KAZ Minerals PLC Report on Payments to Govts (9782Q)

TIDMKAZ

RNS Number : 9782Q

KAZ Minerals PLC

24 June 2020

24 June 2020

REPORT ON PAYMENTS TO GOVERNMENTS FOR THE YEARED 31 DECEMBER 2019

KAZ Minerals PLC ("KAZ Minerals" or "the Group") today provides information in accordance with DTR4.3A and The Reports on Payments to Governments Regulations 2014 (the "Regulations") in respect of payments made by the Group for the year ended 31 December 2019.

Payments to Governments

The table below represents the Group's consolidated report on payments made to governments under the Regulations. The table includes all payments made in excess of GBP86,000 ($110,000) for activities related to the exploration, prospection, discovery, development and extraction of minerals by project, government type and country, rounded to the nearest thousand US Dollars. Where the payment relates to activities that are reportable under the Regulations, as well as to activities which are not reportable, the payment has been included in its entirety if it is not possible to disaggregate it.

For the year ended 31 December 2019, payments to governments under the Regulations amounted to $325.8 million.

 
                                             Mineral 
                                          Extraction                                           Infrastructure 
                            Corporate        Tax and     Withholding       Signature  Licence      and social 
US$'000                  income taxes   royalties(1)             tax           bonus   fee(2)     payments(3)    Total 
KAZAKHSTAN 
Artemyevsky - license               -         14,116               -               -        -               -   14,116 
Irtyshsky - license                 -          7,853               -               -        -               -    7,853 
Orlovsky - license                  -         17,676               -               -        -               -   17,676 
Legal entity                   16,582              -               -               -        -           3,618   20,200 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
Total East Region              16,582         39,645               -               -        -           3,618   59,845 
Aktogay licence and 
 legal entity                  30,245         90,115           9,847               -    1,011          11,887  143,105 
Bozshakol licence and 
 legal entity                  20,376         71,029          12,551               -      133           5,657  109,746 
Koksay licence and 
legal entity                        -              -               -               -        -               -        - 
Other legal entities            1,252              -               -               -        -               -    1,252 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
                               68,455        200,789          22,398               -    1,144          21,162  313,948 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
RECIPIENT 
State Revenue 
 Committee                     68,455        200,789          22,398               -      133           3,608  295,383 
Local government                    -              -               -               -    1,011          17,554   18,565 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
                               68,455        200,789          22,398               -    1,144          21,162  313,948 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
KYRGYZSTAN 
Bozymchak licence and 
 legal entity                       -          8,444           2,703               -        -             171   11,318 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
RECIPIENT 
State Tax 
 Administration 
 (central government)               -          5,852           2,703               -        -               -    8,555 
Local government                    -          2,592               -               -        -             171    2,763 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
                                    -          8,444           2,703               -        -             171   11,318 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
RUSSIA 
Baimskaya licence and 
 legal entity                       -              -               -               -        -             548      548 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
RECIPIENT 
Federal Tax Service                 -              -               -               -        -               -        - 
Local government                    -              -               -               -        -             548      548 
                                    -              -               -               -        -             548      548 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
UNITED KINGDOM 
Legal entity paid to 
HMRC                                -              -               -               -        -               -        - 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
 
Total Payments to 
 Governments                   68,455        209,233          25,101               -    1,144          21,881  325,814 
---------------------  --------------  -------------  --------------  --------------  -------  --------------  ------- 
 

(1) The Mineral Extraction Tax is payable in Kazakhstan on the value of the mineral resources extracted based on the average price of the minerals on the London Metal Exchange or at the London Bullion Market Association. Royalties are paid by Bozymchak on sold metal. Mineral Extraction Tax includes taxes paid on water extraction.

   (2)   Payments made as required under subsoil use license. 

(3) Infrastructure and social payments represent payments made to bodies, associations, trusts, state-owned enterprises and other public interest groups located in the regions in which the Group operates. These payments include the transfer of assets at their book value, which the Group regards as social payments because they benefit the local communities.

A copy of this report can be found on the Company's website at: https://www.kazminerals.com/investors/news/

For further information please contact:

 
 KAZ Minerals PLC 
======================  ===========================  ====================== 
 Chris Bucknall          Investor Relations, London   Tel: [phone] 
 Anna Mallere            Investor Relations, London   Tel: [phone] 
 Maksut Zhapabayev       Corporate Communications,      Tel: + 7 727 244 03 
                          Almaty                                         53 
======================  ===========================  ====================== 
 Brunswick Group 
======================  ===========================  ====================== 
 Carole Cable, Charlie 
  Pretzlik                                            Tel: [phone] 
======================  ===========================  ====================== 
 

REGISTERED OFFICE

6th Floor, Cardinal Place, 100 Victoria Street, London SW1E 5JL, United Kingdom.

NOTES TO EDITORS

KAZ Minerals is a high growth copper company focused on large scale, low cost, open pit mining in Kazakhstan, Russia and Kyrgyzstan. It operates the Aktogay and Bozshakol open pit copper mines in the East Region and Pavlodar region of Kazakhstan, three underground mines and associated concentrators in the East Region of Kazakhstan and the Bozymchak copper-gold mine in Kyrgyzstan. In 2019, total copper production was 311 kt with by-products of 201 koz of gold, 3,382 koz of silver and 38 kt of zinc in concentrate. The Group acquired the Baimskaya project in the Chukotka region of Russia in January 2019, one of the world's most significant undeveloped copper assets, with the potential to become a large scale, low cost, open pit copper mine.

The Group's new operations at Aktogay and Bozshakol have delivered industry leading production growth and transformed KAZ Minerals into a company dominated by world class, open pit copper mines.

Aktogay is a large scale, open pit mine similar to Bozshakol, with a remaining mine life of around 25 years (including the expansion project) at an average copper grade of 0.35% (oxide) and 0.33% (sulphide). Aktogay commenced production of copper cathode from oxide ore in December 2015 and copper in concentrate from sulphide ore in February 2017. The operating sulphide concentrator has an annual ore processing capacity of 25 million tonnes and the sulphide processing capacity will be doubled to 50 million tonnes with the addition of a second concentrator by the end of 2021. Aktogay is competitively positioned on the global cost curve and will produce an average of 100 kt of copper per year from sulphide ore until 2021, increasing to 170 kt per year from 2022 to 2027, after the second concentrator commences operations. Copper production from oxide ore will be in the region of 20 kt per annum until 2024.

Bozshakol is a first quartile asset on the global cost curve with an annual ore processing capacity of 30 million tonnes and a remaining mine life of c.40 years at an average copper grade of 0.36%. The mine and processing facilities commenced output in 2016 and will produce an average of 100 kt of copper cathode equivalent and 120 koz of gold in concentrate per year over the first 10 years of operations.

The Peschanka deposit within the Baimskaya licence area in Russia has JORC resources of 9.5 Mt of copper at an average grade of 0.43% and 16.5 Moz of gold at an average grade of 0.23 g/t. The project is located in a region identified by the Russian Government as strategically important for economic development and will benefit from the construction of state-funded power and transport infrastructure and the provision of tax incentives. The estimated capital budget for construction is around $7 billion, with c.10% to be incurred after the commencement of production. The detailed parameters of the project are to be confirmed on completion of the feasibility study by the end of 2020. The Group expects the project to generate a significant NPV uplift and an attractive IRR at analyst consensus copper prices. The development of Baimskaya will enable the Group to continue its high growth trajectory, adding a large scale, long life asset to the Group's portfolio.

KAZ Minerals is listed on the London Stock Exchange and the Kazakhstan Stock Exchange and employs around 16,000 people, principally in Kazakhstan.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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June 24, 2020 11:00 ET (15:00 GMT)