TIDMCAML
RNS Number : 1454L
Central Asia Metals PLC
11 January 2021
11 January 2021
CENTRAL ASIA METALS PLC
('CAML' or the 'Company')
2020 Operations Update
Central Asia Metals plc (AIM: CAML) today provides a Q4 and full
year 2020 operations update for the Kounrad dump leach, solvent
extraction and electro-winning ('SX-EW') copper recovery plant in
Kazakhstan ('Kounrad') and the Sasa zinc-lead mine in North
Macedonia ('Sasa').
Summary
- No lost time injuries ('LTIs') at either Kounrad or Sasa during 2020
- 2020 copper production at Kounrad within increased guidance range
o 13,855 tonnes produced
- Strong 2020 zinc and lead production at Sasa despite tailings
storage facility 4 ('TSF4') related shutdown
o Zinc in concentrate production within guidance range at 23,815
tonnes
o Lead in concentrate production within 1% of guidance range at
29,742 tonnes
- Cash in the bank on 31 December 2020 of $47.9 million
- Gross debt as at 31 December 2020 of $80.4 million (including
drawn North Macedonian overdraft facilities totalling $9.7
million)
o 2020 Group corporate debt repayments of $38.4 million
2021 production guidance
- Copper, 12,500 to 13,500 tonnes
- Zinc in concentrate, 23,000 to 25,000 tonnes
- Lead in concentrate, 30,000 to 32,000 tonnes
CAML production summary
Metal production (tonnes) Q4 2020 2020 2019
Copper 3,365 13,855 13,771
-------- ------- -------
Zinc 5,848 23,815 23,369
-------- ------- -------
Lead 7,442 29,742 29,201
-------- ------- -------
Nigel Robinson, Chief Executive Officer, commented:
"We are pleased to report strong production at both of our
operations despite the challenges of 2020. We are also delighted to
be able to report that CAML Group has recorded zero LTIs during
2020. Effective safety training and supervision for our employees
will always be a priority and are crucial to maintaining this
positive trend into 2021.
"We enter 2021 with a strong balance sheet, having repaid $38.4
million of our corporate debt package during 2020, and we look
forward to the year ahead in a period of improving metal
prices.
"Our 2020 annual results are scheduled to be released on 30
March 2021, when our final dividend for 2020 will also be
announced."
COVID-19 update
There are currently zero Sasa employees and one Kounrad employee
positive for COVID-19. All previously stated COVID-19 related
health measures remain in place at the two sites.
Safety
No LTIs were reported at either Kounrad or Sasa during 2020. By
the end of 2020, there had been 959 days since the last LTI at
Kounrad and 702 days since the last LTI at Sasa.
Kounrad
Kounrad Q4 2020 copper production of 3,365 tonnes brings output
for 2020 to 13,855 tonnes. Total Kounrad copper production since
operations commenced in 2012 is now 110,100 tonnes.
Copper sales during Q4 2020 were 3,272 tonnes, bringing the
total for 2020 to 13,860 tonnes.
Sasa
Environmental update
The river remediation programme implemented following the TSF4
incident has progressed well during Q4 2020, with Phase 1 now
complete. It is estimated that, by 31 December 2020, in excess of
95% of the tailings deposited during the leakage had been removed
from the river. Efforts to remove the remaining tailings will
continue into 2021, with the necessary sediment traps already in
place and collecting material. Biodiversity efforts can now
accelerate in 2021, with revegetation and tree planting activities
to be undertaken along the riverbanks, as well as the long-term
monitoring of algae and macro-invertebrate regeneration.
Production
In Q4 2020, mined and processed ore were 208,181 tonnes and
207,499 tonnes respectively, bringing the total for 2020 to 826,421
tonnes of ore mined and 820,215 tonnes of ore processed. The
average head grades for the quarter were 3.28% zinc and 3.80% lead,
and for the year were 3.37% and 3.85% respectively. The average
2020 metallurgical recoveries were 86.1% for zinc and 94.3% for
lead.
Sasa produces a zinc concentrate and a separate lead
concentrate. In Q4 2020, 11,625 tonnes of concentrate containing
50.3% zinc and 10,284 tonnes of concentrate containing 72.4% lead
were produced. Total production for 2020 was 47,583 tonnes of zinc
concentrate at an average grade of 50.0% and 41,289 tonnes of lead
concentrate at an average grade of 72.0%.
Units Q4 2020 2020 2019
Ore mined t 208,181 826,421 817,714
--------- -------- -------- --------
Plant feed t 207,499 820,215 820,491
--------- -------- -------- --------
Zinc grade % 3.28 3.37 3.29
--------- -------- -------- --------
Zinc recovery % 86.1 86.1 86.5
--------- -------- -------- --------
Lead grade % 3.80 3.85 3.77
--------- -------- -------- --------
Lead recovery % 94.5 94.3 94.5
--------- -------- -------- --------
Zinc concentrate t (dry) 11,625 47,583 47,104
--------- -------- -------- --------
* Grade % 50.3 50.0 49.6
--------- -------- -------- --------
* Contained zinc t 5,848 23,815 23,369
--------- -------- -------- --------
Lead concentrate t (dry) 10,284 41,289 40,366
--------- -------- -------- --------
* Grade % 72.4 72.0 72.3
--------- -------- -------- --------
* Contained lead t 7,442 29,742 29,201
--------- -------- -------- --------
Sales
Sasa typically receives from smelters approximately 84% of the
value of its zinc in concentrate and approximately 95% of the value
of its lead in concentrate. Accordingly, Q4 2020 payable production
of zinc was 4,918 tonnes and of lead was 7,070 tonnes, bringing
total 2020 payable production to 20,008 tonnes of zinc and 28,254
tonnes of lead.
Payable base metal in concentrate sales from Sasa in Q4 2020
were 4,783 tonnes of zinc and 6,913 tonnes of lead and for 2020
were 19,930 tonnes of zinc and 28,218 tonnes of lead.
During Q4 2020, Sasa sold 72,057 ounces of payable silver to
Osisko Gold Royalties and during 2020 sold 341,633 ounces, in
accordance with its streaming agreement.
Cut and Fill Project (formerly 'Life of Mine study')
Since completing the technical and financial work on the Sasa
Cut and Fill Project during 2020, implementation of this project
has commenced.
The proposed new underground access decline, which was at the
time of previous update pending Board approval, has subsequently
been approved and its construction will commence in Q2 2021.
A Capital Projects team has been formed at Sasa to ensure
appropriate focus on this key project and ensure delivery on time
and on budget in Q4 2022. Further details of progress will be
advised at the time of the 2020 annual results in March 2021.
2021 guidance
CAML targets 2021 Kounrad copper production of between 12,500
and 13,500 tonnes of cathode.
At Sasa, CAML expects 2021 underground ore production of between
825,000 and 850,000 tonnes. This should result in zinc in
concentrate of between 23,000 and 25,000 tonnes and lead in
concentrate of between 30,000 and
32,000 tonnes.
Given the Cut and Fill Project underway, as stated in the H1
2020 report, CAML expects Group 2021 capital expenditure of between
$15 million and $17 million, of which between $10 million and $12
million is expected to be committed to sustaining capex.
Given the increased capital expenditure required to deliver the
Cut and Fill Project, CAML has put in place hedging arrangements
for a portion of its 2021 metal production. Kounrad's Zero Cost
Collar contract for 30% of copper production includes a put option
of $6,900 per tonne and a call option of $8,380 per tonne. Sasa's
zinc and lead arrangements are swap contracts, with 30% of Sasa's
payable zinc production to be sold at $2,804 per tonne and 30% of
its payable lead production to be sold at $2,022 per tonne.
These arrangements ensure that CAML retains its leverage to
strong copper, zinc and lead prices, while protecting a meaningful
proportion of revenues during the higher capex period and
continuing to rapidly deleverage.
Cash and debt
As of 31 December 2020, CAML had cash in the bank of $47.9
million and gross debt of $80.4 million, inclusive of drawn North
Macedonian overdraft facilities totalling $9.7 million.
For further information contact:
Central Asia Metals Tel: +44 (0) 20 7898 9001
Nigel Robinson, CEO
Gavin Ferrar, CFO
Louise Wrathall, Director of Corporate louise.wrathall@centralasiametals.com
Relations
Peel Hunt (Nominated Advisor and Tel: +44 (0) 20 7418 8900
Joint Broker)
Ross Allister
David McKeown
BMO Capital Markets (Joint Broker) Tel: +44 (0) 20 7236 1010
Thomas Rider
Pascal Lussier Duquette
Blytheweigh (PR Advisors) Tel: +44 (0) 20 7138 3204
Tim Blythe
Megan Ray
Rachael Brooks
Note to editors:
Central Asia Metals, an AIM-listed UK company based in London,
owns 100% of the Kounrad SX-EW copper project in central Kazakhstan
and 100% of the Sasa zinc-lead mine in North Macedonia.
For further information, please visit www.centralasiametals.com
and follow CAML on Twitter at @CamlMetals and on LinkedIn at
Central Asia Metals Plc
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END
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