Tag Archives: metals and mining

Markets: Central Asia Metals

APRIL 13 2017 (The Conway Bulletin) — Central Asia Metals, which is focused on Kazakhstan, posted turnover up 3% at $69.3m for 2016, helping to push up its share price to a five-week high of 242p by April 10.

This has since come off slightly but Central Asia Metals is still threatening to push past an all-time high of 246p set in mid-February. That’s certainly what analysts think. Most of them reiterated a ‘buy’ rating with Peel Hunt targeting 255p and FinnCap targeting 264p.

One of the main attractions for shareholders is the strong dividend that Central Asia Metals pays out. The Motley Fool, a stock analysis blog, explained.

“Shareholders will reap the benefit of this strong performance.

As much as 31% of last year’s revenue will be returned to shareholders by way of a total dividend of 15.5p. This gives a yield of 6.7% at the current share price of 229p,” the Motley Fool wrote before the share price started rising.

“This isn’t a one-off performance. The company’s dividend policy is to return at least 20% of revenue from Kounrad to shareholders each year.”

Kounrad is Central Asia Metal’s low-cost copper producing site in Balkhash, central Kazakhstan.

To underline the Motley Fool’s point, take a look at previous dividends. In 2015 and 2014, Central Asia Metals paid out 12.5p, in 2013 9p and in 2012 10.7p.

ENDS

(News report from Issue No. 324, published on April 13 2017)f

Stock Market: Tethys, Centerra Gold

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APRIL 6 2017 (The Conway Bulletin) — Shares in oil producer Tethys traded up at 1.73% on Monday despite full year results showing that its revenues from oil and gas sales had fallen by 47% to $11.7m.

It blamed the drop in revenue on the devaluation of the tenge in the second half of 2015 and a drop in oil output. Tethys sells most of its production on the domestic Kazakh market.

Despite the drop in revenues, Tethys said that its losses for 2016 were actually smaller than its losses in 2015, perhaps driving the price up 26% on the London Stock Exchange. Tethys if one of the region’s most illiquid stocks.

Most of the savings came in tight cost-cutting in administrative issues. It said that losses for 2016 were $46.9m compared to $74.6m in 2015. Tethys is pulling out of a project with China’s CNPC and France’s Total in Tajikistan because it couldn’t keep up with its call payments. It is also locked in a commercial dispute in Kazakhstan which has meant that the bank accounts of its subsidiary have been frozen.

Despite hitting a 6-month high of C$7.65, analysts have been lining up to give Centerra Gold’s stock a hefty ‘buy’ rating.

CIBC gave it a target rating of C$10 this year and CSFB went even further with a rating of C$10.25. The consensus target price is C$8.08.

The buy ratings appear to be based on strong gold prices which are enough to shrug off Centerra Gold’s spat with the Kyrgyz authorities. Kyrgyzstan wants a direct stake in the Kumtor gold mine, its largest industrial asset, which is wholly owned by Centerra Gold. Instead it currently holds a 32.7%% stake in Centerra Gold.

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(News report from Issue No. 323, published on April 6 2017)

Armenia signs up to be EITI candidate

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YEREVAN, MARCH 9/14 2017 (The Conway Bulletin) — Armenia’s government started the task of implementing various standards ordered by the global governance watchdog, the Extractive Industries Transparency Initiative (EITI), five days after it was approved as a candidate country.

At the same meeting in Bogota that Armenia’s candidature was approved, the EITI suspended Azerbaijan for not improving its rules over NGO registration. The next day Azerbaijan quit the group calling its biased and accusing it of mission creep.

Still, Armenian PM’s chief of staff, Davit Harutyunyan, explained the importance for Armenia of the EITI’s candidate status.

“A well-managed natural resource extraction can become more profitable for the citizens of Armenia, and the EITI is the right tool to achieve this goal,” he was quoted as saying in an EITI press release.

Originally aimed at improving governance in countries where the extractive industries, either mining or oil and gas, dominate, the EITI Standards have become more widespread and diluted. Armenia mines some gold and copper, but it is a small part of its economy compared to other products such as electricity and banking. According to the EITI press release, mining accounts for just 5% of Armenia’s GDP.

But, as well as widening its remit, the EITI Standards have become important in international fiance. International lenders use it as governance benchmark. The EBRD has warned Azerbaijan that it may consider pulling funding from projects if it fails the EITI Standards. It has yet to comment on Azerbaijan quitting the EITI.

At its AGM, the EITI said both Tajikistan and Kyrgyzstan had made progress towards meeting its Standards but there was more work to be done.

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(News report from Issue No. 321, published on March 20 2017)

Nuclear fuel bank in Kazakhstan nears completion

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MARCH 6 2017 (The Conway Bulletin) — A low enriched uranium bank being built in Kazakhstan should be operational by September, the director-general of the International Atomic Energy Agency (IAEA) Yukiya Amano said in a press release. The uranium fuel bank will be the first of its kind in the world and will allow countries to buy uranium for nuclear fuel. It will be administered by the IAEA. For Kazakh president Nursultan Nazarbayev, the fuel bank will be a personal success as he wants to build Kazakhstan’s reputation as a global centre for nuclear energy. Kazakhstan is the world’s biggest uranium miner.

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(News report from Issue No. 320, published on March 13 2017)

Centerra expects to have to pay Kyrgyz fines

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BISHKEK, FEB. 23 2017 (The Conway Bulletin) — In its 2016 results Toronto-listed Centerra Gold said that it expected to have to pay all or part of a set of fines handed out to it by Kyrgyz environmental bodies over what it had previously described as an attempt by the government to pressure it into ceding a larger stake in the Kumtor gold mine.

Centerra Gold is locked in a battle with the Kyrgyz government over ownership of the Kumtor mine. Kyrgyzstan owns a 32.7% stake in Centerra Gold but it wants to own a direct stake in the mine which generates about a tenth of its GDP.

Last year Centerra launched an action at an international arbitration court after a Kyrgyz judge ordered cash generated by the Kumtor mine to stay in the country.

“If the Company were obligated to pay these amounts, it would have a material adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition,” Centerra said.

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(News report from Issue No. 318, published on Feb.24 2017)

Stock market: KAZ Minerals, Bank of Georgia

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FEB. 24 2017 (The Conway Bulletin) — Bank of Georgia’s share price barely budged after it released full year results for 2016 that showed an increase in profit held back by a 10.5% devaluation in the Georgian lari throughout the year.

By Feb. 23, its shares were trading at 2,987p on the London Stock Exchange, its lowest level since the end of January. Analysts said that the poor performance of the lari was holding back the Bank of Georgia share price, confirming just how exposed the bank is to Georgia’s macro-economic performance.

Over at KAZ Minerals, the Kazakhstan-focused copper producer, it was a more positive, upbeat earnings session.

It said that its revenues had increased in 2016 by 15% to around $766m, because a clutch of new mines had now come on-stream. This appeared to impress the market and pushed up its shares by another 2.6% to 573p on the London Stock Exchange, near a four year high of 589p hit earlier in the month.

Analysts are split on the KAZ Minerals stock. JP Morgan and Credit Suisse kept their neutral rating on the stock while Citigroup reaffirmed its ‘buy’ rating.

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(News report from Issue No. 318, published on Feb.24 2017)

KAZ minerals revenue rises

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FEB. 23 2017 (The Conway Bulletin) — Revenues at Kazakhstan-focused copper producer KAZ Minerals jumped 43% in 2016 to $969m because of the start-up of production at its Bozshakol copper- gold mine in Kyrgyzstan and the Aktogay open pit copper mine in Kazakhstan. KAZ Minerals is listed on the London Stock Exchange and used to be called Kazakhmys

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(News report from Issue No. 318, published on Feb.24 2017)

Buy gold, not som, says Kyrgyz Central Bank chief

BISHKEK, FEB. 15 2017 (The Conway Bulletin) — In an interview with the Bloomberg news agency, Tolkunbek Abdygulov, head of the Kyrgyz Central Bank essentially told ordinary Kyrgyz that they should buy gold rather than keep their savings in the unpredictable Kyrgyz som.

Gold is considered a safe-haven for investors and savers whenever the global outlook is fragile but it holds added importance in Kyrgyzstan, which relies on the Kumtor gold mine to produce over a tenth of its GDP.

Like the rest of the region, an economic slowdown has hit the Kyrgyz economy, denting GDP growth and undermining the economy. The Kyrgyz som has slid from around 50/$1 to 69/$1.

Mr Abdygulov appeared to reference this som weakness in his interview with Bloomberg.

“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he was quoted as saying.

Over the past couple of years, the Kyrgyz Central Bank has offered to sell gold in different sizes to ordinary Kyrgyz and to store it safely. Mr Abdygulov said that the Bank had sold around 140kg of gold through this system.

And the Central Bank appears to be leading by example. It has increased its purchases of gold while many other central banks have reduced theirs. Bloomberg data showed that Kyrgyzstan currently holds around $190m of gold in its reserves, four times the level of 10 years ago.

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(News report from Issue No. 317, published on Feb.17 2017)

Tajik aluminium smelter and Rusal near deal

FEB. 16/17 2017 (The Conway Bulletin) — Talco, the Tajik aluminium smelter owned through a series of offshore companies by the family of President Emomali Rakhmon, has struck a deal to end a long-running dispute with Russia’s Rusal, both Eurasianet and RFE/RL reported.

A court in 2014 ruled against Talco, in a ruling that focused on a breach of contract a decade earlier, meaning that it needed to pay Rusal up to $375m.

Now, Eurasianet and RFE/RL reported, Talco will pay Rusal the full amount it has been fined plus an extra sum for control of the Hyatt hotel and a business centre in Dushanbe, which Rusal had owned.

The deal appears to allow both sides to save face and also for Rusal to quit Tajikistan.

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(News report from Issue No. 317, published on Feb.17 2017)

KAZ Minerals starts sulphide production

FEB. 14 2017 (The Conway Bulletin) — London-listed KAZ Minerals, formerly known as Kazakhmys, has started sulphide production at its Atokay mine in Kazakhstan, the mining-journal.com website reported. It said that production was in-line with expectations and that output would be ramped up throughout the year. KAZ Minerals is best known for its copper production.

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(News report from Issue No. 317, published on Feb.17 2017)f