Central Asia Metals Plc · LSE:CAML
Central Asia Metals — FY2018 Earnings Presentation
44 slides from Central Asia Metals's earnings presentation, April 2019
Slide 1: Building a Sustainable Business: 2018 Results Presentation
BUILDING A SUSTAINABLE BUSINESS 2 0 1 8 R E S U LT S P R E S E N TAT I O N APRIL 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: 2018 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 2018 PERFORMANCE AND UPDATE ▪ Sasa acquisition demonstrated to be accretive ‒ 2018 EBITDA per share accretion 65% 2018 Cu production 2018 revenue ‒ 2018 EPS accretion 8% 14,049t $204.2m ▪ Total 2018 dividend 14
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 2018 dividend 14.5p, yield of c.5.5% 70% 20 91p 180 60% 18 160 50% 16 140 14 120 40% 12 p/share 100 $m 30% 10 80 8 20% 60 6 4 40 10% 2 20 0% 0 - 2012
Slide 5: Building a Sustainable Business
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 BUILDING A SUSTAINABLE BUSINESS Economic performance Caring for our communities Governance ▪ Resources to support long life ▪ $0.6m spent in 2018 in North ▪ Strong Board of experienced operations Macedonia and
Slide 6: Financial Review
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 FINANCIAL REVIEW
Slide 7: 2018 Market Conditions
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 2018 MARKET CONDITIONS Copper ▪ Price fell by 17% to $5,965/t ▪ 2019 refined Cu metal deficit is expected to increase to 292kt ▪ 2019 broker consensus price, $6,436/t Zinc ▪ Price fell by 24% to $2,511/t ▪ Acco
Slide 8: 2018 Income Statement
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 2018 INCOME STATEMENT YoY increase in EBITDA of 132% 2018 2017 % change ▪ 2018 results reflect acquisition of Sasa ‒ full period of ownership for both operations Gross revenue, $m 204.2 106.5 +92% ▪ EBITDA per
Slide 9: 2018 Cash Costs
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 2018 CASH COSTS Kounrad copper C1 cash cost $0.54/lb 2018 $/lb 2017* $/lb ▪ Remains firmly in lowest quartile of industry cash cost curve Kounrad copper C1 cash cost 0.54 0.52 ▪ Up 4% YoY due to increased produ
Slide 10: 2018 Fully Inclusive Cu Eq. Unit Cost
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 2018 FULLY INCLUSIVE CU EQ. UNIT COST CAML Group fully inclusive cost, $1.64/lb 2018 ($/lb) 2017* ($/lb) ▪ Up 26% YoY C1 Cash cost 0.87 0.76 ‒ Full year of interest charges Capital expenditure 0.24 0.21 ‒ Incre
Slide 11: 2018 Operational Capex
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 2018 OPERATIONAL CAPEX 2018 capex, $14.8m 2018 $m ▪ Sasa capex includes Sasa sustaining capex 6.8 ‒ Mining equipment, $2.1m (inc. PAUS Minca, Granby wagons, Rockbreakers) Sasa tailings dam construction 6.6 ‒ P
Slide 12: 2018 Balance Sheet
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 2018 BALANCE SHEET Net debt $110.3m (31 Dec 2017: $138.9m) 2018, $m 2017*, $m ▪ Group gross debt, $144.9m (2017: $181.9m) PPE 429.6 469.3 ‒ 2018 net repayment of $38.5m Intangible assets 61.3 69.9 ▪ Group cash
Slide 13: 2018 Cash Flow
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 2018 CASH FLOW Proceeds and repayment of borrowings reflect December 2018 re-financing. Gross debt repaid in 2018 was $38.5m. $m
Slide 14: Operational Review
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 OPERATIONAL REVIEW
Slide 15: CSR – Safety and the Environment
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 CSR – SAFETY AND THE ENVIRONMENT Safety TRIFR for ICMM companies* ▪ CAML Total Recordable Injury Frequency Rate (‘TRIFR’) of 3.76 10.02 7.49 ▪ 2018 lost time injuries (‘LTIs’) 6.22 5.74 ‒ Kounrad, 2 5.23 ‒ Sas
Slide 16: CSR – Employees and Community
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 CSR – EMPLOYEES AND COMMUNITY 2018 employee and community examples Kounrad Foundation 2018 spending ($0.2m) Medical assistance, Kounrad Sasa Sporting competitions, 3% 1% Schools, 2% Kind Heart project, 9% New
Slide 17: Kounrad, Overview
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 KOUNRAD, OVERVIEW In-situ dump leach and SX-EW plant ▪ 170kt recoverable copper Eastern Dumps ▪ 2019 copper production guidance, 12,500-13,500t 5 7 Kounrad 6 ▪ Eastern Dumps mine 2 ‒ Average dump height 20m 20
Slide 18: Kounrad, Recovering Copper
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 KOUNRAD, RECOVERING COPPER Western Dumps ILA ILA copper recovery Eastern Dumps ▪ Leaching since Q2 2017 ▪ Leaching since Q2 2012 45 ▪ Recovered 67,928t Cu ▪ Recovered 14,546t Cu 40 35 Remaining In-situ Cu, Lea
Slide 19: Kounrad, 2018 Operational Statistics
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 KOUNRAD, 2018 OPERATIONAL STATISTICS 2018, stable operations 2012 2013 2014 2015 2016 2017 2018 ▪ 2018, 2 LTIs LTI 0 0 1 2 0 0 2 ‒ LTI free hours reset, now 366,702 Cu production, t 6,586 10,509 11,136 12,071
Slide 20: Kounrad, Scale of Leaching Operations
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 KOUNRAD, SCALE OF LEACHING OPERATIONS 200.0 15,000 0.167% 180.0 13,500 160.0 12,000 ▪ Average copper grade under leach stable Total material under leach, Mt 140.0 10,500 ▪ Leach application rate of 2.5-3 l/hr/
Slide 21: 2018 Kounrad C1 Copper Cash Cost
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 2018 KOUNRAD C1 COPPER CASH COST 2018 C1 cash cost $0.54/lb Wood MacKenzie 2018 copper cost curve 400 Local G&A, $0.07 300 Copper C1 cash cost (c/lb) Kounrad $0.54/lb 200 Realisation, 100 $0.08 0 18Mt Processi
Slide 22: Sasa, Production Update and Outlook
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, PRODUCTION UPDATE AND OUTLOOK Long life of mine to 2038 Unit Q1 2019 2018 2017 ▪ Hydrothermal Metasomatic Skarn deposit Ore mined t 197,836 803,101 792,068 ▪ Established sublevel caving operation Plant f
Slide 23: Sasa for the Future
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 FOR THE FUTURE Low cost operation ▪ Capital development to all main mine levels already completed ▪ Well established materials handling via decline and shaft access ▪ Stable production profile ▪ Decline e
Slide 24: Sasa, Resources and Reserves
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 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 25: 2018 Sasa C1 Zinc Eq. Cash Cost
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 2018 SASA C1 ZINC EQ. CASH COST 2018 C1 cash cost $0.46/lb Wood Mackenzie 2018 zinc eq cost curve 160 Mining , $0.17 Processing, $0.09 120 Zinc Eq C1 cash cost (c/lb) Sasa $0.46/lb 80 40 Realisation , $0.14 Lo
Slide 26: Sasa Tailings Storage
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 SASA TAILINGS STORAGE TSF4 under construction ▪ Downstream facility ‒ Widely viewed as safest design option ‒ However, most expensive construction ▪ Current Sasa TSF3.2 is a downstream facility ▪ Construction
Slide 27: Looking to the Future
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 LOOKING TO THE FUTURE Continuing to add value for shareholders ▪ 2018 dividend, 14.5p Returns to Debt ‒ 44% of adjusted FCF shareholders reduction ‒ 2019E, 30-50% FCF ▪ 2018 debt repayments, $38.5m principal p
Slide 28: Outlook
27 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S OUTLOOK ▪ Two low cost, low capex operations in prospective jurisdictions ▪ Offering exposure to three base metals with attractive market fundamentals – copper, zinc and lead ▪ Strong 2018 CAML financial perfo
Slide 29: Contact Details
28 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S CONTACT DETAILS INVESTOR RELATIONS CONTACT Louise Wrathall Sackville House 40 Piccadilly London W1J 0DR louise.wrathall@centralasiametals.com +44 (0) 207 898 9001 www.centralasiametals.com
Slide 30: Share Price and Shareholders
29 C E N T R AL AS I A M E T ALS P LC BU I L D I N G A S U S T A I N A BL E BU S I N E S S SHARE PRICE AND SHAREHOLDERS 350 12,000 350 300 300 10,000 250 250 8,000 Copper ($/t) 200 200 Price (p) Price (p) 6,000 150 150 4,000 100 100 2,000 50 50 0 0 0 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16
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 2018 2017 2016 2015 2014 2013 2012 (80 months) (Sasa 2 months) (8 months) Kounrad Cu production, tonnes 82,474 14,049 14,103 14,020 12,071 11,136 10,509 6,586 Kounrad C
Slide 32: Board of Directors
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 BOARD OF DIRECTORS
Slide 33: Director Biographies
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 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. He has years spent within senior manag
Slide 34: Senior Management Biographies
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 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
Slide 35: Corporate Structure
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 CORPORATE STRUCTURE
Slide 36: Kounrad Resource and Technology
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 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 37: Kounrad, PLS and Groundwater Model
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 KOUNRAD, PLS AND GROUNDWATER MODEL
Slide 38: Sasa 2018 Exploration – Svinja Reka
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 SASA 2018 EXPLORATION – SVINJA REKA* From Intersection Pb grade Zn grade Combined Drill hole (m) (m) (%) (%) (%) B10 830 750 68 28.0 7.46 4.60 12.06 B11 830 750 73 40.0 9.40 2.56 11.96 B12 830 750 80 28.0 6.81
Slide 39: Sasa Drilling Sections
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 SASA DRILLING SECTIONS
Slide 40: Sasa 2018 Exploration – Golema Reka
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 SASA 2018 EXPLORATION – GOLEMA REKA* From Intersection Pb grade Zn grade Combined Drill hole (m) (m) (%) (%) (%) 279 5 5.65 2.98 8.63 B5_GR 284 5 4.09 0.81 4.90 289 15 6.71 3.16 9.87 B6_GR 345 5 1.22 0.52 1.74
Slide 41: Sasa Processing Flow Sheet
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 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
Slide 42: Copper
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 COPPER Uses ▪ Copper wire rod accounts for almost 75% of total copper consumption. Key end use sectors for copper are building & construction, the electrical network including power generation and transmission
Slide 43: Zinc
42 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 ZINC Uses ▪ Galvanizing is the predominant first use for zinc, accounting for c.60% of global zinc usage in all forms ▪ Other common first uses are die-casting and producing brass ▪ End-use market dominated by
Slide 44: Lead
43 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 LEAD Uses ▪ The battery sector is the single largest consumer of lead, accounting for 86.6% of demand and can be sub-divided into automotive (75% of battery use) and industrial batteries (25%) ▪ The second lar