TIDMCAML
RNS Number : 6836V
Central Asia Metals PLC
10 April 2019
10 April 2019
CENTRAL ASIA METALS PLC
('CAML' or the 'Company')
Q1 2019 Operations Update
Central Asia Metals plc (AIM: CAML) today provides a Q1 2019
operations update for the Kounrad dump leach, solvent extraction
and electro-winning ('SX-EW') copper recovery plant in Kazakhstan
('Kounrad') and the Sasa zinc-lead mine in North Macedonia
('Sasa').
Highlights
- Production, on track to meet full year guidance for copper, zinc and lead
o Q1 2019 Kounrad
-- Copper produced, 2,952 tonnes
o Q1 2019 Sasa
-- Zinc in concentrate produced, 5,639 tonnes
-- Lead in concentrate produced, 7,212 tonnes
- Preparation of updated SRK Consulting (UK) Limited ('SRK')
Mineral Resource Estimate ('updated MRE') for Sasa in accordance
with Joint Ore Reserves Committee ('JORC') guidelines
o Total combined Indicated and Inferred Mineral Resources of
22.5 million tonnes with a zinc grade of 2.87% and a lead grade of
4.23%, containing 646,000 tonnes of zinc and 953,000 tonnes of
lead
o Despite 18 months of mining depletion since previous Mineral
Resource Estimate as of 1 July 2017 ('2017 MRE'), minimal reduction
in contained metal of approximately 6,000 tonnes of zinc and 7,000
tonnes of lead due to higher resource grades (informed by recent
drilling programmes)
o Golema Reka deposit Indicated Mineral Resources of 1.3 million
tonnes, at a zinc grade of 1.61% and a lead grade of 3.80%,
converted from Inferred Mineral Resources through the successful
2018 infill drilling programme
o Resource base to support a long mine life at Sasa of at least
19 years
CAML production summary
Metal production (tonnes) Q1 2019 Q1 2018
Copper 2,952 3,070
-------- --------
Zinc 5,639 5,518
-------- --------
Lead 7,212 7,020
-------- --------
Nigel Robinson, Chief Executive Officer, commented:
"These production results reflect a good start to the year at
Kounrad and Sasa, both of which are on track to achieve 2019
production targets. Base metals production guidance for 2019 is
12,500 to 13,500 tonnes of copper cathode, plus 22,000 to 24,000
tonnes of zinc in concentrate and 28,000 to 30,000 tonnes of lead
in concentrate.
"The updated MRE underscores our belief that in Sasa we have a
long-life asset with a high-quality resource base. Since the 2017
MRE, we have, in the updated MRE, demonstrated higher overall zinc
and lead grades at our current mining area of Svinja Reka. At
Golema Reka, our resource was previously all within the Inferred
category and we now have 1.3 million tonnes within the higher
confidence Indicated category out of a total Golema Reka combined
Indicated and Inferred Mineral Resource of 7.6 million tonnes.
"In 2019, we will continue to drill at Svinja Reka, with the
primary objective being to increase our understanding of the
mineralisation at depth. We will also drill some exploratory holes
into the Kozja Reka area that lies between Svinja Reka and Golema
Reka, which was mined between 1966 and 1989."
Kounrad
Kounrad Q1 2019 copper production was 2,952 tonnes. Total
Kounrad copper production since operations commenced in 2012 is now
85,426 tonnes.
Total copper recovered from the Western Dumps in 2019 is 1,958
tonnes, equating to approximately 66% of the amount plated.
Copper sales during Q1 2019 were 2,894 tonnes.
Sasa
Production and sales
In Q1 2019, mined and processed ore were 197,836 tonnes and
199,489 tonnes respectively. The average head grades for the Q1
2019 period were 3.26% zinc and 3.84% lead. Q1 metallurgical
recoveries were 86.8% for zinc and 94.0% for lead.
Sasa produces a zinc concentrate and a separate lead
concentrate. In Q1 2019, 11,447 tonnes of concentrate containing
49.3% zinc and 9,870 tonnes of concentrate containing 73.1% lead
were produced.
Sasa typically receives from smelters approximately 84% of the
value of its zinc in concentrate and approximately 95% of the value
of its lead in concentrate. Accordingly, Q1 2019 payable production
was 4,723 tonnes of zinc and 6,851 tonnes of lead. Given that
deliveries from Sasa to the smelters occur on a daily basis,
payable base metal in concentrate sales for the quarter were very
similar at 4,754 tonnes of zinc and 6,921 tonnes of lead.
During Q1 2019, Sasa sold 88,392 ounces of payable silver that
were recovered in the lead concentrate. Due to an existing
streaming agreement with Osisko Gold Royalties, CAML's silver
production has been pre-sold.
Units Q1 2019 Q1 2018
Ore mined t 197,836 192,372
--------- --------- --------
Plant feed t 199,489 196,364
--------- --------- --------
Zinc grade % 3.26 3.32
--------- --------- --------
Zinc recovery % 86.8 84.6
--------- --------- --------
Lead grade % 3.84 3.83
--------- --------- --------
Lead recovery % 94.0 93.3
--------- --------- --------
Zinc concentrate t (dry) 11,447 11,385
--------- --------- --------
* Grade % 49.3 48.5
--------- --------- --------
* Contained zinc t 5,639 5,518
--------- --------- --------
Lead concentrate t (dry) 9,870 9,587
--------- --------- --------
* Grade % 73.1 73.2
--------- --------- --------
* Contained lead t 7,212 7,020
--------- --------- --------
SRK Mineral Resource Statement
During 2018, CAML undertook diamond drilling at both Svinja
Reka, the location of current Sasa mining operations, and Golema
Reka, which was mined between 1981 and 2010. The assay results of
these holes were released on 9 January 2019. Approximately 3,000
metres of drilling were undertaken at each deposit, with the aim of
verifying previous exploration programmes and converting a portion
of the Inferred Mineral Resources into the Indicated category.
The Svinja Reka and Golema Reka deposits have been explored and
sampled using appropriate methodologies and are sufficiently
understood to support the estimation of Indicated and Inferred
Mineral Resources.
The Mineral Resource Statement below demonstrates Sasa's
resources as of 31 December 2018. The statement has been prepared
in accordance with JORC (2012) guidelines by Competent Person, Mr
Guy Dishaw (P.Geo.). Mr Dishaw is a consultant employed by SRK who
is independent of CAML.
SRK Mineral Resource Statement for combined Svinja Reka and
Golema Reka deposits of the Sasa mine, as of 31 December 2018,
reported at $35.0 and $40.0 per tonne net smelter return ('NSR')
cut-off for each deposit respectively.
Classification Deposit Tonnage Pb grade Pb contained Zn grade Zn contained Ag grade Ag contained
(mt) (%) (kt) (%) (kt) (g/t) (koz)
Indicated
Mineral Svinja
Resources Reka 12.3 4.80 592 3.80 468 25 9,857
------------ -------- --------- ------------- --------- ------------- --------- -------------
Golema
Reka 1.3 3.80 48 1.61 20 13 528
----------------------------- -------- --------- ------------- --------- ------------- --------- -------------
Total
Indicated 13.6 4.71 640 3.60 489 24 10,385
----------------------------- -------- --------- ------------- --------- ------------- --------- -------------
Inferred
Mineral Svinja
Resources Reka 2.7 3.55 96 2.64 71 18 1,545
------------ -------- --------- ------------- --------- ------------- --------- -------------
Golema
Reka 6.3 3.47 217 1.38 86 12 2,444
----------------------------- -------- --------- ------------- --------- ------------- --------- -------------
Total
Inferred 9.0 3.49 313 1.76 157 14 3,989
----------------------------- -------- --------- ------------- --------- ------------- --------- -------------
Total Indicated
and Inferred
Mineral Resources 22.5 4.23 953 2.87 646 20 14,374
-------- --------- ------------- --------- ------------- --------- -------------
-- CAML owns 100% of the Sasa mine and is the operator
-- All Indicated Mineral Resources are reported within the
Exploitation Licence, although approximately 600kt (22%) of
reported Inferred Resources at Svinja Reka exist outside the
current Exploitation Licence
-- Mineral Resources are reported as undiluted. No mining
recovery has been applied in the Statement.
-- Tonnages are reported in metric units, grades in per cent (%)
or grammes per tonne (g/t), and the contained metal in metric
units. Tonnages, grades, and contained metal totals are rounded
appropriately. Rounding, as required by reporting guidelines, may
result in apparent summation differences between tonnes, grade and
contained metal content.
Svinja Reka
The updated MRE has demonstrated a 4% increase in overall zinc
grade to 3.59% and a 7% increase in lead grade to 4.58% when
compared to the 2017 MRE. This improvement in reported grades is
largely a result of the intersection of mineralisation that was
both thicker and higher grade than expected in the drilling between
the 830 metre and 750 metre levels. This increase in grade has
resulted in only a relatively small decrease in contained metal
since the 2017 MRE of approximately 7,000 tonnes of lead and 6,000
tonnes of zinc, despite production during the period of 33,378
tonnes of zinc and 44,390 tonnes of lead.
The total Svinja Reka combined Indicated and Inferred Resources
of 15.1 million tonnes reflects removal from the model of 1.46
million tonnes of material that was mined or not recovered, 0.45
million tonnes of Inferred Resources that were converted to
Indicated Resources and 0.45 million tonnes of new Inferred
Resources that were identified through the drilling programme.
Golema Reka
At Golema Reka, combined Indicated and Inferred Mineral
Resources of 7.6 million tonnes reflect an increase of 0.2 million
tonnes since the 2017 MRE as a result of the drilling programme.
1.3 million tonnes of the total have been upgraded from the
Inferred to Indicated category, demonstrating an increased level of
confidence in this material, as a result of the 2018 drilling
programme.
For further information contact:
Central Asia Metals Tel: +44 (0) 20 7898 9001
Nigel Robinson, CEO
Gavin Ferrar, CFO
Louise Wrathall, Investor Relations louise.wrathall@centralasiametals.com
Peel Hunt (Nominated Advisor and Tel: +44 (0) 20 7418 8900
Joint Broker)
Ross Allister
James Bavister
David McKeown
BMO Capital Markets (Joint Broker) Tel: +44 (0) 20 7236 1010
Jeff Couch
Thomas Rider
Neil Elliot
Blytheweigh (PR Advisors) Tel: +44 (0) 20 7138 3204
Tim Blythe
Camilla Horsfall
Megan Ray
Review by Competent Person:
The Mineral Resource Estimate has been completed by Guy Dishaw,
a Principal Consultant (Mining Geology) with SRK Consulting (UK)
Ltd., who is a Member of the Association of Professional Engineers
and Geologists of Saskatchewan. Guy Dishaw has some twenty years'
experience in the exploration, definition and mining of precious
and base metal Mineral Resources. Guy Dishaw has sufficient
experience which is relevant to the style of mineralisation and
type of deposit under consideration, and to the type of activity
which he is undertaking to qualify as a "Competent Person" as
defined by JORC and as required by the June 2009 Edition of the AIM
Note for Mining and Oil & Gas Companies. Guy Dishaw has
reviewed, and consents to, the inclusion in the announcement of the
matters based on their information in the form and context in which
it appears and confirms that this information is accurate and not
false or misleading. The technical information contained within
this announcement has also been reviewed and approved by Scott
Yelland, CAML COO, a qualified Chartered Engineer and Fellow of the
Institute of Materials, Minerals and Mining (FIMMM).
Note to editors:
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. For further
information, please visit www.centralasiametals.com.
Glossary:
Ag Chemical symbol for silver
Assay Laboratory test conducted to determine the proportion of
a mineral within a rock or other material
-------------------------------------------------------------------
Grade The proportion of a mineral within a rock or other material.
For zinc and lead mineralisation this is usually reported
as a percentage of zinc and lead per tonne of rock
-------------------------------------------------------------------
g/t Grammes per tonne
-------------------------------------------------------------------
Indicated An Indicated Mineral Resource is that part of a Mineral Resource
Mineral for which quantity, grade or quality, densities, shape and
Resource physical characteristics are estimated with sufficient confidence
to allow the application of Modifying Factors in sufficient
detail to support mine planning and evaluation of the economic
viability of the deposit. Geological evidence is derived
from adequately detailed and reliable exploration, sampling
and testing and is sufficient to assume geological and grade
or quality continuity between points of observation. An Indicated
Mineral Resource has a lower level of confidence than that
applying to a Measured Mineral Resource and may only be converted
to a Probable Ore Reserve
-------------------------------------------------------------------
Inferred An Inferred Mineral Resource is that part of a Mineral Resource
Mineral for which quantity and grade or quality are estimated on
Resource the basis of limited geological evidence and sampling. Geological
evidence is sufficient to imply but not verify geological
and grade or quality continuity. An Inferred Mineral Resource
has a lower level of confidence than that applying to an
Indicated Mineral Resource and must not be converted to an
Ore Reserve. It is reasonably expected that the majority
of Inferred Mineral Resources could be upgraded to Indicated
Mineral Resources with continued exploration
-------------------------------------------------------------------
JORC The Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves, as published by the Joint
Ore Reserves Committee of The Australasian Institute of Mining
and Metallurgy, Australian Institute of Geoscientists and
Minerals Council of Australia
-------------------------------------------------------------------
Mineral A Mineral Resource is a concentration or occurrence of solid
Resource material of economic interest in or on the Earth's crust
in such form, grade or quality and quantity that there are
reasonable prospects for eventual economic extraction. The
location, quantity, grade or quality, continuity and other
geological characteristics of a Mineral Resource are known,
estimated or interpreted from specific geological evidence
and knowledge, including sampling
-------------------------------------------------------------------
NSR cut The lowest net smelter return ('NSR') value of mineralised
off material that qualifies as potentially economically mineable
-------------------------------------------------------------------
Pb Chemical symbol for lead
-------------------------------------------------------------------
Zn Chemical symbol for zinc
-------------------------------------------------------------------
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END
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