Central Asia Metals Plc · LSE:CAML
Central Asia Metals — H1 2015 Earnings Presentation
34 slides from Central Asia Metals's earnings presentation, Sep 14, 2015
Slide 1: Interim Results
Interim Results 14 September 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: H1 2015 results highlights
H1 2015 results highlights 2015 interim dividend • Profitable business with healthy EBITDA margins in a challenging market environment • Significant returns to shareholders, all cash raised 4.5p at IPO returned over 5 years H1 2015 copper production • Continued focus on cost control keeps CAML in th
Slide 4: Share price performance
Share price performance 250 12,000 200 180 10,000 194.0p 200 160 140 8,000 LME Copper (US$/t.) 150 120 Share price (p) Price (p) 6,000 100 100 80 4,000 60 50 40 54.0p 2,000 20 0 0 0 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Copper (LME Cash U$/t.) Central As
Slide 5: Financial Review
Financial Review
Slide 6: H1 2015 income statement
H1 2015 income statement CONTINUED PROFITABILITY IN A CHALLENGING MARKET H1 2015 H1 2014 REVENUE $30.3m • Increased production and sales volumes Production, t 5,444 5,094 • 16% decrease in average sale price resulting in 10% reduction in revenue Sales, t 5,120 4,698 PROFIT BEFORE TAX $10.0m Average
Slide 7: H1 2015 balance sheet
H1 2015 balance sheet STRONG BALANCE SHEET – NO DEBT SOLID ASSET BASE H1 2015 FY 2014 • >$150m of PPE and intangible assets $m $m • SX-EW expansion completed $2.5m under budget PPE 75.1 74.7 Intangibles 78.3 81.6 HEALTHY WORKING CAPITAL Cash 35.8 46.3 • $35.8m of cash in the bank Other 18.0 13.7 • $
Slide 8: H1 2015 unit costs
H1 2015 unit costs UNIT COSTS REMAIN IN LOWEST QUARTILE C1 CASH COSTS - $0.74/lb FULLY ABSORBED COSTS $1.87/lb • Marginal increase in unit costs of 3% (H1 2014: $1.62/lb) • Increased production staff by 26 (13%) • Increased production capacity FULLY ABSORBED COSTS - $1.87/lb • Impact of reagent loss
Slide 9: Returns to shareholders and cash flow
Returns to shareholders and cash flow RETURNED OVER 100% OF $60M RAISED AT IPO Return to shareholders pence £m $m H1 2015 CASH FLOW ($m) 2012 special, annual & interim 10.7 9.0 14.2 2012 share buyback (pre-dividend) 2.0 2013 interim & final 9.0 9.6 15.6 2014 interim & final 12.5 13.6 21.8 2015 inter
Slide 10: Financial outlook
Financial outlook PROFITABLE BUSINESS CHALLENGING MARKET CONDITIONS • Healthy EBITDA margins >50% COPPER PRICE AT 5-YEAR LOW • Low cash cost of production $0.74/lb $11,000 210 STRONG BALANCE SHEET $10,000 180 • Cash balance $35.8m • No debt $9,000 150 LME Copper (US$/t.) $8,000 120 Price (p) HEALTHY
Slide 11: Operational Review
Operational Review
Slide 12: Operations overview
Operations overview 2012 H1 2013 H1 2014 H1 2015 • No LTIs in H1 2015 Lost-time injuries 0 0 1 0 • Lower PLS grade mitigated by 16% increase Copper production, t 6,586 4,857 5,094 5,444 in solution flow-rates PLS flow-rate, m3/hr 383 570 735 854 • Maintain stable irrigation rates (l/m2/hr) over PLS
Slide 13: Leaching operations 2012 – H1 2015
Leaching operations 2012 – H1 2015 82% Dump In-situ Cu, t Extracted, t To recover, t Year Residual copper, t 9-10 23,450 11,721 238 2015 11,491 6 14,610 7,079 372 2015 - 2016 7,159 7 43,060 15,130 6,831 2015 - 2017 21,099 5 60,774 0 27,348 2016 - 2018 33,426 2 25,210 0 11,344 2018 - 2019 13,866 Tota
Slide 14: Solution management
Solution management SX CAPACITY Material under leach, Mt 51.2 20000 In-situ Cu, t 81,120 4 units Target Cu, t 41,371 1,200 m3/h 15000 Cu leached to H1 2015, t 33,930 tpa Recovery achieved, % 82 3 units 10000 900 m3/h Design flux, m3/t material 0.36 Measured flux to H1 2015, m3/t 0.4 5000 1.25 1.50 1
Slide 15: Stage 1 Expansion
Stage 1 Expansion • Completed ahead of schedule and $2.5m under budget • Additional mixer-settler commissioned, flow rate increased to 1,120m3/hr (93% of design) • 24 additional EW cells fully commissioned • Loss of 30% of the organic inventory in June SX expansion water test caused by mechanical fa
Slide 16: Stage 2 Expansion
Stage 2 Expansion • All BGRIMM and local designs completed • All equipment and materials specified and quantified, competitively-tendered quotes obtained • All sub-committee approvals received, awaiting SX-EW plant final sign-off from the ministry by end 2015 • Capex lower than originally estimated
Slide 17: Social and environmental responsibility
Social and environmental responsibility HEALTH & SAFETY • Zero LTI in H1 2015 • Independent safety audit, positive result • Risk management committee established SOCIAL • Strong focus on training, MBAs and Degrees OES unit • >$100,000 toward local community projects • 98% of workforce recruited loca
Slide 18: Copper Bay tailings project, Chile
Copper Bay tailings project, Chile PFS COMPLETED Q2 2015 • JORC compliant mineral resource estimate • 124,000 tonnes of contained copper (I&I) at 0.24% • Indicative metallurgical recoveries 72.8% • Annual copper production 8,600 tonnes • Capex c.$88m / C1 cash costs c.$1.34/lb DFS COMMENCED Q3 2015
Slide 19: Update and Outlook
Update and Outlook
Slide 20: Update and outlook
Update and outlook UPDATE • 5,444 tonnes produced in H1 2015 (6.9% up YOY) • Stage 1 Expansion completed • Cash $35.8m* • 2015 interim dividend 4.5p, 25% of revenue • $61m returned to shareholders since July 2012, 31% of revenues OUTLOOK • 12,000 tonnes of copper production in 2015 • Obtaining appro
Slide 21: Appendices
Appendices
Slide 22: Structure and ownership
Structure and ownership MAJOR SHAREHOLDERS AS OF 31 AUGUST 2015 No. of shares % Holding KENGES RAKISHEV 21,211,751 19.01 Central Asia Metals Plc (UK) HARGEAVE HALE 11,117,500 9.97 FIDELITY INVESTMENT 10,090,019 9.04 100% 100% 100% 75% D&A INCOME LIMITED 7,584,147 6.80 CAML Sary Kazna LLP CAML Copper
Slide 23: Kounrad financial performance to date
Kounrad financial performance to date Total H1 2015 2014 2013 2012 38 months 6 months 12 months 12 months 8 months* Sales, Cu tonnes 33,355 5,120 11,163 10,689 6,383 Production, Cu tonnes 33,675 5,444 11,136 10,509 6,586 Average sale price, $/t 7,015 5,936 6,794 7,114 7,995 Project revenue, $m 234.0
Slide 24: H1 2015 costs of production
H1 2015 costs of production H1 2015 COST OF PRODUCTION $0.45/lb H1 2015 COSTS OF PRODUCTION $0.45/lb (H1 2014: $0.39/lb) H1 2015 H1 2014 Change Other, $0.04 Payroll $0.15 $0.13 +15% Materials, $0.05 Payroll, $0.15 Electricity $0.11 $0.10 +10% Reagents, $0.10 Electricity, $0.11 Reagents $0.10 $0.07 +
Slide 25: Cash flows IPO to H1 2015
Cash flows IPO to H1 2015 190 108.2 (27.8) 170 150 (58.7) 130 110 (53.1) 5.2 90 70 59.0 50 1.7 35.8 1.3 30 Opening cash Net IPO Cash generated Corporate Capex Kounrad Disposal & Dividend paid Other net Cash at 30 pre IPO Proceeds in from operating Income Tax acquisitions, net cashflows June 2015 201
Slide 26: 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 27: 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 28: 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 29: 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 • 4.3% GDP growth rate in 2014 MINING IN KAZAKHSTAN • Mi
Slide 30: 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 31: 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 32: 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 33: Kazakhstan management
Kazakhstan management Pavel Semenchenko General Director, Sary Kazna With 24 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 34: Contacts
Contacts 11 Albemarle Street, London, W1S 4HH 11 Albemarle 11 +44 207 898 9001 info@centralasiametals.com www.centralasiametals.com