The process of offering Koza’s shares to the public will start on Wednesday and continue until Friday. The shares will be listed on the İstanbul Stock Exchange (İMKB) between TL 36.8 and TL 46 and valued at $600 million -- the second largest IPO after Türk Telekom in two years.
With regard to how the firm could manage to offer such a large IPO in this economic environment, Koza Gold Assistant General Manager Hayri Öğüt, speaking to Today’s Zaman, pointed out the firm’s strong credentials in keeping costs low and their belief that gold prices would not affect their share prices. According to the firm, the cost of extracting an ounce of gold is $310, which on a global scale is in the lowest quartile of costs for global gold producers. Moreover, the firm is efficient in extraction, able to obtain 6.9 grams of gold from a ton of rock, much higher than the firm’s competitor in the province Uşak, which obtains only 2.5 grams, leading to much higher costs per ounce. The firm is also showing great profitability, with TL 90 million in profits in the first nine months of 2009, up 39 percent from the same period in 2008. Koza Gold sold TL 220.5 million worth of extracted materials in the first nine months of the year, up 52 percent from TL 145.0 million in the same period in 2008.
According to Öğüt, spot prices for gold will not affect the company’s share prices, a fear that has affected mining firms, as a decrease in the price of gold will lead to a sharp dive in the company’s share prices. Öğüt revealed that “if gold prices drop, our share prices will not because we will continuously be bringing new mines into the mix and increasing gold production.
In fact, if the price drops, it will only help us expand and help us in purchases of mines. Investors in the stock market don’t see our share prices linked to the price of gold.” He also added that decreasing confidence in the dollar, a slowdown in the global production of gold and findings that the available mines are decreasing meant that gold prices were much more likely to increase than to decrease.
