RE: Great Results26 Feb 2021 11:50
Rastuss, you are back, all doom and gloom. Always good to have some pour cold water over my optimism for this share. I do disagree with you though. They can issue all sorts of negative forecasts, yes, but the facts will speak for themselves, just like yesterday's results. It is quite well known in the market that KAZ consistently understate its guidance and always have been. Did you not notice how they always manage to beat their guidance or at worst come near the top of the guided range? We all praise the management for "job well done", but this would be impossible to do so consistently if you were not understating guidance to begin with. On occasion they were even forced to increase the guidance part through the year. I am sure they would do 300kt this year, no doubt whatsoever, even from existing operations. And if you looked at the company's presentation yesterday and read more detailed description of the progress on Aktogay II, you would notice that all the main production units are complete now, just a few bits and bobs left to install. The concentrator has been electrified. It sounds like they will be starting dry commissioning any day now, probably March-April. I bet you they already started mining ore for Aktogay II, at least a few months ago. I will not at all be surprised if they commission Aktogay II by mid-year or end of summer at the latest. I'm willing to bet they will produce 5-10kt from Aktogay 2 this year, and that's not in their guidance. There is very little doubt in my mind that KAZ will produce less than 300kt of copper this year, and quite likely 310kt.
And you are wrong about selective mining, Rastuss. It is possible to do it, to some degree, but very difficult, particularly in the early years of the open pit, when grades are quite often higher due to supergene enrichment, which is evident at both Aktogay and Bozshakol. If you follow production announcements (and compare them with guidance) since operations began at the two mines, you will see a common theme, something along the lines of "production has been higher due to grades being higher than expected". Surely they knew the grades will be higher as they are obviously mining a supergene layer. We don't know how thick these zones are, but eventually they would move into lower grade main ore body, but it could be a few years before they can. These are huge open pits, they can't just strip one side to open up a lower grade layer. Plus these are massive disseminated sulphides, where grade is evenly distributed, so selective mining opportunities are rare. There are so many other reasons why they cannot or would not shoot themselves in the foot by doing something stupid like curtailing their production on purpose. The point it is, they can lie and cheat, but the facts will tell the truth.
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