Kazakhmys is an international natural resources company with principal operations in Kazakhstan and the surrounding region. The core business is the production and sale of copper. The company is fully integrated from mining ore through to the production of finished metal. The copper division also produces other metals as zinc, silver and gold.

Copper ore extraction for the first quarter 2012 was 8% higher than same period of 2011. However, copper cathode equivalent production declined 13%. The company suffered metal’s low price, in fact the copper for the first three months of the year traded with a discount of 1,000 $/tonne than same period one previous year. This trend is continuing in the second quarter and we could have a negative impact on semiannual results.
Even if the valuations could seem weak (5 times full year earnings, according Thomson Reuters’ estimates) but this is in line with its peers and historic trading.

Since beginning of the year the share outperformed the FTSE all-share Mining Index, above 10%. The share is trading in bearish trend, even if in the last trading sessions it tried a technical rebound. We could give confidence in this movement only if the share breaks out the short-term resistance of GBp 776. In this case we might fix target price in the area of GBp 900. Alternative scenario, if the share breaks out the lowest price (GBp 665) since June 2009, in this case the bearish trend could continue towards GBp 520.