KazakhGold Group Limited
Report & Accounts
26 September to 31 December 2005 Aktöbe
Oral
Atyrau
Kostanay
Arkalyk
Petropavl
Pavlodar
Karaghandy
Shymkent
Kyzylorda
Zhambyl
Almaty
Öskemen
-
Aktau
TURKMENISTAN
UZBEKISTAN
KYRGYZSTAN
KUARAGHANDY
EAST KAZAKHSTAN
AKMOLA
ASTANA
KOSTANAY
AKTOBE
ATYRAU
ALMATY
ZHAMBYL
PAVLODAR
CHINA
RUSSIAN FEDERATION
CASPIAN
SEA
ARAL
SEA
NORTH KAZAKHSTAN
WEST KAZAKHSTAN
MANGGHYSTAU
KYZYLORDA
Boldykol & Zhanan
Zholymbet
Southern
Karaultube
Zones 1 & 2
of Akshatu
Stepnogorsk
Aksu
Kyzylsorskoe
Bestobe
Mines in production
Properties acquired - July 2005
New licences awarded - December 2005
Akzhal
Vasilevskyi
Pridorojnoe
Kaskabulakskoe
KazakhGold Group Limited is the largest
specialised gold mining company in Kazakhstan.
We estimate our gold reserves and resources to
be the largest known in the country. We are
developing rapidly, and aiming to become a
leading low-cost central Asian gold producer.
In 2005, we acquired eight new properties 
in Kazakhstan, adding to our three existing
operational mines.
KazakhGold Group Limited  KazakhGold
Overview
Contents
• Gold reserves and resources believed to be the largest in
Kazakhstan, with an estimated 27 per cent of the country’s
known gold reserves
• Three main operating mines with total gold reserves (B+C
1
)
of 13.2 million oz and combined reserves and resources
(B+C
1
+C
2
+P
1
) of 46.6 million oz
• Eight new properties acquired in 2005, not yet included in
KazakhGold’s resource calculations 
• Developing as a low-cost producer, with increasing economies 
of scale
• An improving sales mix, from lower margin concentrates 
to higher value-added products
• A mine strategy to realize the full potential of existing
operations, with options under consideration to accelerate
production growth even further
• An experienced and proven management team, with 
extensive knowledge of the local geology, business and
regulatory environment
01 Overview
02 Highlights & Priorities
03 Mission & Strategy
04 Chairman’s Statement
06 President & CEO’s Review
09 Group Proﬁle 
10 Kazakhstan
11 Operational Review
15 Aksu Overview
17 Bestobe Overview
19 Zholymbet Overview
23 Financial Review
24 Board of Directors
26 Directors’ Report
28 Statement of Directors’ Responsibilities
29 Independent Auditors’ Report
30 Consolidated Income Statement
31 Company Income Statement
32 Consolidated Balance Sheet
33 Company Balance Sheet
34 Consolidated Cash Flow Statement
35 Company Cash Flow Statement
36 Statement of Changes in Equity for the Group
37 Statement of Changes in Equity for the Company
38 Notes forming part of the Financial Statements
50 Directors, Company Secretary and Advisers
51 Glossary
KazakhGold Group Limited 1 Highlights
& Priorities
2005 Highlights
• KazakhGold Group Limited incorporated in Jersey on 
26 September
• Production targets met at Aksu, Bestobe, Zholymbet –
gold production for the ﬁnal quarter of 52,691oz
• Exploration licences awarded in December for ﬁve new 
Kazakh properties 
• Successful November IPO and introduction to the London
Stock Exchange Main Market, raising some US$97.4 million
net of costs for reinvestment in the business
• Further negotiations with Barrick Gold, following an earlier
framework agreement reached with Kazakhaltyn* on 
23 September
*Now the principal operating subsidiary of KazakhGold
2006 Priorities
• Increase overall processing capacity and gold production: 
-  Expand open pit activity at Aksu and Bestobe – initiate open 
pit work at Zholymbet
-  Expansion of Aksu and Bestobe heap leaching capacity and
possible expansion of the Aksu CIP plant
-  Construction of a CIP plant and expansion of the heap leach
plant at Bestobe
-  Development of a heap leach processing plant and possible
expansion of the CIP plant at Zholymbet
• Further exploration of the Vera zone at Aksu
• Development/exploration of the properties acquired in 2005
• Continued negotiation of a joint venture with Barrick Gold
• Evaluation of an accelerated investment programme, to
achieve further increases in production levels
KazakhGold Group Limited 2 Mission
To become one of central Asia’s leading gold
mining companies.
Strategic Objectives
• Increase gold output substantially
- Increase ore production signiﬁcantly at 
the three main operational mines
- Open new mines to increase ore 
production
- Expand processing capacity dramatically
to achieve scale economies
• Introduce appropriate ore processing
technologies
- Process existing low-grade ores
- Focus production on higher-margin
products
- Reduce unit mining and processing
costs further, to become a low-cost
producer across all operations
• Capture growth opportunities
- Utilize the Group’s expertise to convert
the maximum resources to reserves
- Seek selective, value-adding
acquisitions in Kazakhstan and
elsewhere in central Asia
• Partner with global sector leaders to
maximise returns from business
opportunities 
- Joint venture with Barrick Gold, to
exploit the potential of several recently
acquired properties, and pursue other
opportunities in the region
- Work with China National Gold
Corporation to develop underground
mining at Bestobe
In implementation of the strategy, the Group
is committed to ensuring the health and
safety of its employees and to protecting the
environment in which it operates.
Key Strengths
• Substantial gold resources, with the
management skills to ensure maximum
conversion to reserves
• A commitment to reducing overall
production costs further, with low
extraction and processing costs already
for open pit, waste dump and tailings
operations
• A developed infrastructure close to 
major assets
• Well placed to acquire further
exploration properties in Kazakhstan and
elsewhere in central Asia
• A stable political and strong economic
environment in Kazakhstan
- President Nazarbayev re-elected in
December 2005 for a further seven-
year term
- 2005 GDP growth of 9.0 per cent 
and inﬂation of 7.7 per cent, making
Kazakhstan the best-performing
economy amongst the CIS countries
Mission &
Strategy
KazakhGold Group Limited 3
Ore transfer and crushing at Aksu Chairman’s
Statement
I am delighted to present
KazakhGold Group Limited’s 
ﬁrst Report and Accounts, for 
the period from 26 September to
31 December 2005. KazakhGold
was incorporated in Jersey on 
26 September 2005, with the
intention of unlocking what we
believe to be the largest-known
gold reserves and resources in
Kazakhstan. From this base,
KazakhGold aims to become 
one of central Asia’s leading 
gold mining companies.
Our strategy is to realize the full potential 
of the Group’s existing assets; signiﬁcantly
expanding production in the medium term
and pursuing growth opportunities, both 
in Kazakhstan and elsewhere in the region,
that create value for shareholders. Where
appropriate, KazakhGold will partner with
other leading mining companies to realize
the full potential of our existing resources
and to pursue acquisition opportunities. 
On 12 October 2005, the Group acquired
the entire issued units of Romanshorn LC 
AG from Kanat Assaubayev and Marussya
Assaubayeva for nil consideration.
Romanshorn is the holding company of 
the Group’s main operating subsidiary
Kazakhaltyn. 
In November, KazakhGold successfully
completed an Initial Public Offering (IPO),
joining the London Stock Exchange Main
Market on 1 December 2005. The IPO was
ﬁve times over-subscribed and the issue of
7.1 million new shares raised some US$97.4
million for the Group net of costs.
Results and dividend
From 26 September to 31 December 2005,
the Group had total revenue of US$20.4
million, and a loss after tax of US$2.2 million.
During this period, the Group mined and
processed 757,048 tonnes of ore with an
average grade of 3.25 grammes per tonne
of gold, enabling 52,691oz of gold 
to be recovered.
As stated at the time of last year’s IPO, the
Board does not propose the payment of
shareholder dividends until the current plant
modernisation programme is completed and
our processing facilities reach their maximum
designed output capacity. After this, and
subject to KazakhGold’s performance, we
intend to commence paying dividends
progressively of up to 25 per cent of the
Group’s consolidated annual net income.
Strategic developments
Since our IPO, KazakhGold has continued 
to seek new exploration and production
opportunities in Kazakhstan. Following a
successful tender, the Kazakh government
awarded the Group ﬁve new licences that
include mineral rights to Southern Karaultube
and Kyzylsorskoe in Northern Kazakhstan,
Pridorojnoe and Kaskabulakskoe in Eastern
Kazakhstan and Zones 1 & 2 of the Akshatau
MMC deposit in central Kazakhstan. Further
details about these properties are included 
in the Operational Review.
In September 2005, Kazakhaltyn reached 
an agreement with Barrick Gold to cooperate
with the exploration of new properties in
Kazakhstan and elsewhere in central Asia.
Detailed negotiations remain ongoing and
are expected to be concluded later in 2006.
Early in 2005, Kazakhaltyn began
negotiations with the China National Gold
Corporation regarding the future
development of underground mining at
Bestobe. An agreement is expected shortly,
whereby China Gold will act as a
subcontractor, providing equipment and
operational management. 
Board and management 
In overseeing the development and
implementation of our strategy, the Group 
is fortunate to be able to draw upon the
Board’s signiﬁcant industry, technical, and
international expertise, as well as in-depth
local operational knowledge. The Directors
are supported by an experienced senior
management team and dedicated workforce.
Their hard work has enabled our three main
operating assets to be reconﬁgured and to
meet the production targets set for 2005.
Without the continuing support and loyalty
of our employees, to whom the Board
extends its gratitude, the Group’s
achievements of 2005 would not have 
been possible. 
KazakhGold Group Limited 4 KazakhGold Group Limited 5
Corporate governance
The Board supports the principles of good
corporate governance. Although there are
no corporate governance recommendations
applicable to companies incorporated in
Jersey, the Group intends, so far as it is 
able, having regard to its size and stage 
of development, to comply with the
recommendations of the Combined Code 
on Corporate Governance for UK registered
and listed companies. To this end, the Board
has established three committees with
delegated duties and responsibilities for:
Audit; Health, Safety & Environment; and
Remuneration matters. 
Although the Board has responsibility for
maximising shareholder returns, it is also
determined that KazakhGold’s operations
adopt sound environmental management
practices, employ sustainable development
policies, and that the Group is a valued
member of all the communities in which it
operates. Given the nature of the Group’s
activities, the Board places a high priority 
on ensuring that KazakhGold and its
subsidiaries provide a healthy, safe and
fulﬁlling workplace for employees. 
Outlook
In December 2005, Kazakhstan’s President
Nursultan Nazarbayev was re-elected for 
a further seven-year term. Under President
Nazarbayev, Kazakhstan is moving towards 
a free-market economy that is supportive of
business and foreign direct investment. For
gold mining companies such as KazakhGold,
further investment is encouraged by keeping
royalty payments at a realistic level. In 2005,
for example, the Group paid royalties of 
2.3 per cent of its production value, which
compares favourably with rates of over six
per cent in countries such as Russia. 
The Group’s results are inﬂuenced by 
macro-economic factors such as the gold
price and the tenge/US dollar exchange 
rate. At the end of 2005, gold prices rose
above US$500/oz, a level not seen since 
the early 1980s. 
KazakhGold’s costs are primarily
denominated in Kazakh tenge. While 
this was of beneﬁt to us last year, as the
tenge depreciated against the US dollar, 
this favourable trend began to reverse
following the Presidential elections. The
tenge is also a petro-currency, reﬂecting the
importance of the oil sector to the Kazakh
economy. Inevitably, this will see some
inﬂationary pressure in Kazakhstan during
2006. While the Group cannot inﬂuence
these external macro-economic factors, we
will continue to focus on managing our costs.
KazakhGold expects to increase gold output
signiﬁcantly over the medium term. We 
will achieve this by a dramatic expansion 
of our processing capacity, using simple 
but effective production and processing
methods. In 2006 we are conducting 
further exploration of Aksu’s signiﬁcant Vera
zone. We are also evaluating the possibility
of accelerating the Group’s investment
programme, to achieve even higher
production levels over a shorter time period.
Top-line growth will be supported by
increasing our reserves, through realization
of the full potential of our existing and
recently acquired assets. Our joint venture
with Barrick Gold will provide us with access
to valuable expertise, accelerating the joint
exploration of several properties acquired
through successful tender last year. Overall,
the Board is conﬁdent that KazakhGold has
the strategy, management expertise and
growth opportunities to make further
signiﬁcant progress in 2006. 
Lord Daresbury
Chairman President &
CEO’s Review
Laying the foundations for
sustainable growth
2005 was a successful year as well as an
important milestone in the development 
of KazakhGold Group and its principal
operating subsidiary Kazakhaltyn. Our
production targets were met and the
ﬁnancial and operational foundations were
laid to realize the full potential of our assets.
These assets, we believe, comprise the
largest-known gold reserves and resources 
in Kazakhstan.
KazakhGold’s London IPO in November 
2005 led to the issue of 13.1 million Global
Depositary Receipts (GDRs) at US$15 per
GDR. This included a primary issue of 7.1
million new shares, with net proceeds of
some US$97.4 million, after costs. Our GDRs
were admitted to the Main Market of the
London Stock Exchange on 1 December 2005.
KazakhGold employed 3,209 people at the
end of 2005. The success of our business
reﬂects their skill, professionalism and sheer
hard work. I should like to acknowledge
their enormous contribution and ongoing
role in shaping the future of our business.
2005 Operating Results 
(26 September – 31 December 2005)
The Group is reporting results for the period
26 September 2005 (the date of incorporation)
to 31 December 2005. On 12 October 2005,
KazakGold Group Limited acquired
Kazakhaltyn and accordingly the results of
Kazakhaltyn are included in those of the
Group’s ﬁnancial statements from this date.
From July to December 2005, there
was a phased increase in production at
Kazakhaltyn’s three principal mines. This
followed their partial closure from August
2004 to July 2005, during which time the
mine facilities were reconﬁgured and
upgraded. The Group’s operating and
ﬁnancial results for the reporting period are
therefore not typical. In future, the Group
will provide annual and interim results.
In the last quarter of 2005, the Group mined
and processed 757,048 tonnes of ore, with
an average grade of 3.25 grammes per
tonne and an average recovery rate of 66.7
per cent. During the period, 52,691oz of
gold was produced, at an average cash 
cost of US$210/oz.
KazakhGold Group Limited 
6
2005 Results Summary (26 September – 31 December 2005)
Total ore processed 757,048 tonnes
Recovered grade 3.25 grammes/tonne
Recovery rate 66.7 per cent
Gold production 52,691oz
Average production cost US$210/oz KazakhGold Group Limited 7
Strategy in Action
KazakhGold aims to become one of 
central Asia’s leading gold mining
companies. To achieve this, our strategy 
has four key components: 
• Introduce more appropriate and modern
processing technologies
• Signiﬁcantly raise gold production
• Capture growth opportunities 
(organic and acquired)
• Partner with global sector leaders
I am pleased to report that in 2005,
including the period 26 September to 31
December 2005, we have made progress
against all these strategic priorities.
Effective processing technologies
As part of our modernisation programme,
we are now seeing the beneﬁts from
reducing our dependence on gravitation 
and ﬂotation technologies. This follows 
the introduction of more appropriate ore
processing methods, such as carbon-in-pulp.
We are now able to recover gold not only
from underground ore, but also from open
pit oxide ore, old tailings and low-grade ore
in waste dumps. The transition helps us
produce and sell greater volumes of higher
margin gold products, rather than ﬂotation
and gravitation concentrates.
Production expansion
In the third quarter of 2005, Kazakhaltyn
began operations at Aksu and Bestobe’s 
new heap leaching facilities, and started
processing ore at modernised concentration
and extraction plants at Aksu and
Zholymbet. Almost all of KazakhGold’s 
new or reconstructed processing facilities 
are expected to continue increasing their
processing capacity from 2006, until our
current modernisation programme is fully
implemented. This additional capacity will
enable a substantial increase in gold
production in 2006 and beyond.
Capturing growth opportunities
Our growth strategy is to increase
KazakhGold’s reserve base, through
conversion of our existing gold resources,
and to expand our current portfolio of gold
mining operations by actively pursuing
appropriate acquisitions. 
The Group intends to participate in
government tenders and to negotiate 
with potential sellers in the private sector. 
In December 2005, for example, we were
awarded licences to ﬁve new exploration
properties in Kazakhstan. Where beneﬁcial,
we will consider selective acquisitions of
underperforming, operational gold mining
companies or their assets, and mineral rights
to exploration properties in Kazakhstan and
elsewhere in central Asia. 
International partners 
KazakhGold will use its local knowledge 
and expertise to partner with international
mining companies. In September 2005, a
memorandum of understanding was signed
between Kazakhaltyn and Barrick Gold
Corporation, one of the world’s leading gold
mining companies, to cooperate with the
joint development of new licences, such as
those acquired in Kazakhstan during
December 2005. With Barrick Gold, the
Group will also seek other development
opportunities in both Kazakhstan and
elsewhere in central Asia.
Additionally, in 2005, Kazakhaltyn began
negotiations with the China National Gold
Corporation, China’s leading gold mining
company, with a view to CNGC becoming 
a subcontractor for underground mining 
at Bestobe. 2006 Priorities and Outlook
In 2006 we are continuing to develop open
pit mining at our three principal mines. Work
will be initiated at Zholymbet in the second
half of 2006, whilst at Aksu and Bestobe
production is being increased steadily
throughout the year. In the ﬁrst quarter 
of 2006 we produced 33,624 oz of gold,
which was in line with our expectations. 
We intend to signiﬁcantly expand the
Group’s use of carbon-in-pulp processing
methods. This technology beneﬁts from no
seasonal effects and enables the recovery 
of up to 95 per cent of the gold present in
ore. It is compatible with ore mined at our
underground and open pit operations. 
In the second half of 2006, processing is
scheduled to begin at a new heap leach
facility in Zholymbet. The priority there will
be to process some 12.5 million tonnes of
dumps, with a gold content of 1.2 grammes
per tonne. At Aksu and Bestobe, we
anticipate further expansion of our heap
leaching capacity, to support planned
increases in our gold production.
At a strategic level, the Group will continue
to seek opportunities to acquire additional
properties in Kazakhstan and elsewhere 
in the region, partnering with other
organisations, where appropriate, to 
develop such assets.
Kanat Assaubayev
President & Chief Executive Ofﬁcer
President &
CEO’s Review
(continued)
KazakhGold Group Limited 8
Performance monitoring at the Group’s recently
installed CIP processing facilities History
KazakhGold Group Limited was incorporated
under the laws of Jersey on 26 September
2005. It was formed as a holding company for
the Group’s assets, and to facilitate its Global
Offer of GDRs and subsequent admission to
the Main Market of the London Stock
Exchange on 1 December 2005.
The Group’s principal operating subsidiary,
Kazakhaltyn, is the ultimate successor
company to the Kazakh state-owned
enterprise Open Joint Stock Company 
(OJSC) Kazakhaltyn, and owns and 
operates gold mining assets in Northern 
and Eastern Kazakhstan.
Kazakhaltyn’s business dates back to 1929,
when gold ore reserves were discovered in
Northern Kazakhstan. During the Soviet era, 
it was a part of the USSR’s Non-Ferrous
Metallurgy Ministry. Between 1953 and 
1992, the business traded under the name 
of Kazzoloto Ore Mining and Processing
Enterprise (Kazzoloto). After the collapse of
the Soviet Union in 1991, Kazzoloto was
transformed into an independent economic
unit, OJSC Kazakhaltyn. In 1996, the Kazakh
government transferred management of 
OJSC Kazakhaltyn to Gold Pool LLP . These
management rights were cancelled in 1997, 
in part due to Gold Pool’s failure to perform
under the management agreement.
In August 1998, the Kazakh government put
the assets of OSJC Kazakhaltyn up for open
tender. AskamSnab LLP , a Kazakh-registered
company controlled by the Assaubayev family,
won the tender and acquired the bankrupt
company’s assets and certain of its liabilities 
in June 1999. These liabilities included
accrued but unpaid salaries and certain other
ﬁnancial obligations. As required under the
terms of the tender, the family created a new
legal entity to own the assets and continue
the employment of the former employees 
of OJSC Kazakhaltyn.
The business was initially registered with the
Akmola Regional Justice Department as a
limited liability partnership, on 10 September
1999, under the name Kazakhaltyn Mining
and Processing Company Limited Liability
Partnership (Kazakhaltyn LLP).
To enable the listing of bonds on the
Kazakhstan Stock Exchange in July 2001, the
limited liability partnership was transformed
into an open joint stock company under the
name OJSC Kazakhaltyn Mining Metallurgical
Concern. Following the adoption of a new
Joint Stock Company Law in Kazakhstan in
May 2003, which, amongst other things,
removed the distinction between open 
and closed joint stock companies, OJSC
Kazakhaltyn Mining Metallurgical Concern
adopted a new charter and was renamed JSC
Kazakhaltyn Mining Metallurgical Concern.
On 12 October 2005, in preparation for
KazakhGold’s Global Offer of GDRs and
listing on the London Stock Exchange, Kanat
Assaubayev and Marussya Assaubayeva
transferred, via nominees, their entire
interest in Romanshorn LC AG (the holding
company of Kazakhaltyn), being the entire
issued units in Romanshorn LC AG, to the
Group for nil consideration.
Group Proﬁle
1929 Discovery of gold in 
Kazakhstan. Production begins 
at Aksu mine
1921
Fall of USSR - Kazakhstan formed
Government puts Kazakhaltyn up for tender
Soviet 
control
Uncertain 
direction
Privatisation
2006
1991
1992
1998
1999
1931 Production begins at 
Bestobe and Zholymbet mines
The business became part of the 
USSR Non-Ferrous Metallurgy 
Ministry
1950s Assets consolidated into 
state-owned Kazzoloto
Largest gold mines in Kazakhstan. During the 1980s production reaches up to 244,000 oz per year
1954 Production begins at 
Quartzite Hills Mine
1992 Kazzoloto transformed 
into state-owned OJSC 
Kazakhstan
1998 Mismanagement leads to 
bankruptcy of Kazakhaltyn
June 1999 Assaubayev family 
acquires assets and liabilities, 
Kazakhaltyn LLP formed
2004 Start of major 
modernisation programme
November 2005 
IPO – London 
Stock Exchange
2005 Acquired eight additional 
properties in Kazakhstan. Start of 
cooperation with Barrick Gold
KazakhGold Group Limited 9 Kazakhstan
Overview
Kazakhstan is the ninth-largest country in
the world, covering an area of approximately
2.7 million square kilometres. It is similar 
in size to Western Europe and spans two
time zones.
With a population of over 15 million in 2005,
and an average of fewer than six persons per
square kilometre, Kazakhstan has one of the
lowest population densities in the world. The
country is ethnically diverse, with over half
the population being ethnic Kazakhs while
more than a quarter are Russians.
Politically, the country is stable. President
Nazarbayev was re-elected in December
2005 for a further seven-year term, with 
the backing of 91 per cent of the vote.
Economic strength
The Government of Kazakhstan began
implementation of market-based economic
reforms in 1991. This includes a signiﬁcant
privatisation programme, the promotion of
foreign direct investment and the introduction
of an extensive legal framework. In September
2002, Kazakhstan became one of the ﬁrst
countries in the former Soviet Union to
receive an investment grade rating from 
a major international credit rating agency.
Between 1993 and 2005, the country
attracted more than US$34 billion in foreign
direct investment, making it the highest per
capita rate of all the CIS countries.
In each of the past ﬁve years, Kazakhstan’s
Gross Domestic Product (GDP) has grown 
by over nine per cent. This is also the highest
rate achieved amongst the countries of the
Confederation of Independent States (CIS).
In absolute terms, GDP per capita has grown
threefold since 2000, reaching US$3,763.
This growing prosperity has been supported
by world demand for oil and rising oil prices.
Oil receipts have boosted Kazakhstan’s
current account and balance of payments,
with the country’s trade surplus now over
US$10 billion. Despite this, inﬂation was 7.7
per cent in 2005, the lowest level in any CIS
country. In the foreign exchange markets,
the Kazakh tenge remained stable within 
a KTZ/US$130-4 range throughout 2005,
although it has since appreciated against 
the US dollar.
Natural resources and gold mining
Metallurgy, mining and mineral processing
have traditionally been the main industrial
activities in Kazakhstan. More recently,
however, oil and gas-related industries have
become the most important sector of the
economy. Overall, Kazakhstan is the world’s
ﬁfth-largest exporter of natural gas and has
the world’s eighth-largest proven oil reserves.
Kazakhstan beneﬁts from a good transport
network, low energy costs and royalty
payments set at a comparatively low level
which support ongoing investment in the
mining industry. Kazakhstan’s proximity to
China also beneﬁts mining companies by
providing ready access to low-cost Chinese
technology and mining equipment.
Geology
KazakhGold Group Limited 10
’00
9.8% 13.5% 9.8% 9.3% 9.4% 9.0%
13.2%
8.4%
5.9%
6.4%
6.9%
7.7%
’01 ’02 ’03 ’04 ’05
’00 ’01 ’02 ’03 ’04 ’05
1.3 2.9 2.2 2.2 5.4 2.5
145
150
155
144
130
134
Real GDP (% Y o Y)
CPI (average Y o Y)
GDP growth and inﬂation
Net foreign direct investment and tenge exchange rate
Real GDP (% Y o Y)
CPI (average Y o Y)
Net FDI (US $bn)
Exchange rate (KTZ/US $) Reserves and Resources
Geology
Kazakhstan has some 20 identiﬁed gold-
bearing regions, with the most signiﬁcant
grouped in the North, East and centre of 
the country, where the Group’s properties
are located. The deposits in the North fall
broadly into two groups, quartz-vein and
metasomatic alteration types. Gold
mineralisation originates from the Pre-
Cambrian rocks. The Group’s three main
mines have abundant low grade and easily
treatable surface oxide ores, with an average
grade of 2.03 g/tonne. These mines also have
high-grade underground sulphide reserves,
with an average grade of 9.84 g/tonne.
Mining activity is at present split equally
between underground and open pit activity.
The latter is set to increase in importance from
2006, as KazakhGold begins to process more
of these plentiful ore resources.
Resource classiﬁcation
The Group uses the FSU classiﬁcation
system, which is deﬁned in law with strict
criteria for compliance. This system was
developed in 1960 and revised in 1981. It
remains widely used in the Commonwealth
of Independent States, including in
Kazakhstan. Mineral concentrations are
divided into seven categories of three major
groups, based on the level of exploration
performed. Explored reserves are designated
as either A, B, or C
1
, evaluated reserves are
designated as C
2
and prognostic resources
are designated either as P
1
, P
2
or P
3
.
While the Group’s properties beneﬁt from a
large quantity of resource data compiled
during Soviet times, the material requires
reviewing and validation by independent
mining consultants. The intention is to put
this work out to tender in 2006, with a view
to reclassiﬁcation of the Group’s three
principal operating mines to JORC standards
by the end of 2007. 
A signiﬁcant asset base
The Group believes it has the largest-known
gold reserves and resources in Kazakhstan,
with an estimated 27 per cent of the
country’s total reserves. Based on the FSU
system (see the glossary on page 51 for
deﬁnitions), the three principal operating
mines of Aksu (including Quartzite Hills),
Bestobe and Zholymbet have estimated total
gold reserves (B+C
1
) and reserves &
resources (B+C
1
+C
2
+P
1
) of 13.2 million
ounces and 46.6 million ounces respectively,
as of June 2005. These mines, which share a
similar geological formation, have operating
licences valid until 2016.
The Group currently undertakes annual
revisions of its estimates of reserves and
resources, based upon actual exploration
and production results, depletion, new
information and ﬂuctuations in production
and economic parameters. The most recent
review was completed in June 2005 and
forms the basis of the Group’s current stated
B and C
1
reserves and C
2
and P
1
resources.
This annual revision was conducted prior 
to the completion of the acquisitions of the
Akzhal, Boldykol & Zhanan and Vasilevskyi
deposits in July 2005. As a result, these
properties have not yet been included in 
the Group’s calculations.
The Group’s three principal mines are all
located within 100 kilometres of the city 
of Stepnogorsk, in the Akmola region of
Northern Kazakhstan. The main operating
subsidiary Kazakhaltyn has its headquarters
in Stepnogorsk, which acts as an operations
hub for the Group’s mines in the North of
the country. The mines enjoy access to
inexpensive electrical power and are served
by a well-developed road and rail network.
As production is increased in 2006, the close
proximity of these mines will help generate
further economies of scale.
Exploration – Converting resources 
to reserves
The Group’s exploration strategy is focused
on the extension of its existing ore bodies,
both at its current operational mines and 
at undeveloped properties. A signiﬁcant 
part of the licenced mining area at the Aksu,
Bestobe, Zholymbet mines, as well as at 
the recently acquired Akzhal, Boldykol &
Zhanan and Vasilevskyi mines, remains
substantially unexplored.
Operational
Review
KazakhGold Group Limited 11 Operational
Review
(continued)
The Group is working to convert its
resources into reserves. During the second
half of 2005, exploratory investigations were
undertaken in the Tsentralnaya zone of the
Bestobe mine and Kariernaya zone of the
Aksu mine. In addition, drilling work was
performed in the Southeastern part of the
Vera plot, to conﬁrm that the ore body
continues to the surface. The outcome of
this exploration is expected to enable an
increase of reserves of high-grade ore to 
be mined. 
Processing 
Technologies
The Group is moving towards the use 
of more appropriate technologies, such 
as carbon-in-pulp (CIP), which are well
established internationally although
relatively new to the CIS countries. In the
former Soviet Union, by contrast, ﬂotation
and gravitation technology was widely 
used for gold production.
The Group’s processing strategy is to:
•  Use well-established, appropriate and
proven ore processing technologies
•  Employ low-cost techniques to ensure the
commercial viability of processing open pit
oxide and tailings/dumps
•  Source only business-critical equipment
from international suppliers, using Chinese
suppliers where possible, to keep costs
low without compromising quality
The main processing technologies employed at
the Group’s operations are summarized below
Flotation and Gravitation
This technology enables the processing of
higher-grade sulphide ores. It is, however,
unsuitable for oxide ores, due to their high
clay content. Both free gold and ﬂotation
concentrate, with a gold content of 60-90
grammes/tonne, are produced using this
method. Combined recovery rates average
around 90 per cent (50 per cent for 
ﬂotation and 40 per cent for gravitation
processing methods).
Carbon-in-Pulp (CIP)
This was ﬁrst used in gold production 
20 years ago and in 2005 KazakhGold
became the second company to implement
CIP technology in Kazakhstan. It is the most
efﬁcient method to process both oxide and
sulphide ores, with recovery rates of over 
90 per cent.
Heap Leaching
This technology was ﬁrst used in gold
production 30 years ago, and is used to
process low-grade oxide ores. In 2005,
Bestobe became the second mine in
Kazakhstan to implement this technology.
While it is the lowest-cost method of
processing, recovery rates are only
approximately 60 per cent.
Both CIP and heap leaching produce
cathodic gold with a gold content of
between 60 and 90 per cent.
Appropriate processing – optimised
production 
Prior to the bankruptcy of state-owned OJSC
Kazakhaltyn, production at Aksu, Bestobe
and Zholymbet was focused on mining and
processing high-grade ore. Lower-grade ore,
if extracted, was generally sent to on-site
waste dumps. The new management of
Kazakhaltyn recognised the potential to
increase gold production, whilst reducing
the unit production cost through extracting
and processing lower-grade ore. Consequently,
from 1999 to 2004, Kazakhaltyn engaged 
in extensive research on the mineralogy of
the Group’s main deposits. Using data
collected during the Soviet era, and by
undertaking further exploration work, the
existence of large reserves of low-grade ore,
that could be extracted by open pit mining,
was conﬁrmed.
KazakhGold Group Limited 12
Reserves and resources of the three principal mines
Ore Grade Gold Gold
(m tonnes) (g/tonnes) (tonnes) (m oz)
Reserves (B + C
1
) 161.6 2.55 411.3 13.2
Resources ( C
2
) 54.8 6.92 379.1 12.2
Resources (P
1
) 139.4 4.73 660.0 21.2
Total reserves and resources
(B + C
1
+ C
2
+ P
1
) 355.8 4.08 1,450.4 46.6 B = 5%
C
1
= 23%
C
2
= 26%
P
1
= 46%
Resources
(1)
by FSU
classiﬁcation*
In 2004, implementation of a modernisation
programme began that moves the Group
from a dependence on ﬂotation and
gravitation technology, to the use of 
more appropriate processing methods 
such as heap leaching and carbon-in-pulp
(cyanidation) treatment techniques. The
modernisation programme began with 
the construction of new heap leach plants 
at Aksu, Bestobe and Zholymbet. The
programme also identiﬁed the need for new
or reconstructed CIP plants that rely primarily
upon cyanidation processing technology.
The newly constructed Aksu heap leach 
and CIP processing plants, the Bestobe 
heap leach plant and the Zholymbet CIP
plant, all commenced operations in the 
third quarter of 2005. The Group is currently
expecting to begin operations at Zholymbet’s
new heap leach plant in the ﬁrst quarter of
2007, and at Bestobe’s CIP plant in the third
quarter of 2008.
The processing technology used at the Group
enables a range of products to be fabricated,
including: cathodic sludge, cathodic gold, free
gold, ﬂotation concentrate, quartzite ore and
doré bars. Further explanation of these products
is provided in the glossary on page 51.
Cost competitiveness – A critical
success factor
KazakhGold’s operations beneﬁt from 
a number of distinct cost advantages. 
These include:
• Conveniently located assets
• Quality reserves, amenable to low-cost
mining techniques
• On-site processing facilities
• Competitive labour and electricity costs
• Modest royalty payments
• Local currency stability – which is
important, as operating costs are
primarily denominated in tenge
In the period 26 September to 31 December
2005, gold was produced at the Group’s
three principal mines for a cost of
approximately US$210/oz. This is already
below the average cost for Asia, and
signiﬁcantly below the average costs in other
gold mining countries such as South Africa
and Australia. The Group’s production costs
per ounce are set to fall further, due to
economies of scale as production increases.
KazakhGold Group Limited 13
B
2.57 g/tonne
C
1
2.54 g/tonne
C
2
6.92 g/tonne
P
1
4.73 g/tonne
Total
4.08 g/tonne
11.0
12.2
21.2
46.6
2.2
Average 
grade:
Reserves and resources by FSU classiﬁcation (m oz)*
Dumps @ 1.07 g/t = 9%
Underground @ 9.84 g/t = 44%
Open pit @ 2.03 g/t = 41%
Tailings @ 0.99 g/t = 6%
Reserves by source
(1, 2)
*
Zholymbet = 33%
Aksu = 44%
Bestobe = 23%
Reserves by mine
(1, 2)
*
(1)
Based on gold content, excludes new acquisitions
(2)
Includes only reserves (B+C
1
)
*As at June 2005 The Aksu and adjacent Quartzite Hills
mines are located in the Akmola region
of Northern Kazakhstan, 18 kilometres
north of the city of Stepnogorsk. 
KazakhGold Group Limited 14 Overview
Exploration at Aksu began in 1929, when
gold deposits of a quartz-vein mineralization
type were discovered. There are currently
four operating shafts; one dedicated
ventilation shaft; and one open pit facility 
in operation at the two mines. In addition,
low-grade ore is processed from tailings in
on-site tailings dams and waste dumps. 
Until 2005, only underground mining and
ﬂotation processing were performed at
Aksu. Ore from Aksu is now processed using
ﬂotation, CIP or heap leach technology.
Aksu is the location of a geological
exploration unit that handles all of the
Group’s internal exploration work.
Reserves and resources
Kazakhaltyn estimated that as of June 2005
the Aksu mine, which includes the Aksu and
nearby Quartzite Hills deposits, had B and C
1
gold reserves and C
2
and P
1
gold resources of
approximately 5.8 million ounces and 15.0
million ounces respectively. Approximately
one third of the reserves identiﬁed are
concentrated in the Vera zone. The ore body
at Vera continues to the surface, which will
allow the Group to develop large-scale open
pit operations at Vera in the future.
Production highlights and capital
expenditure
In the period 26 September to 31 December
2005, 369,259 tonnes of ore were mined,
with an average grade of 2.54 grammes of
gold per tonne. The gold recovery rate was
63 per cent, enabling 18,981oz of gold to 
be produced. Capital expenditure at Aksu
during the period was US$3.0 million.
Processing
Until July 2005, all ore at Aksu was
processed using the ﬂotation method. Then,
after extensive testing, two new processing
technologies were introduced. First into
operation, on 13 July 2005, was a new heap
leach plant with an annual throughput
capacity of approximately 0.5 million tonnes.
This facility is producing cathodic gold.
On 28 August 2005, operations commenced
at Aksu’s new CIP facility, following the
reconstruction of the original ﬂotation
technology plant to rely primarily on CIP
technology. This CIP facility has an annual
throughput capacity of 1.0 million tonnes
per annum and produces cathodic gold.
Finally, in August, a small-scale ﬂotation 
line with a capacity of 0.2 million tonnes 
per annum was re-started at the Aksu
Processing Plant. This treats refractory 
ores and produces ﬂotation concentrates.
Outlook
In 2006 the focus at Aksu will be on
development of open pit operations, 
to support the Group’s production 
expansion plans.
Longer term, the Group expects to start
underground mining of the high-grade
sulphide ore in the Vera zone from 2008.
This zone has signiﬁcant potential, despite
being only partly drilled and proven. Vera 
has approximately 2.0 million ounces of
reserves, with the ore having a high gold
content of 10.7 grammes per tonne.
100
200
300
400
500
600
700
level (metres)
Tailings Dam
Processing Plant
Kapitalnaya Shaft
Novaya Shaft
Flangovaya Shaft
17’ Shaft
41-39 Shaft
Vera Zone
Shaft 40
Shaft 38
Karyernaya Zone
Shaft 38’
Heap Leach Pads
Shaft “R”
Shaft “B”
Waste Dump
Aksu
Overview
KazakhGold Group Limited 15
Schematic section through the Aksu ore ﬁeld
Reserves (B + C
1
) by source*
(1)
Ore Grade Gold Gold
m tonnes g/tonnes tonnes m oz
B 14.0 2.28 32.0 1.0
C
1
56.7 2.62 148.6 4.8
Total Reserves (B + C
1
) 70.7 2.55 180.6 5.8
C
2
21.8 7.16 156.4 5.0
P
1
62.0 5.00 310.0 10.0
Total Reserves and Resources
(B + C
1
+C
2
+P
1
) 154.5 4.19 647.0 20.8
Reserves and Resources*
Dumps @ 1.00 g/t 
Underground @ 8.40 g/t
Open pit @ 2.06 g/t
Tailings @ 0.97 g/t
*As at June 2005 
(1)
Based on gold content
Note: Based on FSU classiﬁcation Located 80km northeast of Stepnogorsk,
most of the exploration work at Bestobe
was undertaken in the 1950s. 
KazakhGold Group Limited 16 Overview
Over 380 quartz veins have been identiﬁed
at the mine, of which some 285 are considered
suitable for mining.
There are four underground mining locations,
a dedicated ventilation shaft and one open
pit mine. Low-grade ore is contained in 
on-site tailings dams and waste dumps. 
Until 2005, only underground mining 
and ﬂotation processing were undertaken 
at Bestobe.
Reserves and resources
In June 2005, according to Kazakhaltyn’s
estimates, Bestobe had B and C
1
gold reserves
and C
2
and P
1
gold resources under the FSU
Classiﬁcation of approximately 3.0 million
ounces and 10.2 million ounces respectively.
Production highlights and capital
expenditure
For the period 26 September to 31
December 2005, 257,807 tonnes of ore
were mined, with an average grade of 3.87
grammes per tonne. The gold recovery rate
was 62 per cent, enabling 19,904 oz of gold
to be produced. Over the period, US$0.2
million was invested in Bestobe’s 
ore crushing facility. 
Processing
The original processing plant at Bestobe was
constructed in 1932. Unlike the Aksu and
Zholymbet deposits, a signiﬁcant proportion
of the gold can be recovered using gravity
concentration. The plant currently treats
both underground ore and some oxidised
material using gravity and ﬂotation
technologies. Gold recovered from the
gravity circuit is amalgamated to produce
gravity concentrate, whilst gold bearing
ﬂotation concentrate is also produced.
A new heap leach plant at Bestobe
commenced operations on 15 August 2005.
It treats a combination of tailings and oxide
ore and has an annual throughput capacity
of approximately 1.0 million tonnes of ore.
The existing ﬂotation processing facility 
has an annual throughput capacity of
approximately 0.25 million tonnes. This 
plant will continue in operation and will be
used to process ore from the Dalnaya zone,
which is better suited to processing using
ﬂotation technology.
Outlook
Expansion of open pit mining is a priority in
2006, in order to support the Group’s rising
production plans. On the processing side,
heap leaching capacity will be expanded in
2006. Construction of a new CIP plant, with
annual capacity of 2.5 million tonnes, is 
also planned and due to become operational
by 2008. This will replace the old ﬂotation
facility of 0.25 million tonnes annual
throughput capacity.
Bestobe
Overview
KazakhGold Group Limited 17
45
110
160
250
340
430
520
610
700
790
790
970
level (metres)
Waste Dump (Zapadnaya)
Kapitalnaya Shaft
Novaya Shaft
Zapadnaya Shaft
Waste Dump (Dalnaya)
Dalnaya Zone
Waste Dump (Ventilyatsionnaya)
Waste Dump (Processing Plant)
Shaft 50
Old Tailings Dump
Zone 1008
Zone 1009
Shaft 2
Heap Leach Pads
New Tailings Dump
Ventilyatsionnaya Shaft
Schematic section through the Bestobe ore ﬁeld
Reserves (B + C
2
) by source*
(1)
Ore Grade Gold Gold
m tonnes g/tonnes tonnes m oz
B 4.9 3.39 16.7 0.5
C
1
29.6 2.60 76.9 2.5
Total Reserves (B + C
1
) 34.5 2.71 93.6 3.0
C
2
9.2 12.90 118.2 3.8
P
1
33.3 6.00 200.0 6.4
Total Reserves and Resources
(B + C
1
+C
2
+P
1
) 77.0 5.35 411.8 13.2
Reserves and Resources *
Dumps @ 1.02 g/t 
Underground @ 7.37 g/t
Open pit @ 2.23 g/t
Tailings @ 1.00 g/t
*As at June 2005 
(1)
Based on gold content
Note: Based on FSU classiﬁcation Zholymbet is located 100km south
of Stepnogorsk and saw most of
the exploration work carried out
in the 1930s.
KazakhGold Group Limited 18 Overview
There are four underground mine operations
as well as a dedicated ventilation shaft. Low-
grade ore is contained in on-site tailings
dams and waste dumps.
Reserves and resources
In June 2005, Kazakhaltyn estimated that
the Zholymbet mine had B and C
1
gold
reserves and C
2
and P
1
gold resources of
approximately 4.4 million ounces and 8.2
million ounces respectively. The deposit
includes a siliciﬁed zone extending 2.5
kilometres and up to 80 metres wide. The
underground ore is the Group’s highest-
grade reserve, with a gold content of 21.15
grammes/tonne.
Production highlights and capital
expenditure
For the period 26 September to 31
December 2005, 129,982 tonnes of ore
were mined, with an average grade of 4.03
grammes per tonne. The gold recovery rate
was 82.1 per cent, enabling 13,806 oz of
gold to be produced. Capital expenditure 
at Zholymbet during this period was 
US$1.5 million.
Processing
Until 2005 only underground mining and
ﬂotation processing were performed at
Zholymbet. The original processing plant was
designed to treat sulphide ores using gravity
and ﬂotation technologies. As part of the
Group’s modernisation programme, the
ﬂotation sections were removed and the
plant was modiﬁed to treat tailings. A newly-
constructed CIP plant began operations in
August 2005, with an annual throughput
capacity of approximately 0.5 million tonnes.
A new heap leach plant is expected to
become operational later in 2006. It will
have an annual throughput capacity of
approximately 1.0 million tonnes.
Outlook
Open pit production is due to commence in
the second half of 2006. To accommodate
the additional ore, later this year it is planned
to steadily increase the processing capacity
at the CIP plant to 2.5 million tonnes by
2008. The Group is also expecting to begin
operations at a new 2.0 million tonne
capacity heap leach plant in the ﬁrst quarter
of 2007. These changes will allow
production levels at Zholymbet to rise
considerably.
Zholymbet
Overview
KazakhGold Group Limited 19
Ore Grade Gold Gold
m tonnes g/tonnes tonnes m oz
B 8.0 2.55 20.3 0.7
C
1
48.4 2.41 116.8 3.7
Total Reserves (B + C1) 56.4 2.43 137.1 4.4
C
2
23.8 4.40 104.6 3.4
P
1
44.1 3.40 150.0 4.8
Total Reserves and Resources
(B + C
1
+C
2
+P
1
) 124.3 3.15 391.7 12.6
Waste Dump (Processing Plant)
Waste Dump (Dioritovaya Dyke)
Shaft 8
Tsentralnaya Shaft
Chubokaya Shaft
Shaft 6
Dioritovaya Dyke (Open Pit)
Ventilyatsionnaya Shaft
Quartzy Zone
47.5
135
205
275
350
430
520
600
680
760
840
920
1000
level (metres)
Schematic section through the Zholymbet ore ﬁeld
Dumps @ 1.20 g/t 
Underground @ 21.15 g/t
Open pit @ 1.87 g/t
Tailings @ 1.00 g/t
Reserves (B + C
1
) by source*
(1)
Reserves and Resources *
*As at June 2005 
(1)
Based on gold content
Note: Based on FSU classiﬁcation Operational
Review
(continued)
Acquisitions
In July 2005, Kazakhaltyn acquired three
mines for a total consideration of US$3.1
million, which now form part of the Group’s
assets. These mines are the Akzhal and
Vasilevskyi mines, and the assets and mineral
rights to the Boldykol & Zhanan mine. The
properties are largely unexplored and are 
in Eastern Kazakhstan.
The Akzhal, Boldykol & Zhanan and
Vasilevskyi mines are within 210 kilometres
of the city of Semipalatinsk, where the
Group has established its headquarters for
managing its operations in Eastern Kazakhstan.
Akzhal
Visart LLP , a privately-owned Kazakh
partnership, was acquired for US$694,000.
Visart LLP has the rights to the Akzhal mine,
which is an exploration property with no
current gold production.
Vasilevskyi
Rudnik Vasilevskyi LLP , a privately-owned
Kazakh partnership, was acquired for
US$393,000. Rudnik Vasilevskyi LLP has the
rights to the Vasilevskyi mine, which is an
exploration property with no current gold
production.
Boldykol & Zhanan
The mine and mineral rights to the Boldykol
& Zhanan deposits, together with other
assets in Semipalatinsk and Ust-Kamenogorsk,
were acquired for US$2.01 million. The
assets were previously owned by JSC Altyn
Tobe and were acquired from JSC
Kazkommertsbank, through a tender
process, following a loan default by Altyn
Tobe. The Group is currently in the process 
of securing subsurface use contracts for
these deposits with the Kazakh Government
(Ministry of Energy and Mineral Resources).
New Licences 
Kazakhaltyn was awarded ﬁve new
exploration licences in December 2005.
Southern Karaultube (9.3 km
2
) and
Kyzylsorskoe (60 km
2
) are both located in 
the Akmola region of Northern Kazakhstan,
near our existing mining operations. They
can both be explored and developed
efﬁciently by KazakhGold and were
historically part of Kazakhaltyn, with the
results of earlier exploration work from the
1980s still available.
Pridorojnoe (390 km
2
) and Kaskabulakskoe
(491 km
2
) are in Eastern Kazakhstan, close to
the three mines acquired by Kazakhaltyn in
July 2005, while Zones 1 & 2 of the
Akshatau MMC deposit (56.6 km
2
) are
located in the Karaganda region of central
Kazakhstan. These deposits are likely to be
explored and developed by a joint venture
with Barrick Gold. Registration of the
necessary legal documents will be completed
in 2006, although the joint venture has
already started to prepare a detailed
programme for the geological investigation
of the deposits. Prospecting work will begin
later this year.
International Partners
The Group’s management team has
signiﬁcant experience of the geology,
metallurgy, mining and processing
technologies currently used in Kazakhstan.
This knowledge means that KazakhGold 
is well placed to cooperate with leading
international gold mining companies to
develop a range of opportunities.
Barrick Gold Corporation
A framework agreement was signed by
Kazakhaltyn with Barrick Gold on 23
September 2005, to cooperate with
exploration projects in Kazakhstan and
central Asia. Barrick Gold will beneﬁt from
access to new properties in the region, while
Kazakhaltyn will have access to explore and
develop certain of Barrick Gold’s resources. It
is anticipated that the tenders won in
December 2005, for exploration properties
in Eastern and central Kazakhstan, will be
acquired, explored and developed under this
agreement through a joint venture company,
in which Kazakhaltyn and Barrick Gold will
each have a 50 per cent interest. Final details
are expected to be concluded in 2006.
Kazakhaltyn’s proposed joint venture
agreement with Barrick Gold also covers 
the exploration of territories in Kazakhstan,
Kyrgyzstan and Uzbekistan. The partners will
take part in tenders to acquire the rights to
explore sites in these areas. The investment
in exploration works will be carried out in
conjunction with Barrick Gold.
China National Gold Corporation
Discussions with the China National Gold
Corporation (CNGC) regarding the
expansion of underground mining
operations at Bestobe are under way, with 
a view to CNGC acting as a subcontractor 
at Bestobe. CNGC is likely to provide
equipment and operational management,
enabling the Group to beneﬁt from CNGC’s
KazakhGold Group Limited 20 underground mining expertise. The total
planned expenditure for the reconstruction
of the Bestobe underground mine, and 
the construction of a new CIP plant, is
approximately US$20 million.
Sales
The Group’s business strategy envisages
increasing sales of higher margin gold
products, at the expense of ﬂotation and
gravity concentrates and quartzite ore. 
From 26 September to 31 December 2005,
52,691 oz of gold was produced. Most of 
the production was of cathodic sludge, 
part of which was sold in Kazakhstan and
Kyrgyzstan, with the balance expected to 
be sold in 2006. The Group expects the
proportion of cathodic sludge produced to
decline throughout 2006, in favour of higher
margin cathodic gold. This shift is due to 
the optimisation of recently installed
electrolysis equipment. 
The remaining production of free gold and
gold doré during the period was sold to
Metalor SA in Switzerland, while ﬂotation
and gravity concentrates were sold to
customers in Russia. A breakdown of sales
by product and market for the period is
provided in Note 2 of the ﬁnancial statements.
Looking ahead, the Group is seeking to
broaden its customer base and expects to
export all its gold production in 2006. 
Health & Safety
As a mining group, with large numbers of
workers employed at its facilities, workplace
safety issues are of paramount importance.
KazakhGold encourages all employees to
pursue a healthy, balanced lifestyle. This is
supported by comprehensive health policies
at the Group’s plants, preventative medical
care and subsidised health centres.
In the period 26 September to 31 December
2005, there were no fatalities at the Group’s
operations. The Group, through its
subsidiary Kazakhaltyn, is engaged in a
process of continuous improvement in the
work practices at its mines, not only to
comply with Kazakh law but also to move
towards best international practice. To
achieve this, a department has been
established to ensure compliance with
Kazakh health and safety regulations, and 
to address all relevant issues arising. This
department is developing a management
system compliant with the international
OHSAS 18101 standard on occupational
health and safety. An occupational health
and safety plan is also being prepared 
and will be implemented progressively
through 2006.
At Aksu, Bestobe and Zholymbet, the Group
operates occupational safety training facilities
where mandatory training is provided to all
employees engaged in operations. From
2006, this training is being extended to
workers at the recently-acquired Akzhal,
Boldykol & Zhanan and Vasilevskyi mines.
Environment
Historically, industrial complexes in
Kazakhstan have often employed sub-
optimal procedures and technologies. Under
Kazakh law, the Group’s principal operating
subsidiary Kazakhaltyn is required to give
priority to environmental considerations. 
This includes monitoring the impact of
operations on the environment, limiting
desertiﬁcation and soil erosion and
preventing the pollution or exhaustion 
of subsurface water.
This legal obligation is matched by the
Group’s proactive approach towards the
environment. In addition to compliance 
with Kazakh law, KazakhGold aims to
improve the environmental impact of its
operations by bringing standards into line
with international accepted practice for
mining companies. To facilitate this, a
dedicated environmental department has
been established in Kazakhaltyn to monitor
compliance with Kazakh environmental
regulations, and to address any issues
arising. It is led by Kazakhaltyn’s Chief
Geologist, with support from an
environmental engineer. There is also 
an ecologist based at each of the three
principal mines.
Prior to commencing mining operations 
at any property, Kazakhaltyn is required 
to obtain approval from the Kazakh
environmental authorities. Upon the
conclusion of mining operations, it is 
obliged to make good the environment 
of the impacted area, to ensure that any
environmental damage is mitigated, and 
that the work area is suitable for future use.
To ﬁnance this, Kazakhaltyn is required to
transfer an amount equivalent to one per
cent of its net income into a liquidation fund
for environmental clean-up costs, following
cessation of mining operations, including the
costs of removing buildings and equipment.
In the event that this fund proves to be
KazakhGold Group Limited 21 Operational
Review
(continued)
insufﬁcient to meet the cost of Kazakhaltyn’s
clean-up obligations, Kazakhaltyn is obliged
to fund any such shortfall. No additional
payments were necessary in the period 26
September to 31 December 2005.
In 2005, Kazakhaltyn reached agreement
with the Kazakh Ministry of Environmental
Protection on an ecological monitoring
programme for its operations. Water and 
air quality samples are now taken at three-
monthly intervals and soil samples are 
tested annually.
The Group continues to invest in its
operations to ensure their compliance with
local environmental standards. In 2005, for
example, new equipment was installed at
the Zholymbet mine boiler facility, that
enables harmful or hazardous emissions 
to be reduced by up to 85 per cent. At the
Aksu mine, similar gas scrubber equipment
was installed in 2005. 
Corporate Social
Responsibilty
The Group acknowledges that it has a wider
role in the communities in which it operates,
beyond just the employment provided.
Kazakhaltyn is required by the Kazakh
government to provide ﬁnancing of at least
one per cent of the total amount of its mine
investment, for development of the social
infrastructure of the area covered by each
mining contract.
Kazakhaltyn has a track record of providing
charitable support for the communities
bordering its mines. In the period 26
September to 31 December 2005,
US$21,300 was donated to projects 
that included the provision of support 
for schools and orphanages and the
maintenance of local water supplies.
Kazakhaltyn recently met regional and
community representatives to address any
environmental concerns with its operations
and to discuss its plans. On a broader level,
the Group has undertaken to purchase
goods and services from local businesses,
wherever possible and where competitive
with alternatives options available outside
Kazakhstan. In 2006, the Group plans 
to formalise its community work through 
the introduction of a community
development plan.
People
The Group continues to place great
importance on the welfare, training 
and development of its employees. 
As is common with mining agreements
between mining companies and national
governments, Kazakhaltyn has also
undertaken certain social obligations for 
the beneﬁt of its employees and their
dependants. These include investing at 
least one per cent of Kazakhaltyn’s annual
net income in training programmes for 
its employees.
The Group, through Kazakhaltyn, transfers
10 per cent of Kazakh employees’ salaries
into a private deﬁned contribution pension
plan. This fulﬁls a requirement established by
the Kazakh government.
The number of Group employees was 3,209
at 31 December 2005, an increase of 146
over the period. 
KazakhGold Group Limited 22
KazakhGold employees by principal activity
26 September 2005 31 December 2005
Aksu mine 821 857 
Bestobe mine 1,081 1,101 
Zholymbet mine 671 701 
Geological exploration unit 81 82 
Central supply base 43 64 
Construction and maintenance unit 126 116 
Security services unit 115 174 
Management 125 114 
Total 3,063 3,209  Financial
Review
The fourteen weeks from 26
September to 31 December 2005
is the ﬁrst period for which the
Group is reporting ﬁnancial
results, following its incorporation
in Jersey on 26 September 2005.
The ﬁnancial statements have
been prepared in accordance
with International Financial
Reporting Standards (IFRS).
On 12 October 2005 the Group acquired 
the entire issued units of Romanshorn LC
AG, from Kanat Assaubayev and Marussya
Assaubayeva for nil consideration.
Romanshorn is the holding company of 
the Group’s main operating subsidiary,
Kazakhaltyn. At that date, Kazakhaltyn had
cash and cash equivalents of US$0.5 million.
Revenue for the period was US$20.4 million,
with slightly over half of sales made to
Kyrgyzstan and the remainder to Switzerland,
Russia and Kazakhstan. The cost of sales was
US$14.9 million, leaving a gross proﬁt of
US$5.5 million. After allowing for other
operating income and expenses, an operating
loss of US$713,000 resulted for the period.
Interest charged to the consolidated income
statement in the period, on the Group’s ﬁxed
rate bank debt and its ﬂoating rate bonds,
was US$647,000. The loss before tax was
US$1.1 million. After the deduction of
US$1.1 million in tax, the loss attributable 
to equity shareholders was US$2.2 million.
Basic (and diluted) losses per share were
US$0.05.
The Group’s revenues are denominated in 
US dollars, while its costs are predominantly
in Kazakh tenge, except for some equipment
and a small number of consumables
purchased internationally. Hedging is not
used to cover this foreign currency risk, as 
it could impact the Group’s intention of
being an unhedged gold producer. Further
information on the management of the
Group’s ﬁnancial risks is contained in Note
29a of the ﬁnancial statements.
The cash cost of gold production for the
period was US$210/oz, while the average
gold price achieved on sales made in the
period was US$448/oz.
The most signiﬁcant impact on the Group’s
cash ﬂow last year was its IPO in November.
The primary issue of 7.1 million GDRs, at
US$15/GDR, raised some US$97.4 million
net of costs for reinvestment in the Group. 
A signiﬁcant proportion of the proceeds
have been allocated for investment in 2006,
for the expansion and upgrading of the
Group’s ore processing facilities, for mine
development and exploration. Of the
balance, US$6.3 million was used to 
repay borrowings during the period and 
the remainder was used for working 
capital purposes.
Operating cash ﬂow from 26 September
2005 to the year-end was US$5.1 million.
The Group had cash and cash equivalents 
at the end of the period of US$87.9 million.
At 31 December 2005, the Group had debt
of US$46.6 million made up of ﬂoating rate
tenge bonds and US dollar and tenge
denominated ﬁxed rate debt and ﬁnance
leases. The bonds have a variable coupon
capped at 13 per cent, which in 2005
amounted to an effective rate of 10.6 per
cent over the period. The ﬁxed rate US dollar
and tenge debt, meanwhile, had coupons 
of 13 to 15 per cent. In 2006, the Group
intends to pay down all this relatively high
cost debt using proceeds from the IPO. The
Group will continue to manage actively its
borrowings to ensure that their cost remains
competitive and that they reﬂect 
the Group’s size and potential.
Looking ahead, the Group is examining
ﬁnancing and technical options for an
accelerated development plan for its mines.
It is conﬁdent that any such plans, if
implemented, can be ﬁnanced through
additional debt, without compromising 
the Group’s long-term ﬁnancial stability 
and operational ﬂexibility.
KazakhGold Group Limited 23 Board of
Directors
KazakhGold Group Limited 24
13
24
57
6 8 Kanat Shaikhanovich Assaubayev
1
President & Chief Executive Ofﬁcer
Kanat Assaubayev has been President of Kazakhaltyn
since 1999, and was also a member of the Board of
Directors of Kazakhaltyn from 2001 until 2004,
subsequently being re-elected a Director in February
2005. Between 1991 and 1999, he established and
participated in the management of a number of
companies in Kazakhstan, in several different industrial
sectors, some of which provided goods and services to
various Kazakh government ministries. He graduated
from the Kazakh Polytechnic Institute in 1970, and
subsequently received a candidate of science degree from
The Institute of Systemic Analysis in Moscow in 1978. In
1985 he was awarded a doctor of science degree from
the Institute of Steel and Alloys in Moscow. 
Member of the Health, Safety and Environment
Committee
Baurzhan Kanatovich Assaubayev
2
First Deputy Chief Executive Ofﬁcer
Baurzhan Assaubayev is a Vice President of Kazakhaltyn,
where he has been responsible for gold mining and
processing operations since 1999. He graduated from the
Kazakh National Technical University in 1992, where he
specialised in system software development. In 1996 he
received a candidate of science degree, from the same
university, in the automation of technological processes
and production cycles.
Aidar Kanatovich Assaubayev
3
Deputy Chief Executive Ofﬁcer - 
Corporate Development  
Aidar Assaubayev is a Vice President of Kazakhaltyn,
which he joined in 1999. His responsibilities there include
the supervision of the legal department, international
activities and the introduction of new mining and
processing technologies. In 2000, he graduated with
honours from the Kazakh National Technical University,
where he specialised in engineering and economics. In
2006 he will receive a candidate of science degree from
the Institute of Systemic Analysis in Moscow.
Member of the Health, Safety and Environment
Committee
Marussya Maralovna Assaubayeva
4
Deputy Chief Executive Ofﬁcer - 
Health, Safety, Environment and HR 
From 2000 to 2001, Mrs Assaubayeva was Vice President
of Kazakhaltyn, and was Director and Deputy
Chairperson of the Board of Directors between 2001 and
2004. In 2005 she was re-elected as a Director and
Deputy Chairperson of the Board of Directors. She
graduated from the pharmaceutical department of the
Almaty Medical Institute in 1972.
Member of the Health, Safety and Environment
Committee
KazakhGold Group Limited 25
Executive
Directors
Lord Daresbury
5
Non-Executive Chairman
Peter Daresbury joined the Board in October 2005. He
served as the Chairman of De Vere Group plc from 2000
until 2006. Between 2002 and 2005 he was Executive
Chairman of Highland Gold Mining Limited. He has an 
MA in History from Magdalene College, Cambridge
University and also received a Sloan Fellowship from the
London Business School.
Member of the Audit and Remuneration Committees
Toktarkhan Kozhagapanov 
6
Non-Executive Director 
Toktarkhan Kozhagapanov has been Chairman of the Board
of Kazakhaltyn since 2001. Between 1993 and 1997 he
served as Chairman of the Supervisory Board of JSC Turan
Bank, leaving to become a Vice Governor of the Almaty
region between 1997 and 2001. He graduated from the
Kazakh Polytechnic Institute and the National Academy of
Economics of the USSR Council of Ministers. He also has a
candidate of science degree in Economics. In 1989, he
received the title of Honoured Economist of the Republic
of Kazakhstan. In 2005 he was awarded the Kurmet
Order, a prestigious national award, by a decree of the
President of Kazakhstan.
Member of the Audit and Remuneration Committees
David Netherway 
7
Non-Executive Director
David Netherway has nearly 30 years of experience in the
mining industry. From 2002, he served as Chief Executive
Ofﬁcer of the Toronto-listed Afcan Mining Corporation, a
China-focused gold mining company, until its takeover by
Eldorado Gold Corporation in 2005. He has been involved
in the construction and development of the Iduapriem,
Siguiri and Kiniero gold mines in West Africa. Prior to
joining Afcan, he held senior management positions in a
number of mining companies, including Golden Shamrock
Mines, Ashanti Goldﬁelds and Semafo.
He received a BE in Mining Engineering from the University
of Melbourne in 1975 and a Certiﬁed Diploma in
Accounting and Finance from the Chartered Association
of Certiﬁed Accountants in the United Kingdom in 1985.
Chairman of the Health, Safety and Environment
Committee; Chairman of the Remuneration Committee;
Member of the Audit Committee 
Stephen Oke 
8
Non-Executive Director
Stephen Oke has some 30 years of mining operational
management, and natural resources investment banking
experience. He has held senior positions with Standard
Bank, NM Rothschild & Sons Ltd, Merrill Lynch and Smith
Newcourt. He has also worked with the UK National Coal
Board, AngloVaal Mining (Johannesburg), BP Coal (Pty)
Ltd and Johannesburg Consolidated Investment Ltd. He is
a Non-Executive Director of International Ferro Metals
Ltd. He has an honours degree in Geology from the
University of Southampton and an MBA from the
University of the Witwatersrand Graduate School of
Business, in Johannesburg.
Chairman of the Audit Committee; Member of the
Remuneration Committee
Non-Executive
Directors The Directors of KazakhGold Group Limited have pleasure in submitting
their Report with the audited financial statements for the period 26
September to 31 December 2005.
Principal activities
KazakhGold Group Limited (the“Group”) is the ultimate holding company
and the indirect parent company of Kazakhaltyn, a company incorporated
in Kazakhstan and the operating company through which the Group holds
its gold mining assets in Kazakhstan. The principal activities of the Group
are exploration, mining and gold production. KazakhGold Group Limited
was incorporated in Jersey on 26 September 2005 (registered number
91264), and was registered as a Public Company on 18 November 2005. 
It acts as a holding company and provides financing and management
services to its subsidiaries, from its principal place of business in London,
where it is centrally managed and controlled. The relationship between it,
its operating companies and its mines is explained on the inside back cover
of this report.
Business review & future developments
A summary of the Group’s main business developments for the period 
26 September to 31 December 2005 and potential future developments 
is contained within the Chairman’s Statement and the President and
CEO’s Review.
Accounting policies
The financial statements have been prepared in accordance with
International Financial Reporting Standards, as adopted by the European
Union and also in accordance with the Companies (Jersey) Law 1991.
Share capital and reserves
Details of the Group’s authorised and issued share capital as at 31 December
2005 are contained in Note 22 of the financial statements.
Results and dividends
An overview of the Group’s results, covering the period 26 September to
31 December 2005, is provided in the Financial Review on page 23. Detailed
financial information is included from page 30 to page 49 of the report.
The Directors do not propose the payment of shareholder dividends until
the Group’s plant modernisation and processing capacity programmes are
completed. Thereafter, subject to KazakhGold’s performance, the Group
intends to commence paying dividends progressively up to 25 per cent of
its consolidated annual net income.
Post-balance sheet events
There were no significant post-balance sheet events.
Directors and their interests
Details of Directors’ emoluments are contained within Note 8 of the
accounts.
The table below sets out the interests of the Directors in KazakhGold
Group’s issued share capital as at 31 December 2005.
Number of % of issued 
Director ordinary shares share capital
Kanat Assaubayev
1
33,600,000 71.3
Baurzhan Assaubayev
1
33,600,000 71.3
Aidar Assaubayev
1
33,600,000 71.3
Marussya Assaubayeva
1
33,600,000 71.3
Lord Daresbury
2
561,901 1.2
Toktarkhan Kozhagapanov – –
David Netherway
2
3,325 –
Stephen Oke
2
3,325 –
1 These interests include those of Kanat Assaubayev, Baurzhan Assaubayev, Aidar
Assaubayev, Marussya Assaubayeva as discretionary beneficiaries under the ABM
SK Trust, whose only named discretionary beneficiaries are members of the
Assaubayev family. No members of the Assaubayev family have a direct interest in
the Group.The shareholding interests of the ABM SK Trust are held by Gold Lion
Limited.
2 Of the total shown for Lord Daresbury, 400,000 shares are held in the form of
ordinary shares, while the remaining interest and those of David Netherway and
Stephen Oke are held in the form of Global Depositary Receipts.
The following options to purchase the Group’s ordinary shares were
outstanding at 31 December 2005.
David Netherway Stephen Oke
Number of options granted on 
1 December 2005 26,667 26,667
Exercise price $15 $15
Substantial shareholdings
The Group is aware of the following beneficial shareholdings, representing
10 per cent or more of the issued ordinary share capital of the Group, as at
31 December 2005.
Number of % of issued 
ordinary shares share capital
Gold Lion Limited 33,600,000 71.34
BNY (Nominees) Limited
1
13,100,000 27.81
1 BNY (Nominees) Limited holds these shares as depositary, against which
13.1 million Global Depositary Receipts have been issued, each representing one
ordinary share with a nominal value of £0.0001.
Corporate governance
There are no corporate governance recommendations applicable to
companies incorporated in Jersey, but the Group intends so far as it is able,
having regard to its size and stage of development, to comply with the
recommendations of the Combined Code on Corporate Governance for UK
registered and listed companies.
KazakhGold Group Limited 26
Directors’ Report Board
The Board of Directors is composed of eight members, four Executive
Directors and four Non-Executive Directors, including a Non-Executive
Chairman.
The Board has established: Audit; Health, Safety and Environment; and
Remuneration Committees with formally delegated duties, responsibilities
and written terms of reference. From time to time, separate committees
may be set up by the Board to consider specific issues as and when the
need arises.
Audit Committee
The Audit Committee helps the Board discharge its responsibilities regarding
financial reporting, external and internal audits and controls as well as
reviewing the Group’s annual financial statements. It also assists by
reviewing and monitoring the extent of non audit work undertaken by
external auditors, advising on the appointment of external auditors and
reviewing the effectiveness of the Group’s internal audit activities, internal
controls and risk management systems. The ultimate responsibility for
reviewing and approving the annual report and accounts and the half-yearly
reports remains with the Board.
The Audit Committee comprises four independent Non-Executive Directors
(Lord Daresbury, Toktarkhan Kozhagapanov, David Netherway and Stephen
Oke). Stephen Oke is considered by the Board to have recent and relevant
financial experience. The Chairman of the Audit Committee is Stephen Oke.
The committee meets formally at least three times a year in London and
otherwise as required.
Remuneration Committee
The Remuneration Committee assists the Board in determining its
responsibilities in relation to remuneration. This includes making
recommendations to the Board on the Group’s policy on executive
remuneration, determining the individual remuneration and benefits
package of each of the Executive Directors and recommending and
monitoring the remuneration of senior management below Board level.
The Remuneration Committee comprises four Non-Executive Directors
(Lord Daresbury, Toktarkhan Kozhagapanov, David Netherway and Stephen
Oke) and is chaired by David Netherway. The committee meets formally at
least twice a year in London and otherwise as required.
Health, Safety and Environment Committee
The Health, Safety and Environment Committee helps the Board in
formulating the Group’s health, safety and environment policies as they
affect the Group’s operations. The committee also monitors compliance
with national and international standards and reviews management’s
investigations of any incidents or accidents that may occur, in order to
assess whether policy improvements are required.
The Health, Safety and Environment Committee is composed of four
members, one of whom is an independent Non-Executive Director (David
Netherway). The other members of the committee are Executive Directors
(Kanat Assaubayev, Aidar Assaubayev and Marussya Assaubayeva). The
Chairman of the Health, Safety and Environment Committee is David
Netherway. The committee meets formally at least twice a year in London
and otherwise as required.
Relations with shareholders
The Directors attach importance to the provision of clear and timely
information to shareholders, GDR holders and the broader investment
community. Information about the company is available on its website
(www.kazakhgold.com). The Group’s annual and interim reports will also be
sent to shareholders and be made available to GDR holders through the
Group’s website.
Following its IPO in November 2005, the Group began to implement a
programme of contact with its principal and institutional shareholders, in
addition to sell-side financial analysts. The Board is provided with feedback
from these meetings. Shareholders are encouraged to attend the 2006
Annual General Meeting at which members of the Board will be available to
answer questions.
Directors and officers liability insurance
The Group has in place a Directors and Officers insurance policy to cover
relevant individuals against claims arising from their work on behalf of the
company. The Board intends to keep the level of cover provided under
annual or more frequent review, as appropriate.
Going concern
Based on the Group’s budgets and cash flow projections for 2006, the
Directors are satisfied that the Group has adequate resources to continue its
operations and meet its commitments for the foreseeable future.
Annual general meeting
The 2006 Annual General Meeting will be held at 11.00 am on 28 July
2006, at the De Vere Cavendish Hotel, 81 Jermyn Street, London SW1Y 6JF,
England. The Notice of Meeting, together with an explanation of the items
of special business, is provided separately to shareholders with this report.
Auditors
BDO Stoy Hayward LLP were appointed as the first auditors of the Company
and a resolution for their reappointment will be proposed at the Annual
General Meeting.
On behalf of the Board
Aidar Assaubayev
Deputy Chief Executive – Corporate Development
5 June 2006
KazakhGold Group Limited 27 The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company, for safeguarding the assets, for taking reasonable steps for the
prevention and detection of fraud and other irregularities and for the
preparation of financial statements which comply with the requirements 
of the Companies (Jersey) Law 1991.
The Directors have prepared the financial statements in accordance with
International Financial Reporting Standards (IFRSs).
International Accounting Standard 1 requires that financial statements
present fairly for each financial year the company’s financial position,
financial performance and cash flows. This requires the faithful
representation of the effects of transactions, other events and conditions 
in accordance with the definitions and recognition criteria for assets,
liabilities, income and expenses set out in the International Accounting
Standards Board’s ‘Framework for the preparation and presentation of
financial statements’. In virtually all circumstances, a fair presentation will 
be achieved by compliance with all applicable International Financial
Reporting Standards. A fair presentation also requires the Directors to:
• consistently select and apply appropriate accounting policies;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information; and
• provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand 
the impact of particular transactions, other events and conditions 
on the entity’s financial position and financial performance.
Financial statements are published on the Group’s website. The
maintenance and integrity of the Group’s website is the responsibility 
of the Directors. The Directors’ responsibility also extends to the financial
statements contained therein.
KazakhGold Group Limited 28
Statement of Directors’ responsibilities We have audited the Group and Parent Company financial statements (the
‘’financial statements’’) of KazakhGold Group Limited for the period ended
31 December 2005 which comprise the Group and Parent Company Income
Statements, the Group and Parent Company Balance Sheets, the Group and
Parent Company Cash Flow Statements, the Group and Parent Company
Statements of Changes in Shareholders’ Equity and the related notes. These
financial statements have been prepared under the accounting policies set
out therein.
Respective responsibilities of Directors 
and Auditors
The Directors’ responsibilities for preparing the Report and the financial
statements in accordance with applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union are set out
in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a
true and fair view and whether the financial statements have been properly
prepared in accordance with the Companies (Jersey) Law 1991. We also
report to you if, in our opinion, the Directors’ Report is not consistent with
the financial statements, if the company has not kept proper accounting
records, if we have not received all the information and explanations we
require for our audit.
We read other information contained in the Report and consider whether
it is consistent with the audited financial statements. The other information
comprises only the Directors’ Report and the Chairman’s Statement. We
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements. Our responsibilities do not extend to any other information.
Our report has been prepared pursuant to the requirements of the
Companies (Jersey) Law 1991 and for no other purpose. No person is
entitled to rely on this report unless such a person is a person entitled to
rely upon this report by virtue of and for the purpose of the Companies
(Jersey) Law 1991 or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for this
report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on
Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements. It also includes an assessment of
the significant estimates and judgments made by the Directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the Group’s and Company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements.
Opinion
In our opinion:
• the Group financial statements give a true and fair view, in accordance
with IFRSs as adopted by the European Union, of the state of the
Group’s affairs as at 31 December 2005 and of its loss for the period
then ended;
• the Group financial statements have been properly prepared in
accordance with the Companies (Jersey) Law 1991;
• the Parent Company financial statements give a true and fair view, in
accordance with IFRSs as adopted by the European Union, of the state
of the Parent Company’s affairs as at 31 December 2005 for the period
then ended; and
• the Parent Company financial statements have been properly prepared
in accordance with the Companies (Jersey) Law 1991.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
London
5 June 2006
KazakhGold Group Limited 29
Independent Auditors’ Report to the
Shareholders of KazakhGold Group Limited 2005
Note US$000
Revenue 2 20,357
Cost of sales (14,863)
Gross profit 5,494
Other operating income 3 1,473
Distribution expenses (86)
Administrative expenses (6,954)
Other operating expenses 4 (640)
Operating loss 5 (713)
Financial income 9 277
Financial expenses 10 (647)
Net financing costs (370)
Loss before tax (1,083)
Taxation 11 (1,090)
Loss for the period attributable to equity shareholders (2,173)
Basic and diluted loss per share 12 $(0.05)
All amounts relate to continuing operations.
KazakhGold Group Limited 30
Consolidated Income Statement 2005
Note US$000
Revenue –
Cost of sales –
Gross profit –
Administrative expenses (5,744)
Operating loss 5 (5,744)
Financial income 9 277
Loss before tax (5,467)
Taxation 11 –
Loss for the period attributable to equity shareholders (5,467)
All amounts relate to continuing operations.
KazakhGold Group Limited 31
Company Income Statement 2005
Note US$000
Non-current assets
Property, plant and equipment 13 49,797
Mining properties 14 493,573
Exploration and development costs 15 9,013
Intangible assets 16 1,092
Other financial assets 18 1,713
555,188
Current assets
Inventories 19 7,629
Trade and other receivables 20 20,112
Cash and cash equivalents 21 87,887
115,628
Total assets 670,816
Equity and liabilities
Equity attributable to shareholders
Share capital 22 8
Share premium 97,429
Capital contributions 510,000
Translation reserve (41)
Retained earnings 714
Total equity 608,110
Non-current liabilities
Interest-bearing loans and borrowings 24 24,543
Other financial liabilities 25 1,197
Provisions 26 241
Deferred tax liabilities 28 2,732
28,713
Current liabilities
Interest-bearing loans and borrowings 24 20,464
Trade and other payables 27 10,959
Current tax payable 27 2,156
Other financial liabilities 27 414
33,993
Total equity and liabilities 670,816
These financial statements were approved and authorised for issue by the Board on 5 June 2006
Lord Daresbury Aidar Assaubayev
Chairman Deputy Chief Executive – Corporate Development
KazakhGold Group Limited 32
Consolidated Balance Sheet 2005
Note US$000
Non-current assets
Investment in subsidiaries 17 510,000
510,000
Current assets
Amounts due from group undertaking 20 26,685
Other receivables 20 636
Cash and cash equivalents 21 70,203
97,524
Total assets 607,524
Equity and liabilities
Equity attributable to shareholders
Share capital 22 8
Share premium 97,429
Capital contributions 510,000
Retained earnings (2,580)
Total equity 604,857
Current liabilities
Other payables 27 2,667
2,667
Total equity and liabilities 607,524
These financial statements were approved and authorised for issue by the Board on 5 June 2006
Lord Daresbury Aidar Assaubayev
Chairman Deputy Chief Executive – Corporate Development
KazakhGold Group Limited 33
Company Balance Sheet 2005
Note US$000
Cash flows from operating activities
Loss before tax for the period (1,083)
Adjustments for:
Depreciation, depletion and amortisation 1,411
Foreign exchange gain 8
Interest paid 647
Loss on disposal of non-current assets 640
Equity settled share-based payment expenses 2,887
Cash flows from operating activities before changes in working capital and provisions 4,510
Increase in trade and other receivables (6,095)
Decrease in inventories 5,511
Increase in trade and other payables 888
Increase in provisions 241
Cash generated from operating activities 5,055
Cash flows from investing activities
Acquisition of property, plant and equipment (6,930)
Proceeds from the disposal of non-current assets 385
Capitalised exploration and development costs (4,491)
Capitalised mining properties costs (114)
Cash held in subsidiary companies at the date of acquisition 565
Net cash from investing activities (10,585)
Cash flows from financing activities
Proceeds from the issue of share capital 106,507
Share issue costs (9,070)
Proceeds from the issue of bonds 24
Issue of promissory notes 3,007
Repayment of borrowings (6,284)
Interest paid (647)
Payment of finance lease liabilities (120)
Net cash from financing activities 93,417
Net increase in cash and cash equivalents 87,887
Cash and cash equivalents at 26 September 2005 –
Cash and cash equivalents at 31 December 2005 21 87,887
Significant non-cash transactions are as follows:
Investing activities:
Equity consideration for the acquisition of Romanshorn LC AG: see Note 30.
KazakhGold Group Limited 34
Consolidated Cash Flow Statement 2005
Note US$000
Cash flows from operating activities
Loss before tax for the period (5,467)
Adjustments for:
Equity settled share-based payment expenses 2,887
Cash flow from operating activities before changes in working capital and provisions (2,580)
Increase in other debtors (636)
Increase in amounts due from group undertaking (26,685)
Increase in other payables 2,667
Cash absorbed from operating activities (27,234)
Cash flows from financing activities
Proceeds from the issue of share capital 106,507
Share issue costs (9,070)
Net cash from financing activities 97,437
Net increase in cash and cash equivalents 70,203
Cash and cash equivalents at 26 September 2005 –
Cash and cash equivalents at 31 December 2005 21 70,203
KazakhGold Group Limited 35
Company Cash Flow Statement For the period ended 31 December 2005
Share Share Capital Translation Retained
Capital Premium Contributions Reserve Earnings Total
Balance at 26 September 2005 ––––––
Shares issued in the period 8 106,499––– 106,507
Share issue costs – (9,070) – – – (9,070)
Equity settled share-based payments –––– 2,887 2,887
Contribution of ownership of Romanshorn LC AG – – 510,000 – – 510,000
Foreign exchange on translation of foreign operations – – – (41) – (41)
Losses after tax for the period –––– (2,173) (2,173)
Balance at 31 December 2005 8 97,429 510,000 (41) 714 608,110
– Share capital is the amount subscribed for shares at nominal value
– Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses. Share issue expenses
comprise a proportion of the costs incurred in respect of the placing offer and the issue by the Group of Global Depositary Receipts as attributable to the issue of new
matching shares under the terms of the placing. The costs allocated against the share premium account include all of the underwriting fees relating to the issue of new shares,
together with a proportion (in the ratio of 7.1 million to 13.1 million) of all other similar costs, being the ratio of new shares issued to the total of all listed shares
– Capital contributions represent the value of Romanshorn LC AG and its subsidiaries, the beneficial ownership of which was acquired by the Company as detailed in Note 30
– Exchange differences arising on translating the net assets and the results of overseas operations to US dollars are recognised directly in the translation reserve
– Retained earnings represent the cumulative profit/(loss) of the Group attributable to the equity shareholders
KazakhGold Group Limited 36
Statement of Changes in 
Equity for the Group For the period ended 31 December 2005
Share Share Capital Retained
Capital Premium Contributions Earnings Total
US$000 US$000 US$000 US$000 US$000
Balance at 26 September 2005 –––––
Shares issued in the period 8 106,499 – – 106,507
Share issue costs – (9,070) – – (9,070)
Equity settled share-based payments – – – 2,887 2,887
Contribution of ownership of Romanshorn LC AG – – 510,000 – 510,000
Loss after tax for the period – – – (5,467) (5,467)
Balance at 31 December 2005 8 97,429 510,000 (2,580) 604,857
– Share capital is the amount subscribed for shares at nominal value
– Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses. Share issue expenses
comprise a proportion of the costs incurred in respect of the placing offer and the issue by the Company of Global Depositary Receipts as attributable to the issue of new
matching shares under the terms of the placing. The costs allocated against the share premium account include all of the underwriting fees relating to the issue of new shares,
together with a proportion (in the ratio of 7.1 million to 13.1 million) of all other similar costs, being the ratio of new shares issued to the total of all listed shares
– Capital contributions represent the value of Romanshorn LC AG and its subsidiaries, the beneficial ownership of which was acquired by the Company as detailed in Note 30 
– Retained earnings represent the cumulative profit/(loss) of the Company attributable to the equity shareholders
KazakhGold Group Limited 37
Statement of Changes in 
Equity for the Company 1 Accounting policies
a. Basis of presentation
KazakhGold Group Limited (the “Company”) is a company incorporated in
Jersey. The Company is centrally managed and controlled in the United
Kingdom, and therefore resident in the United Kingdom for the purposes of
United Kingdom taxation liabilities.
The group financial statements consolidate those of the Company and its
subsidiaries (together referred to as the “Group”). The parent company
financial statements present information about the Company as a separate
entity and not about its group.
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs and IFRIC interpretations)
as adopted by the European Union and also in accordance with the
Companies (Jersey) Law 1991.
The accounting policies set out below have, unless otherwise stated, been
applied consistently in these financial statements.
Judgments made by the Directors in the application of these accounting
policies that have significant effect on the financial statements and
estimates with a significant risk of material adjustment in the next year 
are discussed in Note 31.
b. Measurement convention
The financial statements are prepared on the historical cost basis except
that the following assets and liabilities are stated at their fair value: financial
instruments classified as fair value through the profit or loss or as available-
for-sale.
c. Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern
the financial and operating policies of another entity or business so as to
obtain benefits from its activities, that entity or business is classified as a
subsidiary. The consolidated financial statements present the results of the
Company and its subsidiaries (“the Group”) as if they formed a single
entity. Intercompany transactions and balances between group companies
are therefore eliminated in full.
d. Business combinations
During the period the Company acquired the entire share capital of
Romanshorn LC AG. As the controlling party of Romanshorn LC AG and
KazakhGold Group Limited were the same, the acquisition has been
accounted for as a capital contribution with the assets and liabilities
acquired initially recognised at fair value and a corresponding increase to
equity credited to the “capital contributions” reserve.
No acquisitions in the period are within the scope of IFRS 3.
e. Revenue
Revenue arises from the sale of cathodic sludge, cathodic gold, free gold,
flotation and gravitational concentrate, quartzite ore and doré bars.
Revenues are recognised when the risks and rewards of ownership together
with effective control are transferred to the customer and the amount of
the revenue and associated costs incurred in respect of the relevant
transaction can be reliably measured. Revenue is not recognised unless it is
probable that the economic benefits associated with the sales transaction
will flow to the Group.
f. Foreign currency
In accordance with IAS21, transactions entered into by group entities in a
currency other than the currency of the primary economic environment in
which it operates (the “functional currency”) are recorded at the rates
ruling when the transactions occur. Foreign currency monetary assets and
liabilities are translated at the rates ruling at the balance sheet date.
Exchange differences arising on the retranslation of unsettled monetary
assets and liabilities are similarly recognised immediately in the income
statement. The presentational currency for the Group consolidated financial
statements is the US dollar. This is also the functional currency of the
Company and is considered by the Board also to be appropriate for the
purposes of preparing the Group financial statements.
On consolidation, the results of overseas operations are translated into US
dollars, the presentational currency, at rates approximating to those ruling
when the transactions took place. All assets and liabilities of overseas
operations are translated at the rate ruling at the balance sheet date.
Exchange differences arising on translating the opening net assets at
opening rate and the results of overseas operations at the actual rate are
recognised directly in equity (the “translation reserve”).
g. Classification of financial instruments issued by the Group
In accordance with IAS 32, financial instruments issued by the Group are
treated as equity (i.e. forming part of shareholders’ funds) only to the
extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Group to deliver cash
or other financial assets or to exchange financial assets or financial
liabilities with another party under conditions that are potentially
unfavourable to the Group; and
(b) where the instrument will or may be settled in the Company’s own
equity instruments, it is either a non-derivative that includes no
obligation to deliver a variable number of the Company’s own equity
instruments or is a derivative that will be settled by the Company
exchanging a fixed amount of cash or other financial assets for a fixed
number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are
classified as a financial liability. Where the instrument so classified takes the
legal form of the Company’s own shares, the amounts presented in these
financial statements for called up share capital and share premium account
exclude amounts in relation to those shares.
Finance payments associated with financial liabilities are dealt with as part
of finance expenses. Finance payments associated with financial instruments
that are classified in equity are dividends and are recorded directly in equity.
h. Trade and other receivables
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally
through the provision of goods and services to customers (trade debtors)
but also include other types of contractual monetary assets. These assets
are carried at amortised cost less any provision for impairment.
i. Property, plant and equipment
Property, plant and equipment are stated at cost less any subsequent
accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different
useful lives, they are accounted for as separate items of property, plant and
equipment.
Leases in which the Group assumes substantially all the risks and rewards of
ownership of the leased asset are classified as finance leases. Leased assets
acquired by way of finance lease are stated at an amount equal to the
lower of their fair value and the present value of the minimum lease
payments at inception of the lease, less accumulated depreciation and
impairment losses.
Depreciation is charged to the income statement within cost of sales and
administrative expenses on a straight-line basis over the estimated useful
lives of each part of an item of property, plant and equipment. Land is not
depreciated. The estimated useful lives are as follows:
KazakhGold Group Limited 38
Notes forming part of the 
financial statements – Freehold buildings 11 – 50 years
– Machinery and equipment 2 – 35 years
– Vehicles 4 – 10 years
– Other 1.5 – 17 years
Expenses incurred in respect of the maintenance and repair of property,
plant and equipment are charged against income when incurred.
Refurbishments and improvements expenditure, where the benefit is
expected to be long lasting, is capitalised as part of the appropriate asset.
Assets under construction are carried at cost less any recognised impairment
loss. Cost includes interest capitalised and associated borrowing costs.
j. Exploration and development
Exploration and development costs are capitalised as intangible assets until
the decision is made to proceed to development, whereupon the related
expenditures are transferred to non-current assets as mining properties, or
until the projects are determined not to be commercially viable, whereupon
the related costs are written off to the income statement.
k. Mining properties
Once a decision is made to proceed with the development of a mining
project, exploration and development expenditure other than that on
buildings, machinery and equipment is capitalised under non-current assets
as mining properties, together with any amount transferred from
exploration and development.
Depreciation, depletion and amortisation of mining properties are calculated
using the ‘units of production method’ based upon actual production and
estimated recoverable reserves. This amount is charged to cost of sales in
the income statement.
l. Intangible assets
Expenditure on research activities is recognised in the income statement as
an expense as incurred.
Other intangible assets that are acquired by the Group are stated at cost
less accumulated amortisation and impairment losses.
Amortisation of intangible assets is charged to cost of sales over the
following periods:
– Mining and other licences 3 – 4 Years
– Computer software 3 Years
m. Inventories
Raw materials which consist of tools for development activities, spare parts,
diesel fuel and various materials used in mining operations are valued at the
lower of cost and net realisable value. The basis on which cost is derived is
a weighted average cost formula.
Finished goods (comprising cathodic sludge, cathodic gold, free gold,
flotation and gravitational concentrate, quartzite ore and doré bars) are
stated at the lower of weighted average cost or net realisable value. Costs
include direct materials, direct labour costs and production overheads
(including the depreciation/depletion of relevant property, plant and
equipment and mining properties). Net realisable value represents the
estimated selling price less all expected costs to completion and costs to be
incurred in selling and distribution.
n. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part of the
Group’s cash management are included as a component of cash and cash
equivalents for the purpose only of the statement of cash flows.
o. Impairment
An impairment loss is recognised in respect of mining properties where the
assessed estimate of the quantum of mineable resources indicates a
reduction from the previous estimate.
Impairment losses recognised in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to
cash-generating units and then to reduce the carrying amount of the other
assets in the unit on a pro rata basis. A cash generating unit is the smallest
identifiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets.
Impairment losses and reversals of impairment losses previously included in
the income statement under the same category are included within other
operating expenses in the income statement.
An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
p. Other financial liabilities
Trade payables and other short-term monetary items are recognised at
amortised cost.
q. Interest-bearing loans and borrowings
Bank borrowings are initially recognised at the amount advanced less any
transaction costs directly attributable to the borrowings. Such interest-
bearing liabilities are subsequently measured at amortised cost using the
effective interest rate method, which ensures that any interest expense over
the period to repayment is at a constant rate on the balance of the liability
carried in the balance sheet. Interest expense in this context includes initial
transaction costs and premia payable on redemption as well as any interest
or coupon payable while the liability is outstanding.
Other interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost with any difference
between cost and redemption value being recognised in the income
statement over the period of the borrowings on an effective interest basis.
r. Employee benefits
Defined contribution plans
The Group contributes to certain defined contribution pension and
employee benefit schemes on behalf of its employees. These costs are
charged to the income statement on an accruals basis.
Other employee benefits
Other employee benefits are charged to the income statement on an
accruals basis.
s. Share-based payment transactions
The Company awards share options to certain Company Directors to
acquire shares of the Company. The fair value of options granted is
recognised as an employee expense with a corresponding increase in equity.
The fair value is measured at grant date and spread over the period during
which the employees become unconditionally entitled to the options. The
fair value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is adjusted to
reflect the actual number of share options that vest only where vesting is
dependent upon the satisfaction of service and non-market vesting
conditions.
KazakhGold Group Limited 39 t. Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that
an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
u. Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each
period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
v. Financing costs
Financing costs comprise interest payable on bank loans, bonds and finance leases. Interest payable is recognised in profit or loss as it accrues, using the
effective interest method unless such interest is attributable to ‘assets under construction’ and qualifies for capitalisation under IAS 23.
w. Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided for: the initial recognition of assets or liabilities that affect neither accounting nor
taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
2 Revenue
The Group operates in one segment, the mining and production of gold in Kazakhstan. The revenues from this segment are analysed as follows:
2005
US$000
By product
Cathodic sludge 16,998
Cathodic gold 682
Free gold 1,841
Flotation and gravitational concentrate 602
Quartzite ore 138
Doré bars 96
20,357
By destination market
Kyrgyzstan 10,633
Kazakhstan 7,178
Switzerland 1,805
Russia 741
20,357
3 Other operating income
Group
2005
US$000
Foreign exchange gains 1,274
Other income 199
1,473
The company has no other operating income.
KazakhGold Group Limited 40
Notes forming part of the
financial statements 4 Other operating expenses
Group
2005
US$000
Loss arising from the disposal of non-current assets 640
The company has no other operating expenses.
5 Operating loss
This has been stated after charging:
Group Company
2005 2005
US$000 US$000
Depreciation of property, plant and equipment 441 –
Amortisation of exploration and development costs and mining licences 236 –
Depletion of mining properties 734 –
Initial public offering and reorganisation costs 2,264 2,264
Equity settled share-based payment expense 2,887 2,887
Auditors’ remuneration (see Note 6) 588 –
6 Auditors’ remuneration
Group Company
2005 2005
US$000 US$000
Amounts receivable by auditors and their associates in respect of:
Audit of financial statements of the Group 250 250
Transaction advisory services relating to the placing and global offer 738 738
988 988
Of the amounts paid to the auditors for the transaction advisory services, $338,000 was charged to the income statement and $400,000 was charged to the share premium
account.
7 Staff numbers and costs
The average number of persons employed by the Group (including Directors) during the period, analysed by category, was as follows:
Group
2005
Number
Management 117
Supply 64
Construction and maintenance 116
Research and exploration 82
Security 174
Mining activities 2,659
3,212
The Company employed four Non-Executive and four Executive Directors during the period. The Company did not have any employees other than Directors
in the period.
Group Company
The aggregate payroll costs of these persons were as follows: 2005 2005
US$000 US$000
Wages and salaries (including Directors’ emoluments) 2,317 177
Social security and other pension costs 284 11
2,601 188
KazakhGold Group Limited 41 8 Directors’ remuneration
Group Company
2005 2005
US$000 US$000
Directors’ emoluments 377 177
Pension contributions 28 –
405 177
The emoluments of the Chairman were: 35 35
During the period the Chairman exercised a share option over 400,000 shares (Note 23). The IFRS2 charge disclosed in Note 5 relates entirely to options awarded to Directors.
9 Financial income
Group Company
2005 2005
US$000 US$000
Interest receivable 277 277
10 Financial expenses
Group Company
2005 2005
US$000 US$000
Interest payable 647 –
11 Taxation
Group
2005
US$000
Recognised in the income statement
Current tax expense (1,421)
Deferred tax income 331
Total tax charge (1,090)
Reconciliation of effective tax rates
US$000
The reasons for the difference between the actual tax charge for the period and 
the rate of 30% applied to the loss for the period are as follows:
Loss before tax (1,083)
Tax using domestic rates of corporation tax of 30% 325
Effect of:
Effect of expenses not deductible for tax purposes (1,293)
Losses carried forward (122)
Total tax charge for the period (1,090)
There is no tax charge or tax credit arising in the parent company.
The Group’s principal operations are in Kazakhstan. The corporate tax system in Kazakhstan has been in place a relatively short time. As a result, the tax legislation in Kazakhstan
is evolving and is subject to different and varying interpretations as well as inconsistent enforcement. The Board of the Company believes there have been no material breaches 
of Kazakhstan tax regulations and that all necessary provisions have been made.
KazakhGold Group Limited 42
Notes forming part of the
financial statements 12 Loss per share
The calculation of basic loss per share is based upon the net loss after tax attributable to the ordinary shareholders of US$2,173,000 and a weighted average
number of shares in issue, for the period 26 September 2005 to 31 December 2005, of 40,212,371.
2005
Loss per share $(0.05)
US$000
Loss attributable to ordinary shareholders (2,173)
Weighted average number of ordinary shares Number
Issued ordinary shares at 26 September 2005 100,000
Effect of issue on 30 September 2005 37,843,299
Effect of issue on 30 November 2005 2,269,072
Weighted average number of ordinary shares at 31 December 2005 40,212,371
Diluted loss per share
No diluted loss per share has been calculated, as the Group has incurred a loss for the period.
The numerator for the calculation of the basic loss per share is the loss after tax of US$2,173,000. The denominator for the calculation of the basic loss per
share is 40,212,371.
13 Property, plant and equipment
Freehold Freehold Assets under Machinery and
Land Buildings Construction Equipment Vehicles Other Total
Group US$000 US$000 US$000 US$000 US$000 US$000 US$000
Cost
Balance at 26 September 2005 –– – ––––
Acquisitions through business combinations 92 21,689 14,876 8,447 2,798 858 48,760
Other acquisitions – 1,028 689 4,851 312 50 6,930
Disposals – (773) (472) (240) (84) (4) (1,573)
Effect of movements in foreign exchange– 221 – – 5
Balance at 31 December 2005 92 21,946 15,095 13,059 3,026 904 54,122
Depreciation and impairment
Balance at 26 September 2005 –– – ––––
Acquisitions through business combinations – 1,514 – 2,114 459 327 4,414
Depreciation charge for the period – 219 – 121 85 16 441
Disposals – (402) – (100) (28) – (530)
Balance at 31 December 2005 – 1,331 – 2,135 516 343 4,325
Net book value
At 31 December 2005 92 20,615 15,095 10,924 2,510 561 49,797
At 26 September 2005 –– – ––––
The net book value at 31 December 2005 of non-current assets held under finance leases was:
US$000
Cost 1,632
Depreciation (164)
Net book value 1,468
Included within additions to assets under construction and machinery and equipment is interest capitalised of US$291,000.
KazakhGold Group Limited 43 14 Mining properties
US$000
Cost
Balance at 26 September 2005 –
Acquisitions through business combinations 494,193
Capitalised costs 114
Balance at 31 December 2005 494,307
Depletion and impairment
Balance at 26 September 2005 –
Depletion charge for the period (734)
Balance at 31 December 2005 (734)
Net book value
At 31 December 2005 493,573
At 26 September 2005 –
15 Exploration and development costs
US$000
Cost
Balance at 26 September 2005 –
Acquisitions through business combinations 4,593
Capitalised costs 4,491
Balance at 31 December 2005 9,084
Depreciation and impairment
Balance at 26 September 2005 –
Amortisation for the period (71)
Balance at 31 December 2005 (71)
Net book value
At 31 December 2005 9,013
At 26 September 2005 –
16 Intangible assets
Mining
Licences
US$000
Cost
Balance at 26 September 2005 –
Acquisition of Romanshorn LC AG 1,257
Balance at 31 December 2005 1,257
Amortisation and impairment
Balance at 26 September 2005 –
Amortisation for the period (165)
Balance at 31 December 2005 (165)
Net book value
31 December 2005 1,092
26 September 2005 –
The amortisation and impairment charge is recognised in cost of sales.
KazakhGold Group Limited 44
Notes forming part of the
financial statements 17 Investments in subsidiaries
The Company has an investment in the following subsidiary:
Note Country of Class of Ownership
Incorporation Share %
Romanshorn LC AG 30 United States Units 100
Indirect subsidiaries of the Company
JSC Kazakhaltyn MMC Kazakhstan Ordinary 100
Visart LLP Kazakhstan Ordinary 100
Rudnik Vasilevskyi LLP Kazakhstan Ordinary 100
JSC Kazakhaltyn MMC, Visart LLP and Rudnik Vasilevskyi LLP are all engaged in mining exploration, development and mining operations in Kazakhstan. Romanshorn LC AG is a
dormant holding company of JSC Kazakhaltyn MMC. Visart LLP and Rudnik Vasilevskyi LLP are both subsidiaries of JSC Kazakhaltyn MMC.
18 Other financial assets
2005
US$000
Non-current
Amounts receivable in respect of deferred consideration from the sale in 2000 of 
‘sub-surface’ mining rights, related mining assets and land by JSC Kazakhaltyn MMC 1,713
This deferred consideration represents the non current balance of consideration which is receivable in instalments over the next three years. The current
proportion of amounts due is included in other debtors. The amounts due are denominated in US dollars.
19 Inventories
2005
US$000
Raw materials and consumables 4,201
Work in progress 519
Finished goods 2,909
7,629
Certain spares, materials, tools and equipment held in inventory amounting to $1,305,000 became obsolete in the period following the modernisation of elements of the Group’s
mining assets and were written down to net realisable value.
20 Trade and other receivables
Group Company
2005 2005
US$000 US$000
Trade receivables 11,369 –
Amounts due from group undertaking – 26,685
Other debtors 8,626 636
Prepaid expenses 117 –
20,112 27,321
– Amounts due from group undertaking represent amounts due to the parent company in respect of funding provided to a subsidiary and is classified as a related party loan
under IAS24. The loan is repayable within 30 days of demand, is unsecured and is interest free. All other monetary assets included in trade and other receivables are
denominated in Kazakhstan tenge.
– Included within the group other debtors as at the period end was an amount of US$77,000 due from Baurzhan Assaubayev. This amount was repaid in March 2006.
21 Cash and cash equivalents
Group Company
2005 2005
US$000 US$000
Cash per balance sheet and per the cash flow statement 87,887 70,203
Cash and cash equivalents consist of cash.
KazakhGold Group Limited 45 22 Capital and reserves 2005
Number
Share capital
Number of ordinary shares
In issue at 26 September 2005 –
Issued for cash 47,100,000
In issue at 31 December 2005 47,100,000
2005
In issue at 31 December 2005 – fully paid US$000
47,100,000 ordinary shares of £0.0001 each 8
2005
Number
Authorised
Ordinary shares of £0.0001 each 100,000,000
Allotted, called up and fully paid
Ordinary shares of £0.0001 each 47,100,000
Holders of 13,100,000 of the ordinary shares hold their shares through the Bank of New York, which acts as a depositary for these shares. These deposited shares are matched to
Global Depository Receipts (“GDRs”) on a share for share basis. The GDRs are listed on the London Stock Exchange.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share. Payments of cash dividends and other amounts
(including cash distributions) will, in the case of the GDRs issued by the Company, be made by the Depositary of the GDRs to the persons entitled to the receipt of the funds.
23 Equity settled share-based payment transactions
The number and weighted average exercise prices of share options granted to Directors of the Group are as follows: Number of 
options
Outstanding at 26 September 2005 –
Granted during the period 453,333
Exercised during the period (400,000)
Lapsed during the period –
Outstanding at 31 December 2005 53,333
Exercisable at 31 December 2005 –
– $2,887,388 is charged to the income statement within administrative expenses, representing the fair value at the date of grant of the 400,000 options exercised of $2,870,000
together with an element of the fair value at the date of grant of the options outstanding as at 31 December 2005 of $17,388 relating to the period ending on that date. The
weighted average cost of the options exercised in the period was $7.18.
– The fair value of the 400,000 options exercised in the period has been valued by the Board based upon the value of the acquired entities as at the date of acquisition.
The following additional options to purchase the Company’s ordinary shares were granted during the period and were outstanding at 31 December 2005:
Total
Number of options granted on 1 December 2005 53,334
Number of employees 2
Share price on 1 December 2005 $15
Exercise price $15
The options vest on 1 December 2008 and are exercisable until 1 December 2011.
The outstanding options at 31 December 2005 have been valued by the Directors based on advice from an independent valuer who assessed the valuation
using a binomial option valuation model under the assumptions listed below. Under these assumptions, the total value of the charge arising from these
options is $5.88 per share option or $313,000 in total. The total charge will be spread over the period to 1 December 2008.
The principal assumptions used within the stock option valuation model were as follows:
Fair value of the share price at date of grant issued (flotation price) $15
Interest rate per annum (zero coupon gilt yield at option grant date) 4.2 %
Dividend yield 2.5 %
Volatility (two-year average of volatility of close competitor companies) 39 %
Vesting time in years 3
Employee exit rate 0%
KazakhGold Group Limited 46
Notes forming part of the
financial statements 24 Interest-bearing loans and borrowings
2005
Note US$000
Non-current
Bank loans 28 4,174
Bonds 28 20,369
24,543
Current
Bank loans 28 17,457
Promissory notes 3,007
20,464
The bank loans are secured on the assets and share capital of JSC Kazakhaltyn MMC and its subsidiaries. The bonds are unsecured and pay interest at 
a variable rate, which is capped at 13%.
The bank loans, which are secured, are from the following banks and in the following currencies:
Bank Location Currency Rate US$000
Kazkommertsbank Kazakhstan Kazakhstan tenge 13% 5,272
Kazkommertsbank Kazakhstan United States dollars 13% 15,462
Nurbank Kazakhstan United States dollars 14% 897
Total bank loans 21,631
25 Non-current liabilities – other financial liabilities
2005
US$000
Lease liabilities 1,197
26 Provisions
2005
US$000
Within non-current liabilities
Balance at 26 September 2005 –
Charged to profit and loss 241
Balance at 31 December 2005 241
The provision represents a statutory reserve for potential future liabilities in respect of site closure and environmental ‘clean up’ costs. There are no current plans for the early
closure of any of the Group’s mines.
27 Current liabilities – trade and other payables
Group Company
2005 2005
US$000 US$000
Trade payables 3,632 –
Current tax payable 2,156 –
Other tax and social security payable 1,173 –
Interest payable 1,314 –
Lease liabilities 414 –
Other creditors and accruals 4,840 2,667
13,529 2,667
KazakhGold Group Limited 47 28 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
2005
US$000
Deferred tax assets and liabilities are attributable to the following:
Non-current assets 2,925
Other (193)
Net deferred tax liabilities 2,732
No deferred tax asset has been recognised in respect of the loss arising in the Company.
29 Effective interest rates and repricing analysis
In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance
sheet date and the periods in which they mature or, if earlier, are repriced.
Effective
interest
rate 0 – 1 Years 2 – 5 Years Total
% US$000 US$000 US$000
Cash and cash equivalents 4.0 87,887 – 87,887
Bank loans 13.0 to 14.0 (17,457) (4,174) (21,631)
Bonds 10.6 – (20,369) (20,369)
70,430 (24,543) 45,887
At 31 December 2005 the Group had commenced negotiations to repay all outstanding borrowings within the next year utilising funds raised from the Initial Public Offering and
the subsequent listing of the Group’s Global Depositary Receipts. The strength of the Group’s balance sheet following the success of the recent fund-raising exercise should enable
the Group to benefit from this strength in the form of lower effective interest rates.
29a
Risk and sensitivity analysis
The Group is exposed through its operations to one or more of the following financial risks:
Foreign currency risk, fair value and cash flow interest rate risk, liquidity risk, market price risk and credit risk. The policy for managing these risks is set by the
Board and all such risks are managed at a Group level within the organisation. The policies for these risks are described further below.
Foreign currency risk
Foreign exchange risk arises due to the Group’s primary revenues being in US dollars, also the presentational currency, whilst the Group’s principal operating
costs are denominated in Kazhak tenge, which is the Group’s principal functional currency.
The Group has a general policy of not hedging against foreign currency risk in accordance with a policy of being an unhedged producer of gold. In managing
interest rate and currency risks, the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings. Over the longer-term, however,
permanent changes in foreign exchange rates could have an impact on consolidated earnings.
Fair value and cash flow interest rate risk
The Group utilises or intends to utilise fixed and variable rate loans and floating rate bonds. The Group intends to repay all fixed rate borrowings in the next
period. The Board sets a policy for each material borrowing dependent upon the prevailing market conditions and the terms available in respect of each
particular financial instrument and the interest rates attaching thereto. The Group seeks to achieve an appropriate balance of exposure to these risks.
As described in Note 29 above, the Group is in discussions with its providers of finance to redeem all outstanding borrowings in 2006. This will eliminate the
interest rate and foreign exchange rate risks in respect of these borrowings.
Liquidity risk
The liquidity risk of the Group is managed centrally. New loans are taken out where additional funds are required and surplus funds not allocated to future
investment and working capital requirements are used to repay existing loans and bonds. The Group intends to maintain a balance of funding designed to
reduce liquidity risks whilst also seeking to minimise the costs of borrowing.
Market price risk
As an ‘unhedged gold producer’, the Group is exposed to market price risk from its current activities.
Credit risk
The Group is exposed to credit risk arising from ‘credit sales’ of its product to customers. Due to the nature of the market, the Group’s principal customers are
concentrated on a small number of significant customers. It is the Board’s policy to assess the credit risk of all new customers before entering into contracts and
also, where possible, to trade only with established entities.
KazakhGold Group Limited 48
Notes forming part of the
financial statements 30 Acquisition of subsidiaries
On 12 October 2005 the Company was gifted the entire share capital of Romanshorn LC AG, the non-trading parent company of JSC Kazakhaltyn MMC, by
Kanat Assaubayev and Marussya Assaubayeva. The ultimate majority shareholder of the Company is the ABM SK Trust, a Jersey-registered discretionary trust
whose only named discretionary beneficiaries are the Assaubayev family.
The details of the fair value of identifiable assets and liabilities acquired are as follows:
Book Fair Value Fair
Value Adjustments Value
US$000 US$000 US$000
Acquiree’s net assets at the acquisition date:
Mining properties – 494,193
1
494,193
Mining licences and other intangible assets 1,257 – 1,257
Tangible fixed assets 44,346 – 44,346
Capitalised mine development costs 4,593 – 4,593
Inventories 8,679 4,459
2
13,138
Trade and other receivables 15,727 – 15,727
Cash and cash equivalents 565 – 565
Interest-bearing loans and borrowings (48,255) – (48,255)
Other liabilities (14,226) (1,338)
2
(15,564)
Net identifiable assets and liabilities 12,686 497,314 510,000
510,000
1 No identifiable goodwill has arisen in respect of this transaction. The surplus of value of the consideration over the other separable net assets and liabilities of the acquired
group has been attributed to the mining properties and represents the estimated recoverable gold reserves within the Romanshorn LC AG group as at the date of acquisition
of 12 October 2005. There was no cash element in the consideration.
2 The fair value of inventory has been assessed with reference to the market value of finished product less estimated selling costs. A deferred tax liability has been recognised
in respect of this increase in value.
The income statement includes the following profit after tax from this acquisition for the period from 12 October 2005 to 31 December 2005:
Revenue Profit after tax
US$000 US$000
JSC Kazakhaltyn MMC and subsidiaries 20,357 7,149
The revenue and profit after tax of JSC Kazakhaltyn MMC and subsidiaries for the full year to 31 December 2005 was:
Revenue Profit after tax
US$000 US$000
JSC Kazakhaltyn MMC and subsidiaries 26,323 1,445
Cash flow
US$000
The cash flow arising from the acquired entities for the period was: 17,684
31 Accounting estimates and judgments
Capitalised mining costs and mining resources
The Group’s reserves of precious metals (“mining properties”) are estimates based upon geological studies. Over the longer term the actual mineable
resources achieved may vary significantly form the current estimates.
Base of mining operations
The Group’s primary base of operations is in Kazakhstan. The laws relating to commercial operations, taxation and future dividend payments are still under
development and there may be unforeseen changes to the operating and fiscal environment. The financial statements have been prepared on the
assumption that no significant adverse changes to the economic, regulatory and fiscal environment will arise.
32 Immediate and ultimate parent
The immediate parent company of the Group is Gold Lion Limited, a company incorporated in Jersey. The ultimate parent entity and controlling party is the
ABM SK Trust, a Jersey-registered discretionary trust, whose only named discretionary beneficiaries are members of the Assaubayev family.
KazakhGold Group Limited 49 Directors
Kanat Assaubayev
President and Chief Executive Officer
Baurzhan Assaubayev
First Deputy Chief Executive Officer
Aidar Assaubayev
Deputy Chief Executive Officer
– Corporate Development
Marussya Assaubayeva
Deputy Chief Executive Officer
– Health, Safety, Environment and HR
Lord Daresbury
Non-Executive Chairman
Toktarkhan Kozhagapanov
Non-Executive Director
David Netherway
Non-Executive Director
Stephen Oke
Non-Executive Director
Legal Advisers
As to English law
Denton Wilde Sapte
One Fleet Place
London EC4M 7WS
England
As to Kazakh law
Denton Wilde Sapte
273 Furmanov Street
3rd Floor
Almaty
Kazakhstan
As to Jersey law
Bedell Cristin
26 New Street
St. Helier
Jersey JE2 3RA
Channel Islands
Registered Office
KazakhGold Group Limited
La Motte Chambers
St. Helier
Jersey JE1 1BJ
Channel Islands
Company Secretary
Abacus Secretaries (Jersey) Limited
La Motte Chambers
St. Helier
Jersey JE1 1BJ
Channel Islands
Principal Place of Business
KazakhGold Group Limited
20 Richbourne Court
Harrowby Street
London W1H 5PT
England
GDR Depositary
The Bank of New York
101 Barclay Street
22nd floor
New York, NY 10286
United States of America
Broker
ING Bank N.V.
60 London Wall
London EC2M 5TQ
England
Auditors
BDO Stoy Hayward LLP
8 Baker Street
London W1U 3LL
England
KazakhGold Group Limited 50
Directors, Company Secretary
and Advisers Ore reserves and resources estimation
Under the FSU Classification explored reserves are designated as either A, B,
or C
1
, evaluated reserves are designated as C
2
and prognostic resources are
designated as either: P
1
; P
2
or P
3
.
Category A
The reserves in place are known in detail. The boundaries of the deposit
have been outlined by trenching, drilling, or underground workings. The
quality and properties of the ore are known in sufficient detail to ensure the
reliability of the projected exploitation.
Category B
The reserves in place have been explored but are only known in fair detail.
The boundaries of the deposit have been outlined by trenching, drilling, or
underground workings. The quality and properties of the ore are known in
sufficient detail to ensure the basic reliability of the projected exploitation.
Category C
1
The reserves in place have been estimated by a sparse grid of trenches, drill
holes or underground workings. This category also includes reserves
adjoining the boundaries of A and B reserves, as well as reserves of very
complex deposits in which the distribution cannot be determined even by a
very dense grid. The quality and properties of the deposit are known
provisionally by analyses and by analogy with known deposits of the same
type. The general conditions for exploitation are known tentatively.
Category C
2
The reserves have been extrapolated from limited data, probably from a
single hole. This category includes reserves that are adjoining A, B, and C
1
reserves in the same deposit. Prognostic resources are estimated for
mineralisation outside the limits of areas that have been explored in detail
and are often based on data from trenches and from geochemical and
geophysical surveys.
Category P
1
Resources under the P
1
category may extend outside the actual limits of 
the ore reserves defined in the C
2
category. The outer limits of P
1
-type
resources are determined indirectly by extrapolating from similar known
mineral deposits in the area. P
1
is the main source from which C
2
reserves
can be increased.
Category P
2
These resources represent possible mineral structures in known mineral
deposits or ore-bearing regions. They are estimated based on geophysical
and geochemical data. Morphology, mineral composition and the size of
the ore body are estimated by analogy with similar mineralised geologic
structures in the area.
Category P
3
Any potential ore-bearing deposits are classified as resources in the P
3
category. The presence of these resources relies on the theoretical definition
of a “favourable geological environment”. Resource figures are derived from
figures of similar deposits in the region. Estimates of prognostic resources
routinely depend on assumptions and projections regarding the probable
dimensions (i.e. length, width and depth) and grade of the deposit that 
are subject to confirmation by more detailed investigations.
Au
The chemical symbol for gold.
CIS
Confederation of Independent States, or Former Soviet Union.
CPI
Consumer price index.
Carbon-in-pulp or CIP
An established method of gold recovery using cyanide and activated carbon.
Cathodic gold
The gold product that arises following the processing of mined ore by the
CIP and HL methods, which ends with the gold bearing solution being
treated by electrolysis. The gold is deposited on the cathodes of the cell,
which are then washed to remove the deposited gold which can be further
smelted into doré bars.
Cathodic sludge
The gold residue in the electrolysis cell from that part of the solution that 
is not deposited on the cathodes.
Company
KazakhGold Group Limited.
Doré bars
These are produced when the cathodic gold is smelted with flux and 
the mixture poured as gold doré bars.
FDI
Foreign direct investment.
FSU
Former Soviet Union.
FSU Classification
The Former Soviet Union system of classification of geological reserves 
and resources.
Flotation concentrate
The product of a processing method used to separate gold sulphide
particles in slurry, by causing them to selectively adhere to froth and float 
to the surface. The resultant gold concentrate is then filtered to form
flotation concentrate.
Free gold
Gold uncombined with other substances; gold not found in chemical
combination with other minerals; found largely in placer gold form.
g/t or g/tonne
Grammes per metric tonne.
GDP
Gross Domestic Product.
GDR
Global Depositary Receipt equivalent to one underlying ordinary share of
the Group, with a nominal value £0.0001.
Gold doré
Unrefined gold bullion bars, which will be further refined to almost pure
metal (99.9 per cent Au). See also Doré bars.
KazakhGold Group Limited 51
Glossary Grade
Relative quantity or the percentage of ore mineral or metal content in an
ore body, usually expressed in grammes per metric tonne.
Gravitation
Gold particles in slurry are separated based on their specific gravity.
Group
KazakhGold Group Limited and its subsidiary companies.
Heap Leaching or HL
An ore processing technology (see page 12 for further explanation).
IFRS
International Financial Reporting Standards.
IPO
Initial Public Offering of equity securities.
JORC
Joint Ore Reserves Committee – a widely used International Ore reporting
classification standard.
JSC
Joint Stock Company.
KZT
Kazakh tenge, the official currency of Kazakhstan.
Kazakhaltyn
JSC Kazakhaltyn MMC – a company registered in Kazakhstan and the
Group’s principal operating subsidiary.
LLP
Limited liability partnership.
Listing
The listing of the Group’s Global Depositary Receipts on the London Stock
Exchange on 1 December 2005, following an IPO the previous month.
MMC
Mining Metallurgical Concern.
Mineralisation
Process of formation and concentration of elements and their chemical
compounds within a mass or body of rock.
NBK
The National Bank of Kazakhstan.
Open pit
A large-scale hard rock surface mine.
Ore
Rock that can be mined and processed at a profit.
Ore body
A solid mass of mineralised rock which can be mined profitably under
current or immediately foreseeable economic conditions.
Ounce or oz
Troy ounce, equal to 31.1035 grammes.
Pounds sterling
The official currency of the United Kingdom and ‘‘£’’.
Quartzite ore
A mass of mineralised quartzite rock containing gold.
Recovery
Proportion of valuable material obtained in the processing of an ore, 
stated as a percentage of the material recovered compared with the total
material present.
Romanshorn LC AG
A company incorporated in the United States of America and the direct
holding company of Kazakhaltyn (see inside back cover).
Rudnik Vasilevskyi LLP
A Kazakh partnership with rights to the Vasilevskyi deposit in Eastern Kazakstan.
$/t or $/tonne
US dollars per metric tonne.
Shaft
Vertical or inclined excavation into mine workings.
Silicification
The introduction of silica into a rock, either filling pore spaces or replacing
pre-existing minerals.
Tailings
Material that remains after all metals/minerals considered economic have
been removed from the ore.
tenge
The official currency of Kazakhstan.
US dollar
The official currency of the United States of America, “US$“ and “$“.
Vein
A tabular deposit of mineralized rock.
Visart LLP
A Kazakh partnership with rights to the Akzhal mine in Eastern Kazakhstan.
KazakhGold Group Limited 52
Glossary KazakhGold Group Limited 
Designed by SAS
www.sasdesign.co.uk
Printed by St.Ives Westerham Press
Group Structure and Subsidiaries
Mines acquired in 07/05
100%
100%
100%
100%
100%
100%
100%
KazakhGold Group Limited
(incorporated in Jersey)
JSC Kazakhaltyn MMC
(incorporated in Kazakhstan)
Romanshorn LC AG
(incorporated in USA)
Aksu 
(including 
Quartzite 
Hills)
Bestobe Zholymbet Vasilevskyi
Akzhal
Holding Companies Operating Companies Principal Mines
Visart LLP
(incorporated in 
Kazakhstan)
Rudnik Vasilevskyi LLP
(incorporated in 
Kazakhstan)
Boldykol
& Zhanan KazakhGold Group Limited
20 Richbourne Court, Harrowby Street,
London W1H 5PT, England
Registered number 91264
www.kazakhgold.com