We contribute to the development of certain sectors of the mining and metallurgical industry of the Republic of Kazakhstan by implementing projects jointly with strategic investors

Company Activities

JSC «Таu-Кеn Samruk» National Mining Company carries out its activities in the field of mining and metallurgical complex (MMC) that aimed at implementing the set objectives of President and Government of the Republic of Kazakhstan to develop the industry.

All the activities of the Company cover the entire technological process of MMC: exploration, extraction, beneficiation and metallurgical processing.

The main objective of exploration is to intensify geological exploration (GE) for prior solid minerals and achieving GE funding of 200 million US Dollars per annum.

Priorities in the field of mining and processing are engaging and effective implementation of innovative technologies, providing comprehensive processing of raw materials and the company's competitiveness.

M&A projects aimed at expanding the resource potential of the Company through acquisition of strategic facilities for mining and mineral processing.

As a result of the implementation of the objectives, in 2022 JSC «Tau-Ken Samruk» will be a major national company of mining and metallurgical sector of Kazakhstan, introducing advanced technology and best world experience of the industry.

Geological Exploration

Company's development strategy, based on a thorough analysis of economic, market and social aspects of major solid minerals (SM) of Kazakhstan the following prior SM are identified: copper, zinc, lead, gold, iron, wolfram, chromium and tin. Thus, the performed projects are divided into the following divisions: copper, gold, lead-zinc, iron and rare metal.

Project Portfolio on signed contracts (% of investment amount to 2022)

Copper Division 59%

Gold Division 11%

Iron Division 16%

Lead-Zink Division 14%

For the development of the resource potential of the Company's prior MS, JSC «Tau-Ken Samruk» permanently conducts analyses of free subsoil area to select prospective facilities for exploration, in close cooperation with the Ministry of Investment and Development (MID), National Company JSC «Kazgeology» and other subsoil users.

According to the analysis the direct negotiations are held with the competent authority for mineral rights. Contracts for the following projects have been signed in 2013:

1. Exploration of copper, lead, barite at Tuyuk Temirlik ore district in Almaty region.

2. Exploration of copper, gold and associated components of the Spassky copper mineralization zone in Karaganda region.

3. Extraction of polymetallic ore in Alaigyr deposit in Karaganda region.

4. Exploration of gold at Gagarinskoe deposit in Zhambyl region.

The procedure on registration of contracts for deposits Karatas-Maybulakskaya area and Progress are completed.

The Company has the right for subsoil use of 8 objects

Currently the exploration works on the following projects are carried out:

Copper Division

Project «Exploration of copper, gold and associated components of the Spassky copper mineralization zone in Karaganda region»

Project «Exploration of copper, lead, barite at Tuyuk Temirlik ore district in Almaty region»

Gold Division

Project «Exploration of gold, copper at Eshkeolmes deposit in Akmola region»

Project «Exploration of gold at Predgorny Ketmen site in Almaty region»

Project «Exploration of gold at Shokpar and Gagarinskoe deposits in Zhambyl region»

Iron Devision

Project «Exploration of titanium magnetite ores at the West Sayak deposit in Karaganda region»

Also in 2013 the direct negotiations with competent bodies have been conducted on the following objects:

1. Exploration of tin, wolfram, lithium at Karagaily Aktas deposit in Almaty region;

2. Exploration of gold at Karatas-Maybulaksky area in Zhambyl region;

3. Exploration of gold at South Moiyntinsky area in Karaganda region;

4. Exploration of rare earths at Priozernyi area in Aktobe region.

The issues of getting mineral rights for Progress, Tuyuk and Upper Kairakty deposits are being negotiated.

Extraction Projects

Currently the extraction project portfolio is presented for projects of Alaigyr, Shalkiya and Massalsky deposits.

JSC «JV Alaigyr»

Organizational works on extraction of polymetallic ore at Alaigyr deposit is carried out by subsidiary of the Company LLP «JV Аlaygyr» with 100% shares. The construction of mining and processing plant for production of lead concentrate is planned in the framework of the Project. Development operations (overburden operations) of 250.0 thousand sq.m with the site preparation for infrastructure have been conducted year-to-date.

Project business plan and budget for implementation are prepared.

JSC «ShalkiyaZink Ltd»

Since June 2014 the ownership of shares of JSC «ShalkiyaZinc Ltd» have been transferred to JSC «Samruk-Kazyna». In July 2014 the shares of JSC «ShalkiyaZinc Ltd» have been transferred to the authorized capital of JSC «Tau-Ken Samruk».

Organizational works on extraction and processing of lead and zink ore and lead and zink concentrates production at the deposit is carried out by JSC « ShalkiyaZinc Ltd». Reconstruction of the existing mine infrastructure (maintenance of administration building, on-site roads, asphalting from administration building to checkpoint, maintenance of mining buildings and facilities «Output», the compressor building, the central warehouse and mine rescue brigade). Inspection of mining equipment and partial purchasing vehicles are conducted, the issue of signing contract, delivery of representative samples for technological research of ore preparation characteristics and development of technology regulations are under consideration with SSE «Kazmekhanobr» and Eastern Mining Research Institute of Nonferrous Metal (VNIITSVETMET).

JSC «Massalsky Mining and Prosessing Plant»

In July 2014 JSC «Tau-Ken Samruk» has acquired 93% share of LLP «Masalsky Mining and Processing Plant». The project involves the construction of the processing plant.

Extraction and processing of Masalsky ore deposit assume an annual capacity of 10 million tons of ore. Currently, within the framework of the Project «Production of iron ore at Masalsky deposit in Akmola region», an action plan of the project has been developed, and in accordance with this, a contract has been signed between LLP «Mining Bureau» to carry out technological research and development of technological regulations for beneficiation and metallurgical processing. Technical specifications have been developed for elaborating the technological regulations for ores processing and concentrate at Masalsky deposit.

JSC «Tau-Ken Samruk» is expanding the projects portfolio, namely considering the issue of acquisition of strategically important deposits for developing iron ore, rare metal and lead-zinc and other divisions.

The results of the given works will provide the income-base for further reinvestment in exploration and growth projects.

Opening New Areas

In the midterm, the Company expects to open new areas in the chain of processing the minerals and begin creating new metallurgic plants for production of refined metals and rolled products.

In this regard, the preparation works of the corresponding concepts on creation and development of processing industries and final processing have been started.

The search works are being held for designing and consulting organization for the development of the Concept of construction of electro-metallurgic steel production.

Besides, the issue of developing the technological chain of refining industry is being considered.

«Refinery»

With the purpose of developing the production of precious metals in Kazakhstan and on behalf of the President of Kazakhstan, in 2012 the Company has started the construction of refinery in Astana. The project operator is a subsidiary company LLP «Tau-Ken Altyn».

Construction of refinery with capacity of 25 tons of refined gold and 50 tons of refined silver per annum has been resulted at the end of the fourth quarter of 2013. Commissioning of the object has been held and State Acceptance Commission Act has been signed on November 25, 2013. In December 2013 President of the Republic of Kazakhstan Nursultan Nazarbayev has visited the plant and attended the start-up and commissioning work of producing the first product.

In April 2014, the refinery shipped an initial output of refined gold production to the National Bank of the Republic of Kazakhstan. In 2015, the amount was over 10 tons. According to the plan, in 2016, production of gold weighted bullion bar will amount to 12 tons, in 2017 – 15 tons, in 2018 – 20 tons, the company is anticipating to be awarded a Good Delivery status from London Bullion Market Association (LBMA) and enter a global market the same year. Achieving design capacity of 25 tons is scheduled for 2019.

The plant is equipped with the modern and efficient equipment of Italian company «IECO Keeps On Improving», a leading manufacturer of the world producing the given equipment. The plant specialists have been trained at the company's plants in Italy.

Plant for Metallurgical Silicon Production

In the fulfilment of the order of the Council for mining industry, geology and subsoil use of solid minerals under the President of the Republic of Kazakhstan, in 2013 the Company has launched restoration works at the plant for production of metallurgical silicon in Karaganda. The project operator is a subsidiary company LLP «Tau-Ken Temir».

Employees of LLP «Tau-Ken Temir» conducted the technical auditing of production capacity of the plant together with the specialists of «OTTO WOLFF» and «SMS Siemag».

The plant’s shop floor consists of two ore-thermal furnaces and auxiliary facilities for preparing raw materials, which include furnace shell, gas purification, gasholder, water treatment building and other buildings. Arc ore-thermal furnace with a capacity of 12.5 thousand tons of metallic silicon per year. The total capacity is 25 thousand tons per year.

Current year in October the restoration works have been completed, the first melting at the ore-thermal furnace №1 has been carried out and metallic silicon has been produced.

Innovative-technological development of the Company

One of the main priorities of the Company is to develop innovative and technological potential and the introduction of efficient technologies. Scientific and Technical Council of the Company has been established in order to select and implement the technological solutions.

Currently the search and analysis of innovative technologies, patents, recent developments in integrated extraction of useful components of mineral raw materials and high metallurgy industry. Based on them the proposals for transfer and implementation of new technologies and laboratory, enlarged and pilot studies on processing iron, polymetallic, copper and gold ores are prepared.

In the midterm, the construction of pilot database of mining and metallurgical production is being considered to cover the entire process chain from raw materials to finished products.

Financial and Economic Indicators 2016

Description

Unit

2012

Fact

2013

Fact

2014

Fact

2015

Fact

2016

Fact

ROACE*

%

(2.7)

1.2

0.06

(3.42)

1.9

EBITDA margin*

%

-

-

(3.78)

(0.2)

(0.7)

Net profit (loss)

KZT mln

(608)

1,670

147

(14,017)

9,353

* - indicators are calculated in accordance with the method approved by the Sole Shareholder

In 2016, the Company is planning to derive consolidated net profit in the amount of KZT 9,353 million with due regard to equity accounting of Kazzinc LLC net profit.

Operational indicators:

The following works are scheduled for 2016 within Alaigyr project:

1. Completion of the concentrator design.

2. Purchasing of mining and transportation machinery as well as service equipment.

3. Order placement of machinery manufacturing for the concentrator.

4. Construction of Power Transmission Line and Main Step Down Substation.

5. Mining preparing works.

6. Re-evaluation of natural resources at the deposit for the further transit to JORC standard.

7. Construction of buildings, facilities, infrastructure assets.