Central Asia Metals Plc · LSE:CAML
Central Asia Metals — FY2021 Earnings Presentation
44 slides from Central Asia Metals's earnings presentation, March 2022
Slide 1: A Record Year: 2021 Results
CENTRAL ASIA METALS PLC A RECORD YEAR 2021 RESULTS
Slide 2: Disclaimer
DISCLAIMER The information contained in this confidential document (“Presentation”) has been prepared by Central Asia Metals plc (the “Company”). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation has not been approved by an authoris
Slide 3: Central Asia Metals (CAML) Operations
CENTRAL ASIA METALS (CAML) OPERATIONS KAZAKHSTAN - Population, 18.3 million - GDP per capita, $11,165 NORTH MACEDONIA - Population, 2.1 million - GDP per capita, $6,143 SASA (100%) KOUNRAD (100%) - Underground zinc and lead mine, northeast North Macedonia - In-situ dump leach and SX-EW processing fa
Slide 4: 2021 Results Highlights
2021 RESULTS HIGHLIGHTS 2021 revenue 2021 EBITDA Record Group financial performance - Four LTIs in 2021 $235.2m $141.5m 2020: $170.3m 2020: $95.7m - 17% reduction in Group GHG emissions YoY - Total 2021 dividend 20p (2020: 14p) 2021 net cash 2021 gross debt - - Highest annual dividend to date Includ
Slide 5: Our Purpose
OUR PURPOSE Copper “Our purpose is - Global push towards renewable energy to produce base - Supply deficit could widen to 9 Mt by 2030 (Source: BMO) metals, which are - EVs more copper intensive (c. 4x) than ICEs essential for - Building efficiencies set to drive greater copper modern living, demand
Slide 6: Our Purpose-Driven Approach
OUR PURPOSE-DRIVEN APPROACH OUR PURPOSE SHAPES OUR BUSINESS AND OUR STRATEGIC DECISIONS. IT IS UNDER-PINNED BY OUR VALUES WHICH INFORM THE BEHAVIOUR AND STANDARDS EXPECTED OF ALL OUR COLLEAGUES. TOGETHER THESE DETERMINE HOW WE EMPLOY THE INPUTS TO THE BUSINESS TO IDENTIFY AND DELIVER OUR IMMEDIATE A
Slide 7: Focus on Sustainability
FOCUS ON SUSTAINABILITY Central Asia Metals PLC 6
Slide 8: Sustainability Framework
SUSTAINABILITY FRAMEWORK PILLAR RELATED SDGs MATERIAL TOPICS DELIVERING − Responsible supply chain VALUE THROUGH − Corporate governance and STEWARDSHIP business ethics DELIVERING MAINTAINING − Health and wellbeing VALUE THROUGH HEALTH − Safety STEWARDSHIP AND SAFETY MAINTAINING HEALTH FOCUSING ON −
Slide 9: 2021 Health and Safety Performance
2021 HEALTH AND SAFETY PERFORMANCE Sasa 10 10 9 9 - 4 LTIs 8 8 8 8 7 7 Injury frequency rate - Relatively minor but lessons have been learnt and teams Number of injuries 6 6 trained accordingly 5 5 4 4 - 0 MTIs 4 4 3 3 2 - No occupational health issues at Sasa 2 2 1 1 1 1 - 48% employees with ≥ 1 CO
Slide 10: Caring for the Environment
CARING FOR THE ENVIRONMENT Climate Change Strategy developed 2021 GHG emissions (Scope 1&2) 81,698t - Initial reporting towards TCFD GHG emission reduction YoY 17% - Board approval for Kounrad solar project 2030 GHG emission reduction target 50% from a 2020 base - Next steps - Scenario analysis, 202
Slide 11: Unlocking Value for Our Communities
UNLOCKING VALUE FOR OUR COMMUNITIES Sasa Foundation* - $0.4m Kounrad Foundation - $0.1m - Formation of Sasa Foundation charity - Purchase of ambulance for Kounrad village residents - Purchase of new BIO cabinet class II to Public Health Centre – Kochani - Financial support to government scheme to en
Slide 12: Focusing on Our People / Governance
FOCUSING ON OUR PEOPLE / GOVERNANCE Diversity progress and targets Training and development - 2021, formed site based diversity and inclusion - 2021, total training hours 37,805 committees 99% - 36 average training hours per employee - 2022, action issues / initiatives which arose in these committee
Slide 13: Targeting Low Cost, High Margins
TARGETING LOW COST, HIGH MARGINS Central Asia Metals PLC 12
Slide 14: 2021 Market Conditions
2021 MARKET CONDITIONS 2021 average copper price $9,310/t (2020: $6,184/t) COVID-19 pandemic 12000 Cu H2 2021 avg. $9,539/t - Strong recovery, supported by global stimulus packages and 11000 ramp up of vaccination programmes 10000 Cu H1 2021 avg. $9,077/t Metal prices $/t 9000 - Copper - price suppo
Slide 15: 2021 Income Statement
2021 INCOME STATEMENT EBITDA margin 60% Highlights 2021 2020 % change - Gross revenue and EBITDA significantly increased Gross revenue, $m 235.2 170.3 +38% - higher copper, zinc and lead prices and lower TCs Selling & distribution, $m 2.1 2.6 -19% - Increased costs - higher royalties due to increase
Slide 16: EBITDA 2021 vs 2020
EBITDA 2021 VS 2020 141.5 Central Asia Metals PLC 15
Slide 17: 2021 Kounrad C1 Copper Cash Cost
2021 KOUNRAD C1 COPPER CASH COST 2021 C1 cash cost $0.57/lb (2020: $0.51/lb) 2021 2020 2021 2020 Local G&A Cost $m $m $/lb $/lb $0.07/lb Reagents 3.2 2.4 0.10 0.08 Realisation $0.08/lb Power 2.6 2.0 0.09 0.07 Payroll 4.4 4.0 0.14 0.13 Processing $0.42/lb Materials 1.0 1.1 0.03 0.03 Consulting & 1.9
Slide 18: 2021 Sasa C1 Zinc Eq. Cash Cost
2021 SASA C1 ZINC EQ. CASH COST 2021 C1 cash cost $0.63/lb (2020: $0.50/lb) 2021 2020 2021 2020 C1 cash cost $m $m Zinc payable - - 18,616t 20,008t production Pro-rata costing zinc - - 44% 38% Mining 19.0 17.1 $0.20/lb $0.15/lb Processing 10.0 9.1 $0.11/lb $0.08/lb Local G&A 7.1 6.2 $0.08/lb $0.05/l
Slide 19: 2021 Capex
2021 CAPEX 2021 Group capex $14.7m (2020: $8.5m) 7 - Original 2021 guidance, $15-17m 6 6.1 5.9 - Capex higher vs 2020, includes $5.9m for Cut and Fill Project 5 - Further prepayments of $4.3m of capex – C&F; $2.4m, Sasa; $1.5m, Kounrad $0.4m 4 $m - Cut and Fill Project payments, includes 3 2.7 - Cen
Slide 20: 31 December 2021 Balance Sheet
31 DECEMBER 2021 BALANCE SHEET Net cash $22.7m (2020: -$36.2m) 31 Dec 2021, $m 31 Dec 2020, $m PPE 384.9 418.0 - Group cash balance, $59.2m (2020: $47.9m) Intangible assets 52.1 56.6 - Other assets increased by $3.4m Cash 55.7 44.3 - Due in part to Cut and Fill Project prepayments Restricted cash 3.
Slide 21: 2021 Cash Flow
2021 CASH FLOW 2021 FCF of $103.8m 59.2 Central Asia Metals PLC 20
Slide 22: Kounrad Copper Operation
KOUNRAD COPPER OPERATION Remaining recoverable copper Eastern Dumps c.8,000t Western Dumps c.118,000t Total c.126,000t Central Asia Metals PLC 21
Slide 23: Kounrad Production
KOUNRAD PRODUCTION In-situ dump leach and SX-EW plant Annual copper production 16,000 140,000 - Exceeded 2021 guidance Cumulative annual production (t) 14,000 120,000 Annual production (t) - Q4 2021 copper production, 3,680t 12,000 100,000 10,000 - 2021 copper production, 14,041t 80,000 8,000 60,000
Slide 24: Kounrad Scale of Leaching
KOUNRAD SCALE OF LEACHING Dripper network from London to Nur-Sultan Ave area Total Total Average installed material grade Annual Year under drippers, under under - Average copper grade under leach increased due leach, ha km leach, Mt leach, % Cu, t to the commissioning of high-grade Dump 21 (0.176%)
Slide 25: Sasa Zinc and Lead Mine
SASA ZINC AND LEAD MINE Highly profitable operation - Acquired for $402.5m in November 2017 - Sasa EBITDA since acquisition to end 2021, $245.1m - Debt repaid (plus deferred consideration) since acquisition to end 2021 of $175.7m - Reserves and resources to 2037 Central Asia Metals PLC 24
Slide 26: Sasa Production
SASA PRODUCTION 2021 production Unit 2021 2020 2019 2018 Ore mined t 818,609 826,421 817,714 803,101 - Zinc in concentrate, 22,167t Plant feed t 830,709 820,215 820,491 804,749 - Lead in concentrate, 27,202t Zn grade % 3.14 3.37 3.29 3.31 - Challenging ground conditions plus enhanced Zn recovery % 8
Slide 27: Ensuring Prudent Capital Allocation
ENSURING PRUDENT CAPITAL ALLOCATION
Slide 28: Cut and Fill Project
CUT AND FILL PROJECT Maximum extraction of resources - ….in a safer, more sustainable and more efficient manner - 3 components - Central Decline (c.650m development to date, will be 3.8km in total) - Paste backfill (‘PBF’) plant and associated reticulation - Dry stack tailings (‘DST’) plant and asso
Slide 29: Cut and Fill Project – PBF and DST
CUT AND FILL PROJECT – PBF AND DST Paste backfill plant Dry stack tailings - All major plant components ordered, including - Knight Piésold completed landform design - Civils and structural steels - Metso-Outotec completed process plant design - Thickener and flocculant plant - Continuous mixer - Co
Slide 30: Dividends and Debt Repayments
DIVIDENDS AND DEBT REPAYMENTS Returns to shareholders Deleveraging, 2017 - 2021(corporate debt facility) - 2021 dividend, 20p - 45% of FCF - CAML dividend policy, 30-50% FCF - Total dividends since 2012, $256.9m or 132p 275 132p 250 225 200 175 23.4 150 $m 125 100 75 50 25 0 2012 2013 2014 2015 2016
Slide 31: Delivering Growth
DELIVERING GROWTH Central Asia Metals PLC 30
Slide 32: Delivering Growth
DELIVERING GROWTH 2021 review, 2022 outlook - maintained focus on business development activities - Size and liquidity remain important considerations - Political risk a consideration - Strong CAML balance sheet - Attractive commodity exposure - Ideally copper 2021 business development activities -
Slide 33: Outlook
OUTLOOK A strong sustainable business - Producing the metals essential for modern living safely and sustainably - Strong 2021 EBITDA and FCF - Capital allocation priorities - 2021 dividend, 20p - Net cash position as of end 2021 - Implementation of Sasa Cut and Fill Project underway - Looking for gr
Slide 34: Contact Details
DIRECTOR OF CORPORATE RELATIONS CONTACT Louise Wrathall Sackville House DETAILS 40 Piccadilly London W1J 0DR louise.wrathall@centralasiametals.com +44 (0) 207 898 9001 https://www.centralasiametals.com/
Slide 35: Appendix
APPENDIX
Slide 36: Board of Directors
BOARD OF DIRECTORS Gavin Ferrar Nurlan Zhakupov CFO David Swan NED Mike Prentis - Kazakhstan experience NED Dr Gillian Davidson - accounting experience NED Member - Capital markets experience - Nomination Committee NED Chair - Sustainability Committee - sustainability experience - Audit Committee Me
Slide 37: Share Price / Shareholders
SHARE PRICE / SHAREHOLDERS Share price performance versus peers 250 Share price* (AIM:CAML) £2.40 Total no. voting shares 176,026,619 Treasury shares 471,647 200 Issued shares 176,498,266 Market capitalisation £422m 150 Free float 96% Average daily volume 0.48m *Share price as of 28 March 2022 Share
Slide 38: Copper – Global Energy Transition a Major Driver Past Short Term Volatility
COPPER – GLOBAL ENERGY TRANSITION A MAJOR DRIVER PAST SHORT TERM VOLATILITY Market tightness continues to support prices - The copper market reacted in a more muted way to the Russia- 1,000 Copper Market Balance $5.0 Ukraine conflict than other commodities, albeit still breaking out of its recent US
Slide 39: Zinc – High Energy Prices Drive Market Tightness
ZINC – HIGH ENERGY PRICES DRIVE MARKET TIGHTNESS Physical metal availability worries push up prices - Zinc spiked briefly over US$4,000/t for the first time in 15 years in reaction to Russia’s invasion of Ukraine, as the market witnessed a 1,500 Zinc Market Balance $3,500 scramble for physical metal
Slide 40: Lead – Rebounding Supply
LEAD – REBOUNDING SUPPLY Lead market set to overcome recent shortages - After supply dropped by 2% in 2021, extending lead’s 2020 price $2,600 Lead Price Chart rally, output is expected to grow this year $2,400 - Lead prices are forecasted to stabilise in 2022, before beginning Price (US$/t) to ease
Slide 41: Kounrad Resources and Technology
KOUNRAD RESOURCES AND TECHNOLOGY Category Quantity, Mt Grade (%) Contained copper, kt Eastern Dumps Indicated 89.7 0.10 85.8 Inferred 79.6 0.10 81.7 Total 169.3 0.10 167.5 Western Dumps Indicated 296.4 0.10 282.4 Inferred 181.5 0.09 164.3 Total 477.9 446.7 Total East 647.1 614.2 and West Prepared by
Slide 42: Sasa Reserves and Resources
SASA RESERVES AND RESOURCES Deposit Mt Pb grade (%) Zn grade (%) Ag grade (g/t) Pb metal (kt) Zn metal (kt) Ag metal (koz) Probable Svinja Reka Reserves 9.5 4.1 2.8 22.3 395 272 6,834 Total Reserves 9.5 4.1 2.8 22.3 395 272 5,834 Svinja Reka 11.6 4.6 3.2 25.5 536 370 9,485 Indicated Mineral Resource
Slide 43: 2021 Group Costs
2021 GROUP COSTS Kounrad copper C1 cash cost $0.57/lb 2021 2020 % change - Remains amongst lowest in copper industry Kounrad Cu C1 cash cost, 0.57 0.51 +12% - 12% higher YoY due to higher reagent costs for metallurgical $/lb adjustment arising from solely leaching the Western Dumps, Sasa Zn eq. C1 c
Slide 44: Conceptual Closure Plans
CONCEPTUAL CLOSURE PLANS GROUP ‘ARO’ $18.5M (2020: $9.2M) Sasa $16.1m (2020: $7.2m) - Sasa conceptual closure plan updated by consultants WSP UK for revised rehabilitation, remediation, decommissioning and demolition - Recognises impacts on the environment and aims to ensure a sustainable legacy, in