Central Asia Metals Plc · LSE:CAML
Central Asia Metals — FY2020 Earnings Presentation
47 slides from Central Asia Metals's earnings presentation, March 2021
Slide 1: A Decade of Delivery: 2020 Results
A DECADE OF DELIVERY 2020 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: 2020 Results Highlights
2020 RESULTS HIGHLIGHTS 2020 revenue 2020 EBITDA Strong performance in a challenging year - Total 2020 dividend 14p (2019: 6.5p) $170.3m $95.7m - includes proposed final dividend of 8p (2019: 0p) 2019: $180.8m 2019: $108.6m - Solid 2020 production 2020 net debt 2020 gross debt - Strong 2020 EBITDA m
Slide 4: Financial Results
FINANCIAL RESULTS
Slide 5: 2020 Market Conditions
2020 MARKET CONDITIONS 2020 copper price $6,184/t (2019: $6,005/t) COVID-19 pandemic 8,500 - COVID-19 lockdowns impacted all major economies 8,000 7,500 - Strong recovery expected, supported by global stimulus Cu H2 2020 avg. $6,842/t 7,000 packages and ramp up of vaccination programmes 6,500 $/t Me
Slide 6: 2020 Income Statement
2020 INCOME STATEMENT EBITDA margin 56% Highlights 2020 2019 % change - Gross revenue and EBITDA lower YoY due to weak H1 Gross 170.3 180.8 -6% zinc and lead commodity prices and higher TCs revenue, $m - Strong EBITDA margin given global conditions Selling & distribution, 2.6 1.8 +44% - Increased S&
Slide 7: EBITDA 2020 vs 2019
EBITDA 2020 VS 2019 95.7 Central Asia Metals PLC 6
Slide 8: 2020 Kounrad C1 Copper Cash Cost
2020 KOUNRAD C1 COPPER CASH COST 2020 C1 cash cost $0.51/lb (2019: $0.52/lb) Cost 2020 $m 2020 $/lb 2019 $m 2019 $/lb Local G&A, $0.06/lb Reagents 2.4 0.08 2.6 0.08 Power 2.0 0.07 1.9 0.06 Realisation, $0.08/lb Payroll 4.0 0.13 3.5 0.12 Processing , $0.37/lb Materials 1.1 0.03 1.1 0.04 Consulting 1.
Slide 9: 2020 Sasa C1 Zinc Eq. Cash Cost
2020 SASA C1 ZINC EQ. CASH COST 2020 C1 cash cost $0.50/lb (2019: $0.47/lb) 2020 2019 2020 2019 C1 cash cost Processing , $m $m Mining , $0.15 $0.08 Zinc payable - - 20,008t 19,601t production Pro-rata costing zinc - - 38% 41% Mining 17.1 17.3 $0.15/lb $0.16/lb Local G&A , $0.05 Realisation , $0.22
Slide 10: 2020 Group Costs
2020 GROUP COSTS Kounrad copper C1 cash cost $0.51/lb 2020 2019 % change - Remains in lowest quartile of industry cash cost curve Kounrad Cu C1 cash cost, 0.51 0.52 -2% $/lb - 2% lower YoY due to weaker Tenge and cost control Sasa Zn eq. C1 cash cost, - Average C1 cash cost over life of project, $0.
Slide 11: 2020 Capex
2020 CAPEX 2020 Group capex $8.5m (2019: $11.0m) 8.0 - Original 2020 guidance, $12-14m 7.0 6.0 - Exercise undertaken to identify savings and deferrals 5.0 Sasa capex, includes $m 4.0 7.2 3.0 - Underground fleet $2.6m less $0.3m trade-in (3 loaders, 2 boomers 2.0 and 1 truck), underground development
Slide 12: 31 December 2020 Balance Sheet
31 DECEMBER 2020 BALANCE SHEET Net debt $36.2m (2019: $80.2m) 31 Dec 2020, $m 31 Dec 2019, $m PPE 418.0 406.4 - Group cash balance, $47.9m (2019: $32.6m) Intangible assets 56.6 58.7 - Group gross debt, $80.4m (2019: $108.8m) Cash 44.3 28.6 - $70.7m Traxys corporate debt Restricted cash 3.6 4.0 - $9.
Slide 13: 2020 Cash Flow
2020 CASH FLOW 2020 FCF of $58.9m 47.9 Central Asia Metals PLC 12
Slide 14: Sustainability
SUSTAINABILITY CENTRAL ASIA METALS PLC
Slide 15: 2020 Sustainability Activities Update
2020 SUSTAINABILITY ACTIVITIES UPDATE Key activities and initiatives - Employee and community COVID-19 support - Publish inaugural Sustainability Report, Q2 2020 - Undertook stakeholder engagement exercise with consultants, ERM, leading to development of materiality matrix - Develop and publish of G
Slide 16: Sustainability Materiality Matrix
SUSTAINABILITY MATERIALITY MATRIX STAKEHOLDER ENGAGEMENT UNDERTAKEN BY ERM 3 Increasing importance Energy usage and climate Health and Safety change wellbeing Social economic Water benefit management Community engagement (Degree of stakeholder concern) 2 and development Labour Relations External Vie
Slide 17: 2020 Health and Safety
2020 HEALTH AND SAFETY Sasa 2020 2020 2020 2019 Sasa Kounrad CAML CAML - 0 LTI No. lost time - 702 days since last Sasa LTI to 31 December 2020 0 0 0 1 injuries (LTI) - 1 MTI (employee broken finger) No. medical treatment 1 0 1 1 - No occupational health issues identified at Sasa injuries (MTI) - Em
Slide 18: TSF4 - River Remediation Work Progressing
TSF4 - RIVER REMEDIATION WORK PROGRESSING Phase 1 complete Good progress made with river clean-up - TSF4 2020 cost, $0.7m (plus $0.2m capitalised) - 2022E cost $<0.5m - Wardell Armstrong advised on river remediation programme - Community relations remain strong - Kamenica River remediation commenced
Slide 19: Riverside 'Youth Park' Project
RIVERSIDE ‘YOUTH PARK’ PROJECT Sasa Foundation established Q1 2021 Conceptual design - CAML plans to develop riverside youth park along banks of the Kamenica River which runs through Makedonska Kamenica, the town closest to Sasa - Conceptual design by two local architects - Project will create trail
Slide 20: Unlocking Value for Our Communities
UNLOCKING VALUE FOR OUR COMMUNITIES Sasa community support ($0.3m) Kounrad Foundation spend ($0.2m) - COVID-19 support ($0.2m) - COVID-19 support ($0.1m) - Community and medical staff PPE provisions, food and - Purchase of PCR machine for Balkhash Central Hospital, hygiene donations, purchase of new
Slide 21: Operations Update
OPERATIONS UPDATE
Slide 22: Kounrad Copper Operation
KOUNRAD COPPER OPERATION Eastern Dumps 7 6 2 5 20 Kounrad mine 9-10 SX-EW 13 plant 21a Western 15 Dumps 1a 16 Kounrad village Remaining recoverable resources Eastern Dumps c.10,000t 22 Western Dumps c.130,000t Total c.140,000t Central Asia Metals PLC 21
Slide 23: Kounrad Production
KOUNRAD PRODUCTION In-situ dump leach and SX-EW plant 4.5 120 4.0 Quarterly copper production (kt) - Met increased 2020 guidance 100 Cumulative copper production (kt) 3.5 - 2020 copper production, 13,855t 3.0 80 2.5 - 2021 guidance, 12,500t – 13,500t 2.0 60 - Eastern Dumps 1.5 40 1.0 - Average dump
Slide 24: Kounrad Scale of Leaching
KOUNRAD SCALE OF LEACHING Dripper network from London to Nur-Sultan Ave area Total Total Average material Annual - Average copper grade under leach stable under installed grade Year under leach, drippers, under Cu, t leach, - Leach application rate of 2.0-2.5 l/hr/m2 is optimal ha km Mt leach, % - 6
Slide 25: Sasa Zinc and Lead Mine
SASA ZINC AND LEAD MINE Long life of mine N - Reserves and resources to 2037 - Skarn hosted deposit - Mechanised underground mine - Currently, sub-level caving operation, with transition to cut and fill planned - Single boom jumbos and diesel loaders - Currently, ore either trucked 0km 1km (30%) or
Slide 26: Sasa Production Update
SASA PRODUCTION UPDATE Solid 2020 performance Unit 2020 2019 2018 - Ore mined, 826,421t Ore mined t 826,421 817,714 803,101 - Zinc in concentrate, 23,815t Plant feed t 820,215 820,491 804,749 - Lead in concentrate, 29,742t Zinc grade % 3.37 3.29 3.31 2021 production guidance maintained Zinc recovery
Slide 27: Cut and Fill Project Update
CUT AND FILL PROJECT UPDATE Dedicated Capital Projects Team developed - Decline equipment ordered, to arrive in Q2 2021 - Tendering process underway for backfill building - Reticulation materials ordered - Local consultants, Atrium, retained to undertake design documentation for services permits (pi
Slide 28: Strategic Objectives
STRATEGIC OBJECTIVES CENTRAL ASI METALS PLC
Slide 29: Our Purpose-Driven Approach
OUR PURPOSE-DRIVEN APPROACH OUR PURPOSE SHAPES OUR BUSINESS MODEL AND OUR STRATEGIC DECISIONS. IT IS UNDERPINNED BY OUR VALUES WHICH INFORM THE BEHAVIOUR AND STANDARDS EXPECTED OF ALL OUR COLLEAGUES IN THE BUSINESS. TOGETHER THESE DETERMINE HOW WE EMPLOY THE INPUTS TO THE BUSINESS TO IDENTIFY AND DE
Slide 30: Capital Allocation
CAPITAL ALLOCATION Returns to shareholders Deleveraging - 2020 final dividend, 14p (8p final, 6p interim) - 57% of FCF - CAML dividend policy, 30-50% FCF - Total dividends since 2012, $209.6m or 112p 225 112p 200 80.4 175 150 125 $m 100 75 50 25 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cumulat
Slide 31: Capital Allocation Contd.
CAPITAL ALLOCATION 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 - Improved ta
Slide 32: Outlook
OUTLOOK A strong sustainable business - Strong operational performance - LoM review identifies most effective long-term approach at Sasa - Low cost production - Producing the metals essential for modern living safely and sustainably - Capital allocation priorities - 2020 full year dividend, 14p - De
Slide 33: 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 34: Appendix
APPENDIX
Slide 35: Share Price / Shareholders
SHARE PRICE / SHAREHOLDERS Share price performance versus peers 250 Share price* (AIM:CAML) £2.50 Total no. voting shares 176,026,619 Treasury shares 471,647 200 Issued shares 176,498,266 Market capitalisation £440m Free float 86% 150 Average daily volume 0.54m *Share price as of 29 March 2021 Share
Slide 36: CAML Achievements
CAML ACHIEVEMENTS 2012, Kounrad $39m 10kt 2015, completed $13m SX-EW plant Stage 1 Expansion to 2010 AIM IPO, raised 2012, instigated dividend commissioned, copper increase annual copper $60m at 96p policy production from Eastern production to current Dumps commenced 13,000-14,000t 2017, completed $
Slide 37: Copper – Green Stimulus Boosts Long-Term Fundamentals
COPPER – GREEN STIMULUS BOOSTS LONG-TERM FUNDAMENTALS The perfect storm for copper 1,000 Copper Market Balance $4.0 - Tight raw material supply, elastic scrap response to prices, $3.5 Surplus / (Deficit) (ktpa) strong China imports, and rising expectations of copper- $3.0 Price (US$/lb) intensive de
Slide 38: Zinc – Leveraged to Industrial Recovery
ZINC – LEVERAGED TO INDUSTRIAL RECOVERY 1,500 Zinc Market Balance $3,500 Zinc the base metal most affected by COVID- $3,000 Surplus / (Deficit) (ktpa) 19 related mine restrictions 1,000 $2,500 Price (US$/t) - Most of these supply restrictions have been in Latin America, with Peruvian output falling
Slide 39: Lead – Recyclability a Challenge
LEAD – RECYCLABILITY A CHALLENGE $2,500 Lead Price Chart Auto market recovery led to price rise - Lead has participated in the wider base metal rally, helped $2,250 Price (US$/t) by the recovery in the global auto market - Chinese lead battery secondary supply output ahead of 2019 $2,000 levels sinc
Slide 40: Central Asia Metals (CAML) Operations
CENTRAL ASIA METALS (CAML) OPERATIONS KAZAKHSTAN - Population, 18.3 million - GDP per capita, $11,165 NORTH MACEDONIA - Population, 2.1 million - GDP per capita, $6,143 SASA (100%) KOUNRAD (100%) - Underground zinc and lead mine, northeast North Macedonia - In-situ dump leach and SX-EW processing fa
Slide 41: 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 Nigel Hurst-Brown
Slide 42: Our Purpose, Culture and Values
OUR PURPOSE, CULTURE AND VALUES Our purpose Our values Our purpose is to produce base Health and safety. The safety of our employees is a metals, which are essential for core value and we are passionate about protecting the health and wellbeing of our people. We work hard to modern living, profitabl
Slide 43: Kounrad Operating Statistics
KOUNRAD OPERATING STATISTICS 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cu production, t 6,586 10,509 11,136 12,071 14,020 14,103 14,049 13,771 13,855 Ave. PLS, m3/hr 383 532 771 784 888 921 993 985 1,048 PLS grade, gpl 3.9 3.0 2.2 2.3 2.4 2.5 2.2 2.2 2.1 Plant availability, % 96.9 99.3 98.7 99.1
Slide 44: Kounrad, PLS and Groundwater Model
KOUNRAD, PLS AND GROUNDWATER MODEL Central Asia Metals PLC 43
Slide 45: Kounrad Resources and Technology
KOUNRAD RESOURCES 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 0.10 282.4 Inferred 181.5 0.09 164.3 Total 477.9 446.7 Total East 647.1 614.2 and West Prepared by
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: Sasa Processing Flow Sheet
SASA PROCESSING FLOW SHEET Central Asia Metals PLC 46