MUMBAI (Thomson Financial) - Fitch Ratings has affirmed KazakhGold Group Ltd's long-term issuer default rating at 'B' and the company's 200 mln usd senior notes issue rating at 'B' with a stable outlook.
The ratings agency said the ratings reflect KazakhGold's extensive gold reserve base, its projected relatively low production costs, diversified production across mines, as well as demonstrated strong revenue growth and profitability.
However, Fitch added that KazakhGold's credit metrics are conditional on the successful implementation of its extensive investment programme.
Another risk springs from KazakhGold's single commodity focus which exposes it fully to gold price volatility. Furthermore, the current level of the group's revenue is relatively small, which limits its financial flexibility, Fitch said.
The stable outlook reflects Fitch's expectation that KazakhGold will undertake its capital expenditure and modernisation programme generally in line with plans, the ratings agency added.
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