TIDMCAML
RNS Number : 8882Y
Central Asia Metals PLC
14 September 2015
14 September 2015
Ticker: CAML (AIM)
Central Asia Metals plc ("the Group", "the Company" or
"CAML")
Interim Results for the Six Months Ended 30 June 2015
Central Asia Metals plc (AIM: CAML), a copper producing company
focused on base metals in Central Asia is pleased to announce its
unaudited interim results for the six months ended 30 June 2015
("H1 2015" or the "Period").
The Company is also pleased to declare an interim dividend of
4.5 pence per ordinary share (H1 2014: 5 pence) which equates to
25% of the gross revenue for the period. CAML raised $60 million at
its IPO in September 2010 and this latest dividend will bring the
total cash returned to shareholders, in dividends and share buy
backs, to approximately $61 million, representing over 100% of the
funds raised.
Operational highlights
-- H1 2015 copper production of 5,444 tonnes, an increase of 7% vs. H1 2014 (5,094 tonnes)
-- H1 2015 copper sales of 5,120 tonnes, an increase of 9% vs. H1 2014 (4,698 tonnes)
-- Kounrad Solvent Extraction-Electro Winning (SX-EW) plant
expansion commissioned on time and under budget
-- Completion of all detailed construction designs for Stage 2
Expansion to access the Western dumps
Financial highlights
-- EBITDA of $16.0 million (H1 2014: $21.8 million) with EBITDA margin of 53%
-- 2015 interim dividend of 4.5 pence per ordinary share to be paid on 30 October 2015
-- H1 2015 Group gross revenue of $30.3 million (H1 2014: $33.7 million)
-- Average copper price received of $5,936 per tonne (H1 2014: $7,049 per tonne)
-- Continued focus on maintaining low costs of production:
- C1 cash costs of production of $0.74 per lb (H1 2014: $0.72 per lb)
- Fully absorbed unit costs of $1.87 per lb (H1 2014: $1.62 per
lb) including non-cash costs for depreciation and amortisation of
$0.54 per lb (H1 2014: $0.48 per lb)
-- Group cash balance of $35.8 million as at 30 June 2015 (31 December 2014: $46.3 million)
Business Development
-- Additional $3.0 million investment in Copper Bay Limited
("Copper Bay") in June 2015 increasing shareholding to 75%
-- Copper Bay Definitive Feasibility Study ("DFS") commenced
-- Management continues to look for additional growth opportunities
Outlook
-- 2015 production guidance of 12,000 tonnes of copper
-- Construction permits and licences for Stage 2 Expansion expected by the end of 2015
-- Stage 2 Expansion to access the Western dumps on track for production in 2017
-- Continued focus on operational and capital cost discipline in
current challenging commodity price environment
-- Impact of recent devaluation of Kazakhstan Tenge ("KZT") on
operational cost base under review
Nick Clarke, Chief Executive Officer, commented:
"I am pleased to report that our business has remained
profitable in the first half of 2015, despite a 16% decrease in the
copper price since the beginning of the year. We delivered a solid
operational performance, and despite a temporary production
disruption in late June, we have increased our production by 7%
from the corresponding period. In addition, we delivered the Stage
1 Expansion of the plant on time and under budget and we are
working towards the Stage 2 Expansion.
Our continued focus on cost control has maintained Kounrad's
position in the lowest quartile of the industry cash cost curve.
The continued low cost of our operations together with our strong
balance sheet enables us to continue market leading dividend
payments in a challenging commodity environment.
CAML's increased investment in Copper Bay demonstrated our
confidence in the project and we look forward to providing further
updates as the DFS progresses. Furthermore, we continue to look for
additional opportunities to grow the business and deliver value to
our shareholders.
Finally, with the dividend announced today, total cash returned
to shareholders now exceeds the funds raised at IPO five years ago,
an achievement of which we are extremely proud."
For further information please visit www.centralasiametals.com.
(The content of the CAML website should not be considered to form
part of or be incorporated into this announcement)
Enquiries:
Nick Clarke, Nigel +44 (0)20 7898
Central Asia Metals plc Robinson 9001
---------------------------------- ---------------------- ---------------
Peel Hunt LLP (Nominated Adviser Matthew Armitt, Ross +44 (0)20 7418
& Joint Broker) Allister 8900
---------------------------------- ---------------------- ---------------
+44 (0)20 3772
Bell Pottinger Lorna Cobbett 2500
---------------------------------- ---------------------- ---------------
Mirabaud Securities (Joint +44 (0)20 7321
Broker) Peter Krens 2508
---------------------------------- ---------------------- ---------------
Analyst presentation conference call
An analyst presentation on the Company's interim results hosted
by management will take place at 09:30 (BST) on Monday 14 September
2015 at the offices of Bell Pottinger and will be accompanied by a
live conference call.
The accompanying presentation slides will be available on the
Company's website. The conference call can be accessed by dialling
020 3059 8125 (from the UK) or + 44 20 3059 8125 (from all other
locations) and quoting the confirmation code 'Central Asia Metals
Interim Results'. A replay of the call will be available following
the presentation at http://www.centralasiametals.com.
Chief Executive Officer Review
The CAML Board is sufficiently confident in its business plan to
declare an interim dividend for the period of 4.5 pence per
ordinary share. This represents 25% of the gross revenue for the
period, in line with the Company's dividend policy. Almost five
years since our initial listing on AIM in September 2010, we have
now returned to shareholders in dividends and share buy-backs over
100% of the $60 million raised. This represents 32% of the
attributable revenue generated since the commencement of operations
in 2012.
As previously announced to the market, during the period we
produced 5,444 tonnes of cathode copper (H1 2014: 5,094 tonnes)
representing a 7% increase. The incident we reported on 29 June
2015 has impacted our 2015 production, but nonetheless we will see
an increase on 2014 production. The Kounrad SX-EW plant has now
been in operation for 38 months at an average utilisation rate of
98% and has produced over 33,600 tonnes of copper to 30 June 2015,
and this incident is the first such interruption to operations.
We remain on track with our expansion plans for Kounrad, and in
the period completed the Stage 1 Expansion of the SX-EW plant on
time and under budget. We are also working towards the Stage 2
Expansion which will see us install additional infrastructure to
enable the extraction of copper from the Western dumps.
In addition, we announced in June that we had increased our
shareholding in Copper Bay to 75%, following an additional
investment of $3.0 million. These funds will be used for the DFS
which is currently underway. Further to our investment in Copper
Bay, we continue to look for additional growth opportunities for
the business to create value for our shareholders.
Operating Review
Kazakhstan (Kounrad)
Operations
During the first six months of 2015, operational performance
remained strong with copper production of 5,444 tonnes,
representing a 7% increase on the corresponding period of 2014.
This increase is largely due to the expanded boiler-house capacity
at the plant resulting in higher solution volume treatment rates
during the winter months.
As previously announced, an incident occurred on site on 26 June
2015 which resulted in approximately a third of the organic
inventory being lost to the dumps within a very short time frame.
On inspection, it was identified that the weir plate system had
failed in the recently commissioned SX mixer settler, allowing some
of the organic inventory to escape from the circuit via the
raffinate system and on to the dumps.
The failure was quickly rectified but the loss of organic
inventory and the subsequent lead times to replace it resulted in
the revision of the 2015 full year production target from 13,000
tonnes to 12,000 tonnes of copper.
The plant has now been in operation for 38 months at an average
utilisation rate of 98%, and this incident is the first such
interruption to production. The Company will strive throughout H2
2015 to meet the revised production target. As at 31 August 2015,
all of the organic inventory had been replenished and the plant was
gradually being ramped up to design capacity levels.
The technical quality of the cathode copper production remains
high and continues to meet the requirements of our main
customers.
Kounrad Expansion
Stage 1 Expansion - SX-EW Plant
Less than a year after the start of the Stage 1 Expansion
programme, the extended SX-EW facility was commissioned ahead of
schedule in May 2015. The programme included construction works and
equipment installation, all undertaken by Company personnel. The
extra mixer-settler tank has increased the plant's solution
treatment capacity by 33% to 1,200 cubic metres per hour, and the
additional 24 electro-winning cells have increased the plant's
daily plating capability by 42% to 50 tonnes of copper. The
infrastructure upgrade also included the installation of an
additional 10MW transformer substation.
(MORE TO FOLLOW) Dow Jones Newswires
September 14, 2015 02:00 ET (06:00 GMT)
The Stage 1 Expansion and additional 5.6MW boiler capacity
installed towards the end of 2014 have increased the plant's
name-plate annual capacity from 10,000 to 15,000 tonnes of cathode
copper at a cost of approximately $13.0 million, against a budget
of $15.5 million.
Stage 2 Expansion - Western Dumps
The application to the relevant authorities for the required
permits to allow copper extraction from the Western dumps are in
progress and approvals are expected to be received by the end of
2015. The Stage 2 Expansion remains on track for production in
2017.
Corporate & Social Responsibility ("CSR")
After over three years of production at Kounrad with an
exemplary health and safety record, we experienced our first major
accident on site shortly after the period end. The accident
resulted in injuries to two employees, both of whom have received
the appropriate medical treatment and are being given all of the
necessary support to ensure a swift recovery. Detailed internal and
external investigations have been undertaken to ensure that the
risk of a similar accident is minimised.
A key focus during the period for the environmental team has
been the hydrogeological drilling and monitoring programme at
Kounrad. The Company has spent approximately $0.5 million on a
programme of drilling and the installation of geological as well as
technical and monitoring boreholes in the vicinity of the Western
and Eastern dumps. The Company maintains best-practice
environmental monitoring standards.
The Company continues to actively engage with the local
community and during the period contributed over $0.1 million to
social programmes and committed a further $0.2 million with a
special emphasis on health and education.
Operations outside of Kazakhstan
Copper Bay Project - Chile
On 30 June 2015, CAML exercised its right to invest a further
$3.0 million to increase its shareholding in Copper Bay from 50% to
75% following the completion of the pre-feasibility study.
The DFS has now commenced and a project manager has been
appointed. The DFS will work towards providing more accuracy and
confidence regarding all aspects of the project. CAML management
will continue to monitor the future economic viability of
constructing the project based on the outputs of the DFS and the
copper market environment.
Mongolia
The Group continues to hold for sale the assets it owns in
Mongolia.
Financial Review
The copper price came under increasing pressure during the first
six months of 2015 due to continued concerns over the slowdown in
the growth of the Chinese economy and an increasing supply of
copper into the market. These concerns appear to have increased
during Q3 2015 and as at late August 2015, copper prices had
declined close to $5,000 per tonne.
Against this background, the Group continued to focus efforts on
maintaining its low cash costs of production and delivering the
Stage 1 Expansion on time and under budget.
Income Statement
Group profit after tax from continuing operations was $6.0
million for the six month period ended 30 June 2015 (H1 2014: $47.2
million). The comparative period results (H1 2014) were impacted by
a one-off gain of $33.0 million arising from the completion of the
Kounrad Transaction in May 2014. Earnings per share from continuing
operations were 5.37 cents (H1 2014: 52.06 cents, 15.31 cents
excluding the one-off gain).
Revenue
A total of 4,938 (H1 2014: 4,562) tonnes of copper cathode were
sold as part of the Company's off-take arrangements at Kounrad and
a further 182 (H1 2014: 136) tonnes were sold locally. As mentioned
above, the Group revenue was impacted by the decline in copper
prices and an average selling price of $5,936 (H1 2014: $7,049) per
tonne was achieved. This generated reported gross revenues for the
Group of $30.3 million (H1 2014: $33.7 million).
Cost of sales
Cost of sales for the period were $12.9 million (H1 2014: $10.8
million). This increase generally reflects the higher levels of
production inclusive of higher depreciation and amortisation
charges. The C1 cash costs were $0.74 per lb (H1 2014: $0.72 per
lb). Fully absorbed unit costs for the period were $1.87 per lb (H1
2014: $1.62 per lb). This included non-cash costs for depreciation
and amortisation of $0.54 per lb (H1 2014: $0.48 per lb).
Total depreciation and amortisation charges recognised within
cost of sales for the period were $6.0 million (H1 2014: $4.9
million). This included an additional depreciation and amortisation
charge of $3.6 million during H1 2015 (H1 2014: $2.9 million) as a
result of the uplift to the asset values following the completion
of the Kounrad Transaction in May 2014.
The fully absorbed unit costs include a one-off charge of $0.7
million, which equates to $0.06 per lb, arising from the write-off
of organic inventory following the incident on 26 June 2015.
Administrative expenses
During H1 2015, the Group employed an average of 49 staff (H1
2014: 45) at Kounrad to oversee the technical and commercial
management of the operations in Kazakhstan, together with head
office staff in London of 9 (H1 2014: 7). Administrative expenses
for the period were $6.1 million (H1 2014: $4.5 million) reflecting
the growing activities of the Group.
During the period, the Group incurred $0.3 million on business
development activities in Kazakhstan and elsewhere as Management
continue to look for additional growth opportunities for the
business.
During the period, the Group recognised a share based payment
charge of $1.1 million (H1 2014: $0.8 million) in relation to the
Company's Share Option Schemes. The Group also incurred withholding
tax of $0.4 million (H1 2014: nil) on dividend payments made
between subsidiaries in the Group.
Balance Sheet
During H1 2015, there were additions to property, plant and
equipment of $6.6 million (H1 2014: $2.9 million). The majority of
this expenditure was incurred on the construction work at Kounrad
for the Stage 1 Expansion which was commissioned in May 2015.
As at 30 June 2015, non-current trade and other receivables were
$7.1 million (31 December 2014: $6.4 million). This outstanding
balance represents the amount currently owed to the Group by the
Kazakhstan Government for VAT. The Group is in the process of
appealing to the Kazakhstan authorities and the outcome may not be
known until early 2016. A portion of the outstanding VAT balance is
being recovered through the offset of VAT liabilities on local
sales of copper cathode.
As at 30 June 2015, current trade and other receivables were
$7.1 million (31 December 2014: $3.2 million). The increase is a
result of $4.5 million owed for the sale of copper for June
deliveries which were received in early August 2015. The Group had
$35.8 million of cash as at 30 June 2015 (31 December 2014: $46.3
million) including restricted cash of $0.6 million (31 December
2014: $0.1 million) and no debt.
As at 30 June 2015, current trade and other payables were $3.6
million (31 December 2014: $4.3 million).
On 13 May 2015, the Company completed a Court approved capital
reduction scheme, which resulted in $67.1 million being transferred
from the share premium account to distributable reserves. A
condition of the capital reduction scheme was to set aside an
amount into a restricted bank account, which would cover certain
creditors as of the effective date of the capital reduction. The
balance of the restricted bank account in relation to the capital
reduction scheme as at 30 June 2015 was $0.4 million.
Foreign Exchange
The Group operates overseas and is exposed to foreign currency
movements. During August 2015, the KZT devalued by almost 37%
overnight, as highlighted in note 15, when the government
transitioned to a free-floating exchange rate, allowing the market
to determine the rate.
Given that the Group's operations in Kazakhstan generate their
income in US dollars through the export of copper, the immediate
impact from a purely financial standpoint is positive as
approximately 60% of the cost base in Kazakhstan is denominated in
KZT.
The Board will continue to monitor events in the country and
respond accordingly. The Group does not keep large amounts of cash
in KZT and as at 30 June 2015, held the US dollar equivalent of
$0.2 million.
Copper Bay investment
On 30 June 2015, CAML subscribed for 135,621,610 newly allotted
ordinary shares in Copper Bay for a cash consideration of $3.0
million, which increased CAML's shareholding from 50% to 75%.
Following this additional investment, management has
reconsidered the accounting treatment of the initial $3.2 million
investment in 2013 and has fully consolidated the Copper Bay Group
as at 30 June 2015 at historical cost. This has resulted in a
reduction in Group retained earnings at 30 June 2015 of $1.2
million. An intangible asset of $3.2 million recognised in 2013
equal to the cash consideration paid for the initial 50%
shareholding has been reduced by $1.6 million. The resulting value
of the intangible exploration and evaluation assets currently held
in the Copper Bay Group as at 30 June 2015 was $1.6 million (see
note 8).
Dividend
The CAML Board has declared an interim dividend for the period
of 4.5 pence per ordinary share in accordance with its dividend
policy announced in December 2012. The interim dividend equates to
approximately 25% of the gross revenue for the period and will be
payable on 30 October 2015 to shareholders registered on 9 October
2015.
CONDENSED INTERIM INCOME STATEMENT (unaudited)
for the six months period ended 30 June 2015
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September 14, 2015 02:00 ET (06:00 GMT)
Six months ended
30-Jun-15 30-Jun-14
Note $'000 $'000
----------------------------------------------------- ------ ------------ ----------
Continuing operations
Gross revenue 30,323 33,704
----------------------------------------------------- ------ ------------ ----------
Revenue 29,035 32,244
----------------------------------------------------- ------ ------------ ----------
Cost of sales (12,914) (10,758)
----------------------------------------------------- ------ ------------ ----------
Gross profit 16,121 21,486
----------------------------------------------------- ------ ------------ ----------
Distribution and selling costs (133) (142)
Administrative expenses (6,058) (4,451)
Inventory write-off (715) -
Other income/(expenses) 8 (6)
Exchange rate differences gain 1,091 2,495
Operating profit 10,314 19,382
----------------------------------------------------- ------ ------------ ----------
Finance income 21 44
Finance costs (257) (128)
Gain on re-measuring to fair value the existing
interest on acquisition of control - 33,039
----------------------------------------------------- ------ ------------ ----------
Profit before income tax 10,078 52,337
Income tax (4,093) (5,150)
----------------------------------------------------- ------ ------------ ----------
Profit from continuing operations 5,985 47,187
----------------------------------------------------- ------ ------------ ----------
Discontinued operations
Loss from discontinued operations (112) (161)
----------------------------------------------------- ------ ------------ ----------
Profit for the period 5,873 47,026
----------------------------------------------------- ------ ------------ ----------
Profit attributable to:
431 -
* Non-controlling interests
* Owners of the parents 5,442 47,026
----------------------------------------------------- ------ ------------ ----------
5,873 47,026
----------------------------------------------------- ------ ------------ ----------
Earnings per share from continuing and discontinued
operations attributable to
owners of the parent during the period (expressed
in cents per share)
Basic earnings/(loss) per share
From continuing operations 6 5.37 52.06
From discontinued operations (0.10) (0.18)
----------------------------------------------------- ------ ------------ ----------
From profit for the period 5.27 51.88
----------------------------------------------------- ------ ------------ ----------
Diluted earnings/(loss) per share
From continuing operations 6 5.24 50.06
From discontinued operations (0.10) (0.18)
----------------------------------------------------- ------ ------------ ----------
From profit for the period 5.14 49.89
----------------------------------------------------- ------ ------------ ----------
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
for the six months period ended 30 June 2015
Six months ended
------------------------------------------------------ --------------------------------
30-Jun-15 30-Jun-14
$'000 $'000
------------------------------------------------------ --------- ---------------------
Profit for the period 5,873 47,026
Other comprehensive income:
Items that may be reclassified subsequently to profit
or loss:
Currency translation differences (1,258) (10,144)
Other comprehensive income for the period, net of
tax (1,258) (10,144)
------------------------------------------------------ --------- ---------------------
Total comprehensive income for the period 4,615 36,882
------------------------------------------------------ --------- ---------------------
Attributable to:
- Owners of the parent 4,184 36,882
- Non-controlling interests 431 -
------------------------------------------------------ --------- ---------------------
Total comprehensive income for the period 4,615 36,882
------------------------------------------------------ --------- ---------------------
Total comprehensive income/(expense) attributable to equity
shareholders arises from:
- Continuing operations 4,727 37,043
- Discontinued operations (112) (161)
----------------------------- ------ ------
4,615 36,882
----------------------------- ------ ------
CONDENSED INTERIM BALANCE SHEET
as at 30 June 2015
Unaudited Audited Unaudited
------------ ------------ ------------
30-Jun-15 31-Dec-14 30-Jun-14
Note $'000 $'000 $'000
------------------------------------------- ---- ------------ ------------ ------------
Assets
Non-current assets
Property, plant and equipment 7 75,061 74,661 73,677
Intangible assets 8 78,290 81,605 82,949
Trade and other receivables 9 7,100 6,393 5,406
------------------------------------------- ---- ------------ ------------ ------------
160,451 162,659 162,032
------------------------------------------- ---- ------------ ------------ ------------
Current assets
Inventories 3,755 4,054 3,700
Trade and other receivables 9 7,070 3,214 15,034
Restricted cash 569 148 120
Cash and cash equivalents 35,206 46,144 28,871
------------------------------------------- ---- ------------ ------------ ------------
46,600 53,560 47,725
------------------------------------------- ---- ------------ ------------ ------------
Assets of the disposal group classified
as held for sale 109 80 134
------------------------------------------- ---- ------------ ------------ ------------
46,709 53,640 47,859
------------------------------------------- ---- ------------ ------------ ------------
Total assets 207,160 216,299 209,891
------------------------------------------- ---- ------------ ------------ ------------
Equity attributable to owners of
the parent
Ordinary shares 10 1,121 1,121 1,077
Share premium 10 - 67,079 56,464
Treasury shares (8,146) (9,644) (3,680)
Other reserves (12,375) (11,117) (5,079)
Retained earnings 199,239 140,484 132,889
------------------------------------------- ---- ------------ ------------ ------------
179,839 187,923 181,671
------------------------------------------- ---- ------------ ------------ ------------
Non-controlling interests 431 - -
------------------------------------------- ---- ------------ ------------ ------------
Total equity 180,270 187,923 181,671
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------------------------------------------- ---- ------------ ------------ ------------
Liabilities
Non-current liabilities
Deferred income tax liability 20,562 20,567 20,604
Provision for other liabilities
and charges 2,306 3,093 3,171
------------------------------------------- ---- ------------ ------------ ------------
22,868 23,660 23,775
------------------------------------------- ---- ------------ ------------ ------------
Current liabilities
------------------------------------------- ---- ------------ ------------ ------------
Trade and other payables 3,572 4,252 3,928
------------------------------------------- ---- ------------ ------------ ------------
3,572 4,252 3,928
------------------------------------------- ---- ------------ ------------ ------------
Liabilities of disposal group classified
as held for sale 450 464 517
------------------------------------------- ---- ------------ ------------ ------------
4,022 4,716 4,445
------------------------------------------- ---- ------------ ------------ ------------
Total liabilities 26,890 28,376 28,220
------------------------------------------- ---- ------------ ------------ ------------
Total equity and liabilities 207,160 216,299 209,891
------------------------------------------- ---- ------------ ------------ ------------
CONDENSED INTERIM STATEMENT OF CHANGES OF EQUITY (unaudited)
for the six months period ended 30 June 2015
Ordinary Share Treasury Other Retained Non-controlling Total
Shares Premium Shares Reserves Earnings interest
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
$'000 $'000 $'000 $'000 $'000 $'000 $'000
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
At 31 December
2014 1,121 67,079 (9,644) (11,117) 140,484 - 187,923
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
Profit for the
period - - - - 5,873 - 5,873
Other
comprehensive
income - currency
translation
differences - - - (1,258) - - (1,258)
Total
comprehensive
income - - - (1,258) 5,873 - 4,615
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
Transactions with
owners
Capital reduction
(note 10) - (67,079) - - 67,079 - -
Share based
payments - - - - 1,110 - 1,110
Exercise of
options - - 1,327 - (1,189) - 138
Sales of EBT
shares - - 171 - (171) - -
Dividends - - - - (12,787) - (12,787)
Copper Bay
acquisition* - - - - (1,160) 431 (729)
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
Total transactions
with owners,
recognised
directly in
equity - (67,079) 1,498 - 52,882 431 (12,268)
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
At 30 June 2015 1,121 - (8,146) (12,375) 199,239 431 180,270
------------------ ------------ ------------ ------------ ------------- ------------- --------------- ---------
*The results of the Copper Bay Group have been consolidated
within the CAML Group from 30 June 2015. This has resulted in a
reduction to group retained earnings at 30 June 2015 of $1.2
million.
Ordinary Share Treasury Other Retained Total
Shares Premium Shares Reserves Earnings
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
At 31 December 2013 862 - (4,100) 44,140 94,827 135,729
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
Profit for the period - - - - 47,026 47,026
Other comprehensive
income -
currency translation
differences - - - (10,144) - (10,144)
Total comprehensive
income - - - (10,144) 47,026 36,882
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
Transactions with owners
Share based payments - - - 799 - 799
Promise of shares to
be issued to KR on completion
of Kounrad Transaction - - - 16,845 - 16,845
Ordinary shares issue 212 56,041 - (56,253) - -
Exercise of warrants 3 423 - - - 426
Exercise of options - - 420 (304) - 116
Dividends - - - - (9,018) (9,018)
Sale of Mongolian assets - - - (162) 54 (108)
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
Total transactions with
owners, recognised directly
in equity 215 56,464 420 (39,075) (8,964) 9,060
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
At 30 June 2014 1,077 56,464 (3,680) (5,079) 132,889 181,671
------------------------------- ----------- ----------- ----------- ------------ ------------ ----------
CONDENSED INTERIM STATEMENT OF CASH FLOWS (unaudited)
for the six months period ended 30 June 2015
Six months ended
30-Jun-15 30-Jun-14
Note $'000 $'000
---------------------------------------------------------- --------- --------- -----------------
Cash flows from operating activities
Cash generated from operations 11 13,250 8,620
Income tax paid (5,739) (11,048)
Interest paid (134) (28)
---------------------------------------------------------- --------- --------- -----------------
Net cash generated from/(used in) operating
activities 7,377 (2,456)
---------------------------------------------------------- --------- --------- -----------------
Cash flows from investing activities
Purchases of property, plant and equipment (7,197) (2,892)
Purchase of intangible assets (159) (105)
Interest received 21 44
Acquisition of subsidiary net of cash
acquired 1,053 327
Discontinued operations (40) (115)
---------------------------------------------------------- --------- --------- -----------------
Net cash used in investing activities (6,322) (2,741)
---------------------------------------------------------- --------- --------- -----------------
Cash flows from financing activities
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September 14, 2015 02:00 ET (06:00 GMT)
Dividend paid to owners of the parent (12,787) (9,031)
Payment on completion of Kounrad Transaction - (1,432)
Receipt on exercise of share options 125 115
Exercise of warrants - 426
Restricted cash (note 10) (421) 1,614
---------------------------------------------------------- --------- --------- -----------------
Net cash used in financing activity (13,083) (8,308)
---------------------------------------------------------- --------- --------- -----------------
Effect of foreign exchange gains/(losses)
on cash and cash equivalents 1,090 (364)
Net decrease in cash and cash equivalents (10,938) (13,869)
---------------------------------------------------------- --------- --------- -----------------
Cash and cash equivalents at 1 January 46,159 42,795
---------------------------------------------------------- --------- --------- -----------------
Cash and cash equivalents at 30 June 35,221 28,926
---------------------------------------------------------- --------- --------- -----------------
Cash and cash equivalents at 30 June 2015 includes cash at bank
on hand included in assets held for sale of $15,000 (30 June 2014:
$55,000).
NOTES TO THE INTERIM FINANCIAL INFORMATION
For the six months period ended 30 June 2015
1. General information
Central Asia Metals plc ("CAML" or the "Company") and its
subsidiaries (the "Group") are a mining 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 two exploration projects in Mongolia which are held for
sale and owns a 75% shareholding in the Copper Bay tailings project
in Chile.
CAML is a public limited company, which is listed on the AIM
market of the London Stock Exchange 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.
The condensed consolidated interim financial information
incorporate the results of Central Asia Metals plc and its
subsidiary undertakings as at 30 June 2015 and was approved by the
Directors for issue on 14 September 2015. This condensed interim
financial information does not constitute accounts within the
meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2014 were approved by the
Board of Directors on 27 March 2015 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was
unqualified.
The condensed consolidated interim financial information has not
been unaudited.
2. Basis of preparation
The condensed interim financial information for the six months
ended 30 June 2015 has been prepared in accordance with IAS 34,
'Interim financial reporting'. The condensed interim financial
information should be read in conjunction with the annual financial
statements for the year ended 31 December 2014, which have been
prepared in accordance with IFRS.
3. Accounting policies
The accounting policies, methods of computation and presentation
used in the preparation of the interim financial information are
the same as those used in the Group's audited financial statements
for the year ended 31 December 2014.
After review of the Group's operations, financial position and
forecasts, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, the Directors continue to
adopt the going concern basis in preparing the unaudited interim
financial information.
Investment in Copper Bay Limited
The results of Copper Bay Limited and its subsidiaries have been
fully consolidated from 30 June 2015, being the date of the
additional investment of $3 million to increase CAML's shareholding
from 50% to 75% (note 8).
4. Estimates
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed interim financial information, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 31 December 2014.
5. Segmental information
The Board is the Group's chief operating decision-maker.
Management have 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 perspective.
As at 30 June 2015, the Group had two business segments
consisting of an SX-EW copper plant at Kounrad in Kazakhstan and
the Copper Bay project in Chile. The Copper Bay project has been
reported as a segment for the first time for the period ended 30
June 2015 following the additional 25% investment made by CAML on
30 June 2015. The Group operations are controlled from a head
office in London, UK but this does not represent a separate
business segment.
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 Kounrad and Copper Bay
projects are closely monitored and controlled.
The segmental results for the six months period ended 30 June
2015 do not include the results of the Copper Bay project which
will be consolidated from 30 June 2015 following the increase in
CAML's shareholding from 50% to 75%.
Segmental result
----------------------------------------------------------- --------------------
Unaudited Unaudited
----------------------------------------------------------- --------- ---------
30-Jun-15 30-Jun-14
----------------------------------------------------------- --------- ---------
$'000 $'000
----------------------------------------------------------- --------- ---------
Gross revenue 30,323 33,704
----------------------------------------------------------- --------- ---------
Off-take buyers' fees (1,288) (1,460)
----------------------------------------------------------- --------- ---------
Revenue 29,035 32,244
----------------------------------------------------------- --------- ---------
Kounrad EBITDA 20,509 24,970
Unallocated costs including corporate (4,524) (3,125)
----------------------------------------------------------- --------- ---------
Group continuing operations EBITDA 15,985 21,845
Gain on re-measuring to fair value the existing interest
on acquisition of control - 33,039
Depreciation and amortisation (6,055) (4,952)
Inventory write-off (715) -
Gain on foreign exchange 1,091 2,495
Other expenses, net 8 (6)
Finance income 21 44
Finance costs (257) (128)
----------------------------------------------------------- --------- ---------
Profit before income tax 10,078 52,337
----------------------------------------------------------- --------- ---------
Income tax (4,093) (5,150)
----------------------------------------------------------- --------- ---------
Profit for the period after taxation from continuing
operations 5,985 47,187
----------------------------------------------------------- --------- ---------
Loss from discontinued operations (112) (161)
----------------------------------------------------------- --------- ---------
Profit for the period 5,873 47,026
----------------------------------------------------------- --------- ---------
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Group segmental assets and liabilities for the six months ended
30 June 2015 are as follows:
Segmental Assets Segmental Liabilities
----------------------- -------------------- -----------------------
30-Jun-15 31-Dec-14 30-Jun-15 31-Dec-14
----------------------- --------- --------- ----------- ----------
$'000 $'000 $'000 $'000
----------------------- --------- --------- ----------- ----------
Kounrad 178,777 173,154 (25,273) (26,688)
Copper Bay 3,848 - (46) -
Assets held for sale 109 80 (450) (464)
Corporate 24,426 43,065 (1,121) (1,224)
----------------------- --------- --------- ----------- ----------
Total 207,160 216,299 (26,890) (28,376)
----------------------- --------- --------- ----------- ----------
6. Earnings per share
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.
(a) Basic
Six months ended
------------------------------------------------------------- -----------------------
30-Jun-15 30-Jun-14
------------------------------------------------------------- ----------- ----------
$'000 $'000
------------------------------------------------------------- ----------- ----------
Profit from continuing operations attributable to
owners of the parent 5,985 47,187
------------------------------------------------------------- ----------- ----------
Loss from discontinued operations attributable to
owners of the parent (112) (161)
------------------------------------------------------------- ----------- ----------
Total 5,873 47,026
------------------------------------------------------------- ----------- ----------
Weighted average number of Ordinary Shares in issue 111,558,091 90,645,415
------------------------------------------------------------- ----------- ----------
Earnings/(loss) per share from continuing and discontinued
operations attributable to owners of the parent during
the period (expressed in $ cents per share) $ cents $ cents
From continuing operations 5.37 52.06
From discontinued operations (0.10) (0.18)
------------------------------------------------------------- ----------- ----------
From profit for the period 5.27 51.88
------------------------------------------------------------- ----------- ----------
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.
(b) Diluted
Six months ended
------------------------------------------------------ ------------------------
30-Jun-15 30-Jun-14
------------------------------------------------------ ------------ ----------
$'000 $'000
------------------------------------------------------ ------------ ----------
Profit from continuing operations attributable
to owners of the parent 5,985 47,187
------------------------------------------------------ ------------ ----------
Loss from discontinued operations attributable
to owners of the parent (112) (161)
------------------------------------------------------ ------------ ----------
Total 5,873 47,026
------------------------------------------------------ ------------ ----------
Weighted average number of ordinary shares in issue 111,558,091 90,645,415
Adjusted for:
- Share Options 2,736,700 2,673,812
- Mirabaud Securities warrants - 932,053
------------------------------------------------------ ------------ ----------
Weighted average number of ordinary shares for
diluted earnings per share 114,294,791 94,251,280
Diluted earnings per share $ cents $ cents
From continuing operations 5.24 50.06
From discontinued operations (0.10) (0.18)
------------------------------------------------------ ------------ ----------
From profit for the period 5.14 49.89
------------------------------------------------------ ------------ ----------
7. Property, plant and equipment
Construction Plant and Motor vehicles Total
in progress equipment and office
equipment
------------------------------- ----------------- ----------- -------------- -------
Group $'000 $'000 $'000 $'000
------------------------------- ----------------- ----------- -------------- -------
Cost
At 1 January 2014 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 interests (260) (3,510) (231) (4,001)
Acquisition of Subsidiary
100% 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
Additions 5,198 1,079 349 6,626
Disposals - (15) (79) (94)
Change in estimate - asset
retirement obligation - (778) - (778)
Transfers (9,911) 9,890 21 -
Acquisition of Copper Bay - 3 - 3
Exchange differences (134) (765) (34) (933)
------------------------------- ----------------- ----------- -------------- -------
At 30 June 2015 2,836 91,404 1,972 96,212
------------------------------- ----------------- ----------- -------------- -------
Accumulated depreciation
At 1 January 2014 - 7,445 539 7,984
Provided during the period - 9,307 169 9,476
Disposals - (778) (58) (836)
Derecognition of previously
held interests - (1,315) (169) (1,484)
Acquisition of Subsidiary
100% - 2,192 281 2,473
Exchange differences - (851) (35) (886)
------------------------------- ----------------- ----------- -------------- -------
At 31 December 2014 - 16,000 727 16,727
Provided during the period - 4,637 116 4,753
Disposals - (13) (65) (78)
Exchange differences - (236) (15) (251)
------------------------------- ----------------- ----------- -------------- -------
At 30 June 2015 - 20,388 763 21,151
------------------------------- ----------------- ----------- -------------- -------
Net book value at 31 December
2014 7,683 65,990 988 74,661
------------------------------- ----------------- ----------- -------------- -------
Net book value at 30 June
2015 2,836 71,016 1,209 75,061
------------------------------- ----------------- ----------- -------------- -------
The change in estimate in relation to the asset retirement
obligation of $778,000 is as a result of adjusting the provision
recognised at the net present value of future expected costs using
an inflation rate of 4.3% (H1 2014: 6.6%) and discount rate of
8.07% (H1 2014: 8.65%) representing the risk free rate (pre-tax)
for Kazakhstan.
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8. Intangible assets
Goodwill Deferred Mining Computer Total
exploration licences software
and evaluation and permits
costs
--------------------------------- --------- --------------- ------------- ---------- -------
Group $'000 $'000 $'000 $'000 $'000
--------------------------------- --------- --------------- ------------- ---------- -------
Cost
At 1 January 2014 9,278 1,941 5,535 47 16,801
Additions - 98 - 17 115
Addition Goodwill 11,013 - - - 11,013
Disposals - (92) - (11) (103)
Derecognition of previously held
interests - (1,649) (1,947) (16) (3,612)
Acquisition of Subsidiary 100% - 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
Additions - 150 - 9 159
Acquisition of Copper Bay (see
below) - (1,581) - - (1,581)
Exchange differences - (58) (414) (2) (474)
--------------------------------- --------- --------------- ------------- ---------- -------
At 30 June 2015 20,291 1,316 59,985 62 81,654
--------------------------------- --------- --------------- ------------- ---------- -------
Accumulated amortisation
At 1 January 2014 - 51 29 28 108
Provided during the year - 65 1,857 14 1,936
Derecognition of previously held
interests - (92) - (11) (103)
Acquisition of Subsidiary 100% - (42) (22) (9) (73)
Disposal - 70 37 15 122
Exchange differences - 12 (51) (6) (45)
--------------------------------- --------- --------------- ------------- ---------- -------
At 31 December 2014 - 64 1,850 31 1,945
Provided during the year - 14 1,414 6 1,434
Exchange differences - 1 (14) (2) (15)
--------------------------------- --------- --------------- ------------- ---------- -------
At 30 June 2015 - 79 3,250 35 3,364
--------------------------------- --------- --------------- ------------- ---------- -------
Net book value at 31 December
2014 20,291 2,741 58,549 24 81,605
--------------------------------- --------- --------------- ------------- ---------- -------
Net book value at 30 June 2015 20,291 1,237 56,735 27 78,290
--------------------------------- --------- --------------- ------------- ---------- -------
Copper Bay investment
On 30 June 2015, CAML subscribed for 135,621,610 newly allotted
ordinary shares in Copper Bay Limited for cash consideration of
$3.0 million, which increased CAML's shareholding from 50% to
75%.
Following this additional investment, management has
reconsidered the accounting treatment of the initial $3.2 million
investment in 2013 and have fully consolidated the Copper Bay Group
as at 30 June 2015 at historical cost. An intangible asset of $3.2
million recognised in 2013 equal to the cash consideration paid for
the initial 50% shareholding has been reduced by $1.6 million. The
resulting value of the intangible exploration and evaluation assets
currently held in the Copper Bay Group as at 30 June 2015 was $1.6
million.
9. Trade and other receivables
30-Jun-15 31-Dec-14
$'000 $'000
------------------------------------------------------ ----------- ---------
Trade receivables 13,046 6,953
Less: provision for impairment of trade receivables (39) (41)
------------------------------------------------------ ----------- ---------
Trade receivables, net 13,007 6,912
Prepayments 1,163 2,695
14,170 9,607
------------------------------------------------------ ----------- ---------
Less: non-current portion:
Trade and other receivables (7,100) (6,393)
Current Portion 7,070 3,214
------------------------------------------------------ ----------- ---------
As at 30 June 2015, current trade and other receivables were
$7.1 million (31 December 2014: $3.2 million). The increase is a
result of $4.5 million owed for the sale of copper for June
deliveries. These funds were received in early August 2015.
The carrying value of all the above receivables is a reasonable
approximation of fair value.
10. Share capital and premium
Number Ordinary Share Premium Treasury Total
of Shares Shares Shares
------------------------ -------------- ----------- ----------------- ----------- --------
No $'000 $'000 $'000 $'000
------------------------ -------------- ----------- ----------------- ----------- --------
At 1 January 2014 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) -
Exercised warrants 1,192,053 12 1,928 - 1,940
Exercised 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
------------------------ -------------- ----------- ----------------- ----------- --------
Capital reduction - - (67,079) - (67,079)
Exercised options - - - 1,327 1,327
Sales of EBT shares - - - 171 171
------------------------ -------------- ----------- ----------------- ----------- --------
At 30 June 2015 112,069,738 1,121 - (8,146) (7,025)
------------------------ -------------- ----------- ----------------- ----------- --------
On 13 May 2015, the Company completed a Court approved capital
reduction scheme, which resulted in $67.1 million being transferred
from the share premium account to distributable reserves. A
condition of the capital reduction scheme was to set aside an
amount into a restricted bank account, which would cover certain
creditors as of the effective date of the capital reduction (13 May
2015). The balance of the restricted bank account in relation to
the capital reduction scheme as at 30 June 2015 was $0.4
million.
11. Cash generated from operations
Six months ended
30-Jun-15 30-Jun-14
$'000 $'000
-------------------------------------------------------------------------------------------------- --------- ---------
Profit before income tax including discontinued
operations 9,966 52,176
Adjustments for:
Depreciation 4,620 4,485
Amortisation 1,434 467
Change in provision for doubtful receivables (2) -
Foreign exchange gain (1,091) (2,495)
Gain on re-measuring to fair value the existing
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