Central Asia Metals Share Discussion Threads

[dougmachin] 09/1/2025 07:53

Positives:
- Cu prodcued
- Zn / Pb recovering in 2025 to full guidance
- Zn / Pb produced in 2024 only 2% below guidance (or put this as a -ve)
- Cash balance higher than expected @ $67.6m (for me)
- Assay results in Q1 2025 for Aberdeen Minerals and "massive sulphides"
- Capital projects at Sasa are (essentially) complete
- No debt

Negatives:
- Tick, tock, they need a new resource at some point!
- Capital expenses forecast for 2025 higher than I was hoping for

[tricky red] 09/1/2025 07:19

Update reads ok. Nothing special but solid again. Still think undervalued in general.

[2603] 08/1/2025 21:40

Nuts. No explanation for the down grade price. At these prices if the divi is kept around 18-20p a year gets you over 10% on your money. With 30k plus shares 5k a year pays towards my kids uni rent. No brainer.

[tricky red] 08/1/2025 17:00

I added too.

[fuji99] 08/1/2025 16:15

Added today as it was a good opportunity to accumulate for the long term at very low prices.

[tricky red] 08/1/2025 12:10

Thanks for the downgrade, Berenberg.

[justiceforthemany] 07/1/2025 16:15

$4.2 Copper and rising.

[fuji99] 07/1/2025 11:23

IMO we have hit the bottom at around 151p.
The recovery has started from here.
Within 6 to 12 months we will be over 200p+.

[fuji99] 04/1/2025 15:57

CAML has more than $50 million cash with no debt.
With their efficient production processes, they are geared for a better performance in 2025, thus why one has to take a position and accumulate at the earliest stage of 2025.
I also expect them to increase their portfolio by taking over a smaller company or a mining segment in 2025.
IMO 2025 will definitely be the year of CAML - 2024 being the worst is now behind us.
Good luck to all holders.

An old refreshment from Nov. 2024.
"CEO Gavin Ferrar talked with Proactive about the company’s progress and strategic initiatives at the One2One Investor forum.

The company reported strong performance metrics, including a revenue of $103.8 million and an EBITDA margin of 47% in the latest half-year report. Key updates include the transition to new mining methods at the Sasa zinc-lead mine in North Macedonia and continued low-cost production at the Kounrad copper project in Kazakhstan.

Ferrar highlighted that Kounrad is one of the lowest-cost copper producers globally, with C1 cash costs of $0.78 per pound. He also discussed sustainability efforts, such as the introduction of dry stack tailings and investments in local communities, totaling 3.5% of annual revenue.

Regarding growth, Ferrar outlined the company’s search for transformative acquisitions while maintaining a robust balance sheet with $56.3 million in cash and no debt. “We are generating healthy EBITDA margins of 72% at Kounrad, and Sasa’s new methods extend the mine life to 2039,” Ferrar explained. He also touched on recent investments in exploration projects in Scotland and Kazakhstan, aiming to build a pipeline of future opportunities."

[dougmachin] 02/1/2025 12:42

Good point VISH65.
So let's assume that Kounrad produces for 7.5 years and nothing for years 8.5, 9 & 10.

That would give 13,500 * 7.5 tons for those 7.5 years = 100,000 tons.
This is what GF confirms / thinks is remaining:


That means from my 2034 prediction model, need to generate an extra:
- 17m * 2.5 (to maintain the total cash in the bank)
- 40m * 2.5 (to maintain the total dividend payouts)
= 142.5 million extra FROM THE FIRST 7.5 YEARS...

Where can this come from?
At a Cu price of $8,800 / ton.
- 100,000 tons gives 880 million USD.
- That means there needs to be a 16.2% increase to get from 880 to (880+142.5)m USD
- So Cu prices need to increase by 16.2% (on average for those 7.5 years)
- 8,800 * 1.162 = 10,225 USD /ton OR 4 * 1.162 = 4.65 USD / lb

IMO, Cu is going to be AT LEAST 4.65 USD / lb (on average) over the next 10 years.

In summary, a 16.2% increase in Cu price equates to the reduced production in Cu.

Note: I understand that it's not as simplistic as this, more like a gradual decline and there will also be operating costs too after 7.5 years. However, a lot (?) of these should be managed down as the amount of Cu produced is less.

This is just trying to show that with a reasonable Cu price increase, this mitigates the Cu production decline over the next 10 years.

Article from 31st October 2024:

Universal bank Switzerland are forecasting Cu prices of $10,500-$11,000 in 2025.

Let's see what happens to the price of Cu !!

[vish65] 02/1/2025 10:03

DM, note that Kounrad doesn't keep going at it's current rate in the final few years . Can't remember exactly but it drops by about a half in the last 2 or 3 years as it winds down . Plus I assume some environmental/ reclamation/severance to pay out . So both cash in bank and div payout is overstated somewhat

[xamf] 02/1/2025 08:24

Thank you Dougmachin. Excellent analysis and very insightful.

[tricky red] 31/12/2024 13:10

With all the pish around the markets, there is no reason why rock solid shares should not rise in 2025. I expect CAML will be back at the 200p level soonish.

[tag57] 30/12/2024 20:37

Thanks DM. I assume that the yields will reduce as the mines come to an end, although I assume that the life of mines quoted could also be conservative so could offset or push out the yield drop.
Unfortunately my av. share price is 183 after divis but would still give an 8%comound return for me.

[1knocker] 30/12/2024 19:12

When I read the words 'acquisition' and 'transformational' in the same sentence I get a queazy feeling.

[fuji99] 30/12/2024 17:46

Cheers dougmachin.
Very interesting great projections.
Hopefully they will purchase another asset that will improve everything.
Happy New Year.

[dougmachin] 30/12/2024 16:29

MORE ANALYSIS
So I thought I would try to give the amount 1 CAML share is worth in 2034.
This is on the basis that there has been no “transformative” purchase.

Also, I’m not saying that this is the share price that would be achieved, but this is the amount of cash you would be getting back in 2034 (for your original 1 share at 155p), based on the amount your shareholding has increased (due to CAMLs increased cash in the bank and you increasing your holding by reinvesting the divi).

[1] EXTRA CASH IN THE BANK EACH YEAR
H1 2024 cash = 56.3m // FY 2024 cash (assumed) = 63.4m
Without the Sasa CAPEX, each year can add 15-17m extra cash to the bank (assumed)
This would give (10 * 17m) = 170m
Add the 63.4m = 233.4m USD = 177.4m UKP
This gives 97p / share (182m shares)

[2] DIVIDENDS EACH YEAR
Dividends at 18p for 10 years = 180p (assumed)

[3] COMPOUNDING EFFECT OF THE DIVIDEND
There’s a great compounding effect of reinvesting the divis, especially over 10 years.
Purchase 18p worth of a 155p CAML share, you then get the 11.6% divi on this too.
At the end of the next year, that 18p worth of a share is giving you 2p of extra divi.
Basically the 18p divi is now worth 20p.
If you keep doing this for 9 years, then the original 18p divi is worth 48p.

Repeat this for the next 9 years worth of divis too.
So for 2026-2034, the 18p divi ends up being worth 43p at the yield of 11.6%.

For all 10 years, this gives an extra value of 130p.

FINAL TOTAL
This gives a final value of your original 155p share = 180p + 97p + 130p = 407p.
This gives a 10% compounded annual growth from 155p, which is decent.

DRIVING THAT PRICE POTENTIALLY HIGHER
There’s still the extra 5 years of life at Sasa to 2039.
Metal price increases over the next 10 years, to increase the above.

RISKS
As the LoM approaches the end, the throughput will be less.
Metal prices might not go higher (but surely Cu and Zn are going higher medium term).

As Sasa has not been a thumpingly good purchase, I would hope the BoD would only purchase a new asset that is truly transformative. So if they did purchase a new asset, then it would increase that 407p target substantially (even with any potential dilution, borrowing or temporary pausing of the divi to purchase the new asset).

So, for me, I think 155p and around here is a good buy.
Of course the US is a risk now IMO, with the markets there going up 20% 2-years in a row.
CAML Q4 operations update in mid January.

[pughman] 27/12/2024 12:17

The dollar appreciation against the tenge/denar has knocked a couple of million off the cost base. With SASA capex set to fall dramatically, there is room for a 10% buyback. I am wary of acquisitions, as the share price shows SASA has been a non event. Belated Happy Xmas to the doughnut who ticks down every post.

[bo doodak] 27/12/2024 11:13

I didn't quite get that same feel on the div. The answer GF gave to Sarah was quite nuanced - committed to 10%, but is based on there being no acquisition.

As the market knows they are looking for a transformational acquisition, which will be funded partly by an equity raise, and GF talked about ‘’limiting dilution’̵7; for shareholders, this is probably impacting the share price

They've been very disciplined on not rushing into anything, and long may that approach continue, but the leadership change does bring its own risks.

[vish65] 27/12/2024 10:27

Good analysis and I see no reason not to maintain the dividend either. Pity the share price chart or the supposed 'seller' are less optimistic ? The run down in Kounrad and inability to clearly define growth ( so far) continues to hang over the share. But I'm still happy to receive the div each year

[dougmachin] 27/12/2024 10:23

Well worth watching this (again) too, if you haven't already. Latest presentation from 18th November 2024.



With the presentation slides here:
TRANSITIONING FOR THE FUTURE - Q4 2024 CORPORATE PRESENTATION


Nothing new in the slides, but from the presentation, a couple of key takeaways:

[1] Even though above the 30-50% FCF dividend policy, Gavin Ferrar talked about committed to a 10% yield for the dividend. Sarah (from proactive) even questioned increasing the dividend due to having so much cash in the bank. I'm increasingly hopeful for the long-term maintenance of a yearly divi of 18p (or above).

[2] A great takeaway was about Sasa returning to 2021 throughput due to the capital projects being completed at Sasa. That sounds very encouraging.

[fuji99] 27/12/2024 09:52

Dougmachin: Thanks a lot for your great work and your time.
Merry Christmas and Happy New Year.

[dougmachin] 26/12/2024 06:20

HAPPY CHRISTMAS!
Some Boxing Day analysis, looking at 2024 Vs 2023.
Trying to predict the maintenance (likelihood) of the 2024 H2 9p dividend...

2023 H1 cash generated = 42.7m
2024 H1 cash generated = 42.4m

This would factor in:
[1] Amount produced
[2] Prices of metals
[3] Cost of production

So for H1 comparison, it’s the same.
From that, the dividend was also the same at 9p.

Now to look at H2 comparison of 2023 Vs 2024.

Cash in the bank:
2022 start = 59.2m
2022 end = 60.6m
2023 H1 start = 60.6m
2023 H1 end = 50.6m (paid forward tax)
2023 H2 start = 50.6m
2023 H2 end = 57.2m
2024 H1 start = 57.2m
2024 H1 end = 56.3m
2024 H2 start = 56.3m
2024 H2 end = ???m

My view is, it would be good to get back above 60 million cash in the bank.
Whilst keeping the 9p dividend for 2024 H2.

So ASSUMING (will address this later) CAML can generate the same amount of cash in 2024 H2, compared to 2023 H2. This means generating 51.5m cash.

2024 H2 (assumptions)
Cash generated = +51.5m
Dividends @ 9p = -21.4m
Interest received = +1.2m
Income tax = -9.0m
CAPEX = -15.2m (informed in H1 presentation, giving 23.5m for the year)
This gives final cash of 63.4m = GREAT !!

For “Cash generated of 51.5m”. Can this be achieved in 2024 H2 (same as 2023 H2)?
[1] Amount produced (compare 2024 vs 2023)
For H1 comparison (comparing 2024 vs 2023):
Cu = -1.6%
Zn = -7.7%
Pb = -6.3%

For Q3 comparison (comparing 2024 vs 2023)
Cu = -0.6%
Zn = -7.0%
Pb = -2.5%
So, production is getting better in Q3 compared to H1.
Also, this is improving / maintaining into Q4.
And the head grades are also improving in Q3 / maintaining into Q4 of 2024.

Point is, H2 is looking better than H1, when comparing back to 2023 vs 2024.

[2] Prices of metals
H1 actual price change for CAML from H1 2023 to H1 2024
Cu = +6.4%
Zn = -0.7%
Pb = +3.0%
With these price increases, it offset the production decreases.

Looking at statista website, this gives the following for H1 2023 to H1 2024:
Cu = +4.5%
Zn = -7.0%
Pb = -0.4%
So based on that CAML, did well in H1 2024 compared to H1 2023.
Statista takes day 1 of each month as the price.

Looking at statista website again, this gives the following for H2 2023 to H2 2024:
Cu = +11.7%
Zn = +17.1%
Pb = -5.6%
Which is fantastic overall.

Looking at graphs of H2 2023 to H2 2024, these %ages are in the right range, certainly in the correct direction (positive / negative).

[3] Cost of production
This went up in 2024 H1. Should stabilise for 2024 H2…?
Inflation is coming down (reagents / wages).
The solar plant will help.

CONCLUSIONS:
H2 production is better than H1 for 2024 (for each time period compared to 2023).
Metal prices are better in H2 than H1 for 2024 (again compared to 2023).

So, yes, I think that if 2023 H2 generated 51.5m cash, then 2024 H2 can generate (at least) 51.5m cash. Subtract the CAPEX and tax costs.

This gives:
The capacity to pay 9p dividend in 2024 H2
For the total cash in the bank to go above 60 million

LONG TERM:
If Sasa CAPEX is (finally) finished, then that releases another 15-18 million / year to add to the “cash in the bank”. (I removed the sustaining capital already).

Price of Cu - this will be interesting to watch. Of course, I’m bullish on this. Really hoping that it will remain above 9,000 USD/ton and proceed higher.

Price of Zn - Not too sure about Zn, hopefully will remain at least the same. Am looking into factors affecting Zn prices.

Price of Pb - Unfortunately, will probably go down, but again hopefully, not by too much.

I’m certainly watching these metal prices with interest.

Also, of course, are future possibilities in Kazakhstan and Scotland.

[dougmachin] 23/12/2024 11:06

Cu prices in 2024 H1 and H2 higher than both 2023 and 2022.

Zn prices in 2024 higher than 2023.

Pb prices in 2024 slightly lower than 2023.

Surely, the 9p dividend will be maintained for 2024 H2... (surely!)

Also, are the main Sasa CAPEX expenses now done? To maintain the LOM to 2039.

Cu hopefully still on the ascendancy over the next 10 years for Kounrad.