Central Asia Metals Plc · LSE:CAML
Central Asia Metals — H1 2014 Earnings Presentation
36 slides from Central Asia Metals's earnings presentation, September 2014
Slide 1: Central Asia Metals Plc
CENTRAL ASIA METALS PLC ae
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 2014 results
H1 2014 results INTERIM DIVIDEND 5p, $8.7m • 5,094t of copper produced (yoy +4.9%) • 4,698t of copper sold (443t stock) • 100% ownership of Kounrad since May • CAML Group gross revenue $33.7m • CAML Group EBITDA $21.8m (65% margin) • C1 cash cost $0.72/lb (H1 2013: $0.76) • Cash at 30 June $29m ($41
Slide 4: H1 Financial Review
H1 Financial Review
Slide 5: CAML income statement
CAML income statement H1 2014 H1 2013 H1 2013 COMPARATIVES – H1 2014 v H1 2013 Reported Project Reported (100%) (100%) (60%) Gross revenue, $m 33.7 35.4 21.2 CONTINUED STRONG PROFITABILITY Operating profit, $m 19.4 21.0 11.6 Operating profit, % 57.5 59.3 54.7 ONE-OFF IMPACTS • Completion of Kounrad
Slide 6: CAML financial performance
CAML financial performance GROSS REVENUE H1 2014 H1 2013 Change • 4,698 tonnes sold Sales, tonnes of Cu 4,698 5,035 (6.7%) • Average price 7,049 per tonne ($3.20/lb) • Gross project revenue $33.7m Unit price, $/t 7,049 6,996 - C1 CASH COSTS Project revenue, $m 33.7 35.4 (4.8%) • C1 cash costs $7.5m
Slide 7: Kounrad unit costs
Kounrad unit costs C1 CASH COST $0.72/lb (H1 2013: $0.76/lb) KOUNRAD’S POSITION ON THE CASH COST CURVE C1 Production Costs $0.72/lb Cumulative Production Source: AME Group FULLY ABSORBED COST $1.62/lb (2013: $1.43/lb) THE KOUNRAD PROJECT IS IN THE LOWEST QUARTILE OF THE CASH COST CURVE 7
Slide 8: CAML 26 months' performance
CAML 26 months’ performance Total H1 2014 2013 2012 26 months 6 months 12 months 8 months* Sales, Cu tonnes 21,770 4,698 10,689 6,383 Production, Cu tonnes 22,189 5,094 10,509 6,586 Average unit price, $/t 7,386 7,049 7,114 7,995 Project revenue, $m 160.8 33.7 76.0 51.1 GROUP EBITDA, $m 101.7 21.8 4
Slide 9: Kounrad transaction 100% complete
Kounrad transaction 100% complete SUC KCC Total Joint Venture 60:40 100% Control 100% H1 2014 2013 Control Consideration paid $17m $41m $58m 15,366,096 shares for 40% of KCC – valued at KCC $40.8m ($39.4m + $1.4m dividends) FV uplift to 40% acquired – BS $21m $19m $40m Joint Control FV uplift to 60%
Slide 10: CAML H1 2014 balance sheet
CAML H1 2014 balance sheet STRONG BALANCE SHEET 30 June 31 Dec 2014 2013 INTANGIBLE ASSETS INCREASE $m $m • FV uplift on SUC acquisition $54m PPE 73.7 77.7 • Additional goodwill on SUC acquisition $11m, Intangible assets 82.9 16.7 total goodwill $20m Cash 28.9 44.5 • Additional $4m annual charge ove
Slide 11: Cash flows & returns to shareholders
Cash flows & returns to shareholders pence £m $m 60 $12.7m receivables from Traxys for May & June deliveries 2012 Special, Annual & Interim 10.70 9.00 14.20 8.6 0.3 (11.1) 2013 Annual & Interim 9.00 7.70 12.50 50 2013 KR dividends 9.00 1.90 3.10 44.5 41.6 (3.0) (9.0) 19.70 18.60 29.80 40 2014 Interi
Slide 12: H1 Kounrad Operational Review
H1 Kounrad Operational Review
Slide 13: Operations overview
Operations overview • Efficient and stable year-round leaching and 2012 2013 H1 2014 SX-EW operations since May 2012 Lost-time Injuries 0 0 1 • Established procedures for operating in severe climatic conditions (below -30°C) Copper production, t 6,586 10,510 5,094 • Experienced and capable operation
Slide 14: Leaching operations
Leaching operations Dump 7 Dump 6 Overall recovery Dump recovery Dump 5 Dump 2 Dump 9-10 Dump In-situ Cu, t Extracted, t Forecast, t Year In-situ balance, t 9-10 23,450 11,601 358 2015 11,491 6 14,610 4,426 3,025 2014/15 7,159 7 43,060 8,690 13,271 2014/15 21,099 5 62,175 0 31,088 2016/17/18 31,088
Slide 15: Boiler house upgrade
Boiler house upgrade • $2.3m capital upgrade programme approved late 2013 • Construction of boiler house extension commenced May 2014, with two 2.8MW units delivered in July • Both units fully installed and at advanced commissioning stage June 2014 • Total 14MW boiler capacity to facilitate higher w
Slide 16: Stage 1 expansion overview
Stage 1 expansion overview • $13.4m expansion program to 15,000t annual capacity is underway • Site works progressing well with buildings to be erected by end of November 2014 • All equipment ordered, 90% expected on site by mid-December and final delivery in February 2015 • 10MW transformer deliver
Slide 17: SX expansion progress
SX expansion progress • Original construction team in place, currently 38 personnel • Concrete works, MCC/Transformer room, and all below-ground service connections completed • Installation of sixth mixer-settler unit’s steel framework commenced on 19th September • Building to be fully clad and encl
Slide 18: EW expansion progress
EW expansion progress • Concrete works on schedule with completion expected end of October 2014 • All steel and insulation materials on site for planned erection and cladding of the building by end of November • Overhead crane expected on site by end of October, facilitating internal equipment insta
Slide 19: Stage 2 expansion - Western Dumps
Stage 2 expansion - Western Dumps • Project documentation passing regulatory approvals and will be completed 6th October • Submission to MINT by mid-October with approval likely in Q2 2015 SX-EW plant • All detailed design drawings supplied by BGRIMM • Local institutes being appointed to adapt Weste
Slide 20: Social and environmental responsibility
Social and environmental responsibility • Over 95% of the 289-strong workforce recruited from local communities • Over 60% of procurement from within Kazakhstan • Strong focus on training and education, with two employees on sponsored MBA courses • Continuing hands-on engagement in community project
Slide 21: Copper Bay investment
Copper Bay investment • Chañaral Bay copper recovery project located 800km north of Santiago, Chile • CAML acquired 50% in 2013 for £2m • 136-hole drilling campaign (1,250m) completed September 2014 • JORC-compliant resource expected October 2014 • Various studies for pre-feasibility study nearing c
Slide 22: Update and Outlook
Update and Outlook
Slide 23: Summary
Summary 2014 UPDATE TO 30 JUNE • 5,094t produced (yoy +4.9%), 4,698t sold BUSINESS DEVELOPMENT • 5p interim dividend. $8.7m • Actively seek growth opportunities • 100% ownership of Kounrad since May • Retain focus on copper • Boiler house upgrade complete • In Central Asia and other jurisdictions •
Slide 24: Appendices
Appendices
Slide 25: Peer and market comparison
Peer and market comparison 180 160 140 Price (rebased to 100) 120 100 80 60 AIM: CAML 169p* 40 20 Market capitalisation $310m 0 Sep 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 CAML 35.9% Amerigo 1.2% Antofagasta (12.5%) Capstone 1.2% Cash† $29m Copper Mountain 39.2% EMED (9.0%) Kazakhmys (7.9%) Maw
Slide 26: Structure and ownership
Structure and ownership MAJOR SHAREHOLDERS AS OF 30 AUGUST 2014 No. of shares % Holding KENGES RAKISHEV 21,211,751 19.05 HARGEAVE HALE 9,977,500 8.96 Central Asia Metals Plc COMMONWEALTH AMERICAN PARTNERS 7,445,492 6.69 (UK) LEGAL AND GENERAL GROUP 6,638,800 5.96 CENTRAL ASIA METALS TRUST 6,287,403
Slide 27: 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 28: 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 29: 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 30: Leaching operations 2014-16
Leaching operations 2014-16 30
Slide 31: 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 Standard & Poor • 5.95% GDP growth rate (2013 estimate) MINING
Slide 32: 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 33: Board of directors
Board of directors Nigel Hurst-Brown Nick Clarke Robert Cathery Non-Executive Chairman David Swan Chief Executive Officer Non-Executive Director Non-Executive Director Nurlan Zhakupov Kenges Rakishev Howard Nicholson Non-Executive Director Nigel Robinson Non-Executive Director Technical Director Chi
Slide 34: 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 35: Kazakhstan management
Kazakhstan management Pavel Semenchenko General Director, Sary Kazna With 22 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. Saken Ashirbekova General Directo
Slide 36: Contacts
Contacts 11 Albemarle Street, London, W1S 4HH 11 Albemarle 11 +44 207 898 9001 info@centralasiametals.com www.centralasiametals.com