Production Plummets at Eurasian Natural Resources Corporation


LONDON -- The shares of Eurasian plunged 7% to 282 pence early this afternoon trading after the miner revealed a 24% slump in salable iron-ore production compared to last year.

Eurasian, the Kazakhstan-based metal miner, blamed extreme winter weather for the 9% fall in iron-ore extraction.

Saleable ferroalloys, the company's largest division by turnover, suffered a 3% fall in production due to planned maintenance at its Aksu smelter.

Eurasian confirmed that it had not yet received an offer from its three billionaire founders regarding a possible takeover. The trio, who along with the Kazakh government own more than half of the company, have until 17 May to make a formal bid.

Eurasian chief executive Felix Vulis, who took no questions at today's analyst conference call, said:

I am pleased with the Group's recent operational performance, which is a reminder of the underlying strength of the business. ... Our focused capital expenditure plan is starting to reap rewards, with concentrate having been produced from Frontier during the first quarter and the Frontier processing plant fully commissioned in April. ... As a management team our focus continues to be on the development of our key growth projects, management of cost inflation and maximizing production volumes from our world class asset base.

With a market cap of £3.7 billion, Eurasian's shares trade at nine times expected earnings, and offer a prospective dividend yield of just 0.5%.

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