REG - Central Asia Metals - Proposed acquisition of New World Resources

Central Asia MetalsAnnouncement

21/05/2025 07:00

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RNS Number : 5650J  Central Asia Metals PLC  21 May 2025

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21 May 2025

Central Asia Metals Plc

(the 'Group', the 'Company' or 'CAML')

Proposed acquisition of New World Resources Limited for A$185 million

Central Asia Metals Plc (AIM: CAML) ('CAML') is pleased to announce that it
has entered into a definitive Scheme Implementation Deed ('SID') with New
World Resources Limited (ASX: NWC) ('NWR') under which CAML has agreed to
acquire all of the shares in NWR (the 'NWR Shares') for A$0.05 per share in
cash for each NWR Share held ('Scheme Consideration').

The Scheme Consideration values the fully diluted equity value of NWR at A$185
million 1  (#_ftn1) (US$119 million 2  (#_ftn2) ). The transaction, as
contemplated in the SID (the 'Transaction'), will be implemented by way of an
Australian Court-approved scheme of arrangement pursuant to Part 5.1 of
Australia's Corporations Act 2001 (Cth) (the 'Scheme').

The acquisition of NWR will add to CAML's portfolio a 100% interest in the
Antler Project, a high-grade copper deposit located in Arizona in the United
States (the 'Antler Project'). In 2024, NWR released a prefeasibility study
('PFS') and maiden probable ore reserve estimate for the Antler Project. The
PFS demonstrated a post-tax net present value ('NPV') of US$498 million at a
7% discount rate, an internal rate of return ('IRR') of >30% and a
three-year payback period, while producing an average of approximately 30,000
tonnes of payable copper equivalent 3  (#_ftn3) per annum over a 12-year life
of mine ('LoM'). The latest mineral resource estimate published by NWR for the
Antler Project totals 14.2 million tonnes at a copper equivalent grade of
3.8% 4  (#_ftn4) .

The Transaction is to be funded from existing cash reserves and a new US$120
million credit facility from a syndicate of leading international lending
banks.

NWR's Directors consider that the Scheme is in the best interests of NWR's
shareholders and unanimously recommend that NWR's shareholders vote in favour
of the Scheme, in the absence of a superior proposal and subject to an
independent expert concluding (and continuing to conclude) that the Scheme is
in the best interests of NWR's shareholders.

NWR's shareholders will be asked to approve the Scheme at a Scheme meeting
('Scheme Meeting') which is expected to be held in Q3 2025, with
implementation of the Scheme to occur shortly after the Scheme Meeting.

Transaction highlights and rationale

·    Transformative transaction

o  Once in production, more than doubles CAML's current annual payable copper
equivalent production and cash flow, with average annual production from the
Antler Project of approximately 30,000 tonnes (years 2-11) and average annual
post-tax unlevered free cash flow of US$115 million according to the PFS

o  Adds material near-term growth to complement CAML's cash-generative
portfolio, with additional potential for further exploration at the Antler
Project as well as regionally

·    High-grade advanced development project with robust economics

o  High-grade volcanogenic massive sulphide copper project with a total
mineral resource estimate of 14.2 million tonnes at a copper equivalent grade
of 3.8%

o  The PFS demonstrated a LoM of 12 years with average steady-state payable
metal production of approximately 30,000 tonnes per annum of copper equivalent
at LoM C1 cash costs of US$1.97 per pound of copper equivalent and all in
sustaining cost ('AISC') of US$2.18 per pound of copper equivalent

o  Manageable pre-production capex estimated at US$298 million in the PFS,
representing a capital intensity of US$8,563/t 5  (#_ftn5) of average annual
recoverable copper equivalent production for the 12-year LoM, placing the
project in the lowest quartile globally

o  Post-tax NPV(7%) of US$498 million, a payback period of three years and an
IRR of over 30% at a long-term copper price of US$4.20 per pound according to
the PFS

·    Increased copper exposure in a tier-one jurisdiction

o  The Antler Project is located in Arizona, the 'Copper Capital' of the US,
benefiting from excellent infrastructure, services and technical skills

o  Unprecedented support from the current US administration for domestic
critical minerals production

·    Attractive valuation

o  The Scheme Consideration to be paid by CAML implies an acquisition P/NPV
multiple of ~0.2x based on the PFS NPV

o  Transaction immediately accretive to CAML's NAV per share based on
analysts' consensus NAV per share estimates for CAML and the Antler Project
PFS

·    Clear pathway to project development

o  Permitting process on track and definitive feasibility study ('DFS')
currently under way and is expected to be finalised under CAML's ownership

o  Project is unconstrained from offtake commitments, and CAML intends to
consider numerous suitable construction funding options

Commenting on the transaction, Nick Clarke, CAML's Non-Executive Chairman,
said:

"We believe that this Transaction is an exceptional opportunity for CAML to
acquire a high-grade copper asset which complements our existing business. The
addition of the Antler Project to our portfolio will give us the potential for
near-term growth as it would more than double our production and cash flow.

The Transaction is projected to be accretive on a net asset value per share
basis, based on the PFS NPV, which is in line with our business development
strategy of pursuing value-accretive acquisitions in the base metals sector to
support the long-term cash flow generation of our business."

Commenting on the transaction, Gavin Ferrar, CAML's Chief Executive Officer,
said:

"The addition of this high-grade copper project in a tier-one jurisdiction
will significantly strengthen our portfolio. We have been impressed by the
strength of NWR's team and aim to work with them to integrate the Antler
Project, complete the DFS and work towards a construction decision. In
addition, the manageable capital expenditures of the Antler Project would
provide us the opportunity to fund its development whilst ensuring we maintain
a strong financial position."

NWR overview

NWR engages in the exploration and development of mineral properties in North
America. The company explores for copper, zinc, silver, gold and lead
deposits. It holds a 100% interest in its flagship asset, the Antler Project,
which is situated in a sparsely populated area 200 kilometres southeast of Las
Vegas in northwestern Arizona, and a 100% interest in the Javelin Project,
covering approximately 4,000 acres located near the Antler Project in Arizona,
and the Tererro copper-gold-zinc project, located northeast of the city of
Albuquerque in northern New Mexico.

The Antler Project

The Antler Project is a high-grade copper deposit with mineralisation
outcropping at surface over 750 metres of strike. The area is well serviced by
existing infrastructure, and there are multiple mining operations in the wider
region.

The PFS, released in 2024, demonstrated a technically and financially robust
project capable of delivering approximately 30,000 tonnes per annum of payable
copper equivalent metal over a 12-year life from an underground operation
feeding a 1.2 million tonnes per annum on-site processing plant.

Antler Project 2024 PFS Key Parameters

 Parameter                                     PFS Outcome
 Commodity price                               Copper: US$4.20/lb (US$9,259/t)

                                               Zinc: US$1.23/lb (US$2,712/t)

                                               Lead: US$1.00/lb (US$2,205/t)

                                               Gold: US$2,055/oz

                                               Silver: US$25.00/oz
 LoM mining inventory with average head grade  13.6Mt at 1.6% Cu, 3.7% Zn, 0.6% Pb, 24.5g/t Ag and 0.3g/t Au (3.0% Cu-eq) 6 
                                               (#_ftn6)
 Probable Ore Reserve                          11Mt at 1.6% Cu, 3.7% Zn, 0.6% Pb, 25.9g/t Ag and 0.3g/t Au
 LoM production profile                        1.2Mtpa over 12.2 years
 LoM total production                          186,700t Cu

 (payable metal)                               387,600t Zn

                                               41,100t Pb

                                               5.9Moz Ag

                                               67,500oz Au

                                               341,100t Cu-eq
 Steady-state annual production                16,400t Cu

 (average payable metal years 2-11)            34,500t Zn

                                               3,600t Pb

                                               533,300oz Ag

                                               6,000oz Au

                                               30,100t Cu-eq
 LoM post-tax free cash flow                   US$978 million
 Annual post-tax free cash flow                US$115 million per annum

 (average years 2-11)
 Pre-production capex                          US$298 million (including US$31.4 million for contingencies)
 C1 costs 7  (#_ftn7)                          US$1.97/lb Cu-eq

                                               US$0.12/lb Cu (net of co-products)
 AISC costs 8  (#_ftn8)                        US$2.18/lb Cu-eq

                                               US$0.51/lb Cu (net of co-products)
 Post-tax NPV(7%)                              US$498 million
 Post-tax IRR                                  30.3%

The DFS for the Antler Project is currently under way. Following completion of
the Transaction, CAML intends to assume responsibility for completion of the
DFS utilising its expertise in underground mining, paste backfill and dry
stack tailings.

The majority of infrastructure required to develop the Antler Project is
expected to be constructed on private land which NWR either owns or currently
has the right to purchase. Minor surface infrastructure is expected to be
installed on adjacent public lands, which are administered by the Bureau of
Land Management. NWR has significantly progressed the permitting process for
the Antler Project.

For further information on NWR, please visit www.newworldres.com
(http://www.newworldres.com)

Transaction funding

The Transaction will be funded from existing cash reserves and a new US$120
million senior secured credit facility. As of 31 December 2024, CAML had cash
in the bank of approximately US$68 million and US$10 million of undrawn
overdraft credit facilities. CAML has received credit approved firm
commitments from a syndicate comprised of BMO, ING Bank and Société
Générale with the following key terms:

·    Principal amount: US$120 million

·    Term: 5 years

·    Interest: 4.15% + 3-month term SOFR

·    Grace period of principal repayment: 6 months from utilisation of the
facility

·    Repayment: equal quarterly repayments after grace period

Drawdown of funds under the credit facility will be subject to limited
conditions precedent aligned with the SID.

Board of Directors' approval and recommendations

The Board of Directors of CAML has unanimously approved the Transaction,
including, without limitation, the Scheme Consideration.

NWR's Directors consider that the Scheme is in the best interests of NWR's
shareholders and unanimously recommend that NWR's shareholders vote in favour
of the Scheme at the Scheme Meeting, in the absence of a superior proposal and
subject to the independent expert concluding (and continuing to conclude) that
the Scheme is in the best interests of NWR's shareholders.

NWR's Directors, who collectively hold and/or control voting rights in respect
of approximately 90.67 million NWR Shares (representing approximately 2.56% of
the total ordinary shares on issue), have confirmed that they each intend to
vote (or procure the voting of) all shares they directly or indirectly hold or
control in favour of the Scheme at the Scheme Meeting, subject to those same
qualifications.

Transaction structure and certain terms of the SID

Under the SID, CAML will acquire all of the shares in NWR by way of the
Scheme, pursuant to which NWR's shareholders will receive cash consideration
of A$0.05 per NWR Share held.

The Transaction is subject to customary and other conditions including:

·    Receipt of specified US and North Macedonian regulatory approvals;

·    An independent expert concluding and continuing to conclude that the
Transaction is in the best interests of NWR's shareholders;

·    There being no material adverse change, no restraints and no
prescribed occurrences in relation to NWR;

·    Approval of the Scheme by NWR's shareholders in accordance with
Australia's Corporations Act 2001 (Cth) at the Scheme Meeting; and

·    Requisite Australian Court approval.

In addition, the SID contains customary exclusivity provisions, including no
shop, no talk and no due diligence, and a notification obligation and a
matching right in favour of CAML. The SID also contains certain circumstances
under which NWR may be required to pay a break fee to CAML or CAML may be
required to pay a break fee to NWR.

Full details of the conditions to the Scheme, as well as the other terms that
have been agreed, are set out in the SID, which is attached to NWR's
announcement of the Transaction.

Subject to Australian Court approval, NWR intends to distribute a scheme
booklet to its shareholders containing information in relation to the
Transaction, including reasons for the unanimous recommendation of NWR's
Directors and the independent expert's report providing an assessment as to
whether the Scheme is in the best interests of NWR's shareholders, and other
matters relevant to NWR's shareholders, indicatively around late July 2025.

The Scheme Meeting of NWR's shareholders to approve the Transaction is
expected to be held in August 2025. Subject to the conditions of the Scheme
being satisfied or waived (as permitted), the Transaction is expected to be
implemented in September 2025 9  (#_ftn9) .

CAML will keep the market informed of any material developments in accordance
with its continuous disclosure requirements.

Adviser and counsel

BMO Capital Markets is acting as exclusive financial adviser, Mayer Brown is
acting as UK and US legal adviser, and Clayton Utz is acting as Australian
legal adviser to CAML.

About CAML

Central Asia Metals Plc is a UK-incorporated base metals producer,
headquartered in London. The Company has been admitted to trading on the
London Stock Exchange since its IPO in 2010. Today the Company has a market
capitalisation of approximately US$380 million, and base metal operations in
Europe and Central Asia. The Board of Directors of CAML is composed of
UK-based senior level executives, bringing a mix of international mining
experience, capital markets experience and environmental, social and
governance experience. CAML is well supported by tier-one UK and US
institutional shareholders, with the top three owners comprising Fidelity
International, JO Hambro and BlackRock (between them accounting for
approximately 25% of the Company's share register).

CAML owns 100% of the Sasa underground zinc-lead mine in North Macedonia,
Europe, and 100% of the Kounrad SX-EW copper project in central Kazakhstan.
CAML also owns an 80% interest in CAML Exploration, a subsidiary formed to
progress early-stage exploration opportunities in Kazakhstan, and a 28.4%
interest in Aberdeen Minerals Ltd, a privately-owned UK company focused on the
exploration and development of base metals opportunities in northeast
Scotland.

The Transaction represents a substantial transaction for CAML pursuant to Rule
12 of the AIM Rules for Companies.

Analyst conference call and webcast

A live conference call and webcast hosted by Gavin Ferrar (Chief Executive
Officer) and Louise Wrathall (Chief Financial Officer) will take place today
at 09:30 (BST). The call can be accessed by dialling +44 (0) 33 0551 0200 (UK)
or +1 786 697 3501 (US Local) and quoting the confirmation code 'CAML' when
prompted by the operator, and the webcast can be accessed using the link:
https://brrmedia.news/CAML_CU (https://brrmedia.news/CAML_CU)

The presentation will be available on the Company's website and there will be
a replay of the call available following the presentation at
https://www.centralasiametals.com (https://www.centralasiametals.com)

The person responsible for arranging the release of this announcement on
behalf of CAML is Richard Morgan, Investor Relations Manager.

For further information contact:

 Central Asia Metals                                                          Tel: +44 (0) 20 7898 9001
 Gavin Ferrar
 CEO
 Louise Wrathall
 CFO
 Richard Morgan                                                               richard.morgan@centralasiametals.com
 Investor Relations Manager

 BMO Capital Markets (Exclusive Financial Adviser to CAML and Joint Broker)   Tel: +44 (0) 20 7236 1010
 Thomas Rider
 Pascal Lussier Duquette
 Jonathan Reard

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

 Emily Bhasin

 BlytheRay (PR Advisers)                                                      Tel: +44 (0) 20 7138 3204
 Tim Blythe
 Megan Ray

 

 1  (#_ftnref1) Fully diluted equity value based on the Scheme Consideration
and approximately 3,541m ordinary shares on issue; 32m ordinary shares and 4m
performance rights to be issued as part of June 2025 NWR's extraordinary
general meeting; and 158m options and 54m performance rights outstanding.

 2  (#_ftnref2) US$/A$ exchange rate of 0.64.

 3  (#_ftnref3) Copper equivalence in 2024 PFS calculated based on the
following life of mine commodity price assumptions: Copper - US$9,259/t, zinc
- US$2,712/t, lead - US$2,205/t, silver - US$25.00/oz, and gold - US$2,055/oz.

 4  (#_ftnref4) Copper equivalence in the latest mineral resource estimate
(published in May 2025) calculated based on the following commodity price
assumptions: Copper - US$9,259/t, zinc - US$2,866/t, lead - US$1,984/t, silver
- US$28.00/oz, and gold - US$2,800/oz.

 5  (#_ftnref5) Source: NWR PFS presentation July 2024

 6  (#_ftnref6) Mining inventory copper equivalent (%) = (Cu% x 0.944) + (Zn%
x 0.947 x 2712/9,259) + (Pb% x 0.799 x 2205/9,259) + (Ag oz/t x 0.82 x
25/9,259x100) + (Au oz/t x 0.77 x 2055/9,259x 100).

 7  (#_ftnref7) C1 cash costs include mining costs, processing costs,
mine-level G&A, transport, treatment and refining charges and royalties.

 8  (#_ftnref8) AISC include cash costs plus sustaining capital and closure
costs.

 9  (#_ftnref9) Dates are indicative only and may be subject to change.

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