Central Asia Metals#: Sasa Site Visit We recently visited Central Asia Metals (CAML LN) Sasa mine in North Macedonia. CAML have now been operators for over 18 months maintain strong margins and cashflow in 2018 with US$103m revenue and US$71m EBITDA. The site visit allowed us to see how the asset has been absorbed into the wider group, particularly in light of the ongoing Life of Mine review which is seeking to conclude whether additional value can be realised through optimising operational performance. Sasa Life of Mine Review As previously announced CAML is undertaking a holistic Life of Mine review of Sasa to better understand whether changes to operational practices and a deeper understanding of the ore body will enable efficiency gains and an increase to the potential realisable value. The first step of this was an updated resource statement which included an increase in lead and zinc grades as well as the conversion of 17% of Golema Reka into the higher Indicated category. The operational review will seek to understand amongst other things whether gains can be made by increasing plant throughput from 805kt in 2018 to nameplate capacity of 850ktpa. Recommendation and Target Price Since our April update, the shares have pulled back 11% as US China tensions have reignited causing base metal prices to retreat through Q2 2019. While optimistic a resolution can be found we previously highlighted that the final stages would likely be the most contentious. With leading cost metrics versus peers and trading on a significant dividend yield of 7% we continue to believe that CAML is attractively valued, and the recent pullback offers a buying opportunity. Furthermore, we believe that CAML is capable of enhancing Sasa’s operating practice to directly benefit earnings, however, the results and extent are as yet unclear. This does offer potential upside risk to our earnings outlook which is unchanged. We reiterate our Buy recommendation and target price of 300p which implies 36% upside and 44% on a total return basis.
RNS Number: 6694 A Central Asia Metals PLC 31 May 2019 31 May 2019. Central Asia Metals plc announces that, on 30 May 2019, the following nominal cost options over ordinary shares in the Company at a nominal exercise price of $0.01 per share, were granted to Executive Directors of the Company. Central Asia Metals, an AIM-listed UK company based in London, owns 100% of...
RNS Number: 2943 Z Central Asia Metals PLC 16 May 2019. Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper project in central Kazakhstan and the Sasa zinc-lead mine in North Macedonia. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom.
The Company's Annual General Meeting is to be held at the offices of Jones Day, 21 Tudor Street, London, EC4Y 0 DJ at 12:00 noon on 16 May 2019.. Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper project in central Kazakhstan and the Sasa zinc-lead mine in North Macedonia. RNS is approved by the Financial Conduct...
Central Asia Metals#: 2018 Full Year Results Robust Full Year Financials Central Asia Metals (CAML LN) having delivered on production guidance for 2018 released robust full year results underpinned by the low cost base of the group. Revenue of US$192m was up 88% YoY while Kounrad unit costs of US$0.54/lb were up 4% YoY, in line with our forecast. Sasa unit costs were 5% higher YoY. The stronger top line and low cost base meant EBITDA was up 88% YoY to US$125m. Net income from continuing operations was up 48% YoY and with EPS up 8% YoY to 31 cents per share highlighting the accretive nature of the transaction. The full year dividend of 14.5p/sh. was 5% ahead of our estimate. Ongoing Strong Free Cash Flow Generation We anticipate copper output of 13.4kt in 2019 with lead and zinc production of 29.4kt and 22.5kt. Although we anticipate modest inflationary pressure from higher power and pumping costs at Kounrad and rising zinc treatment charges at Sasa we expect margins to remain strong with EBITDA of US$120m in 2019. With capital expenditure expected to drop to US$11.2m following the completion of the tailings facility at Sasa, in H1 2019, levered FCF is likely to increase 15% YoY in 2019F to US$84.6m enabling a dividend of 15.7p.sh. Sasa Mine Review Having integrated Sasa, management is now focused on enhancing the operational efficiencies via a life of mine review covering all aspects of operations. The first step of this was an updated resource statement which included an increase in lead and zinc grades as well as the conversion of 17% of Golema Reka into the higher Indicated category. This confirms the mine’s current 19 year life although drilling new areas in 2019 offers upside potential to the current resource. Reccomendation and Target Price Although the shares are up 14% YTD, trading on a dividend yield of 6% and at a 12% discount to peers this highlights the ongoing value opportunity and we expect FCF generation to continue to increase in 2019F and 2020F. We reiterate our Buy recommendation although adjust our target price to 300p which implies 21% upside and 28% on a total return basis.
Shares in Central Asia Metals (CAML) are down 10 per cent in early trading today, after the diversified miner posted an increase in cash costs at its two mines, and a final proposed dividend of 8p a share for 2018. That distribution is equivalent to 44 per cent of adjusted free cash flow, and so towards the top-end of CAML’s dividend policy, but means the year-on-year pay-out has softened by 2p. Adjusted EPS and pre-tax profit numbers also came in slightly down on broker Peel Hunt’s forecasts, though the group is well on-course to repaying its $110m net debt within three years. Buy.
Central Asia Metals Plc (CAML.L) Announced, in its full year results for the 12 months ended 31 December 2018, that its total revenue stood at $192.33 million, compared to $102.12 million in the preceding year. Profit after tax was $53.86 million compared to $36.36 million. The company's diluted earnings per share was 30.65c, compared to 28.38c. Further, the company, in its 1Q19 operations update, stated that it recorded total combined Indicated and Inferred Mineral Resources of 22.50 million tonnes with a zinc grade of 2.9% and a lead grade of 4.2%, containing 646,000.00 tonnes of zinc and 953,000.00 tonnes of lead.
RNS Number: 6836 V Central Asia Metals PLC 10 April 2019 10 April 2019. Central Asia Metals plc today provides a Q1 2019 operations update for the Kounrad dump leach, solvent extraction and electro-winning copper recovery plant in Kazakhstan and the Sasa zinc-lead mine in North Macedonia. -Production, on track to meet full year guidance for copper, zinc and lead.
RNS Number: 6532 S Central Asia Metals PLC 13 March 2019 13 March 2019. Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper project in central Kazakhstan and the Sasa zinc-lead mine in North Macedonia. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom.
Central Asia Metals#: Q4 2018 Operations Update 2018 Production Ahead of Estimates Central Asia Metals (CAML LN) beat our full year production estimates across copper, lead and zinc owing to continued strong operational performance. Copper production of 3.36kt in Q4 2018, up 8% YoY meant full year production of 14kt, in line with 2017 production, at the top end of full year guidance and 2% ahead of our forecast. Sasa zinc production of 5.8kt in Q4 2018 was up 8% YoY resulting in 2018 output of 22.53kt, up 4% YoY and ahead of our forecast by 1%. Lead production of 7.40kt was flat YoY meaning 29.39kt through 2018 although down 2% YoY was 2% ahead of our forecasts. Guidance for 2019 Implies Continued Robust Output CAML has provided 2019 guidance broadly in line with our existing forecasts. At Kounrad guidance of 12.5-13.5kt for 2019 is 0.5kt lower than 2018 and 2% lower than our prior estimate of 13.75kt. This is due to the higher contribution from the Western dumps in 2019 (c70%). At Sasa guidance for zinc and lead output is unchanged from 2018 at 22-24kt and 28-30kt respectively. We anticipate 2019 production of 28.6kt lead and 22.2kt of zinc. Rising Free Cash Flow Generation Despite a reduction in 2018 forecasts reflecting weaker commodity prices in H2 2018 we have reduced our revenue, EBITDA and net income estimates by 3%, 5% and 8% to US$198m, US$122m and US$50m respectively. Net income continues to reflect a one-off legacy tax charge meaning our 2018F dividend estimate is reduced to 13.85p/sh. However, lower capital spending and a continued low cost base imply a 33%increase in FCF to US$88m in 2019F. Recommendation and Target Price Trading on a dividend yield of 6% highlights the ongoing value opportunity and we expect the shares to outperform as FCF generation continues to increase in 2019 and 2020. We reiterate our Buy recommendation and target price of 309p which implies 33% upside and 40% on a total return basis.
RNS Number: 0586 N Central Asia Metals PLC 15 January 2019 15 January 2019. Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper project in central Kazakhstan and the Sasa zinc-lead mine in Macedonia. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom.
Central Asia Metals (CAML LN) 228 pence, Mkt Cap �403.9m – 2018 operations results and 2019 guidance • Central Asia Metals reports that it produced 14,049t of copper from its Kounrad operation - earlier this year the company issued production guidance of 13-14,000 tonnes. Copper production guidance for 2019 is 12,500-13,500 tonnes. • The company also met its guidance for zinc production (22,532 tonnes in concentrate) and lead (29,388 tonnes in concentrate) for the Sasa mine. Guidance for 2019 is for 22-24,000t of zinc in concentrate and 28-30,000t of lead in concentrate from underground ore production in the range 800-825,000t. • The company also reports that “During H2 2018, CAML commenced a 'Life of Mine' study at Sasa. This work programme will entail an in-depth review of each aspect of the Sasa operation and is expected to be completed throughout the course of 2019”. • This programme included diamond drilling at the existing operating site at Svinja Reka where there is an existing, JORC compliant, inferred resource of 2.7mt at an average grade of 3.2% lead and 2.1% zinc, and at Golema Reka “which was mined between 1981 and 2010”. • A total of more than 3,000m of diamond drilling below the 830m level at Svinja Reka has “confirmed extensions to mineralisation down to and beneath the 750m level” over a 150m strike length. “CAML is encouraged that the grades identified in the area below the 830 metre level appear to be higher than the current inferred resource demonstrates” and results presented in today’s announcement include individual intersection of over 9% lead and up to 10% zinc. It appears that these drilling results have yet to be reflected in the mineral resource estimates. • Drilling at Golema Reka, where there is an inferred, JORC compliant, resource estimate of 7.4mt at an average grade of 3.7% lead and 1.5% zinc also comprised over 3000m “over a 350m strike length that demonstrates an extension to mineralisation beneath the 700 metre level. Golema Reka is accessible from the current mine infrastructure.” Individual drill intersections reported today include intersection of up to 15m width and grades in the range of 1.7-10.4% lead and 0.2-4.2% zinc. Conclusion: Central Asia Metals’ 2019 production guidance indicates that existing levels of lead and zinc production are likely to be maintained and that copper output from Kounrad may decline slightly. Drilling at Sasa has produced results which may lead to mineral resource updates, as part of a continuing life of mine study, later this year.
An operational update from Central Asia Metals (CAML), out this morning, reveals several things: the miner hit guidance for each of its metals in 2018, output from Kounrad is expected to be slightly lower this year, and exploration activities at Shuak have failed to establish a project "sufficiently material in terms of scale...to develop". However, the group says that after screening 22 "business development opportunities", it is actively "reviewing two potential base metals" projects. Buy.
Central Asia Metals (CAML LN)# Central Asia Metals (CAML LN) has announced strong production results for 2018 in line with company guidance and marginally ahead of our estimates across copper, lead and zinc. Copper production of 3.4kt in Q4 2018 resulted in full year 2018 production of 14kt which was flat YoY, despite the impact of severe weather in Q1 2018, and the company was able to make up the shortfall through the balance of the year. Having forecast 13.8kt copper output was 2% ahead of our forecasts while average LME copper prices of US$6,544/t were in line. Guidance for 2019 of 12.5-13.5kt copper output is marginally lower than our estimate of 13.8kt although remains in line with historical production levels. At Sasa zinc production of 22.5kt was up 4% YoY with Q4 2018 production of 5.8kt up 8% YoY. Full year production was broadly in line with our estimate of 22.3kt as a combination of consistently stronger grades through the year along with rising recoveries to 85% in Q4 2018. The latter followed the commissioning of the new SMD mill earlier in the year. Lead production of 29.4kt was 2% lower YoY, however, it was 2% ahead of our estimate of 28.8kt and comfortably within the guidance range of 28-30kt. The lower YoY output was largely driven by a modest decline in lead grades from 3.98% to 3.90% and a 1pp decline in recoveries to 93.6%. This, therefore represents a strong first full year of operations at Sasa, in our view, and with zinc and lead guidance maintained at Sasa of between 22-24kt and 28-30kt respectively for 2019 CAML is set to maintain the established stable operational track record at Sasa. Updated production guidance remains in line with our estimates for 2019 onwards. The tailings storage facility at Sasa is now largely complete which will provide storage at Sasa for a further seven years meaning that near term capital requirements at Sasa are largely confined to sustaining capex. Additionally, CAML commenced a life of mine study and resource infill drilling programme. The updated JORC resource is expected to be completed during Q1 2019. Our current model is based only on the existing JORC resources for Svinja Reka and Golema Reka; announced drilling results demonstrate extensions of mineralisation at depth for both ore bodies while at Svinja Reka grades below the 830m level are stronger than the inferred resource which stands at 2.7mnt at 3.2% lead and 2.1% zinc. Exploration at Sasa continues to provide material upside potential versus our mine life estimates while infill drilling will likely provide greater confidence in the near term mine plan. CAML has continued to make progress in identifying growth opportunities screening 22 projects in the period with three site visits. However, exploration results from Shuak have been deemed not to warrant further development by the company and we highlight that having successfully integrated Sasa, CAML has transformed to a larger multi asset operator since it acquired the assets in 2016. Having beaten our production estimates in copper, zinc and lead CAML has again demonstrated its ability to consistently deliver strong operational performance. Although broader market volatility has meant the share performance has been rangebound over the past quarter we believe that the shares remain attractive trading on a 7% yield for 2018 based on our estimates. A core asset base able to deliver consistent strong free cash flow provides a robust platform to grow the business and we believe the shares offer an attractive entry point. We reiterate our Buy recommendation and 309p target price.
Central Asia Metals (CAML.L) 221p �388.9m Q4 and FY 2018 operations update. Production guidance met for copper, zinc and lead 2018 Kounrad Copper produced, 14,049 tonnes 2018 Sasa Zinc in concentrate produced, 22,532 tonnes Lead in concentrate produced, 29,388 tonnes Diamond drilling exploration programme completed with updated mineral resource estimate expected in Q1 2019 2019 production guidance Copper, 12,500 to 13,500 tonnes Zinc in concentrate, 22,000 to 24,000 tonnes Lead in concentrate, 28,000 to 30,000 tonnes Cash in the bank on 31 Dec 2018, $39m
Central Asia Metals Plc (CAML.L) Announced its 4Q and full year 2018 operations update for the Kounrad dump leach, solvent extraction and electro-winning copper recovery plant in Kazakhstan and the Sasa zinc-lead mine in Macedonia. Production guidance met for copper, zinc and lead. copper produced was 14,049 tonnes in 2018 at Kounrad. Zinc in concentrate was produced 22,532 tonnes and Lead in concentrate was produced 29,388 tonnes in 2018 at Sasa. Further, diamond drilling exploration programme is completed with updated mineral resource estimate expected in 1Q 2019. During 2018, the company has screened 22 business development opportunities and conducted three site visits. The company is currently further reviewing two potential base metals opportunities. As of 31 December 2018, the company had cash in the bank of $39.0 million.
RNS Number: 5506 M Central Asia Metals PLC 09 January 2019 9 January 2019. Central Asia Metals plc today provides a Q4 and full year 2018 operations update for the Kounrad dump leach, solvent extraction and electro-winning copper recovery plant in Kazakhstan and the Sasa zinc-lead mine in Macedonia. -Production guidance met for copper, zinc and lead.
Central Asia Metals (CAML LN) 219.5 pence, Mkt Cap �386.3 – Consolidation of Debt • Central Asia Metals reports that it has consolidated its debt into a single facility with its offtake partner, Traxys. • The $402.5m acquisition of the Sasa in late 2017 mine was partially financed with a loan facility of $120m from Traxys and Sasa itself brought a further $67m of debt leading to gross debt in CAML of $187m in November 2017. • The company has now “made contractual debt repayments of $36 million since the acquisition” and further discloses that it “increased the size of the Traxys facility in December 2018 by $60 million to$151 million and used the proceeds to repay the Sasa facility in full and a local bank working capital facility, plus accrued interest.” • The facility “carries a 4.75% interest plus 1- month US Libor and will be repaid monthly on a straight-line basis within four years with no requirement for cash sweeps.” • Commenting on the restructuring of the company’s debt into a single facility, CEO, Nigel Robinson, said “Removal of the Sasa debt will enable CAML to restructure and simplify its Sasa corporate structure, which is expected to be completed in Q1 2019.”
Central Asia Metals (CAML LN)# Central Asia Metals (CAML LN) has announced that it has refinanced and consolidated its corporate debt as of December 2018. The Sasa mine had gross debt of US$67m at the time of the acquisition by CAML in November 2017. As part of the acquisition financing CAML raised US$120m in debt from its offtake partner, Traxys. In order to simplify the outstanding corporate debt CAML has increased the size of the Traxys facility by US$60m to US$151m and repaid the outstanding Sasa debt plus accrued interest. The Traxys facility carries 4.75% interest plus 1-month US Libor and is to be repaid monthly on a straight-line basis within four years without the previous requirement for cash sweeps. Our current estimates based on prior guidance assume that gross debt would be repaid by the end of 2021 and we forecast year end 2018 gross debt of around US$132m. Given the removal of the cash sweep constraint this likely gives CAML more flexibility over repayments and use of cash which may prompt a less aggressive deleveraging programme particularly since our current forecasts suggest net debt to EBITDA of 0.8x at year end 2018. The shares have traded within a narrow range over the past three months despite commodity price volatility, however, given the strong free cash flow outlook which is highlighted by the ability to rapidly deleverage whilst continuing to pay a robust dividend the shares remain attractive, in our view. At the current price we anticipate a dividend yield of around 7% in 2018. We reiterate our Buy recommendation and target price of 309p.