Central Asia Metals Plc · LSE:CAML
Central Asia Metals — FY2016 Earnings Presentation
36 slides from Central Asia Metals's earnings presentation, April 2017
Slide 1: Central Asia Metals 2016 Results
CENTRAL ASIA METALS 2016 RESULTS APRIL 2017
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: 2016 Results and Update
2016 RESULTS AND UPDATE 2016 record copper Proposed 2016 final dividend 10p (+25% YoY) production Total dividends for 2016 15.5p (+24% YoY) 14,020t 2015: 12,071t Record copper production 14,020t (+16% YoY) C1 cash cost Gross revenue $69.3m (+3% YoY) C1 cash cost $0.43/lb (-28% YoY) $0.43/lb 2015: $0
Slide 4: Share Price Performance
SHARE PRICE PERFORMANCE 300 12,000 250 225 250 10,000 200 175 200 8,000 LME Copper (US$/t) Share price (p) 150 150 6,000 125 Price (p) 100 100 4,000 75 50 50 2,000 25 0 0 0 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 M
Slide 5: Financial Review
CENTRAL ASIA METALS FINANCIAL REVIEW _
Slide 6: Market Conditions: Copper Market and Currency
MARKET CONDITIONS COPPER MARKET Max. Feb 2011, c.$10,000/t 2016 avg. LME copper price $4,863/t (-11% YoY) $1 : ₸384 9,500 350 2017 market consensus $5,489/t 8,500 300 Long term consensus $6,283/t beyond 2021 7,500 LME Copper (US$/t.) 250 IPO, Sep 2010, c.$8,000/t KZT/USD exchange rate CURRENCY Comme
Slide 7: 2016 Income Statement
2016 INCOME STATEMENT STRONG PROFITABILITY, 56% EBITDA MARGIN 2016 2015 % change GROSS REVENUE $69.3m Sales, t 13,938 12,040 +16% Sales volumes +16% YoY reflect a full year of expanded production Average sale price, $/t 4,994 5,336 -6% Average sales price achieved $4,994/t, -6% YoY Gross revenue, $m
Slide 8: 2016 Unit Cost of Copper Production
2016 UNIT COST OF COPPER PRODUCTION FULLY INCLUSIVE UNIT COST $1.06/lb (2015: $1.58/lb) 2016 2015 % $/lb $/lb change $0.06/lb Local administrative $0.28/lb expenses C1 cash cost 0.43 0.60 -28% Cost of production $0.09/lb MET & other taxes 0.14 0.19 -26% Distribution and selling Depreciation 0.16 0.3
Slide 9: 2016 C1 Cash Cost of Production
2016 C1 CASH COST OF PRODUCTION KOUNRAD COSTS CONSISTENTLY BELOW COPPER PRICE 2016 2015 % change $/lb $/lb 4.00 Payroll 0.09 0.13 -31% 3.00 Reagents 0.05 0.08 -38% $/lb 2.00 Power 0.05 0.09 -44% 1.00 Materials 0.05 0.06 -17% - 2012 2013 2014 2015 2016 (8m) Consulting & other 0.04 0.04 0% Copper pric
Slide 10: Kounrad Capex
KOUNRAD CAPEX CAML HAS CONSISTENTLY DELIVERED ITS CAPITAL PROJECTS BELOW BUDGET ALL MAJOR CAPITAL AT KOUNRAD NOW INVESTED 90 80 70 60 Capex $m 50 40 30 20 10 0 Initial plant construction Stage 1 Expansion Stage 2 Expansion Total Estimated annual sustaining Sustaining actual Project actual Project bu
Slide 11: Cash Flow
CASH FLOW 2016 CASH FLOW CASH FLOW SINCE IPO (2010) 90 250 44.7 (9.2) 176.4 (44.5) 80 (13.9) 200 (73.6) 70 (20.4) 60 150 50 $m $m (2.8) 40.4 (81.7) 42.0 40 100 30 59.0 20 3.5 50 40.4 10 1.3 - - Cash pre IPO Net IPO Cash generated Income tax Capex Returns Other Closing cash Opening cash Cash generate
Slide 12: 2016 Balance Sheet
2016 BALANCE SHEET STRONG BALANCE SHEET, NO DEBT 2016 2015 $m $m ASSET BASE PPE 50.3 40.8 $91m of PPE and intangible assets, increase due to Stage 2 Expansion Intangible assets 40.8 40.3 Stage 2 Expansion materially complete and c.30% Cash 40.4 42.0 under budget Other 7.0 10.0 WORKING CAPITAL Total
Slide 13: Returns to Shareholders
RETURNS TO SHAREHOLDERS $96M RETURNED TO SHAREHOLDERS* REPRESENTS 31% OF CUMULATIVE GROSS REVENUE 100 90 80 70 60 $m 50 40 30 20 10 0 2012 2013 2014 2015 2016 Cumulative shareholder returns * Includes 2016 proposed final dividend 13
Slide 14: Operations Review
CENTRAL ASIA METALS OPERATIONS REVIEW ue
Slide 15: 2016 Production Update and Outlook
2016 PRODUCTION UPDATE AND OUTLOOK 4.5 70 2016 COPPER PRODUCTION AND SALES 4.0 Quarterly copper production (kt) Cumulative copper production (kt) 60 3.5 Record annual copper production, 14,020t (+16% YoY) 50 3.0 2.5 40 2016 copper cathode sales, 13,938t (+16% YoY) 2.0 30 1.5 Total copper production
Slide 16: Kounrad 2016 Operational Overview
KOUNRAD 2016 OPERATIONAL OVERVIEW STABLE OPERATIONS No LTI in 2016, LTI free hours now 1.5m 2012 2013 2014 2015 2016 PLS flow rates increased with expansion LTI 0 0 1 2 0 PLS grades stable Cu production, t 6,586 10,510 11,136 12,071 14,020 Irrigation area stable Ave. PLS, m3/hr 383 532 771 784 888 P
Slide 17: Leaching Operations - Scale
LEACHING OPERATIONS - SCALE 80.0 15,000 0.167% Cu 13,500 70.0 Average copper grade under leach declining, copper Total material under leach, Mt 12,000 60.0 10,500 recovered increased YoY Leached copper, t 50.0 9,000 40.0 7,500 Lower grades under leach compensated by increased leach 0.082% Cu 6,000 3
Slide 18: Eastern Dump Resources, 2012-2019
EASTERN DUMP RESOURCES, 2012-2019 In-situ Cu, Leached Cu, Recoverable Dump tonnes tonnes Cu, tonnes 9-10 23,450 11,840 119 6 14,610 7,227 224 7 43,060 20,478 1,485 5 60,774 15,136 12,819 2 25,210 0 10,588 Total 167,104 54,681 25,235 Dumps 9-10, 6 and 7 will continue to be leached with ILS to depleti
Slide 19: Q2 2017, Leaching from Western Dumps
Q2 2017, LEACHING FROM WESTERN DUMPS Future leaching operations at both Eastern and Western Dumps Total Western Dumps area of 741 hectares Different leaching characteristics in Western Dumps – Average leaching time 20 months vs. 8 months (East) – Dump height 40m vs. 20m (East) Copper recovery 35-42%
Slide 20: Western Dumps, Initial Leaching Area (ILA)
WESTERN DUMPS, INITIAL LEACHING AREA (ILA) ILA identified as part of Dump 16 and Dump 16 22 Dump 22 Area (ha) 70.1 38.6 Commence leaching ILA, Q2 2017 Recoverable copper (t), 42% 22,856 14,016 ILA area 109ha and 96Mt material Recoverable copper 36,872t 14,000 Leaching blocks for winter 2017/18 12,00
Slide 21: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY HEALTH & SAFETY No LTI in 2016, total LTI free man hours now 1.5 million Government health and safety inspections successfully undertaken in 2016 ENVIRONMENTAL Government environmental checks successfully undertaken during 2016 252 monitoring boreholes cover Eastern a
Slide 22: Business Development
BUSINESS DEVELOPMENT
Slide 23: Business Development Review
BUSINESS DEVELOPMENT REVIEW Over 130 opportunities reviewed in the past three years 2016 business development review CAML team has strong technical experience to review 35 opportunities 30 Seeking to grow the company through value accretive 25 transactions in base metals and to enhance CAML’s 20 Num
Slide 24: Shuak, Kazakhstan (CAML 80%)
SHUAK, KAZAKHSTAN (CAML 80%) Framework agreement signed in November 2016 Licence area 197km2 Shuak extensively explored in Soviet times Contains three near term targets, with the priority area being Mongol V – Pre-GKZ resource, c. 327,000 tonnes of contained copper at 0.66% Cu in C2 and P1 categorie
Slide 25: Copper Bay, Chile (CAML 75%)
COPPER BAY, CHILE (CAML 75%) DFS COMPLETED Q4 2016 Site of historic tailings disposal, Atacama region of Northern Chile Exploitation licence 15.25km2 DFS utilises beach dredging operation to recover copper tailings, SX-EW plant to produce cathode and flotation circuit to produce copper in concentrat
Slide 26: Outlook
OUTLOOK PROFITABLE BUSINESS 2016 record production EBITDA margins >50% 14,020t C1 cost in lowest quartile STRONG BALANCE SHEET Cash at 31 Dec 2016 Cash $40.4m at 31 December 2016 No debt $40.4m HEALTHY CASHFLOWS Maintain dividend policy 2016 C1 cash cost Expansions self financed Project capital now
Slide 27: Contacts
CONTACTS INVESTOR RELATIONS CONTACT Louise Wrathall 11 Albemarle Street London W1S 4HH louise.wrathall@centralasiametals.com +44 (0) 207 898 9001 27
Slide 28: Appendices
CENTRAL ASIA METALS APPENDICES we
Slide 29: Structure and Ownership
STRUCTURE AND OWNERSHIP MAJOR SHAREHOLDERS AS OF 28 FEBRUARY 2017 No. of shares % Holding MR KENGES RAKISHEV 21,211,751 19.01 HARGREAVE HALE 11,357,050 10.18 FIL INVESTMENT 9,910,941 8.88 INTERNATIONAL MAJEDIE ASSET MGT 8,140,083 7.30 COMMONWEALTH AMERICAN 7,118,243 6.38 PARTNERS BLACKROCK INVESTMEN
Slide 30: Board of Directors
BOARD OF DIRECTORS 30
Slide 31: Directors' Biographies
DIRECTORS’ BIOGRAPHIES NICK CLARKE, EXECUTIVE CHAIRMAN DAVID SWAN, NON-EXECUTIVE DIRECTOR Nick has over 40 years of mining experience, including 16 years spent within senior David is a chartered accountant with extensive experience across the natural resources sector. management positions in product
Slide 32: Kounrad Financial Performance to Date
KOUNRAD FINANCIAL PERFORMANCE TO DATE Total 2016 2015 2014 2013 2012 56 months 12 months 12 months 12 months 12 months 8 months Sales, Cu tonnes 54,213 13,938 12,040 11,163 10,689 6,383 Production, Cu tonnes 54,322 14,020 12,071 11,136 10,509 6,586 Average sale price, $/t 6,447 4,994 5,336 6,794 7,1
Slide 33: 2016 Copper Industry Cost Curve
2016 COPPER INDUSTRY COST CURVE 4.5 4 3.5 3 2.5 Cash cost, $/lb 2 CAML fully inclusive unit cost $1.06/lb 1.5 1 0.5 CAML C1 cash cost $0.43/lb 0 0 10 20 30 40 50 60 70 80 90 100 -0.5 Cumulative copper production 2016 COSTS 2016 TOTAL COSTS 33 Source: GFMS, Thomson Reuters, Central Asia Metals plc
Slide 34: Financial Impact of Tenge Devaluation
FINANCIAL IMPACT OF TENGE DEVALUATION TENGE DEVALUATION Tenge (“KZT”) devalued from 185 KZT/USD by 85% in August 2015 KZT income and expenses are translated into USD at average annual exchange rate in CAML income statement 2016 average exchange rate 342 KZT/USD (2015: 222 KZT/USD) equates to USD “sa
Slide 35: Kounrad Resource and Technology
KOUNRAD RESOURCE AND TECHNOLOGY JORC Code (2004) Resource Estimate by Wardell Armstrong (prepared in 2013) Contained Resource type Category Quantity, Mt Grade, % copper, kt Eastern Dumps Indicated 89.7 0.10 85.8 Oxide Inferred 79.6 0.10 81.7 Total 169.3 167.5 Western Dumps Indicated 275.4 0.10 276.2
Slide 36: PLS and Groundwater Model
PLS AND GROUNDWATER MODEL Infiltration of acidic solution and precipitation through leach piles Monitoring & Abstraction Collector trench. Low Boreholes permeability liner on down 50m CENTRAL ASIA METALS PLC Monitoring & Abstraction Boreholes 100m gradient side Diagram not to scale