KAZ Minerals : Q4 Production Report Presentation

INVESTOR PRESENTATION

January 2020

1

IMPORTANT NOTICE

DISCLAIMER

Certain statements included in this presentation contain forward-looking statements. All statements other than historical facts are forward-looking statements. Examples of forward-looking statements include those regarding the business, strategy and plans of KAZ Minerals PLC ('KAZ Minerals') and its current goals, assumptions and expectations relating to its future financial condition, performance and results, commodity demand and trends in commodity prices, growth opportunities, circumstances in the countries, sectors or markets in which it operates and any assumptions underlying or relating to any of the foregoing. Although KAZ Minerals believes that the expectations reflected in such forward-looking statements are reasonable and are made in good faith, no assurance can be given that such expectations will prove to be correct. By their nature, forward-looking statements involve known and unknown risks, assumptions and uncertainties and other factors which are unpredictable as they relate to events and depend on circumstances that will occur in the future which may cause actual results, performance or achievements of KAZ Minerals to be materially different from those expressed or implied in these forward-looking statements.

Principal risk factors that could cause KAZ Minerals' actual results, performance or achievements to differ materially from those in the forward-looking statements include (without limitation) health and safety, community and labour relations, employees, environmental compliance, business interruption, new project construction and commissioning, reserves and resources, political risk, legal and regulatory compliance, commodity prices, foreign exchange and inflation, exposure to China, acquisitions and divestments, liquidity and such other risk factors disclosed in KAZ Minerals' most recent Annual Report and Accounts. Forward-looking statements should therefore be construed in light of such risk factors. These forward-looking statements should not be construed as a profit forecast.

No part of this presentation constitutes, or shall be taken to constitute, an invitation or inducement to invest in KAZ Minerals, or any other entity, and shareholders are cautioned not to place undue reliance on the forward-looking statements. Except as required by the Listing Rules of the UK Listing Authority and applicable law, rule or regulation, KAZ Minerals undertakes no obligation to publicly update or change any forward-looking statements whether as a result of new information, future events or otherwise, to reflect events or new information occurring after the date of this presentation.

Neither this presentation, which includes the question and answer session, nor any part thereof may be recorded, transcribed, distributed, published or reproduced in any form, except as permitted by KAZ Minerals. By attending this presentation, whether in person or by webcast or call, you confirm your agreement to the foregoing and that, upon request, you will promptly return any records or transcript of the presentation without retaining any copies.

All financial definitions can be found in the glossary to the half-yearly results 2019 press release.

1

1. Introduction to

KAZ Minerals

NEAR AND LONG TERM GROWTH IN COPPER

Proven track	Near term	Strong
record	growth	platform
>50% CAGR	Aktogay	Supports
copper production	expansion	Baimskaya	Long
2015-18	project	construction
term
			growth

• Achieved annual copper production guidance for 10 years

►Low cost producer		►Adds 80 ktpa from 2022-27	►Increased earnings and	►Strong NPV and
		cash flow	attractive IRR
►Bozshakol and Aktogay		►Low risk brownfield
		►Favourable long
	expansion	►Enables financing of longer
delivered on time and on
	term copper
		term growth
budget, ramped up		►Low capital intensity of
	fundamentals
successfully		$15,000/t
2015	2018	2021	2024	2027

3

INDUSTRY LEADING COST POSITION

Net cash cost

USc/lb1

Diversified peer Copper peer

										174	185
									168
								158
					127	133	135
			117	119
	80	85
70
Peer	KAZ	Peer	Peer	Peer	Peer	Peer	Peer	Peer	Peer	Peer	Peer
1		2	3	4	5	6	7	8	9	10	11

1. Source: Company data, most recently reported financial period.

4

ALL ASSETS IN FIRST QUARTILE

Net cash cost curve1		USc/lb	H1 2019	H1 2018
		Bozshakol	42	55
H1 2019		Aktogay	96	107
	East Region	103	77
80
	& Bozymchak
USc/lb
		Group	80	82
	108 USc/lb
	$2,381/t
1stquartile2	2ndquartile	3rdquartile		4thquartile

1. Conceptual representation as at 30 June 2019, not to scale.

2. Wood Mackenzie first quartile cut off 108 USc/lb, 30 June 2019.	5

VALUE AND VOLUME

Aktogay II and Baimskaya will significantly increase the Group's copper production at a lower capital intensity than the previous major growth projects

Economies of scale at Aktogay II will maintain cash costs at 100-1201USc/lb out to 2027

Baimskaya is expected to be in the first quartile of the global cost curve

Both projects offer significant NPV uplift and attractive IRR

Lower capital intensity

($/t)2
17,700	17,200
		16,700
		15,000
Aktogay I	Bozshakol	Aktogay II	Baimskaya

Low operating costs

(USc/lb)3
120		120
	90
100		100
	70		First
		quartile
Aktogay I	Bozshakol	Aktogay II	Baimskaya

Notes:	6
1. 2017 US dollar terms.

1. Approximate capital expenditure per ktpa copper equivalent production calculated as capital expenditure divided by forecast annual copper equivalent production for the first ten years after commissioning.
2. Net cash cost guidance in USc/lb for the first ten years of operations. Baimskaya operating costs subject to feasibility study.

H1 2019 RESULTS HIGHLIGHTS

Continued growth in copper production1, +6%

Maintained low cost position, 80 USc/lb2

Volume growth partially offset 11% reduction in copper prices in H1 2019:

• Revenues $1,052 million (H1 2018: $1,098 million)
• EBITDA3$620 million (H1 2018: $690 million)

Group continues to develop its growth pipeline:

• Aktogay expansion project progressed, $223 million invested in H1 2019
• Completed acquisition of Baimskaya, one of the world's largest undeveloped copper deposits

Interim dividend of 4.0 US cents declared

6% copper production1growth

	kt			H1 2018			H1 2019
140	148					koz
							90	88
		Copper			Gold
Low unit costs maintained
USc/lb				H1 2018			H1 2019
145	144
							82	80
		Gross			Net
	cash cost			cash cost2

1.	Payable metal in concentrate and copper cathode from Aktogay oxide ore.	7
2.	Cash operating costs, plus TC/RC on concentrate sales, less by-product revenues, divided by copper sales volume.
3.	EBITDA excludes MET, royalties and special items.

2. Review of operations

AKTOGAY - RECORD COPPER PRODUCTION

Q4 2019:

• 6.4 Mt ore processed (Q3 2019: 6.1 Mt) as scheduled maintenance deferred from Q4 2019 to January 2020
• Copper production 34.3 kt (Q3 2019: 37.3 kt) - seasonally lower oxide output and reduced sulphide grades

FY 2019:

• 55.1 Mt ore extracted (2018: 41.9 Mt) due to stripping of low grade ore and preparation for Aktogay II
• 25.2 Mt sulphide ore processed (2018: 20.8 Mt), achieved annual design capacity

Copper sulphide kt1		Full year guidance
	105 - 115
				123
31	31	31	30
	Q1	Q2	Q3	Q4
Copper oxide kt1			c.25
				23
	6	6	7	4
			Q3	Q4
	Q1	Q2

Sulphide ore throughput and grade

• Record copper production of 145.7 kt (2018: 131.4 kt), exceeded guidance of130-140 kt

Average sulphide grades are expected to reduce towards the life of mine average of 0.33% over the first 10 years of operations

• Sulphide copper grade guidance for the period2019-2021 remains c.0.50%

30.0			Throughput (Mt)		Grade (%)
				25.2 Mt
25.0	20.8 Mt
20.0
15.0	0.61%	0.58%
10.0
5.0
0.0

20182019

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%

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

9

Aktogay open pit

June 2019

BOZSHAKOL - ACHIEVED OR EXCEEDED GUIDANCE ACROSS ALL METALS

Q4 2019:

• Ore processed reduced to 7,844 kt (Q3 2019: 8,378 kt) due to scheduled mill relining
• Copper production 31.0 kt (Q3 2019: 32.1 kt) and gold
  production 41.8 koz (Q3 2019: 43.4 koz), in line with lower throughput

FY 2019:

• 29.5 Mt ore processed (2018: 28.5 Mt)
• Copper production increased 8% to 110.2 kt (2018: 101.6 kt), at themid-point of guidance of 105-115 kt
• Gold production increased 13% to 144.8 koz (2018: 127.8 koz), above guidance due to high grades and recoveries

Copper kt1			Full year guidance
		105 - 115
				110
	24	23	32	31
			Q3	Q4
	Q1	Q2
Gold koz1			130 - 140
				145
30	30	43	42
	Q1	Q2	Q3	Q4
Silver koz1			c.700
				803
169	165	233	236
	Q1	Q2	Q3	Q4

1. Payable metal in concentrate.

11

Bozshakol open pit

July 2019

EAST REGION AND BOZYMCHAK

Q4 2019:

• Ore processed increased to 1,016 kt (Q3 2019: 982 kt) due to processing of stockpiles
• Belousovsky concentrator closed as planned on 25 October, ore now processed at Nikolayevsky
• Copper production increased 16% to 15.6 kt (Q3 2019: 13.5 kt), due to higher Nikolayevsky throughput and higher grades at Orlovsky

FY 2019:

• Copper production 55.5 kt in line with guidance
• Gold and silver production exceeded guidance

Artemyevsky grades and ore volumes will remain at around current levels until extraction commences from the second ore body, expected from 2022

Orlovsky production over its remaining life expected to be at or below current output, as mining takes place in deeper horizons and more challenging geological conditions

Copper kt1			Full year guidance
		c.55
				55
9	17	14	16
	Q1	Q2	Q3	Q4
Gold koz1			40 - 45
		54
13	14	14	13
	Q1	Q2	Q3	Q4
Silver koz1			c.1,800
		2,024
314	616	583	511
	Q1	Q2	Q3	Q4
Zinc kt2			40 - 45
		38
	6	12	11	9
				Q4
	Q1	Q2	Q3

1.	Payable metal in concentrate.	13
2.	Zinc in concentrate.

2019 PRODUCTION VS GUIDANCE

Copper1

kt

Gold3,5

koz

Silver3

koz

Zinc4

kt

Aktogay	Bozshakol	East Region &	Group
		Bozymchak
1462	110	55	311
130 - 140	105 - 115	c.55	c.300
3	145	54	201
-	130 - 140	40 - 45	170 - 185
555	803	2,024	3,382
c.500	c.700	c.1,800	c.3,000
		38	38
		40 - 45	40 - 45

Notes:	14
Actual 12 months production results shown against guidance ranges set in 2019.
1.	Payable metal in concentrate and copper cathode from Aktogay oxide ore.
2.	Range includes c.25 kt of cathode production from oxide ore.
3.	Payable metal in concentrate.
4.	Zinc in concentrate.
5.	Minimal volume of gold recovered from Aktogay material.

3. H1 2019 results

HEALTH AND SAFETY

Two fatalities in July 2019 at East Region underground mines

• Maintained zero fatalities track record at all open pit operations

Material reduction in injury rate indicates general improvement in workplace safety

"Goal Zero" initiative launched in H1 2019

• Group-wideprogramme to achieve zero fatal incidents and lost time injuries

Total Recordable Injuries

33

21

H1 2018

H1 2019

Total Recordable Injury Frequency Rate1

ICMM2average 2018: 3.41

2.00

0.99

H1 2018

H1 2019

1. Total Recordable Injury Frequency Rate or TRIFR is the number of Recordable Injuries occurring per million hours worked.

2. International Council on Mining and Metals.	16

IMPROVED ENVIRONMENTAL PERFORMANCE

Ramp up of new open pit assets has significantly reduced the Group's CO2emissions intensity

Consumption of fresh water is declining as the quantity reclaimed from tailings increases

• KAZ Minerals does not operate in water stressed areas

CO2

Emissions per unit of ore processed (kt)

0.200

0.094

0.051 0.049 0.050

2015

2016

2017

2018

H1 2019

CO2intensity is set to improve further:

-Aktogay II will generate economies of scale	Water

-Large scale Baimskaya project will draw power	Withdrawal per unit of copper produced (megalitres/kt)
	212
from carbon free sources	181	190
	146
					92
	2015	2016	2017	2018	H1 2019
					17

FINANCIAL UPDATE

$m (unless otherwise stated)	H1 2019	H1 2018	Production-driven 3% increase in copper sales
Revenues	1,052	1,098	volumes, partially offset 11% lower LME price
EBITDA1	620	690	H1 2019 EBITDA of $620 million, 59% margin
	Margin (%)	59	63	Industry leading first quartile net cash cost2of 80
Net cash cost (USc/lb)2	80	82	USc/lb (H1 2018: 82 USc/lb)
Free Cash Flow3	182	308	Interim dividend of 4.0 US cents per share declared
				Net debt $2,635 million at 30 September (30 June
Basic EPS - based on Underlying	0.48	0.62
2019: $2,560 million)
Profit ($)4
Net debt	(2,560)	(2,052)	$1.7 billion of new debt facilities raised:
				-$600 million DBK facility to finance Aktogay
				expansion, Jun 2019
				-$100 million CAT facility, Nov 2019
				-$1,000 million PXF, Jan 2020
1.	Excluding MET, royalties and special items.				18
2.	Cash operating costs, plus TC/RC on concentrate sales, less by-product revenues, divided by copper sales volume.

1. Net cash flow from operating activities before capital expenditure and VAT associated with the major growth projects, less sustaining capital expenditure.
2. Basic EPS based on Underlying Profit excluding special items.

19

EBITDA RECONCILIATION

Increased copper and gold sales volumes partially offset the reduction in commodity prices

($m)

	Volume1	Commodity prices
40		19
690
(25)	(3)	(15)	620
		(74)	(12)

Copper

EBITDA	Aktogay	Bozshakol East Region	By-product	Cost	Copper	By-products	EBITDA
H1 2018		and	volume	impact²	price	price	H1 2019
		Bozymchak

1. Change in sales volumes at current year margin.

2. Net change in cash costs per tonne.	19

OPERATING COST DETAIL

Aktogay		FY2019
		gross cash cost
61	72	guidance
105-125 USc/lb

Volume-driven decrease in gross cash costs to 101 USc/lb

Additional maintenance shutdowns planned, costs expected to move into guidance range in H2 2019

H1 H1

2018 2019

Bozshakol

109

101

(5)

96

H1	H1	H1
2018	2019	2019

FY2019

gross cash cost

guidance

130-150 USc/lb

Net cash cost of 42 USc/lb includes 21 USc/lb byproduct credit from 26 koz gold inventory sale

Gross cash cost of 157 USc/lb includes 13 USc/lb

50	45	127	157	(115)
				42
H1	H1	H1	H1	H1
2018	2019	2018	2019	2019

costs associated with inventory sale

H2 2019 gross cash cost expected to trend lower due to higher grades and increased contribution from clay plant

Copper sales volumes (kt)		Gross cash cost (USc/lb)		By-product credit (USc/lb)		Net cash cost (USc/lb)

20

OPERATING COST DETAIL (CONT'D)

East Region & Bozymchak
			FY2019
			gross cash cost
			updated guidance
			230-250 USc/lb1
		250	236	(133)
30	28			103
H1	H1	H1	H1	H1
2018	2019	2018	2019	20192

Cost reduction initiatives and weaker tenge delivered lower gross cash costs in H1 2019

Full year gross cash cost guidance reduced by 30 USc/lb to 230-250 USc/lb

Net cash cost increase in H1 2019

(H1 2018: 77 USc/lb) mainly due to lower zinc volumes, which are guided to increase in H2 2019

Group

Gross cash cost in line with prior year period

141 144

H1 H1

2018 2019

145	144	(64)
		80

H1	H1	H1
2018	2019	2019

Net cash cost amongst the lowest of copper producers globally

Copper sales volumes (kt)		Gross cash cost (USc/lb)		By-product credit (USc/lb)		Net cash cost (USc/lb)

1. Gross cash cost guidance reduced to 230-250 USc/lb from previous guidance of 260-280 USc/lb.

21

MOVEMENT IN GROUP NET DEBT

($m)

Sustaining capex	HY 2019	FY 2019
	Actual	Guidance
Aktogay	21	50
Bozshakol	25	50
East Region & Bozymchak	20	50
Total	66	150

	29
(28)	(2,560)

620

(435)

(1,986)

						(105)
			(126)
(131)
	Change in inventories	(87)
	Change in prepayments and other
	current assets	(22)
	Change in trade and other payables
	and provisions	(22)
	Total	(131)

(332) (66)

Expansionary capex HY 2019	FY 2019	FY 2019
	Actual	Guidance	Updated
Aktogay I & II	255	470	570
Bozshakol	37	40	40
East Region & Bozymchak	15	70	70
Baimskaya	23	70	150
Other	2	20	20
Total	332	670	850

Net debt¹

Working

MET and CIT

Net

Sustaining

Expansionary

Acquisition of

Dividends

Other

Net debt¹

31 Dec 2018

EBITDA

capital

paid

interest paid

capex

capex and

Baimskaya²

paid

movements³

30 June 2019

increase

new project

1.

The excess of borrowings over cash and cash equivalents and current investments.

22

2.

Net of $1 million cash acquired.

3.

Includes $45 million receipt in respect of NFC's equity investment in Koksay, VAT associated with major growth projects, foreign exchange and other movements.

23

2019 FINANCIAL GUIDANCE

Gross cash cost				Sustaining capex					Expansionary capex
(USc/lb)				($ million)					($ million)
Aktogay	105-125			Aktogay1	50				Aktogay I & II2	100	570
Bozshakol	130-150			Bozshakol1	50				Bozshakol3		40
East Region 30	230-250			East Region	50				East Region		70
& Bozymchak				& Bozymchak1					& Bozymchak4
				Group	150				Baimskaya5	80	150
									Other		20
									Group		850

1. Includes $10 million of sustaining capital expenditure deferred from 2018.

2.	Includes $500 million for Aktogay II and $70 million for Aktogay I, of which $50 million was carried over from 2018, mainly for final stage of heap leach cells..	23
3.	Bozshakol final retention payments to contractors of c.$40 million carried over from 2018 and settled in H1 2019.
4.	Principally Artemyevsky underground mine extension, includes $10 million carried over from 2018.
5.	Includes $70 million for feasibility study and $80 million for pioneer works in H2 2019.

CAPITAL ALLOCATED TO GROWTH

Group continues to invest in value-accretive growth in copper

$436 million cash consideration paid for Baimskaya in H1 2019

$332 million invested into growth projects in H1 2019, primarily Aktogay ($255 million)

Of the new $600 million DBK facility signed in June 2019, $260 million was drawn as at 30 September 2019 with $340 million to be drawn 2019-20

Cash and cash equivalents of $601 million as at 30 September 2019

Gross debt reduced to $3,236 million as at 30 September 2019

Net cash flows from operating activities

($ million)

350

236

H1 2018

H1 2019

Net debt as at 30 September 2019

($ million)

601

	(3,236)	(2,635)
Cash and cash	Borrowings	Net debt
equivalents

24

4. Aktogay expansion project

LOW RISK NEAR TERM GROWTH

Aktogay II is a $1.2 billion project approved in December 2017 to double sulphide processing capacity from 25 to 50 Mtpa

Low risk project, benefits from existing site infrastructure and identical concentrator design to Aktogay I and Bozshakol

First production expected in 2021, ramp up in 2022

Adds c.80 kt of annual copper production from 2022-27 and c.60 kt from 2028 onwards

Net cash cost guidance 100-120 USc/lb1Accelerated processing reduces mine life from 56 to

27 years

Aktogay expansion project, June 2019

1. Net cash cost guidance in USc/lb for the period 2022-27 in 2017 US dollar terms.

26

AKTOGAY GUIDANCE SUMMARY

Net cash costs to 2027 expected to be maintained at 100-120 USc/lb1

Operating cost efficiencies from larger scale mining operations offset the effect of accelerated grade decline, as processing volumes are brought forward

Sustaining capital expenditure estimated to increase from $30-$40 million to $50-$60 million per annum from 2022

Copper processing grade profile2
12 months to 31 December 2018,	0.61%
supergene enriched

2019 - 2021	c.0.50%
Aktogay I

2022 - 2027	c.0.40%
Aktogay I and Aktogay II

Life of mine sulphide	0.33%
resource grade

1. 2017 US dollar terms.

2. Sulphide ore.	27

AKTOGAY II ON SCHEDULE

H1 2019 key milestones

Grinding and flotation foundations

Progress concentrator structural steel

Commence mining fleet commissioning Commence crusher foundations

✓

✓

✓

✓

Other major project milestones	Status:
Permanent camp upgrade and	Commenced
mine maintenance facilities
Overland conveyor	Commenced
Enclose concentrator building	Q4 2019	Aktogay II construction, June 2019
Complete mill installation	2020
First ore processed	2021

28

AKTOGAY II CAPEX GUIDANCE

$1.2 billion budget maintained

$100 million rephased into 2019 to further de-risk the delivery of the project

($m)

$100 million capex

brought forward

into H2 2019

2021 capex reduced by $100 million

400

277

204223

100

FY 2018A

H1 2019A

H2 2019E

2020E

2021E

29

Aktogay I existing concentrator

Aktogay expansion project

Aktogay II sulphide concentrator,

June 2019

Aktogay mining fleet upgrade:

Caterpillar 793D haul truck

5. Baimskaya copper project

BAIMSKAYA PROJECT OVERVIEW

The Group acquired the Baimskaya copper project for $900 million in cash and shares in January 2019

• $675 million Initial Consideration plus Deferred Consideration of $225 million

Indicative $5.5 billion nominal capex budget 2018-261

60 Mtpa ore processing capacity, c.25 year mine life

Average annual production2of 250 kt copper and 400 koz gold, copper equivalent 330 ktpa3

First quartile net cash costs over life of mine, higher grades in first ten years of operations

Potential for resource expansion in c.1,300 sq. km licence area

Baimskaya

Baimka mineral trend and licence area

Licence area Mineral trend

Peschanka deposit

10 km

1.	In nominal terms based on 100% share of development capital expenditure, subject to confirmation in feasibility study.	34
2.	Average for first ten years of operations, based on 100% share of production.
3.	Assuming analyst consensus long term copper price of 6,700 $/t and gold price of 1,300	$/oz.

GLOBALLY SIGNIFICANT COPPER RESOURCE

Mineral Resources (Mt copper)1		Possible project
42.2		Under construction

		37.0												KAZ Minerals asset
			27.3	26.7
				24.1
					22.0
							15.2	15.0	13.6	13.4	13.0
								10.8	9.5
												7.7	7.2	7.1
													6.9	5.5
														4.6
Kamoa	Kakula	Pebble	Resolution	Udokan	Reko Diq	La Granja	Tampakan	El Pachon	Quellaveco	Los Azules	Taca Taca	Cascabel	Baimskaya (Peschanka)	Vizcachitas	Michiquillay	Rio Blanco	Aktogay	Galore Creek	Bozshakol

The Peschanka deposit in the Baimskaya licence area ranks in the top 10 undeveloped greenfield copper projects globally

1. Source: Company data. Mineral Resources include Measured and Indicated Resources (bottom bar) and Inferred Resources (top bar).

35

PROJECT PROGRESSING

A bankable feasibility study is being conducted by Fluor Corporation and is due to be completed in H1 2020

Preliminary discussions on financing continue

Partnering options to be assessed

Existing TASED zone expanded to include Baimskaya licence area

$80 million of capital expenditure approved for pioneer works in H2 2019:

• Camp, fuel storage, landing strip and site power infrastructure
• Total 2019 capex guidance now $150 million, including $70 million feasibility study costs

Landing strip

110 kV power line (Pevek)

Airfield access road

Pioneer works

Tailings

110 kV substation

Concentrator

Ore body

Crusher

Construction camp

220 kV

Project site plan

36

INFRASTRUCTURE BEING DELIVERED

Power

Government funded 110 kV Bilibino-Baimskaya power line on

Pevek

schedule to be completed by end of 2019, 90% of pylons erected

Floating nuclear facility 'Akademik Lomonosov' scheduled to begin

Bilibino

110 kV power

transfer from Murmansk to Pevek at the end of August 2019 220 kV Magadan power line, state financing allocated to commence construction

Road

Construction of government financed all-seasonOmolon-Anadyr highway progressing

Financing allocated for 250 km section from Baimskaya to Ilirney

Shipping

Rosatom 2024 cargo target for Northern Sea Route raised to 93 Mt

Baimskaya

220 kV power

Magadan

Copper concentrate transported by sea to Asian markets

Power

Road

Shipping

37

Pevek

Existing motor roads / winter roads with extended life

All-season"Magadan-Anadyr" highway (under construction)

All-season highway (completed)

Anadyr

100 km completed

section

Ilirney

Baimskaya

250 km Baimskaya - Ilirney construction to commence in

Omolon

2019

110 kV power line

and transformer

August 2019

Completed bridge at Ilirney

August 2019

Floating nuclear power facility

'Akademik Lomonosov' Murmansk, August 2019

6. Platform for growth

PLATFORM FOR GROWTH

KAZ Minerals continues to deliver strong operational and financial results from its high quality existing assets

Group is well equipped to navigate copper price fluctuations, with amongst the lowest operating costs of copper miners globally

Operating cash flow and new $600 million DBK financing supports investment in copper growth pipeline

Near term growth from Aktogay II is low risk and is progressing on schedule and within budget

The strengthened platform post Aktogay II start-up will support investment into the transformational Baimskaya growth project

43

APPENDIX

SUMMARY INCOME STATEMENT

Key line items				H1 2019 revenues split by product
$m (unless otherwise stated)	H1 2019	H1 2018		2%
Revenues	1,052	1,098		14%		Copper
Cost of sales	(533)	(533)		3%		Zinc
Gross profit	519	565
Operating profit	410	464				Gold
Net finance costs	(121)	(109)				Silver
Profit before taxation	289	355
Income tax expense	(62)	(79)
Profit for the period	227	276		81%
EPS based on Underlying Profit ($) - basic	0.48	0.62

45

REVENUES AND SALES VOLUMES

Revenues

$m	H1 2019	H1 2018
Copper cathode	400	342
Copper in concentrate	449	560
Zinc in concentrate	31	60
Gold	73	33
Gold in concentrate	70	72
Silver	17	19
Silver in concentrate	8	7
Other	4	5
Total revenues	1,052	1,098

Average realised prices

	H1 2019	H1 2018
Copper cathode ($/t)	6,211	6,916
Copper in concentrate ($/t)2	5,616	6,135
Zinc in concentrate ($/t)	1,801	2,255
Gold ($/oz)	1,305	1,314
Gold in concentrate ($/oz)2	1,343	1,296
Silver ($/oz)	15.1	16.6
Silver in concentrate ($/oz)2	15.4	16.1

Sales volumes

kt (unless otherwise stated)	H1 2019	H1 2018
Copper cathode	64	50
Copper in concentrate1	80	91
Zinc in concentrate1	17	27
Gold (koz)	56	25
Gold in concentrate (koz)1	52	56
Silver (koz)	1,124	1,116
Silver in concentrate (koz)1	495	438

LME and LBMA Prices

	H1 2019	H1 2018
Copper ($/t)	6,165	6,917
Zinc ($/t)	2,732	3,268
Gold ($/oz)	1,307	1,318
Silver ($/oz)	15.2	16.7

1.	Payable metal in concentrate sold.	46
2.	After the deduction of processing charges.

REVENUE RECONCILIATION

Volume growth offsets decrease in commodity prices ($m)

		Volume
	62		19
1,098	(27)	(14)
		By-products volume
		($m)
		Gold	33
		Silver	1
		Zinc	(17)
		Other	2

	Average LME
	HY 2019 vs HY 2018
Commodity prices
	(11)%
(74)	1,052	(16)%
(12)
	Copper	Zinc

Average LBMA

HY 2019 vs HY 2018

(1)%

(9)%

Revenues	Aktogay	Bozshakol East Region	By-product	Copper	By-product	Revenues	Gold	Silver
H1 2018		and	volume	price	price		H1 2019
		Bozymchak

47

CASH FLOW

$m		H1 2019	H1 2018
EBITDA1	620		690
Working capital movements	(131)		(57)
Interest paid	(117)		(112)
MET and royalties paid	(97)		(111)
Income tax paid	(29)		(60)
Foreign exchange and other movements	2		(3)
Net cash flows from operating activities before capital expenditure and VAT associated with major growth projects2	248		347
Sustaining capital expenditure	(66)		(39)
Free Cash Flow	182		308
Expansionary and new project capital expenditure	(332)		(325)
Acquisition of Baimskaya copper project, net of cash acquired	(435)		-
Net VAT paid/(received) associated with major growth projects2	(12)		3
Proceeds from disposal of property, plant and equipment	1		-
Interest received	12		14
Dividends paid	(28)		-
Other investments	45		-
Other movements	(1)		(1)
Cash flow movement in net debt	(568)		(1)
1.	EBITDA excludes MET, royalties and special items.			48
2.	The difference between 'net cash flow from operating activities before capital expenditure and VAT associated with major growth projects' and 'net cash from operating activities' as

reflected on the Group cash flow statement, is the net VAT (paid)/received on the construction of the major growth projects.

SUMMARY BALANCE SHEET

Assets

$m	H1 2019	2018	H1 2018
Non-current assets	4,169	2,897	3,125
Cash and cash equivalents and current	739	1,469	1,653
investments
Other current assets	786	674	670
Total	5,694	5,040	5,448

Non-current assets

$m	H1 2019	2018	H1 2018
Intangible assets	6	6	7
Tangible assets	3,762	2,562	2,840
Other non-current assets	355	301	216
Deferred tax asset	46	28	62
Total	4,169	2,897	3,125

Equity & liabilities

$m	H1 2019	2018	H1 2018
Equity	1,776	1,054	1,198
Borrowings	3,299	3,453	3,705
Other liabilities	619	533	545
Total	5,694	5,040	5,448

Net debt

$m	H1 2019	2018	H1 2018
Cash and cash equivalents and current	739	1,469	1,653
investments
Less: restricted cash	-	(2)	-
Borrowings	(3,299)	(3,453)	(3,705)
Long-term	(2,759)	(2,914)	(3,187)
Short-term	(540)	(539)	(518)
Total	(2,560)	(1,986)	(2,052)

49

DEBT FACILITIES

Facility	Balance1	Undrawn	Final	Interest rate	Repayment details & covenants
	$m, 30 Jun 19	$m, 30 Jun 19	maturity
CDB Bozshakol/	1,265	-	2025	$ LIBOR + 4.5%	Semi-annual principal and interest payments
Bozymchak					Balance sheet covenant
CDB Aktogay	1,284	-	2029	$ LIBOR + 4.2%	Semi-annual principal and interest payments2
				(USD facility)	Balance sheet covenant
				PBoC 5 year
				(RMB facility)
DBK Aktogay I	257	-	2025	$ LIBOR + 4.5%	Semi-annual principal and interest payments
					Balance sheet covenant
DBK Aktogay II	120	480	2034	$ LIBOR + 3.9%	Repayments commence from 2022
					Semi-annual principal and interest payments
					Balance sheet covenant
PXF	400	-	20243	$ LIBOR + 2.50%	Monthly interest payments and principal repayments
New $1 billion		$700m available for		Variable range	commencing from January 2021
PXF agreed on		drawing under new		2.25% to 3.50%	Initial final maturity in December 2024, with extension
	facility
28 Jan 20				options to December 2025 or December 2026
					Income statement covenant
CAT	-	-	2023-26	$ LIBOR + 3.00%	Quarterly principal repayments for both sub-facilities
New $100 million		$100m available for		Variable range	from December 2020, with final maturities between
facility agreed on		drawing under new		3.00% to 4.50%	December 2023 and March 2026
	facility
15 Nov 19				Income statement covenant

1. Drawn amount excludes arrangement fees.

2.	RMB facility interest payments are quarterly.	50
3.	Extendable to 2026.

ILLUSTRATIVE DEBT REPAYMENT PROFILE

Repayment Profile1($m)

CAT		PXF2,3		DBK Aktogay II		DBK Aktogay I		CDB Aktogay		CDB Bozshakol/Bozymchak

1000

900

800

700

600

500

400

300

200

100

0

Extension Options3

provide for repayment of $333 million in 2025-26, subject to agreement of lenders

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030-344

1. Assumes all available debt facilities are fully drawn, for illustrative purposes only. Actual loan balance may vary.

2.	New $1,000 million PXF facility is expected to be fully drawn by the end of February 2020.	51
3.	Extension Options are exercisable on the first and second anniversaries of signing.
4.	Average debt repayment per annum.

GUIDED CAPITAL EXPENDITURE

Expansionary capex ($m)1
		Aktogay I		Aktogay II		Bozshakol		East Region & Bozymchak		Baimskaya			Other
			21	518
					460
						127	60
2	332				55
23
15
37
						277	400			160
	223								60
	32				38					100
		H1 2019A					H2 2019	2020			2021

Baimskaya's capex guidance for 2019 increased to $150 million, with $80 million approved for pioneer works and on-site infrastructure in H2 2019

Aktogay II capex rephased, with $100 million of capital expenditure into 2019 to further de-risk the delivery of the project

1. Approved projects only. Further guidance on Baimskaya will be provided following completion of the feasibility study.

52

GROUP CASH COST RECONCILIATION

$m (unless otherwise stated)	H1 2019	H2 2018	H1 2018	H2 20171	H1 20171		2018	20171
Copper sales volumes (kt)	144	155	141	141	115		296	256
Revenues	1,052	1,064	1,098	942	721		2,162	1,663
EBITDA2	(620)	(620)	(690)	(609)	(429)		(1,310)	(1,038)
Pre-commercial production	-	-	-	38	40		-	78
Corporate costs and other adjustments	(20)	(13)	(15)	(15)	(10)		(28)	(25)
TC/RCs on concentrate sales	47	58	57	53	45		115	98
Gross cash cost	459	489	450	409	367			776
	939
Gross cash cost (USc/lb)	144	143	145	132	144		144	138
By-product credits	(203)	(187)	(194)	(201)	(205)		(381)	(406)
Net cash costs	256	302	256	208	162		558	370
Net cash cost (USc/lb)	80	88	82	67	64		85	66

1.	Includes the results of pre-commercial production.	53
2.	EBITDA excludes MET, royalties and special items.

INCREASING EFFICIENCY REDUCES

ENVIRONMENTAL IMPACTS

Energy consumption (TJ / kt of ore processed)			Water withdrawal per unit of copper produced (megalitres/kt)
H1 2019		0.22			H1 2019		91.7
2018		0.22			2018			145.6
2017			0.24			2017				190.4
2016	0.46			2016	212.4
2015				0.86		2015	180.7

CO2emissions per unit of copper (kt)

H1 2019

2018

2017

2016

2015

9.4

8.8

8.3

10.3

10.8

	CO2emissions per unit of ore processed (kt)			CO2emissions per $ million revenue (t)
	H1 2019		0.050			H1 2019			1,325
2018		0.049			2018		1,203
2017			0.051			2017			1,289
2016	0.094			2016		1,923
2015				0.200		2015		1,376

54

TAILINGS FACILITIES

			First	Expected
	Facility	Type	construction	closure date	Status
	Bozshakol	Downstream	2016	2058	Active
	Aktogay	Downstream	2017	2045	Active
	Bozymchak	Dry stack	2014	2032	Active
	East Region
	Zhezkentsky	Upstream	1989	2026	Active
	Nikolayevsky	Upstream	1980	20201	Active
	Belousovsky	Upstream	1949	Under review	Active

1. Artemyevsky mine transitioning in 2020 to in-pit tailings disposal in the Nikolayevsky open pit.

55

HIGH GROWTH PORTFOLIO

East Region & Bozymchak	Bozshakol	Aktogay I (sulphide and oxide)	Aktogay II		Baimskaya
		Baimskaya - long term
	Aktogay II - low risk	growth from 2026
	brownfield project,
Bozshakol and	delivers +80 ktpa
2022-2027
Aktogay delivered
>50% CAGR,			Group copper production
2015-18
		2027-2036 of c.500 ktpa

2015

2018

2021

2024

2027

2030

2033

2036

Notes:

Indicative production schedule, not to scale. Assumes 100% ownership, first production from Baimskaya in 2026 and ramp up from 2027. Actual construction timetable to be determined 56during feasibility study.

MINERAL RESOURCES SUMMARY - 31 DEC 2018

		Artemyevsky	Irtyshsky	Orlovsky	Bozymchak	Aktogay	Aktogay	Bozshakol	Bozshakol
						sulphide	oxide	sulphide	clay
	Resources1(kt)	19,9972	3,878	11,844	14,843	1,558,110	73,969	902,650	116,830
	Copper grade (%)	2.05	2.25	3.29	0.78	0.33	0.37	0.36	0.44
	Zinc (%)	4.53	5.28	4.53	-	-	-	-	-
	Gold grade (g/t)	1.03	0.38	0.86	1.31	-	-	0.14	0.20
	Silver grade (g/t)	94	92	46	8.2	-	-	1.1	1.3
	Molybdenum grade (%)	-	-	-	-	0.008	-	0.008	0.006
	Type of mine	Underground	Underground	Underground	Open pit /	Open pit		Open pit
					underground
	Concentrator	Nikolayevsky	Belousovsky	On-site	On-site	On-site		On-site
	Description	Mine with	Irtyshsky has	Orlovsky is the	Bozymchak is	Large scale mine, located in East	Large scale mine, located in
		polymetallic ore,	been	largest mine in	located in	Region of Kazakhstan. Commenced	Pavlodar Region of Kazakhstan.
		operating since	operating	East Region by	Kyrgyzstan	production of copper cathode from	Commenced production of copper
		2005	since 2001	copper metal in		oxide ore in December 2015 and	in concentrate from sulphide ore in
				ore extracted		copper in concentrate from sulphide	February 2016
						ore in February 2017
	Notes:								57
	1. Measured and indicated as at 31 December 2018.

2. Includes Artemyevsky II expansion.

PESCHANKA DEPOSIT MINERAL RESOURCES

		Measured	Indicated	Inferred	Total
Mineral resources	Mt	139	1,289	774	2,202
Copper grade	%	0.72	0.44	0.36	0.43
Contained copper	Mt	1.0	5.7	2.8	9.5
Gold grade	g/t	0.39	0.26	0.16	0.23
Contained gold	Moz	1.7	10.8	4.0	16.5
Silver grade	g/t	4.0	2.4	2.0	2.4
Molybdenum grade	ppm	140	120	90	110
					58

			PEVEK
			Krasnoarmeisky
			Komsomolsky
The Sakha Republic
(Yakutia)	CHERSKY
			Mayskoye
			Polymetal
	Anuysk
		Karalveem
		BILIBINO
Klen		Kekura	100 km completed
	Highland Gold
Highland Gold	section
Exploration &
Exploration & development
development	ILIRNEY
			Kupol
	Baimskaya	Kinross
			Kayen
			Highland Gold
			Exploration &
			development
		250 km Baimskaya -	Gold mine
OMOLON		Ilirney construction to	Existing motor roads / winter roads
	commence in 2019	with extended life
			Existing winter roads
			All-season"Magadan-Anadyr"
Magadan Region			highway (under construction)
			All-season highway (completed)
100	200
	km

Valunisty

Highland Gold

ANADYR

SENIOR MANAGEMENT

Oleg Novachuk, Chair	Eldar Mamedov, General Director, KMM LLP
Joined the Company in 2001, former Chief Executive and was	Joined the Company in 1996, former Head of Legal and
appointed Chair on 1 January 2018, with responsibility for	was appointed as General Director of the KMM LLP in
strategy, government relations and business development.	2014, with responsibility for government relations,
	legal, procurement and administration.

Andrew Southam, Chief Executive Officer	Madina Kaparova, Group Procurement Director
Joined the Company in 2006, former Chief Financial Officer	Joined the Company in 1998 and was appointed Group
and was appointed Chief Executive Officer on 1 January 2018,	Procurement Director in 2016, with responsibility for
with responsibility of executive management of the Group and	development and implementation of procurement strategy.
leading the senior management team in the day to day running
of the business.

	John Hadfield, Chief Financial Officer	Sergey Leu, General Director, Bozshakol
	Joined KAZ Minerals in November 2017 as Deputy Chief	Joined KAZ Minerals in August 2016 as General Director
	Financial Officer and was appointed Chief Financial Officer on	of Bozshakol with responsibility for management of
	1 January 2018.	Bozshakol operations.
	Mian Khalil, General Director, Projects	Ilsur Dautov, General Director, East Region
	Joined the Company in 2010, with responsibility for	Appointed General Director of the East Region in March
	construction of major growth projects, Aktogay and Bozshakol	2014. Responsible for the management of East Region
	and is currently focused on the Aktogay expansion project and	operations.
	Baimskaya (Peschanka) copper project in Chukotka, Russia.
	Philip Welten, General Director, Aktogay	Ilyas Tulekeev, General Director, Bozymchak
	Joined KAZ Minerals in 2018 as General Director of Aktogay,	Joined KAZ Minerals in 2006 and was appointed General
	with responsibility for management of Aktogay operations.	Director of Bozymchak in 2011, with responsibility for
		management of Bozymchak operations.
		60

RESTRUCTURING OCTOBER 2014

Disposal Assets

Copper and other metals

Coal mines

Captive Power

KAZ Minerals

Growth projects

Copper and other metals

61

KAZ Minerals PLC

6th Floor, Cardinal Place 100 Victoria Street London

SW1E 5JL

UK

www.kazminerals.com