Kounrad: Operations Update

RNS Number : 9236C

Central Asia Metals PLC

15 March 2011

 



15 March 2011

CENTRAL ASIA METALS PLC

Kounrad: Operations Update

Central Asia Metals PLC ("CAML" or the "Company"), (AIM:CAML), a mining exploration and development company focused on base and precious metals in Central Asia, announces an update on construction progress at the Kounrad SX-EW project ("Kounrad" or the "Plant"), a 10,000 tonne per annum copper cathode plant, in Kazakhstan.

CAML has, since its listing in September 2010, been aggressively pursuing the development of the Kounrad SX-EW project and can provide the following update:

·    Plant remains on course for commissioning in Q4 2011

·    Estimated capex of US$46.9 million on budget

·    The detailed engineering design is fully completed

·    First deliveries of plant equipment and steel to site expected during April

·    Infrastructure developments achieved;

o Completion and commissioning of rail system providing access to Kounrad

o Power to be provided by the construction of a new 4.5km overhead power line

·    Site earthworks have been completed and  all concrete works are expected to be completed by the end of May

·    Solution collector trenches are on track to be excavated and lined by Q3 2011

o 2.56km of collector trenches have been excavated (80% of the total required) 

o Approximately 1km of collector trenches have been lined

·    All 4 of the required solution ponds have been excavated and lined with HDPE

·    133 construction personnel are now on site

Detailed engineering design by Beijing General Research Institute of Mining and Metallurgy (BGRIMM), which commenced in October 2010, has been completed and BGRIMM have been awarded the main procurement contract for Kounrad.  All major equipment is on order, with first deliveries expected at site during April.  The bulk of the equipment is being sourced from China and Kazakhstan, but key specialised items are being imported from Germany, USA and Chile.

Access to Kounrad from the main national rail system has been completed with the commissioning of 900m of rail line and sidings.  Power is being provided by a new 4.5km overhead power line from an existing main sub-station to a new in plant transformer station with 6.3MW capacity; all the major equipment items have been placed on order, with installation  scheduled to commence during April 2011.

Site earthworks have been completed for all of the major solution ponds and building foundations.  The solution ponds covering an area of some 17,500m² have been lined with HDPE.  Over 30% of the mass concrete has been placed to date, with the remainder of the total of 3,289m³  expected to be completed by end May 2011.

The estimated capital expenditure to completion is consistent with the forecast of US$46.9 million, given at time of the listing, and completion of the Kounrad plant is scheduled for Q4 2011.

The next phase of project development, scheduled for June 2011, will enable the Company to assess, on a semi commercial scale, the hydrometallurgical characteristics of the sulphide dumps.  The assessment will facilitate an early decision for the potential construction of an additional commercial plant to extract copper from the Western Dumps area.

Nick Clark, Chief Executive Officer of CAML, commented:

"I am pleased to report that the Kounrad construction is well advanced and will be completed later this year, meeting our target schedule.  This will be the first commercial scale SX-EW facility in Kazakhstan and we have the full backing and support of our government partners, Sary Arka, and also from the Ministry of Industry of New Technology.  The successful implementation of this project is in line with government initiatives to encourage the introduction of new technologies and innovative solutions to the country.  We are also embarking on the next phase of our project development by testing the western sulphide dumps, which will allow CAML to make an early decision on the possible construction of an additional 10,000-15,000t copper cathode plant, targeting potential annual copper cathode production at Kounrad of 20,000-25,000t."

Enquiries:

Central Asia Metals 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 Lorna Spears	[phone] / [phone]

KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated by the Financial Services Authority for investment business activities, is acting for CAML as nominated adviser in relation to the matters set out in this announcement and is not acting for any other person in relation to these matters. KPMG Corporate Finance will not be responsible to anyone other than CAML for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement.

Overview of Central Asia Metals

Central Asia Metals Plc currently has interests in a number of copper, gold and molybdenum mining exploration and development assets in Kazakhstan and Mongolia.

In Kazakhstan, the Company has advanced plans for the construction of a plant at the former Kounrad copper mine that will have the capacity to deliver 10,000 tonnes per annum of near term, low-cost copper production.  CAML plans to construct the plant with a joint venture with a local Kazakh government entity, Saryarka.  Kounrad was formerly an open-pit copper mine that was operated between 1936 and 2005.  The site around the mine contains a number of dumps of waste material from the mine from which copper can be extracted through an in-situ leaching process followed by Solvent Extraction - Electro-Winning (''SX-EW'').  Initial construction ground-works for the commercial SX-EW plant have already been started and production at the plant is expected to commence during Q4 2011.

Central Asia Metals also has exploration opportunities in the region.  One of these is Alag Bayan, an early stage exploration project in Mongolia, where the Company is focused on outlining a potentially significant copper/gold porphyry target.  This asset is situated close to the Oyu Tolgoi copper mine being developed by Rio Tinto and Ivanhoe Mines.  In addition Central Asia Metals plans to develop further its molybdenum exploration project, Handgait, and its gold exploration project, Ereen, both located in Mongolia.

The Company has an experienced management team that has a proven track record of developing and commercialising mining opportunities in Central Asia.  Central Asia Metals plans to use this experience to look at additional opportunities in the region and is already in early stage discussions in respect of a new exploration and development opportunity.

Further details about Central Asia Metals can be found on the Company's website: www.centralasiametals.com

 

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