Tag Archives: metals and mining

Stock market: Centerra Gold

JUNE 3 2016 (The Conway Bulletin) — Centerra Gold shares in Toronto usually closely follow the ups and downs of spot gold prices, but a recent escalation of the spat with the Kyrgyz government has altered this trend.

Investors welcomed the strong verbal reaction by the company to a raid in a Centerra-owned office in Bishkek at the end of April and gave the stock a boost in the first weeks of May.

Since then, though, a number of environmental fines have dented confidence. It’s been a rocky ride with the share price bouncing around depending on the various statements issued by each side. At the start of the week, as this graph shows, Centerra’s share price rose on news that it would start arbitration proceedings against the Kyrgyz government.

Decreasing gold prices, as the graph shows, now add to the mix and with a legal battle with Kyrgyzstan on the horizon, analysts have become increasingly pessimistic on Centerra’s target price.

ENDS

(News report from Issue No. 283, published on June 3 2016)

Kazakhstan to take majority control of major uranium mine

ALMATY, MAY 31 2016 (The Conway Bulletin) — Canada’s Cameco, the world’s largest publicly traded uranium company, said it will cut its stake in its joint venture with Kazakhstan’s state-owned Kazatomprom, giving the Kazakh government majority control over one of its biggest uranium deposits.

Under the new agreement Cameco and Kazatomprom will extend their partnership in the Inkai joint venture until 2045, although the share split will switch from 60:40 in Cameco’s favour to 60:40 in Kazatomprom’s favour.

Inkai is one of the most important uranium deposits in Kazakhstan.

Cameco’s CEO Tim Gitzel said in a statement: “The agreement advances our strategy to mitigate the risk of today’s uncertain uranium market and positions us to maximize returns when the market recovers.”

Under the plan, also welcomed by Kazatomprom chairman Askar Zhumagaliyev, Inkai will double uranium production to 4,000 tonnes and could potentially build a new uranium refinery.

In its annual report, Cameco said it was surprised by continued low uranium prices.

The deal also comes a few months after Kazakh President Nursultan Nazarbayev hinted he wanted more state control over the uranium sector.

“It is necessary to either ensure that [Kazatomprom’s partners] meet their obligations or look into reclaiming those assets in the interests of our state,” Mr Nazarbayev said.

This is in line with policy in other sectors, such as oil and gas where Mr Nazarbayev also wants to extend control.

Kazakhstan, which is the world’s largest uranium producer, is faced with a dilemma. It needs the expertise of large uranium companies such as Cameco, France’s Areva and Japan’s Sumitomo to become a safe and reli- able hub for nuclear fuel, but it also wants to gain more control of an industry it had widely privatised in the first years after independence.

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(News report from Issue No. 283, published on June 3 2016)

Azerbaijani President to bail out mining company

MAY 27 2016 (The Conway Bulletin) — Azerbaijan’s President Ilham Aliyev said that the state was ready to buy the Aimroc mining company, which is alleged to be linked to his family. The company closed in 2014, as it ran into financial difficulties exploiting the Chovdar mine in western Azerbaijan. Aimroc’s name appeared in numerous investigations that linked its opaque offshore business to the presidential family. By presidential decree state-owned Azerigold will take over Aimroc.

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(News report from Issue No. 283, published on June 3 2016)

Azerbaijani miner posts record production

MAY 25 2016 (The Conway Bulletin) — Azerbaijan-based miner Anglo Asian posted a record production year in 2015, mining 72,000 ounces of gold, a 19% increase compared to 2014. The company’s revenues also grew by 15%, despite lower gold prices. Anglo Asian said it plans to produce even more gold in 2016 and plans to cut costs further thanks to the depreciation of the manat currency at the end of last year.

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(News report from Issue No. 282, published on May 27 2016)

Kyrgyz environmental court fines Centerra

BISHKEK, MAY 25 2016 (The Conway Bulletin) — A Kyrgyz court fined the Kumtor Gold Company, a subsidiary of Canada’s Centerra Gold, 6.7b som ($98m) for environmental damage, in a move that will strain relations between the government and the mining company.

The fine follows an earlier penalty of $10,000 the court levied at Kumtor on May 23. Centerra, has denied any wrongdoing.

“Centerra and Kumtor strongly dispute the claims and will appeal both decisions to the Bishkek City Court and, if necessary, to the Supreme Court. Centerra and Kumtor have expressly reserved their rights to refer such disputes to international arbitration,” John Pearson, VP of investor relations at Centerra, said. Although strictly unrelated to the ongoing spat between Centerra

and the Kyrgyz government, the latest series of fines are a sign that relations are worsening. The Kyrgyz government wants to own a direct share in Kumtor Gold.

Last month, Kyrgyz police raided a Centerra-owned office in Bishkek looking for evidence linked to allegations Centerra had received an illegal dividend in 2013 from Kumtor Gold.

Centerra has denied the allegations.

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(News report from Issue No. 282, published on May 27 2016)

People protest in Georgian mine

MAY 13 2016 (The Conway Bulletin) – Residents of Ieli, a small village in the Svaneti region in the north of Georgia, demonstrated against a gold mining company that had started excavation work in the area. Dozens of protesters said that they didn’t believe that Optical System, a St Kitts and Nevis-based company, had a valid licence. The local government later showed that the company had been given an exploration licence in 2005.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Gelncore to sell futures in Kazakhstan

MAY 17 2016 (The Conway Bulletin) — Switzerland-based trader Glencore is considering selling gold futures, not its whole gold mining operation at Vasilkovskoye, a source close to the deal told the business website atameken.info. Glencore owns 70% of Kazzinc, the company that operates Vasilkovskoye which is located 300 km north-west of Astana. Reports had previously stated that Glencore was looking to sell its stake in the mine.

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(News report from Issue No. 281, published on May 20 2016)

Polymetal production grows from deposits in Kazakhstan and Armenia

MAY 18 2016 (The Conway Bulletin) — Russian miner Polymetal increased its production guidance for the next three years to reflect the gold deposits it has bought in Armenia and Kazakhstan this year. By the year 2020, the Kapan and Komarovskoye mines will add 12.5% to Polymetal’s total production. Polymetal bought Kapan, located in southern Armenia, in March and Komarovskoye, in north-east Kazakhstan, in April.

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(News report from Issue No. 281, published on May 20 2016)

Stock market: Central Asia Metals, KAZ Minerals

MAY 13 2016 (The Conway Bulletin) – Copper prices dipped below the psychological threshold of $2/lb in mid January, for the first time since 2009, and it has bit of a roller-coaster ride since.

Shares of Central Asia Metals and KAZ Minerals, two Kazakhstan– focused producers, have followed copper’s ups and downs.

As shown in the graph above, shares in KAZ Minerals, which mines copper in northern and eastern Kazakhstan, have fluctuated more dramatically with copper prices.

Shares in Central Asia Metals, have been more stable.

With copper prices now sliding back towards $2/lb, share prices for both Central Asia Metals and KAZ Minerals are falling. This week, they were down 5.3% and 9% respectively.

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(News report from Issue No. 280, published on May 13 2016)

Orsu reveals Q1 results in Kazakhstan

MAY 12 2016 (The Conway Bulletin) – Toronto-listed miner Orsu Metals lost $437,000 in the first quarter of 2016, cutting its losses by around 50% from the same period last year. Most of the company’s losses are now booked for “assets held for sale”. Last month, Orsu agreed to sell its Karchiga and Kogodai mines in Kazakhstan to UAE-registered Karasat Trading for around $10m. After announcing the sale, Orsu de-listed from London’s AIM.

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(News report from Issue No. 280, published on May 13 2016)