30th Apr 2015 10:58
LONDON (Alliance News) - Kazakhstan-focused copper miner KAZ Minerals PLC Thursday said its copper production remains on track to meet its guidance for 80 to 85 kilotonnes of copper cathode in 2015, as sales fell in the first quarter and were impacted by lower commodity prices across the board.
During the quarter, the company produced 19.1 kilotonnes of copper cathode, down from 21.2 kiltonnes a year before and 24.1 kilotonnes in the previous quarter, as a result of a lower volume of copper in ore mined at its Artemyevsky and Orlovsky mines.
The company said that one of the two furnaces at its Balkash smelter is due to undergo maintenance in the second quarter of the year, which could hit its copper cathode production.
The company achieved copper cathode sales of 17.8 kilotonnes in the first quarter of 2015, down from 20.5 kilotonnes in the previous year, due to a decline in production, a high build-up of finished goods inventory, and a build-up of goods in transit.
Copper cathode prices fell in the period. Prices for copper sold from the East Region and Bozymchak averaged USD5,749 per tonne in the quarter compared to USD7,127 per tonne a year earlier.
Sales of zinc in concentrate fell to 24.5 kilotonnes from 30.8 kiltonnes a year before, due to lower production in the quarter. Silver granule sales reduced to 873,000 ounces from 1.13 million ounces, and gold bar sales fell to 6,400 ounces from 9,500 ounces, also due to a decline in production.
Zinc and gold prices achieved fell to USD1,158 per tonne and USD1,228 per ounce, respectively, compared to zinc prices of USD1,167 per tonne and a gold price of USD1,276 per ounce a year earlier. Silver prices followed suit in the period, dropping to USD16.4 per ounce from USD21.0 per ounce.
KAZ Minerals does not currently have any hedges in place.
The average zinc grade is expected to reduce in 2015 as production temporarily moves to lower grade areas, KAZ Minerals said. It said that whether or not it meets its guidance for 42,000 ounces to 47,000 ounces of gold produced in 2015 depends on increased production from its Bozymchak mine in the second half as optimisation works continue.
"Our East Region operations have delivered a solid start to 2015, with efficient processing of materials. Copper production remains on track to achieve our guidance of 80-85 kilotonnes of cathode in 2015," said Chief Executive Oleg Novachuk in a statement.
The miner's cash balance at the end of the period was USD1.73 billion, considerably down from the end of December when it reported a balance of USD2.13 billion.
Shares in KAZ Minerals are trading down 0.3% at 256.70 pence Thursday midday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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