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EFG Continent - Daily Update, Jul 13, 2012.


Chaarat Gold issues operating update (page 2)

Anglo Asian Mining: 2Q12 operating results (page 2)

Hambledon Minig: 2Q2012 results (page 3)

Kazakhtelecom posts 1H12 results (page 3)

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Chaarat Gold issues operating update

EVENT: Chaarat Gold Holdings (CGH) announced that Kyrgyz President was set to ratify new legislation governing mining companies which had been approved by Kyrgyz Parliament. The company believes that the new legislation represents a clearer and more investor friendly mining legislative code that does not necessitate the direct negotiations with the Government to develop an Investment Agreement. In particular, any discovery will result in the holder of the exploration licence for that discovery having an automatic right to obtain a mining permit. Besides, the process of allocating state owned land to mining ventures has been simplified. Previously any allocation of land to a foreign owned company required a government resolution. The status of foreign owned mining companies will now be made equivalent to that of local companies. The income tax regime will be changed to a strict revenue based regime in which a sliding scale of royalties increases with the gold price.

COMMENT: We view the news as positive for Chaarat Gold from economic and political risk respective with potentially favorable impact on valuation as well. CGH has decided to lift the suspension of further capital investment activities as previously announced on 16 April 2012, with gold production expected to commence over 2H2013.

Anglo Asian Mining: 2Q12 operating results

EVENT: Anglo Asian Mining (AAZ) provided an update on operations and production for the three months to 30 June 2012 at its flagship Gedabek gold/copper/silver mine in Azerbaijan.

During Q2 2012, the company produced 11,716 oz of gold and 4,504 oz of silver at Gedabek from its heap leach operations, bringing the total production for H1 2012 to 21,641 oz of gold. Due to an unseasonably harsh winter H1 2012 production figures fell marginally below management's internal estimates, however Q3 and Q4 2012 are expected to be stronger in terms of production levels due to revised processing targets. In light of this the Board still maintains its gold production target of 54,000 ounces ('oz') for FY 2012. In terms of gold sales completed for the three months to 30 June 2012, Anglo Asian sold 9,883 oz at an average of US$1,609 per oz and for H1 2012 sold 18,135 oz of gold at an average of US$1,644 per oz.

COMMENT: Results are encouraging and positive for Anglo Asian Mining. Gedabek's heap leach stacking operation has performed strongly in Q2 2012 with the company transferring 238,058 tonnes of dry ore onto the leach pad with an average gold content of 3.24 g/t (Q1 2012: 176,438 tonnes of dry ore onto the leach pad with an average gold content of 2.83 g/t Au). As a result of this improvement AAZ has increased processing targets which will ensure that the annual budget tonnes of gold and silver dore targeted are achieved.

Hambledon Minig: 2Q2012 results

EVENT: Hambledon Mining (HMB) released the results for the quarter ended 30 June 2012. The following are the main production numbers:

COMMENT: Neutral on HMB. The process plant recovery continues to be below budgeted levels. The cause of this relates to an increased level of ore hardness and increased abrasiveness. Remedial works to modify the plant are on-going and are expected to be complete in early Q4, 2012; so that higher recovery levels can be attained and the stockpiled higher grade underground ores can be processed more efficiently. The remedial works associated with Tailings Dam 3 are well advanced and are expected to be completed in Q3, 2012. The construction of the Tailings Dam 4 embankment is 85% complete.

Kazakhtelecom posts 1H12 results

EVENT: Kazakhtelecom JSC (KZTK) announced its financial and operational results for 1H12. KTK reported revenue of KZT 85.97 billion and net income of KAZ215.4 billion. The number of fixed lines in KZTK's the network in 1H12 totaled 4 million units, with 3million units in urban telecommunications network and 1million units in rural.

Local telecommunication network, as of July 1, 2012 included 5.4K (+1.1% units) switching points, with 2.5K in urban area and 2.8K in rural. The number of the Internet subscribers totaled to 2.9million, including broadband Internet customers - 2.8 million people.

COMMENT: The announced 1H12 results are, in our opinion, neutral for KZTK, as revenues and net income growth rates came in line with our and general market expectations.


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Publication:Russian Banks and Brokers Reports
Date:Jul 13, 2012
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