Central Asia Metals plc 2017 Full Year Results

Central Asia Metals plc 2017 Full Year Results

Central Asia Metals plc (AIM: CAML) today announces its full year results for the 12 months ended 31 December 2017.

Financial summary

  • $402.5 million acquisition of Lynx Resources, 100% owner of Sasa zinc-lead mine, Macedonia
  • 2017 dividend of 16.5 pence per share (2016: 15.5 pence), includes final proposed dividend of 10 pence
  • Group gross revenue of $106.5 million (2016: $69.3 million)
  • Kounrad 2017 C1 cash cost of $0.52 per pound (2016: $0.43 per pound)
  • Sasa 2017 C1 zinc equivalent cash cost of $0.44 per pound
  • Adjusted Group EBITDA of $66.4 million (2016: $39.9 million)
  • Unadjusted EBITDA of $53.8 million (includes Lynx Resources acquisition cost of $12.6 million)
  • Adjusted EBITDA margin of 62% (2016: 58%), unadjusted EBITDA margin of 51% (2016: 58%)
  • Cash in the bank as at 31 December 2017 of $45.8 million (2016: $40.3 million)
  • Group net debt as at 31 December 2017 of $138.9 million (2016: net cash of $40.3 million)

Operational summary

Kounrad

  • Record copper production of 14,103 tonnes (2016: 14,020 tonnes)
  • Record copper sales of 14,181 tonnes (2016: 13,938 tonnes)
  • Western Dumps under leach with 40% of 2017 production from that area
Sasa
  • Zinc in concentrate production of 21,585 tonnes (CAML attributable 3,625 tonnes)
  • Lead in concentrate production of 29,881 tonnes (CAML attributable 4,951 tonnes)

2018 outlook 

  • Kounrad copper production guidance, between 13,000 and 14,000 tonnes - Approximately 65% of 2018 copper production to be leached from Western Dumps
  • Sasa production guidance - Zinc, between 21,000 and 23,000 tonnes - Lead, between 28,000 and 30,000 tonnes
  • Shuak 2018 exploration programme, to commence in Q2

Nick Clarke, Chairman of CAML, commented: "2017 was a truly transformational year for the Company with the $402.5 million acquisition of Lynx Resources, 100% owner of the Sasa zinc-lead mine in Macedonia. We can already see the benefits of our acquisition, as demonstrated by the 66% increase in Group adjusted EBITDA and 62% adjusted EBITDA margin. This result also reflects a much improved copper market, with the LME price increasing by 30% throughout the year.

"In a sector that is now starting to experience cost inflation, we were pleased to deliver a C1 cash cost at Kounrad of $0.52 per pound. While this cost reflects increased electricity usage as a result of commencing Western Dump leaching operations, we are proud to remain one of the lowest cost copper producers in the world. Costs at Sasa were also as expected and reflect a low cost zinc and lead operation by industry standards.

"Adding Sasa to our portfolio has developed CAML from a copper company to a diversified low cost base metals producer. Including our zinc and lead production from Sasa, CAML's annual copper equivalent production has now increased by approximately 150% to 35,000 tonnes, and copper equivalent recoverable resources have increased by almost 200%.

"We are delighted to propose a 10 pence final 2017 dividend, equating to a full year dividend of 16.5 pence. Once the final dividend for 2017 has been paid, the Company will have returned $129 million to its shareholders in six years of Kounrad operations. With production from both Kounrad and Sasa, we are confident that we can continue to offer attractive returns to shareholders in 2018 and beyond. 

"2017 was a strong year for all of the base metals in CAML's portfolio, with the three metals averaging a price increase of 28%. Going forward into 2018, many industry commentators are expecting a challenging year for copper supply that could result in another positive 12 months for the copper price. In the zinc market, supply side challenges remain, while demand is expected to increase to over 15 million tonnes by 2019.

"The 2017 CAML share price closed at £3.06, which represents a 35% increase during the year, and reflected positive market sentiment following our Lynx Resources acquisition. We now move forward into 2018 as a larger and diversified base metals business, with low cost operations in two prospective jurisdictions.

"CAML has enjoyed an excellent 2017 and we look forward to continuing to build the Company's future in 2018. I am pleased to announce the appointments of Nigel Robinson as Chief Executive Officer and Gavin Ferrar as Chief Financial Officer, with effect from 16 April 2018. Both Nigel and Gavin, in their current roles of Chief Financial Officer and Business Development Director respectively, have been instrumental in the success and growth of our business and I believe that their new roles will position the Company for its next stage of development."

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