Central Asia Metals Plc · LSE:CAML
Central Asia Metals — H1 2019 Earnings Presentation
42 slides from Central Asia Metals's earnings presentation, September 2019
Slide 1: Building a Sustainable Business: H1 2019 Results Presentation
BUILDING A SUSTAINABLE BUSINESS H 1 2 0 1 9 R E S U LT S P R E S E NTAT I ON SEPTEMBER 2019
Slide 2: Disclaimer
1 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S 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 updati
Slide 3: H1 2019 Performance and Update
2 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 PERFORMANCE AND UPDATE ▪ H1 2019 dividend 6.5p (H1 2018: 6.5p) H1 2019 Cu production H1 2019 gross revenue ▪ Reliable production, on track to meet 2019 guidance for all metals 6,594t $89.9m ‒ Copper 12,
Slide 4: Delivering Shareholder Value
3 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S DELIVERING SHAREHOLDER VALUE Industry leading EBITDA margins H1 2019 dividend 6.5p 200 70% 98p 60% 160 50% 120 40% $m 30% 80 20% 40 10% 0% 0 CAML KAZ SCCO ANTO ERO FM HBM SRF LUN TV CS ATYM TKO KGHM CMMC OZL BO
Slide 5: Financial Review
4 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S FINANCIAL REVIEW
Slide 6: H1 2019 Market Conditions
5 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 MARKET CONDITIONS Copper 8,000 ▪ Price rose to $6,570/t in March but fell to $5,971/t at period end ▪ Trade wars / slowing Chinese growth impacting copper price ▪ 2019 broker consensus price, $6,371/t 7
Slide 7: H1 2019 Income Statement
6 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 INCOME STATEMENT EBITDA margin maintained at 63% HIGHLIGHTS H1 2019 H1 2018 % change ▪ Revenue and EBITDA 12% lower due to weak commodity prices Gross revenue, $m 89.9 102.4 -12% ▪ Maintained EBITDA mar
Slide 8: H1 2019 C1 Cash Costs
7 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 C1 CASH COSTS Kounrad copper C1 cash cost $0.51/lb H1 2019 $/lb H1 2018 $/lb ▪ Remains firmly in lowest quartile of industry cash cost Kounrad copper C1 cash cost 0.51 0.53 curve ▪ 4% lower HoH due to w
Slide 9: H1 2019 Fully Inclusive Cu Eq. Unit Cost
8 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 FULLY INCLUSIVE CU EQ. UNIT COST CAML Group fully inclusive cost, $1.44/lb H1 2019 H1 2018 ($/lb) ($/lb) ▪ 5% lower HoH C1 cash cost 0.90 0.79 ▪ Lower capex HoH as a result of Capital expenditure 0.14 0
Slide 10: H1 2019 Capex
9 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 CAPEX H1 2019 capex, $4.4m H1 2019 $m H1 2018 $m ▪ Sasa capex includes Sasa sustaining capex 2.7 3.3 ‒ Underground development $1.2m Sasa TSF4 construction 1.1 3.9 ‒ Processing equipment $0.7m (includes
Slide 11: 30 June 2019 Balance Sheet
10 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S 30 JUNE 2019 BALANCE SHEET 30 Jun 31 Dec Net debt $100.4m (31 Dec 2018: $110.3m) 2019, $m 2018, $m PPE 418.3 429.6 ▪ PPE reflects Intangible assets 60.3 61.3 ‒ additions of $5.2m Cash 26.0 34.6 ‒ depreciation
Slide 12: H1 2019 Cash Flow
11 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 CASH FLOW H1 2019 FCF of $35.5m $m
Slide 13: Sustainability
12 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SUSTAINABILITY
Slide 14: Building a Sustainable Business
13 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S BUILDING A SUSTAINABLE BUSINESS Economic performance Caring for our communities Governance ▪ Resources to support long life ▪ $0.2m spent in H1 2019 in North ▪ Strong Board of experienced operations Macedonia
Slide 15: Health and Safety
14 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S HEALTH AND SAFETY Sasa Sasa Kounrad CAML ▪ 1 LTI (incident with an underground machine) No. lost time injuries 1 0 1 ▪ 1 MTI (employee cut leg) (LTI) No. medical ▪ Several recent safety initiatives at Sasa, in
Slide 16: Looking After the Environment
15 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S LOOKING AFTER THE ENVIRONMENT CAML approach ▪ Environmental departments fully integrated in all relevant operational areas ▪ Focus on water, air, soil, biodiversity, waste management Sasa ▪ ISO14001 accreditat
Slide 17: Supporting Our Local Communities
16 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SUPPORTING OUR LOCAL COMMUNITIES Sasa community support Sasa H1 2019: $0.1m Local association Cultural events ▪ Annual community stakeholder meetings held to ascertain 3% 1% the needs of the community Medical
Slide 18: Developing People
17 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S DEVELOPING PEOPLE Sasa Developing local people ▪ During H1 2019, 12 training courses were delivered ▪ Sasa developed a centre to train engineers to Sasa standards. ‒ Predominantly in topics related to health a
Slide 19: Operational Review
18 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S OPERATIONAL REVIEW
Slide 20: Sasa Update - 20 Months CAML Ownership
19 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SASA UPDATE -20 MONTHS CAML OWNERSHIP Sasa EBITDA of $117.4m since acquisition Unit H1 2019 2018 CAML 2017 ▪ Skarn hosted deposit, sublevel caving operation Ore mined t 400,251 803,101 134,063 ▪ Mechanised min
Slide 21: Sasa – Improvements Implemented
20 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SASA – IMPROVEMENTS IMPLEMENTED Underground mining improvements Key management changes made ▪ Improved mine planning and grade control ▪ COO, Scott Yelland ▪ New computer software introduced to modernise ▪ Gen
Slide 22: Sasa – Longer Term Improvements
21 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SASA – LONGER TERM IMPROVEMENTS Optimisation ▪ Life of Mine (LoM) review to focus on optimisation of metal production ‒ to be completed H2 2019 ▪ Review of current and historic mining practises to better infor
Slide 23: Sasa Tailings Storage
22 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SASA TAILINGS STORAGE TSF4 construction and lining complete ▪ Downstream facility ‒ Widely viewed as safest design option ‒ However, most expensive construction ▪ Current Sasa TSF3.2 is a downstream facility ▪
Slide 24: Kounrad Overview
23 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S KOUNRAD OVERVIEW In-situ dump leach and SX-EW plant ▪ 165kt recoverable copper ▪ 2019 copper production guidance, 12,500t-13,500t Kounrad 6 ▪ Eastern Dumps mine 5 7 2 20 ‒ Average dump height 20m 9-10 ‒ Averag
Slide 25: Recovering Copper from Kounrad Dumps
24 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S RECOVERING COPPER FROM KOUNRAD DUMPS Western Dumps Eastern Dumps 45 40 35 Recovery of total Cu % 30 25 Actual recovery all operating 20 blocks 15 Forecast leach curve 10 5 0 0 100 200 300 400 500 600 700 Leach
Slide 26: Looking to the Future
25 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S LOOKING TO THE FUTURE Capital allocation Striking the right balance ▪ Deleveraging ‒ H1 2019 debt repayments $19.2m principal plus $5.2m interest ‒ 2019E debt repayments, $38-39m ▪ Returns to shareholders Retu
Slide 27: Outlook
26 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S OUTLOOK ▪ Two low cost, low capex operations in prospective jurisdictions ▪ Offering exposure to three base metals with attractive market fundamentals – copper, zinc and lead ▪ Strong H1 2019 CAML financial pe
Slide 28: Contact Details
27 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S CONTACT DETAILS INVESTOR RELATIONS CONTACT Louise Wrathall Sackville House 40 Piccadilly London W1J 0DR louise.wrathall@centralasiametals.com +44 (0) 207 898 9001 www.centralasiametals.com
Slide 29: Share Price and Shareholders
28 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SHARE PRICE AND SHAREHOLDERS Share price performance versus peers Shareholder investment styles 160 Value GARP 140 4% 8% Growth 9% 120 Quant 2% 100 Index 80 4% 60 PCB 21% 40 20 0 Jan-19 Mar-19 May-19 Jul-19 Mu
Slide 30: Board of Directors
29 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S BOARD OF DIRECTORS Nick Clarke Gavin Ferrar Nigel Robinson Chairman CFO CEO Chair Member - Nomination Committee - CSR Committee Member - CSR Committee Robert Cathery Nigel Hurst-Brown Nurlan Zhakupov Roger Dav
Slide 31: CAML Summary Financial Performance
30 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S CAML SUMMARY FINANCIAL PERFORMANCE Total H1 2017 2012 2018 (Sasa 2 2016 2015 2014 2013 (86 months) 2019 months) (8 months) Kounrad Cu production, tonnes 89,068 6,594 14,049 14,103 14,020 12,071 11,136 10,509 6
Slide 32: H1 2019 Taxes Paid
31 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 TAXES PAID H1 2019 UK ($m) Kazakhstan ($m) North Macedonia ($m) Total ($m) Corporate income tax - 6.8 4.1 10.9 Mineral extraction tax - 2.2 - 2.2 Concession fees - - 1.3 1.3 VAT* - 1.2 - 1.2 Land and p
Slide 33: H1 2019 CAML Employees
32 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 CAML EMPLOYEES Male Female Local Expat Permanent Temporary Total Sasa 617 55 663 9 491 181 672 Kounrad 282 77 358 1 345 14 359 CAML (excl. Sasa 15 6 na na 21 0 21 and Kounrad) Total 914 138 1,021 10 85
Slide 34: Corporate Structure
33 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S CORPORATE STRUCTURE
Slide 35: Central Asia Metals Operations
34 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S CENTRAL ASIA METALS OPERATIONS KAZAKHSTAN Population, 18.3 million GDP per capita, $8,763 SASA (100%) Underground zinc and lead mine, northeast North Macedonia Production commenced in 1960’s Produces 22,000-24
Slide 36: H1 2019 Sasa C1 Zinc Eq. Cash Cost
35 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 SASA C1 ZINC EQ. CASH COST H1 2019 C1 cash cost $0.47/lb Wood Mackenzie 2018 zinc eq cost curve 160 Mining , $0.17 Processing, $0.09 120 Zinc Eq C1 cash cost (c/lb) Sasa $0.47/lb 80 40 Realisation , $0
Slide 37: H1 2019 Kounrad C1 Copper Costs
36 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S H1 2019 KOUNRAD C1 COPPER COSTS H1 2019 C1 cash cost $0.51/lb Wood Mackenzie 2018 copper cost curve Local G&A, $0.06 400 300 Copper C1 cash cost (c/lb) Kounrad Realisation, $0.08 200 $0.51/lb 100 Processing, $
Slide 38: Kounrad Resource and Technology
37 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S 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
Slide 39: Kounrad, PLS and Groundwater Model
38 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S KOUNRAD, PLS AND GROUNDWATER MODEL
Slide 40: Kounrad, H1 2019 Operational Statistics
39 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S KOUNRAD, H1 2019 OPERATIONAL STATISTICS H1 2019, stable operations 2012 2013 2014 2015 2016 2017 2018 H1 2019 ▪ H1 2019, no LTIs LTI 0 0 1 2 0 0 2 0 ‒ LTI free hours 784,301 Cu production, t 6,586 10,509 11,13
Slide 41: Sasa, Resources and Reserves
40 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SASA, RESOURCES AND RESERVES Category Quantity Grade Contained Resources support c.19 year life of mine Mt Pb (%) Zn (%) Ag (g/t) Pb (kt) Zn (kt) Ag (koz) Svinja Reka, Reserves Probable 9.7 3.8 3.1 18 373 298
Slide 42: Sasa Processing Flow Sheet
41 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S 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 ZI