KAZ MINERALS GROUP PRODUCTION REPORT FOR 12 MONTHS AND THE fourth QUARTER ENDED 31 december 2017

• Full year copper production¹ increased by 80% to 259 kt (FY 2016: 144 kt)
  • Copper at top of February 2017 FY guidance (225-260 kt) and in line with updated range (250-270 kt)
  • Full year gold production² of 179 koz at upper end of guidance range (160-180 koz)
  • Q4 copper production¹ of 65 kt (Q3 2017: 75 kt) reflecting expected grade reduction at Aktogay and Bozshakol concentrator maintenance

• Bozshakol copper production² of 23 kt in Q4 (Q3 2017: 27 kt)
  • Full year copper production² of 101 kt (FY 2016: 48 kt), in line with guidance of 100-110 kt
  • Gold production² maintained at 28 koz in Q4 (Q3 2017: 28 koz), FY 2017 output of 119 koz at top of range (110-120 koz)
  • Sulphide plant throughput limited in Q4 due to 13 day stoppage for maintenance in November
  • Changes to mining sequence resulted in a reduced sulphide ore mined copper grade of 0.49% in Q4 2017 and a processed grade of 0.44% is now expected for 2018. Copper production² at Bozshakol is expected to be in the region of 100 kt in 2018

• Aktogay copper production¹ of 26 kt in Q4 (Q3 2017: 31 kt)
  
  • Full year copper production¹ of 90 kt (FY 2016: 18 kt), in line with guidance of 85-95 kt
  • Main sulphide concentrator achieved 68% of design throughput in Q4
  • Oxide production of 7 kt in Q4 and 25 kt for the full year, at the top end of guidance of up to 25 kt

• 17 kt of copper production² in Q4 from East Region and Bozymchak results in FY production of 67 kt
  
  • Ahead of FY 2017 copper production² guidance of c.65 kt
  • Q4 zinc in concentrate output of 12 kt, full year production of 58 kt below guidance of 60-65 kt due to delayed access to high grade ore at Artemyevsky

1. Payable metal in concentrate and copper cathode from Aktogay oxide ore.
2. Payable metal in concentrate.

Andrew Southam, Chief Executive Officer, said: “I am pleased that in 2017 we achieved copper production targets across all of our assets including at Aktogay, where we launched sulphide production in February 2017 and declared the concentrator commercial in October. The performance of our two recently commissioned mines at Bozshakol and Aktogay has delivered an 80% increase in annual copper output into a tightening market and gold production at the top of our guidance range.”

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• $1.2 billion expansion project approved to double sulphide ore processing capacity at Aktogay from 2021
• Annual copper production from sulphide ore to increase to 170 kt from 2022 to 2027 and 130 kt thereafter
• Net cash cost guidance to 2027 maintained at 100-120 USc/lb
• Capital investment supported by strong cash flows from Bozshakol and Aktogay

KAZ Minerals PLC (“KAZ Minerals” or “the Group”) announces a planned expansion of its processing facilities at the Aktogay copper mine in the East Region of Kazakhstan. Following the achievement of commercial production at the Aktogay sulphide concentrator in October 2017, the Board has approved the construction of a second concentrator which will double the current sulphide ore processing capacity from 25 million to 50 million tonnes per annum.

The expansion represents a low risk growth project, being a duplicate of the sulphide processing facilities successfully commissioned at Bozshakol and Aktogay. Construction will be managed by the KAZ Minerals projects division which delivered the original project, with contracts to be tendered in 2018. The capital budget for the expansion project is expected to be in the region of $1.2 billion with approximately $200 million to be invested in 2018. The remaining expenditure will be incurred from 2019 to 2021. The mining fleet will be upgraded to support the higher ore throughput.

Output from the new concentrator is expected to commence in the second half of 2021 with the facility ramping up during 2022. Copper production from sulphide ore at Aktogay will increase by 80 kt to an average of around 170 kt per annum from 2022 to 2027, supported by higher copper grades. Over the remaining life of the mine, when copper grades will be in line with the average resource grade of 0.34%, the Aktogay expansion will add 60 kt per annum, increasing annual production to around 130 kt. Due to higher processing volumes the life of the sulphide ore body will reduce from over 50 years to approximately 28 years. Copper cathode production from oxide ore at Aktogay will be unchanged at the current level of around 20 kt per annum for the remaining eight year life of the oxide deposit.

Net cash cost guidance to 2027 following the expansion is unchanged at 100-120 USc/lb in 2017 US dollar terms with efficiency gains from larger scale mining operations offsetting the effect of accelerated grade decline as processing volumes are brought forward. Sustaining capital expenditure will increase from $30-$40 million to $50-$60 million per annum from 2022 onwards. The expansion is expected to generate a return in excess of the Group’s cost of capital in the analyst consensus copper price scenario.

Oleg Novachuk, Chief Executive, said: “I am pleased to announce the planned expansion of our second major growth project, Aktogay, which will double its processing capacity from 2021. This expansion represents an opportunity for our proven project team to deliver a strong return on investment from an asset we know well by replicating the existing sulphide plant. Our outlook for copper remains positive and this development will help us to continue to grow in a tightening market. The capital expenditure over the period to 2021 for the expansion will be supported by strong cash flows from our new, low cost operations at Bozshakol and Aktogay.”

A call for analysts will be held at 10:00am UK time. To participate in the call in listen-only mode please use the following dial-in details:

Conference call dial in: +44 (0) 20 3003 2666
Password: KAZ Minerals
Webcast: http://view-w.tv/834-1089-19140/en
Presentation download: https://www.kazminerals.com/investors/presentation-library/

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KAZ Minerals PLC (“KAZ Minerals” or “the Group”) announces that it has received notification today from the Government of Kyrgyzstan that the suspension of operations at Bozymchak announced on 2 November 2017 has been cancelled. Bozymchak has resumed full production.

Bozymchak produced 7 kt of copper cathode and 38 koz of gold bar in the year to 31 December 2016.

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KAZ Minerals PLC (“KAZ Minerals” or “the Group”) announces that the Government of Kyrgyzstan has today suspended operations at Bozymchak, the Group’s copper and gold mine in Kyrgyzstan, for a period of three months. The Group believes that Bozymchak is in compliance with its obligations and is in discussions with the relevant authorities to recommence operations as soon as possible.

Bozymchak produced 7 kt of copper cathode and 38 koz of gold bar in the year to 31 December 2016. The Group’s 2017 copper production guidance remains 250-270 kt.

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