Central Asia Metals Plc · LSE:CAML
Central Asia Metals — H1 2018 Earnings Presentation
40 slides from Central Asia Metals's earnings presentation, September 2018
Slide 1: H1 2018 Results Presentation
H 1 2 0 1 8 R E S U LT S P R E S E NTAT I O N SEPTEMBER 2018
Slide 2: Disclaimer
1 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS 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
Slide 3: H1 2018 Performance
2 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 PERFORMANCE ▪ H1 2018 dividend 6.5p (H1 2017: 6.5p) H1 2018 Cu production H1 2018 revenue ▪ Kounrad copper production 6,747t (H1 2017: 7,027t) 6,747t $102.4m ▪ Sasa production ‒ Zinc 11,020t H1 2017: 7,027t H1 2017: $38.6m ‒ Lead 14,386
Slide 4: Operational Review
3 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS OPERATIONAL REVIEW
Slide 5: CAML CSR Approach
4 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS CAML CSR APPROACH Health and safety Community ▪ LTI Kounrad, 2 - LTI free hours to end H1 2018, 77,626 ▪ Kounrad Charitable Foundation approached with 29 requests during H1 2018 ▪ LTI Sasa, 2 (sub-contractors) - LTI free hours to end H1 2018, 1
Slide 6: Kounrad, Overview
5 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS KOUNRAD, OVERVIEW Eastern Dumps ▪ Commenced leaching Q2 2012 ▪ Average dump height 20m, average leach time 8 months ▪ Average copper recovery 45-50% ▪ Leached 65,295t from Eastern Dumps ‒ c.14,000t recoverable remaining Western Dumps ▪ Commence
Slide 7: Western (ILA) and Eastern Dump Resources
6 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS WESTERN (ILA) AND EASTERN DUMP RESOURCES Western Dumps ILA copper recovery Eastern Dumps 45 40 6 16 35 5 30 7 Cu recovery % 25 20 22 15 2 Actual recovery ( Irrigated 14 blocks ) 10 5 Forecast leach curve 9-10 0 0 100 200 300 400 500 600 700 Lea
Slide 8: Kounrad, Production Update and Outlook
7 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS KOUNRAD, PRODUCTION UPDATE AND OUTLOOK Copper production 4.5 80 Cumulative copper production (kt) 4.0 70 Quarterly copper production (kt) ▪ 2017 copper production 14,103t 3.5 60 3.0 ▪ H1 2018 copper production 6,747t 2.5 50 40 2.0 ▪ Total coppe
Slide 9: Kounrad, H1 2018 Operational Overview
8 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS KOUNRAD, H1 2018 OPERATIONAL OVERVIEW H1 2018, stable operations 2012 2013 2014 2015 2016 2017 H1 2018 ▪ H1 2018, 2 LTIs LTI 0 0 1 2 0 0 2 ‒ LTI free hours reset, now 77,626 Cu production, t 6,586 10,509 11,136 12,071 14,020 14,103 6,747 ▪ Prod
Slide 10: H1 2018 Kounrad Copper C1 Cash Cost
9 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 KOUNRAD COPPER C1 CASH COST H1 2018 C1 cash cost $0.53/lb Processing H1 2018 $/lb H1 2017 $/lb Reagents 0.08 0.06 Local G&A, Power 0.07 0.06 $0.07 Payroll 0.12 0.10 Materials 0.04 0.04 Consulting & other 0.07 0.05 Processing total 0.38
Slide 11: Sasa, Production Update and Outlook
10 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SASA, PRODUCTION UPDATE AND OUTLOOK H1 2018 production and sales Units Q1 2018 Q2 2018 H1 2018 2017 Ore mined t 192,372 198,560 390,932 792,068 ▪ Underground ore production 390,932t Plant feed t 196,364 197,241 393,605 793,332 ▪ Zinc in concen
Slide 12: Sasa Production Statistics
11 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SASA PRODUCTION STATISTICS 2017 – H1 2018 ore mined 2017 – H1 2018 plant availability 70,000 100 90 60,000 80 plant availability (%) 50,000 70 ore mined (t) 40,000 60 50 30,000 40 20,000 30 20 10,000 10 0 0 2017 – H1 2018 combined grade Produc
Slide 13: H1 2018 Sasa Zinc Eq. C1 Cash Cost
12 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 SASA ZINC EQ. C1 CASH COST H1 2018 C1 cash cost $0.44/lb Unit costs, Run of Mine (RoM) H1 2018 2017 Processing, Mining, $000 7,449 14,413 Mining , $0.16 $0.08 Processing, $000 3,816 7,499 Local G&A, $000 2,497 5,019 Total operating cos
Slide 14: Sasa for the Future
13 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SASA FOR THE FUTURE Mine and processing plant activities ▪ A well capitalised mine ▪ Infrastructure to access stoping block between 830 and 750 levels continued in 2018 ▪ Installation of new SMD mill ▪ Current exploration objective is to repla
Slide 15: Tailings Storage Facility (TSF4)
14 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS TAILINGS STORAGE FACILITY 4 (TSF4) TSF4 under construction View looking north ▪ Currently using TSF3.2 ▪ Construction of TSF4 commenced TSF3.2 face in Q2 2017 ‒ Completion expected H2 2018 ‒ Designed to contain 6.5+Mt tailings starter wall ‒ S
Slide 16: Shuak Update
15 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SHUAK UPDATE 2018 exploration underway ▪ Exploration commenced May 2018 ▪ 19,461m of core hydrotransport (CHT) undertaken, programme now complete ▪ Diamond drilling commenced August 2018, focusing on Kyzyl-Sor oxide potential ‒ 1,050m diamond
Slide 17: Financial Review
16 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS FINANCIAL REVIEW
Slide 18: H1 2018 Market Conditions
17 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 MARKET CONDITIONS Post period Copper 8000 end fall in metal prices ▪ Price decreased by 7% to $6,646/t ▪ 2018 broker consensus price $6,878/t (September) 7000 ▪ H1 2018 realised price $6,672/t Zinc 6000 ▪ Price decreased by 11% to $2,9
Slide 19: H1 2018 Income Statement
18 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 INCOME STATEMENT Increased Group EBITDA reflects Sasa acquisition H1 2018 H1 2017 % $m $m change ▪ H1 2018 results reflect full period for both Kounrad and Sasa Gross revenue 102.4 38.6 +165% ▪ Kounrad ‒ Gross revenue $40.5m (H1 2017:
Slide 20: H1 2018 Cash Costs
19 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 CASH COSTS Kounrad copper C1 cash cost $0.53/lb H1 2018 H1 2017 2017 $/lb $/lb $/lb ▪ Remains firmly in lowest quartile of industry cash Kounrad copper C1 cash cost 0.53 0.45 0.52 cost curve Sasa zinc eq. C1 cash cost 0.44 - 0.44* ▪ In
Slide 21: H1 2018 Fully Inclusive Cu Eq. Unit Cost
20 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 FULLY INCLUSIVE CU EQ. UNIT COST H1 2018, $1.51/lb H1 2018 2017* ▪ Sasa and Kounrad fully inclusive copper eq. unit New Historic New Historic method reported method reported cost $1.51/lb $/lb $/lb $/lb $/lb ‒ Increase as a result of i
Slide 22: H1 2018 Capex
21 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 CAPEX Sasa H1 2018 $m ▪ Major capex items include Total Sasa capex 7.2 ‒ Underground mine development $1.3m ‒ SMD mill, $0.7m - Sasa sustaining capex 3.3 ‒ Granby wagons, $0.2m - Sasa tailings dam construction 3.9 ▪ Construction of new
Slide 23: H1 2018 Balance Sheet
22 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 BALANCE SHEET Net debt $125.2m H1 2018 2017 $m $m ▪ Group continues to report a strong net asset position at 30 June 2018 PPE 440.6 461.0 ▪ Manageable debt levels Intangible assets 67.2 70.3 Cash 37.6 43.0 ▪ Other liabilities includes
Slide 24: H1 2018 Cash Flow
23 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS H1 2018 CASH FLOW $m
Slide 25: Delivering Shareholder Value
24 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS DELIVERING SHAREHOLDER VALUE H1 2018 dividend 6.5p CAML dividend policy 160 $144.1m 140 Total dividend per share 120 since 2012, 83p “CAML will return to shareholders a target 100 range of between 30% and 50% of free cash flow, defined as net
Slide 26: Outlook
25 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS OUTLOOK ▪ Strong H1 2018 CAML financial performance with EBITDA and EPS accretion demonstrating Sasa acquisition rationale ▪ Attractive cash flow based dividend policy – H1 2018, 6.5p ▪ Two low cost, low capex operations in prospective jurisdi
Slide 27: Investor Relations Contact
26 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS INVESTOR RELATIONS CONTACT Louise Wrathall 11 Albemarle Street London W1S 4HH louise.wrathall@centralasiametals.com Tel: +44 (0) 20 7898 9001 www.centralasiametals.com
Slide 28: Appendix
27 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS APPENDIX
Slide 29: CAML Summary Financial Performance
28 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS CAML SUMMARY FINANCIAL PERFORMANCE Total H1 2018 2017 2016 2015 2014 2013 2012 (74 months) (Sasa 2 months) (8 months) Kounrad Cu production, tonnes 75,173 6,747 14,103 14,020 12,071 11,136 10,509 6,586 Sasa Pb production, tonnes 19,337 14,386
Slide 30: Share Price and Shareholders
29 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SHARE PRICE AND SHAREHOLDERS 350 12,000 350 300 300 10,000 250 250 8,000 Copper ($/t) 200 Price (p) 200 Price (p) 6,000 150 150 4,000 100 100 2,000 50 50 0 0 0 Sep 10 May 11 Jan 12 Sep 12 May 13 Jan 14 Sep 14 May 15 Jan 16 Sep 16 May 17 Jan 18
Slide 31: CAML Relative Share Price Performance
30 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS CAML RELATIVE SHARE PRICE PERFORMANCE 180 160 140 Rebased to 100 120 100 80 60 40 20 0 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 CAML ATYM KAZ ANTO GFM TV TECK Source: Peel Hunt
Slide 32: Central Asia Metals Operations
31 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS CENTRAL ASIA METALS OPERATIONS SHUAK (80%) KAZAKHSTAN 197km2 exploration licence, northern Population, 18.0 million Kazakhstan GDP per capita, $8,837 Potential for copper oxide and sulphide resources Extensively explored in Soviet times 22,000
Slide 33: Board of Directors
32 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS BOARD OF DIRECTORS
Slide 34: Director Biographies
33 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS DIRECTOR BIOGRAPHIES NICK CLARKE, CHAIRMAN. Nick has over 40 years of mining experience, including 16 DAVID SWAN, NON-EXECUTIVE DIRECTOR. David is a chartered accountant with years spent within senior management positions in production and tec
Slide 35: Senior Management Biographies
34 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SENIOR MANAGEMENT BIOGRAPHIES HOWARD NICHOLSON, TECHNICAL DIRECTOR. Howard is a metallurgist with PAVEL SEMENCHENKO, GENERAL DIRECTOR, KOUNRAD. With over 17 years’ 35 years of experience in project development and mine operations experience of
Slide 36: Corporate Structure
35 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS CORPORATE STRUCTURE
Slide 37: Kounrad Resource and Technology
36 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS KOUNRAD RESOURCE 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
Slide 38: Kounrad, PLS and Groundwater Model
37 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS KOUNRAD, PLS AND GROUNDWATER MODEL
Slide 39: Sasa, Reserves and Resources
38 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SASA, RESERVES AND RESOURCES ▪ Sasa is a zinc / lead skarn deposit Category Quantity Grade Contained Mt Pb (%) Zn (%) Ag (g/t) Pb (kt) Zn (kt) Ag (koz) ▪ Ore body dips at approximately 35°, with 2-3 parallel Svinja Reka, Reserves lenses, 1km s
Slide 40: Sasa Processing Flow Sheet
39 CENTRA L A SIA META LS PLC BUILDING A BIGGER BUSINESS SASA PROCESSING FLOW SHEET LEAD CONDITIONER LEAD ROUGHER AND SCAVENGERS LEAD THICKENER PRIMARY/ SECONDARY CRUSHING ORE FROM LEAD FILTER MINE TO BALL MILL LEAD LEAD CLEANERS CONCENTRATE TO BALL MILL ROD MILL ZINC CONDITIONER ZINC THICKENER ZINC