Copper counts KAZ – update 06

About Kaz

KAZ Minerals is a high growth copper company focused on large scale, low cost open pit mining in Kazakhstan. The Group is listed in London, Kazakhstan and Hong Kong.

Early 2019 – acquire the Baimskaya copper project

Following the RNS on 22 Jan 2019 here are the main bullet points:

  • Initial Completion is $436 million in cash
  • 22,344,944 new KAZ Minerals PLC shares
  • KAZ Minerals PLC shares in issue is 480,723,977
  • progress a bankable feasibility study of the Project
  • construction of the 110 kV power line from Bilibino is on schedule to be completed by the end of 2019

Back of envelope calculations:

shares in issue480,723,977
shares issued22,344,944
shares before issue458,379,033
factor increase1.04874774
% increase4.9

Update on metrics

Market Cap = £2.3 billion ~ $3 bill

Current PE = 4.25 (based on TTM)

[Liabilities, Assets] = [4.6 bill, 5.6 bill]

Equity (book value) = 1 bill

Liab / Asset Ratio = 82% (high)

Conclusion

Readers need to refer to the previous articles to gain an understanding.

This is a high risk, but high gain project which is expected to produce
865 mill USD per year in added revenue (at today’s price). This would be a significant revenue increase (40%) based on last full year data.

Combined with the low PE, if executed well and copper maintains its value on the open market, the base case would be for the share price to increase by 100 to 200%.


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