TIDMCAML
RNS Number : 9211K
Central Asia Metals PLC
06 January 2016
6 January 2016
Central Asia Metals plc
("CAML" or the "Company")
2015 production update and 2016 outlook
Central Asia Metals plc (AIM: CAML) today provides a Q4 and full
year 2015 production update, together with 2016 production
guidance, for the Kounrad dump leach, solvent extraction and
electro-winning (SX-EW) copper recovery plant in Kazakhstan
("Kounrad").
Summary
-- Record annual copper production of 12,071 tonnes in 2015 (8.4% YoY increase);
-- 2015 C1 cash cost guidance, US$0.65 to US$0.70 per pound;
-- 2016 production guidance, 13,000 to 14,000 tonnes;
-- 2015 C1 cash costs expected to continue into 2016;
-- Cash as of 31 December 2015, US$42m.
2015 Kounrad copper production and sales
During Q4 2015, CAML produced 3,661 tonnes of copper from
Kounrad (Q4 2014: 2,701 tonnes, 35% QoQ increase), bringing the
total copper production for 2015 to 12,071 tonnes. This compares to
production of 11,136 tonnes for 2014 and represents an 8.4%
increase year on year.
The company sold 12,040 tonnes of copper cathode during 2015
(2014: 11,160 tonnes). These sales were predominantly through
off-take arrangements with Traxys, which has been retained as
CAML's offtake partner through to 31 December 2018, following a
competitive tender process. The agreed terms with Traxys will
provide additional cost savings to CAML and have been fixed for the
3 year period.
As of 31 December 2015, CAML's cash position was US$42m.
2015 C1 cash cost guidance
CAML reported a C1 cash cost of US$0.74 per pound for H1 2015,
and now expects FY 2015 C1 cash costs of between US$0.65 and
US$0.70 per pound. This cost reduction is due to a combination of
efficiency improvements, increased copper production and the
devaluation of the local currency.
2016 production guidance
The Company is now targeting increased copper production for
2016 to between 13,000 and 14,000 tonnes, having completed the
expansion of the Kounrad SX-EW plant capacity (Stage 1) in May
2015, ahead of schedule and below budget.
Consistent monitoring and analysis of the copper leaching rate
since production commenced in April 2012 indicates that the
recovery of copper from the dumps is taking slightly longer than
originally projected. The Company remains confident of producing
the same total tonnage of copper from the Kounrad resource as
previously estimated, thereby extending the life of the operation
beyond 2030.
The SX-EW plant's increased nominal capacity of 15,000 tonnes
per annum is predicated on two inputs; the throughput volume of
pregnant leach solution ("PLS") to the plant from the dumps and the
grade of copper within the solution. The plant is now capable of
handling up to 1,200m(3) of PLS per hour and this throughput was
achieved in Q3 2015. Due to the seasonal temperature variations at
Kounrad, the average annualised throughput is estimated at
approximately 80% of design.
The combination of a longer leaching cycle, seasonal variations
to the volume of PLS and a stabilisation of the long run PLS grade
means that the company believes a production guidance range of
between 13,000 and 14,000 tonnes of copper cathode is more
appropriate to ensure sustainable copper production over an
extended period.
The company is confident that 2016 C1 cash costs will be
maintained within the FY 2015 guidance range of US$0.65 and US$0.70
per pound.
Nick Clarke, Chief Executive Officer commented:
"Once again, we are pleased to report record annual copper
production in 2015 and to also provide production guidance for the
year ahead. With our expansion plans to the western dumps
commencing in March 2016, copper production is ensured for many
years.
Our cost discipline combined with the weakening of the Kazakh
Tenge has significantly reduced the cost base of the operation. We
are confident that we can continue to generate positive cashflows
from the operations at Kounrad despite market headwinds, which have
seen copper prices drop to a six year low in 2015.
In turn, this means that our key objective of delivering value
to our shareholders can be maintained and our dividend policy of
returning a minimum of 20% of the annual gross revenues remains
robust. Since production commenced in 2012, we have averaged
returns to shareholders in excess of this minimum.
Our 2015 annual results are scheduled to be announced on 11
April 2016, when our final dividend will be declared."
For further information contact:
Tel: +44 (0) 20
Central Asia Metals plc 7898 9001
Nick Clarke, CEO
Nigel Robinson, CFO
Louise Wrathall, Investor
Relations
louise.wrathall@centralasiametals.com
Peel Hunt LLP (Nominated Tel: +44 (0) 20
Adviser & Joint Broker) 7418 8900
Matthew Armitt
Ross Allister
Mirabaud Securities LLP (Joint Tel: +44 (0) 20
Broker) 7878 3362
Peter Krens
Tel: +44 (0) 20
Bell Pottinger (PR Advisers) 3772 2500
Greg Wood
Aarti Iyer
Richard Crowley
Note to editors:
Central Asia Metals, an AIM-listed UK company based in London,
owns 100% of the Kounrad SX-EW copper facility in Kazakhstan. The
Company also has a 75% equity interest in Copper Bay Ltd, which is
a private company conducting a definitive feasibility study of the
Chañaral Bay Copper Project in Chile. For further information,
please visit www.centralasiametals.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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