WOOD Flash – KAZ Minerals: 2Q19 trading update – immaterial cut in zinc guidance
KAZ Minerals released its 2Q19 trading update this morning (25 July), and reiterated its 2019E production guidance for copper at 300kt, gold at 170-185koz and silver at 3,000koz, with gold and silver output ahead of the required run-rate after 1H19 and copper output needing to accelerate only 3% hoh. After the weak 1Q19 production of zinc, despite the acceleration in 2Q19 (zinc output nearly doubled qoq), the company has revised down its zinc guidance from 50kt to 40-45kt, which is unsurprising, in our view. However, given that zinc was less than 5% of the group revenue in 2018, we do not see this decline as material. Overall, we see the results as neutral for the stock.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.
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