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Investment Consensus:

KGHM is a well-positioned company on both domestic and international markets. While benchmarked comparisons reveal slight underperformance in profitability, investor sentiment stems from good financial stability, excellent management, and a sustained level of business activity. These factors, among others examined throughout this report, exemplify a company with strong future earnings potential and generous investment outlook.

At this time, East Mill Capital Research Group supports investments in this company and is committing to a position within the Research Fund.

KGHM DD Report

Executive Summary:

KGHM Polska Miedz SA (hereinafter “KGHM” or “The Company”) is a Poland-based company involved in the copper ore mining, copper production and the production of precious metals and other nonferrous metals. The Company also produces salts and provides casting services for light metals. Supplementary activities include geological and exploratory activities, and waste management. KGHM Polska Miedz SA has a multi-divisional organizational structure, which is comprised of its Head Office and several divisions: mines, smelters, the concentrator division, the tailings division, the mine-smelter emergency rescue division and the data-center division. Its products are sold domestically, as well as exported to Germany, the United Kingdom, France, China, and the Czech Republic, among others. Through a wholly owned subsidiary, Bipromet SA, the Company is also engaged in the construction and engineering industry. KGHM owns three copper smelters: “Głogów”, “Legnica”, and “Cedynia”. KGHM’s smelters also produce lead, refined lead, sulphuric acid, nickel sulphate, and platinum-palladium concentrate. The Company has faced in the past supply chain inefficiencies, management instability, and poor profitability. This is all taken into consideration as the company is examined in determining it’s investment potential as a turnaround equity position.