29th Oct 2015 07:56
LONDON (Alliance News) - KAZ Minerals PLC Thursday said it is on track to hit or exceed its production guidance for the full year across all of its commodities, which are all still battling lower prices.
The FTSE 250-listed copper miner operating in Kazakhstan said it remains on track to produce 80,000 to 85,000 tonnes of copper cathode in the full year. In the first nine months of 2015, the miner has produced 67,000 tonnes, suggesting the company is currently running ahead of its guidance.
Since the start of 2015, the miner has sold 57,900 tonnes of copper cathodes, down from 60,900 tonnes a year earlier due to a small increase in goods in transit and lower production levels.
Compounding lower sales were faltering copper prices, which averaged USD5,707 per tonne in the first nine months of 2015 compared to USD7,047 per tonne a year earlier. However, KAZ achieved a premium to the London Metal Exchange price which only averaged USD5,699 a tonne in the same period.
Zinc production for the full year is still expected to be at the upper end of the company's full year guidance of 90,000 to 95,000 tonnes after the miner produced 73,000 tonnes in the first nine months of the year, again ahead of its guidance.
Zinc sales since the start of 2015 have totalled 74,900 tonnes, down from 89,300 tonnes. That was above production volumes as it processed some of its stockpile, but was down from the previous year because of lower production levels.
Following the trend of commodity prices falling, zinc prices have averaged USD1,162 per tonne so far in 2015, compared to USD1,215 per tonne a year earlier. That is also considerably less than the average LME price of USD2,035 per tonne in the period.
Silver granule production for the full year is now expected to be higher than originally thought as the benefits of previous work start to come through. Full year production will now exceed the 2,250 to 2,500 ounces of silver "by around 10%", suggesting production will come in at between 2,750 ounces to 3,000 ounces.
Silver granule sales was slightly down in the first nine months of the year to 2,393 ounces from 2,450 ounces. Silver sales were down due to a decline in production and because it sold a lot of stockpile last year that it did not have this year.
Silver prices since the start of 2015 have averaged around USD16 per ounce, down from USD20 per ounce a year ago but in line with average LME prices in the period.
Gold production for the full year remains on track to be between 34,000 to 38,000 ounces after it produced 28,000 ounces in the first three quarters, boosted especially in the third quarter due to higher output.
Gold sales totalled 28,100 ounces in the first nine months of 2015, consistent with its production levels. That was up from 24,600 ounces a year earlier.
Gold prices also dropped to an average of USD1,205 per ounce, down from USD1,275 per ounce a year earlier but a premium to the average LME price of USD1,178 in the same period.
"Another solid quarter of production from our East Region operations and Bozymchak leaves us well positioned to meet our 2015 copper and by-product targets," said Chief Executive Oleg Novachuk.
At the end of the quarter, KAZ reported net debt of USD1.85 billion, a large rise from the USD1.58 billion at the end of June, largely due to the continued development of the Bozshakol and Aktogay projects.
Gross debt at the end of September was USD3.20 billion compared to USD3.04 billion at the end of June. Total cash stood at USD1.35 billion, down from USD1.46 billion at the end of June.
By Joshua Warner; [email protected]; @JoshAlliance
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