2021 Operations Update

RNS Number : 9832X

Central Asia Metals PLC

11 January 2022

 

11 January 2022

CENTRAL ASIA METALS PLC

('CAML' or the 'Company')

2021 Operations Update

Central Asia Metals plc (AIM: CAML) today provides a Q4 and full year 2021 operations update for the Kounrad dump leach, solvent extraction and electro-winning ('SX-EW') copper recovery plant in Kazakhstan ('Kounrad') and the Sasa zinc-lead mine in North Macedonia ('Sasa').

Recent Kazakhstan disturbances

The CAML Board and management team are closely monitoring the recent unrest in Kazakhstan, which currently appears to have stabilised. To date, there has been no disruption to Kounrad's operations, and 2022 copper production is in line with expectations.

2021 summary

-  Zero lost time injuries ('LTIs') at Kounrad and four LTIs at Sasa during 2021

-  2021 copper production at Kounrad above guidance range

o  14,041 tonnes produced

-  2021 zinc and lead production at Sasa marginally below guidance range

o  Zinc in concentrate production of 22,167 tonnes

o  Lead in concentrate production of 27,202 tonnes

-  Cash in the bank on 31 December 2021 of $59.2 million

-  Gross debt as at 31 December 2021 of $33.0 million (including drawn North Macedonian overdraft facilities totalling $9.6 million)

o  2021 Group corporate debt repayments of $48.4 million

2022 production guidance

-  Copper, 12,500 to 13,500 tonnes

-  Zinc in concentrate, 20,000 to 22,000 tonnes

-  Lead in concentrate, 27,000 to 29,000 tonnes

CAML production summary

Metal production (tonnes)	Q4 2021	2021	2020
Copper	3,680	14,041	13,855
Zinc	5,133	22,167	23,815
Lead	6,469	27,202	29,742

Nigel Robinson, Chief Executive Officer, commented:

"We are following closely the recent events in Kazakhstan. We can confirm that our operations at Kounrad have so far been unaffected and our 2022 copper production to date is in line with our expectations. Most importantly, our employees remain safe and well. We will of course make any necessary announcements should it become appropriate to do so.  

"We are pleased with our 2021 base metal output as, at Kounrad, we exceeded our guidance, producing over 14,000 tonnes of copper cathode into a strong pricing environment. We faced some challenges at Sasa during the year, which reinforce our decision to transition to the Cut and Fill mining method, and I am proud of our team's hard work and effort to deliver this credible, albeit below original guidance, zinc and lead production result.

"We enter 2022 in a net cash position and with robust copper, zinc and lead commodity prices. Our 2021 annual results are scheduled to be released on  29 March 2022, when our final dividend for 2021 will also be announced."

Health and Safety

There were no LTIs at Kounrad during Q4 2021 and one LTI at Sasa. While this Sasa injury was clearly a disappointment, it was a relatively minor injury, and the employee is now fully recovered. There were no medical treatment injuries ('MTIs') at either operation and therefore one Group total recordable injury ('TRI') during the quarter.

During 2021, there were zero TRIs at Kounrad and, to 31 December 2021, there has been 1,324 days since the last LTI at Kounrad. At Sasa, there were four LTIs and zero MTIs during the year, equating to four TRIs for the Company for 2021.

COVID-19 remains a risk to the welfare of CAML employees and contractors and there have been cases of the virus at both Kounrad and Sasa during the reported period. Despite this, the Company is confident that its COVID-19 procedures at both operations will be sufficient to protect the welfare of its employees, meet respective government guidance and maintain production.

Kounrad

Kounrad Q4 2021 copper production of 3,680 tonnes brings output for 2021 to 14,041 tonnes.

Copper sales during Q4 2021 were 3,854 tonnes, bringing the total for 2021 to 14,051 tonnes.

Sasa

In Q4 2021, mined and processed ore were 203,802 tonnes and 203,803 tonnes respectively, bringing the total for 2021 to 818,609 tonnes of ore mined and 830,709 tonnes of ore processed. The average head grades for the quarter were 3.00% zinc and 3.45% lead, and for the year were 3.14% and 3.52% respectively. The average 2021 metallurgical recoveries were 84.9% for zinc and 93.1% for lead.

Sasa produces a zinc concentrate and a separate lead concentrate. In Q4 2021, 10,380 tonnes of concentrate containing 49.5% zinc and 9,037 tonnes of concentrate containing 71.8% lead were produced. Total production for 2021 was 44,383 tonnes of zinc concentrate at an average grade of 49.9% and 37,893 tonnes of lead concentrate at an average grade of 71.8%. 

Challenging ground conditions coupled with an enhanced approach to underground safety risks resulted in short term reductions in flexibility of working areas, leading to a 1% shortfall in ore mined versus guidance and, in some cases, increased dilution which led to reduced zinc and lead head grades versus expected metal content.

Sasa typically receives from smelters approximately 84% of the value of its zinc in concentrate and approximately 95% of the value of its lead in concentrate. Accordingly, Q4 2021 payable production of zinc was 4,303 tonnes and of lead was 6,145 tonnes, bringing total 2021 payable production to 18,616 tonnes of zinc and 25,842 tonnes of lead.

Payable base metal in concentrate sales from Sasa in Q4 2021 were 4,432 tonnes of zinc and 6,247 tonnes of lead and for 2021 were 18,586 tonnes of zinc and 25,877 tonnes of lead.

During Q4 2021, Sasa sold 85,314 ounces of payable silver to Osisko Gold Royalties and during 2021 sold 323,849 ounces, in accordance with its streaming agreement. 

	Units	Q4 2021	2021	2020
Ore mined	t	203,802	818,609	826,421
Plant feed	t	203,803	830,709	820,215
Zinc grade	%	3.00	3.14	3.37
Zinc recovery	%	84.0	84.9	86.1
Lead grade	%	3.45	3.52	3.85
Lead recovery	%	92.0	93.1	94.3
Zinc concentrate	t (dry)	10,380	44,383	47,583
-  Grade	%	49.5	49.9	50.0
-  Contained zinc	t	5,133	22,167	23,815
Lead concentrate	t (dry)	9,037	37,893	41,289
-  Grade	%	71.8	71.8	72.0
-  Contained lead	t	6,469	27,202	29,742

2022 guidance

CAML targets 2022 Kounrad copper production of between 12,500 and 13,500 tonnes of cathode.

Prior to the 2023 transition to cut and fill mining at Sasa, which will create a safer and sustainable underground mining operation for the long term, CAML cautiously allows for continued ground support challenges in its 2022 guidance and will maintain its enhanced approach to underground safety risks.   The Company therefore targets ore mined of between 790,000 and 810,000   tonnes. This should result in zinc in concentrate production of between 20,000 and 22,000 tonnes and lead in concentrate production of between 27,000 and 29,000   tonnes. The Sasa team is also working on the development of an increased number of sub-levels to enhance flexibility. This will enable a greater number of potential working faces in the event of further support being required in some areas.

Given the Sasa Cut and Fill Project underway, CAML expects Group 2022 capital expenditure of between $28 million and $30 million, of which between $11 million and $13 million is expected to be committed to sustaining capex. Overall 2021 and 2022 Sasa Cut and Fill Project capital expenditure incorporates costs for the paste backfill plant and associated reticulation pipework, the dry-stack tailings plant and the purchase of equipment necessary to develop the Central Decline, as well as decline portal costs, that are in line with initial 2020 estimates. The Group expects additional capitalised development costs associated with progressing the decline during 2022. As the team's understanding of the factors involved in construction of an appropriate landform to store the dry tailings has advanced, CAML is also including costs for this element of the project in its capital expenditure guidance.  

Cash and debt

As of 31 December 2021, CAML had cash in the bank of $59.2 million and gross debt of $33.0 million, inclusive of drawn North Macedonian overdraft facilities totalling $9.6 million.  

For further information contact:

Central Asia Metals	Tel: [phone]
Nigel Robinson, CEO
Gavin Ferrar, CFO
Louise Wrathall, Director of Corporate Relations	[e-mail]
Peel Hunt (Nominated Advisor and Joint Broker)	Tel: [phone]
Ross Allister
David McKeown
BMO Capital Markets (Joint Broker)	Tel: [phone]
Thomas Rider
Pascal Lussier Duquette
Blytheweigh (PR Advisors)	Tel: [phone]
Tim Blythe
Megan Ray
Rachael Brooks

Note to editors:

Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper project in central Kazakhstan and 100% of the Sasa zinc-lead mine in North Macedonia.

For further information, please visit www.centralasiametals.com and follow CAML on Twitter at @CamlMetals and on LinkedIn at Central Asia Metals Plc

 

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