Practicable Date (the “Letters of Intent“).

   4. Background to and reasons for the Acquisition

The Consortium believes that there is a strong  rationale for the Acquisition given KAZ Minerals’ shift to a capital-intensive strategy. KAZ Minerals is a well-established and efficient copper company focused on open pit mining in the CIS region.

The Consortium recognises that KAZ Minerals’ focus on developing and operating large scale, low cost copper mines in Kazakhstan and the CIS region has enabled it to successfully progress a pipeline of growth projects, including its largest assets in Kazakhstan, Aktogay and Bozshakol.

The Consortium also believes that KAZ Minerals’ decision to dedicate efforts to a capital intensive strategy focused on long term growth remains the optimal long term strategic path for KAZ Minerals. The Consortium has the appetite for the significantly higher risks involved in this strategy, which demands a number of years of heavy capital investment with curtailed prospects for a reliable dividend stream. The members of the Consortium accept those diminished prospects but recognise this may be misaligned with the preference of many investors in the mining sector who look for a greater proportion of capital to be allocated to dividends rather than focussed on re-investment into long term growth projects.

The Baimskaya project is one of the world’s most significant undeveloped copper assets with the potential to deliver a strong return on investment in the future. However, in the announcement made on 28 October 2020, the Bidco Directors and the Independent Committee of KAZ Minerals highlighted that the risks to the Baimskaya project were significant and had increased.  These include project delivery risks, demand and supply dynamics for copper, future prevailing prices for copper and gold, and a reliance on Government of the Russian Federation to make the necessary investments in new infrastructure for the project.

Since the announcement of the Original Offer, certain of these risks have begun to crystallise. KAZ Minerals announced in the Baimskaya Project Update on 18 November 2020 that the Ministry of Development of the Russian Far East and Arctic had submitted for approval by the Prime Minister of the Russian Federation a multi-party Complex Development Plan (“CDP”) for new infrastructure in the Chukotka region, including infrastructure to be used by KAZ Minerals for the Baimskaya project.  Under the CDP, additional responsibility was transferred to KAZ Minerals for a portion of these infrastructure capital costs.  Together with a revised cost for the tailings storage facility and the impact of an approximate one year delay to the project schedule, the capital construction budget for the Baimskaya project is now estimated to be close to USD8 billion. The project will also have a peak working capital requirement of USD700 million in nominal terms over the initial years of operation. 

In addition to this capital construction and working capital costs, members of the Consortium anticipate that the financial liabilities that KAZ Minerals will have to enter into associated with life-of-mine take-or-pay contracts will be substantial.

The Consortium believe that the project delivery risks remain elevated; both the project schedule and budget remain subject to change.  KAZ Minerals continues to be exposed to unprecedented wider economic instability compounded by a global financial system significantly weakened as a result of the COVID pandemic as well as consistent geopolitical tensions. These factors could reduce the ability of KAZ Minerals to finance the construction of the Baimskaya project from its own cash resources, materially increasing pressure on gearing levels during development of the project.  Furthermore, there is increasing risk that KAZ Minerals may need to make material capital investments ahead of definitive commitments from the Russian government in respect of all aspects of infrastructure, whether or not covered by the CDP. 

In September 2020, the Russian State Duma approved an increase in mineral extraction tax (“MET“) for mining companies in Russia; the Consortium believes the revised MET regime has a negative impact on the overall economics of the Baimskaya project.

The Independent Committee has acknowledged the risks surrounding the successful development of the project are significant. The members of the Consortium accept those uncertainties.

Consequently, whilst the Consortium firmly believes that Baimskaya is the right project to underpin the long term transformation of KAZ Minerals and represents an attractive opportunity to deliver value accretive growth from 2027, the members of the Consortium have concluded that KAZ Minerals’ long term development of Baimskaya would be best undertaken away from public markets as a private company.

The spot price of copper reached a five year high on 25 February 2021 of US$9,456/t. The increase in spot copper was seen in the context of rapid depletion of LME and SHFE copper inventories.  This trend in depletion of inventories has reversed with March LME and SHFE inventories increasing materially month-on-month.  This has coincided with a decline in the spot price of copper which as at the Latest Practicable Date was US$8,973/t, a reduction of c.5.1 per cent. from the five year high price. Notwithstanding this decline, market consensus estimates on the long-term price of copper remain significantly lower than the spot copper price.

In this context, the Consortium is confident that the Final Increased Offer Price represents compelling value for KAZ Minerals on the basis of consensus long-term estimates for the price of copper. Accordingly, the Consortium is offering KAZ Minerals Shareholders an opportunity to crystallise the value of their investment in KAZ Minerals Shares in cash at a material increase to pre offer announcement trading levels whilst providing certainty, in cash, and insulating them from the risks to KAZ Minerals described above.

The Consortium considers the terms of the Acquisition to be highly attractive for KAZ Minerals Shareholders. The Final Increased Offer Value represents a premium of approximately:

• 35.9 per cent. to the Original Offer Price of 640 pence in cash for each KAZ Minerals Share;
• 11.5 per cent. to the Original Increased Offer Price of 780 pence in cash for each KAZs Minerals Share;
• 69.7 per cent. to the Closing Price of 512.4 pence per KAZ Minerals Share on 2 October 2020 (being the last Business Day prior to agreement having been reached with the Independent Committee); and
  • 71.9 per cent. to the volume-weighted average Closing Price of 505.8 pence per KAZ Minerals Share for the six-month period ended on 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement).

   5. Background to and reasons for the Independent Committee Recommendation

Subsequent to the announcement of the increased offer price on 4 February 2021 and the publication of the Original Offer Document on 8 February 2021, the spot price of copper on the LME has further increased by 11.5 per cent. and medium-term analyst price expectations for copper have also been revised further upwards, resulting in stronger forecast cash flows for KAZ Minerals.

In light of this, the Independent Committee and its advisers engaged in further extensive discussions with Bidco regarding a further improved offer. Following this engagement, Bidco made a revised proposal to the Independent Committee regarding an improved, final cash offer value of 869 pence per share. This improved, final cash offer value comprises a final cash offer of 850 pence per share and a special dividend of 27 US cents per share (or approximately 19.5 pence per share for KAZ Minerals Shareholders who elect or have elected to receive dividends in pounds sterling), which represents:

• an increase of 229 pence per KAZ Minerals Share (and 35.9 per cent) over the Original Offer Price, and an increase of 89 pence per KAZ Minerals Share (and 11.5 per cent.) over the Original Increased Offer Price;
• a premium of approximately 52.3 per cent. to the Closing Price of 570.8 pence per KAZ Minerals Share on 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement); and
• a premium of approximately 71.9 per cent. to the volume-weighted average price of 505.8 pence per KAZ Minerals Share for the six-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement).

The Independent Committee is recommending the Final Increased Offer to KAZ Minerals Shareholders as it believes the Final Increased Offer Value:

• fairly compensates KAZ Minerals Shareholders for the increased cash flows generated since 27 October 2020 and the current improved prospects for the KAZ Minerals Group resulting from the increase in the spot copper price and in the medium-term analyst consensus price expectations for copper;
• represents a fair value for KAZ Minerals’ operating assets and development portfolio, on a fundamental basis using KAZ Minerals’ internal model, whilst reflecting the risks in the development of the Baimskaya project, including its significant estimated capital construction budget of close to USD8 billion and the progress still required to secure the external project infrastructure, principally the power, port and a section of the road; and
• ensures that an offer is put to KAZ Minerals Shareholders at a price significantly greater than 780 pence per KAZ Minerals Share and provides KAZ Minerals Shareholders with the opportunity to realise their investments in KAZ Minerals at a premium in cash.

In coming to its recommendation, the Independent Committee’s view on the fundamental valuation of KAZ Minerals has taken account of the benefits of increased market consensus copper prices over the short and medium term. It has also taken account of the current market consensus on the long-term price of copper that, whilst higher than at the date of the Original Offer Document, is lower than the current spot price, which has fluctuated significantly. Given the impact of commodity prices, the Independent Committee notes that, if a KAZ Minerals Shareholder has a materially different view of long-term commodity prices than the current market consensus, the Final Increased Offer Value may be viewed differently by that shareholder.

The Independent Committee, which has been so advised by Citigroup and UBS as to the financial terms of the Final Increased Offer, considers the terms of the Final Increased Offer to be fair and reasonable. In providing their advice to the Independent Committee, Citigroup and UBS have taken into account the commercial assessments of the Independent Committee.

Accordingly, the Independent Committee, having carefully considered the Final Increased Offer and engaged with a number of KAZ Minerals Shareholders, has concluded that it unanimously recommends the Final Increased Offer to KAZ Minerals Shareholders.

   6. Action to be taken

The Final Increased Offer, which remains subject to the terms and Conditions set out in the Original Offer Document (as amended and/or supplemented by the Final Offer Document) and, in respect of KAZ Minerals Shares in certificated form, the Forms of Acceptance, will remain open for acceptances until 1.00 p.m. (London time) on 9 April 2021.

KAZ Minerals Shareholders who have not yet accepted the Final Increased Offer and who wish to do so, are urged to do so as soon as possible and by the following deadlines:

• if you hold your KAZ Minerals Shares, or any of them, in certificated form (that is, not in CREST), you should complete, sign and return a Form of Acceptance (witnessed, where relevant) (together with your share certificate(s) and/or other document(s) of title) by post as soon as possible and in any event so as to be received by the Receiving Agent, Computershare, by no later than 1.00 p.m. (London time) on 9 April 2021; or
• if you hold your KAZ Minerals Shares, or any of them, in uncertificated form (that is, in CREST) you should NOT complete, sign and return any Form of Acceptance but instead follow the procedure for Electronic Acceptance through CREST so that the TTE instruction settles as soon as possible and in any event by no later than 1.00 p.m. (London time) on 9 April 2021. If you hold your KAZ Minerals Shares as a CREST sponsored member, acceptance of the Final Increased Offer should be referred to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details of the procedure to accept the Final Increased Offer are set out in paragraph 14 of Part 2 of the Final Offer Document and, in respect of certificated KAZ Minerals Shares, in either of the Forms of Acceptance.

The default currency for receipt of dividends declared by KAZ Minerals is USD, although KAZ Minerals Shareholders can elect to receive their dividends in pounds sterling. For those KAZ Minerals Shareholders who wish to receive the Special Dividend in pounds sterling, currency election forms or a CREST message should be sent to the KAZ Minerals’ registrar, Computershare Investor Services PLC, so as to arrive no later than 6.00 p.m. on 9 April 2021. The relevant currency election form can be found on the website of KAZ Minerals’ registrar, Computershare, at https://www-uk.computershare.com/Investor/FormsCatalogue.asp. The relevant Company Code is KZK.

For those KAZ Minerals Shareholders who now make, or have previously made, a valid dividend currency election, the Special Dividend will be paid in pounds sterling, with the currency conversion rate to convert the Special Dividend denominated in USD into pounds sterling being £0.72068 per US dollar (the “Dividend Conversion Rate”). The Dividend Conversion Rate is based on the average exchange rate for the five business days ending two business days before the date of this announcement.

The payment of the Special Dividend to each KAZ Minerals Shareholder who is on the register of members of KAZ Minerals at 6.00 p.m. (London time) on the day that the Final Increased Offer becomes or is declared unconditional in all respects (or to the first-named shareholder in the case of joint holders) shall be effected by the issue of cheques, or BACS payments in the case of those KAZ Minerals Shareholders that have provided a valid bank mandate to KAZ Minerals, whether the relevant KAZ Minerals Shares are held in uncertificated form (i.e. in CREST) or in certificated form.

KAZ Minerals Shareholders who have previously validly accepted the Original Increased Offer (and have not validly withdrawn their acceptance) will automatically be deemed to have accepted the terms of the Final Increased Offer by virtue of their prior acceptances, and therefore need not take any further action to accept the Final Increased Offer. Subject to the Final Increased Offer becoming or being declared unconditional in all respects, all KAZ Minerals Shareholders that have validly accepted the Original Increased Offer will receive the Final Increased Offer Price in respect of their KAZ Minerals Shares.

Subject to the Final Increased Offer becoming or being declared unconditional in all respects, KAZ Minerals Shareholders who have previously made a valid currency election to receive their dividends in pounds sterling will automatically receive their Special Dividend in pounds sterling, and do not need to submit a further currency election form or CREST message.

KAZ Minerals Shareholders with any questions relating to the completion and return of any Form of Acceptance or the making of an Electronic Acceptance (as the case may be) should contact the Receiving Agent, Computershare, between 8.30 a.m. and 5.30 p.m. Monday to Friday (except UK public holidays) on (0) 370 707 1100 (if calling from within the UK) or +44 (0) 370 707 1100 (if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Final Increased Offer nor give any financial, legal or tax advice.

   7. Conditions to the Acquisition

As announced on 24 March 2021, all of the Regulatory Conditions have now been satisfied. The Final Increased Offer remains conditional on, among other things, receipt of sufficient acceptances of the Final Increased Offer to fulfil the acceptance condition set out in paragraph 1(a) of Part A of Appendix I of the Original Offer Document (as amended by Appendix I to the Final Offer Document). The terms and Conditions of the Final Increased Offer are set out in full in Appendix I to the Original Offer Document (as amended by Appendix I to the Final Offer Document).

   8. Interests in relevant securities of KAZ Minerals

The interests, rights to subscribe and short positions in respect of relevant securities of KAZ Minerals held by members of the Consortium, Bidco, each of their close relatives and related trusts and companies, and persons acting in concert with Bidco, as at the close of business on the Latest Practicable Date, are set out below.

Neither Bidco, nor any person acting in concert with Bidco, has borrowed or lent any KAZ Minerals relevant securities (including any financial collateral arrangements), save for any borrowed shares which have been either on-lent or sold.

Members of the Consortium

As announced previously, Oleg Novachuk has waived his vested options to acquire 186,884 KAZ Minerals Shares through his participation in the Long Term Incentive Plan 2007, and unvested options to acquire 629,927 KAZ Minerals Shares through his participation in the 2017 Long Term Incentive Plan, subject to the Final Increased Offer becoming, or being declared, unconditional in all respects.

Persons acting in concert with Bidco

* Beneficially owned by Stansbury International Ltd., a company limited by shares and incorporated under the laws of the British Virgin Islands, registered with company number 689940 (“Stansbury“).  As set out in the Original Offer Document, Stansbury is owned by a family member of Eduard Ogay, who is considered to be acting in concert with Vladimir Kim for the purposes of the Takeover Code. Bidco has received valid acceptances in respect of all of these shares, as noted in paragraph 0 above.

   9. Financing

The Final Increased Offer Price payable to KAZ Minerals Shareholders by Bidco pursuant to the terms of the Acquisition will be financed with the proceeds of the VTB Facility Agreement, as further amended and restated pursuant to an amendment and restatement agreement dated 25 March 2021 between, amongst others, Bidco, Holdco and VTB Bank (the “VTB Second Amendment and Restatement Agreement“), to reflect the Final Increased Offer Price. Further details in respect of the VTB Second Amendment and Restatement Agreement are set out in the Final Offer Document.

VTB Capital is satisfied that sufficient resources are available to Bidco to satisfy in full the consideration payable to KAZ Minerals Shareholders under the terms of the Acquisition. This cash confirmation does not apply to the Special Dividend, which is payable by KAZ Minerals.

   10. General

This announcement should be read in conjunction with the Original Offer Document and the Final Offer Document.

Each of VTB Capital, Citigroup and UBS has given and not withdrawn its consent to the publication of this announcement with the inclusion herein of the references to its name in the form and context in which they appear. VTB Capital is acting as financial adviser to Bidco for the purposes of the Acquisition.

The Appendix to this announcement contains the sources and bases of certain information contained in this announcement.

   11. Documents available on website

Copies of the following additional documents are available, or will be made available promptly and by no later than 12 noon (London time) on the Business Day following this announcement, on both Bidco’s website at http://www.novaresourcesbv.com/Announcements.html and on KAZ Minerals’ website at https://www.kazminerals.com/investors/announcement/details/, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, until the end of the Acquisition:

(a)       this announcement;

(b)       the Final Offer Document;

(c)       the Second Form of Acceptance;

(d)       the VTB Second Amendment and Restatement Agreement;

(e)       the 2020 KAZ Minerals Annual Report;

(f)        a copy of the written consent letters from each of Citigroup, UBS and VTB Capital referred to in paragraph 5 of Appendix V to the Final Offer Document; and

(g)       the Letters of Intent.

For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.

Enquiries

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

Linklaters LLP is acting as legal adviser to KAZ Minerals.

PLEASE FOLLOW THE LINK TO DOWNLOAD THE FULL ANNOUNCEMENT

PLEASE FOLLOW THE LINK TO DOWNLOAD THE FULL ANNOUNCEMENT

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

24 March 2021

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

Satisfaction of all Regulatory Conditions, update on Acceptance Levels and Increased Offer Extension

      1. Introduction

On 8 February 2021, Bidco published an offer document (the “Offer Document“) setting out the full terms and conditions of its recommended increased cash offer for the entire issued and to be issued share capital of KAZ Minerals PLC (“KAZ Minerals“) (other than the KAZ Minerals Shares already owned or controlled by members of the Consortium). As announced by Bidco on 10 March 2021, the closing date of the Increased Offer was extended to 23 March 2021 (the “Second Closing Date“).

      2. Levels of Acceptances

As at 1.00 p.m. (London time) on the Second Closing Date, Bidco had received valid acceptances of the Increased Offer in respect of 94,119,370 KAZ Minerals Shares representing approximately 19.91 per cent. of the existing issued share capital of KAZ Minerals, which Bidco may count towards the acceptance condition of the Increased Offer.

The aggregate of those KAZ Minerals Shares in respect of which Bidco has received acceptances (as set out above) and the KAZ Minerals Shares in which the Consortium is already interested represents approximately 59.28 per cent. of the existing issued share capital of KAZ Minerals.

Of the total number of acceptances set out above, acceptances have been received in respect of a total of 50,233,953 KAZ Minerals Shares, representing in aggregate, approximately 10.63 per cent. of the existing issued share capital of KAZ Minerals, which were subject to irrevocable undertakings given by members of the Independent Committee and other KAZ Minerals Shareholders. Bidco confirms that it has received acceptances in respect of all KAZ Minerals Shares which are subject to an irrevocable undertaking.

The total number of acceptances set out above also includes acceptances in respect of 669,129 KAZ Minerals Shares, representing approximately 0.14 per cent. of the existing issued share capital of KAZ Minerals, which were received from persons who are considered to be acting in concert with members of the Consortium for the purposes of the Takeover Code.

     3. Extension of the Increased Offer

The Increased Offer, which remains subject to the terms and conditions set out in the Offer Document and, in respect of KAZ Minerals Shares in certificated form, the Form of Acceptance, is being extended and will remain open for acceptances until 1.00 p.m. (London time) on 9 April 2021.

Should there be any further extension of the Increased Offer, this will be publicly announced by 8.00 a.m. (London time) on the Business Day following the day on which the Increased Offer is otherwise due to expire, or such later time as the Takeover Panel may agree.

KAZ Minerals Shareholders who have not yet accepted the Increased Offer and who wish to do so should take action to accept the Increased Offer as soon as possible. Details of the procedure for doing so are set out below and in further detail in the Offer Document.

      4. Actions to be taken

KAZ Minerals Shareholders who have not yet accepted the Increased Offer and who wish to do so, are urged to do so as soon as possible and by the following deadlines:

• if you hold your KAZ Minerals Shares, or any of them, in certificated form (that is, not in CREST), you should complete, sign and return the Form of Acceptance (witnessed, where relevant) by post as soon as possible and in any event so as to be received by the Receiving Agent, Computershare, by no later than 1.00 p.m. (London time) on 9 April 2021; or
• if you hold your KAZ Minerals Shares, or any of them, in uncertificated form (that is, in CREST) you should NOT complete, sign and return the Form of Acceptance but instead follow the procedure for Electronic Acceptance through CREST so that the TTE instruction settles as soon as possible and in any event by no later than 1.00 p.m. (London time) on 9 April 2021. If you hold your KAZ Minerals Shares as a CREST sponsored member, acceptance of the Increased Offer should be referred to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details of the procedure for acceptance of the Increased Offer are set out in paragraph 19 of Part 2 and in Parts C and D of Appendix I of the Offer Document and, in respect of certificated KAZ Minerals Shares, as further described in the Form of Acceptance accompanying the Offer Document.

The Offer Document is available, subject to certain restrictions relating to persons resident in a Restricted Jurisdiction, on Bidco’s website at http://www.novaresourcesbv.com/Announcements.html and KAZ Minerals’ website at https://www.kazminerals.com/investors/announcement/details/.

KAZ Minerals Shareholders with any questions relating to the completion and return of the Form of Acceptance or the making of an Electronic Acceptance (as the case may be) should contact the Receiving Agent, Computershare, between 8.30 a.m. and 5.30 p.m. Monday to Friday (except UK public holidays) on (0) 370 707 1100 (if calling from within the UK) or +44 (0) 370 707 1100 (if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Increased Offer nor give any financial, legal or tax advice.

     5. Interests in relevant securities of KAZ Minerals

The interests, rights to subscribe and short positions in respect of relevant securities of KAZ Minerals held by members of the Consortium, Bidco, each of their close relatives and related trusts and companies, and persons acting in concert with Bidco, as at the close of business on 23 March 2021 (being the last Business Day prior to the date of this announcement), are set out below.

Neither Bidco, nor any person acting in concert with Bidco, has borrowed or lent any KAZ Minerals relevant securities (including any financial collateral arrangements), save for any borrowed shares which have been either on-lent or sold.

Members of the Consortium

As announced previously, Oleg Novachuk has waived his vested options to acquire 186,884 KAZ Minerals Shares through his participation in the Long Term Incentive Plan 2007, and unvested options to acquire 629,927 KAZ Minerals Shares through his participation in the 2017 Long Term Incentive Plan, subject to the Increased Offer becoming, or being declared, unconditional in all respects.

Persons acting in concert with Bidco

* Beneficially owned by Stansbury International Ltd., a company limited by shares and incorporated under the laws of the British Virgin Islands, registered with company number 689940 (“Stansbury“).  As further set out in the Offer Document, Stansbury is owned by a family member of Eduard Ogay, who is considered to be acting in concert with Vladimir Kim for the purposes of the Takeover Code. Bidco has received valid acceptances in respect of all of these shares, as noted in paragraph 2 above.

       6. Satisfaction of all Regulatory Conditions

Bidco is pleased to announce that, in addition to the satisfaction of the Regulatory Conditions referred to in its announcements of 11 January 2021 and 10 March 2021, it has also now received:

• a clearance decision of the Federal Antimonopoly Service of Russia approving the Acquisition pursuant to Art. 33(2)(1) of the Federal Law No. 135-FZ “On the Protection of Competition” dated 26 July 2006 (as further amended); and
• consent from the Kazakhstan Agency for the Protection and Development of Competition for economic concentration by way of the acquisition by Bidco of the entire issued and to be issued share capital of KAZ Minerals.

Accordingly, all of the Regulatory Conditions have now been satisfied.

The Acquisition remains conditional on the satisfaction of the acceptance condition and the remaining Conditions set out in Part A of Appendix I of the Offer Document.

        7. General

The percentages of KAZ Minerals Shares referred to in this announcement are based on a figure of 472,663,927 KAZ Minerals Shares in issue, excluding shares held in treasury, on 23 March 2021 (being the last Business Day prior to the date of this announcement).

Unless otherwise stated, the terms used in this announcement have the same meanings as given to them in the Offer Document.

Enquiries

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

PLEASE FOLLOW THE LINK TO DOWNLOAD THE FULL ANNOUNCEMENT

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

10 March 2021

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

Update on Acceptance Levels, Increased Offer Extension and Conditions

       1. Introduction

On 8 February 2021, Bidco published an offer document (the “Offer Document“) setting out the full terms and conditions of its recommended increased cash offer for the entire issued and to be issued share capital of KAZ Minerals PLC (“KAZ Minerals“) (other than the KAZ Minerals Shares already owned or controlled by members of the Consortium).

       2. Levels of Acceptances

As at 1.00 p.m. (London time) on 9 March 2021, being the First Closing Date of the Increased Offer, Bidco had received valid acceptances of the Increased Offer in respect of 93,930,451 KAZ Minerals Shares representing approximately 19.88 per cent. of the existing issued share capital of KAZ Minerals, which Bidco may count towards the acceptance condition of the Increased Offer.

Of the total number of acceptances set out above, acceptances have been received in respect of a total of 50,233,953 KAZ Minerals Shares, representing in aggregate, approximately 10.63 per cent. of the existing issued share capital of KAZ Minerals, which were subject to irrevocable undertakings given by members of the Independent Committee of KAZ Minerals and other KAZ Minerals Shareholders to accept, or procure the acceptance of, the Increased Offer.

The total number of acceptances set out above also includes acceptances in respect of 669,129 KAZ Minerals Shares, representing approximately 0.14 per cent. of the existing issued share capital of KAZ Minerals, which were received from persons who are considered to be acting in concert with members of the Consortium for the purposes of the Takeover Code.

In total therefore, the aggregate of those KAZ Minerals Shares in respect of which Bidco has received acceptances and the KAZ Minerals Shares in which the Consortium is already interested (as set out in further detail in paragraph 6 below), represents approximately 59.25 per cent. of the existing issued share capital of KAZ Minerals as of 9 March 2021 (being the last Business Day prior to the date of this announcement).

      3. Extension of the Increased Offer

The Increased Offer, which remains subject to the terms and conditions set out in the Offer Document and, in respect of KAZ Minerals Shares in certificated form, the Form of Acceptance, is being extended and will remain open for acceptances until 1.00 p.m. (London time) on 23 March 2021.

Should there be any further extension of the Increased Offer, this will be publicly announced by 8.00 a.m. (London time) on the Business Day following the day on which the Increased Offer is otherwise due to expire, or such later time as the Takeover Panel may agree.

KAZ Minerals Shareholders who have not yet accepted the Increased Offer and who wish to do so should take action to accept the Increased Offer as soon as possible. Details of the procedure for doing so are set out below and in further detail in the Offer Document.

     4. Actions to be taken

KAZ Minerals Shareholders who have not yet accepted the Increased Offer and who wish to do so, are urged to do so as soon as possible and by the following deadlines:

• if you hold your KAZ Minerals Shares, or any of them, in certificated form (that is, not in CREST), you should complete, sign and return the Form of Acceptance (witnessed, where relevant) by post as soon as possible and in any event so as to be received by the Receiving Agent, Computershare, by no later than 1.00 p.m. (London time) on 23 March 2021; or
• if you hold your KAZ Minerals Shares, or any of them, in uncertificated form (that is, in CREST) you should NOT complete, sign and return the Form of Acceptance but instead follow the procedure for Electronic Acceptance through CREST so that the TTE instruction settles as soon as possible and in any event by no later than 1.00 p.m. (London time) on 23 March 2021. If you hold your KAZ Minerals Shares as a CREST sponsored member, acceptance of the Increased Offer should be referred to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details of the procedure for acceptance of the Increased Offer are set out in paragraph 19 of Part 2 and in Parts C and D of Appendix 1 of the Offer Document and, in respect of certificated KAZ Minerals Shares, as further described in the Form of Acceptance accompanying the Offer Document.

The Offer Document is available, subject to certain restrictions relating to persons resident in a Restricted Jurisdiction, on Bidco’s website at http://www.novaresourcesbv.com/Announcements.html and KAZ Minerals’ website at https://www.kazminerals.com/investors/announcement/details/.

KAZ Minerals Shareholders with any questions relating to the completion and return of the Form of Acceptance or the making of an Electronic Acceptance (as the case may be) should contact the Receiving Agent, Computershare, between 8.30 a.m. and 5.30 p.m. Monday to Friday (except UK public holidays) on (0) 370 707 1100 (if calling from within the UK) or +44 (0) 370 707 1100 (if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones. Calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Increased Offer nor give any financial, legal or tax advice.

     5. Irrevocable Undertakings

Bidco notes that in paragraph 6.1 of Appendix V of the Offer Document it was stated that Andrew Southam had given an irrevocable undertaking to accept, or procure the acceptance, of the Increased Offer in respect of his entire beneficial holdings of 676,236 KAZ Minerals Shares, representing 0.14% of the existing issued share capital of KAZ Minerals as of 4 February 2021. However, Andrew Southam beneficially holds 7,096 KAZ Minerals Shares through the trustee of the KAZ Minerals SIP, which were expressly excluded from the terms of the irrevocable undertaking. As such, Andrew Southam has, in fact, given an irrevocable undertaking to accept, or procure the acceptance, of the Increased Offer in respect of 669,140 KAZ Minerals Shares, representing approximately 0.14 per cent. of the issued share capital of KAZ Minerals as of 9 March 2021 (being the last Business Day prior to the date of this announcement).

Bidco notes that this also results in an error in the information contained in paragraph 11 of Part 1 and paragraph 3 of Part 2 of the Offer Document, which sets out  aggregate details on the number of KAZ Minerals Shares in respect of which Bidco has obtained irrevocable undertakings to accept, or procure the acceptance of, the Increased Offer, from members of the Independent Committee alone and in aggregate with other KAZ Minerals Shareholders.

The corrected total number of KAZ Minerals Shares which are therefore subject to irrevocable undertakings to accept, or procure acceptance of, the Increased Offer is 50,233,953 KAZ Minerals Shares, representing approximately 10.63 per cent. of the issued share capital of KAZ Minerals as of 9 March 2021 (being the last Business Day prior to the date of this announcement).

As such, Bidco confirms that, as set out in paragraph 2 above, it has received acceptances in respect of all KAZ Minerals Shares which are subject to an irrevocable undertaking.

    6. Interests in relevant securities of KAZ Minerals

The interests, rights to subscribe and short positions in respect of relevant securities of KAZ Minerals held by members of the Consortium, Bidco, each of their close relatives and related trusts and companies, and persons acting in concert with Bidco, as at the close of business on 9 March 2021 (being the last Business Day prior to the date of this announcement), are set out below.

Neither Bidco, nor any person acting in concert with Bidco, has borrowed or lent any KAZ Minerals relevant securities (including any financial collateral arrangements), save for any borrowed shares which have been either on-lent or sold.

Members of the Consortium

As at the close of business on 9 March 2021 (being the last Business Day prior to the date of this announcement), Oleg Novachuk had waived his vested options to acquire 186,884 KAZ Minerals Shares through his participation in the Long Term Incentive Plan 2007, and unvested options to acquire 629,927 KAZ Minerals Shares through his participation in the 2017 Long Term Incentive Plan, subject to the Increased Offer becoming, or being declared, unconditional in all respects.

Persons acting in concert with Bidco

* Beneficially owned by Stansbury International Ltd., a company limited by shares and incorporated under the laws of the British Virgin Islands, registered with company number 689940 (“Stansbury“).  As further set out in the Offer Document, Stansbury is owned by a family member of Eduard Ogay, who is considered to be acting in concert with Vladimir Kim for the purposes of the Takeover Code. Bidco has received valid acceptances in respect of all of these shares, as noted in paragraph 2 above.

Update on Conditions to the Acquisition

The Increased Offer is conditional on, among other things, receipt of certain regulatory approvals and antitrust clearances. The full terms and conditions of the Increased Offer are set out in Appendix 1 to the Offer Document.

As set out in the Offer Document, significant progress had already been made at the time of publication in respect of the satisfaction of the Regulatory Conditions. Bidco is pleased to announce that it has also now received:

• a clearance decision of the Government Commission on Monitoring Foreign Investments in the Russian Federation issued by the Federal Antimonopoly Service, as a federal executive body authorized to control the procedures for foreign investments in the Russian Federation, approving the Acquisition pursuant to Art. 11 of the Federal Law No. 57-FZ “On the Procedure for Making Foreign Investments in the Business Entities of Strategic Importance for National Defence and State Security” dated 29 April 2008; and
• a clearance decision from the Turkish Competition Board pursuant to the Act on the Protection of Competition Law No. 4054, as amended and Communique No. 2010/4 on the Mergers and Acquisitions Calling for the Authorisation of the Competition Board (as amended), approving the Acquisition.

Accordingly, including those Regulatory Conditions which it was announced in the Offer Document had already been satisfied, the Conditions set out in paragraphs 1(b), (d), (e), (g) and (h) of Part A of Appendix 1 of the Offer Document, have each been satisfied.

The Acquisition remains conditional on the satisfaction of the acceptance condition and the remaining Conditions set out in Part A of Appendix 1 of the Offer Document.

     7. General

The percentages of KAZ Minerals Shares referred to in this announcement are based on a figure of 472,564,573 KAZ Minerals Shares in issue, excluding shares held in treasury, on 9 March 2021 (being the last Business Day prior to the date of this announcement).

Unless otherwise stated, the terms used in this announcement have the same meanings as given to them in the Offer Document.

Enquiries

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

Linklaters LLP is acting as legal adviser to KAZ Minerals.

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

4 February 2021

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

INCREASED CASH OFFER

1. Increased Offer

On 28 October 2020 the board of Nova Resources B.V. (“Bidco“) and the Independent Committee announced the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of KAZ Minerals PLC (“KAZ Minerals“) (other than the KAZ Minerals Shares already owned or controlled by members of the Consortium) (the “2.7 Announcement“) and on 7 December 2020, Bidco announced (the “Switch Announcement“) that the Acquisition was to be implemented by way of a recommended takeover offer (the “Original Offer“).

Bidco and KAZ Minerals are pleased to announce the terms of a significantly increased offer comprising 780 pence in cash for each KAZ Minerals Share (the “Increased Offer“), which has been unanimously recommended by the Independent Committee of KAZ Minerals.

Under the terms of the Increased Offer, KAZ Minerals Shareholders will be entitled to receive:

The Increased Offer Price values the entire issued and to be issued share capital of KAZ Minerals at approximately £3.7 billion, and represents a premium of approximately:

• 22 per cent. to the Original Offer price of 640 pence in cash for each KAZ Minerals Share;
• 52 per cent. to the Closing Price of 512.4 pence per KAZ Minerals Share on 2 October 2020 (being the last Business Day prior to agreement in respect of the Original Offer having been reached with the Independent Committee);
• 37 per cent. to the Closing Price of 570.8 pence per KAZ Minerals Share on 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement);
• 42 per cent. to the volume-weighted average price of 549.2 pence per KAZ Minerals Share for the one-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement); and
• 54 per cent. to the volume-weighted average price of 505.8 pence per KAZ Minerals Share for the six-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement).

The offer document, which will contain the full terms and conditions of the Increased Offer and the procedures for acceptance of the Increased Offer (the “Offer Document“), will be posted to KAZ Minerals Shareholders on 8 February 2021 (or such later date as may be agreed between KAZ Minerals and Bidco, subject to the consent of the Panel), together with the related Form of Acceptance. For information purposes only, the Offer Document will also be sent, or made available, to persons with information rights and participants in the KAZ Minerals Share Plans.

Unless otherwise stated, the terms used in this announcement have the same meanings as given to them in the Switch Announcement.

Commenting on the Increased Offer, Oleg Novachuk, Chairman of Bidco, said:

“Bidco is pleased to announce this increased recommended cash offer for KAZ Minerals. Mr. Kim and I are proud KAZ Minerals has made consistent progress as a public company since listing as Kazakhmys on the London Stock Exchange in 2005. During this period, it has demonstrated strong governance and delivered significant shareholder returns. However, KAZ Minerals must now focus on the execution of a higher risk, capital intensive strategy to deliver the Baimskaya project. Accordingly, we believe that KAZ Minerals’ long term interests are now best served as a private organisation. 

Whilst the Baimskaya project is one of the world’s most exciting undeveloped copper assets, the implementation risks are substantial. As previously announced, the project is already facing increased costs and delays to its delivery schedule. In this context, the materially increased offer delivers a substantial increase in price from the terms of the original recommended offer in October 2020. 

We are pleased to have reached agreement with KAZ Minerals’ Independent Committee as to the terms of a recommended transaction recognising the changing risk profile of the business. This increased offer represents a highly attractive return for KAZ Minerals Shareholders ensuring they have the opportunity to realise in cash the value of their investment at a compelling valuation.”

Commenting on the Increased Offer, Michael Lynch-Bell, Chair of the Independent Committee, said:

“Following improved market conditions towards the end of 2020 the Independent Committee of KAZ Minerals has been engaged in extensive negotiations with Bidco. Today, we are pleased to announce a substantial increase in their offer to 780 pence per share. This increase in Bidco’s offer was achieved through the work of the Independent Committee that was established following the initial approach from Bidco and allows KAZ Minerals Shareholders to realise cash consideration for their shares at an attractive price, while recognising the increasing risks to the Baimskaya project. Based on our assessment after taking advice, and following consultation with shareholders, the Independent Committee unanimously recommends that KAZ Minerals Shareholders accept this higher offer.”

2. Background to and reasons for the Acquisition

The Consortium believes that there is a strong rationale for the Acquisition given KAZ Minerals’ shift to a capital-intensive strategy.

The Consortium also believes that KAZ Minerals’ decision to dedicate its efforts to a capital intensive strategy focused on long term growth is the optimal strategy for KAZ Minerals. The Consortium has the appetite for the significantly higher risks implied by this strategy, which demands a number of years of heavy capital investment with curtailed prospects for a reliable dividend stream. The members of the Consortium accept those diminished dividend prospects.

The Baimskaya project is one of the world’s most significant undeveloped copper assets with the potential to deliver a strong return on investment in the future. However, in the 2.7 Announcement, the directors of Bidco and the Independent Committee of KAZ Minerals highlighted that the risks to the Baimskaya project were significant and had increased. These include project delivery risks, demand and supply dynamics for copper, future prevailing prices for copper and gold, and a reliance on the Government of the Russian Federation to make the necessary investments in new infrastructure for the project.

Since the announcement of the Original Offer, certain of these risks have begun to crystallise and the Consortium believes that the project delivery risks remain significant; both the project schedule and budget remain subject to change. KAZ Minerals continues to be exposed to unprecedented wider economic instability compounded by a global financial system significantly weakened as a result of the COVID pandemic as well as consistent geopolitical tensions. These factors could reduce the ability of KAZ Minerals to finance the construction of the Baimskaya project from its own cash resources. Furthermore, there is an increasing risk that KAZ Minerals may need to make material capital investments ahead of definitive commitments from the Government of the Russian Federation in respect of all aspects of infrastructure.

Consequently, whilst the Consortium firmly believes that Baimskaya is the right project to underpin the long term transformation of KAZ Minerals and represents an attractive opportunity to deliver value accretive growth from 2027, the members of the Consortium have concluded that KAZ Minerals’ long term development of Baimskaya would be best undertaken away from public markets as a private company.

Since the announcement of the Original Offer, the spot price of copper has increased. However, the Consortium is confident that the Increased Offer Price represents a compelling value for KAZ Minerals on the basis of consensus long-term estimates for the price of copper which remain significantly lower than the spot copper price. Accordingly, the Consortium is offering KAZ Minerals Shareholders an opportunity to crystallise the value of their investment in KAZ Minerals Shares in cash at a material increase to pre-Original Offer announcement trading levels, providing certainty, in cash, in place of the Baimskaya project-driven risks to KAZ Minerals described above.

The Consortium considers the terms of the Acquisition to be highly attractive for KAZ Minerals Shareholders.

3. Background to and reasons for the Independent Committee Recommendation

On 28 October 2020, it was announced that the boards of Bidco and KAZ Minerals had reached agreement on the terms of a recommended cash offer by Bidco for the entire issued and to be issued share capital of KAZ Minerals (other than the KAZ Minerals Shares already owned or controlled by the Consortium). In reaching its decision to recommend the Acquisition to KAZ Minerals Shareholders at the time, the Independent Committee took account of a number of factors and concluded that the Acquisition provided KAZ Minerals Shareholders with a fair value for KAZ Minerals’ operating assets and development portfolio in Kazakhstan and Kyrgyzstan, whilst crystallising a value for the Baimskaya project which reflected the Independent Committee’s view of the increasing risks of the project.

Subsequent to that announcement, there have been a number of significant developments that have affected KAZ Minerals specifically, as well as its copper mining peer group. The London Metal Exchange copper price has increased by 14 per cent since 26 October 2020 and medium-term analyst price expectations for copper have also been revised upwards, resulting in stronger forecast cash flows for KAZ Minerals. The share prices of other copper-focused companies have also risen over the same period, reflecting this improved outlook.

In light of this, the Independent Committee notified Bidco that, if the improved market conditions persisted, it would expect to withdraw its recommendation of the Acquisition unless a higher price was forthcoming at a level that it felt reflected an appropriate value for KAZ Minerals Shareholders, and engaged in extensive discussions with Bidco regarding an improved offer. Following this engagement, Bidco made a revised proposal to the Independent Committee regarding a potential improved cash offer of 730 pence per share, which after careful consideration the Independent Committee rejected on the grounds that it undervalued the company. Following this, on 30 January 2021, Bidco put forward a further increased proposal of 780 pence per share in cash.

The Increased Offer Price represents:

• an increase of 140 pence per share over the Original Offer, representing an increase of approximately 22 per cent and a total value increase of £403 million for KAZ Minerals Shareholders;
• a premium of approximately 37 per cent to the Closing Price of 570.8 pence per KAZ Minerals Share on 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement); and
• a premium of approximately 54 per cent to the volume-weighted average price of 505.8 pence per KAZ Minerals Share for the six-month period ended 27 October 2020 (being the last Business Day prior to the date of the 2.7 Announcement).

The Independent Committee believes the Increased Offer Price:

• fairly compensates KAZ Minerals Shareholders for the increased cash flows generated since 27 October 2020 and the current improved prospects for the KAZ Minerals Group;
• represents a fair value for KAZ Minerals’ operating assets and development portfolio, on a fundamental basis using KAZ Minerals’ internal model, whilst reflecting the risks in the development of the Baimskaya project, including the increase of the estimated capital construction budget to close to $8 billion, as announced on 18 November 2020; and
• ensures that an offer is put to KAZ Minerals Shareholders at a price significantly greater than 640 pence per KAZ Minerals Share and provides KAZ Minerals Shareholders with the opportunity to realise their investments in KAZ Minerals at a premium in cash.

In coming to its recommendation, the Independent Committee’s view on the fundamental valuation of KAZ Minerals has taken account of the benefits of increased market consensus copper prices over the short and medium term. It has also taken account of the current market consensus on the long-term price of copper that, whilst higher than at the date of the 2.7 Announcement, is lower than the current spot price, which has fluctuated significantly. Given the impact of commodity prices, the Independent Committee notes that, if a KAZ Minerals Shareholder has a materially different view of long-term commodity prices than the current market consensus, the Increased Offer Price may be viewed differently by that shareholder.

The Independent Committee, which has been so advised by Citigroup and UBS as to the financial terms of the Increased Offer, considers the terms of the Increased Offer to be fair and reasonable. In providing their advice to the Independent Committee, Citigroup and UBS have taken into account the commercial assessments of the Independent Committee.

Accordingly, the Independent Committee, having carefully considered the Increased Offer and engaged with a number of KAZ Minerals Shareholders, has concluded that it will unanimously recommend the Increased Offer to KAZ Minerals Shareholders.

4. Irrevocable Undertakings

As previously disclosed, Bidco obtained irrevocable undertakings to accept, or procure acceptance of, the Original Offer in respect of 50,241,049 KAZ Minerals Shares in aggregate, representing approximately 10.63 per cent. of the existing issued share capital (excluding shares held in treasury) of KAZ Minerals on 3 February 2020, being the last Business Day prior to the date of this announcement and the aggregate of those KAZ Minerals Shares and the KAZ Minerals Shares in which the Consortium is already interested (as further described in paragraph 5 of the Switch Announcement), represents approximately 50.02 per cent. of the existing issued share capital (excluding shares held in treasury) of KAZ Minerals as of the above date. Each of these irrevocable undertakings remain binding and continue to apply in respect of the Increased Offer.

Further details of these irrevocable undertakings are set out in paragraph 3 and Appendix 2 of the Switch Announcement.

5. Financing

The Increased Offer Price payable to KAZ Minerals Shareholders by Bidco pursuant to the terms of the Acquisition will be financed with the proceeds of the VTB Facility Agreement, as amended and restated pursuant to an amendment and restatement agreement dated 4 February 2021 between, amongst others, Bidco, Holdco and VTB Bank (the “VTB Amendment and Restatement Agreement“), to reflect the Increased Offer Price. Further details in respect of the VTB Facility Agreement will be set out in the Offer Document.

VTB Capital is satisfied that sufficient resources are available to Bidco to satisfy in full the consideration payable to KAZ Minerals Shareholders under the terms of the Acquisition.

6. Conditions to the Acquisition

The Increased Offer is conditional on, among other things, receipt of certain regulatory approvals and antitrust clearances. The terms and conditions of the Increased Offer are set out in Appendix 1 to the Switch Announcement and will be set out in full in the Offer Document.

As announced on 11 January 2021, significant progress has been made in respect of the satisfaction of the Regulatory Conditions since the date of the Switch Announcement, with Bidco having received, prior to release of this announcement:

• clearance from the State Administration for Market Regulation of the PRC, confirming that it will not conduct a further review of the Acquisition and approving the implementation of the Acquisition;
• clearance from the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan permitting the Acquisition and the transfer of subsoil use rights related objects pursuant to the Kazakh Subsoil Code to Bidco; and
• a decision from the Prime Minister of the Kyrgyz Republic confirming that the Government of the Kyrgyz Republic waives its pre-emption rights in relation to the Acquisition, pursuant to the Law of Kyrgyzstan on Strategic Assets.

Accordingly, the Conditions set out in paragraphs 1(b), (g) and (h) of Part A of Appendix 1 of the Switch Announcement have each been satisfied.

The Acquisition remains conditional on the satisfaction of the acceptance condition and the remaining Conditions set out in Appendix 1 of the Switch Announcement.

7. Timetable and Action to be taken by KAZ Minerals Shareholders

Full details of the procedure for acceptance of the Increased Offer will be set out in the Offer Document and in the Form of Acceptance accompanying the Offer Document.

It is anticipated that Bidco will post the Offer Document to KAZ Minerals Shareholders on 8 February 2021 (or such later date as may be agreed between KAZ Minerals and Bidco, subject to the consent of the Panel). The Panel and KAZ Minerals have consented to this timing.

Bidco and KAZ Minerals continue to expect that the Acquisition will become Effective in the first half of 2021.

Further details of the expected timetable will be set out in the Offer Document.

8. General

This announcement should be read in conjunction with the full text of the Switch Announcement and, in due course, the Offer Document.

Each of VTB Capital, Citigroup and UBS has given and not withdrawn its consent to the publication of this announcement with the inclusion herein of the references to its name in the form and context in which they appear. VTB Capital is acting as financial adviser to Bidco for the purposes of the Acquisition.

The Appendix to this announcement contains the sources and bases of certain information contained in this announcement.

9. Documents available on website

Copies of the following documents are available, or will be made available promptly and by no later than 12 noon (London time) on the Business Day following this announcement, on both Bidco’s website at http://www.novaresourcesbv.com/Announcements.html and on KAZ Minerals’ website at https://www.kazminerals.com/investors/announcement/details/, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, until the end of the Acquisition:

(a)       this announcement;

(b)       the 2.7 Announcement;

(c)       the Switch Announcement;

(d)       the irrevocable undertakings referenced in paragraph 4 of this announcement;

(e)       the Confidentiality Agreement;

(f)        the Cooperation Agreement;

(g)       the Shareholders Agreement;

(h)       the Bid Conduct Agreement;

(i)        the Share Exchange Agreement;

(j)        the VTB Facility Agreement;

(k)       the VTB Amendment and Restatement Agreement; and

(l)        the VTB Facility Agreement Consent Letter.

For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.

Enquiries

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

Linklaters LLP is acting as legal adviser to KAZ Minerals.

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FOR IMMEDIATE RELEASE

2 December 2020

Recommended cash offer update

On 28 October 2020, the board of Nova Resources B.V. and the Independent Committee of KAZ Minerals PLC announced the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of KAZ Minerals (other than the KAZ Minerals Shares already owned or controlled by the Consortium) to be implemented by way of a scheme of arrangement.  On 19 November 2020, KAZ Minerals announced that it had asked the Court to adjourn the originally scheduled Court hearing seeking permission to convene the Court Meeting in connection with the Scheme. Posting of the Scheme Document can only take place after this hearing has been held and permission of the Court has been granted. A further announcement regarding the Court process will be made when appropriate.

Capitalised terms used in this announcement have the meaning given to them in the announcement dated 28 October 2020.

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Enquiries:

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

28 October 2020

RECOMMENDED CASH ACQUISITION

of

KAZ MINERALS PLC

by

        NOVA RESOURCES B.V.

(a company indirectly owned by joint offerors (i) Oleg Novachuk and (ii) Vladimir Kim)

to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006

Summary

• The board of Nova Resources B.V. (“Bidco“) and the Independent Committee of KAZ Minerals PLC (“KAZ Minerals“) are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of KAZ Minerals (other than the KAZ Minerals Shares already owned or controlled by the Consortium) (the “Acquisition“). As at 27 October 2020 (being the last Business Day prior to the date of this announcement), the Consortium owned or controlled 186,079,209 KAZ Minerals Shares, representing approximately 39.39 per cent. of KAZ Minerals’ issued share capital (excluding shares held in treasury) as at that date. It is intended that the Acquisition will be implemented by way of a scheme of arrangement.
• Under the terms of the Acquisition, KAZ Minerals Shareholders will be entitled to receive:

For each KAZ Minerals Share: 640 pence in cash

• The Acquisition values the entire issued and to be issued share capital of KAZ Minerals at approximately £3.0 billion, and represents a premium of approximately:
  • 24.9 per cent. to the Closing Price of 512.4 pence per KAZ Minerals Share on 2 October 2020 (being the last Business Day prior to agreement having been reached with the Independent Committee);
  • 12.1% per cent. to the Closing Price of 570.8 pence per KAZ Minerals Share on 27 October 2020 (being the last Business Day prior to the date of this announcement);
  • 16.5% per cent. to the volume-weighted average price of 549.2 pence per KAZ Minerals Share for the one-month period ended 27 October 2020 (being the last Business Day prior to the date of this announcement); and
  • 26.5% per cent. to the volume-weighted average price of 505.8 pence per KAZ Minerals Share for the six-month period ended 27 October 2020 (being the last Business Day prior to the date of this announcement).
• The cash consideration payable to KAZ Minerals Shareholders by Bidco pursuant to the terms of the Acquisition will be financed with the proceeds of the VTB Facility Agreement.
• If, on or after the date of this announcement, any dividend and/or other distribution and/or return of capital is declared, made or paid or becomes payable in respect of the KAZ Minerals Shares, Bidco reserves the right to reduce the consideration payable under the terms of the Acquisition for the KAZ Minerals Shares by an amount up to the amount of such dividend and/or other distribution and/or return of capital, in which case any reference in this announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced.
• The KAZ Minerals Shares owned or controlled by the Consortium (being 186,079,209 KAZ Minerals Shares as at 27 October 2020, being the last Business Day prior to the date of this announcement) will not be Scheme Shares and will not be acquired by Bidco pursuant to the Scheme but will be acquired by Bidco pursuant to the Share Exchange Agreement. The registered holders of the KAZ Minerals Shares owned or controlled by the Consortium will not be permitted to vote such KAZ Minerals Shares at the Court Meeting, but will be permitted to vote such KAZ Minerals Shares at the KAZ Minerals General Meeting.

Recommendation

• The Independent Committee, which has been so advised by Citigroup and UBS as to the financial terms of the Acquisition, considers the terms of the Acquisition to be fair and reasonable. In providing their advice to the Independent Committee, Citigroup and UBS have taken into account the commercial assessments of the Independent Committee.
• Accordingly, the members of the Independent Committee intend unanimously to recommend that KAZ Minerals Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the KAZ Minerals General Meeting, as the members of the Independent Committee who hold KAZ Minerals Shares have irrevocably undertaken to do in respect of their own beneficial holdings totalling 719,026 KAZ Minerals Shares (representing approximately 0.15 per cent. of the existing issued share capital (excluding shares held in treasury) of KAZ Minerals on 27 October 2020 (being the last Business Day prior to the date of this announcement)). Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.

Irrevocable undertakings

• Bidco has also received irrevocable undertakings from Ferris, Denalot and Greenleas to vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the KAZ Minerals General Meeting, in respect of 28,245,449 KAZ Minerals Shares, representing, in aggregate, approximately 5.98 per cent. of the existing issued share capital (excluding shares held in treasury) of KAZ Minerals on 27 October 2020 (being the last Business Day prior to the date of this announcement).
• In total, therefore, Bidco has received irrevocable undertakings to vote, or procure votes, in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the KAZ Minerals General Meeting in respect of 28,964,475 KAZ Minerals Shares in aggregate, representing approximately 6.13% per cent. of the existing issued share capital (excluding shares held in treasury) of KAZ Minerals on 27 October 2020 (being the last Business Day prior to the date of this announcement).

Background to and reasons for the Acquisition and recommendation

• The Consortium believes that there is a strong strategic rationale for the Acquisition, recognising that KAZ Minerals’ focus on developing and operating large scale, low cost copper mines in Kazakhstan and the CIS region has enabled it to successfully progress a pipeline of growth projects, including its largest assets in Kazakhstan, Aktogay and Bozshakol. The Consortium also believes that KAZ Minerals’ decision to dedicate efforts to a capital intensive strategy focused on long term growth remains the optimal long term strategic path for KAZ Minerals. The Consortium recognises this may be misaligned with the preference of many investors in the mining sector.
• Consequently, the members of the Consortium have concluded that KAZ Minerals’ long term development of Baimskaya would be best undertaken away from public markets as a private company. Accordingly, the Consortium is offering KAZ Minerals Shareholders an opportunity to crystallise the value of their investment in KAZ Minerals Shares in cash at a premium to recent trading levels.
• In reaching its decision to recommend the terms of the Acquisition, the Independent Committee of KAZ Minerals has taken account of both the long term potential value of KAZ Minerals and the risks inherent in achieving this value. The Independent Committee believes that the Acquisition provides KAZ Minerals Shareholders with a fair value for KAZ Minerals’ operating assets and development portfolio in Kazakhstan and Kyrgyzstan, and crystallises a value for Baimskaya that reflects the Independent Committee’s view of the increasing risks in this project.

Information on Bidco and the Consortium

• Bidco is a Dutch private limited liability company indirectly owned by a consortium comprising of Oleg Novachuk (the current chairman of KAZ Minerals) and Vladimir Kim (a non-executive director of KAZ Minerals) (together, the “Consortium“). Bidco is a wholly-owned subsidiary of Vostok Cooper B.V. (“Holdco“), itself a Dutch private limited liability company indirectly owned by the Consortium. As at the Effective Date, Oleg Novachuk will indirectly own 36.5 per cent. of Holdco and Vladimir Kim will indirectly own 63.5 per cent. of Holdco.
• Oleg Novachuk and Vladimir Kim are joint offerors with respect to the Acquisition.

Timetable and Conditions

• It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (although Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, subject to the consent of the Panel).
• The Acquisition will be on the terms and subject to the Conditions and further terms set out in Appendix 1 to this announcement, and to be set out in full in the Scheme Document. The Conditions include (among others):
  • approval of KAZ Minerals Shareholders at the KAZ Minerals Meetings;
  • satisfaction of certain Regulatory Conditions; and
  • the sanction of the Scheme by the Court.
• It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and KAZ Minerals General Meeting, together with the associated forms of proxy, will be posted to KAZ Minerals Shareholders in due course and that the Court Meeting and the KAZ Minerals General Meeting will be held in December 2020 or early January 2021. The Acquisition is currently expected to become Effective in the first half of 2021, subject to the approval of the KAZ Minerals Shareholders, receipt of the relevant antitrust clearances and regulatory approvals and the sanction of the Scheme by the Court. An expected timetable of key events relating to the Acquisition will be provided in the Scheme Document.

Commenting on the Acquisition, Oleg Novachuk, Chairman of Bidco, said:

“We are pleased to announce this recommended cash offer for KAZ Minerals. Mr. Kim and I believe that KAZ Minerals has made notable progress as a public company since listing on the London Stock Exchange in 2005. However, driven by the current market uncertainty and the corporate circumstances of sequential development projects, we believe that KAZ Minerals’ long term interests would be best served as a private company. We remain confident that the execution of a higher risk, capital intensive strategy remains the optimal long term path for KAZ Minerals, but we recognise that our risk appetite may be misaligned with the preference of many investors in the mining sector. In taking this important step, we wanted to ensure that KAZ Minerals Shareholders were provided with the opportunity to crystallise the value of their investment at a premium valuation. We are confident that this recommended Acquisition delivers an attractive return to KAZ Minerals Shareholders.“

Commenting on the Acquisition, Michael Lynch-Bell, KAZ Minerals Senior Independent Director and Chair of the Independent Committee, said:

“Following extensive negotiations, the Independent Committee of KAZ Minerals intends to unanimously recommend the Acquisition to KAZ Minerals Shareholders as it represents an opportunity for KAZ Minerals Shareholders to realise their investment in KAZ Minerals at a premium in cash in the near term. We believe the offer provides a fair value for KAZ Minerals’ operating assets and development portfolio, and crystallises a value for Baimskaya that reflects the Independent Committee’s view of the increasing risks in this project.“

This summary should be read in conjunction with the following announcement and the Appendices. The Conditions to, and certain further terms of, the Acquisition are set out in Appendix 1. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2. Details of irrevocable undertakings are set out in Appendix 3 to this announcement. Certain definitions and terms used in this announcement are set out in Appendix 4.

Enquiries:

Clifford Chance LLP is acting as legal adviser to Holdco and Bidco.

Linklaters LLP is acting as legal adviser to KAZ Minerals.

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KAZ Minerals PLC (“KAZ Minerals” or “the Group”) today provides information in accordance with DTR4.3A and The Reports on Payments to Governments Regulations 2014 (the “Regulations”) in respect of payments made by the Group for the year ended 31 December 2019.

Payments to Governments

The table below represents the Group’s consolidated report on payments made to governments under the Regulations. The table includes all payments made in excess of £86,000 ($110,000) for activities related to the exploration, prospection, discovery, development and extraction of minerals by project, government type and country, rounded to the nearest thousand US Dollars. Where the payment relates to activities that are reportable under the Regulations, as well as to activities which are not reportable, the payment has been included in its entirety if it is not possible to disaggregate it.

For the year ended 31 December 2019, payments to governments under the Regulations amounted to $325.8 million.

1. The Mineral Extraction Tax is payable in Kazakhstan on the value of the mineral resources extracted based on the average price of the minerals on the London Metal Exchange or at the London Bullion Market Association. Royalties are paid by Bozymchak on sold metal. Mineral Extraction Tax includes taxes paid on water extraction.
2. Payments made as required under subsoil use license.
3. Infrastructure and social payments represent payments made to bodies, associations, trusts, state-owned enterprises and other public interest groups located in the regions in which the Group operates. These payments include the transfer of assets at their book value, which the Group regards as social payments because they benefit the local communities.

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