Dow Jones reported that shares in Kazakhmys PLC fell as much as 5% after Kazakhstan biggest copper producer reported Q3 copper cathode production fell 13.5% and said Q4 output could decline further. At 0825 GMT, Kazakhmys' shares were down 27 pence or 2.4% at 1086 pence while the FTSE mining index was flat.
The company said that output in the Q4 of 2009 is likely to be lower than in the Q3 of 2009 due to maintenance work and the timing of material processing. The maintenance work had been planned and the miner reaffirmed its full year output target at 315,000 tonnes.
Mr John Smelt Kazakhmy head of communications said that the numbers are on track with guidance. It keeps us on track for the year."
He said that Kazakhmys' production of copper cathode from its own concentrate was 82,200 tonnes during the 3 months to September 30th 2009 compared with 95,000 tonnes during the same period a year earlier. The metal accounted for 63% of the company's H1 earnings before interest, taxes, depreciation and amortization or Ebitda. Kazakhmys also produces gold, zinc and silver, as well as electricity at the country's biggest power station.
Kazakhmys earlier 2009 closed 4 high cost mines and cut output and capital expenditure as copper demand and prices tumbled. But markets have since rebounded and the company in August raised its full year copper production target by 5% to 315,000 tonnes a figure still well below the previous year's 340,100 tonnes.
Mr Smelt said that the company had no immediate plans to reopen the shuttered mines and did not give production guidance for 2010. However, the company appears upbeat on current market conditions. He said that we think it's a good market out there. Previous cutbacks were meant in part to allow the company to focus on reducing its debt net debt fell to USD 1.4 billion as of September 30th 2009 compared with USD 1.57 billion as of June 30.
Liberum Capital said that "This illustrates that the company is well on its way to deleverage its balance sheet which we believe would provide significant value upside potential to the current share price."
Kazakhmys saw mixed results with other metals. Q3 gold production rose 23.1% to 36,200 troy ounces and silver output increased 6.8% to 4.05 million ounces while zinc output was down 15.2% to 32,400 tonnes. Power output meanwhile dipped slightly compared to a year earlier, though the company said the Q3 represented a marked recovery compared with earlier in the year.
The company said that "Kazakhmys Power saw strong recovery in demand during the Q3 market recovery continues and further growth expected in the Q4."
(Sourced from Dow Jones)
