REG - Central Asia Metals - 2021 Operations Update

Central Asia MetalsAnnouncement

11/01/2022 07:05

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RNS Number : 9832X  Central Asia Metals PLC  11 January 2022

11 January 2022

 

CENTRAL ASIA METALS PLC

('CAML' or the 'Company')

2021 Operations Update

Central Asia Metals plc (AIM: CAML) today provides a Q4 and full year 2021
operations update for the Kounrad dump leach, solvent extraction and
electro-winning ('SX-EW') copper recovery plant in Kazakhstan ('Kounrad') and
the Sasa zinc-lead mine in North Macedonia ('Sasa').

Recent Kazakhstan disturbances

The CAML Board and management team are closely monitoring the recent unrest in
Kazakhstan, which currently appears to have stabilised. To date, there has
been no disruption to Kounrad's operations, and 2022 copper production is in
line with expectations.

2021 summary

-      Zero lost time injuries ('LTIs') at Kounrad and four LTIs at Sasa
during 2021

-      2021 copper production at Kounrad above guidance range

o  14,041 tonnes produced

-      2021 zinc and lead production at Sasa marginally below guidance
range

o  Zinc in concentrate production of 22,167 tonnes

o  Lead in concentrate production of 27,202 tonnes

-      Cash in the bank on 31 December 2021 of $59.2 million

-      Gross debt as at 31 December 2021 of $33.0 million (including
drawn North Macedonian overdraft facilities totalling $9.6 million)

o  2021 Group corporate debt repayments of $48.4 million

 

2022 production guidance

-      Copper, 12,500 to 13,500 tonnes

-      Zinc in concentrate, 20,000 to 22,000 tonnes

-      Lead in concentrate, 27,000 to 29,000 tonnes

 

CAML production summary

 Metal production (tonnes)  Q4 2021  2021    2020
 Copper                     3,680    14,041  13,855
 Zinc                       5,133    22,167  23,815
 Lead                       6,469    27,202  29,742

 

Nigel Robinson, Chief Executive Officer, commented:

"We are following closely the recent events in Kazakhstan. We can confirm that
our operations at Kounrad have so far been unaffected and our 2022 copper
production to date is in line with our expectations. Most importantly, our
employees remain safe and well. We will of course make any necessary
announcements should it become appropriate to do so.

"We are pleased with our 2021 base metal output as, at Kounrad, we exceeded
our guidance, producing over 14,000 tonnes of copper cathode into a strong
pricing environment. We faced some challenges at Sasa during the year, which
reinforce our decision to transition to the Cut and Fill mining method, and I
am proud of our team's hard work and effort to deliver this credible, albeit
below original guidance, zinc and lead production result.

"We enter 2022 in a net cash position and with robust copper, zinc and lead
commodity prices. Our 2021 annual results are scheduled to be released on 29
March 2022, when our final dividend for 2021 will also be announced."

Health and Safety

There were no LTIs at Kounrad during Q4 2021 and one LTI at Sasa. While this
Sasa injury was clearly a disappointment, it was a relatively minor injury,
and the employee is now fully recovered. There were no medical treatment
injuries ('MTIs') at either operation and therefore one Group total recordable
injury ('TRI') during the quarter.

During 2021, there were zero TRIs at Kounrad and, to 31 December 2021, there
has been 1,324 days since the last LTI at Kounrad. At Sasa, there were four
LTIs and zero MTIs during the year, equating to four TRIs for the Company for
2021.

COVID-19 remains a risk to the welfare of CAML employees and contractors and
there have been cases of the virus at both Kounrad and Sasa during the
reported period. Despite this, the Company is confident that its COVID-19
procedures at both operations will be sufficient to protect the welfare of its
employees, meet respective government guidance and maintain production.

Kounrad

Kounrad Q4 2021 copper production of 3,680 tonnes brings output for 2021 to
14,041 tonnes.

Copper sales during Q4 2021 were 3,854 tonnes, bringing the total for 2021 to
14,051 tonnes.

Sasa

In Q4 2021, mined and processed ore were 203,802 tonnes and 203,803 tonnes
respectively, bringing the total for 2021 to 818,609 tonnes of ore mined and
830,709 tonnes of ore processed. The average head grades for the quarter were
3.00% zinc and 3.45% lead, and for the year were 3.14% and 3.52% respectively.
The average 2021 metallurgical recoveries were 84.9% for zinc and 93.1% for
lead.

Sasa produces a zinc concentrate and a separate lead concentrate. In Q4 2021,
10,380 tonnes of concentrate containing 49.5% zinc and 9,037 tonnes of
concentrate containing 71.8% lead were produced. Total production for 2021 was
44,383 tonnes of zinc concentrate at an average grade of 49.9% and 37,893
tonnes of lead concentrate at an average grade of 71.8%.

Challenging ground conditions coupled with an enhanced approach to underground
safety risks resulted in short term reductions in flexibility of working
areas, leading to a 1% shortfall in ore mined versus guidance and, in some
cases, increased dilution which led to reduced zinc and lead head grades
versus expected metal content.

Sasa typically receives from smelters approximately 84% of the value of its
zinc in concentrate and approximately 95% of the value of its lead in
concentrate. Accordingly, Q4 2021 payable production of zinc was 4,303 tonnes
and of lead was 6,145 tonnes, bringing total 2021 payable production to 18,616
tonnes of zinc and 25,842 tonnes of lead.

Payable base metal in concentrate sales from Sasa in Q4 2021 were 4,432 tonnes
of zinc and 6,247 tonnes of lead and for 2021 were 18,586 tonnes of zinc and
25,877 tonnes of lead.

During Q4 2021, Sasa sold 85,314 ounces of payable silver to Osisko Gold
Royalties and during 2021 sold 323,849 ounces, in accordance with its
streaming agreement.

                             Units    Q4 2021  2021     2020
 Ore mined                   t        203,802  818,609  826,421
 Plant feed                  t        203,803  830,709  820,215
 Zinc grade                  %        3.00     3.14     3.37
 Zinc recovery               %        84.0     84.9     86.1
 Lead grade                  %        3.45     3.52     3.85
 Lead recovery               %        92.0     93.1     94.3
 Zinc concentrate            t (dry)  10,380   44,383   47,583
 -      Grade                %        49.5     49.9     50.0
 -      Contained zinc       t        5,133    22,167   23,815
 Lead concentrate            t (dry)  9,037    37,893   41,289
 -      Grade                %        71.8     71.8     72.0
 -      Contained lead       t        6,469    27,202   29,742

 

2022 guidance

CAML targets 2022 Kounrad copper production of between 12,500 and 13,500
tonnes of cathode.

Prior to the 2023 transition to cut and fill mining at Sasa, which will create
a safer and sustainable underground mining operation for the long term, CAML
cautiously allows for continued ground support challenges in its 2022 guidance
and will maintain its enhanced approach to underground safety risks. The
Company therefore targets ore mined of between 790,000 and 810,000 tonnes.
This should result in zinc in concentrate production of between 20,000 and
22,000 tonnes and lead in concentrate production of between 27,000 and
29,000 tonnes. The Sasa team is also working on the development of an
increased number of sub-levels to enhance flexibility. This will enable a
greater number of potential working faces in the event of further support
being required in some areas.

Given the Sasa Cut and Fill Project underway, CAML expects Group 2022 capital
expenditure of between $28 million and $30 million, of which between $11
million and $13 million is expected to be committed to sustaining capex.
Overall 2021 and 2022 Sasa Cut and Fill Project capital expenditure
incorporates costs for the paste backfill plant and associated reticulation
pipework, the dry-stack tailings plant and the purchase of equipment necessary
to develop the Central Decline, as well as decline portal costs, that are in
line with initial 2020 estimates. The Group expects additional capitalised
development costs associated with progressing the decline during 2022. As the
team's understanding of the factors involved in construction of an appropriate
landform to store the dry tailings has advanced, CAML is also including costs
for this element of the project in its capital expenditure guidance.

Cash and debt

As of 31 December 2021, CAML had cash in the bank of $59.2 million and gross
debt of $33.0 million, inclusive of drawn North Macedonian overdraft
facilities totalling $9.6 million.

 

For further information contact:

 Central Asia Metals                               Tel: +44 (0) 20 7898 9001
 Nigel Robinson, CEO
 Gavin Ferrar, CFO
 Louise Wrathall, Director of Corporate Relations  louise.wrathall@centralasiametals.com

 Peel Hunt (Nominated Advisor and Joint Broker)    Tel: +44 (0) 20 7418 8900
 Ross Allister
 David McKeown

 BMO Capital Markets (Joint Broker)                Tel: +44 (0) 20 7236 1010
 Thomas Rider
 Pascal Lussier Duquette

 Blytheweigh (PR Advisors)                         Tel: +44 (0) 20 7138 3204
 Tim Blythe
 Megan Ray
 Rachael Brooks

Note to editors:

 

Central Asia Metals, an AIM-listed UK company based in London, owns 100% of
the Kounrad SX-EW copper project in central Kazakhstan and 100% of the Sasa
zinc-lead mine in North Macedonia.

For further information, please visit www.centralasiametals.com
(http://www.centralasiametals.com/)  and follow CAML on Twitter at
@CamlMetals and on LinkedIn at Central Asia Metals Plc

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