Interim Results and Operation

RNS Number : 5575T

Central Asia Metals PLC

30 September 2010

 



30 September 2010

CENTRAL ASIA METALS PLC

 ("CAML" or "the Company")

Interim Results for the six months to 30 June 2010

Central Asia Metals plc (AIM:CAML), a mining exploration and development company focused on base and precious metals in Central Asia, announces its interim results for the six months to 30 June 2010, along with an operational update.

Financial Highlights for H1 2010 (including post period)

·    On 30 September 2010, CAML completed its planned Initial Public Offering (IPO) on AIM raising US$60m (gross), which will be used primarily for the construction of a 10,000 tonne per annum SX-EW facility at Kounrad in Kazakhstan.

·    As part of the IPO process, CAML converted from a private to a public limited company. This conversion included the transfer of the entire share premium account of the parent company of US$54.4m to distributable reserves as at 04 August 2010.

·    In May 2010 CAML raised US$5.4m (gross) by issuing convertible loan notes.  These notes converted into equity at the IPO (5,160,833 new ordinary shares).

·    In February 2010, a $1m 'gold loan' was converted into ordinary shares.

·    CAML has no outstanding debt.  

·    Sales of cathode copper at the Kounrad pilot plant in the six months to June 30 2010 were 184.5 tonnes which generated revenue of c US$1.1m.

·    General and administrative expenses amounted to US$3.9m, which is up by 61% compared to the same period of last year due to increased consulting and IPO costs.

Operational Highlights for H1 2010 (including post period)

·    In July 2010, earthworks commenced on site at Kounrad and key personnel required for the construction and management of the project have been recruited.

·    The Tochtar (Kazakhstan) and Ereen (Mongolia) projects both have potential purchasers and are undergoing due diligence.  Management remains hopeful of selling both assets in the next six months.

·    30 year mining licences were obtained for both Ereen and Handgait in Mongolia.

·    An extended exploration licence to June 2012 was also obtained for the Alag Bayan project.

Outlook for Full Year 2010

·    CAML is planning to spend approximately US$10m on capital expenditure at Kounrad in H2 2010.  The remaining US$37m of the planned overall Kounrad capital cost of approximately US$47m will be spent completing the construction in 2011.  Earthworks will continue through to middle of November 2010 and equipment orders will be placed over the winter.

·    CAML continues to negotiate the disposal of both Ereen and Tochtar.

Operating and Financial Review

During the first six months of the year the feasibility study for the 10,000 tonne per annum SX-EW facility at Kounrad, in Kazakhstan was completed.  The results of the feasibility study were reviewed by the Board and a decision taken to raise finance prior to the IPO in order to facilitate the commencement of the construction programme in the during the summer 2010.  Consequently, US$5.4m (gross) was raised by way of convertible loan notes in May 2010.  These notes converted in to ordinary shares at a 30% discount to the IPO price on 30 September 2010.    

The Company conducted very little exploration activity during the period but managed to convert several licences at both Ereen and Handgait into 30 year mining licences.  This was achieved based on the previous exploration work and drilling that had been performed in 2009.  At Alag Bayan, the Company also managed to extend the exploration licence to 2012 based on the results of its 2009 drilling programme.

The Company's loss for the period of US$4.9m was significantly lower than that recorded in the first six months of 2009 (US$8.4m) primarily due to favourable exchange rate movements and the increased revenue from copper sales.  In the first half of the year, CAML sold 184.5 tonnes of copper cathode from the pilot scale SX-EW plant at Kounrad generating revenue of US$1.1m.   This was due to a decision in April 2009 to increase daily production at the pilot plant from 200kg to 600kg.  These favourable movements were partially offset by increased costs for professional advice associated with the fund raising activities.

In the second half of the year and following the successful IPO and fund raising of US$60m (gross) on 30 September 2010, the Company will move forward with the development of the Kounrad SX-EW plant. Ground works will continue until the onset of winter and then recommence in March 2011.   Management will be placing all the equipment orders over the winter months and finalising contracts in order to complete the construction of the facility in 2011.  Plans to further develop the exploration assets at Alag Bayan and Handgait will be considered by the Board and discussions will continue regarding the potential sale of Tochtar and Ereen.

Nigel Hurst-Brown, Chairman of Central Asia Metals, commented:

"I am delighted on the progress the CAML has made over the past six months. The successful admission of the Company's shares to trading on AIM today and the raising of US$60 million of new funding by way of a placing reinforces our commitment to developing our strategic assets.  We are excited about constructing a plant at Kounrad in order to commence production of 10,000 tonnes per annum of copper in Q4 2011. We will keep all our investors informed of the Company's forthcoming developments."

Enquiries:

Central Asia Metals plc Nick Clarke, CEO Nigel Robinson, CFO	[phone]
KPMG Corporate Finance Nominated Adviser Susan Walker	[phone]
Mirabaud Securities LLP Broker Peter Krens	[phone]
Pelham Bell Pottinger Charles Vivian Klara Kaczmarek	[phone] / [phone]

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2010

		Unaudited	Audited	Unaudited
Assets		30-Jun-10	31-Dec-09	30-Jun-09
Non-Current Assets		$	$	$
Property, Plant and Equipment		1,914,754	2,089,040	2,307,409
Intangible Assets		12,126,860	11,542,686	10,351,342
Trade and Other Receivables		622,225	603,488	1,322,846
		14,663,839	14,235,214	13,981,597
Current Assets
Inventory		233,570	275,986	242,820
Trade and Other Receivables		1,085,397	742,296	364,401
Cash and Cash Equivalents		4,236,073	1,325,088	1,043,157
		5,555,040	2,343,370	1,650,378
Assets of the disposal group classified as held for sale		4,035,911	3,646,307	4,650,966
		9,590,951	5,989,677	6,301,344
Total assets		24,254,790	20,224,891	20,282,941
Equity attributable to owners of the parent
Ordinary Shares		404,168	389,461	292,209
Share Premium		54,446,174	53,460,880	46,944,935
Treasury Shares		(1,723,588)	(1,723,416)	-
Other Reserves		6,091,226	5,044,551	1,074,839
Retained Earnings		(45,786,862)	(40,927,071)	(32,987,651)
Total Equity		13,431,118	16,244,405	15,324,332
Liabilities
Non-Current Liabilities
Provision for Liabilities and Charges		464,349	441,257	1,067,759
		464,349	441,257	1,067,759
Current Liabilities
Trade and Other Payables		1,476,888	1,460,604	451,815
Borrowings		7,792,857	1,000,000	228,291
		9,269,745	2,460,604	680,106
Liabilities of disposal group classified as held for sale		1,089,578	1,078,625	3,210,744
		10,359,323	3,539,229	3,890,850
Total Liabilities		10,823,672	3,980,486	4,958,609
Total Equity and Liabilities		24,254,790	20,224,891	20,282,941

INTERIM CONSOLIDATED INCOME STATEMENT (Unaudited)

for the six months period ended 30 June 2010

		Six months ended 30 June
		2010	2009
Continuing operations		$	$
Revenue		1,179,002	559,121
Cost of Sales		(863,538)	(649,814)
Gross Profit/(Loss)		315,464	(90,693)
Other income / (loss)		44,361	85,414
General and administrative expenses, including:
- Exchange rate differences		965,280	(5,983,528)
- Other General & Administrative Expenses		(3,850,191)	(2,392,086)
Total General and administrative expenses		(2,884,911)	(8,375,614)
Other Expenses		(7,195)	(31,105)
Finance Costs - net		(2,327,510)	(3,090)
Loss before Income Tax		(4,859,791)	(8,415,088)
Income Tax
Loss for the period		(4,859,791)	(8,415,088)
Loss Attributable to:
- Owners of the parent		(4,859,791)	(8,415,088)
Loss per share attributable to the equity holders of the company during the period
Basic loss per share		$(0.12)	$(0.29)

INTERIM CONSOLIDATED STATEMENT OF CHANGES OF EQUITY (Unaudited)

for the six months period ended 30 June 2010

	Share capital	Share Premium	Treasury Shares	Other Reserves	Retained Earnings	Total
	$	$	$	$	$	$
At 31 December 2008	292,208	46,944,935	-	829,229	(25,925,365)	22,141,007
Total comprehensive income	-	-	-	3,391,045	(15,001,706)	(11,610,661)
Transactions with owners
Issue of Shares	71,906	4,817,704	-	-	-	4,889,610
Issue of Share Options	-	-	-	805,677	-	805,677
EBT shares granted	25,347	1,698,241	(1,723,416)	18,600	-	18,772
Total transactions with owners	97,253	6,515,945	(1,723,416)	824,277	-	5,714,059
At 31 December 2009	389,461	53,460,880	(1,723,416)	5,044,551	(40,927,071)	16,244,405
Total comprehensive income	-	-	-	14,542	(4,859,791)	(4,845,249)
Transactions with owners
Gold Loan conversion into shares	14,706	985,294	-	-	-	1,000,000
Issue of Share Options	-	-	(172)	521,374	-	521,202
EBT shares granted	-	-	-	510,759	-	510,759
Total transactions with owners	14,706	985,294	(172)	1,032,133	-	2,031,961
At 30 June 2010	404,167	54,446,174	(1,723,588)	6,091,226	(45,786,862)	13,431,117

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS  (unaudited)

for the six months period ended 30 June 2010

		Six months ended 30 June
		2010	2009
Cash Flows from Operating Activities		$	$
Cash (Absorbed by) / Generated from  operations		(1,816,172)	(2,949,566)
Interest Paid		(1,998)	(5,576)
Income Tax Paid		-	-
Net Cash (Absorbed by) / Generated from Operating Activities		(1,818,170)	(2,955,142)
Cash Flows from Investing Activities
Purchases of Property, Plant and Equipment		(76,501)	(313,767)
Proceeds from sale of Property, Plant and Equipment		5,854	2,985
Purchase of Intangible Assets		(108,529)	(11,880)
Exploration Costs Capitalised		(563,464)	(311,085)
Interest Received		12,345	2,486
Net Cash used in Investing Activities		(730,295)	(631,261)
Cash Flows from Financing Activities
Proceeds from Issuance of Convertible Note		5,455,000	-
Purchase of treasury shares		(172)	-
Net Cash used in Financing Activity		5,454,828	-
Net (Decrease) / Increase in Cash and Cash Equivalents		2,906,363	(3,586,403)
Cash and Cash Equivalents at 1 January		1,330,476	4,629,560
Cash and Cash Equivalents at 30 June		4,236,839	1,043,157

 

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