JPMorgan - KASE

Use of Proceeds
The net proceeds to us on a consolidated basis will be approximately $120.7 million. The gross
proceeds of $123.0 million from this offering will be used by the issuer to make an intercompany
loan to HKM. The proceeds of the intercompany loan will be used by us for working capital and
other general corporate purposes, which may include funding for acquisitions, capital
expenditures or the reduction of indebtedness, and to pay costs relating to this offering
estimated to be $2.3 million.
Prior to this offering, we entered into the Term Facility (and repaid and terminated a $60.0
million predecessor facility). In addition, we redeemed the entire $208.2 million outstanding
principal amount of our Senior Notes due 2006 on February 3, 2003.
Capitalization
The following table sets forth our consolidated cash and short-term deposits and capitalization as
of September 30, 2002 on an actual basis, as adjusted to give effect to the issuance of the notes,
and as further adjusted to reflect our Term Facility, the repayment of our existing term facility
and the redemption of our Senior Notes. This table should be read in conjunction with our
consolidated financial statements and related notes included elsewhere in this offering
memorandum.
As of September 30, 2002
As further
Actual As adjusted adjusted
($ in thousands)
Cash and short-term deposits .............................. 162,246 283,227 223,227
Long-term debt:
Senior Notes due 2006 .................................... 208,280 208,280 —
Predecessor Term Facility .................................. 12,000 12,000 —
New Term Facility (1) ...................................... — — 190,000
HOP bonds .............................................. 13,162 13,162 13,162
Non-recourse joint venture debt ........................... 62,684 62,684 62,684
9.625%Notesdue2010 ................................... — 125,000 125,000
Issue costs ............................................... (2,929) (6,948) (4,019)
Total long-term debt ..................................... 293,197 414,178 386,827
Shareholders’ equity ...................................... 247,223 247,223 227,574
Totalcapitalization....................................... 540,420 661,401 614,401
(1) For these purposes, including an amount that would be classified as short-term debt.
There has been no material change in our capitalization since September 30, 2002, except for the
repayment and termination of our predecessor term facility in December 2002, our entry into and
borrowing of $190.0 million under our Term Facility as of February 7, 2003, and our redemption
on February 3, 2003 of the entire $208.2 million outstanding principal amount of our Senior
Notes due 2006. In addition, our share of Kazgermunai’s debt was reduced by $17.5 million in the
fourth quarter of 2002, leaving a balance at December 31, 2002 of approximately $45.2 million.
We received approval from the Toronto Stock Exchange, or TSX, on August 2, 2002, to proceed
with a normal course issuer bid commencing on August 7, 2002 and terminating on August 6,
2003, or such earlier date as we may complete our purchases thereunder. Under this normal
course issuer bid, we may purchase up to 5,253,238 of our Class A common shares. As of
December 31, 2002, 2,531,870 common shares have been purchased at an average price of
Cdn$14.57 and canceled. This represents 48.2% of the authorized share buyback amount. The
number of common shares outstanding as of December 31, 2002 was 78,956,875.
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