Daily Insight-Kiev, Moscow on "gas" accords; IMF assesses stand-by progress; NBU rate unchanged; Ferrexpo, Astarta news

In its interim management statement, Ferrexpo (FXPO LN; Buy; GBp310; TP GBp565) stated that its growth projects are being implemented according to the company\'s set schedule. In particular, the company stated that its Ferrexpo Yeristovo Mine (FYM) is still expected to yield its first ore in 2013, as was previously planned, while the design of the FYM concentrator is ongoing, subject to full board approval in March 2012. The mine life extension project at Ferrexpo Poltava Mining (FPM) is progressing as planned to extend the life of the FPM mine to 2038. Finally, the quality upgrade project is underway to increase the proportion of 65% Fe pellets to 100% of production, and costs are in line with the budget.

Overall, Ferrexpo remains on track to increase its own pellet production capacity to 12mtpa by the end of 2013 and to increase production of 65% Fe pellets to 100% of output by the end of 2014. The increase in Ferrexpo\'s average production cash cost for 3Q11 was offset by higher output and efficiency improvements, and as a result, increased by 8.9%, to US$52.5/t (versus US$48.2/t in 1H11). The company also stated that the average realised price of its pellets in 3Q11 was in line with that achieved for 2Q11. For the full year, the company expects to sell approximately 25% of its output on the spot market, with new, long-term contracts commencing in 2012. Having attracted a new loan of US$420m in 3Q11, Ferrexpo now has gross borrowing facilities of over US$1bn, with an average tenor of four years and US$60m of net debt as of 31 October, 2011.