KAZ Minerals PLC NEW $600 MILLION DEBT FACILITY (1766C)
June 14 2019 - 9:55AM
UK Regulatory
TIDMKAZ
RNS Number : 1766C
KAZ Minerals PLC
14 June 2019
14 June 2019
NEW $600 MILLION DEBT FACILITY
WITH DEVELOPMENT BANK OF KAZAKHSTAN
KAZ Minerals PLC ("KAZ Minerals" or "the Group") announces that
it has signed a $600 million credit facility with the Development
Bank of Kazakhstan JSC ("DBK"). The new DBK facility will provide
financing for the Group's Aktogay expansion project, which is
currently in construction and will double the processing capacity
of the Aktogay mine. The project was approved by the Board in
December 2017 and is scheduled to be completed by the end of
2021.
The facility is expected to be drawn in 2019 and 2020 and
extends for a term of 15 years until final maturity in 2034. The
loan is repayable in instalments with the first repayment due three
years after the date of first drawing, followed by semi-annual
repayments in May and November of each year from November 2022
until the final repayment in 2034. The first drawing under the loan
is expected during the third quarter of 2019.
The facility bears an interest rate of US dollar LIBOR + 3.90%
and contains a financial covenant which is the same as the Group's
existing facilities with DBK and the China Development Bank based
on a ratio of total liabilities to total assets.
John Hadfield, Chief Financial Officer, said: "The new $600
million debt facility with DBK provides funding for the second
sulphide concentrator at Aktogay, where construction is progressing
well and is on track to deliver near-term copper production growth
from 2021. The Aktogay expansion is a low risk, brownfield
development that is expected to increase cash flow and establish a
stronger platform to deliver the Baimskaya copper project in the
Chukotka region of Russia. KAZ Minerals has an industry leading
pipeline of value-accretive projects which will sustain production
growth over the next decade, when the copper market is forecast to
enter a period of significant supply deficit."
For further information please contact:
KAZ Minerals PLC
====================== =========================== ======================
Chris Bucknall Investor Relations, London Tel: +44 20 7901 7882
Anna Mallere Investor Relations, London Tel: +44 20 7901 7814
Maksut Zhapabayev Corporate Communications, Tel: +7 727 244 03
Almaty 53
====================== =========================== ======================
Brunswick Group
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Carole Cable, Charlie
Pretzlik Tel: +44 20 7404 5959
====================== =========================== ======================
REGISTERED OFFICE
6th Floor, Cardinal Place, 100 Victoria Street, London SW1E 5JL,
United Kingdom.
NOTES TO EDITORS
KAZ Minerals PLC is a high growth copper company focused on
large scale, low cost, open pit mining in Kazakhstan, Kyrgyzstan
and Russia. It operates the Bozshakol and Aktogay open pit copper
mines in the Pavlodar and East Region of Kazakhstan, three
underground mines and associated concentrators in the East Region
of Kazakhstan and the Bozymchak copper-gold mine in Kyrgyzstan. In
2018, total copper production was 295 kt with by-products of 50 kt
of zinc in concentrate, 183 koz of gold and 3,511 koz of
silver.
The Group's new operations at Bozshakol and Aktogay have
delivered one of the highest growth rates in the industry and
transformed KAZ Minerals into a company dominated by world class,
open pit copper mines.
Bozshakol is a first quartile asset on the global cost curve
with an annual ore processing capacity of 30 million tonnes and a
remaining mine life of 38 years at an average copper grade of
0.37%. The mine and processing facilities commenced output in 2016
and will produce an average of 100 kt of copper cathode equivalent
and 120 koz of gold in concentrate per year over the first 10 years
of operations.
Aktogay is a large scale, open pit mine similar to Bozshakol,
with a remaining mine life of 27 years (including the expansion
project) at an average copper grade of 0.36% (oxide) and 0.33%
(sulphide). Aktogay commenced production of copper cathode from
oxide ore in December 2015 and copper in concentrate from sulphide
ore in February 2017. The operating sulphide concentrator has an
annual ore processing capacity of 25 million tonnes and the
sulphide processing capacity will be doubled to 50 million tonnes
with the addition of a second concentrator by the end of 2021.
Aktogay is competitively positioned on the global cost curve and
will produce an average of 90 kt of copper per year from sulphide
ore until 2021, increasing to 170 kt per year from 2022 to 2027,
after the second concentrator commences operations. Copper
production from oxide ore will be in the region of 20 kt per annum
until 2025.
In January 2019, the Group acquired the Baimskaya copper project
in the Chukotka region of Russia. Baimskaya is one of the world's
most significant undeveloped copper assets with the potential to
become a large scale, low cost, open pit copper mine. The Peschanka
deposit within the Baimskaya licence area has JORC resources of 9.5
Mt of copper at an average grade of 0.43% and 16.5 Moz of gold at
an average grade of 0.23 g/t. Average annual production over the
first ten years of operations is expected to be 250 kt copper and
400 koz gold, or 330 kt Copper Equivalent Production, with a mine
life of approximately 25 years and first quartile operating costs.
The project is located in a region identified by the Russian
Government as strategically important for economic development and
will benefit from the construction of state-funded power and
transport infrastructure and the provision of tax incentives. The
estimated capital budget for the construction of the project is
$5.5 billion. The Group expects the project to generate a
significant NPV uplift and an attractive IRR at analyst consensus
copper prices. The development of Baimskaya will enable the Group
to continue its high growth trajectory, adding a large-scale,
long-life asset to the Group's portfolio.
KAZ Minerals is listed on the London Stock Exchange and the
Kazakhstan Stock Exchange and employs around 14,000 people,
principally in Kazakhstan.
Development Bank of Kazakhstan JSC ("DBK") was established in
2001 to invest in the modernization and development of the non-oil
and gas and infrastructure sectors of the Kazakhstan economy, with
a focus on production infrastructure and the manufacturing
industry. DBK is a subsidiary of National Management Holding
"Baiterek" JSC with responsibility for promoting industrial
development and innovation in Kazakhstan.
This announcement contains inside information.
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