MINEX Forum

Tag: Kazgeology

  • Cove Capital Explores Rare Earth Metals in Kazakhstan’s Kostanay Region

    Cove Capital Explores Rare Earth Metals in Kazakhstan’s Kostanay Region

    The American investment firm Cove Capital is actively exploring potential rare earth metal deposits in Kazakhstan’s Kostanay region. The project is partnered with the Kazakh company Kazgeology, which is part of the “Tau-Ken Samruk” structure. The geological exploration is being funded by Cove Capital, according to an interview with Pini Althaus, managing partner and founder of the company, published in the Kazakh outlet “Kursiv.”

    “The site contains a variety of rare earth metals, with a primary focus on four elements used in the production of permanent magnets: neodymium, praseodymium, dysprosium, and terbium,” said Mr. Althaus. The deposit also has significant reserves of yttrium, for which supply and demand are yet to be fully assessed.

    The project is currently in the early stages of implementation, with preliminary feasibility studies indicating the presence of 380,000 tons of rare earth metals. Mr. Althaus noted, “The project looks promising, which is why we invested in it, and we hope it becomes a major rare earth project.”

    However, the profitability of the mining operation remains uncertain, as partners need to confirm the feasibility of extracting these high-value materials. “It will take several years to develop the resource, ensure the metals can be processed, and verify our reserves before we start considering mining scenarios and profitability,” explained the managing partner of Cove Capital.

    Cove Capital holds 11 concessions for the development of critical materials such as lithium, beryllium, tantalum, rhodium, cesium, rubidium, and tin in Eastern Kazakhstan. Represented by its subsidiary, KAZ Critical Minerals, Cove Capital relies on data from Soviet-era geological surveys, refined with modern technologies and research methods.

    Additionally, Cove Capital is in discussions with the Kazakh government regarding the construction of a rare earth metals processing plant, with capital investment potentially reaching $500 million. This facility could serve as an industrial hub and an alternative to exporting these metals to China.

    Founded in 2016, Cove Capital invests in the mining industry, with projects focused on critical minerals, precious metals, and base metals in North America, Australia, Argentina, and other countries.

  • Kazgeology Transfers Besshoky Assets to Ulmus Besshoky

    Kazgeology Transfers Besshoky Assets to Ulmus Besshoky

    АО “NGK Kazgeology,” fully owned by the state holding “Tau-Ken Samruk,” has transferred its Besshoky assets to Ulmus Besshoky, reports inbusiness.kz. The site with valuable mineral resources is located in the Karaganda region. From 2015 to 2021, approximately 1.4 billion tenge were invested in the development of the deposit.

    Kazgeology obtained a license for the exploration of Besshoky in the spring of 2015. In the summer of that year, Ulmus Besshoky joined the investment project and acquired 75% of the rights and obligations under the geological exploration license for this site. In the spring of 2022, the geological survey contract was extended for another three years.

    The largest share in Ulmus Besshoky (over 36%) is owned by Bai Tau Minerals, which belongs to the foreign company GRA Investment Ltd, managed by Serbian businessman Vladimir Delic. In 2023, the company received a loan of eight billion tenge to fund the development of the valuable subsoil site.

    By the end of 2023, the right to use ¼ of the deposit belonged to the private company Besshoky, a 100% subsidiary of Kazgeology. In December 2023, the national company and Ulmus Besshoky signed an agreement to sell the remaining quarter of the shares, transferring full control to the private organization.

    Ulmus Besshoky committed to paying 4,213,808 thousand tenge, of which an advance payment of 918,600 thousand was made at the end of 2023. The remaining amount, approximately 3,295,208 thousand tenge, is to be transferred after the enterprise re-registration.

    Kazgeology’s difficult financial situation may have led to the sale of the subsoil usage rights. In 2022 and 2023, the national company’s net losses amounted to 668,403 thousand and 446,103 thousand tenge, respectively.

  • Kazgeologiya Retains Golden Stake in the Tellur Stepok Project

    Kazgeologiya Retains Golden Stake in the Tellur Stepok Project

    National company “Kazgeology” is holding on to the “golden project” of “Tellur-Stepoch” in its portfolio, which recently joined the state holding “Tau-Ken Samruk”. This information is based on a presentation by the head of the mining group Bakyt Chirchikbaev, which was shown during his speech on the topic “Plans for the development of AO “NGK “Tau-Ken Samruk” after the acquisition of assets of AO “Kazgeology” at the XIV mining and geological forum MINEX Kazakhstan 2024. The potential of the gold-bearing area Tellur-Stepoch was previously estimated at 440 thousand ounces or 13.68 tons of gold. However, the average content of precious metal on the Tellur field was calculated to be more than 17 grams per ton of ore. In 2012, the owner of the deposits was TОО “Akмоla Gold”, which later became known due to its participation in the criminal case of the former head of the geology committee Bazarbay Nuraev. The “Kazakhmys” concern considered this asset attractive in 2018. Previously, the rights to the use of subsoil on Tellur-Stepoch belonged to TОО TS Minerals, where 25% of the shares were owned by “Kazgeology”. However, last year, the Ministry of Industry announced that it had terminated the contract for the use of subsoil on this site. The mining department informed in September last year that the right to use subsoil on Tellur-Stepoch was planned to be put up for auction. However, there is also information that a legal process is being conducted on Tellur-Stepoch. This was noted by a representative of the mining industry at the MINEX forum and confirmed by the head of “Tau-Ken Samruk”. Bakyt Chirchikbaev, in a conversation with a correspondent of inbusiness.kz, said that he could not comment on Tellur-Stepoch because, as far as he knew, there were legal proceedings on this issue, and he would not like to interfere in this process. It is also mentioned in the presentation of “Kazgeology” the infamous Shchevchenkovskoye field, which previously belonged to its former subsoil user SP “Kazkobalt”, where “Kazgeology” also owned 25% of the shares. The Shchevchenkovskoye field was returned to the state after the illegal transfer, and it should have been put up for a competitive auction this year. However, there is information that the Shchevchenkovskoye field may be returned to its former subsoil users, but this information has been denied by the Ministry of Industry. Therefore, the question remains whether the Shchevchenkovskoye and Tellur-Stepoch fields will be put up for a real competitive electronic auction for the right to use subsoil this year or not. If they have been returned to the state, then why were they reflected in the presentation of “Kazgeology” projects at the MINEX Forum, or are they listed there only because of their retained 25% shares?

  • Baksy conducts estimations of reserves in the gold-copper area

    Baksy conducts estimations of reserves in the gold-copper area

    The company Polymetal, in partnership with “Kazgeology,” is currently in the process of calculating the reserves in the gold-copper area of Baksy in the North Kazakhstan Region. The CEO of Polymetal International plc, Vitaly Nesis, provided this information during a press approach at the “Transfer of the Initial Listing to the AIX Exchange and Redomiciliation to the AIFC” ceremony with inbusiness.kz.

    Nesis expressed satisfaction with the partnership with “Kazgeology” and mentioned that discussions regarding future steps will be more meaningful after the reserves are placed on the state balance sheet. Polymetal recently increased its stake in Baksy to 75% and is considering a decision on production at the site for the upcoming year. It’s worth noting that “Kazgeology” is now under the control of the national mining company “Tau-Ken Samruk.”

    During discussions with reporters, Nesis also mentioned the planned sale of Polymetal’s Russian division within the next 6-9 months. The company is exploring opportunities not only in Kazakhstan but also in Central Asian countries.

    The CEO addressed the topic of a potential increase in the tax burden on businesses in Kazakhstan, emphasizing that the recent increase in the mineral extraction tax (MET) was justified given the favorable external conditions. He expressed hope that the final decisions on tax code amendments would consider the capital-intensive nature of the mining industry and maintain its investment attractiveness.

    Furthermore, Polymetal aims to increase the liquidity of its shares on the AIX exchange in Astana over the next two years. The company recently transferred its primary listing from the London Stock Exchange to the AIX exchange, and Nesis emphasized that the domicile in the AIFC is permanent. There are no plans for an additional listing in Abu Dhabi or any other platform at this time.

    The relocation of Polymetal to the AIX exchange is expected to enhance liquidity on the platform and attract global investors. Renat Bekturov, the head of the AIFC, highlighted the positive impact on the Kazakh stock market and the increased participation of renowned investment companies.

    Regarding the proposed merger of the AIFC trading platform with the Kazakhstan Stock Exchange (KASE), Nesis mentioned ongoing discussions on how to combine liquidity between the two entities, considering their respective minority shareholders.

    In conclusion, Polymetal’s collaboration with “Kazgeology” in calculating reserves, its strategic plans for the future, and its involvement in the AIX exchange demonstrate the company’s commitment to growth and development in the mining sector.

    Regarding the potential merger between the AIFC trading platform and the Kazakhstan Stock Exchange (KASE), Nesis commented on the consideration of KASE’s Russian shareholders.

    “Both KASE and Polymetal have minority shareholders. MOEX, the Moscow Exchange, along with local banks and brokers, are shareholders of KASE. On the other hand, the AIFC exchange has notable shareholders such as the Shanghai Stock Exchange, NASDAQ, and the Silk Road Fund. Currently, no decision has been made, and our discussions primarily revolve around how to combine our liquidity, in what form it will take, whether there will be changes in the legal structure, and if so, what those changes will entail. The next step involves negotiations with the existing shareholders to determine their future involvement, whether they will continue as shareholders, or if a new structure will be established. These matters remain open and under discussion,” Bekturov elaborated.

    Furthermore, Bekturov addressed the question of measures planned to enhance the liquidity of Russian issuers like “Rusagro” or Ozon on the AIX.

    “These issuers are relatively new, and their global depositary receipts (GDRs) are listed and traded on our exchange. The challenge lies with the global depository, Euroclear, as they are currently working on segregating the accounts of shareholders due to the situation at hand. Once Euroclear resolves this matter and market-making brokers willing to provide liquidity are identified, the issue will be resolved. We are actively working with the issuers to address this matter,” Bekturov affirmed.

  • Kazgeology Becomes Subsidiary of Tau-Ken Samruk, 100% Voting Shares Transferred

    Kazgeology Becomes Subsidiary of Tau-Ken Samruk, 100% Voting Shares Transferred

    As per the Government Resolution No. 1128 dated December 30, 2022, the state-owned stake in Kazgeology has been transferred as a form of payment in exchange for newly issued shares of the esteemed Samruk-Kazyna Fund. Kazgeology, in its role, primarily focuses on the exploration and assessment of mineral resources, the identification of promising areas, and the facilitation of foreign and domestic investments to bolster the nation’s mineral resource base.

    As the sole shareholder of Kazgeology, Tau-Ken Samruk assumes both the rights and obligations. It is worth highlighting that the conditions for partners and investors in all ongoing projects will remain unaltered. However, we are presented with a remarkable opportunity to broaden the horizons of cooperation. With a shared interest, Tau-Ken Samruk can actively participate in investment projects throughout the construction and operational phases,” expressed Bakytzhan Chirchikbaev, the esteemed Chairman of the Management Board of Tau-Ken Samruk.

    At present, Kazgeology is diligently engaged in the implementation of numerous investment projects in collaboration with esteemed partners. Joint ventures and consortia have been established, fostering fruitful associations with esteemed global leaders in the mining industry such as Rio Tinto, KazZinc, Yildirim Holding A.S., Polymetal, Kazakhmys, and Ulmus Fund.