Kazakhmys on track for full-year targets

Kazakhmys, the FTSE 100 diversified mining group focused in Kazakhstan, says it remains on track to hit its targets for the full year after a solid third quarter.

Kazakhmys, the FTSE 100 diversified mining group focused in Kazakhstan, says it remains on track to hit its targets for the full year after a solid third quarter.

Copper cathode output from own concentrate increased by 12% in the three months to September 30th to 78.5kt, as the group maintained its full-year guidance of 285-295kt.

The average copper grade over the first nine months was 0.95%, down from 1.01% in 2011, as expected. The firm said: "The grade was reduced by renewed output from the relatively low grade Konyrat mine and a lower grade at Orlovsky mine, mentioned in previous production reports."

On the whole, third-quarter zinc, silver and gold volumes were little changed on last year but the company said that by-product output is on track to meet full-year targets for all metals.

However, while average realised gold prices gained over the first nine months of the year, from $1,527 to $1,653 per ounce, the values of copper, silver and zinc all declined.

The firm hailed a strong performance from Kazakhmys Power with a 7% increase in net power generated at Ekibastuz GRES-1 in the third quarter due to continued rising demand from the domestic market. The company owns a 50% stake in Ekibastuz GRES-1 after disposing of a 50% interest in February 2010.

Net debt totalled $462m as at September 30th, up from $418m at the end of the first half, as the group continued to invest in its growth projects.

"Operating cashflows in the third quarter were strengthened by higher sales volumes of copper products, reduced tax payments and lower sustaining capital expenditure. However, operating cashflows were adversely impacted by lower copper prices and the bi-annual interest payment on the China Development Bank/Samruk-Kazyna finance facility."

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