Shares in copper and gold miner KAZ Minerals (KAZ) have surged after it reported record quarterly production numbers and lifted its guidance on gold, taking advantage of higher prices in both metals.
The FTSE 250 firm produced 82,900 tonnes of copper in the third quarter of this year, up from 77,600 tonnes the previous quarter.
It also produced 58,500 ounces of gold, with production of both metals driven by strong performance at its Aktogay and Bozshakol mines in Kazakhstan.
GOLD SET TO EXCEED GUIDANCE
Despite a weaker performance in its smaller East Region and Bozymchak mines, thanks to this quarter’s numbers KAZ now expects gold production to exceed the top end of its current guidance of 170-185,000 ounces by 5%. Copper production is 'on track' to meet the full year target of around 300,000 tonnes.
The strong numbers from KAZ are also ahead of analysts' expectations, leading its share price to jump almost 8% to 487p.
READ MORE ABOUT KAZ MINERALS HERE
Now is a good time for miners to be producing more gold and copper, with the price of gold surging this year amid global economic uncertainty and the price of copper ticking upwards as demand rises.
That demand has also led copper futures contracts to rise, as buyers try to lock in a price for copper now in the expectation of higher price in the future.
COPPER TARGET 'COULD BE BEATEN'
Given the third quarter outcome, Shore Capital analyst Yuen Low believes KAZ could beat its ‘cautious’ full year copper production target.
‘Kaz cautiously said it was “on track” to meet full-year 2019 production guidance of c.300,000 tonnes (2018 actual production: 295,000 tonnes). Going by Q4 2018, it seems to us that there is a good chance that this target could be beaten.’
Created after the restructuring of UK-registered copper miner Kazakhmys in October 2014, KAZ Minerals has generally been in favour with investors, particularly as it is focused on driving growth through large scale, low-cost open pit mining.
However, the company's shares took a big hit last summer when it unveiled a $900m deal to buy a copper project in a remote part of eastern Russia, with investors worried about possible operational issues the firm may well encounter.
Its share price dropped from £10 to around 440p after it announced the deal.
