Report
Andy Jones

WOOD Flash – KAZ Minerals: 1Q20 trading update – guidance reiterated

KAZ Minerals released its 1Q20 trading update this morning (30 April). It reiterated its 2020E production guidance for copper at 280-300kt, gold at 180-200koz, silver at 3moz and zinc at 40kt. The company continues to operate despite COVID-19, with only some small delays in shipments hampering its existing operations so far. However, due to COVID-19 related disruptions, KAZ announced that the Aktogay II expansion will be delayed to the end of 2021E and the 2020E capex on the project will be USD 300-350m, rather than the original plan of USD 400m, with the balance carrying over into 2021E. Previously, KAZ left its commissioning guidance unchanged at “first ore from Aktogay II by 2021”, so this does not result in a change in its official guidance. However, it accelerated the capex on Aktogay II last year, so we (and probably other analysts) would have expected the commissioning to occur earlier prior to these disruptions. This is a small negative, in our view, but it will limit the negative impact on the balance sheet of high spending at a time of low copper prices this year. Overall, we see the news as neutral for the stock. We believe that KAZ’s ability to continue to produce in line with the original plan at a time of massive disruptions elsewhere offsets this negative.
Underlying
KAZ Minerals PLC

Kaz Minerals is a holding company. Co. and its subsidiaries operates in the natural resources industry through five divisions: Bozshakol, Aktogay and East Region, which are engaged in the mining and processing of copper and other metals in Kazakhstan; Bozymchak, which is engaged in the mining and processing of copper and gold in Kyrgyzstan; as well as Mining Projects, which is engaged in the development of metal deposits and processing facilities in Kazakhstan. Co. operates the Bozshakol and Aktogay open pit copper mines in Pavlodar and the East Region of Kazakhstan, three underground mines in the East Region of Kazakhstan and the Bozymchak copper-gold mine in Kyrgyzstan.

Provider
Wood and Company
Wood and Company

WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.

A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.

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Analysts
Andy Jones

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