KAZ Minerals PLC (“the Group”) announces that the refund of VAT paid during the construction of the Bozshakol and Aktogay projects has commenced. Following the completion of audit and other administrative procedures the Group has received $166 million in VAT refunds to date in 2017. The recoverable VAT paid during the construction of the two projects was included within non-current receivables as at 31 December 2016.

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KAZ MINERALS PLC AUDITED RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2016

FINANCIAL HIGHLIGHTS

• Gross EBITDA¹ of $492 million (2015: $208 million) driven by Bozshakol and Aktogay
  • EBITDA of $351 million (2015: $202 million), excludes pre-commercial earnings
  • Operating profit up 142% to $218 million (2015: $90 million)
• Gross Revenues² increase 43% to $969 million (2015: $677 million)
  • 2016 full year copper sales volumes of 141 kt (2015: 84 kt), offset 12% lower copper price
  • Revenues were $766 million (2015: $665 million)
• Group net cash cost of 59 USc/lb (2015: 109 USc/lb)
  • Bozshakol gross cash cost of 106 USc/lb and net cash cost of 27 USc/lb, supported by lower costs in start-up period
  • East Region and Bozymchak gross cash cost of 191 USc/lb and net cash cost of 68 USc/lb (2015: 109 USc/lb)
• Gross liquid funds of $1,108 million, net debt of $2,669 million at 31 December 2016
  • Aktogay project budget reduced by $200 million to $2.1 billion
  • $100 million of final payments at Bozshakol will now fall in 2017
  • New $300 million Development Bank of Kazakhstan facility and $50 million increase to PXF obtained in December 2016
  • Gearing metrics significantly improved and set to reduce further

OPERATIONAL HIGHLIGHTS

• 73% growth in copper production to 140 kt
  • Bozshakol output of 45 kt copper cathode equivalent from 50 kt copper in concentrate in 2016
  • Aktogay output of 18 kt copper cathode from oxide ore, production from sulphide ore commenced in February 2017
  • Optimised Bozymchak mine tripled copper and gold production

2017 OUTLOOK

• Industry leading production growth and low cost position to continue in 2017
  • Aktogay to reach commercial production and Bozshakol to reach design capacity in the year
  • Group copper production³ to increase to 225-260 kt, gold production³ 135-170 koz
  • Zinc in concentrate expected to be 70-75 kt, silver production³ 2,750-3,000 koz
  • Bozshakol and Aktogay 2017 gross cash cost guidance of 125-145 USc/lb
  • East Region and Bozymchak 2017 gross cash cost guidance of 230-250 USc/lb, impacted by lower copper volumes

¹  Includes EBITDA from pre-commercial operations.

²   Includes revenues from pre-commercial operations.

³   Copper, gold and silver production used for the 2017 guidance is payable metal in concentrate produced plus finished metal production.

⁴  Reconciliation of EPS based on Underlying Profit/(Loss) is found in note 8 in the financial information.

⁵  Net cash flow from operating activities before capital expenditure and non-current VAT associated with expansionary and new projects, less sustaining capital expenditure.

⁶  Cash operating costs, including pre-commercial production costs, excluding purchased cathode, divided by the volume of copper cathode equivalent sales.

⁷ Cash operating costs, including pre-commercial production costs, excluding purchased cathode, less by-product Gross Revenues, divided by the volume of copper cathode equivalent sales.

⁸ Reconciliation to operating profit provided in note 4(a)(i) in the financial information.

Oleg Novachuk, Chief Executive, said: “The successful launch of our major growth projects has increased copper output by 73% at an industry leading net cash cost of 59 USc/lb. Following the recent commencement of production at the Aktogay sulphide concentrator both Aktogay and Bozshakol are operational. KAZ Minerals is now well positioned to achieve its target of 300 kt of copper production in 2018, delivering significant copper growth with low operating costs into a strengthening market.”

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KAZ Minerals PLC announced on 8 February 2017 that it will release its preliminary results for the year ended 31 December 2016 on Thursday 23 February 2017 at 7:00am (UK time) and that a presentation for analysts would be held at 9:00am (UK time).

The presentation for analysts will now commence at 9:45am (UK time). All other details remain unchanged, as set out below.

The presentation will be held in the Theatre & Theatre Gallery at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS and can also be accessed by conference call. The dial-in details are as follows:

Telephone: +44 (0) 20 3003 2666

Please quote the password: KAZ Minerals

A webcast of the presentation will be available on the KAZ Minerals website (www.kazminerals.com).

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KAZ Minerals PLC will announce its preliminary results for the year ended 31 December 2016 on Thursday 23 February 2017 at 7.00am (UK time).

A presentation for analysts will be held in the Theatre & Theatre Gallery at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS on Thursday 23 February 2017 at 9.00am (UK time).

The presentation for analysts can also be accessed by conference call on Thursday 23 February 2017 at 9.00am (UK time). The dial-in details are as follows:

Telephone: +44 (0) 20 3003 2666

Please quote the password: KAZ Minerals

A webcast of the presentation for analysts will also be available on the KAZ Minerals website (www.kazminerals.com). 

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KAZ Minerals PLC (“KAZ Minerals” or “the Group”) announces that it has reached agreement on a new $300 million credit facility with the Development Bank of Kazakhstan JSC (“DBK”) which is scheduled to be signed on 14 December 2016.

The DBK facility will finance the completion of the Aktogay project which began commissioning of its main sulphide concentrator on 6 December 2016. The facility is expected to be fully drawn before the year-end and extends for a term of 8.5 years until final maturity in June 2025. The loan is repayable in instalments with the first repayment due in June 2018, followed by semi-annual repayments in May and November of each year from 2019 until 2024 and a final repayment in June 2025. The facility bears an interest rate of US dollar LIBOR +4.50% and contains a financial covenant which is the same as the Group’s loan facilities with the China Development Bank, based on a ratio of total liabilities to total assets, with adjustments to mitigate the translation impact of movements in the US dollar/tenge exchange rate.

The Group also announces that an increased commitment by ING Bank N.V. in the Pre-export finance facility (“PXF”) has been agreed for an additional $50 million under the accordion feature. The additional commitment is expected to be drawn before the year-end. The total amount outstanding under the PXF as at 31 December 2016, including the additional drawing, is expected to be approximately $283 million. As previously announced, the Group intends to resume discussions with the PXF bank syndicate over a longer-term refinancing of the facility, after release of its 2016 financial statements.

Following the previously announced waiver obtained from the PXF lenders, the Group has also received a waiver from Caterpillar Financial Services (UK) Limited in relation to testing of the Net Debt to EBITDA covenant on 31 December 2016 under the $50 million CAT facility.

Andrew Southam, Chief Financial Officer of KAZ Minerals, said: “We are pleased to have secured a new, long-term facility of $300 million from the Development Bank of Kazakhstan and to have increased ING Bank N.V.’s participation in the PXF facility by $50 million, ahead of a planned refinancing in the first half of 2017. These transactions demonstrate the Group’s ability to access diversified sources of finance and the strong support KAZ Minerals enjoys from its lenders.”

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KAZ Minerals PLC (“KAZ Minerals” or “the Group”) announces that a waiver of the Net Debt to EBITDA financial covenant in the Group’s PXF facility due to be tested as at 31 December 2016 has been approved. The covenant is next due to be tested as at 30 June 2017.

The Group continues to enjoy strong support from its lenders and plans to resume discussions with the PXF bank syndicate over a longer term refinancing of the facility in early 2017, after release of the 2016 financial statements.

A similar waiver request has also been issued to Caterpillar Financial Services (UK) Limited in respect of the Group’s $50 million revolving credit facility and a formal response is expected shortly.

Kaz minerals PLC HALF-YEARLY REPORT

FOR THE PERIOD ENDED 30 June 2016

OPERATIONAL HIGHLIGHTS

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

 FINANCIAL HIGHLIGHTS

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

 MAJOR GROWTH PROJECTS

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

 OUTLOOK

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

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

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

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

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

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

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

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

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KAZ Minerals PLC will announce its half-yearly results for the six months ended 30 June 2016 on Thursday 18 August 2016 at 7.00am (UK time).

A presentation for analysts will be held in the Theatre & Theatre Gallery at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS on Thursday 18 August 2016 at 9.15am (UK time).

The presentation for analysts can also be accessed by conference call on Thursday 18 August 2016 at 9.15am (UK time). The dial-in details are as follows:

Telephone: +44(0)20 3003 2666

Please quote the password: KAZ Minerals

A webcast of the presentation for analysts will also be available on the KAZ Minerals website (www.kazminerals.com).

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 2015.

The table below represents the Group’s consolidated report on payments made to governments under The Reports on Payments to Governments Regulations 2014 which became effective for the first time for the year ended 31 December 2015. The table includes all payments made in excess of £86,000 ($130,000) for activities related to the exploration, prospecting, discovery, development and extraction of minerals by project, government type and country, rounded to the nearest thousand US Dollars.

1. The Mineral Extraction Tax is payable 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 Precious Metal Exchange.
2. Payments made as required under subsoil use license.
3. Infrastructure and social payments of $14.8 million represent payments made to bodies, associations, trusts 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 infrastructure and social payments, as these benefit local communities. The infrastructure payments reflected as part of the Bozymchak operation include a statutory infrastructure development levy which is based on a fixed proportion of revenue at 2%.

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KAZ MINERALS PLC AUDITED RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2015

FINANCIAL HIGHLIGHTS

• Group EBITDA of $202 million
  • East Region and Bozymchak EBITDA of $240 million

• Strong cost control in a low commodity price environment
  • Gross cash cost of 230 USc/lb, below guidance of 260-280 USc/lb
  • Net cash costs of 109 USc/lb, first quartile operations
  • Sustaining capital expenditure limited to $68 million, below guidance of $80 – $100 million

• Significant liquidity
  • Available funds of $1,501 million, includes $250 million of undrawn facilities at 31 December 2015
  • Net debt $2,253 million as at 31 December 2015

OPERATIONAL HIGHLIGHTS

• Achieved production targets for all metals
  • Underlying copper in concentrate production of 89 kt
  • Copper cathode production of 81 kt, in line with guidance of 80-85 kt
  • All by-products in line or ahead of guidance

MAJOR GROWTH PROJECTS ON TRACK

• Bozshakol
  • Mining activity ramping up, 7 million tonnes of ore mined in 2015
  • Copper concentrate production commenced in February 2016
  • Production guidance for 2016: 45-65 kt copper cathode equivalent and 50-70 koz gold bar equivalent
  • $50 million reduction in project capital budget

• Aktogay
  • 3 million tonnes of oxide ore mined in 2015
  • Oxide operations contributed initial copper cathode production in 2015
  • Production guidance for 2016: 15 kt of copper cathode from oxide operations
  • Sulphide operations on schedule for 2017 start up

OUTLOOK

• Industry leading copper production growth of over 50% per annum to 2018
  • Group’s copper cathode equivalent production to increase to 130-155 kt in 2016

• Continued focus on cost control
  • Gross cash cost guidance for 2016:
  • East Region and Bozymchak 200-220 USc/lb
  • Aktogay oxide 110-130 USc/lb
  • Bozshakol 150-170 USc/lb

¹  2014 reflects continuing operations only.

²  Group basic and diluted EPS in 2014 includes the net loss on divestment of the Disposal Assets ($2.3 billion) and the profit on disposal of Ekibastuz GRES-1 ($0.2 billion).

³  Reconciliation of EPS based on Underlying Profit is found in note 10(b).

⁴  Net cash flow from operating activities before interest, capital expenditure, non-current VAT and accruals associated with expansionary and new projects, less sustaining capital expenditure on tangible and intangible assets. Free Cash Flow reflects continuing and discontinued operations for the year end 31 December 2014.

⁵  Group cash operating costs excluding mineral extraction tax, divided by the volume of copper cathode equivalent sales. The full year cash operating costs for 2014 include East Region costs only on an allocated basis prior to the Restructuring of the business. The second half of 2014 gross cash cost of 277 USc/lb is considered more representative of the performance of the East Region as a stand-alone business.

⁶ Group cash operating costs excluding mineral extraction tax less by-product revenues, divided by the volume of copper cathode sales. The full year cash operating costs for 2014 include East Region costs only on an allocated basis prior to the Restructuring of the business. The second half of 2014 net cash cost of 107 USc/lb is considered more representative of the performance of the East Region as a stand-alone business.

Oleg Novachuk, Chief Executive, said: “In 2015 we made excellent progress in the delivery of our major growth projects, Bozshakol and Aktogay, and the operating mines in the East Region and Bozymchak hit their production targets at a first quartile net cash cost of 109 USc/lb. Our immediate priorities in 2016 are the ramp up of Bozshakol, the construction of Aktogay and to keep operating costs low across the Group. The delivery of our world class projects will enable us to de-gear the balance sheet and complete our transformation into a low-cost operator of large scale, open pit copper mines in Kazakhstan.”

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