KAZ Minerals maintains guidance despite Covid risks
London-listed KAZ Minerals has maintained its production guidance for the year after an “excellent” first-half performance, despite supply chain and staffing challenges caused by the global Covid-19 pandemic.
Copper production increased by 4% to 154 000 t in the first six months of the year and gold production increased by 25% to 110 000 oz, representing good progress towards the 2020 guidance of 280 000 to to 300 000 t and 180 000 oz to 200 000 oz, respectively.
“Thanks to the dedication and hard work of our employees we have increased copper and gold production and maintained our low cost position, recording a net cash cost of $0.68/lb. Covid-19 risks remain, but the group is on track to achieve its full year production guidance after an excellent performance in the first half,” commented CEO Andrew Southam.
KAZ recorded lower earnings before interest, taxes, depreciation and amortisation of $559-million, down from $620-million a year earlier, but grew net cash flow from operations by 31% to $310-million. Free cash flow increased from $182-million in the first half of 2019, to $251-million.
While sales volumes increased, revenues were lower owing to an 11% fall in average copper prices, partially offset by higher by-product revenues as market prices for gold rose by 26%.
Copper prices have recovered to pre-Covid-19 levels in July, supported by output cuts from other miners.
KAZ operates the Aktogay and Bozshakol openpit copper mines in the East Region and Pavlodar regions of Kazakhstan, respectively, three underground mines and associated concentrators in the East Region of Kazakhstan and the Bozymchak copper/gold mine in Kyrgyzstan.
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