Fitch rates KazakhGold B

Fitch Ratings said it assigned a B foreign-currency issuer default rating to KazakhGold Group Ltd. and an expected B rating to its proposed $150 million senior bond issue.

The outlook is stable.

The ratings reflect KazakhGold's extensive gold reserve base, which is expected to support long mine lives (in excess of 15 years) at expanded levels of production, Fitch said.

The ratings also reflect the company's projected low production costs, which are expected to be close to the lowest quartile by world standards, the agency added. They take into account KazakhGold's modest operating diversity, with production sourced from three mines - each having both underground and open pit reserves with well-established infrastructure.

However, Fitch said the company has a single commodity focus, is fully exposed to gold price volatility and has a very limited relevant financial track record.

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