2014 Full Year Results

RNS Number : 7677I

Central Asia Metals PLC

30 March 2015

CENTRAL ASIA METALS PLC

("CAML" or the "Company" or "Group")

2014 Full Year Results

Central Asia Metals plc (AIM: CAML), a copper producing company, today announces its full year results for the 12 months ended 31 December 2014. The Company proposes a 7.5 pence final* dividend bringing 2014 full year dividend to 12.5 pence (5 pence interim dividend paid in October 2014 and 7.5 pence final* dividend is a 50% increase on this interim dividend).

Financial update:

· The transaction to acquire the sole ownership of Kounrad project completed in May 2014

· Record gross revenue of $76.6 million (increase of 42%, 2013: $54.1 million)

· Group EBITDA of $47.3 million (increase of 46%, 2013: $32.4 million)

· C1 cash costs of $0.71/lb (reduction of 3%, 2013: $0.73/lb)

· The proposed full year dividend represents 28% of attributable revenue for the year

· Group cash balance as at 31 December 2014 of $46.3 million (2013: $44.5 million)

Operational update:

· Kounrad record annual production of 11,136 tonnes of cathode copper (increase of 6%, 2013: 10,509 tonnes)

· Boiler-house capacity increased from 8.4MW to 14MW allowing higher winter treatment rates

· SX-EW plant utilisation increased from 97.0% to 98.7%

· Stage 1 plant expansion to 15,000 tonnes annual capacity commenced in June 2014

2015 Outlook

· Kounrad production target of 13,000 tonnes increasing to 15,000 tonnes in 2016

· Focus on cash costs to remain in lower quartile of industry cost curve

· Stage 1 expansion is under budget and on schedule for completion in Q2

· Continue to appraise business development opportunities to create further shareholder value

Nick Clarke, Chief Executive Officer of CAML, commented:

"2014 was yet another year of CAML meeting its targets as we achieved both record revenues and production. This record performance was accomplished against an increasingly challenging commodity price environment for copper, as our SX-EW plant at Kounrad delivered production in excess of our stated target of 11,000 tonnes. The expansion of the plant is firmly on track and will increase our annual production capacity further to 15,000 tonnes by 2016. A continued focus on cost control by all our employees has allowed us to remain in the lower quartile of the industry's cost curve and we are confident that this position will be maintained as we expand production. Our excellent performance in 2014 is reflected in the final dividend our Board has proposed, and we remain committed to delivering returns to all our shareholders."

Analyst presentation conference call

There will be an analyst presentation and conference call on 30 March 2015 at 09:30 (BST). The call can be accessed by dialling +44 (0) 203 427 1910 and quoting the confirmation code 5576202. The results presentation slides will be available at http://www.centralasiametals.com/ and a replay facility will be available following the presentation.

For further information contact:

Central Asia Metals plc	Tel: +44 (0) 20 7898 9001
Nick Clarke, CEO Nigel Robinson, CFO
Peel Hunt LLP (Nominated Adviser & Joint Broker)	Tel: +44 (0) 20 7418 8900
Matthew Armitt Ross Allister
Mirabaud Securities LLP (Joint Broker)	Tel: +44 (0) 20 7878 3362
Peter Krens

Bell Pottinger	Tel: +44 (0) 20 3772 2500
Lorna Cobbett

Note to editors:

Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper facility in Kazakhstan. The Company also has a 52% equity interest in Copper Bay Ltd, which is a private company conducting a pre-feasibility study of the Chañaral Bay Copper Project in Chile. At the 2014 UK Stock Market Awards, CAML was named Best Basic Resources Plc. For further information, please visit www.centralasiametals.com.

*subject to capital reduction scheme as summarised in note 20 in the financial information below

CHAIRMAN'S STATEMENT

Having established the Kounrad project as a low cost copper project in Kazakhstan, we now plan to increase production to 15,000 tonnes of copper per annum by 2016. We are also looking at expanding the business where we see an opportunity to create value for our shareholders.

Dear Shareholders,

Key Achievements

It is now over four years since the Company listed on AIM and raised $60 million to implement its business plans. Thanks to the hard work, dedication and skill of our staff we have achieved a lot since that time and managed to deliver on all of our key promises to shareholders.

Since September 2010, we have now produced over 30,000 tonnes of cathode copper at Kounrad at extremely competitive cash costs of production. The CAML Board intend to propose a final dividend for 2014 of 7.5 pence per Ordinary Share subject to shareholder approval and to the proposed capital reduction as summarised in the separate RNS announcement released today. This will take the total dividend for 2014 to 12.5 pence per Ordinary Share. This latest dividend will increase the amount returned to shareholders in dividends and share buy backs since the listing to approximately $53 million.

In addition, the Company has retained sufficient cash resources to fund the $35 million expansion programme at Kounrad. Stage 1 of this expansion programme will increase the SX-EW plant's capacity to 15,000 tonnes per annum at a total capital cost of $15.5 million, inclusive of the boiler house expansion, whilst Stage 2 will commence on receipt of the relevant State approvals to enable the resource from the Western dumps to be leached and processed. The capital cost of the Stage 2 expansion is currently estimated at $19.5 million.

In May 2014, the Company completed the transaction to acquire 100% ownership of the Kounrad project. This was a key milestone for the Company and prompted the commencement of the expansion programme mentioned above. As part of the completion of the transaction, Mr Kenges Rakishev, a Non-Executive Director of the Company, also became a 20% shareholder of the Company. We are pleased to have such an influential Kazakhstan businessman as Kenges as both a Board member and a supportive major shareholder.

In recognition of the Company's achievements since the IPO, the Company was awarded 'Best Basic Resources PLC' in the UK Stock Market Awards in March 2014. The award was judged on the basis of the Company's performance within the mining sector and in comparison to its peer group and other larger mining companies.

Corporate Governance

Dr Michael Price retired from the Board in June 2014, having served as a Director of the Company since 2006. During his time with the Company, Mike served both as a valued independent Non-Executive Director and as the Chairman of the Audit and Remuneration Committees of the Board. In these roles he helped lead the transition of the governance of the Company from the private arena to the public market. The rest of the Board and I wish to record our appreciation to Mike for his independent and insightful input over many years.

Following Mike's departure, the Board has been strengthened by the appointment of David Swan in June 2014 as an independent Non-Executive Director of the Company and Chairman of the Audit Committee. David is a chartered accountant with broad commercial experience across a range of small to large companies. We are delighted to welcome David to the Board and believe he will provide great value to the Group as we continue developing CAML's controls and procedures.

The Company is committed to improving corporate governance wherever it can and the Board is well aware of the importance of maintaining strong controls and procedures across the Group's operations.

Strategy and Growth

Kazakhstan

The Company has an established presence in Kazakhstan and since the commencement of operations at Kounrad, has paid almost $50 million in various taxes to the Kazakhstan authorities, contributed close to $690,000 towards the local community and currently employs approximately 330 staff on site, the majority of whom have been recruited locally.

The Company is keen to grow its business and reputation in Kazakhstan and the expansion of operations at Kounrad is testament to this goal. As a responsible operator, we place the highest priority on our obligations to protect the environment in the area of our copper recovery operations and to comply with the applicable health and safety regulations of Kazakhstan.

Alongside the main copper production facilities at Kounrad, the Group has established a business development focus within Kazakhstan which is tasked with seeking out additional opportunities.

Outside of Kazakhstan

Elsewhere, based on our strong financial position and technical experience, the Company is keen to consider other business opportunities. Such opportunities will only be actively pursued by management so long as they can be suitably incorporated into CAML and would add significant shareholder value.

In determining this, the management team will consider a number of factors from the strategic fit within the Group's operations to the funding requirements and overall impact on Group profitability. To support our business development activities we were delighted to appoint Gavin Ferrar as our Business Development Director in June 2014. Gavin brings with him a wealth of commercial experience in the natural resources sector and will be a valuable member of the CAML team.

Outlook

During 2014, the copper price came under pressure due to increasing supply and continued concerns over the outlook for the growth of the Chinese economy. These price pressures became particularly acute in January 2015 when the copper price fell to a five and a half year low.

Whilst the current commodity price environment provides a challenge to all copper producers, from which CAML is not immune, our low operating cash costs of production at Kounrad places us in an enviable position compared to our peers.

Nigel Hurst-Brown

Chairman

CHIEF EXECUTIVE OFFICER'S STATEMENT

Since the start of the project we have exceeded annual production targets and our cash costs of production have remained in the lowest quartile on the industry cost curve.

Kounrad Operations - Record Production in 2014

During 2014, the Company's production at the Kounrad project continued to be a success. We produced 11,136 tonnes of copper cathode and surpassed our production target of 11,000 tonnes whilst maintaining a low cash cost base. During 2014, our C1 cash cost of production was $0.71/lb (2013: $0.73/lb) and fully absorbed costs within Kazakhstan were $1.30/lb (2013: $1.13/lb). The increase in fully absorbed costs is due to increased depreciation and amortisation charges as a result of the accounting treatment of the acquisition of the additional 40% share in the Kounrad project in 2014.

A total of 11,163 tonnes of copper (2013: 10,689) were sold at an average copper price of $6,794 per tonne (2013: $7,114) resulting in annual 2014 gross revenue for CAML of $76.6 million (2013: $54.1 million) and $161.4 million cumulative gross revenues to 31 December 2014 since operations commenced. This revenue stream combined with the low costs of production helped to generate a Kounrad project EBITDA for the year ended 31 December 2014 of $56.0 million.

During 2014, the utilisation rate of the plant was 98.7%. The performance and efficiency of the SX-EW plant continued to meet our expectations and is further evidence of the reliability of the plant design, equipment selection and construction methods employed from the outset.

Similarly, the quality of the copper cathodes produced continued to be of a high standard and met all contractual conditions and London Metal Exchange (LME) specifications.

Our commitments to the local community and environment continued to be a key focus during the year. Significant efforts have been made to ensure that we comply with all the local environmental and health and safety legislation.

Our Corporate Social Responsibility (CSR) Director, Nick Shirley, is based on site in Kazakhstan to lead these activities and is tasked with raising environmental and health and safety standards to ensure they meet industry best practice.

Whilst health and safety is key to the welfare of our employees, the Group did record its first lost time injury (LTI) since the commencement of construction four years ago. The injury to the employee was relatively minor and he made a quick and full recovery and has since returned to duties.

Finally, Kounrad is a valuable contributor to the Kazakhstan economy and specifically in the local area. We currently employ approximately 330 staff on site and paid $24.8 million in taxation to the Republic of Kazakhstan during 2014 whilst contributing $280,000 to local causes through our voluntary and regulated subsoil use contract (SUC) social contributions.

Kounrad Ownership and Expansion

During the year, and as part of the process of purchasing the remaining 40% ownership of the Kounrad project, the Group received all the necessary approvals from the State for the transfer of ownership. On completion of the transaction in May 2014, Mr Kenges Rakishev, a Non-Executive Director of the Company became a 20% shareholder of the Company.

Following the completion of the transaction, the expansion plans for the project commenced in May 2014. The Company plans to invest $35 million into the project in two specific stages. Stage 1 is to increase copper production at the SX-EW plant to 15,000 tonnes per annum by 2016. The estimated cost for this stage is $15.5 million inclusive of the capital costs for constructing the boiler house extension. Stage 2, at an additional estimated capital cost of $19.5 million, will extend the life of mine to enable the resource from the Western dumps to be leached and processed. The programme of works for Stage 1 will be completed in Q2 2015 using the same CAML construction personnel that worked on the construction of the current SX-EW plant.

Stage 1

An additional 5.6MW of boiler capacity was commissioned on schedule in October 2014 to facilitate increased production throughout the winter months. The total capital cost of building and commissioning the boiler was $1.4 million. In June 2014, the Company commenced the construction programme for the expansion of the existing SX-EW plant. This involves the addition of a new mixer settler unit (SX), a new 5,000 tonne per annum capacity Electro-Winning (EW) facility and an upgrade to the existing electrical sub-station. As at 31 December 2014, work was progressing well and we remain on target for commissioning in Q2 2015.

Stage 2

The Stage 2 expansion will only commence upon receipt of all the necessary approvals and mining permits required from the State to allow leaching operations on the Western dumps. All the required applications have been submitted and we hope to have obtained all approvals by Q2 2015.

The Stage 2 expansion programme's focus is on the extraction of copper from the Western dump area. Exploitation of the Western Kounrad resource area will be facilitated by the construction of two 12.6km pipelines from the expanded SX-EW plant in the East to the Western dumps. This will allow for the transportation of pregnant leach solution (PLS) and raffinate solution from the Western leaching areas to the plant for processing. The Stage 2 expansion plans also involve the construction of three additional boilers at the Western leaching area together with solution collection and pumping facilities. The anticipated cost is approximately $19.5 million, phased from late 2015 and completion is planned for 2017.

Growth Opportunities

Copper Bay Project - Chile

During 2014, we progressed the Copper Bay project having acquired a 50% shareholding in November 2013. As at 31 December 2014, significant progress had been made on the in-house developed preliminary feasibility study (PFS) although a number of technical aspects required additional work.

At the time of CAML's investment there was no approved JORC resource despite several previous drilling campaigns and resource calculations prepared by former owners. Consequently, a drilling campaign was planned in consultation with Wardell Armstrong International (WAI) and conducted in August 2014 during which a total of 136 holes were drilled to an average depth of 9.2m. The analysis of the data has enabled WAI to commence preparation of a JORC compliant resource statement.

During much of the year the focus of the PFS work has been on assessing the most efficient means of extracting the copper from the resource. The preferred process route is for the tailings to be reclaimed by dredging from the beach zone, with the reclaimed solids then pumped to the processing plant for copper recovery through an acid leaching process followed by froth flotation. The treated waste tailings from the plant will then be either returned to the beach zone as coarse backfill or sent to a tailings management facility (TMF) as fine tailings.

During this period emphasis was placed on metallurgical testing using the WAI laboratory facilities in Cornwall. The results from the test programme have indicated that a copper recovery in the range of 70% to 73% can be achieved using the process mentioned above. Additional testing performed on a 7 tonne bulk sample taken from the 2014 drilling programme is under consideration as part of the next stage of the project.

These additional aspects of the work remain ongoing, together with the environmental and social studies, and it is anticipated that the PFS will be completed in Q2 2015. A decision whether to then invest a further $3 million to increase CAML's stake to 75%, in line with the Investment and Shareholder's Agreement, will be made shortly thereafter.

Other Opportunities

Elsewhere, we continue to look for additional business opportunities to enhance the value of the CAML portfolio. Whilst the expansion at Kounrad and the 100% ownership of the project will increase the cash generation capabilities of the Company, the CAML Board is keen to further increase returns to shareholders by taking advantage of the Group's balance sheet strength and technical skills.

During the year the Company established a formal business development function in its management structure to establish and execute an accretive growth strategy. Underlying these objectives is to ensure solid shareholder value by targeting only those opportunities that will deliver profitable production and be accretive to our shareholders.

CAML's management has well-established expertise in project delivery, mining and processing operations, which together with the financial strength afforded by strong cash flow and a debt-free balance sheet, will allow the Company to assess a broad range of opportunities.

CAML will assess opportunities in Kazakhstan as well as Europe, Africa and the Americas. Although business development activities are constant, there are currently no transactions in process.

Outlook

During 2014 the copper price fell by 18% and a further reduction in prices was seen in January 2015. Indeed, by the end of January 2015 copper prices had fallen to a five and a half year low of approximately $5,505 per tonne.

Whilst such price reductions are not ideal they are also outside of our control. Consequently, we will focus our efforts on what we can control and strive to maintain our low cash costs of production and meet our production target for 2015 of 13,000 tonnes of copper. Delivery on time and within the capital budget of the expansion programme at Kounrad is a primary objective for the year.

Alongside all of the above operational objectives we will continue to actively pursue additional business opportunities that may arise from the challenging nature of the commodities market as well as making some key decisions on the future of the Copper Bay project in Q2 2015.

Nick Clarke

Chief Executive Officer

FINANCIAL REVIEW

2014 has proved to be another profitable year for CAML in a difficult market. Our continued focus on the low cost of operations at Kounrad and our increased ownership to 100% of the project has further strengthened the balance sheet.

Summary:

· Gross revenue for the year increased by 42% to $76.6 million (2013: $54.1 million)

· Operating profit for the year increased by 34% to $37.5 million (2013: $27.9 million)

· Unit operating costs at Kounrad remain competitive

- C1 cash costs of $1,566 per tonne (2013: $1,600), equates to $0.71/lb (2013: $0.73/lb)

- Fully inclusive cost of $3,642 (2013: $3,147), equates to $1.65/lb (2013: $0. $1.43/lb)

· One-off gain in the period of $33.0 million as a result of the completion of the Kounrad Transaction

· Cash balances as at 31 December 2014 of $46.3 million (2013: $44.5 million)

· Proposed 2014 final dividend of 7.5 pence per share - making 12.5 pence for the full year (2013: 9 pence), a 39% increase.

Overview

During 2014 the Company completed the Kounrad transaction and became the 100% owner of the Kounrad Project. The continued strong operational performance of the project and the associated low costs of production, resulted in strong cash flows for the Group. Cash generated from operations increased to $47 million (2013: $41 million) for the year of which $17.9 million was returned to shareholders as dividend and a further $11 million was invested back into the project.

Financial Performance - Group vs Kounrad Project		Project and Reported 2014 $'000		Reported 2013 $'000		Project 2013 $'000
Gross Revenues		76,561		54,090		76,024
Cost of Producing Copper Cathode		9,381		6,047		8,479
Mineral Extraction Tax		4,431		3,070		4,383
Selling Costs		3,667		2,964		4,200
Total C1 costs		17,479		12,082		17,062
Local Administrative expenses		3,123		2,494		3,751
Corporate Overheads		8,637		7,068		7,068
Total Costs		29,239		21,643		27,880
Group EBITDA		47,322				48,144
Depreciation and Amortisation		11,412		4,546		5,734
Excluded Above		(1,600)		(13)
Operating Profit		37,510		27,913

	2014 $ per tonne		2014 $ per lb		2013 $ per tonne		2013 $ per lb
C1 Unit Costs	1,566		0.71		1,600		0.73
Depreciation	1,022		0.46		538		0.24
Local Administrative Expenses	280		0.13		352		0.16
	2,868		1.30		2,489		1.13
Corporate Overheads	774		0.35		663		0.30
Fully Absorbed unit costs	3,642		1.65		3,152		1.43

Acquisition of 100% of the Kounrad Project

As previously mentioned, on 23 May 2014 the Kounrad transaction was completed with Mr Rakishev resulting in the Group owning 100% of the Kounrad project. Accordingly, the Group accounted for the increased ownership of the Kounrad project by de-recognising its previous interests held and recognising the fair value of the assets and liabilities acquired at the time of completion.

This resulted in an uplift to the asset values of $54.0 million and a one-off gain for the year of $33.0 million (2013: $27.8 million). There was an additional depreciation and amortisation charge during 2014 of $6.6 million as a result of the uplift to the asset values (2013: $1.3 million).

Details of the Kounrad Transaction and business combination accounting treatment are contained in note 21 of the financial information.

Income Statement

The Group operating profit for the 12 month period was $37.5 million (2013: $27.9 million) an increase of 34%. As mentioned above, a one off exceptional gain from the completion of the Kounrad Transaction boosted the Group's profit for the year from continuing operations to $59.7 million (2013: $48.6 million).

Losses from discontinued operations reduced to $0.3 million (2013: $14.1 million) following the full write down of all the Mongolian assets during 2013.

The resulting Group profit for the year was $59.5 million (2013: $34.5 million) which resulted in earnings per share of 56.04 cents (2013: 38.89 cents) or 54.91 cents (2013: 37.36 cents) on a fully diluted basis.

Revenue

10,687 (2013: 10,500) tonnes of copper cathode were sold to Traxys as part of the Company's offtake arrangements at Kounrad and a further 476 (2013: 189) tonnes were sold locally. The Group achieved an average selling price of $6,794 (2013: $7,114) per tonne and this generated reported gross revenues for the Group of $76.6 million (2013: $54.1 million).

The offtake arrangement with Traxys is to sell a minimum of 90% of its product through to 31 December 2015. As part of this arrangement, Traxys takes the goods at the SX-EW plant at Kounrad and is then responsible for transporting the goods to the end customer.

The costs of marketing, distribution and selling associated with this arrangement are borne by the Group at an agreed fixed fee. During the start of 2014 the fixed fee was renegotiated with Traxys from $350 to $320 per tonne of copper shipped.

The Group reports both a gross revenue and net revenue line which reflects the offset of the fixed fee from the price of the copper achieved.

Costs of Production

The Group commenced production of copper cathodes in April 2012. The cathodes are produced by the SX-EW plant at Kounrad which is owned and operated by Kounrad Copper Company LLP. Given the changes in the business over the past two years as a result of the Kounrad Transaction, comparisons between the 2013 and 2014 reported statutory numbers can be difficult to interpret. A more meaningful analysis of the reported revenues and costs can be obtained in the table above.

The reported cost of sales for the year were $25.1 million (2013: $13.8 million). This amount consists of the costs associated with the production of copper cathodes, the associated mineral extraction tax levied by the government and the depreciation and amortisation charges.

The costs related to the physical production of copper cathodes are the production labour, reagents and electricity, plus any other SX-EW site related cost. These costs amounted to $9.4 million (2013: $6.1 million). On a project basis, the equivalent comparable cost in 2013 was $8.5 million which indicates an 11% increase. This increase was primarily due to increased production and higher power and production payroll costs at Kounrad.

Mineral Extraction Tax is charged by the Kazakhstan authorities at the rate of 5.7% on the value of the metal recovered and during the year this amounted to a further cost of $4.4 million (2013: $3.1 million). On a project basis, the equivalent comparable cost in 2013 was also $4.4 million.

During the year depreciation and amortisation charges amounted to $11.4 million (2013: $4.6 million). This includes depreciation and amortisation charges of $6.6 million (2013: $1.3 million) as a result of the fair value accounting for the acquisition of the additional 40% share in the Kounrad project. Again on a project basis, the equivalent comparable charge in 2013 was $5.7 million indicating an increase year on year of $5.7 million or 100%.

The ongoing annual depreciation and amortisation charges are expected to remain at approximately the same level in future years but are always subject to future periodic reviews of the Group's depreciation policy.

Distribution and Selling Costs

The major portion of the sales and distribution costs consist of the buyers fees paid to Traxys as part of the offtake agreements as noted above. During 2014, the Company incurred costs of $3.7 million (2013: $3.0 million) and at project level the equivalent comparable 2013 costs were $4.2 million. The 12% reduction in the year at project level is primarily due to lower negotiated fees with Traxys for the delivery of copper.

Administrative Expenses

During 2014, the Group employed an average of 46 staff (2013: 40) at Kounrad to oversee the technical and commercial management of the operations in Kazakhstan together with a small office headquarters in London of 8 staff including the Directors (2013: 7). Group administrative expenses for the year are $11.8 million (2013: $9.6 million) reflecting the growth of the Group during the period.

Unit Costs

The Group's C1 cash costs of production remains in the lowest quartile on the industry cost curve at $1,566 per tonne throughout the year (2013: $1,600) or $0.71/lb (2013: $0.73/lb). This represents a 3% decrease year on year due a combination of strong management controls and the devaluation of the local Kazakhstan currency by 20% in February 2014. Given that the Group currently only has one significant project, it seems reasonable to also report the Group's unit cost base on a fully inclusive basis. The Group's fully inclusive unit costs are $3,642 per tonne (2013: $3,152) or $1.65/lb (2013: $1.43/lb). The main increase at the fully inclusive level comes from increased depreciation and amortisation charges in 2014 as a result of the fair value accounting for the acquisition of the additional 40% share in the Kounrad project.

Balance Sheet

As a result of the completion of the Kounrad Transaction there has been a significant uplift to the Group's asset base during 2014 to $216.3 million (2013: $161.5 million).

Following the acquisition of the remaining 40% in the subsoil user licence, intangibles assets increased to $81.6 million (2013: $16.7 million) including a fair value uplift of $54.0 million and additional goodwill arising on the transaction of $11.0 million (2013: $9.3 million).

During 2014, there were additions to property, plant and equipment of $11.3 million (2013: $1.9 million). The majority of this spend was incurred on construction work at Kounrad for the SX-EW plant expansion.

At 31 December 2014, non-current trade and other receivables were $6.4 million (31 December 2013: $17.1 million). The large reduction is a consequence of the change from joint operation accounting to 100% consolidation of the Kounrad entities which resulted in the removal of the amounts recoverable from related parties (31 December 2013: $11.7 million).

The outstanding balance of $6.4 million (2013: $5.4 million) represents the amount owed to the Group by the Kazakhstan authorities for recoverable VAT. The amount has been audited by the tax authorities on a number of occasions. The conclusion from the authority's audit work was that the VAT amount claimed has been determined correctly and was supported by the required documentary evidence. Despite this, the amount remained unpaid as at 31 December 2014.

The Group is working closely with its advisors and local partners to recover the outstanding VAT. The planned means of recovery will be through a combination of the local sales of cathode copper to effectively offset VAT liabilities and by a successful appeal to the authorities. Following an unsuccessful appeal in 2014, a further appeal was lodged in January 2015 by the local tax advisors and the final outcome may not be known for a further 12 months. During 2014, 476 tonnes of copper were sold locally (2013: 189 tonnes).

At 31 December 2014, current trade and other payables were $4.3 million (31 December 2013: $11.9 million). The large decrease is a consequence of $8.1 million of 2013 corporate income tax paid in April 2014. During 2014, instalment payments of $8.5 million were paid towards the 2014 corporate income tax liability and at 31 December 2014 approximately $0.8 million remained outstanding. The deferred tax liability has increased to $20.6 million (31 December 2013: $9.7 million) and this relates primarily to the completion of the Kounrad transaction during 2014.

Significant changes to equity occurred during the period as a direct consequence of the completion of the Kounrad transaction and the subsequent issue of 21,211,751 Ordinary Shares to Mr Kenges Rakishev on 23 May 2014 as consideration for the transaction. On 23 July 2014 the Company allotted and issued 3,500,000 Ordinary Shares to the trustee of the Central Asia Metals Limited Share Trust (the Employee Benefit Trust). These Ordinary Shares were issued to satisfy current awards granted under the Company's Employee Share Plans together with any future awards that may be granted by the Company.

Cash Flows

During the year the Group generated $47.2 million (2013: $41.1 million) from operations which resulted in the Group's cash balances increasing to $46.3 million (2013: $44.5 million) as at 31 December 2014.

The return of $17.9 million of funds (2013: $19.7 million) to shareholders through dividends was the main outflow of cash during the year within the Group.

As mentioned previously, $16.6 million of corporate income tax was paid during 2014. This included $8.1 million of 2013 corporate income tax paid in April 2014 and payments of $8.5 million towards the 2014 corporate income tax liability.

The Group purchased property, plant and equipment of $11.0 million (2013: $2.5 million) of which $1.4 million (2013: nil) was in relation to the commissioning of the boiler at Kounrad and $8.0 million (2013: nil) in relation to the Stage 1 SX-EW expansion programme. The remaining balance of $1.6 million (2013: $2.5 million) was in relation to sustaining capex at Kounrad.

Foreign Exchange

The Group operates overseas and is exposed to foreign currency movements. During 2014, the Kazakhstan Tenge devalued by almost 20%. Given that the Group's operations in Kazakhstan generate their income in US dollars through the export of copper, the immediate impact of the devaluation in 2014 and of any future devaluation should be positive in relation to the Group's cost base in Kazakhstan. It is estimated that approximately 60% of the cost base in Kazakhstan is denominated in Kazakhstan Tenge.

The Board will continue to monitor the situation and respond accordingly should a further devaluation occur. During 2014, the Board's response was to increase salaries for staff in the country by 10%.

The Group does not keep large amounts of cash in Kazakhstan Tenge and as at 31 December 2014 held the US dollar equivalent of $0.4 million (2013: $0.6 million). During 2014, the Group reported a $1.9 million foreign exchange gain (2013: $0.2 million), relating to the transactional gains of foreign currency assets and liabilities at the reporting date.

Copper Price

During 2014, the copper price came under pressure and fell by 18% over the course of the year. Indeed, this reduction in copper prices was exacerbated in early January 2015 by a further reduction in copper prices. Despite these reductions, the Group remains profitable due to the low costs of production at Kounrad.

The Group policy has always been to sell the cooper at 'spot' prices in line with the contractual conditions associated with the offtake arrangements. A review of this policy during the year by the Board concluded that, whilst such an approach is still felt to be appropriate for the Group due to the lack of any debt financing and the low costs of production, the ability of the management team to respond to movements in the copper price was considered appropriate.

Consequently, the Board has approved a minor change to the Group's Treasury policy that allows limited hedging up to a maximum of 30% of the Group's rolling 12-month production. It is felt that this policy would allow management to combine the benefits of an exposure to the copper price for its shareholders whilst also facilitating the ability for management to put in place limited hedging to cover the cost base.

As at the time of writing this report no hedges were in place.

Dividend

As part of these annual results, the Board has the intention to propose a 7.5 pence per Ordinary Share final dividend for 2014, making a total dividend for the year of 12.5 pence (2013: 9 pence). Having raised $60 million at IPO in September 2010, this latest dividend will increase the amount returned to shareholders in dividends and share buy backs since the listing to approximately $53 million.

The Company's dividend policy is that it will return a minimum of 20% of the attributable revenues generated from the Kounrad project to shareholders. During 2014, inclusive of the proposed 2014 final dividend, the Company returned 28% of attributable revenues to shareholders (2013: 29%).

The Directors recognise that there are currently insufficient reserves available in the Company for distribution and are proposing to rectify this by completing a court approved capital reduction scheme by cancelling the Company's share premium account and transferring such reserves to retained earnings. This process is expected to become effective on or around 13 May 2015. The Company undertook a previous capital reduction scheme in 2013.

On completion of the capital reduction scheme it is expected that the 2014 final dividend will then be paid in June 2015.

Financing Growth

The total capital cost for the Kounrad expansion is estimated at $35 million phased over the next three years, including approximately $9.4 million already spent up to 31 December 2014. This expenditure is in addition to the estimated $6.5 million that will be spent on sustaining capital expenditure for the plant and Kounrad site during the three-year period.

As at 31 December 2014, the Group had $46.3 million of cash in the bank of which $33.6 million was held in London and $12.7 million in Kazakhstan to cover the expansion costs and working capital requirements in country and instalment payments of Corporate Income Tax.

The Group has no debts outstanding as at 31 December 2014 and with the cash reserves at its disposal is confident that it has sufficient funds available to finance the dividend policy in the coming years, complete the capital expansion plans at Kounrad and provide the Company with the financial flexibility to support the growth of the business.

Nigel Robinson

Chief Financial Officer

CONDENSED FINANCIAL INFORMATION

Consolidated Income Statement

for the year ended 31 December

	Group
	Note	2014 $'000	2013 $'000
Continuing operations Gross revenue	5	76,561	54,090
Revenue	5	73,141	51,483
Cost of sales	6	(25,103)	(13,778)
Gross profit		48,038	37,705
Distribution and selling costs	7	(292)	(357)
Administrative expenses	8	(11,836)	(9,562)
Other expenses		(295)	(32)
Foreign exchange rate gain		1,895	159
Operating profit		37,510	27,913
Finance income		61	17
Finance costs		(334)	(412)
Gain on re-measuring to fair value the existing interest on acquisition of control	21	33,039	27,835
Profit before income tax		70,276	55,353
Income tax	9	(10,548)	(6,712)
Profit for the year from continuing operations		59,728	48,641
Discontinued operations Loss for the year from discontinued operations		(257)	(14,149)
Profit for the year		59,471	34,492
Profit attributable to: - Owners of the parent		59,471	34,492
Earnings/(loss) per share from continuing and discontinued operations attributable to owners of the parent during the year (expressed in cents per share) Basic earnings/(loss) per share From continuing operations	10	56.28	54.85
From discontinued operations	10	(0.24)	(15.96)
From profit for the year	10	56.04	38.89
Diluted earnings/(loss) per share From continuing operations	10	55.15	52.69
From discontinued operations	10	(0.24)	(15.96)
From profit for the year	10	54.91	37.36

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent Company Income Statement or Statement of Comprehensive Income. The loss for the parent Company for the year was $9,703,595 (2013: $21,086,497).

Consolidated Statement of Comprehensive Income
for the year ended 31 December	Note	2014 $'000	2013 $'000
Profit for the year		59,471	34,492
Other comprehensive expense: Items that may be subsequently reclassified to profit or loss Currency translation differences	25	(10,291)	(722)
Other comprehensive expense for the year, net of tax		(10,291)	(722)
Total comprehensive income for the year		49,180	33,770
Attributable to: - Owners of the parent		49,180	33,770
- Non-controlling interests		-	-
Total comprehensive income for the year		49,180	33,770
Total comprehensive income attributable to equity shareholders arises from: - Continuing operations		49,437	48,702
- Discontinuing operations		(257)	(14,932)
		49,180	33,770

During 2014 the Group had no balances attributable to non-controlling interests (2013: nil). Items in the statement above are disclosed net of tax.

Statements of Financial Position

at 31 December

		Group		Company
	Note	2014 $'000	2013 $'000	2014 $'000	2013 $'000
Assets Non-current assets Property, plant and equipment	11	74,661	77,716	159	198
Intangible assets	12	81,605	16,693	-	-
Investments		-	-	8,663	7,990
Trade and other receivables	13	6,393	17,090	-	11,216
		162,659	111,499	8,822	19,404
Current assets
Inventories		4,054	3,916	-	-
Trade and other receivables	13	3,214	1,402	30,170	30,131
Restricted cash	14	148	1,734	-	1,649
Cash and cash equivalents	14	46,144	42,774	33,644	28,932
		53,560	49,826	63,814	60,712
Assets of disposal group classified as held for sale		80	186	-	-
		53,640	50,012	63,814	60,712
Total assets		216,299	161,511	72,636	80,116
Equity attributable to owners of the parent
Ordinary Shares	15	1,121	862	1,121	862
Share premium	15	67,079	-	67,079	-
Treasury shares	15	(9,644)	(4,100)	(9,644)	(4,100)
Other reserves	16	(11,117)	44,140	-	44,966
Retained earnings		140,484	94,827	12,856	36,374
		187,923	135,729	71,412	78,102
Non-controlling interests		-	-	-	-
Total equity		187,923	135,729	71,412	78,102
Liabilities Non-current liabilities Deferred income tax liability	24	20,567	9,652	-	-
Provisions for other liabilities and charges		3,093	3,667	-	-
		23,660	13,319	-	-
Current liabilities
Trade and other payables	17	4,252	11,860	1,224	2,014
		4,252	11,860	1,224	2,014
Liabilities of disposal group classified as held for sale		464	603	-	-
		4,716	12,463	1,224	2,014
Total liabilities		28,376	25,782	1,224	2,014
Total equity and liabilities		216,299	161,511	72,636	80,116

During 2014 the Group had no balances attributable to non-controlling interests (2013: nil). Items in the statement above are disclosed net of tax.

Consolidated statement of changes in equity

for the year ended 31 December

Attributable to owners of the parent	Note	Ordinary Shares $'000	Share Premium $'000	Treasury Shares $'000	Other Reserves $'000	Retained Earnings $'000	Total Equity $'000
Balance as at 1 January 2013		862	61,431	(4,236)	4,347	8,626	71,030
Profit for the year		-	-	-	-	34,492	34,492
Other comprehensive expense - currency translation differences	16	-	-	-	(722)	-	(722)
Total comprehensive (expense)/income		-	-	-	(722)	34,492	33,770
Transactions with owners Share based payments	16	-	-	-	1,588	-	1,588
Forfeited options	16	-	-	-	(346)	-	(346)
Capital reduction	15	-	(61,431)	-	-	61,431	-
Promise of shares to be issued to Kenges Rakishev (KR) on completion of KCC acquisition	16	-	-	-	39,409	-	39,409
Dividends		-	-	-	-	(10,204)	(10,204)
Sale of Mongolian assets		-	-	-	-	482	482
Correction to treasury shares	16	-	-	136	(136)	-	-
Total transactions with owners, recognised directly in equity		-	(61,431)	136	40,515	51,709	30,929
Balance as at 31 December 2013		862	-	(4,100)	44,140	94,827	135,729
Profit for the year		-	-	-	-	59,471	59,471
Other comprehensive income - currency translation differences	16	-	-	-	(10,291)	-	(10,291)
Total comprehensive (expense)/income		-	-	-	(10,291)	59,471	49,180
Transactions with owners
Reserve transfer^*	16	-	-	-	(5,557)	5,557	-
Share based payments		-	-	-	-	1,914	1,914
Promise of shares to be issued to KR on completion of SUC acquisition	16	-	-	-	16,844	-	16,844
EBT shares granted	15	35	9,110	(9,145)	-	-	-
Ordinary shares issue to KR on completion of Kounrad transaction	15	212	56,041	-	(56,253)	-	-
Exercise of warrants	15	12	1,928	-	-	-	1,940
Exercise of options	15	-	-	3,399	-	(3,236)	163
Sale of EBT shares	15	-	-	202	-	(194)	8
Dividends		-	-	-	-	(17,855)	(17,855)
Total transactions with owners, recognised directly in equity		259	67,079	(5,544)	(44,966)	(13,814)	3,014
Balance as at 31 December 2014		1,121	67,079	(9,644)	(11,117)	140,484	187,923

* The Group and Company made a reserve transfer during 2014 to include the share option reserve as part of retained earnings as permitted by IFRS.

During 2014 the Group had no balances attributable to non-controlling interests (2013: nil).

Company Statement of Changes in Equity

for the year ended 31 December

Company	Note	Ordinary Shares $'000	Share Premium $'000	Treasury Shares $'000	Other Reserves $'000	Retained Earnings $'000	Total Equity $'000
Balance as at 1 January 2013		862	61,431	(4,236)	4,451	6,234	68,742
Loss for the year		-	-	-	-	(21,087)	(21,087)
Total comprehensive expense		-	-	-	-	(21,087)	(21,087)
Transactions with owners Share based payments	16	-	-	-	1,588	-	1,588
Forfeited options	16	-	-	-	(346)	-	(346)
Capital reduction	15	-	(61,431)	-	-	61,431	-
Promise of shares to be issued to KR on completion of KCC acquisition	16	-	-	-	39,409	-	39,409
Dividends		-	-	-	-	(10,204)	(10,204)
Correction to treasury shares	16	-	-	136	(136)	-	-
Total transactions with owners, recognised directly in equity		-	(61,431)	136	40,515	51,227	30,447
Balance as at 31 December 2013		862	-	(4,100)	44,966	36,374	78,102
Loss for the year		-	-	-	-	(9,704)	(9,704)
Total comprehensive expense		-	-	-	-	(9,704)	(9,704)
Transactions with owners
Reserve transfer^*	16	-	-	-	(5,557)	5,557	-
Share based payments		-	-	-	-	1,914	1,914
Promise of shares to be issued to KR on completion of SUC acquisition	16	-	-	-	16,844	-	16,844
EBT shares granted	15	35	9,110	(9,145)	-	-	-
Ordinary shares issue to KR on completion of the Kounrad transaction	15	212	56,041	-	(56,253)	-	-
Exercise of warrants	15	12	1,928	-	-	-	1,940
Exercise of options	15	-	-	3,399	-	(3,236)	163
Sale of EBT shares	15	-	-	202	-	(194)	8
Dividends		-	-	-	-	(17,855)	(17,855)
Total transactions with owners, recognised directly in equity		259	67,079	(5,544)	(44,966)	(13,814)	3,014
Balance as at 31 December 2014		1,121	67,079	(9,644)	-	12,856	71,412

* The Group and Company made a reserve transfer during 2014 to include the share option reserve as part of retained earnings as permitted by IFRS.

Statements of Cash Flows

for the year ended 31 December

		Group		Company
	Note	2014 $'000	2013 $'000	2014 $'000	2013 $'000
Cash flows from operating activities Cash generated from/(used in) operations	18	47,152	41,080	10,485	(6,281)
Interest paid		(58)	(190)	(11)	(9)
Income tax paid		(16,624)	(5,533)	-	-
Net cash generated from/(used in) operating activities		30,470	35,357	10,474	(6,290)
Cash flows from investing activities
Purchases of property, plant and equipment	11	(11,004)	(2,464)	(7)	(207)
Proceeds from sale of property, plant and equipment		-	9	-	-
Purchase of intangible assets	12	(115)	(5,750)	-	(50)
Investment in Kounrad project		-	-	(598)	(502)
Investment in Copper Bay project		-	-	-	(3,222)
Repayment of loan from subsidiary	23	-	-	11,270	32,360
Loans to subsidiaries	23	-	-	(135)	-
Interest received		61	17	-	-
Acquisition of subsidiary, net of cash acquired	21	327	3,293	-	-
Net cash (used in)/generated from investing activities		(10,731)	(4,895)	10,530	28,379
Cash flows from financing activities
Dividends paid to owners of the parent	20	(17,932)	(19,739)	(17,932)	(19,739)
KR payment on completion of Kounrad transaction	21	(1,432)	-	(1,432)	-
Receipt on exercise of share options	15, 16	168	-	168	-
Exercise of warrants	15	1,942	-	1,942	-
Restricted cash	14	1,586	(1,734)	1,649	(1,649)
Net cash used in financing activity		(15,668)	(21,473)	(15,605)	(21,388)
Effect of foreign exchange (losses)/ gains on cash and cash equivalents		(707)	(65)	(687)	-
Net increase in cash and cash equivalents		3,364	8,924	4,712	701
Cash and cash equivalents at the beginning of the year	14	42,795	33,871	28,932	28,231
Cash and cash equivalents at the end of the year		46,159	42,795	33,644	28,932

The notes below are an integral part of this consolidated financial information.

Notes to the Condensed Financial Information for the year ended 31 December 2014

1. General information

Central Asia Metals plc (CAML or the Company) and its subsidiaries (the Group) are a mining and exploration organisation with operations primarily in Kazakhstan and a parent holding company based in the United Kingdom.

The Group's principal business activity is the production of copper cathode at its Kounrad operations in Kazakhstan. The Group also owns various exploration projects in Mongolia which are held for sale and has an investment in a copper tailings project in Chile.

CAML is a public limited company, which is listed on AIM and incorporated and domiciled in the UK. The address of its registered office is Masters House, 107 Hammersmith Road, London, W14 0QH. The Company's registered number is 5559627.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of this consolidated financial information are set out in the 2014 Annual Report. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of Preparation of the Condensed Financial Information

The financial information set out above does not constitute the Group's statutory financial statements for the year ended 31 December 2014, but is derived from the Group's audited full financial statements. The auditors have reported on the 2014 financial statements and their reports were unqualified and did not contain statements under s498(2) or (3) Companies Act 2006. The 2014 Annual Report was approved by the Board of Directors on 27 March 2015, and will be mailed to shareholders in April 2015. The financial information in this statement is audited but does not have the status of statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The Group's consolidated financial information has been prepared in accordance with International Financial Reporting standards (IFRS) and IFRS Interpretations Committee (IFRSIC) interpretations as adopted by the European Union, and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial information has been prepared under the historical cost convention with the exception of assets held for sale which have been held at fair value. The accounting policies which follow set out those policies which apply in preparing the financial information for the year ended 31 December 2014. The Group's financial information is presented in US dollars ($) and rounded to the nearest thousand.

The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial information are explained in note 3.

Comparative results

The Group commenced production of copper cathodes on 30 April 2012. The cathodes are produced by the SX-EW plant at Kounrad which is owned and operated by Kounrad Copper Company LLP (KCC). On 21 October 2013, the ownership of KCC increased from 60% to 100% following the acquisition of 40% of KCC. Consequently, the comparative results for the year ended 31 December 2013 comprise only 60% of the revenues and costs associated with the Kounrad project for the first nine months of the year but 100% for the final three months of the year. In contrast, the results for the year ended 31 December 2014 account for 100% of the revenue and costs associated with the Kounrad project throughout the year.

The impact of the above event makes annual comparisons difficult from the annually reported numbers in several of the notes to this financial information. A more meaningful analysis of the reported revenues and costs can be obtained from the Financial Review section.

Going concern

The Group meets its day-to-day working capital requirements though its profitable operations at Kounrad. The Group has substantial cash balances as at 31 December 2014 and on the date of issue of this financial information. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the forseeable future.

The Group sells and distributes its copper cathode product primarily through an offtake arrangement with 90% of the SX-EW plant's output committed as sales for the period up until 31 December 2015.

The Group therefore continues to adopt the going concern basis in preparing its consolidated financial information. Please refer to notes 5, 14 and 17 for information on the Group's revenues, cash balances and trade and other payables.

Basis of Consolidation

Joint Venture Accounting - Kounrad Project

The Kounrad project ownership changes have taken a significant amount of time to complete. Throughout the periods of joint ownership and under the terms of the Joint Operating Agreement (JOA), both of the parties had an equal vote on all significant operational, financial and planning matters. Consequently, it was concluded that Joint Control existed over the Kounrad project and so, whilst the various transactions have been negotiated and submitted for government approval, the Kounrad project has been accounted for in the following manner;

1. The subsoil user licence operations (SUC) under Sary Kazna LLP (SK) are classified as a jointly controlled asset. The assets, liabilities, income and expenditure have been proportionately consolidated on a 60:40 basis.

2. All of the operations conducted under Kounrad Copper Company LLP (KCC) have also been proportionately consolidated on a 60:40 basis as it has been a jointly owned legal entity.

The Kounrad transaction resulted in CAML obtaining control over the Kounrad project in two transactions:

1. The first transaction (KCC) was effected in October 2013 by CAML's wholly owned subsidiary, CAML Kazakhstan BV (CAML BV), acquiring the remaining 40% share capital of KCC.

2. The second and final part of the transaction (SUC) was effected in May 2014 by CAML's wholly owned subsidiary SK acquiring the remaining 40% economic interest in the SUC.

Following the completion of the Kounrad Transaction on 23 May 2014, the Group now owns 100% of the Kounrad project and during the year ended 31 December 2014 has accounted for 100% of the income and expenditure together with 100% of the assets and liabilities of the legal entities associated with the Kounrad project.

Business Combinations - Kounrad Project

The completion of both transactions, being the acquisition of the remaining 40% of KCC and the SUC, resulted in a change in control of the Kounrad project from joint control to control by CAML. As such an IFRS 3 Business Combination was deemed to have taken place upon completion.

Details of the accounting treatment for the business combination are contained in note 21.

3. Critical accounting estimates and judgments

The Group has five key areas where critical accounting estimates and judgements are required that could have a material impact on this financial information:

Impairment

As mentioned above estimates are required periodically to assess assets for impairment. These estimates will incorporate the expected future commodity prices, estimates of the ore reserves and projected future costs of development and production. This includes an assessment of the carrying values of assets held for sale.

The carrying value of the goodwill generated by accounting for the business combination of the Group acquiring an additional 40% in the Kounrad project requires an annual impairment review. This review will determine whether the value of the goodwill can be justified by reference to the carrying value of the business assets and the future discounted cash flows of the business.

Mineral reserves and resources

The major value associated with the Group is the value of its mineral resources. The value of the resources have an impact on the Group's accounting judgements in relation to depreciation and amortisation, impairment of assets and the assessment of going concern. These resources are the Group's best estimate of product that can be economically and legally extracted from the relevant mining property. The Group's estimates are supported by geological studies and drilling samples to determine the quantity and grade of each deposit.

Significant judgement is required to generate an estimate based on the geological data available. Ore resource estimates may vary from period to period. This judgement has a significant impact on impairment consideration and the period over which capitalised assets are depreciated within this financial information.

The resources have been independently verified by Wardell Armstrong International and were classified as JORC Compliant in 2013.

Decommissioning and site rehabilitation estimates

Provision is made for the costs of decommissioning and site rehabilitation costs when the related environmental disturbance takes place. Provisions are recognised at the net present value of future expected costs using a discount rate of 8.65% (2013: 6.40%) representing the risk free rate (pre-tax) for Kazakhstan.

The provision recognised represents management's best estimate of the costs that will be incurred, but significant judgement is required as many of these costs will not crystallise until the end of the life of the mine. Estimates are reviewed annually and are based on current contractual and regulatory requirements and the estimated useful life of mines. Engineering and feasibility studies are undertaken periodically; however significant changes in the estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period.

Business combination

The Kounrad Transaction resulted in the Group acquiring the 40% of the joint venture project at Kounrad that it did not previously own. The assessment of the fair value uplift of the underlying assets acquired and the treatment of the two legal entities involved in the project required a high degree of judgement.

The assessment of the overall project as a business combination for both legal entities, Kounrad Copper Company LLP and Sary Kazna LLP, and the impact on that judgement caused by the different stages of completion required a careful review of the overall transaction as opposed to the specific nature of the assets being acquired.

The fair value uplift of the assets acquired as a result of that judgement and the resulting accounting treatment have resulted in a significant change to both the income statement and the statement of financial position of the business. The details are explained in note 21.

VAT recoverability

The Group's main receivable is the VAT incurred on purchases within Kazakhstan as explained in note 13. As at 31 December 2014 a total of $6,392,885 (2013: $5,436,475) of VAT receivable was still owed to the Group by the Kazakhstan authorities. The Group still remains confident about its prospects to recover this outstanding debt and is working closely with its advisers and local partners to achieve this.

The planned means of recovery will be through a combination of the local sales of cathode copper to effectively offset VAT liabilities and by a successful appeal to the authorities. Following an unsuccessful appeal in 2014, a further appeal was lodged in January 2015 by the local tax advisers and the final outcome may not be known for a further 12 months. As a result of the above and the uncertainty regarding timing, the Group has classified the VAT receivable as non-current.

4. Segmental information

The Board is the Group's chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the Board for the purposes of allocating resources and assessing performance. The Board considers the business from a geographic prospective.

As at 31 December 2014, the Group only had one operating and reporting segment consisting of an SX-EW copper plant at Kounrad in Kazakhstan. The head office in London, where the Group operations are controlled, and Copper Bay project (Chile), being an exploration asset in its early stages, do not represent separate operating and reporting segments.

Previously reported segments within the Group, namely all the Mongolian operations, are classified as held for sale as at 31 December 2014. In June 2014, Bayanresources LLC, a Mongolian incorporated company owned 70% by the Group was sold for nil consideration.

The Board assesses the performance of the Kounrad project based on a number of key operational and financial measures which relate to copper production output, revenues from the sales of copper and the overall costs of producing the copper. All capital related expenditure at the project is also closely monitored and controlled.

The segmental results for the year ended 31 December 2014 are as follows:

	2014 $'000	2013 $'000
Gross revenue	76,561	54,090
Traxys buyers' fees	(3,420)	(2,607)
Revenue	73,141	51,483
Kounrad EBITDA	55,960	39,486
Unallocated costs including corporate	(8,638)	(7,068)
Group continuing operations EBITDA	47,322	32,418
Gain on re-measuring to fair value the existing interest on acquisition of control	33,039	27,835
Depreciation and amortisation	(11,412)	(4,632)
Exchange rate differences gain	1,895	159
Other expenses, net	(295)	(32)
Finance income	61	17
Finance costs	(334)	(412)
Profit before income tax	70,276	55,353
Income tax	(10,548)	(6,712)
Profit for the year from continuing operations	59,728	48,641
Loss from discontinued operations	(257)	(14,149)
Profit for the year	59,471	34,492

The total production at Kounrad for 2014 was 11,136 tonnes (2013: 10,509 tonnes) whilst the total quantity of copper sold was slightly higher at 11,163 tonnes (2013: 10,689 tonnes). The average price achieved from the sale of copper was $6,794 per tonne (2013: $7,114 per tonne).

EBITDA is a non-IFRS financial measure. CAML calculates EBITDA as profit or loss for the year excluding the following items:

· Income tax expense;

· Finance income and expense;

· Depreciation and amortisation; and

· Discontinued operations; and Gain on re-measuring to fair value and other income or expenses.

EBITDA is intended to provide additional information to investors and analysts. It does not have any standardised meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently.

A reconciliation between net profit for the year and EBITDA is presented below:

	2014 $'000	2013 $'000
Profit for the year	59,471	34,492
Plus/(less):
Gain on re-measuring to fair value the existing interest on acquisition of control	(33,039)	(27,835)
Depreciation and amortisation	11,412	4,632
Exchange rate differences gain	(1,895)	(159)
Other expenses, net	295	32
Finance income	(61)	(17)
Finance costs	334	412
Income tax expense	10,548	6,712
Loss from discontinued operations	257	14,149
Group continuing operations EBITDA	47,322	32,418
Unallocated costs including corporate	8,638	7,068
Kounrad EBITDA	55,960	39,486

Group segmental assets and liabilities for the year ended 31 December 2014 are as follows:

	Segmental assets		Segmental liabilities
	31 Dec 14 $'000	31 Dec 13 $'000	31 Dec 14 $'000	31 Dec 13 $'000
Kounrad - Kazakhstan	173,154	130,473	(26,688)	(23,165)
Assets held for sale - Mongolia	80	186	(464)	(603)
Unallocated including UK corporate	43,065	30,852	(1,224)	(2,014)
Total	216,299	161,511	(28,376)	(25,782)
5. Revenue Group			2014 $'000	2013 $'000
Main plant International customers			73,532	53,197
Domestic customers			3,029	796
			76,561	53,993
Pilot plant
Domestic customers			-	97
			-	97
Total Gross Revenue			76,561	54,090
Less: Traxys buyers' fees			(3,420)	(2,607)
Revenue			73,141	51,483

The Group sells and distributes its copper cathode product primarily through an offtake arrangement with Traxys. The offtake arrangements are for a minimum of 90% of the SX-EW plant's output for the period up until 31 December 2015. The copper cathodes are delivered from the Kounrad site by rail under an FCA (Incoterms 2010) contractual basis and delivered to the end customers in Turkey. As part of the offtake arrangements, the Group sells the copper cathodes at a price linked to the London Metal Exchange (LME) copper price based on an agreed quotational period.

The costs of delivery to the end customers have been effectively borne by the Group through means of an annually agreed buyer's fee which is offset from the selling price (note 7).

During 2014 the Group sold 10,687 tonnes (2013: 10,500 tonnes) of copper through the offtake arrangements. Some of the copper cathodes are also sold locally and during 2014 a total of 476 tonnes (2013: 189 tonnes) were sold to local customers.

6. Cost of sales

Group	2014 $'000	2013 $'000
Main plant
Mineral extraction tax	4,431	3,070
Reagents and materials	5,041	3,192
Depreciation and amortisation	11,291	4,546
Employee benefit expense	3,321	2,021
Consulting and other services	1,019	835
	25,103	13,664
Pilot plant	-	114
Total	25,103	13,778
7. Distribution and selling costs Group	2014 $'000	2013 $'000
Transportation costs	15	123
Employee benefit expense	80	60
Taxes and duties	52	45
Depreciation and amortisation	45	37
Materials and other expenses	100	92
	292	357

The above distribution and selling costs are those incurred at the Kounrad site in addition to the costs associated with the offtake arrangements. Note 5 refers to the costs associated with the offtake arrangements with Traxys.

8. Administrative expenses

Group	2014 $'000	2013 $'000
Employee benefit expense	5,848	4,459
Share based payments	1,914	1,588
Consulting and other services	1,527	1,522
Office related costs	1,445	1,087
Taxes and duties	1,026	857
Depreciation and amortisation	76	49
Total from continuing operations	11,836	9,562
Total from discontinued operations	249	348
Total	12,085	9,910

9. Income tax

	Group		Company
	2014 $'000	2013 $'000	2014 $'000	2013 $'000
Current tax:
Current tax on profits for the year	10,588	6,778	-	-
Total current tax	10,588	6,778	-	-
Deferred tax (note 24)	(40)	(66)	-	-
Income tax expense	10,548	6,712	-	-

UK corporate income tax is calculated at 21.5% (2013: 23.25%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

	Group
	2014 $'000	2013 $'000 restated
Profit before taxation and discontinued operations	70,019	41,204
Tax calculated at domestic tax rates applicable to profits in the respective countries	13,858	9,362
Tax effects of:
Gain on re-measuring to fair value to existing interest on acquisition of control	(7,103)	(6,472)
Expenses not deductible for tax purposes	2,771	2,856
Tax losses for which no deferred income tax asset was recognised	1,592	966
Utilisation of previously unrecognised tax losses	(570)	-
Income tax expense	10,548	6,712

From 1 April 2014, the main UK Corporation tax rate reduced from 23% to 21%. Further reductions in the main tax rate to 20% from 1 April 2015 have been announced.

The rate reductions were substantively enacted on 3 July 2013 and have been reflected in the calculation of deferred tax at the statement of financial position date.

10. Earnings/(loss) per share

(a) Basic

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of the Company by the weighted average number of Ordinary Shares in issue during the year excluding Ordinary Shares purchased by the Company and held as treasury shares (note 15).

	2014 $'000	2013 $'000
Profit from continuing operations attributable to owners of the parent	59,728	48,641
Loss from discontinued operations attributable to owners of the parent	(257)	(14,149)
Total	59,471	34,492
Weighted average number of Ordinary Shares in issue	106,126,062	88,681,029

	$ cents	$ cents
Earnings/(loss) per share from continuing and discontinued operations attributable to owners of the parent during the year (expressed in $ cents per share) From continuing operations	56.28	54.85
From discontinued operations	(0.24)	(15.96)
From profit for the year	56.04	38.89

(b) Diluted

The diluted earnings/(loss) per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding after assuming the conversion of all outstanding granted share options and exercise of outstanding security warrants.

	2014 $'000	2013 $'000
Profit from continuing operations attributable to owners of the parent	59,728	48,641
Loss from discontinued operations attributable to owners of the parent	(257)	(14,149)
Total	59,471	34,492
Weighted average number of Ordinary Shares in issue	106,126,062	88,681,029
Adjusted for
- Share options	2,183,927	2,439,060
- Mirabaud Securities warrants (note 15)	-	1,192,053
Weighted average number of Ordinary Shares for diluted earnings per share	108,309,989	92,312,142

Diluted earnings/(loss) per share	$ cents	$ cents
From continuing operations	55.15	52.69
From discontinued operations	(0.24)	(15.96)
From profit for the year	54.91	37.36

11. Property, plant and equipment

Group	Construction In Progress $'000	Plant and Equipment $'000	Motor Vehicles and Office Equipment $'000	Total $'000
Cost At 1 January 2013	44	21,617	863	22,524
Additions	933	617	412	1,962
Disposals	-	(160)	(43)	(203)
Transfers	(526)	483	-	(43)
Change in JV accounting	-	4,508	-	4,508
Derecognition of previously held interests¹	(44)	(16,194)	(530)	(16,768)
Acquisition of Subsidiary 100%¹	73	73,381	884	74,338
Exchange differences	(4)	(589)	(25)	(618)
At 31 December 2013	476	83,663	1,561	85,700
Additions	9,496	1,602	227	11,325
Disposals	-	(1,292)	(38)	(1,330)
Transfers	(856)	856	-	-
Derecognition of previously held interests²	(260)	(3,510)	(231)	(4,001)
Acquisition of Subsidiary 100%²	434	6,900	385	7,719
Exchange differences	(1,607)	(6,229)	(189)	(8,025)
At 31 December 2014	7,683	81,990	1,715	91,388
Accumulated depreciation At 1 January 2013	-	1,926	311	2,237
Provided during the year	-	3,937	195	4,132
Disposals	-	(210)	(29)	(239)
Change in JV accounting	-	1,336	-	1,336
Derecognition of previously held interests¹	-	(803)	(105)	(908)
Acquisition of Subsidiary 100%¹	-	1,338	175	1,513
Exchange differences	-	(79)	(8)	(87)
At 31 December 2013	-	7,445	539	7,984
Provided during the year	-	9,307	169	9,476
Disposals	-	(778)	(58)	(836)
Derecognition of previously held interests²	-	(1,315)	(169)	(1,484)
Acquisition of Subsidiary 100%²	-	2,192	281	2,473
Exchange differences	-	(851)	(35)	(886)
At 31 December 2014	-	16,000	727	16,727
Net book value at 1 January 2014	476	76,218	1,022	77,716
Net book value at 31 December 2014	7,683	65,990	988	74,661

1. On completion of the KCC Transaction on 21 October 2013, the Group derecognised its previously held 60% interest and recognised its 100% interest in property, plant and equipment together with the fair value uplift associated with the transaction of $46,392,000. On completion of the whole Kounrad Transaction on 23 May 2014, the Group updated the purchase price allocation and as a result the fair value uplift increased by $1,049,798 as explained in note 21.

2. On completion of the SUC Transaction on 23 May 2014, the Group derecognised its previously held 60% interest and recognised its 100% interest at cost. There was no fair value uplift to property, plant and equipment associated with the SUC transaction.

3. There was an additional depreciation charge during 2014 of $5,345,806 (2013: $1,335,856) as a result of the fair value uplift in property, plant and equipment.

The Company had $158,916 of office equipment at net book value as at 31 December 2014 (2013: $198,119).

12. Intangible assets

Group	Goodwill $'000	Deferred Exploration and Evaluation Costs $'000	Mining Licences and Permits $'000	Computer Software $'000	Total $'000
Cost At 1 January 2013	-	6,408	1,050	57	7,515
Additions	-	260	5,476	14	5,750
Addition Goodwill (note 21)	9,278	-	-	-	9,278
Disposals	-	-	(1)	(32)	(33)
Joint Venture adjustment	-	-	33	9	42
Transfer of Bayanresources to disposal group classified as held for sale	-	(4,505)	(1,000)	-	(5,505)
Exchange differences	-	(222)	(23)	(1)	(246)
At 31 December 2013	9,278	1,941	5,535	47	16,801
Additions	-	98	-	17	115
Addition Goodwill (note 21)	11,013	-	-	-	11,013
Disposals	-	(92)	-	(11)	(103)
Derecognition of previously held interests¹	-	(1,649)	(1,947)	(16)	(3,612)
Acquisition of Subsidiary 100%¹	-	2,748	57,261	27	60,036
Exchange differences	-	(241)	(450)	(9)	(700)
At 31 December 2014	20,291	2,805	60,399	55	83,550
Accumulated amortisation At 1 January 2013	-	-	1	40	41
Provided during the year	-	52	4	12	68
Disposal	-	-	24	(26)	(2)
Change in JV accounting	-	-	1	3	4
Exchange differences	-	(1)	(1)	(1)	(3)
At 31 December 2013	-	51	29	28	108
Provided during the year	-	65	1,857	14	1,936
Disposal	-	(92)	-	(11)	(103)
Derecognition of previously held interests¹	-	(42)	(22)	(9)	(73)
Acquisition of Subsidiary 100%¹	-	70	37	15	122
Exchange differences	-	12	(51)	(6)	(45)
At 31 December 2014	-	64	1,850	31	1,945
Net book value at 1 January 2014	9,278	1,890	5,506	19	16,693
Net book value at 31 December 2014	20,291	2,741	58,549	24	81,605

1. On completion of the SUC Transaction on 23 May 2014, the Group derecognised its previously held 60% interest and recognised its 100% interest at cost together with the fair value uplift associated with the transaction of $54,015,555.

2. There was an additional amortisation charge during the year of $1,209,344 as a result of the fair value uplift in intangible assets.

As a result of the Kounrad Transaction, the Group has recognised goodwill of $20,291,000.

The Company had no intangible assets as at 31 December 2014 (2013: nil).

Impairment test for goodwill

The Group currently only has one business segment, namely the Kounrad project located in Kazakhstan which has an associated goodwill balance.

In accordance with IAS 36 'Impairment of assets' and IAS 38 'Intangible Assets', a review for impairment of goodwill is undertaken annually or at any time an indicator of impairment is considered to exist and in accordance with IAS 16 'Property, plant and equipment', a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist.

The discount rate applied to calculate the present value is based upon the real weighted average cost of capital applicable to the Cash Generating Unit (CGU). The discount rate reflects equity risk premiums over the risk-free rate, the impact of the remaining economic life of the CGU and the risks associated with the relevant cash flows based on the country in which the CGU is located. These risk adjustments are based on observed equity risk premiums, historical country risk premiums and average credit default swap spreads for the period.

The value in use (VIU) of a CGU is generally lower than its fair value less costs of disposal (FVLCD), due primarily to the fact that the optimisation of the mine plans has been taken into account when determining its FVLCD. Consequently, the recoverable amount of a CGU for impairment testing purposes is determined based on its FVLCD.

The key economic assumptions used in the review were:
- copper price $6,614 per tonne
- discount rate 8%

The carrying value of the net assets is not currently sensitive to any reasonable changes in key assumptions.

13. Trade and other receivables	Group		Company
13. Trade and other receivables	31 Dec 14 $'000	31 Dec 13 $'000	31 Dec 14 $'000	31 Dec 13 $'000
Trade receivables	6,953	5,715	377	58
Less: provision for impairment of trade receivables	(41)	(33)	-	-
Trade receivables, net	6,912	5,682	377	58
Receivables from related parties	-	11,654	29,571	41,216
Prepayments	2,695	1,156	222	73
	9,607	18,492	30,170	41,347
Less: non - current portion Trade receivables	(6,393)	(5,436)	-	-
Receivables from related parties	-	(11,654)	-	(11,216)
Current Portion	3,214	1,402	30,170	30,131

The carrying value of all the above receivables is a reasonable approximation of fair value. There are no amounts past due at the end of the reporting period that have not been impaired.

The Group amount receivable from related parties in 2013 had arisen as a consequence of the joint venture accounting treatment required at the Kounrad project and was reduced to nil during 2014 on completion of the transaction to acquire 100% of the project (note 21).

The Group's non-current receivable is the VAT incurred on purchases within Kazakhstan. As at 31 December 2014 a total of $6,392,885 (2013: $5,436,475) of VAT receivable was still owed to the Group by the Kazakhstan authorities. The Group still remains confident about its prospects to recover this outstanding debt and is working closely with its advisers and local partners to achieve this. The planned means of recovery will be through a combination of the local sales of cathode copper to effectively offset VAT liabilities and by a successful appeal to the authorities. Following an unsuccessful appeal in 2014, a further appeal was lodged in January 2015 by the local tax advisers and the final outcome may not be known for a further 12 months. As a result of the above and the uncertainty regarding timing, the Group has classified the VAT receivable as non-current.

Management's policy is to assess all trade and other receivables for recoverability on a regular basis. A provision is made where doubt exists and amounts are fully written off when information comes to light that the amounts due will not be recovered.

The Group did not have any slow moving, obsolete or defective inventory as at 31 December 2014 (2013: nil).

14. Cash and cash equivalents

	Group		Company
	31 Dec 14 $'000	31 Dec 13 $'000	31 Dec 14 $'000	31 Dec 13 $'000
Cash at bank and on hand	46,144	32,774	33,644	28,932
Short term deposits	-	10,000	-	-
	46,144	42,774	33,644	28,932
Cash at bank and on hand included in assets held for sale	15	21	-	-
Total cash and cash equivalent	46,159	42,795	33,644	28,932
Restricted cash	148	1,734	-	1,649
Total cash and cash equivalent including restricted cash	46,307	44,529	33,644	30,581

$1,649,000 of money in the restricted account was released upon the completion and payment of the final consideration of the Kounrad transaction. The remaining amount of $148,072 is held to cover SUC legislation requirements (2013: $85,324).

An amount of nil (2013: $10.0 million) was held in a short term deposit account as at 31 December 2014.

73% of the Group's cash and cash equivalents including restricted cash at the year end were held by an AA- rated bank (2013: 68.7% by an AA- bank). The rest of Group's cash was held within mix of institutions with credit rating between B to B- (2013: B to B1).

15. Share capital and premium

	Number of Shares	Ordinary Shares $'000	Share Premium $'000	Treasury Shares $'000	Total $'000
At 1 January 2013	86,165,934	862	61,431	(4,236)	58,057
Capital reduction	-	-	(61,431)	-	(61,431)
Sale of treasury shares	-	-	-	136	136
At 31 December 2013	86,165,934	862	-	(4,100)	(3,238)
Ordinary shares issue	21,211,751	212	56,041	-	56,253
Issue of EBT shares	3,500,000	35	9,110	(9,145)	-
Exercise of warrants	1,192,053	12	1,928	-	1,940
Exercise of options	-	-	-	3,399	3,399
Sales of EBT shares	-	-	-	202	202
At 31 December 2014	112,069,738	1,121	67,079	(9,644)	58,556

The par value of Ordinary Shares is $0.01 per share (2013: $0.01) and all shares are fully paid.

On 23 May 2014, on the completion of the Kounrad transaction, a total of 21,211,751 Ordinary Shares were issued to Kenges Rakishev (note 33). The shares were allocated in two tranches with one tranche of 15,336,096 Ordinary Shares at a share price of $2.57 each for the transfer of the 40% share capital of Kounrad Copper Company LLP to CAML Kazakhstan BV. The remaining 5,875,655 Ordinary Shares were issued at a share price of $2.87 each for the transfer of the 40% economic interest in the subsoil use contract to Sary Kazna LLP.

On 23 July 2014 the Company allotted and issued 3,500,000 Ordinary Shares to the trustee of the Central Asia Metals Limited Share Trust (the Employee Benefit Trust). These Ordinary Shares were issued to satisfy current awards granted under the Company's Employee Share Plans together with any future awards that may be granted by the Company.

Upon the successful completion of the Initial Public Offering (IPO) on 30 September 2010, Mirabaud Securities (MS) were granted 1,192,053 warrants. These warrants had an exercise price of 96 pence and on 30 June 2014, MS exercised a total of 260,000 for which the Company received £249,600. MS exercised their remaining 932,053 warrants on 31 July 2014 for which the Company received £894,771.

16. Other reserves Group	Share Option Reserve $'000	Shares Reserve to be Issued $'000	Currency Translation Reserve $'000	Total Group $'000
At 1 January 2013	4,451	-	(104)	4,347
Currency translation differences	-	-	(722)	(722)
Share based payments	1,588	-	-	1,588
Exercise of options	(346)	-	-	(346)
Correction of treasury shares	(136)	-	-	(136)
Promise of shares to be issued to KR on completion of KCC acquisition (note 21)	-	39,409	-	39,409
At 31 December 2013	5,557	39,409	(826)	44,140
Reserve transfer	(5,557)	-	-	(5,557)
Currency translation differences	-	-	(10,291)	(10,291)
Promise of shares to be issued to KR on completion of SUC acquisition (note 21)	-	16,844	-	16,844
Ordinary shares issued to KR on completion of Kounrad transaction (note 21)	-	(56,253)	-	(56,253)
At 31 December 2014	-	-	(11,117)	(11,117)

The $10,291,000 currency translation reserve movement (2013: $722,000) is primarily as a result of the 18.7% devaluation of the Kazakhstan Tenge from 31 December 2013 to 31 December 2014.

Company	Share Option Reserve $'000	Shares Reserve to be Issued $'000	Total Group $'000
At 1 January 2013	4,451	-	4,451
Share based payments	1,588	-	1,588
Exercise of options	(346)	-	(346)
Correction of treasury shares	(136)	-	(136)
Promise of shares to be issued to KR on completion of KCC acquisition (note 21)	-	39,409	39,409
At 31 December 2013	5,557	39,409	44,966
Reserve transfer	(5,557)	-	(5,557)
Promise of shares to be issued to KR on completion of SUC acquisition (note 33)	-	16,844	16,844
Ordinary shares issue to KR on completion of Kounrad transaction (note 21)	-	(56,253)	(56,253)
At 31 December 2014	-	-	-

Prior to the completion of the Kounrad Transaction, the shares not issued to Kenges Rakishev (KR) were classified within Shares Reserve to be issued as contingent equity consideration.

The Group and Company made a reserve transfer during 2014 to include the share option reserve as part of retained earnings as permitted by IFRS.

17. Trade and other payables

	Group		Company
	31 Dec 14 $'000	31 Dec 13 $'000	31 Dec 14 $'000	31 Dec 13 $'000
Trade payables	1,041	222	439	208
Dividends payable	-	1,012	-	1,012
Corporation tax, social security and other taxes	3,211	10,626	785	794
	4,252	11,860	1,224	2,014

The carrying value of all the above payables is equivalent to fair value.

As at 31 December 2014, the main liabilities of the Group are the Corporate Income tax liability at Kounrad for the 12 months ending 31 December 2014. The Group made a net provision for this liability of $803,940 (2013: $8,367,253) having paid an amount of $8,505,272 in advance during the year (2013: $1,302,000).

18. Cash generated from/(used in) operations

		Group		Company
	Note	2014 $'000	2013 $'000	2014 $'000	2013 $'000
Profit/(loss) before income tax including discontinued operations		70,019	41,204	(9,704)	(21,087)
Adjustments for:
Depreciation	11	9,476	4,564	46	18
Amortisation	12	1,936	68	-	-
Loss on disposal of property, plant and equipment		494	-	-	-
Foreign exchange gain/(loss)		1,887	594	850	(1,111)
Gain on re-measuring to fair value the existing interest on acquisition of control	21	(33,039)	(27,835)	-	-
Change in provision for doubtful receivables	13	8	33	-	-
Impairment of Mongolian intercompany receivables		-	-	206	13,691
Impairment of Mongolian intangible assets and investments		-	12,879	60	1,927
Share based payments		1,914	1,588	1,914	1,588
Cash settled share options and EBT shares	16	-	(482)	-	(482)
Finance income		(61)	(17)	-	(391)
Finance costs		334	581	(11)	9
Changes in working capital: Inventories		83	306	-	-
Trade and other receivables	13	(1,740)	10,444	16,314	82
Trade and other payables	17	(2,842)	(2,969)	810	(525)
Movement in provisions		(1,317)	122	-	-
Cash generated from/(used in) operations		47,152	41,080	10,485	(6,281)

19. Contingencies

The Group has disclosed a contingent liability of $159,793 (2013: nil) representing an estimate of amounts that may become payable towards research and development activities under the terms of subsoil use contract (SUC) agreement with a subsidiary of the Group.

The extent to which an outflow of funds will be required is yet to be determined and is considered to be a contingent liability.

20. Dividend per share

In line with the Company dividend policy, the Company paid $17,932,000 in 2014 (2013: $14,306,000) which consisted of a 2014 interim dividend of 5 pence per share and an annual dividend for 2013 of 5 pence per share (2013: special dividend of 3.7 pence per share and an annual dividend for 2012 of 7 pence per share).

The Directors have the intention to propose a final dividend in respect of the year ended 31 December 2014 of 7.5 pence per share at the forthcoming Annual General meeting (AGM). The Directors recognise that there are currently insufficient reserves available in the Company for distribution and are proposing to rectify this by completing a court approved capital reduction scheme by cancelling the Company's share premium account and transferring such reserves to retained earnings. This process is expected to become effective on or around 13 May 2015. The Company undertook a previous capital reduction scheme in 2013.

In September 2013 the Company declared dividends amounting to $5.3 million. Although the Company had sufficient distributable reserves to make the dividend payments, the relevant interim accounts had not been filed with the Registrar of Companies as required. Consequently payment of the dividends was a technical infringement of the Companies Act 2006.

The Directors will propose at the upcoming AGM to appropriate distributable profits of the Company to these payments of dividends and to release the relevant shareholders from any claims that the Company may have in relation to such payments. These financial statements have been drawn up on the basis that the technical infringement described above has been regularised in the manner described.

21. Business combination

The Company has been working on the completion of the acquisition of the remaining 40% of the Kounrad project since early 2012. The acquisition (collectively known as the Kounrad Transaction) consisted of two key parts;

· The first transaction involving the transfer of an additional 40% ownership of Kounrad Copper Company LLP (KCC) was completed on 21 October 2013.

· The second transaction involving the transfer of the remaining 40% economic interest in the subsoil use contract (SUC) remained outstanding as at 31 December 2013. This was completed on 23 May 2014.

On completion of the Kounrad Transaction and in line with the agreements, a total of 21,211,751 Ordinary Shares were issued to Mr Kenges Rakishev (KR) on 23 May 2014. In addition a cash payment of $1,432,047 was paid to KR on that date in line with the agreements to reflect the entitlement to dividends payable.

As a consequence of the completion of both transactions, the Group became 100% owner of the Kounrad project and, in accordance with IFRS 3 Business Combinations, recognized the acquired assets and liabilities of both KCC and the SUC based upon their fair values.

Consideration

The fair value of the 21,211,751 Ordinary Shares issued as part of the consideration for the Kounrad Transaction was determined based on the published share price of the Company on the relevant dates. In the case of KCC this was 21 October 2013 when the remaining 40% of KCC Shares were re-registered and in the case of the SUC transfer it was deemed to be 23 May 2014 when the Kounrad Transaction was finally completed and the agreed consideration paid to KR.

In addition an agreed cash consideration of $1,432,047 was paid on 23 May 2014. This was all allocated as consideration for the additional 40% shares in KCC as per the legal agreements resulting in a minor adjustment of $1,049,798 to the fair values associated with the assets and liabilities of KCC as reported at 31 December 2013.

The total purchase consideration amounted to $57,685,494 plus an adjustment for settlement of intercompany borrowings of $9,471,000.

The table below summarises the consideration paid for both KCC and the SUC together with the fair value of all the assets acquired and the liabilities assumed for both the KCC and SUC parts of the Kounrad Transaction;

Consideration	Subsoil Use Contract - 23 May 2014 $'000	Kounrad Copper Company LLP - 21 October 2013 $'000	Total $'000
Equity instrument	16,845	39,409	56,254
Cash consideration	-	1,432	1,432
Total consideration	16,845	40,841	57,686
Settlement of intercompany borrowings	9,471	-	9,471
Adjusted consideration	26,316	40,841	67,157

Recognised amounts of identifiable assets acquired and liabilities acquired 100%	Subsoil Use Contract - 23 May 2014 $'000	Kounrad Copper Company LLP - 21 October 2013 $'000	Total
Property, plant and equipment	4,196	73,875	78,071
Intangible assets	59,914	-	59,914
Inventories	554	4,075	4,629
Cash and cash equivalents	816	8,233	9,049
Trade and other receivables	2,225	35,855	38,080
Trade and other payables	(1,556)	(9,853)	(11,409)
Other liabilities and charges	(359)	(10,083)	(10,442)
Deferred tax liabilities	(10,803)	(9,488)	(20,291)
Total identifiable net assets at fair value	54,987	92,614	147,601
Derecognition of previously held interests 60%
Removal of book value	(7,064)	(32,796)	(39,860)
Removal of fair value uplift	(32,409)	(28,465)	(60,874)
Total interests acquired 40%	15,513	31,353	46,866
Purchase consideration	26,316	40,841	67,157
Provisional goodwill	10,803	9,488	20,291

Completion of the SUC Transaction

As stated above, the second transaction involving the transfer of the remaining 40% economic interest in the SUC completed on 23 May 2014. In accordance with IFRS 3 Business Combinations, the Group recognised the assets and liabilities based upon their fair values. The fair value uplift applied to the assets acquired as part of the SUC transaction has all been applied to the intangible assets of the SUC under Mining Licences and Permits resulting in an uplift of $54,015,555.

The Group recognised a gain of $32,409,333 as a result of measuring at fair value its 60% interest in the SUC held before the business combination. This gain is included in the consolidated income statement, as a line item "Gain on re-measuring to fair value the existing interests on acquisition of control", in the Group's income statement for the year ended 31 December 2014.

Amendments to provisional purchase price allocated in relation to the KCC Transaction as reported at 31 December 2013

As at 31 December 2013, the cash consideration had been apportioned to both the KCC and SUC parts of the Kounrad Transaction. This assumption was revised following a review of the detailed legal agreements associated with the transaction. Consequently, the adjustment and revised allocation of the cash consideration to the KCC part of the transaction resulted in an additional gain of $629,798 through the income statement for the year ended 31 December 2014.

As a result the Group reported a total gain through the income statement, under the line item "Gain on re-measuring to fair value the existing interests on acquisition of control", for the year ended 31 December 2014 of $33,039,131. This reported gain is in addition to the $27,835,000 gain reported by the Group in the year ended 31 December 2013 making a reported total gain for the completion of the Kounrad Transaction of $60,874,131.

This minor amendment to the allocation of the cash consideration also resulted in an additional fair value uplift associated with the property, plant and equipment of KCC. The fair value uplift reported as at 31 December 2013 was $46,392,000 giving a total on completion of $47,441,797.

Goodwill

The goodwill arising on the completion of the Kounrad Transaction amounted to $20,291,043 which includes a minor adjustment of $209,933 resulting from the reallocation of the cash consideration assigned to KCC as mentioned above. The goodwill is not deductible for tax purposes.

This is the amount of the deferred tax liability which arises on the difference between the assigned fair value of the acquired assets and liabilities and their tax base.

The acquisition costs related to the completion of the transaction in the year ended 31 December 2014 are approximately $105,161 (2013: $221,264). These have been charged to administrative expenses in the consolidated income statement.

22. Events after the reporting period

As explained in note 20, the Directors recognise that there are currently insufficient reserves available in the Company for distribution and are proposing to rectify this by completing a court approved capital reduction scheme by cancelling the Company's share premium account and transferring such reserves to retained earnings. This process is expected to become effective on or around 13 May 2015. The Company undertook a previous capital reduction scheme in 2013.

23. Related party transactions

The Group had the following related party balances and transactions during the year ended 31 December 2014. Related parties are those entities owned or controlled by the Company, which is the ultimate controlling party of the Group.

Transactions between the Company and subsidiaries

Amounts receivable based on the Kounrad Transaction	31 Dec 14 $'000	31 Dec 13 $'000
CAML Kazakhstan BV Current portion	29,571	30,000
Non-current portion	-	11,216
Total	29,571	41,216

On 21 October 2013, the transfer of the remaining 40% in Kounrad Copper Company LLC was registered. The acquisition was registered under the ownership of CAML Kazakhstan BV which is a 100% controlled subsidiary of the Company. The agreed consideration for the acquisition was 15,336,096 Ordinary Shares in the Company and the value of the 2013 interim dividend associated with those shares. The adjustment and revised allocation of the cash consideration to the KCC part of the transaction (note 21) resulted in an increase to the cash consideration and therefore the amount receivable from CAML Kazakhstan BV of $420,000. During 2014, CAML Kazakhstan BV repaid $11,270,000 to the Company (2013: nil).

As at 31 December 2014, all the intercompany loans together with all the outstanding interest receivable from both Sary Kazna LLP and Kounrad Copper Company LLP had been fully repaid to the Company.

As at 31 December 2014, $206,000 of intercompany loans and management fee receivable with the Mongolian subsidiaries had been written off during the 12 month period as part of the Group impairment testing (2013: $13,691,176).

The Company also received interest income during the year of nil (2013: $391,348) and management fee income from Sary Kazna LLP of $60,000 (2013: $60,000).

Directors' Remuneration, EBT shares and options

Directors' remuneration, including Non-Executive Directors, during the year was as follows:

Group	2014 Basic salary/fees $	2014 Annual Bonus $	2014 Benefits in kind $	2014 Total $	2013 Total $
Executive Directors:
Nick Clarke	453,122	453,122	6,115	912,359	818,917
Nigel Robinson	288,350	288,350	9,357	586,057	526,342
Howard Nicholson	288,350	288,350	3,960	580,660	519,831
Non-Executive Directors: Dr Michael Price (resigned 16 June 2014)	41,193	-	-	41,193	75,183
Nigel Hurst-Brown	82,386	-	-	82,386	70,389
Robert Cathery	65,909	-	-	65,909	54,747
Nurlan Zhakupov	65,909	-	-	65,909	74,747
Kenges Rakishev	65,909	-	-	65,909	5,214
David Swan (appointed 16 June 2014)	43,253	-	-	43,253	-
Directors' aggregate emoluments	1,394,381	1,029,822	19,432	2,443,635	2,145,370

The aggregate emoluments of the highest paid Director totalled $912,359 in 2014 (2013: $818,917). Details of the Directors' interests in the Ordinary Shares of the Company are set out in the Governance Report and below. No Director has a service agreement with the Company that is terminable on more than 12 months' notice.

Directors' EBT share awards	As at 31 Dec 2014 Number	As at 31 Dec 2013 Number
Nigel Hurst-Brown	250,543	250,543
Dr Michael Price (resigned 16 June 2014)	-	300,543
Nick Clarke	1,342,887	1,342,887
Howard Nicholson	446,715	446,715
Nigel Robinson	646,715	646,715
Total Directors' Interests	2,686,860	2,987,403

The above shares were awarded to the Directors of the Company as part of the EBT incentive scheme. All the share awards were made prior to the IPO and vested upon its successful completion.

Directors' Options awards

During 2014 the Company awarded the following New Scheme options to the Directors of the Company.

Group	2014 Number	2013 Number
Nick Clarke	299,597	110,403
Nigel Robinson	179,937	70,063
Howard Nicholson	179,937	70,063
Nurlan Zhakupov	50,000	-
Total	709,471	250,529

During 2014 the Directors exercised the following New Scheme options.

Group	2014 Number	2013 Number
Nick Clarke	400,000	-
Nigel Robinson	269,737	-
Howard Nicholson	377,764	-
Total	1,047,501	-

The number of options exercised in the table above includes the number of shares covered by such awards increased by up to the value of dividends as if these were reinvested in Company shares at the dates of payment.

Kounrad Transaction

Mr Kenges Rakishev (KR) became a major shareholder of CAML on 23 May 2014 following completion of the Kounrad Transaction. He was appointed to the CAML Board on 9 December 2013 following the completion of the first part of the transaction. As a consequence, KR is considered a related party in any future dealings he has with the Group.

KR owns 16.02% and is a Director of JSC Kazkommertsbank. The Group uses the facilities of JSC Kazkommertsbank within Kazakhstan for its normal day-to-day banking.

On 2 July 2014, the Company announced that the SDB Group LLP, an entity 100% owned and controlled by KR, a Non-Executive Director of the Company, had entered into a loan agreement whereby security over 21,211,751 Ordinary Shares of US$0.01 each in the capital of the Company (the Pledged Shares) held by KR was granted in favour of JSC CenterCredit Bank.

There is no change in KR's legal or beneficial shareholding in the Company and he continues to have an interest and voting rights in 21,211,751 Ordinary Shares. The Pledged Shares will remain subject to the restricted dealing provisions originally agreed with KR and CAML as part of the Kounrad Transaction.

The Company has obtained an undertaking from JSC CenterCredit Bank that should the security be enforced, the Company will be granted a priority right to place the shares.

As far as the Group is aware, they do not have any other dealings with companies associated with KR. As part of the obligations on KR for completing the Kounrad Transaction, he signed a relationship agreement with CAML setting out the terms of the relationship between KR and the Group.

24. Deferred income tax

Group

The movements in the Group's deferred tax assets and liabilities are as follows:

			Group
	At 1 January 2014 $'000	Acquisition $'000	Currency translation differences $'000	Credited to income statement $'000	At 31 December 2014 $'000
Other timing differences	(374)	-	58	40	(276)
Deferred tax liability on fair value adjustment (note 21)	(9,278)	(11,013)	-	-	(20,291)
Deferred tax liability, net	(9,652)	(11,013)	58	40	(20,567)
Reflected in the statement of financial position as: Deferred tax assets	-	-	-	-	-
Deferred tax liabilities	(9,652)	(11,013)	58	40	(20,567)
Deferred tax liability, net	(9,652)	(11,013)	58	40	(20,567)

			Group
	At 1 January 2013 $'000	Acquisition $'000	Currency translation differences $'000	Credited to income statement $'000	At 31 December 2013 $'000
Other timing differences	(272)	(179)	11	66	(374)
Deferred tax liability on fair value adjustment	-	(9,278)	-	-	(9,278)
Deferred tax liability, net	(272)	(9,457)	11	66	(9,652)
Reflected in the statement of financial position as: Deferred tax assets	-	-	-	-	-
Deferred tax liabilities	(272)	(9,457)	11	66	(9,652)
Deferred tax liability, net	(272)	(9,457)	11	66	(9,652)

During 2014, a deferred tax liability of $10.8 million has been recognised in respect of the SUC acquisition that occurred in the year. The net assets of SUC were recognised in the consolidated financial information at their fair values at the date of acquisition.

During 2013, a deferred tax liability of $9.3 million was recognised in respect of the Kounrad Copper Company LLP acquisition that occurred in the year. The net assets of KCC were recognised in the consolidated financial information at their fair values at the date of acquisition. The adjustment and revised allocation of the cash consideration to the KCC part of the transaction (note 21) resulted in an increase to the deferred tax liability during 2014 of $210,000.

On both parts of above transaction, the tax base of the individual assets and liabilities remains the same as the pre-acquisition tax base as the transaction is considered to be non-taxable. A taxable temporary difference arises as a result of the acquisition of the long term assets where the carrying amount is increased to fair value at the date of acquisition but its tax base remains at cost.

The deferred tax liability arising from this taxable temporary difference is recognised in the consolidated financial information to reflect the future tax consequences of recovering the long term assets recognised at fair value. The resulting deferred tax liability affects goodwill.

Where the realisation of deferred tax assets is dependent on future profits, the Group recognises losses carried forward and other deferred tax assets only to the extent that the realisation of the related tax benefit through future taxable profits is probable.

The Group did not recognise other potential deferred tax assets arising from losses of $3.7 million (2013: $2.7 million) as there is insufficient evidence of future taxable profits within the entities concerned. Unrecognised losses can be carried forward indefinitely.

At 31 December 2014, the Group had other deferred tax assets of $6.0 million (2013: $4.9 million) in respect of the exploration assets pool, depreciation, share based payments and other temporary differences which had not been recognised because of insufficient evidence of future taxable profits within the entities concerned.

There are no significant unrecognised temporary differences associated with undistributed profits of subsidiaries at 31 December 2014 and 2013, respectively.

Company

At 31 December 2014 and 2013 respectively, the Company had no recognised deferred tax assets or liabilities.

At 31 December 2014, the Company had not recognised potential deferred tax assets arising from losses of $3.3 million (2013: $2.2 million) as there is insufficient evidence of future taxable profits. The losses can be carried forward indefinitely.

At 31 December 2014, the Company had other deferred tax assets of $6.0 million (2013: $4.9 million) in respect of share based payments and other temporary differences which had not been recognised because of insufficient evidence of future taxable profits.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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2014 Full Year Results

1. General information

2. Summary of significant accounting policies

Basis of Preparation of the Condensed Financial Information

Comparative results

Going concern

Basis of Consolidation

Joint Venture Accounting - Kounrad Project

Business Combinations - Kounrad Project

3. Critical accounting estimates and judgments

Impairment

Mineral reserves and resources

Decommissioning and site rehabilitation estimates

Business combination

VAT recoverability

4. Segmental information

5. Revenue

6. Cost of sales

7. Distribution and selling costs

8. Administrative expenses

9. Income tax

10. Earnings/(loss) per share

(a) Basic

(b) Diluted

11. Property, plant and equipment

12. Intangible assets

Impairment test for goodwill

13. Trade and other receivables

14. Cash and cash equivalents

15. Share capital and premium

16. Other reserves

17. Trade and other payables

18. Cash generated from/(used in) operations

19. Contingencies

20. Dividend per share

21. Business combination

22. Events after the reporting period

23. Related party transactions

Transactions between the Company and subsidiaries

24. Deferred income tax

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