9 july 2012
Altyntau Resources comes to a new level of planning and cost accounting using IBM Cognos Express Solutions
Altyntau Resources together with GMCS implement the project on deployment of the budget collection and product cost accounting systems based on IBM Cognos Express solutions.

As a result of the long-term project implementation, Altyntau Resources intends to change to a uniform planning system, ensure the obtainment of consolidated IFRS forward financial statements for the group of companies, broken down by different sections, as well as to improve profitability of the company's activities and product cost control.

Altyntau Resources produces gold including extraction of gold ores and refined gold production. The main production and processing facilities of the company are located in Almaty and Kokshetau. The implemented system is aimed at the improvement of the company's performance productivity for the account of forecast metal flow by the group of companies and budget planning. The integrated IBM Cognos Express solution containing a set of tools for budgeting, scenario modeling and business analysis was selected as a platform for the system deployment.

"The cost of finished product in the extractive industry depends on many factors including ore quality, method of manufacture, technology equipment of processing facilities and many other factors. Altyntau Resources looks forward. In the conditions of a complex cost chain, some limits – and we have more than 40 of them – a competitive advantage is an opportunity (as early as at the stage of extraction) to calculate some variants of cost and to sel ect the best one in terms of the type of manufactured finished product and manufacturing method. The implemented system is intended to provide the solution for these tasks," tells Ilyas Kazhibekov, Planning and Budgeting Director, Atyntau Resources.

The project will be implemented in several stages within a few years. The first stage (to be completed at the end of 2012) will result in the implementation of muli-level planning in the system, including the obtainment of consolidated budget by group of companies according to IFRS standards, broken down by different sections including specific gold deposits and types of ores. Altyntau Resources will get the tools for automatic calculation of metal balance, planned product flow of incomplete production and finished products, planned cost of a product unit and planned output of finished products and incomplete production volumes, including plan/fact analysis. Also the calculation of depreciation, lease and taxes, and capital investment budget will be automated.

In the context of the next stages, the following processes will be automated in the system: preparation and collection of budgets fr om subdivisions, calculation of planned output volumes, preparation of analytical reports on materials and fuels, and planning of labor costs (according to schedule of positions and salaries). In order to balance the company's business processes, the IBM Cognos Express will be integrated with the corporate management system of Altyntau Resources based on Microsoft Dynamics AX.

This is the second joint project with Altyntau Resources. The gold producer is an innovator in its industry and this finds reflection in the current project. To date, Altyntau Resources has accumulated a unique expertise and planning methods; and our goal is to automate them using the IBM Cognos Express tools, to bring the planning process to the level of cost calculation for all types of products," notes Evgeny Erofeev, BPM-System Department Director at GMCS.

"The implementation of the long-term project for a leading gold producer in Kazakhstan is an indicator of the IBM Corporation's intentions in relation to business development in the CIS countries. In 2012, the Corporation expands its geographical presence in the regions Russia and the CIS countries through additional investment of $6 million for opening new offices and attraction of highly professional specialists. Business analytics is one of the priority directions for us till 2015. Certainly, the project implemented for the benefit of Altyntau Resources is a considerable contribution to the rapidly growing economy of Kazakhstan," said Adam Dosymov, Head of the IBM Representative Office IBM in Kazakhstan.

About Altyntau Resources

Altyntau Resources is the major company in Kazakhstan in the area of gold production and refining and is comprised of the Head Company Altyntau Resources and subsidiary companies – Altyntau Kokshetau in Akmola oblast and Altyntau Vostok in Eastern-Kazakhstan oblast.
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