TIDMCAML
RNS Number : 2123Z
Central Asia Metals PLC
09 January 2020
9 January 2020
CENTRAL ASIA METALS PLC
('CAML' or the 'Company')
2019 Operations Update
Central Asia Metals plc (AIM: CAML) today provides a Q4 and full
year 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').
Operational highlights
- 2019 copper production exceeded guidance at Kounrad
o 13,771 tonnes produced
- 2019 zinc and lead production from Sasa at the top end of the guidance range
o Zinc in concentrate production, 23,369 tonnes
o Lead in concentrate production, 29,201 tonnes
Corporate highlights
- Cash in the bank on 31 December 2019, $32.4 million
- Gross debt as at 31 December 2019, $108.8 million, a reduction of $36.1 million during 2019
- Nick Clarke transitions to Non-Executive Chairman
2020 production guidance
- Copper, 12,500 to 13,500 tonnes
- Zinc in concentrate, 23,000 to 25,000 tonnes
- Lead in concentrate, 30,000 to 32,000 tonnes
CAML production summary
Metal production Q4 2019 2019 2018
(tonnes)
Copper 3,138 13,771 14,049
-------- ------- -------
Zinc 5,666 23,369 22,532
-------- ------- -------
Lead 7,483 29,201 29,388
-------- ------- -------
Nigel Robinson, Chief Executive Officer, commented:
"I am pleased to report another strong year of production for
CAML with guidance exceeded for copper and production delivered at
the top end of the guidance range for zinc and lead.
"Importantly, our safety performance improved year on year with
lost time injuries recorded at both of our sites reducing from
eight in 2018 to one in 2019.
"We also continued to de-leverage, repaying gross debt of $36.1
million during the course of the year.
"2019 was a productive year at Sasa and I am pleased with the
improvements that we have made on site, including the installation
of our new tertiary crusher, which will facilitate increased
throughput and has allowed us to increase our production guidance
for 2020. It is the intention to transition to cut and fill mining
in the next few years, and this will result in another busy year of
technical studies while we finalise our plans and report these to
the market during 2020.
"Our 2019 annual results are scheduled to be released on 1 April
2020, when our final dividend for 2019 will also be announced.
"I would like to take this opportunity to thank Nick Clarke for
his support and for his dedication as an executive of the Company,
and I look forward to continuing to work with him in his new role
as our Non-Executive Chairman."
Kounrad
Kounrad Q4 2019 copper production of 3,138 tonnes brings output
for 2019 to 13,771 tonnes. Total Kounrad copper production since
operations commenced in 2012 is now 96,245 tonnes. Total copper
recovered from the Western Dumps in 2019 was 9,323 tonnes, equating
to approximately 68% of the amount plated.
All preparations for the winter period were completed in October
and steady state operations continued to the end of 2019.
Copper sales during Q4 2019 were 3,525 tonnes, bringing the
total for 2019 to 13,600 tonnes.
Sasa
Production and sales
In Q4 2019, mined and processed ore totalled 210,446 tonnes and
205,714 tonnes respectively, bringing the total for 2019 to 817,714
tonnes of ore mined and 820,491 tonnes of ore processed. The
average head grades for the quarter were 3.23% zinc and 3.83% lead,
and for 2019 were on average 3.29% and 3.77% respectively. The
average 2019 metallurgical recoveries were 86.5% for zinc and 94.5%
for lead, an increase on those achieved in 2018.
Sasa produces a zinc concentrate and a separate lead
concentrate. In Q4 2019, 11,414 tonnes of concentrate containing
49.6% zinc and 10,401 tonnes of concentrate containing 71.9% lead
were produced. Total production for 2019 was 47,104 tonnes of zinc
concentrate at an average grade of 49.6% and 40,366 tonnes of lead
concentrate at an average grade of 72.3%.
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, Q4 2019 payable production
of zinc was 4,753 tonnes and of lead was 7,109 tonnes, bringing
total 2019 payable production to 19,601 tonnes of zinc and 27,741
tonnes of lead. Given that deliveries from Sasa to the smelters
occur on a regular basis, payable base metal in concentrate sales
for the year were similar to production at 19,697 tonnes of zinc
and 27,875 tonnes of lead.
During 2019, Sasa sold 346,258 ounces of payable silver to
Osisko Gold Royalties, in accordance with its streaming
agreement.
Units Q4 2019 2019 2018
Ore mined t 210,446 817,714 803,101
--------- --------- -------- --------
Plant feed t 205,714 820,491 804,749
--------- --------- -------- --------
Zinc grade % 3.23 3.29 3.31
--------- --------- -------- --------
Zinc recovery % 85.2 86.5 84.6
--------- --------- -------- --------
Lead grade % 3.83 3.77 3.90
--------- --------- -------- --------
Lead recovery % 94.9 94.5 93.6
--------- --------- -------- --------
Zinc concentrate t (dry) 11,414 47,104 46,128
--------- --------- -------- --------
* Grade % 49.6 49.6 48.9
--------- --------- -------- --------
* Contained zinc t 5,666 23,369 22,532
--------- --------- -------- --------
Lead concentrate t (dry) 10,401 40,366 40,317
--------- --------- -------- --------
* Grade % 71.9 72.3 72.9
--------- --------- -------- --------
* Contained lead t 7,483 29,201 29,388
--------- --------- -------- --------
Life of Mine review
During 2019, the CAML operations team, supported by external
consultants where appropriate, materially completed its 'Life of
Mine' review, the purpose of which was two-fold. First was to
identify areas for improvement that could be implemented on site to
optimise productivity, and many such initiatives have been actioned
during the year.
The second part of the rationale for the Life of Mine study was
to ascertain whether the operation should continue utilising the
current sub-level caving mining methodology at the Svinja Reka
orebody, or whether a change to cut and fill mining would be more
appropriate. Cut and fill stoping is a more selective form of ore
extraction, whereby voids created by mining are typically filled
using a paste comprised, in part, of process plant tailings, and
therefore has the additional benefit of reducing the tailings
storage facilities required over the life of the mine.
During Q4 2019, a new crusher and screen were installed, adding
a third crushing stage to the processing circuit that will
alleviate pressure on the existing mills and is expected to allow
for increased future annual plant throughput up to 850,000
tonnes.
A full audit of Sasa's underground mobile fleet has been
undertaken with regards to overall availability, utilisation,
suitability and cost. The analysis indicated that the ageing
underground fleet is becoming less cost effective to run. A
decision was made during Q4 2019 to undergo a phased process of
replacing the current underground mobile plant with a new optimised
fleet.
The initial component of this replacement process will include
the purchase of six new units in 2020, and three additional units
will also be purchased each year in 2021, 2022 and 2023.
During 2019, Sasa began building a wireless underground network,
which will allow for increased monitoring and communication of
machines and, in Q1 2020, the Company will introduce the use of
data analytics in order to better monitor availability and
utilisation.
Regarding Sasa's mining method, pre-feasibility studies have
been undertaken and, on this basis, the CAML Board has decided in
principle to transition to cut and fill stoping at Svinja Reka.
There are several reasons for this:
- Cut and fill is generally regarded as a safer mining method than sub-level caving
- Cut and fill is a more flexible mining method better suited to
the geometry of the three Svinja Reka orebodies and is therefore
expected to result in higher recovery and reduced dilution of ore.
This should lead to
o higher zinc and lead reserve grades
o increased metal production over the life of the mine
- It is currently estimated that over 60% of Sasa tailings
production would be placed underground as this forms part of the
'paste' fill of the mined voids
o Underground storage of tailings is widely viewed as a more
environmentally acceptable solution to traditional surface tailings
dams
o In Sasa's case, this approach could also mean that the
construction of future downstream tailings storage facilities is
not required, thereby saving significant capital expenditure over
the life of the mine, and avoiding potential purchases of nearby
dwellings. The construction of Tailings Storage Facility 4
('TSF4'), was completed during 2019 with a capacity of six to seven
years. Capital expenditure for TSF4 totalled $16 million (pre and
post CAML ownership)
- Recent geotechnical studies at Sasa have demonstrated that
geological stresses will increase with depth and additional pillars
of ore would need to be left in-situ if Sasa continues its current
sub-level caving mining method. The need for increased supporting
pillars, resulting in lower recovery of ore, would be eliminated
due to the use of backfill within voids in the cut and fill mining
method
- It has always been assumed that long-term production from the
Golema Reka resource area would be undertaken using the cut and
fill mining method. Therefore, construction of a paste plant, which
would have been required in the future, has simply been
accelerated
CAML will now complete detailed engineering studies and update
the mineral resource estimate and ore reserve for Svinja Reka. It
is anticipated that this work will be completed during H2 2020.
While detailed capital and operating cost expectations have yet
to be finalised, the capital expenditure required to construct a
paste plant should be spread over two years from 2021 onwards and
is expected to be more than offset by the savings in not
constructing further downstream tailings facilities over the life
of the mine. CAML does not expect to incur any material capital
expenditure for this transition during 2020.
2020 guidance
CAML is targeting 2020 Kounrad copper production of between
12,500 and 13,500 tonnes of cathode, of which approximately 75% is
to be leached from the Western Dumps.
At Sasa, CAML expects 2020 underground ore production of between
825,000 and 850,000 tonnes. This should result in zinc in
concentrate of between 23,000 and 25,000 tonnes and lead in
concentrate of between 30,000 and 32,000 tonnes.
Given the fleet replacement programme underway at Sasa, CAML
expects Group 2020 capital expenditure to be between $12 million
and $14 million.
Cash and gross debt
As of 31 December 2019, CAML had cash in the bank of $32.4
million and gross debt of $108.8 million.
Change in role of CAML Chairman
Effective from 1 January 2020, Nick Clarke has assumed the role
of Non-Executive Chairman. Nick remains committed to CAML, although
has now taken a step back from the day-to-day management of the
business, which is undertaken by CEO, Nigel Robinson, and CFO,
Gavin Ferrar.
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
David McKeown
BMO Capital Markets (Joint Broker) Tel: +44 (0) 20 7236 1010
Thomas Rider
Neil Elliot
Blytheweigh (PR Advisors) Tel: +44 (0) 20 7138 3204
Tim Blythe
Camilla Horsfall
Megan Ray
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 100% of the Sasa zinc-lead mine in North Macedonia.
For further information, please visit: www.centralasiametals.com
and https://twitter.com/CamlMetals
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END
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