Central Asia Metals confident despite fall in revenue, earnings

Central Asia Metals reported a decrease in gross revenue in its 2023 results on Monday, to $207.4m, down from $232.2m in the prior year.

The AIM-traded firm said its net revenue also fell, to $195.3m from $220.9m, while EBITDA dropped to $96.5m at a 47% margin, compared to $131.6m at a 57% margin in 2022.

It generated a free cash flow of $57.5m, a decrease from $90.22m year-on-year.

Despite the financial downturn, CAML reported capital investment of $27.8m in the year, aimed at bolstering long-term operational performance and growth.

The firm ended the year with $57.2m in cash reserves, and remained debt-free.

Its 2023 full-year dividend was declared at 18p per share, slightly lower than the 20p distributed in 2022.

On the operational front, CAML maintained safe and consistent production levels across its assets.

The Kounrad facility reported zero lost time injuries (LTIs), and the Sasa mine saw a reduction in LTIs from two to one.

Production figures slightly varied, with copper output at 13,816 tonnes, zinc in concentrate at 20,338 tonnes, and lead in concentrate production increasing to 27,794 tonnes.

The company continued to invest in its future with several significant developments, including the completion of Sasa's paste backfill plant, the start of the transition to paste fill mining methods, the initial phase of the new Central Decline, and the completion of the Kounrad solar power project.

CAML also launched CAML Exploration in Kazakhstan, securing two exploration licences to date.

Looking forward to 2024, CAML set its production guidance for copper, zinc, and lead concentrates and said it was planning to complete the dry stack tailings plant and the second phase of the Central Decline at Sasa.

An increase in exploratory drilling and exploration work was scheduled in Kazakhstan and Sasa, alongside a commitment to new business opportunities and adherence to the Global Industry Standard for Tailings Management (GISTM).

CAML anticipated a reduction in carbon emissions following the integration of solar power from the new Kounrad facility.

“I am pleased to report a solid performance for CAML in 2023 in which we have met our production guidance in a safe environment at both sites and achieved an improvement in our lost time injury frequency rate (LTIFR),” said chief executive officer Nigel Robinson.

“This performance has been achieved despite a challenging economic environment with metal prices deteriorating by an average of about 10% across our base metal portfolio and ongoing inflationary cost pressures.

“The company has performed well due to our low-cost operations and strong balance sheet.”

Robinson said the company was “delighted” to have separately announced its intention to invest up to £5m in Scottish copper and nickel explorer Aberdeen Minerals on Monday.

“We have been impressed with the Aberdeen team and the company's exploration potential and we look forward to working together to explore the prospective Northeast area of Scotland.

“We will continue to search for additional growth opportunities both at the early exploration stage and also the larger transformational transactions which will enhance shareholder value in the short to medium term.”

At 1412 GMT, Central Asia Metals shares were down 2.01% at 187.35p.

Reporting by Josh White for Sharecast.com.