Central Asia Metals Plc · LSE:CAML
Central Asia Metals — H1 2021 Earnings Presentation
48 slides from Central Asia Metals's earnings presentation, September 2021
Slide 1: Central Asia Metals H1 2021 Results
CENTRAL ASIA METALS H1 2021 RESULTS
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: H1 2021 Results Summary
H1 2021 RESULTS SUMMARY H1 2021 revenue H1 2021 EBITDA Creating value for all stakeholders - H1 2021 dividend 8p (H1 2020: 6p) $106.3m $64.4m H1 2020: $75.4m H1 2020: $42.5m - Post period end early repayment of an additional $10m of corporate debt facility H1 2021 debt H1 2021 gross debt - Strong H1
Slide 4: Financial Results
FINANCIAL RESULTS
Slide 5: H1 2021 Market Conditions
H1 2021 MARKET CONDITIONS COVID-19 pandemic Copper 11,000 - Economic recovery and vaccination programmes vary 10,000 H1 2021 globally avg. $9,088/t 9,000 - IMF forecasts global GDP growth of 6% in 2021 and 5% in $/t 8,000 H2 2020 2022 avg. $6,842/t 7,000 H1 2020 Metal prices 6,000 avg. $5,498/t 5,00
Slide 6: H1 2021 Income Statement
H1 2021 INCOME STATEMENT EBITDA margin 61% (H1 2020: 56%) Highlights H1 2021 H1 2020 % change - Gross revenue increased with stronger commodity Gross revenue, $m 106.3 75.4 +41% prices for all metals Cost of sales, $m 39.3 34.7 +13% - Realised hedging losses $1.9m, unrealised $4.9m Admin expenses, $
Slide 7: EBITDA H1 2021 vs H1 2020
EBITDA H1 2021 VS H1 2020 64.4 95.7 Central Asia Metals PLC 6
Slide 8: H1 2021 Kounrad C1 Copper Cash Cost
H1 2021 KOUNRAD C1 COPPER CASH COST C1 cash cost $0.57/lb (H1 2020: $0.48/lb) Local G&A H1 2021 H1 2021 H1 2020 H1 2020 $0.06/lb Cost $m $/lb $m $/lb Reagents 1.8 0.13 1.2 0.08 Realisation Power 1.1 0.08 0.9 0.06 $0.08/lb Payroll 1.8 0.13 1.7 0.12 Processing $0.43/lb Materials 0.5 0.03 0.5 0.04 Cons
Slide 9: H1 2021 Sasa C1 Zinc Eq. Cash Cost
H1 2021 SASA C1 ZINC EQ. CASH COST C1 cash cost $0.59/lb (H1 2020: $0.43/lb) H1 2021 H1 2020 H1 2021 H1 2020 C1 cash cost Mining Processing $m $m $0.19/lb $0.09/lb Zinc payable - - 9,486t 10,242t production Pro-rata costing - - 42% 37% zinc Realisation $0.25/lb Mining 9.3 8.3 $0.19/lb $0.14/lb Local
Slide 10: 30 June 2021 Balance Sheet
30 JUNE 2021 BALANCE SHEET Net debt $10.1m (2020: $36.2m) 30 Jun 2021, $m 31 Dec 2020, $m PPE 397.9 418.0 - Group cash balance, $54.3m (2020: $47.9m) Intangible assets 54.4 56.6 - Group gross debt, $60.9m (2020: $80.4m) Cash 50.7 44.3 - $52.2m Traxys corporate debt Restricted cash 3.6 3.6 - $8.7m No
Slide 11: H1 2021 Capex
H1 2021 CAPEX CAML 2021E capex $22-23m Group cash capex $7.7m (H1 2020: $4.6m) 3.3 2.9 3 - Includes $1.1m prepayments of equipment (not yet on balance sheet) 2 Sasa sustaining capex, includes $m 1.5 1 - $1.5m mine development - $0.2m Putzmeister concrete pump, $0.2m 0 diamond drill rig, $0.1m Paus M
Slide 12: H1 2021 Cash Flow
H1 2021 CASH FLOW H1 2021 FCF of $48.9m 54.3 Central Asia Metals PLC 11
Slide 13: Sustainability Update
CENTRAL ASIA METALS PLC SUSTAINABILITY UPDATE
Slide 14: Maintaining Health and Safety
MAINTAINING HEALTH AND SAFETY Sasa H1 2021 H1 2021 H1 2021 2020 2019 Sasa Kounrad CAML CAML CAML - H1 2021 – 3 LTIs No. lost time injuries (LTI) 3 0 3 0 1 - 2020 - 0 LTIs, 1 MTI - 77 cumulative COVID-19 cases on site No. medical treatment injuries (MTI) 0 0 0 1 1 since start of pandemic No. recordab
Slide 15: H1 2021 Sustainability Update
H1 2021 SUSTAINABILITY UPDATE CAML 2020 sustainability report published - Published in Q2 2021 - Underpinned by independent stakeholder engagement exercise to develop materiality matrix - First report published in accordance with Global Reporting Initiative (‘GRI’) standards (core option) - Incorpor
Slide 16: 2020 Performance Against Targets
2020 PERFORMANCE AGAINST TARGETS Sustainability 2020 target 2020 target 2021 / long-term target topic achieved? Deliver audit plan for suppliers and Governance contractors to ensure responsible supply Yes Zero human rights abuses chain Zero fatalities Yes Zero fatalities Health and safety 15% reduct
Slide 17: GHG Emissions
GHG EMISSIONS 2020 Group GHG emissions reduced YoY 120,000 4.00 - Lower coal consumption at Kounrad resulted in 3.19 3.28 3.37 3.50 reduction of GHG emissions from 102,315tCO2-e in 100,000 2019 to 98,068tCO2-e in 2020 3.00 - GHG emission intensity increased due to lower copper 80,000 equivalent tonn
Slide 18: H1 2021 Unlocking Value for Our Communities
H1 2021 UNLOCKING VALUE FOR OUR COMMUNITIES Sasa Foundation (and mine) spend ($0.1m) Kounrad Foundation spend ($0.1m) - COVID-19 support - COVID-19 support - Purchase of a bioluminescence cabinet for Kocani Centre - Purchase of an ambulance car for Balkhash to provide for Public Health urgent transp
Slide 19: Sasa – Youth Park ($0.1m)
SASA – YOUTH PARK ($0.1M) Completed August 2021, and comprises trails and walkways along the river, with trees, flower beds and a gazebo as well as children’s play areas Central Asia Metals PLC 18
Slide 20: River Remediation…..One Year Later
RIVER REMEDIATION…..ONE YEAR LATER River Remediation complete - Phase 1 complete Q4 2020 - 95% tailings removed - Phase 2 complete Q2 2021 - As much as possible remaining tailings removed, plus removal of physical silt traps - Planting of 3,600 trees, 350 shrubs, 320kg wildflower seeds and grasses -
Slide 21: Operational Update
OPERATIONAL UPDATE
Slide 22: Kounrad Copper Operation
KOUNRAD COPPER OPERATION Eastern Dumps 7 Remaining recoverable resources Kounrad 5 6 mine 2 20 Eastern Dumps c.10,000t 9-10 SX-EW Western Dumps c.124,000t 13 plant Total c.134,000t Western Dumps 21a 15 1a 16 Kounrad village 22 Central Asia Metals PLC 21
Slide 23: Kounrad Production
KOUNRAD PRODUCTION In-situ dump leach and SX-EW plant 4.5 140 4.0 Quarterly copper production (kt) Cumulative copper production (kt) 120 - Met increased 2020 guidance 3.5 100 - 2020 copper production, 13,855t 3.0 2.5 80 - 2021 guidance, 12,500t – 13,500t 2.0 60 - H1 2021 copper production, 6,214t 1.
Slide 24: Kounrad Operating Statistics and ILS
KOUNRAD OPERATING STATISTICS AND ILS Intermediate Leach System (‘ILS’) - Phase 1 of the ILS has been completed - Comprises 14km of installed pipelines and associated pumps - Allows Kounrad to irrigate previously leached Western Dump blocks with fresh water pumped from Lake Balkhash pipeline via SX-E
Slide 25: Sasa Zinc and Lead Mine
SASA ZINC AND LEAD MINE Highly profitable operation - Sasa EBITDA since acquisition (<4 years) of $214.1m - Debt repaid since acquisition of $134.5m - Reserves and resources to 2037 - Mechanised underground mine Central Asia Metals PLC 24
Slide 26: Sasa Production Update
SASA PRODUCTION UPDATE H1 2021 production Unit H1 2021 2020 2019 2018 - Zinc in concentrate, 11,292t Ore mined t 413,987 826,421 817,714 803,101 - Lead in concentrate, 13,807t - Zn & Pb grades lower due to more ore produced Plant feed t 423,413 820,215 820,491 804,749 from stopes as opposed to from
Slide 27: Sasa Cut and Fill Project Update
SASA CUT AND FILL PROJECT UPDATE Central Asia Metals PLC 26
Slide 28: Central Decline
CENTRAL DECLINE Development commenced - New decline from surface offers increased ventilation, easier access for reticulation infrastructure and the ability to increase ore mined to 900,000t in the medium term - Profile increased to allow for potential future electric vehicle access - Development in
Slide 29: Sasa Long Section Showing Central Decline
SASA LONG SECTION SHOWING CENTRAL DECLINE Svinja Reka Kozja Reka Golema Reka 19.5Mt mined at 9.9%Pb+Zn 3.7Mt mined at 10.5%Pb+Zn 2.7Mt mined at 7.7%Pb+Zn 1966 – To date 1966 – 1989 1980 - 2010 Process Plant 1064 Golema Reka Shaft 830 750 Mined out Indicated Resources Existing Development Inferred Re
Slide 30: Paste Backfill Plant
PASTE BACKFILL PLANT Site location confirmed - Equipment laydown area established - New site offices have arrived Control on site room - All major plant components ordered, including - Civils and structural steels - Thickener and flocculant plant - Continuous mixer - Various pumps, including paste p
Slide 31: Dry Stack Tailings / Plant Expansion
DRY STACK TAILINGS / PLANT EXPANSION KP involvement - Knight Piésold completed conceptual landform design - Detailed studies to be completed during H2 2021 - Construction drawings for stacking of tailings and site preparation to be undertaken during 2022 - Detailed design work for dry stack tailings
Slide 32: Capital Allocation / Outlook
CAPITAL ALLOCATION / OUTLOOK
Slide 33: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Returns to shareholders Deleveraging, 2017 - H1 2021(corporate debt facility) - H1 2021 dividend, 8p Post period end $10m - 40% of FCF early repayment of corporate debt facility - CAML dividend policy, 30-50% FCF - Total dividends since 2012, $229.0m or 120p 120p 225 20
Slide 34: Capital Allocation Priorities Contd.
CAPITAL ALLOCATION PRIORITIES CONTD. Investment in the business Growth opportunities - Cut and Fill Project at Sasa achieves: - Maintain focus on business development activities - Safer operation - Size and liquidity becoming more important considerations - Maximum extraction of mineral resources -
Slide 35: Outlook
OUTLOOK A strong sustainable business - Strong operational performance - Producing the metals essential for modern living safely and sustainably - Strong EBITDA and FCF generation - Capital allocation priorities - H1 2021 dividend, 8p - Accelerated deleveraging ($10m) - Implementation of Sasa Cut an
Slide 36: Contact Details
DIRECTOR OF CORPORATE RELATIONS CONTACT Louise Wrathall Sackville House DETAILS 40 Piccadilly London W1J 0DR louise.wrathall@centralasiametals.com +44 (0) 207 898 9001 https://www.centralasiametals.com/
Slide 37: Appendix
APPENDIX
Slide 38: Share Price / Shareholders
SHARE PRICE / SHAREHOLDERS Share price performance versus peers 250.0 Share price* (AIM:CAML) £2.35 Total no. voting shares 176,026,619 Treasury shares 471,647 200.0 Issued shares 176,498,266 Market capitalisation £414m 150.0 Free float 93% Average daily volume 0.51m *Share price as of 13 September
Slide 39: Board of Directors
BOARD OF DIRECTORS Nick Clarke Nigel Robinson Gavin Ferrar Roger Davey Non-Executive Chairman CEO CFO NED - technical experience Chair Member - Nomination Committee - Sustainability Committee Member - Nomination Committee - Audit Committee - Sustainability Committee Robert Cathery Mike Prentis Nurla
Slide 40: Copper – Global Energy Transition a Major Driver
COPPER – GLOBAL ENERGY TRANSITION A MAJOR DRIVER Positive market backdrop, but risks remain - The copper concentrate market remains tight, creating a 1,000 Copper Market Balance $4.5 bottleneck for primary metal production in China, with available $4.0 on-exchange inventory cover thin Surplus / (Def
Slide 41: Zinc – Galvanising Demand on the Rise
ZINC – GALVANISING DEMAND ON THE RISE Post COVID-19 infrastructure spending a major 1,500 Zinc Market Balance $3,500 tailwind $3,000 Surplus / (Deficit) (ktpa) 1,000 - Zinc prices surged 7.3% YTD, as the metal has benefitted from a $2,500 Price (US$/t) 2021 industrial recovery due to increased globa
Slide 42: Lead – Secondary Supply Recovering
LEAD – SECONDARY SUPPLY RECOVERING US / Europe market showing signs of shortage $2,500 Lead Price Chart - Lead has continued last year’s rally amid an improved macro- outlook and a tight physical lead market in the US and Europe $2,250 Price (US$/t) - LME-registered lead inventories have declined st
Slide 43: H1 2021 Group Costs
H1 2021 GROUP COSTS Kounrad copper C1 cash cost $0.57/lb H1 2021 H1 2020 % change - Remains amongst the lowest cost in the copper industry Kounrad Cu C1 cash cost, 0.57 0.48 +19% - $0.06/lb due to increase in costs of reagents & electricity $/lb - $0.03/lb due to decrease in production Sasa Zn eq. C
Slide 44: Financial Instruments
FINANCIAL INSTRUMENTS Realised losses Realised Actual price Hedged price Loss losses $/t $/t $m - In H1 2021 CAML entered into hedging arrangements: Copper 9,183 8,380 1.6 - A Zero Cost Collar contract for 30% of Cu production, Zinc 2,829 2,804 0.1 which includes a put option of $6,900/t & a call op
Slide 45: Kounrad Resources and Technology
KOUNRAD RESOURCES AND TECHNOLOGY 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 477.9 446.7 Total East 647.1 614.2 and West Prepared by Wardell
Slide 46: Sasa Reserves and Resources (JORC 2021)
SASA RESERVES AND RESOURCES (JORC 2021) Pb contained Zn contained Mt Pb grade (%) Zn grade (%) Ag grade (g/t) Ag (koz) (kt) (kt) Svinja Reka – Ore Reserves Probable 10.7 4.0 3.0 22.3 431 320 7,671 Total 10.7 4.0 3.0 22.3 431 320 7,671 Svinja Reka – Mineral Resources Indicated 12.7 4.7 3.3 25.7 588 4
Slide 47: Alignment to Sustainable Development Goals
ALIGNMENT TO SUSTAINABLE DEVELOPMENT GOALS SDG CAML Commitment End poverty in all its forms We prioritise local employment in regions where opportunities are sparse everywhere and are committed to providing support to the communities close to our operations, where it is needed. Through the transpare
Slide 48: Purchase of Renewable Power from EVN
PURCHASE OF RENEWABLE POWER FROM EVN Central Asia Metals PLC 47