TIDMCAML
RNS Number : 4578S
Central Asia Metals PLC
09 July 2020
9 July 2020
CENTRAL ASIA METALS PLC
('CAML' or the 'Company')
H1 2020 Operations Update
Central Asia Metals plc (AIM: CAML) today provides a H1 2020
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').
H1 2020 operational highlights
- No lost time injuries ('LTIs') at either operation
- Production and sales volumes unaffected by COVID-19 pandemic
- Kounrad copper production, 6,607 tonnes
- Sasa zinc in concentrate production, 12,203 tonnes
- Sasa lead in concentrate production, 15,140 tonnes
Group cash and debt position
- Cash in the bank on 30 June 2020, $44.0 million
- Gross debt (inclusive of overdraft) on 30 June 2020, $99.0 million
o H1 2020 Traxys corporate debt facility repayments of $19.2
million
Outlook
- Production currently on track to meet full year 2020 guidance for copper, zinc and lead
o Copper, 12,500 - 13,500 tonnes
o Zinc, 23,000 - 25,000 tonnes
o Lead, 30,000 - 32,000 tonnes
- Post-period end, reduced workforce at Kounrad to further
increase social distancing measures with no impact on output
levels
CAML production summary
Metal production (tonnes) Q2 2020 Q1 2020 H1 2020 H1 2019
Copper 3,406 3,201 6,607 6,594
-------- -------- -------- --------
Zinc 6,076 6,127 12,203 11,517
-------- -------- -------- --------
Lead 7,533 7,607 15,140 14,357
-------- -------- -------- --------
Nigel Robinson, Chief Executive Officer, commented:
"Today's update demonstrates a period of safe production from
our two operations during H1 2020, with no lost time injuries. We
remain firmly on course to achieve our 2020 production guidance for
copper, zinc and lead.
"H1 2020 has brought its challenges, as COVID-19 related
concerns and restrictions in Kazakhstan and North Macedonia meant
that our site teams have faced and successfully managed many
headwinds to maintain our metals production and sales, including
making significant changes to our operating practices to ensure the
health of all colleagues.
"However, as we enter Q3 2020, COVID-19 cases are rising in the
local town close to the Kounrad operation and, despite our
stringent on-site actions and health measures, some of our
employees have recently been diagnosed with the virus. It is our
duty to do our utmost to prevent the spread of this virus on our
site and, to that end, we have taken the post-period end decision
to temporarily reduce to a minimum the number of employees at
Kounrad to further increase social distancing measures. Due to the
relatively open nature of the operations, we are confident that
such measures will be effective and, with our reduced staffing, we
will be able to broadly maintain production for the near term.
"Our top priority is always the welfare of our employees and
contractors."
COVID-19 update
During H1 2020, both the Kounrad facility in Kazakhstan and the
Sasa mine in North Macedonia continued to operate with no
disruptions to production or sales due to COVID-19.
CAML COVID-19 related actions
The Company has put in place many measures during H1 2020 to try
to ensure the safety of its employees and contractors on both
sites, including:
- Establishing a COVID-19 'Crisis Committee', involving regular
calls between CAML Group and operations teams to coordinate
responses/actions and share ideas. Business continuity plans were
developed and critical inventory levels were reviewed to support
production in the event of supply disruptions
- Staff at both operations and in the UK head office instructed
to work from home where possible
- A cessation of all but essential international travel
- A cessation of all but necessary visitors to site (subject to
authorisation from General Directors)
- Identification and close monitoring of team members most
vulnerable to COVID-19 with most now removed from the workplace
- The distribution of COVID-19 related PPE to employees and contractors
- Undertaking a detailed review of all activities at both sites
to ensure that social distancing is at the heart of operations
during the pandemic
- Changes made to canteen and transport arrangements at both
operations to increase social distancing
- Relevant government guidance reinforced, and increased hygiene
measures implemented on both sites
- Employees instructed to stay at home if they suffer from any potential COVID-19 symptoms
- Temperature testing on entry to transport buses and at the mine gate
Kazakhstan and North Macedonia update
Along with many other countries, the governments of Kazakhstan
and North Macedonia had in May begun to ease lockdown restrictions
on the movement of people, business operations and socialising.
However, both countries are now experiencing an increasing number
of COVID-19 cases. Kazakhstan has recently re-introduced a national
lockdown.
Kounrad and Sasa
To date, 27 Kounrad employees have tested positive for COVID-19.
Post the period end, the Company has temporarily reduced the total
number of employees by 40% in order to further increase social
distancing with a view to ensuring the virus does not spread on the
Kounrad site. During this period, CAML currently expects to broadly
maintain production, safely, albeit with minimal maintenance. The
situation will be under constant review and updates provided as and
when appropriate.
No CAML employees at Sasa have tested positive for COVID-19 and
there are no reported cases in the town closest to the mine,
Makedonska Kamenica.
Community support
During Q2 2020, CAML has supported both Kazakhstan and North
Macedonia in the fight against COVID-19. CAML's Kounrad Foundation
charity in Kazakhstan purchased a polymerase chain reaction ('PCR')
machine for Balkhash Central Hospital, close to the Group's copper
operations, which will be installed during H2 2020. At a cost of
approximately $70,000, this machine will enable timely COVID-19
testing for the local population, as recommended by the World
Health Organisation ('WHO'). The Kounrad Foundation also purchased
an automatic back-up power unit for the hospital to ensure security
of supply during crucial medical treatments.
In North Macedonia, the Sasa mine's EUR126,000 donation included
a national contribution to the Ministry of Health, procurement of
personal protective equipment for medical staff and key members of
the local community, donations of food and hygiene products to the
most vulnerable, and additional automatic anaesthesia equipment for
a key hospital.
Safety
No LTIs were reported at either Kounrad or Sasa during H1 2020.
There has been one medical treatment injury ('MTI') at Sasa during
H1 2020 and therefore one Group total recordable injury ('TRI')
during H1 2020.
Kounrad
Kounrad Q2 2020 copper production of 3,406 tonnes brings output
for the first six months of 2020 to 6,607 tonnes. Total Kounrad
copper production since operations commenced in 2012 is now 102,852
tonnes.
Total copper recovered from the Western Dumps in H1 2020 is
5,017 tonnes, equating to approximately 76% of the amount
plated.
Copper sales during H1 2020 were 6,600 tonnes.
Sasa
During H1 2020, orders were placed for six new pieces of Epiroc
underground equipment and, during the period, four of the six
machines (three loaders and a boomer drill rig) arrived at site. A
second boomer and a truck are due to be delivered to Sasa in Q3
2020.
Despite travel restrictions, technical work continues for the
Life of Mine study that is appraising the change in mining method
from the current sub-level caving method to cut and fill stoping.
The study is on schedule to be completed during H2 2020.
Production
In Q2 2020, mined and processed ore were 208,267 tonnes and
209,192 tonnes respectively, bringing the H1 2020 total to 416,055
tonnes of ore mined and 419,856 tonnes of ore processed. The
average head grades for the Q2 2020 period were 3.37% zinc and
3.83% lead, and for H1 2020 were on average 3.37% and 3.82%
respectively. The average H1 2020 metallurgical recoveries were
86.3% for zinc and 94.3% for lead.
Sasa produces a zinc concentrate and a separate lead
concentrate. In Q2 2020, 12,195 tonnes of concentrate containing
49.8% zinc and 10,475 tonnes of concentrate containing 71.9% lead
were produced. Total H1 2020 production was 24,510 tonnes of zinc
concentrate at an average grade of 49.8% and 21,035 tonnes of lead
concentrate at an average grade of 72.0%.
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, Q2 2020 payable production
of zinc was 5,100 tonnes and of lead was 7,157 tonnes, bringing
total payable production for H1 2020 to 10,242 tonnes of zinc and
14,383 tonnes of lead.
Units Q2 2020 Q1 2020 H1 2020 H1 2019
Ore mined t 208,267 207,788 416,055 400,251
--------- -------- -------- -------- --------
Plant feed t 209,192 210,664 419,856 404,540
--------- -------- -------- -------- --------
Zinc grade % 3.37 3.37 3.37 3.28
--------- -------- -------- -------- --------
Zinc recovery % 86.1 86.4 86.3 86.7
--------- -------- -------- -------- --------
Lead grade % 3.83 3.82 3.82 3.76
--------- -------- -------- -------- --------
Lead recovery % 94.1 94.5 94.3 94.4
--------- -------- -------- -------- --------
Zinc concentrate t (dry) 12,19 5 12,315 24,510 23,306
--------- -------- -------- -------- --------
* Grade % 49.8 49.8 49.8 49.4
--------- -------- -------- -------- --------
* Contained zinc t 6,07 6 6,127 12,203 11,517
--------- -------- -------- -------- --------
Lead concentrate t (dry) 10,475 10,560 21,035 19,720
--------- -------- -------- -------- --------
* Grade % 71.9 72.0 72.0 72.8
--------- -------- -------- -------- --------
* Contained lead t 7,533 7,607 15,140 14,357
--------- -------- -------- -------- --------
Sales
Payable base metal in concentrate sales from Sasa for the
six-month period were 10,273 tonnes of zinc and 14,445 tonnes of
lead.
Recent tightness in the regional lead concentrate market
resulted in spot contracts being sought elsewhere to diversify
CAML's customer base. Two smelters in China were identified and
3,261 dry tonnes of lead concentrate have been shipped to them
during H1 2020. Spot contracts are now in place with these
customers for approximately 15% of Sasa's 2020 lead product.
Through these lead concentrate sales, Sasa is benefitting from
reduced treatment charges that have resulted from global COVID-19
related supply disruptions.
During H1 2020, Sasa sold 176,655 ounces of payable silver to
Osisko Gold Royalties, in accordance with its streaming
agreement.
Group cash and debt position
During Q2 2020, CAML secured a Macedonian Denar denominated
overdraft facility totalling approximately $5.0 million from North
Macedonian bank, Ohridska Banka AD Skopje ('Ohridska Banka'). These
funds have been drawn by CAML and provide the Group with additional
financial flexibility.
As of 30 June 2020, CAML had cash in the bank of $44.0 million
and gross debt of $99.0 million. Gross debt comprises $89.0 million
in corporate debt through Traxys Europe S.A. and $10.0m of North
Macedonian overdraft facilities with Ohridska Banka (interest fixed
at 2.5%) and Komercijalna Banka AD Skopje (interest fixed at
3.8%).
For further information contact:
Central Asia Metals Tel: +44 (0) 20 7898 9001
Nigel Robinson, CEO
Gavin Ferrar, CFO
Louise Wrathall, Director of Corporate louise.wrathall@centralasiametals.com
Relations
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
Megan Ray
Rachael Brooks
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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