Central Asia Metals (LSE:CAML) — Full Year Results

0:00 Good afternoon, ladies and gentlemen, and welcome to the CENTRAL ASIA METALS PLC full year results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform.

0:31 Before we begin, I would just like to submit the following poll and if you'd give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from CENTRAL ASIA METALS PLC. Nigel, good afternoon sir. Yeah good afternoon and thank you to everybody for spending some time with us to go through our 2023 results. So if you just go through the slides and we go read the disclaimer at your own leisure if you wouldn't mind. Company overview first of all, the next slide just to remind the audience where we operate from. We have two operations, the first one in Kazakhstan, which is 100% owned, and that's an in situ dump leach and SXEW, which stands for solvent extraction electro winning processing facility in the central part of Kazakhstan. We've been in production there now for nearly twelve years, and our life of operation remains out till 2034.

1:22 On the back of the success there, we invested in an underground zinc and lead mine in North Macedonia called Sassa. Again, we own this asset 100%. And we've owned it since late twenty seventeen. I've now been operating it for six years. And the life of mine of this particular mine, and we'll talk more about it later is out to 2039. So just some highlights on the next slide, please, Emma, of the results that we announced this morning, some financial highlights. First of all, we generated a revenue just north of $200,000,000 with an associated EBITDA, that's earnings before interest tax, depreciation and amortization of $96,500,000 and a free cash flow of $57,500,000 That's a very solid financial performance in what was fairly challenging markets with zinc in particular, and all three metals declining in value or price, sales price over the course of the year, and obviously with ongoing inflationary cost pressures across our operating platforms.

2:21 Out of the money we generated though, the free cash flow, we've invested $27,800,000 back in some projects, which I'll talk more about later on at SASSA and at Kunrad. And we've paid a dividend or announced the final dividend this morning of 18p for the full year, that's a 9p final dividend. And later last year, September October time, we announced our interim dividend making a total of 18p for the full year. And that will cost us around about the $40,000,000 mark of that free cash flow of 57.5. Just a few highlights though, shareholders returns that we've made over the past and see what a strong dividend payer we are. And the total dividends we've paid since 2012 are close to $339,000,000 in value or £1.70.

3:07 We remain debt free, and we have $57,200,000 in cash in the bank. Next slide, please. On the operational front, it's been a busy year for CAML. We met our production guidelines top end for Coonrad with 13,816 tonnes of copper, and zinc and lead at the Sassa Mine in the middle of our production range 20,338 tonnes of zinc, and 27,794 tonnes of lead. A good performance operationally, as well as a safe performance operationally, we only had one incident on-site at SASSA, which is too many, giving us an LTIFR of 0.4. It's also been busy on-site in terms of the capital programs we've been delivering. In Coonhran, we completed our solar power project for a total of $3,100,000 And that plant is now operational and has been since November, and will ultimately provide around about 16% to 18% of the site's electrical needs.

4:05 And probably more importantly, really, SASSA, we've expended a lot of energy this year on working through our transition which is effectively three aspects of the infrastructure, a paste backfill plant, a dry stack tailings plant, and a new central decline into the lower levels of the ore body. I'll talk more about them later. But a lot of activity there, and probably broken the back of it and intend to complete those projects later on this year. And the last thing operationally, we've also from the geological drilling we've been doing on-site increased our reserves by close to a million tonnes over the past year. On investment case, I probably partly made it in some of the comments I've made already on the financial and operational performance. But just to go through some of these points here, certainly in terms of profitability, I think we've remained a very highly profitable business. And it is testament to our business model, that in a challenging market, as we've seen with zinc, as I said before, declining by 24%, we still returned a strong EBITDA margin of 47% across the group.

5:06 Solid dividend performer, we're dependable on that we have a policy just to remind everybody of

5:10 30 to 50 of the free cash flow. And this particular period, we've gone outside of that range from our strong balance sheet and confidence in the future operations. In terms of productivity and production, we've got a good record of delivering in line with our production guidance. And this year, it's 25,452 tonnes of copper equivalent for the numbers I've already mentioned. And then from a sustainability and ESG angle, strong corporate governance and stewardship, I've already mentioned strong health and safety record, certainly from last year was particularly good. And also in terms of our sustainability projects that we're looking to do, and we've reduced our greenhouse gas emissions since from our 2020 base with a target to reduce it by 50% by 2030. We're 41% into that particular journey of reducing greenhouse gas emissions. So a good company to invest in with solid metrics across the patch.

6:06 And last bit by no means least before I hand over to Gavin for some more details on the financial performance. Main point on one is quite a busy slide, I'm afraid. But the main points I wanted to highlight here, just on the right hand side of the slide, you'll see that what our key objectives are for the business. In the short term, looking to target low cost and high margins, I think we've demonstrated that already, ensure that we allocate our capital very prudently. Again, I think we've demonstrated that from last year's performance, and a focus on sustainability. For a company of our size, I think we're well advanced in terms of both reporting and what we do on the ground for sustainability initiatives. And last, but certainly by no means least, our longer term strategic objectives remains to grow the business, we have things we'll announce, we announced this morning, and Louise will talk more about it later in terms of early stage exploration projects.

6:54 But the larger transformational project, we're still looking to deploy capital on one of those opportunities when we come to the right one. And on that note, I'll hand over to Gavin to give you more details of the finances. Thanks Nigel. Let's start off with the commodity market conditions and particularly those that affected us and our business through the year. Starting with commodity markets on the left hand side, the only really notable thing there has been around the zinc market where we've seen a little bit of oversupply of metal, which caused the prices to come down. The prices came down about 24% during the year. And that resulted in a couple of mine closures, which was you know, somewhat helpful, but sad for the people on the mines. But the treatment charges that is the money we pay to smelters to transfer our sort of product into the sort of saleable metals, Those, had gone up year on year as well as a result of the energy crisis that we suffered back in 2022.

7:50 So we saw a few zinc smelters closing down, less capacity to smelt, the concentrates we produce, so therefore prices went up there as well. Moving on to the right hand side of the page, you know, we're not immune from global inflation. And certainly within, Kazakhstan and North Macedonia, those rates approached 10%, over the year. And to respond to that, we provided pay rises to our staff just to keep those competitive and to combat the cost of living that they were suffering, some problems there as well. That is countered by a fall in electricity prices. They've come down from 18¢ a kilowatt hour average in 2022 to an average of 11¢ a kilowatt hour, which is a nice sort of tailwind for us through the year. They're still slightly above what we've achieved historically in North Macedonia, so we continue to watch that market carefully to see whether we can lock in a more favorable price at the right time.

8:47 You'll recall at our interims announcement, that we announced a couple of new taxes in Kazakhstan that had come into effect in 2023. The first being withholding tax on dividends that are leaving the country. The rate that we pay there is 10% on any money leaving the country, and that resulted in a $7,700,000 charge in the year. And the Kazakh government also raised their royalty rate, which is known as META or mineral extraction tax in the country by 50% to 8.55%, which was a $3,000,000 additional royalty that we paid in 2023 there. Were some accounting changes, a new accounting standard that was introduced, which resulted in an additional $1,000,000 in the CIT line on the income statement.

9:33 Foreign exchange moved ever so slightly against us, the biggest impact which we'll see on the income statement, If you'll go to the next slide, please, Emma. On the right hand side, while we're on the FX, you can see that FX loss of $3,400,000. It's about a $10,200,000 swing. The key thing to understand there, that's non cash. That's all related to intercompany balances with... That are booked in one currency in the operating jurisdictions and booked in US dollars here in London, and we have to make that currency translation there. So not to worry about that from there. If we go through the income statement and the highlights line by line, you can see the impact of those lower commodity prices going through on the gross revenue line. Poster sales up 6%, which I think is a very good result given that our operations... Jurisdictions of operation were around 10% inflation.

10:18 That includes the depreciation charge of around $28,000,000 in there. That includes that additional royalty that I was talking about on the previous slide, the payroll that I was talking about. And we're also seeing some inflation coming through on reagents and spares, and there was an actual slight foreign exchange impact on that as well. I'll throw it back to the right slide now. No worries. Administrative expenses

10:42 have gone up partly due to increased business development activities. Those are accounted for in that line. Also accounted for there are foundation contributions. Those are contributions to our charitable foundations in both Kazakhstan and North Macedonia. We also have to have taken on a few extra staff to affect these capital programs that we are carrying out in North Macedonia in particular. And Nigel will talk you through what the benefits of those are in a few slides time. Taxation, I mentioned that line there. You can see that's gone up 34% year on year. And that's that withholding tax plus also that IAS 12 treatment that's going through there as well. So overall EBITDA margin at a very respectable 47% given the macro environment that we operated in. And if we look at the segmental analysis on the left hand side of the slide, we can see that the gross revenue at CUNRAD has come down. That's a function of copper prices dropping ever so slightly, but also lower number of copper units there, around four thirty eight tons less production year on year. And the size of gross revenue, that reflects both the commodity prices plus also those increased treatment charges, of around $1,500,000 coming through in that line.

11:59 So going on to the next slide, I can show you the development of the EBITDA year on year. We can see the metal revenues on the left hand side, copper. Copper revenue down 7.3, zinc revenue down $16,300,000. That's the 24% drop in the zinc price. Other notable items there are the royalties at $2,600,000. Cost of sales, excluding royalties, has gone up. As I said, we've got some inflation coming through now. And then the business development and the foundations on the right hand side, they're taking you through to that. Still very respectable 96,500,000 of EBITDA for the year. If we look at each of the operations in turn and the cost basis there, just to pick out a couple of the highlights.

12:45 As I mentioned before, we're looking at a 9¢ year on year increase in your c one cash costs there. That's attributable to the payroll costs of 4¢, some reagent costs, particularly sulfuric acid and eskade. Eskade is what we call the organics. It's a sort of paraffin derivative that helps us separate the copper rich liquids from the acid that we put on the raffinate. And then also lower output, as I said, we had record production in 2022. That's come off by, you know, 400 tons, so that's a 3¢ impact. Given all of that, we're still operating at an extremely good EBITDA margin in Kazakhstan at 71% because the asset itself is probably sitting right at the lowest end of the cost curve. The cost curve compares all the copper producers in the world.

13:32 So we're still very proud of that position that we hold there. Moving on to size, we're gonna present this in dollars per ton. So we take out this sort of confusion that the the metals potentially introduce there. You can see the cost per ton have gone up about $3 a ton year on year. Now that is down to, again, payroll, because as I said earlier, the inflation that we had to respond to. We have taken a decision to increase our spare parts inventory, and that has added $1,300,000, and that's with the view to improve equipment availability and the performance of the equipment. So we'll see the benefits of that coming through soon. Drilling and training, clearly there's a lot of investment to do in the business. The drilling work has paid off, and Nigel mentioned that.

14:20 In terms of the increase of the reserves at SASSA, plus also training in anticipation of this transition to paste fill mining. Clearly, important investment there. And then as I said earlier, the electricity costs have come off around 40%, and that's been a $4.5 per ton benefit there. So still a creditable result. Keeping costs down has been key to our thing, and that's one of our our major sort of strategic focuses as well. And you can see that revenue line, if you remember earlier with the zinc price coming off by 24%. That's been the main driver behind that EBITDA margin coming down to 39%. Can we move on to the investment in the business? That $27,800,000 that Nigel was talking about earlier, that is sort of money invested into the projects themselves.

15:06 At SASSA, the sustaining CapEx included underground development, that is boring the tunnels and opening up new mining areas for exploitation, upgrading the flotation equipment that effectively turns the rocks into the final concentrate product that we sell. And then we're going through a fleet management and fleet replacement program, and we spent $2,800,000 on new equipment underground, partially to sort of assist with this this transition as well. Sustaining CapEx, you know, we guided, I think, 1 to $2,000,000. So we're right down the middle of the fairway there for the year. And that's a new irrigation system and dripper pipes, about $700,000 spent on that. And then these SX EW anodes are the sort of fundamental part of the plant where we plate the copper cathode, and we've spent $200,000 on those. And there's a little bit more expenditure to complete the downode replacement program that'll happen this year.

16:03 But importantly, we've got the power power project that's now complete. That cost us $3,000,000 during the year, and we've also invested $14,000,000 in North Macedonia at SASSA. That's on completion of the paste backfill plant plus underground reticulation. That's the pipework that transfers the paste back underground for emplacement back underground. Central decline is another... A new major access into the mine will become the primary and main access in and out of the mine. And then the DST is the dry stack tailings plant. That's a plant that'll produce a product that we can then place on surface, rather than into a wet tailings dam. And we spent $7,500,000 on that plant last year. That plant is scheduled for completion probably early H2 this year.

16:53 Balance sheet, we've run a pretty lean balance sheet over the last few years since we repaid the debt almost two years ago now. The only debt that we have on the balance sheet is a small overdraft facility we use just to manage working capital in North Macedonia. Other notable items that you'll note there is that PPE, property, plant, equipment has gone up, and that reflects that investment in the new plant that we're making there. And other assets is a little bit higher because we... Mainly because we overpaid taxes in both jurisdictions by $6,800,000, and that's reflected in that line there. But as you can see, healthy cash position and, no debt. So a good platform from which to grow. Last slide for me, is the cash flow slide. We can see, the sort of development of cash flow from 01/01/2023 at $60,600,000 we add on the operating cash flow.

17:49 And then, things that we've spent money on and we invested in through the year, on a cash basis, the major items being dividends paid. That would have been the final 2022 dividend plus the interim 2023 dividend. Income tax and capital expenditure taking us to a closing cash balance of $57,200,000. Free cash flow generation during the year, dollars 57,500,000. There's a helpful table in the release that we put out this morning. But just to summarize that, that's net cash from operations, which was $66,400,000 We then subtract sustaining capital of of $10,800,000 from there. There's some intangibles. I think it was about $50,000 or so. And then we earned $1,900,000 of interest, and that takes you to the $57,500,000.

18:40 But yeah, do refer you to the release on the little table that's quite handy to help you calculate that. On that note, I'll hand back to Nigel to talk you through the operations. Thanks very much Gavin. So as you can hear and listen to the strong financial performance, just a bit more color on the operations. The slide you can see in front of you at the moment is an aerial photograph of the operation here. As we know, it's not traditional mining. There's an SXCW plant you can see there on the far right hand side of the dumps, Eastern dumps and Western dumps. We estimate we have close to 100,000 tons of recoverable copper still to go for at the Coonrad Man with a life of mine out to 2034. Next slide please. Just a few facts and figures around it. I've already mentioned the production this year, which was 13,000 sorry, the last year 2023, 13,816 tonnes. We're guiding similarly this year.

19:32 Effectively Coonran is very stable and steady operation. And we're looking, if you look back on that histogram at the bottom there, you'll see for the past eight years since 2016, we've been around that kind of guidance range for eight years now. And we intend to continue that as long as we can. Although as you can see another ten years of life with about 100,000 tons recoverable, there will be a slight drop off towards the end of life of Coonrad. Operating in both Eastern dumps and Western dumps, obviously, most of the material now is left in the Western dumps. And also in the Eastern dumps, we're finding we're getting slightly better than some of the 42 to 51% theoretical planned recoveries, as we've beaten the leach curve and gone back to certain areas to get extra copper. Small marginal improvements there, but it all counts on what's a very low cost operation. Next slide, please, Emma.

20:19 And lastly, on CAMLRad, as I mentioned before, and I think we've probably mentioned enough already on this presentation, but we've completed our solar power project, it is working now it is contributing to the electrical costs of the plant, but around about over the course of a twelve month period, we estimate it will be about 16 to 18% contribution electricity, and have given us around about a 10% reduction in our greenhouse gas emissions within Kazakhstan, I think it's around about 6% at group level. So it's a project we've done ourselves, built it ourselves coming at a very low cost per megawatt hour, it's only 4.77 megawatts. So I think, you know, in terms of cost per megawatt, it's pretty competitive facility that we've built there at Kunrad. So that's probably Kunrad. Sassa, a lot of activity going on at Sassa, just to remind what Sassa is, it's Skarn hosted deposit in North Macedonia.

21:09 It's a more traditional underground mine. Historically, the mining method has been sublevel caving.

21:15 When we acquired it in late twenty seventeen, we did a life of mine review, and decided that as we go lower in the ore body with various geotechnical stresses, and the changes in the ore body, it'd be wise to transition to a method of mining, which is quite well known throughout the world known as cut and fill paste, and long hole stoping with high density paste to fill in. We'll touch on where we've progressed on those projects in a minute. We have got reserves and resources at this mine out to 2039.

21:43 Next slide, please. So in terms of the activity on-site this year, I've mentioned already production, we came in on guidance, we've got similar guidance for 2024, similar level of ore will be mined as we make this transition with an intention ultimately to get that output of ore up to 830,000 tonnes in the coming years. But just to remind you all why we went down this path of changing the mining method. As I say, it was because of the geotechnical stresses going lower in the ore body and the change in the ore body widths and everything that we decided a couple of years ago to embark on these projects effectively, in order to maximize the extraction of the

22:19 mineral resources, ultimately extend the life of the mine, and as I say it's now up to 2039. And one specific objective was to actually manage better the tailings storage. We have a wet dam facility on-site, which as a consequence of the project now will last through to 2039. And so the rest of the tailings will be deposited either underground through the cuts of the mining methodology, or placed on surface through the dry stack tailings project. And it is ultimately a slightly safer operating environment. But as you've heard already, our safety statistics are also currently very good in terms of the mining methods we employ at SASSA. This table there you can see with the actual statistics, I don't tend to talk to that necessarily. At the bottom, Gavin's already mentioned the amount of capital we've invested in these projects. And we will finish off these projects this year and make the transition to paste fill mining.

23:13 Next three slides, really just a bit of a highlight of where we've got to. So I'll run through these paste back fill plant, we have completed it, it is fully commissioned and operational now. The reticulation system, which is effectively the pipework that takes the paste from the plant down into the underground voids is virtually complete, and certainly complete into the areas where we start operating initially. We have a complement of staff now that have been engaged with and finishing off their training. And we're ramping up the operation up to a twenty four hour day. It won't be every day of the year that this is needed. But when it is operational, we will be running full days operations at Paceville operations on-site. In terms of the mining associated with this, we've established crews and training has again begun.

23:58 The transition to do some long haul mining has also commenced, we've identified faces and headings in the 800 level for cut and fill stopes. And I've already mentioned about the pipework to get the paste into those mining areas, which is well complete. The only way we've had a slight delay is some of the boreholes. And we expect to complete that in the next couple of months to actually take the paste vertically down into some of the areas that we're mining.

24:24 The DST that stands for dry stack tailings plant, similar kind of plant, probably more simplistic plant, it's where we take moisture out of the actual tailings themselves to put it into a cake format. That's in work in progress still, but we have done a lot of the work on this. The earthworks have been completed, the concrete's all been laid for the foundations, many of the steel works up as you can see from the pictures there on the slide. We're nearing completion on that aspect of it. And the equipment will then be installed over the coming months, with the intention of commissioning it in the summer of this year. The other side of the project is the landform, where you put the cake in an organized and engineered fashion onto the actual surface itself, with drainage carpets and civil engineering, and culverts to take away moisture from it.

25:10 So that's been cleared, the vegetation has been cleared, it's been leveled, and we intend to complete that as well in the coming months into summer. So the whole aspect of this part of the project will be operational in the summer of this year. And last but no means least on the project CENTRAL DECLINE. The big success last year was holding through in May where surface met with the nine ten level. That was in May 2023. We did about 1.1 kilometers of development on the central decan last year. And we've got approximately another kilometer to complete the whole project, which should be completed by the end of this year. And it will provide a lot of improvements both to the haulage cycle time due to shorter distances, improve the ventilation, and allow us ultimately to take the paste fill reticulation down the new central decline with greater space.

26:00 It's a far broader and wider tunnel than the current development tunnels we have at SASSA. Just moving on quickly to geology, I've already mentioned this, but you can see the diagram there just to remind everybody, we don't just have one ore body at SASSA, we actually have three that have all been mined historically. The one that we're currently mining is the one to the left there, Spinureka, but we've also got the Cosureka and Galemaireka ore bodies, And we've been doing quite a bit of drilling in 2023, around about 9,500 meters of exploration drilling with a further 6,600 meters planned for this current year to actually try and find additional resources either lower down or in between the ore bodies themselves in what we're calling a gap target.

26:45 Just go to the next slide, some of the results of that work has left us with the results at the end of twenty twenty three, whereby our reserves are now classified as total reserves 9,000,000 tonnes. And if you go back previously to the end of twenty twenty two, it was 8,800,000 tonnes. So it's a 200,000 tonne increase in reserves. But given depletion over the year of about 800,000 tonnes, that's a net increase over the year of about a million tonnes of reserves, which is positive. And the bottom table there just shows since we acquired SASSA, how we've improved the reserves through drilling and finding additional tonnage, bit through the assumptions we've made on the mine reserves and the calculations for them, or actual increase in resources, an increase in resources over that five year period or six year period, 2,400,000 tonnes from drilling, but a reserve tonnage that is increased to three by 3,100,000 tonnes.

27:37 And on that note, completing the operational update, I'll hand over to Louise for a bit more on to the sustainability and the growth aspects of the business. Thanks Nigel. And so yeah, just a few key highlights in terms of sustainability in 2023. We had a strong year on the environmental side, We completed the solar power project at CUNRAD and we've also spent a lot of time developing a corporate biodiversity strategy,

28:04 as we know that that's an area that a lot of our stakeholders are increasingly interested in and focused on. We also finalised our water management strategy at SASSA as well. In terms of health and safety, we also had a strong year. We had one lost time injury, LTI. Now obviously one is one too many, but it was an improvement on the previous year, and it also was within our target rate as well for the LTI frequency rate. Finally on this slide, we've also doubled our commitment to our charitable foundations in Cunrad and in SASSA during the year. And we spent a lot of time focusing on long term sustainable development in both of our countries of operation and also as well addressing any immediate local needs as well.

28:56 On to the next slide. Just to give you an update as to where we are in terms of our business development efforts. As I think we've explained to you before, business development is a top priority for us. And we've got a strong platform from which to grow with these two high quality, long life, low cost operations, which Nigel and Gavin have talked to you about. Those generate significant free cash flow from us, and we've got a strong balance sheet with no debt as well. And our business development strategy remains the same. We're still focused primarily on base metal opportunities. We're still looking at the European time zone plus Kazakhstan as our preferred jurisdictions. And we have in recent years been looking at things from very early stage exploration all the way through to production opportunities.

29:48 And in particular, we'd like to deliver on a really big and transformational acquisition, which gives us the size and scale and liquidity that we're looking for to sort of move us to the next level. That said, we're really pleased to be able to have updated you in the last two sets of financial results that we've presented to you, two business development transactions that we've undertaken in the periods. So just to recap on our CAML Exploration or CAML X opportunity that we initially told you about last September with our interim results, we've moved that forward. We've now fully set up the new co, which is 80% owned by CAML and 20% owned by our exploration partners in Kazakhstan.

30:35 We've been busy making applications for new licenses. We've got two licenses that have been granted to us to date, and there's another six kind of in the pipeline as well. And we will soon be setting to work on trying to identify drilling targets this year that we can drill next year. So that's our plan there for this year. Moving on to the next slide, Emma. And hopefully you will also have seen this morning we made a separate announcement as well as our 2023 results. We announced a proposed investment into Aberdeen Minerals, which we're very excited about. The investment is in two stages, totaling £5,000,000 in total. The initial investment is for £3,000,000 for a 29% stake in the company.

31:25 And as well after that, we've got effectively what is a warrant gives us an option to invest an additional £2,000,000 to take our ownership up to 38%. We were really impressed with the Aberdeen team, particularly the CEO and also his wider team that are all based locally close to the assets. Aberdeen's key asset is a copper nickel project called Arthrath. They've already had encouraging geophysics and drilling results from there. And they've got a compelling exploration model, which essentially looks for higher grades of copper and nickel at depth. And the latest drilling that they completed themselves last year seems to demonstrate this. That's what we're looking for. That's what's encouraged us to invest.

32:15 In terms of our funding, what will that do for Aberdeen? It should enable them to drill 10,000 meters of drilling at the project. Depending on results there, they then look towards doing a mineral resource estimate and again dependent on that, towards doing a PEA or scoping level study. There's also some district scale exploration opportunities which they will look to advance as well. So I'm very pleased to have been able to announce that one this morning.

32:50 So just to wrap up our presentation, we hope that we have demonstrated to you a strong financial performance during a period of particularly lower zinc prices year on year. And we're looking forward to the rest of 2024, which we expect to be a truly transformational year for us at CAML. And we will have completed all three of the main components for the capital investments at SASSA, and we'll be well on our way to being a solely paste fill mining operation there, with only really sustaining capital investment required for the long term then for that mine. At Kunrad, we aim to deliver consistency of performance there. And as we get towards the summer months, we'd expect our investment in the solar power plant to be realized as we get to the longer daylight days.

33:40 And finally, we look forward hopefully to some exploration successes at SASSA, also at CAML Exploration in Kazakhstan, and also with our new friends and partners

33:52 at Aberdeen, whilst we continue our focus to find that big transformational acquisition that will really set us up for the long term. How confident would you be in completing the purchase of a new resource in the next twelve months? Well, You can answer that. I can have a go. I suppose a way to I don't think I'd be able to give you a percentage, but the way I could answer it is that we've started 2024 with a strong pipeline of opportunities to look at in terms of business development. And so if I had to compare how confident I would be this year versus this time last year, I would say I'm more confident this year that we would be able to complete a transaction. Indeed, that is what we are working towards.

34:40 Thank you. In percentage terms, how confident would you be that your exploration team in Kazakhstan will locate a commercially viable copper resource within the next twelve months? I see a theme here with these percentages. Look, I think that's not being realistic. That's not what we think we'll be able to deliver this year. What we aim to do this year is to identify targets for us to drill next year. So that's going to be the early stage exploration. We'll be taking some soil samples, we'll be doing geological mapping and geophysics and with a view to finding the best locations to put drill holes, which we will then drill next year. I think in all reality, it's probably a few years away being able to deliver a project if indeed the results from the exploration are able to demonstrate that.

35:31 That is a couple of years away, I would think. You might have answered this next question, but I'll read it anyway. What is the situation with the exploration of new fields? What are the reserves in the fields confirmed or unconfirmed? How many years will they last? And what are the future plans and capacity forecasts?

35:49 Yeah, it's very early stage. The projects in Kazakhstan, in particular, the CAML exploration, very early stage. So we'll I think we seem to have licenses with good potential and the ones that we've applied for as well. We're excited if we're able to get those, but it will be a longer, slower process really than being able to answer that question right now. What dividends are planned for 2023? I think we've answered that really, haven't we? We've announced an 18p dividend for the full year for 2023. If a suitable project is found in Kazakhstan, how do you see it being funded? Look, think, as I said earlier, we've got a clean balance sheet. So we've got capabilities to leverage off of the back of that. We're building a cash balance, got strong cash flow and strong margin assets that are currently cash flowing. So we'll be building up cash from there. And it's really horses for courses. So depending on the size of the project, the location, and the stage of development as to what kind of financial structure we put around it. But I think we've got the real luxury and benefit of having that clean balance sheet that gives us a lot of options plus support of shareholders as well if we should go down that path.

37:04 What is the rationale with investing in an exploration company in Scotland? Where do you see the anticipated payback given the difficulty of implementing a successful mining operation in the region and risk of finding non viable ore? Yeah, sure. It's a good question. Think, I mean, to answer the last part of that first, there's always a risk of finding non viable ore. And I think the thing to point out really is an investment like this is on one hand high risk because there's a high chance of not finding a mine in the future. But on the other hand, it's low risk because we're investing the sort of money that we have that we've generated ourselves to be able to have a go to see if we can find something.

37:51 We were interested and excited by the geology and the potential there. We think of a lot of the things we've looked at Aberdeen shows a lot of promise. In terms of investing in exploration in The UK, it is a very interesting question. I think what we would point out is in any of these opportunities that we would look at, we of course interested in the geology and then we move very quickly to looking at the legal and permitting and all those aspects.

38:20 While we can never be fully sure that you're going to get a mine permitted anywhere in the world, the team has managed to get together over 40 license agreements with separate landowners in terms of mineral rights and also in terms of land access. So from our site visit there, we are genuinely of the impression that the support for the project in the area. In addition, they've also received grant funding for some metallurgical test work for the mineralization that they've identified in terms of the copper, nickel and cobalt, which we also think demonstrates support from the British government as well.

39:01 I'm looking at the SP chart, which seems to have shown a lot of weakness over twelve months. Is this due to general market weakness and poor commodity prices? What do your brokers think is fair value? Good question, I'll want to answer in some ways. And yes, it is a bit disappointing on the share price performance. Suppose as management here though, we focus on delivery in the business, on the projects, production, safety, and controlling our costs effectively. The share price will be what it will be. But what's causing that probably an element of general market weakness, I don't think the mining sector is particularly loved at the moment, obviously, we've had a reduction in all zinc commodity prices, and the others less so as Gary mentioned,

39:43 whether it's the optics to do with the fact that we haven't got growth, I think this is probably a point in our share price weakness that people look at us and know we've got two good operating assets. But actually, are looking for growth. And hence why a lot of this presentation has been focused on what we're doing to achieve that growth, be it the early stage exploration, where we've had a couple of successes, we're now going to work through those programs. But the key one is, as Louise mentioned, we have to get some scale and put to get the more transformational opportunity. A lot of work going on that there's a good pipeline for the future of those opportunities. And I think that's probably as much as anything reflected in a weaker share price. What do the brokers think? Well, I think the brokers would also reflect that we feel we're undervalued. If you look at most of the target prices that the brokers put out, it's above the £2 mark. So certainly, we would feel that we're undervalued in that sense. But what really causes it, it's very hard to put your finger on one particular aspect.

40:37 And all we can do as management is make sure that we deliver on what we're paid to deliver on, which as I said is the production, the safety, the cost side of it, and growing the business as best we can. Thanks, Nigel. What is your modelled cost of the solar electricity that will be produced at CUNRAD? And how does this compare to the grid price?

40:57 I'll take that Yeah, the model cost, I think, of the electricity is around 4.4¢ or something like that. Yeah. And the grid price currently is $06 So there's not a huge economic benefit at the moment to it, but we and as well, we've got two things. One is that all of the grid power in Kazakhstan currently is coal fired. So the only way we could effectively bring down the greenhouse gas emissions at that asset was by putting in our own renewable energy

41:28 facility. But we do see some structural changes potentially, risk of these within that Kazakh grid. There's a lot of talk about introducing renewable energy into that grid as well. Hub, generally, at the outset, a little bit more expensive. So that plant will become more and more valuable going into the future. Thanks, Kevin. Well done on the deal with Aberdeen Minerals announced today. Do any of the CAML team have experience of working with Patrick, Tom and the rest of their team in the past? If you could also comment on the likely timescales for the 10 ks drilling programme that would be useful too. Sure, yes.

42:05 None of us have worked with them. We know a couple of the directors, but none of us have worked with them before. In terms of the timeline, 5,000,000 if we were to invest the full amount would last Aberdeen twenty four months on the basis their projections. And that would of course include the 10,000 metre drilling programme.

42:28 As a jurisdiction, how supportive is The UK for commodity exploration? Kazakhstan to Scotland is quite a change. It is, yeah. Think maybe I've answered that one in terms of I think, you know, the mineral code is quite different in The UK to other countries, because there's lots of individual landowners rather than land being owned by the state. So that's one factor. But I think for sure that there's a lot of effort from the government, particularly for long term critical mineral supply strategic investment, and trying to make sure that there's their own battery metals and metals for the energy transition for the long term. Thank you. Can you remind investors of the 2024 expansionary CapEx budget and planned projects?

43:18 Yeah, no problem. I think I'm gonna split that in two a little bit. So our estimated CapEx for 2024 is between 22,000,000 and $24,000,000. And I'd say around 15,000,000 to $16,000,000 of that is what we call sustaining CapEx. So that is just keeping the existing assets going, and that reflects a slight increase in the usual guidance we give at SASSA. We used to give around 8 to $10,000,000 a year guidance at SASSA. We're probably going to go to 10 to 12, maybe a little more this year. And then the balance of 8 to $10,000,000, that is going to be completing those capital projects at SASSA. And that's all 2024. And then back to 2025, we'll be back to our normal sustaining capital run rates. With that view of that large scale acquisition in base metals, is the current market dynamic supportive of finding that opportunity at the right place, particularly on the headlines of metal shortages on the horizon?

44:14 Yeah, it's a good question. And it's one that we could probably all chat about and debate about. But what we focus on is our position, our cash generation, our debt capacity, our investors and what they'd like to see from us and therefore the value of our equity. And when we take all that into account, we think we are in a strong position to grow in terms of being able to borrow material amounts and also issue equity if required. So I think we can't focus too much on short term ups and downs in the market, we have to look and try and find the best long term opportunity and finance that accordingly. Okay. Did you have any visibility ahead of time of tax changes? Or was it a surprise?

45:04 Or could we see more tax surprises in the near term? No, I mean, I don't think we were surprised. I mean, I think we certainly knew they were coming, and it was all in the public domain back in 2022 that those changes, particularly to the withholding tax regime in Kazakhstan, were going to occur plus also the royalty tax. So I think maybe some people hadn't picked it up properly. We do our best to kind of inform the market as to what's out there.

45:31 I think in terms of future tax rises, there has been some noise in Kazakhstan in the past around future corporate income tax increases. But most recent pronouncements from the government is that those are going to be confined only to the banking sector and the rest of us will be fine. Thanks. Would the management team define as a successful 2024? In other words, what objectives do you want to achieve to define another successful year? Yeah, I'll take that one. Because I think really 2024, we know what we want to achieve in 2024. It's obviously safely meet our production guidance, control costs as we have done, I think, successfully in 2023 as best we can, I think inflation is reducing? So that will help.

46:17 But in terms of actual delivery, obviously, key is operationally to deliver on the project at SASA, finish those off, and make that transition into PACE for mining, have the teams fully trained, and make sure we do that. We've no major projects planned at Coonrad, it's steady as she goes in many ways at Coonrad. But

46:32 then what we I think all of us around this table with I think as success is getting over the line and one of these business development activities, transactions, that's something we're putting a lot of effort into it. It isn't easy, many things, a number of factors you have to take into consideration. But we have got a strong pipeline. And we're hopeful that at some stage, we can bring one of those over the line. I suppose the last thing on success for this year is really bedding in CAMLEX and Aberdeen Minerals into our portfolio of assets and having hopefully some successful results the drilling programmes for Aberdeen, but also for the kind of statistical analysis and the geophysical aspects that we're doing in CAMLEX in Kazakhstan. Thank you. Are there any other copper dumps throughout the world that you would invest in?

47:20 If they have the same characteristics of Coonrad, yeah, if they're in a good jurisdiction, we have looked for them. And it's not that we don't wish to do that, of course, we would do. Mean, who wouldn't want to buy another Coonrad? It's been a fantastic project for us. And if we can find something of a similar kind of nature with the mineralogical properties that we've got in the ground conditions and everything else, then we'd happily invest in it. Thank you. Kazat Jampom earlier stated that sulfuric acid is in shortage, have you experienced a price increase or any difficulties with this?

47:52 Chris, I think you're well picked up. I think CAZATOPROM did say that they were experiencing some shortages. Now their demand for acid is far greater than ours. The way that they process uranium consumes a huge amount of acid in comparison to what we do. We have a long term arrangement in place for our acid supply. It comes from very nearby to the mine. You know, it's got its own infrastructure, etcetera, etcetera. So we're very comfortable with the acid supply. We seen a slight increase in the price of acid, but that's not too dramatic, and I think it's easily manageable. Yeah. Okay. Thank you very much. That's of the questions. The Nigel, would you like to make some closing comments? Yes, I'd love to actually. I mean, first of all, just in closing comments, looking at to remind people what we're looking at doing this year. We've given out our production guidance, just remind everybody copper 13,000 to 14,000 tonnes, zinc similar to last year 19,000 to 21,000 tonnes and lead 27,000 to 29,000 tonnes. That's what our outlook is this year, we intend to deliver on that safely. As I said before, finish our capital investments, but at SASSA primarily, work on the exploration projects and deliver those successfully.

49:07 And obviously continued active assessment of the business development opportunities we're looking at. But maybe in the final comments from me will be just to reiterate our business case, our investment case, I think we've delivered strong margins, 47% EBITDA margin in a very challenging market, and some good solid financial results, which is

49:26 testament to our low cost operations. We have a solid balance sheet, a strong balance sheet. And also, we've demonstrated that we'll pay dividends in the good times as well as the bad times, make sure that we reward shareholders. But we would like to deploy some capital into this transformational opportunity we're hoping to find. And also a strong delivery on production, we've shown again, that we've met our guidance and production, I think we've got a very good record on that. And we've also got a good record on how we develop the business from a sustainability angle and ESG credentials, with reductions in greenhouse gas emissions, strong governance and a very strong health and safety performance. So I think we've a very good business case that we've presented hopefully this afternoon to all of you, and we can look forward to an exciting 2024. Nigel, that's great. And thank you once again for updating investors this afternoon.

50:15 Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete but I'm sure will be greatly valued by the company. On behalf of the management team of CENTRAL ASIA METALS PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you all.