Kazakhstan’s (and one of the world’s) leading copper miner Kazakhmys is splitting up into two related but independent corporate entities. Apart from major operations in Kazakhstan, the company through its subsidiary Kazakhmys Gold Kyrgyzstan is in charge of its property the Bozymchak copper-gold deposit in the Jalal-Abad region, in southern Kyrgyzstan. The asset was acquired back in 2008, with the commitment to invest up to $22 million for the project’s detailed exploration. “A feasibility study should complete by the end of 2008 and will continue to be managed by consulting engineers WorleyParsons. Extraction of ore should commence in 2009 and it is anticipated that annual production will be 30 koz of gold and 7 kt of copper,” a press release issued by Kazakhmys at the time read. The opening of the mine and an adjacent smelter has been scheduled for this year. According to data, the copper reserves at the field make more than 146,000 tonne, along with more than 23 tonne of gold and more than 138 tonne of silver. The operation employed over 500 people as of summer 2013.
The future of the project still seems secure, but its ownership remains under question.“”Kazakhmys has firmed up plans to split most of its mines into a company headed by its largest shareholder,” the Financial Times [http://www.ft.com/intl/cms/s/0/afd6b072-1254-11e4-93a5-00144feabdc0.html#axzz38Oma4War] reported on the move. “The spin-off will break up a miner that was a member of London’s FTSE 100 index until last year and was part of a wave of natural resources companies that swept into UK markets as commodity prices boomed during the last decade. The number of Kazakhmys’s copper mines will fall from 16 to five and its workforce will be cut from 53,000 to 10,000. The UK-listed miner says the split is required to address declining profitability at its ageing and labour-intensive mines.”
According to a report following the news by stock market watch newsreel called Intercooler [http://www.intercooleronline.com/stocks/kazakhmys-plc-stock-rating-reaffirmed-by-nomura-kaz-2/39045/], the new structures’ formation has triggered cautious reactions by corporate rating agencies. “Kazakhmys plc (LON:KAZ)‘s stock had its “reduce” rating restated by equities researchers at Nomura in a research report issued on Thursday,” the news report read. “They currently have a GBX 275 ($4.70) price objective on the stock. Nomura’s target price indicates a potential downside of 20.24% from the stock’s previous close. KAZ has been the subject of a number of other recent research reports. Analysts at Barclays reiterated an “equal weight” rating on shares of Kazakhmys plc in a research note on Thursday. Separately, analysts at Credit Suisse reiterated a “neutral” rating on shares of Kazakhmys plc in a research note on Thursday. They now have a GBX 330 ($5.64) price target on the stock. Finally, analysts at Jefferies Group raised their price target on shares of Kazakhmys plc from GBX 300 ($5.13) to GBX 350 ($5.98) in a research note on Thursday. They now have a “hold” rating on the stock. Six research analysts have rated the stock with a sell rating, eleven have given a hold rating and two have assigned a buy rating to the company. The stock presently has an average rating of “Hold” and a consensus price target of GBX 279.19 ($4.77). Shares of Kazakhmys plc (LON:KAZ) opened at 345.00 on Thursday. Kazakhmys plc has a 52-week low of GBX 170.00 and a 52-week high of GBX 330.388. The stock has a 50-day moving average of GBX 303.5 and a 200-day moving average of GBX 254.2. The company’s market cap is £1.539 billion. Kazakhmys PLC, along with its subsidiaries, is natural resource company focused on the production of copper.”