Central Asia Metals Plc · LSE:CAML
Central Asia Metals — FY2014 Earnings Presentation
39 slides from Central Asia Metals's earnings presentation, Mar 30, 2015
Slide 1: 2014 Results Presentation
2014 Results Presentation London, 30 March 2015
Slide 2: Disclaimer
Disclaimer This Document comprises an institutional update presentation (the “Presentation”) which has been or regulatory requirement, and, in particular, it or any copy of it, should not be distributed directly or prepared by and is the sole responsibility of Central Asia Metals plc (the “Company”)
Slide 3: 2014 results
2014 results • 7.5p final dividend proposed (12.5p total 2014 dividend for 2014) • 11,136 tonnes of copper produced (up 12.5p 5p interim + 7.5p proposed final ($21m) 6% on 2013) 2014 production • CAML Group revenue $76.6m • CAML Group EBITDA $47.3m • C1 cash cost $0.71/lb (2013: $0.73) 11,136t 99.99
Slide 4: Share price performance
Share price performance AIM: CAML £1.55* Market capitalisation £173m Cash† $46.3m Issued shares 111.5m *26 March 2015, †31 December 2014 4
Slide 5: Financial Review
Financial Review
Slide 6: CAML Group 2014 income statement
CAML Group 2014 income statement CONTINUED STRONG FINANCIAL PERFORMANCE 2014 2013 Change Gross revenue, $m 76.6 54.1 +42% ONE-OFF IMPACTS • Completion of Kounrad Transaction in May 2014 Operating profit, $m 37.5 27.9 +34% • Acquisition of subsoil licence (SUC) - $33m gain Operating profit % 49% 52%
Slide 7: 2014 Kounrad project
2014 Kounrad project RECORD PRODUCTION & REVENUE Project Project Change • Reduction in copper prices 2014 2013 • CAML Hedging policy Sales, tonnes of Cu 11,163 10,689 +4% Unit price achieved, $/t 6,794 7,114 - 5% COST BASE Project revenue, $m 76.6 76.0 +1% • Production costs marginal increase overal
Slide 8: 2014 Kounrad unit costs
2014 Kounrad unit costs C1 CASH COST $0.71/lb (2013: $0.73/lb) AVERAGE LME COPPER PRICE VS. CAML COSTS FULLY ABSORBED COST $1.65/lb (2013: $1.43lb) 8
Slide 9: Kounrad financial performance to date
Kounrad financial performance to date Total 2014 2013 2012 32 months 12 months 12 months 8 months* Sales, Cu tonnes 28,235 11,163 10,689 6,383 Production, Cu tonnes 28,232 11,136 10,509 6,586 Average unit price, $/t 7,214 6,794 7,114 7,995 Project revenue, $m 203.7 76.6 76.0 51.1 GROUP EBITDA, $m 12
Slide 10: CAML Group 2014 balance sheet
CAML Group 2014 balance sheet STRONG BALANCE SHEET 2014 2013 • $46.3m cash as at 31 Dec 2014 $m $m • No outstanding debt PPE 74.7 77.7 • Increased Intangible Assets due to FV uplift of $54m (SUC acquisition) Intangibles 81.6 16.7 • Additional goodwill on SUC acquisition $11m, total Cash 46.3 44.5 go
Slide 11: Returns to shareholders & cash flows
Returns to shareholders & cash flows Return to shareholders pence £m Sm CASH FLOW 2014 2012 Special, Annual & 10.7 9.0 14.2 Interim 100 47.2 1.6 (16.6)* 2013 Annual & Interim 9.0 9.6 15.6 90 2014 Interim 5.0 5.4 9.0 80 (11.1) 24.0 38.8 70 (17.9) 2014 Final – proposed 7.5 8.2 12.3 60 50 (1.4) 32.2 51
Slide 12: Operational Review
Operational Review
Slide 13: Operations overview
Operations overview • H&S and environmental aspects are given 2012 2013 2014 high priority by operations management Lost-time Injuries 0 0 1 • Only one lost time accident since start of construction in 2010 and subsequent Copper production, t 6,586 10,510 11,136 operations Average PLS flow-rate, m3/
Slide 14: Cu output vs. PLS flow and grade 2012-14
Cu output vs. PLS flow and grade 2012-14 PLS flow PLS grade 45 • As forecasted by 2010 BGRIMM FS average 1000 Copper transfer 40 PLS grades now approaching 2.0 - 2.3gpl PLS flow (m3/hr), PLS grade (gpl*10—2) 35 • Decline in grade is offset by increasing PLS 800 30 flow rate as part of flexibility fo
Slide 15: Quarterly copper output 2012-14
Quarterly copper output 2012-14 4000 • Since start of operations more than COPPER OUTPUT (TONNES) 30,000 tonnes of copper recovered 3500 3338 3182 3189 • A steady but increasing output on a 3000 2962 2741 2690 2703 quarter by quarter basis 2500 • Main focus has been on increasing Q1 2117 2000 1906 o
Slide 16: Leaching operations
Leaching operations 100% Dump rest period 80% 90% Dump 7 Dump 9-10 69% 80% 70% 62% Dump 6 Dump 6 70% 54% 60% Dump 7 Dump 9-10, 97% 60% 47% 50% Dump 5 50% 42% 36% 40% 40% Dump rest 28% 30% 30% 21% Dump 2 20% 13% 17% 20% Dump 6, 77% 6% 10% 10% Dump 7, 52% 0% Dump 9-10 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 17: Leaching operations
Leaching operations • Three stages of leaching: “bloom”, steady phase, 9.0 60% tail recovery 8.0 50% • The target recovery for eastern dumps is 51% 7.0 • First 120 days recover close to 40%, the remainder 6.0 40% recovered over longer time, interspersed with 5.0 rest/rinse cycles 30% 4.0 • This nece
Slide 18: Impact of phased block leaching PLS grade
Impact of phased block leaching 12 PLS grade block 5-6 • Actual data from 2012 illustrating block 4-1/4-2 recovery concept (see slide 18) 10 block 2-1/2-2 block 3-1/3-2 • New ore blocks are sequentially 8 PLS Cu gpl started developing a “nest” of contiguous leach curves 6 • In steady state, with 4 o
Slide 19: Temperature vs. PLS flow
Temperature vs. PLS flow • PLS flow-rate is seasonal with significant dip during winter (freezing potential) • The two additional boilers have been very successful in reducing this dip • The target is to irrigate dumps in winter with solution at +10ºC (PLS flowing from dump base back to SX is 0ºC) •
Slide 20: Phased expansion and infrastructure works
Phased expansion and infrastructure works • Two additional 2.8MW boiler units installed and commissioned on schedule and within budget • Additional boiler capacity increased winter PLS flow- rates by almost 50% compared to 2013-14 • Construction commenced on the SX-EW expansion in June 2014 • New 10
Slide 21: Stage 1 expansion overview
Stage 1 expansion overview • $13.4m capital budget • SX and EW buildings erected and clad before the on-set of winter 2014, allowing uninterrupted installation works • Extra mixer-settler brings treatment capacity to 1200m3/hr of PLS vs. current 900m3/hr • Extra 24 cells increase daily plating capab
Slide 22: Stage 2 expansion - Western Dumps
Stage 2 expansion - Western Dumps • Two 12.7km 450mm ø pipelines to cross- transfer raffinate and PLS • 2km of trenches, 3 solution storage ponds and 8.4MW boiler-house to be constructed SX-EW plant • Passed the State approvals, official confirmation is awaited • Construction permit applied for and
Slide 23: Social and environmental responsibility
Social and environmental responsibility • Over 95% of the 289-strong workforce recruited from local communities • Over 60% of procurement from within Kazakhstan • Strong focus on training and education, with two employees on sponsored MBA courses • Continuing hands-on engagement in community project
Slide 24: Update and Outlook
Update and Outlook
Slide 25: Copper Bay investment
Copper Bay investment • Chañaral Bay copper recovery project located 800km north of Santiago, Chile • CAML acquired 50% in 2013 for £2m • 136-hole drilling campaign (1,250m) completed September 2014 with JORC-compliant resource report undergoing final checks and reviews • Various studies for pre-fea
Slide 26: Update and outlook
Update and outlook UPDATE • Cash and cash equivalents $46.3m* • Proposed 2014 final dividend of 7.5 (12.5p FY) • $53m returned to shareholders in dividends and share buy-backs – 88% of cash raised at IPO 2015 OUTLOOK • 13,000 tonnes of copper production • Completion of Stage 1 Expansion • Obtaining
Slide 27: Appendices
Appendices
Slide 28: Structure and ownership
Structure and ownership Central Asia Metals Plc MAJOR SHAREHOLDERS AS OF 28 FEBRUARY 2015 (UK) No. of shares % Holding KENGES RAKISHEV 21,211,751 18.93 HARGEAVE HALE 10,859,354 9.69 FIDELITY INVESTMENT 8,445,195 7.54 COMMONWEALTH AMERICAN PARTNERS 7,445,492 6.64 100% 100% 100% 53% CAML Sary Kazna LL
Slide 29: Kounrad resource
Kounrad resource JORC Code (2004) Resource Estimate Northern Dumps by Wardell Armstrong Eastern Dumps Resource type Category Quantity, Mt Grade, % Contained copper, kt Eastern Dumps Indicated 89.7 0.10 85.8 Oxide† Inferred 79.6 0.10 81.7 Western Dumps Total 169.3 167.5 Western Dumps Indicated 275.4
Slide 30: Kounrad transaction 100% complete
Kounrad transaction 100% complete SUC KCC Total Joint Venture 60:40 100% Control 100% H1 2014 2013 Control Consideration paid $17m $41m $58m 15,366,096 shares for 40% of KCC – valued at KCC $40.8m ($39.4m + $1.4m dividends) FV uplift to 40% acquired – BS $21m $19m $40m Joint Control FV uplift to 60%
Slide 31: SX-EW technology overview
SX-EW technology overview Cu-loaded organic Loaded Copper Leaching PLS Extraction Stripping aqueous Electrowinning cathode Stripped Spent Raffinate organic electrolyte Acid makeup CAML SX-EW TEST WORK 2008-2011 PROCESS IN USE GLOBALLY • Pilot in-situ leaching and SX-EW plant operational for three •
Slide 32: PLS and groundwater model
PLS and groundwater model Infiltration of acidic solution and precipitation through leach piles Monitoring & Abstraction Monitoring Boreholes Boreholes Material in Leach Piles K = 1.8 – 720 m/d Collector trench. Low permeability liner on down 50m 100m gradient side ALLUVIAL LAYER K = 0.9 – 8.26 m/d
Slide 33: Leaching operations 2014-16
Leaching operations 2014-16 33
Slide 34: Kazakhstan
Kazakhstan COUNTRY STATISTICS • Ninth largest country in the world by land area, and the largest economy in Central Asia • Population of 17.7m (Kazakhs 63%, Russians 24%) • Stable political environment since 1991 • Rated BBB+ (Stable) by Fitch • 4% GDP growth rate (2014) MINING IN KAZAKHSTAN • Minin
Slide 35: Kounrad mine and dumps history
Kounrad mine and dumps history STATISTICS • 1,500m-wide and 500m-deep pit • 1,500Mt of rock extracted over LOM • 2.9Mt of copper produced • 650Mt of waste piled into dumps • 20 to 40m-high dumps cover 22km2 HISTORY 1928 – Kounrad copper deposit discovery 1938 – Balkhash smelter starts production 199
Slide 36: Board of directors
Board of directors Robert Cathery Nigel Hurst-Brown Nick Clarke Non-Executive Director Non-Executive Chairman David Swan Chief Executive Officer Non-Executive Director Kenges Rakishev Howard Nicholson Nigel Robinson Non-Executive Director Nurlan Zhakupov Technical Director Chief Financial Officer No
Slide 37: Directors' biographies
Directors’ biographies Nick Clarke Chief Executive Officer Robert Cathery Non-Executive Director Nick has 40 years of mining experience, including 16 years spent within senior management Robert Cathery was a member of the London Stock Exchange from 1967 to 2007 and was positions in production and te
Slide 38: Kazakhstan management
Kazakhstan management Pavel Semenchenko General Director, Sary Kazna With 22 years of experience of managing businesses in Kazakhstan and a proven record in the industry, Pavel has excellent management skills and in-depth knowledge of the local business environment. Oleg Telnoi Director, Kounrad Cop
Slide 39: Contacts
Contacts 11 Albemarle Street, London, W1S 4HH 11 Albemarle 11 +44 207 898 9001 info@centralasiametals.com www.centralasiametals.com