25 March 2024
('CAML' or the 'Company')
2023 Full Year Results
Central Asia Metals plc (AIM: CAML) today announces its full year results for the 12 months ended 31 December 2023.
Financial summary
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Group gross revenue1 of |
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Group net revenue of |
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Group earnings before interest, tax, depreciation, and amortisation ('EBITDA')1 of |
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Group free cash flow ('FCF')1 of |
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Capital investment of |
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Cash in the bank of |
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CAML remains debt free |
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2023 full year dividend of |
Operational overview
Safe and consistent production
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Zero lost time injuries ('LTIs') at Kounrad (2022: zero) and one LTI at Sasa (2022: two) |
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Copper production of 13,816 tonnes (2022: 14,254 tonnes) |
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Zinc in concentrate production of 20,338 tonnes (2022: 21,473 tonnes) |
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Lead in concentrate production of 27,794 tonnes (2022: 27,354 tonnes) |
Investing in the future
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Completion of construction of Sasa's Paste Backfill ('PB') Plant and commencement of transition to paste fill mining methods |
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Completion of initial phase of Sasa's new Central Decline |
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Updated 2023 Mineral Resource Estimate ('MRE') demonstrates that an additional 2.4 million tonnes have been identified at Sasa under CAML ownership |
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Completion of Kounrad Solar Power Project |
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Formation of CAML Exploration ('CAML X') in |
1. See Financial Review section for definition of non-IFRS alternative performance measures
2. The definition of FCF was updated to include interest received which changed the 2022 FCF to
3. The cash balance figure disclosed includes restricted cash balance
Post period end
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Intention to invest up to |
2024 outlook
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Production guidance |
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Copper, 13,000 to 14,000 tonnes |
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Zinc in concentrate, 19,000 to 21,000 tonnes |
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Lead in concentrate, 27,000 to 29,000 tonnes |
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Completion of construction of Dry Stack Tailings ('DST') Plant and Landform at Sasa |
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Completion of development of second phase of Central Decline at Sasa |
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Increased exploration work planned in |
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Continued active assessment of new business opportunities with increase in activity in the last six months |
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Reporting to Global Industry Standard for Tailings Management ('GISTM') |
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Reduced carbon emissions expected in 2024 due to contribution of solar power from new Kounrad facility |
Nigel Robinson, Chief Executive Officer, commented:
"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'). This performance has been achieved despite a challenging economic environment with metal prices deteriorating by an average of c.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.
"It has also been a busy year of development and investment in our business both at Sasa and Kounrad. At Sasa we made significant strides towards the completion of our transition to paste fill mining, whilst at Kounrad we completed the construction of the solar power project.
"Alongside the investment at both of our sites during 2023, we have been very active in trying to grow our business and have reviewed 37 opportunities, signed 17 NDAs and conducted seven site visits.
"As part of our growth strategy, we set up our new exploration subsidiary, CAML X with a team of early-stage exploration geologists in
"Following this performance, we propose a
"During 2024 we intend to complete the installation and commissioning of the DST Plant at Sasa and the transition to paste fill mining. This will complete our capital investment programme at Sasa and will ensure the maximum extraction of resources in the safest and most environmentally friendly way through to at least 2039.
"We were delighted to have announced separately today our intention to invest up to
Analyst conference call and webcast
A live conference call and webcast hosted by Nigel Robinson (Chief Executive Officer), Gavin Ferrar (Chief Financial Officer) and Louise Wrathall (Director of Corporate Development) will take place at 09:30 (GMT) today.
The conference call can be accessed by dialling +44 (0) 33 0551 0200 and quoting the confirmation code 'Central Asia Metals - Results', and the webcast can be accessed using the link:
https://brrmedia.news/CAML_FY
The presentation will be available on the Company's website and there will be a replay of the call available following the presentation at www.centralasiametals.com
Presentation via Investor Meet Company
The Company will also hold a live presentation relating to the 2023 Full Year Results via the Investor Meet Company platform on Monday 25 March 2023 at 16:30 (GMT). The presentation is open to all existing and potential shareholders. Questions can be submitted at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet Central Asia Metals Plc via:
www.investormeetcompany.com/central-asia-metals-plc/register-investor
For further information contact:
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Central Asia Metals |
Tel: +44 (0) 20 7898 9001 |
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Nigel Robinson |
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CEO |
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Gavin Ferrar |
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CFO |
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Louise Wrathall |
louise.wrathall@centralasiametals.com |
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Director of Corporate Development |
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Emma Chetwynd Stapylton |
emma.chetwyndstapylton@centralasiametals.com |
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Investor Relations Manager |
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Peel Hunt (Nominated Advisor and Joint Broker) |
Tel: +44 (0) 20 7418 8900 |
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Ross Allister |
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David McKeown Georgina Langoulant |
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BMO Capital Markets (Joint Broker) |
Tel: +44 (0) 20 7236 1010 |
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Thomas Rider |
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Pascal Lussier Duquette |
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BlytheRay (PR Advisors) |
Tel: +44 (0) 20 7138 3204 |
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Tim Blythe |
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Megan Ray |
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Note to editors:
Central Asia Metals, an AIM-listed
For further information, please visit www.centralasiametals.com and follow CAML on Twitter at @CamlMetals and on LinkedIn at Central Asia Metals Plc.
CHAIRMAN'S STATEMENT
Fulfilling our purpose
Our purpose is to produce base metals, essential for modern living, profitably in a safe and sustainable environment for all our stakeholders and we have fulfilled this purpose during 2023.
Our solid operational performance in 2023 generated EBITDA of
2023 has been a notable year for several reasons, not least the fact that, in Q3 2023, we reached the milestone of having generated over
In terms of developing our business for the long term, we continue to place much focus on appraising opportunities for future growth. In 2023, we were pleased to have entered into an arrangement with a team of experienced early-stage exploration geologists with international and significant
Sustainability
We have continued to advance our sustainability efforts during 2023. In Q2 2023, we published our fourth standalone Sustainability Report. This was the Company's third report drafted in accordance with the Global Reporting Initiative ('GRI') Standards, and the first to GRI's new Universal Standards.
We maintain our focus on minimising our environmental impacts on the areas surrounding our operations while creating value for our local stakeholders and, to that end, we have progressed in several key sustainability areas during 2023. We have established the template to estimate our Scope 3 greenhouse gas ('GHG') emissions, and these will be detailed in our forthcoming Climate Change Report for 2023 and also retrospectively for 2022. Our efforts towards conforming with the new GISTM have intensified and we remain confident that we will be able to comprehensively detail our progress and status at the end of H1 2024.
During Q4 2023, we also commenced projects on both biodiversity and occupational health, and we look forward to advancing our work and developing strategies for these two areas in 2024.
Governance
In April 2023, Nurlan Zhakupov left the CAML Board, we thank him for his 11 years of service as a Non-Executive Director.
We remain committed to strong corporate governance practices. Aside from Nurlan's departure, our Board and its committees have enjoyed a period of stability. Our Technical Committee visited Sasa twice to see progress and provide guidance to the team delivering the projects that will enable us to complete the transition to paste fill mining methods.
Our Audit Committee continues to oversee the financial aspects of our business as well as placing an increasing importance on risk management. CAML's Remuneration Committee continues to ensure clear and measurable targets for our Executive Directors and senior management team, which always incorporate sustainability-related targets, while our Nomination Committee aims to ensure we retain, develop, and attract the right talent for the future. Our Sustainability Committee has this year advised our charitable foundations regarding a longer-term approach to our community investments and has ensured Board oversight on our climate change initiatives and tailings management in particular.
Acknowledgements
At the end of 2023, Pavel Semenchenko retired as Kounrad's General Director. Pavel has been with us for 17 years, overseeing the construction and the safe and successful operation of Kounrad. My sincere thanks go to Pavel for all that he has done for Kounrad and for CAML and I am delighted that he has agreed to remain with us as our Regional Manager in
I would like to thank the Board of Directors, our senior management team and all our employees for their dedication to our business during 2023. Your efforts are noted, and we very much appreciate your hard work. I would like to extend my thanks to our stakeholders for their support.
CHIEF EXECUTIVE OFFICER'S STATEMENT
2023 Financial overview
During 2023 we reported gross revenue of
Our Kounrad operations continued to perform well, with production towards the upper end of our guidance range at 13,816 tonnes of copper. Kounrad's C1 cash cost of production remained very low by global standards at
Meanwhile, at Sasa we produced 20,338 tonnes of zinc in concentrate and 27,794 tonnes of lead in concentrate, which was in the middle of our guidance range, at a C1 zinc equivalent cash cost of production of
Despite the above solid financial and operational performance, CAML's shares performed poorly over the course of the year due to the challenging economic environment.
Kounrad
During the year at Kounrad, leaching operations performed well, as did the solvent extraction - electrowinning ('SX-EW') processing facilities with recorded availability of over 99%.
We continued to develop more of the Western Dumps for future leaching operations, while focusing on maximising copper extraction in the Eastern Dumps, which has already delivered more copper than was originally anticipated.
In July 2023, our Board paid a successful visit to site, viewing both the leaching and SX-EW operations plus the construction progress of the Solar Power Project. The Board also took the opportunity to hold meetings with local management and various stakeholders in the area as well as visiting the Kounrad Foundation projects to see their development.
In Q4 2023, the Solar Power Project construction was completed, and I was delighted to officially open the facility. It is now generating renewable power and anticipated to provide 16-18% of the site's electrical needs on an annualised basis and reduce Kounrad's Scope 1 and 2 emissions by 10% versus 2020. The majority of the installation and other works were conducted in-house, and the project was completed on schedule and under budget at a final cost of
I would like to join Nick Clarke in thanking Pavel Semenchenko who, after 17 years as General Director, is stepping away from the day-to-day running of the operations at Kounrad.
Sasa
During 2023, significant construction work took place at site as we built the infrastructure necessary for the transition to paste fill mining methods.
The initial development of the Central Decline is complete, and the decline is now operational with the completion of Phase 1 connecting surface to the 910 level in H1 2023. Phase 2 is scheduled to be completed by the end of H1 2024 and will connect 910 level with the 800 level.
Construction of the PB Plant is complete, and the plant is now effectively operational with cemented tailings being placed underground, and the extraction of ore at the 800 level in line with our new paste fill mining methods is underway.
In 2023, the final design and review process for the DST Plant was completed and the construction of the plant foundations and clearing of vegetation for the landform started in H2 2023. During 2024, the placement of dry stack tailings will commence, and the project is due to be completed by the end of the year.
Sustainability
To demonstrate our efforts and achievements, we will soon be publishing our fifth sustainability report, our fourth to GRI standards and our second to the new GRI 'universal standards'. During 2023, we undertook an internal review process to check the materiality of the topics and their priorities, and the new GRI mining sector standards were taken into account. From this process, we have made the decision to include human rights as an additional material topic. Diversity and inclusion have been identified as a key focus area and have also been added as a material topic. Therefore, we have begun to develop a diversity and inclusion strategy that will be built upon in 2024. Additionally, to support employees during the current global inflationary environment, all staff at both sites were given pay rises.
In 2023, we began to estimate our Scope 3 emissions for 2022 and 2023 and have included this data in our forthcoming 2023 Climate Change Report.
Our Health and Safety performance across the Group continues to be strong and we have always maintained a key focus on this aspect of our business. We were disappointed to report one LTI at Sasa during the year but this is a continued improvement on previous years. We recorded zero LTIs at Kounrad and therefore our 2023 total as a Group was one, with a LTIFR of 0.40.
In Q4 2023, Sasa won a top national safety award from the Council of Health and Safety at work in
We remain committed to reporting to GISTM for our tailings storage facilities ('TSFs') by end of H1 2024. A working group has been formed, comprising members of the production, tailings, sustainability and communications teams, overseen by the Group Sustainability Director and Sasa's General Director, to ensure all workstreams are effectively covered.
In 2023, we reported that we would increase funding to both of our local Foundations from 0.25% from 0.50% of revenue. This is a vital aspect of what we do in the areas close to our operations and, as a result, we enjoy good relations with our neighbours, and we believe we have brought some real, positive change. At Kounrad, the Foundation contributed to equipment for the local hospital, computers for the medical college, educational support for children from low-income families and sports equipment for various youth teams amongst other causes. This year at Sasa, funds were allocated to various projects, including the reconstruction of the medical centre, support of youth sports teams and educational scholarships.
Additionally, we have purchased a foetal heart monitoring piece of equipment in Balkhash and funds have been allocated for an x-ray machine at Sasa to enhance the medical facilities for the local community.
In
At Sasa, Phase 1 of the Local Economic Development Plan ('LEDP') and Local Environment Action Plan ('LEAP') activities was completed in 2023, comprising the development of a community-based tourism concept and the establishment of a brand identity for Makedonska Kamenica which was created by the community itself through workshops with community leaders and existing businesses.
Outlook
While we do foresee global challenges, we are confident that CAML will continue to perform robustly and that we have the teams in place to continue to deliver safe, consistent and low-cost production.
At Kounrad, we expect to produce between 13,000 and 14,000 tonnes of copper during 2024. Our production guidance for Sasa is 790,000 to 810,000 tonnes of ore, which should deliver between 19,000 and 21,000 tonnes of zinc in concentrate and between 27,000 and 29,000 tonnes of lead in concentrate. Our focus at Sasa during 2024 will be the completion of DST Project as the final component of our investment in the infrastructure required to transition to the paste fill mining methods. Completion of these projects at Sasa will then enable us to extract the maximum resources in a safer, more sustainable and efficient manner.
In 2024, Sasa expects to spend between
We were extremely active throughout 2023 in terms of business development, having reviewed 37 opportunities, signed NDAs for 17 of them and conducted seven site visits. In December 2023, we were delighted to receive confirmation that one of our new licence applications for our target generation exploration programme in
This business development momentum has continued into 2024 and we remain in a strong position from which to grow through acquisition, building the business for the future and producing the base metals essential for modern living.
OPERATIONAL REVIEW
Health and safety
There were no LTIs at Kounrad during 2023, and there have now been 2,054 days since the last LTI to the end of 2023.
Leaching operations
Both the Eastern and Western Dumps were simultaneously leached during 2023, with the production split being 32% and 68%, respectively.
At the Eastern Dumps, the team focused on irrigating the side slopes of Dump 7 which had been levelled by a bulldozer during 2022. Additionally, commencing in early spring of 2023, the bulldozer was assigned to levelling the side slopes of the Dump 5 perimeter, thus exposing additional resources of previously unleached material. The leaching response from these two side slope areas was excellent, with the Eastern Dumps producing 4,382 tonnes of copper, a contribution last seen in 2020.
In other areas of the dumps, rotational 'rest and rinse' irrigation was continued, which continues to generate economic levels of PLS in the region of 0.5 to 0.7 grammes per litre ('gpl') copper. The late autumn/early winter temperatures were very mild in 2023 and allowed leaching of the uncovered summer blocks to be extended by a month longer than normal, assisting in overall production. The old winter blocks that are still covered with heat retaining high density polyethylene ('HDPE') sheeting, were brought under leach in the first week of December and will be on-line until Spring 2024. It should be noted that winter leaching of the Eastern Dumps will not be conducted after the current season has ended in March 2024, as the economics of placing the HDPE cover materials and the cost of heating the raffinate to this area are not justified. From 2024 onwards, leaching at the Eastern Dumps will be conducted only during the eight/nine warmer months of the year.
2023 production takes the total quantity of copper recovered from the Eastern Dumps, since operations commenced, to over 85,000 tonnes, higher than the quantity forecast at the time of the CAML Initial Public Offering ('IPO') in 2010. Typically, the daily average area under irrigation at the Eastern Dumps during the year was 22 hectares, noting that winter leaching is restricted to an area of around 12 hectares.
The irrigation plan for 2024 is to focus on the 180,000 cubic metres of materials that were relocated from the edge of the railway link and placed atop Dumps 9-10. It is forecast that this material should produce approximately 1,000 tonnes of copper and will be supplemented with continued side slope irrigation of Dumps 5 and 7, together with rotational 'rest and rinse' from older blocks. It has been noted that a typical ore block that has been subjected to over 600 days of irrigation, through several 'rest/rinse' cycles, is still capable of producing economical PLS grades containing 0.6 to 0.7 gpl of copper pick-up.
The continued successful and economic generation of copper from the Eastern Dumps is anticipated to continue at least into 2025 and potentially beyond.
At the Western Dumps, the focus of irrigation remained on parts of Dumps 16, 21, 22 and 1A, from which 9,434 tonnes of copper were recovered, contributing approximately 68% of the total Kounrad copper production. The average daily area under irrigation on the Western Dumps slightly decreased to 34.6 hectares (38.2 hectares in 2022) of both new and previously leached material. This was as a result of the higher production level at the Eastern Dumps, allowing Western ore blocks to be leached for longer whilst still generating economic returns at planned production target levels. The volume of raffinate pumped around the site averaged 1,299 cubic metres per hour ('m3/hr'), an increase of 5% over 2022 rates. As in previous summer periods, a proportion of the off-flow solutions from the Eastern Dumps were recycled across to the Western Dumps with the aim of maintaining broadly stable PLS grades to the solvent extraction ('SX') plant.
Application rates of solution to the dumps were maintained at a level of 2.44 litres per square metre per hour ('l/m2/hr') throughout the year, slightly higher than in 2022.
During the course of the year, the 890 metres of trenches excavated northwards around Dump 16 edge in 2022 were fully lined with HDPE and brought into operation. An extension of the trench encircling Dump 21 was undertaken this year, with 900 metres being excavated of which 450 metres were lined with HDPE, the balance to be completed in 2024.
Two bulldozers continued with levelling and shaping earthworks, primarily on the Western Dumps. At the Eastern Dumps, bulldozer work was relatively limited to the preparation of unleached side slope and road access areas.
The new winter irrigation/boiler measurement and control systems, which were designed and prepared in late 2021, continue to operate very effectively. Since 2021 there has been a stable reduction in coal consumption by 13%, with both 2022 and 2023 being within 100 tonnes of each other.
SX-EW plant
The SX-EW plant continued to operate efficiently during 2023 and the overall operational availability throughout the year was 99.4%. This was 0.1% above that of 2022, primarily due to a reduced number of power supply interruptions this year. With the process plant now having passed 10 years of permanent operations, for the first time the number of planned maintenance schedules were increased from two to three in an attempt to minimise unscheduled stoppages due to mechanical or electrical failure.
With the average Western Dumps copper grade of around 0.1% and largely fully leached Eastern Dump materials, the average PLS grade for the year was 2.05 gpl, approximately 0.2 gpl lower than in 2022. Solution flow rates through the SX increased to 1,071 m3/hr for the year, with rates in Q3 2023 averaging over 1,200 m3/hr. During the year, each of the four extract settler units were taken off-line to facilitate inspection and undertake any necessary repairs. In addition, a new heat exchanger was installed on the solution line feeding the fourth mixer unit, which now allows it to be run through the winter with the aim of mitigating and optimising organic reagent consumption and therefore production costs through this period.
Operations within the electrowinning ('EW') sections were steady throughout the year, with the operations teams focusing on minimising reagent consumptions in the off gas scrubber units, whilst maintaining high efficiency levels. A further focus was placed on improving ventilation within the EW buildings, through comprehensive checks and renewal of the ventilation piping and increased frequency of atmospheric measurements. To this end gas sampling equipment was purchased, which allowed more frequent monitoring of this parameter. The EW plating bath units were cleaned of accumulated lead sludge in order to ensure high quality copper cathode quality. In Q4 2023, an order was placed for 1,064 new anode plates, with expected delivery to site being Q3 2024 and installation scheduled for the start of Q4 2024.
During the year, the site management team continued their emphasis on reagent consumptions and controls, particularly imported organic reagents such as LIX, achieving a saving of 7.5% compared to 2022. As a consequence of the lower copper grade entering the SX, levels of transferred iron into the rich electrolyte increased by almost 12% and was ameliorated by a higher level of bleeding and fresh make-up water. As such consumption levels of cobalt, acid and smoothing agent were slightly higher but assisted in maintaining the electrical power consumed per tonne of copper at a slightly lower level than 2022, at 4,252 kWh per tonne (4,266 kWh in 2022).
Copper sales
Throughout the year, the quality of CAML's copper cathode product has once again been maintained at high levels. Regular in-house and independent metallurgical analyses have consistently reported 2023 copper purity of around 99.998%. The Company continues to sell the majority of its copper production through offtake arrangements with Traxys.
2024 production guidance
The 2024 guidance for Kounrad's copper cathode production is between 13,000 and 14,000 tonnes.
Solar Power Project
Following approvals for the Solar Power Project capital expenditure by the CAML Board, all orders for the associated equipment and materials were placed in 2022, with the majority of items received at site during Q1 2023. Working with the technical oversight of a Kazakh licensed engineering consultant, TGS, an in-house team of construction and installation engineers were assembled to undertake the site installation works in March 2023 after earthworks associated with levelling the 10 hectare site had been completed in 2022. During Q4 2023, the installation of the 4.77 MW facility, comprising 8,850 solar panels, 24 DC-AC inverters and associated items was essentially completed and the plant commissioned. In November, the facility was officially opened by the CEO in the presence of regional dignitaries. Since then, the facility has generated over 709,000 kWh to year end, equating to 7% of the total site demand and in accordance with winter period forecasts estimated in the feasibility study.
With the vast majority of the installation and other works being conducted in-house, the project was completed under budget at a final cost of
In 2023, Sasa mined 805,621 tonnes of ore and processed 805,819 tonnes of ore. The average head grades for the year were 2.97% zinc and 3.70% lead and the average 2023 metallurgical recoveries were 85.0% for zinc and 93.1% for lead.
Sasa production statistics
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Units |
2023 |
2022 |
2021 |
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Ore mined |
t |
805,621 |
806,069 |
818,609 |
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Plant feed |
t |
805,819 |
806,653 |
830,709 |
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Zinc grade |
% |
2.97 |
3.15 |
3.14 |
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Zinc recovery |
% |
85.0 |
84.6 |
84.9 |
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Lead grade |
% |
3.70 |
3.63 |
3.52 |
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Lead recovery |
% |
93.1 |
93.4 |
93.1 |
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Zinc concentrate |
t (dry) |
40,226 |
42,824 |
44,383 |
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- Grade |
% |
50.6 |
50.1 |
49.9 |
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- Contained zinc |
t |
20,338 |
21,473 |
22,167 |
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Lead concentrate |
t (dry) |
39,136 |
38,439 |
37,893 |
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- Grade |
% |
71.0 |
71.2 |
71.8 |
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- Contained lead |
t |
27,794 |
27,354 |
27,202 |
Health and safety
At Sasa, we continue to improve our health and safety standards reflected in a reduction in our LTIFR to 0.40 in 2023.
Mining
The ore was mined using a combination of sub-level caving and cut and fill mining methods during the year from the 990, 910 and 830 level production areas. The ore and waste from the underground operations is transported to surface via a combination of hoisting via the Golema Reka shaft and trucking via the existing XIVb decline and increasingly the Central Decline using a fleet of 20 tonne Epiroc trucks.
The average combined zinc and lead grade of the ore mined was 6.67%, compared to 6.78% in 2022.
Ore development across the three working areas totalled 6,549 metres, which was broadly in line with last year, included opening the new 830 production area in Q3 2023. Waste development for the year totalled 2,574 metres, approximately 8% above last year, and generated 104,048 tonnes of waste from internal ramp access and crosscuts to the ore body, raise development and the development of the Central Decline. The mine produced a total of 909,669 tonnes of ore and waste during the year, approximately 1% more than last year.
Maintenance
The computerised maintenance management system ('CCMS') for surface and underground equipment is operational and in the process of being updated with additional mobile equipment and fixed plant. As part of the strategy to modernise the procedures, a new underground Wi-Fi communications system was completed across the main areas of the mine and is now in the process of being extended to all working areas.
During the year, certain equipment was purchased to maintain production and improve efficiency:
‣ an Epiroc Bolting Drill Rig Boltec S, for the safe and efficient installation of support including roof and cable bolts
‣ a Manitou MHT-X790 Mining, for installation of the underground reticulation system
‣ a Paus MinCa people transporter
‣ a CAT 320 excavator
‣ a Simba S7 long hole drilling machine
Processing
Sasa processed 805,819 tonnes of ore during the year which is consistent with 2022 production, and the plant had an overall availability of 95%.
In addition to the planned maintenance works completed during the year, the process of improving the automated oil lubrication systems and flow meter continues with additional units installed and commissioned during 2023.
The tailings storage facility systems at Sasa ran to a high standard and without incident during the year, managed by a designated tailings management team. An internal GISTM review was completed in Q3 and the new system captures all recommendations from the Knight Piésold Technical Reviewer, Independent Technical Reviewer ('ITR') and the Engineer of Record ('EoR') reports. Over the course of the year significant progress has been made towards conformance with GISTM in 2024.
During the year, construction of the TSF4 waste rock toe continued with the placement of 21,000 m3 waste rock from the underground mine.
A seismic monitoring system and piezometer sensors were installed in 2022 and additional piezometers have been added and commissioned in 2023 to continue the drive to automate and improve the TSF monitoring systems.
The rehabilitation of the TSF3.2 facility continued throughout the year with the placement of waste rock from the underground mine and is now 90% complete, including placement of rock armouring and topsoil of the face of TSF3.2 to reduce dust and comply with environmental legislation.
A total of 10,157 metres of exploitation drilling was completed during the year across the three working areas, the 830, 910, and 990 levels, to provide additional information on the grade and thickness of the three orebodies. During H1 2024, an additional production area on the 750 level is planned to come into operation to continue the transition to paste fill mining methods.
A total of 1,615 metres of exploration drilling was completed below the 830+14 metre level to improve the geological understanding of the mineralisation at Svinja Reka at depth.
A total of 3,541 metres of exploration drilling in eight holes was completed from surface at the Golema Reka deposit to improve understanding of the geology at depth below the 700 metre level. One hole intersected three zones of mineralisation down to at least the 580 metre level, demonstrating the extension of the mineralisation at depth to the south-west and adding to the Inferred Mineral Resources.
In Kozja Reka and the Gap target (the area between Golema Reka and Kozja Reka), 4,300 metres of exploration drilling was completed in 2023.
Capital investments
The transition to using paste fill at Sasa will create a safer and more sustainable underground mining operation for the long term and provide the ability to improve the overall recovery of metal from the orebody. Investments have been made in three key areas and consist of a PB Plant and the associated surface and underground reticulation, a DST Plant and associated Landform and the development of a new Central Decline.
PB Plant
Following the ESIA approval for the PB Plant in 2022, a contract was signed with local construction company, Aktiva, and excavation and civil works began shortly after. The PB Plant and associated surface and underground infrastructure is now complete and in operation with extension to the underground reticulation system continuing as the mine opens new production areas.
Central Decline
The development of the Central Decline continues to progress well and is now operational, with phase 1 complete in Q2 2023 connecting the surface to the 910 working level. During 2023, 1,056 metres of development were completed and as at the end of 2023, the Central Decline had been developed for a total of 2,610 metres from surface.
The Central Decline has been equipped with a new paste fill reticulation line and is fully serviced with power, stage pumping and cuddies mined at 200 metre intervals. In Q4 2023, a surface 75 kW fan was installed and commissioned, improving mine ventilation by up to 24m3 per second.
DST Plant
During 2023 the final design and review process for the DST Plant was completed, and construction of the plant foundations and clearing of vegetation for the landform started in Q4 2023. In H1 2024, the project is due to be complete and the placement of dry stack tailings will commence.
Tailings management
A key benefit to the transition to paste backfill mining is the improved storage of tailings. Previously, all tailings generated from Sasa's processing plant were stored in TSF4. For the remaining life of the mine, tailings will be stored in the following three locations; underground paste backfill, DST Landform and TSF4.
2024 Production guidance
The transition to the paste fill mining methods is underway. CAML maintains its ore mined guidance year on year of 790,000 to 810,000 tonnes. Expected metal production in 2024 is between 19,000 to 21,000 tonnes of zinc in concentrate and 27,000 to 29,000 tonnes of lead in concentrate.
Sasa Mineral Resources, Ore Reserves and life of mine ('LOM')
During 2023, the technical services team updated Sasa's Mineral Resource Estimate ('MRE') for the Svinja Reka and Golema Reka deposits and the Ore Reserves for the Svinja Reka deposit.
The updated work took into account recent additional drilling, mining depletion and changes to the metal price and transport charges used in the Net Smelter Return ('NSR') calculation. Sasa's MRE and Ore Reserves are shown in the following tables.
Total Sasa Mineral Resources increased by 0.9 million tonnes versus 2022. Svinja Reka Mineral Resources decreased to 11.5 million tonnes at grades of 4.3% lead and 2.9% zinc (2022: 12.3 million tonnes at grades of 4.2% lead and 2.9% zinc) due to mining depletion. Total Golema Reka Mineral Resources increased to 9.3 million tonnes at grades of 3.8% lead and 1.2% zinc (2022: 7.6 million tonnes at grades of 3.6% lead and 1.4%), due to changes in geological reinterpretation based on the results of the 2023 drilling and the use of a NSR cut-off value for reporting.
The Svinja Reka 2023 Ore Reserve is 9.0 million tonnes at grades of 4.0% lead and 2.6% zinc (2022: 8.8 million tonnes at grades of 3.9% lead and 2.6% zinc). Mining depletion of approximately 0.8 million tonnes has been offset by design changes associated with increased metal prices and additional geotechnical data. Based on the latest Mineral Resources and Ore Reserves, CAML expects Sasa to maintain annual production rates of between 800,000 and 830,000 tonnes per annum for an expected life of mine of 15 years until 2039.
Approximately 6,600 metres of exploration drilling is planned at Sasa for 2024, which will focus on underground drilling of the Kozja Reka deposit from the Central Decline to explore for down dip and northern extensions of the previously mined mineralisation. In addition, down dip exploration and infill drilling at Svinja Reka below the 750 level is planned, as well as a structural geology study of the Sasa area to assist with the definition of exploration targets.
Mineral Resource Estimate for Svinja Reka and Golema Reka
Sasa's technical services team has updated the Mineral Resource Estimate ('MRE') for the Svinja Reka and Golema Reka deposits as of 31 December 2023:
|
|
Grades |
Contained metal |
|||||||
|
Classification |
Deposit |
Mt |
Pb (%) |
Zn (%) |
Ag(g/t) |
Pb (kt) |
Zn (kt) |
Ag (koz) |
|
|
Indicated Mineral Resources |
Svinja Reka |
9.6 |
4.6 |
3.0 |
34.6 |
441 |
286 |
10,634 |
|
|
Golema Reka |
1.9 |
4.0 |
1.3 |
13.5 |
77 |
26 |
841 |
|
|
|
Total Indicated |
11.5 |
4.5 |
2.7 |
31.0 |
518 |
312 |
11,475 |
|
|
|
Inferred Mineral Resources |
Svinja Reka |
2.0 |
2.5 |
2.4 |
19.5 |
48 |
47 |
1,221 |
|
|
Golema Reka |
7.3 |
3.7 |
1.2 |
12.8 |
274 |
87 |
3,031 |
|
|
|
Total Inferred |
9.3 |
3.5 |
1.5 |
14.2 |
322 |
135 |
4,242 |
|
|
|
Total Indicated and Inferred Resources |
20.8 |
4.0 |
2.1 |
23.5 |
840 |
446 |
15,717 |
|
|
Notes
- Mineral Resources have an effective date of 31 December 2023.
- The Competent Person for the declaration of Mineral Resources is Graham Greenway, BSc.Honours (Geology), PGeo. Graham Greenway, CAML's Group Geologist, is a Practising Registrant of the Professional Geoscientists of
- Mineral Resources are reported inclusive of Ore Reserves.
- The Svinja Reka Mineral Resource is reported based on a NSR cut-off of
- The Golema Reka Mineral Resource is reported based on a NSR cut-off of
- Mineral Resources are reported as undiluted. No mining recovery has been applied in the Statement.
- Tonnages are reported in metric units, grades in percent (%) or grams per tonne (g/t), and the contained metal in metric units or ounces. Tonnages, grades, and contained metal totals are rounded appropriately.
- Rounding may result in apparent summation differences between tonnes, grade and contained metal content.
Svinja Reka Ore Reserve statement
The following Ore Reserve Statement has been prepared by Sasa's technical services team based on a LOM plan that includes a transition from the Sub-Level Caving mining method to Cut and Fill as well as Long Hole Stoping with paste backfill. The Ore Reserve Statement considers the updated Indicated Resources constrained within a practical and economic mine design only.
|
|
Grades |
Contained metal |
|||||
|
Svinja Reka |
Mt |
Pb (%) |
Zn (%) |
Ag(g/t) |
Pb (kt) |
Zn (kt) |
Ag(koz) |
|
Probable |
9.0 |
4.0 |
2.6 |
29.8 |
359 |
236 |
8,661 |
|
Total |
9.0 |
4.0 |
2.6 |
29.8 |
359 |
236 |
8,661 |
Notes
- Ore Reserves have an effective date of 31 December 2023.
- The Competent Person who has reviewed the Ore Reserves is Scott Yelland, C. Eng, FIMMM, MSc, who is a full-time employee and Chief Operating Officer of CAML. He is a mining engineer with over 40 years' experience in the mining and metals industry, including operational experience in underground zinc and lead mines, and as such qualifies as a Competent Person
as defined in the JORC Code (2012).
- The Ore Reserve is reported using a NSR cut-off of
- Rounding may result in apparent summation differences between tonnes, grade and contained metal content.
- The Mineral Resources and Ore Reserves are reported in accordance with the guidelines of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code').
- Ore reserves have been estimated utilising 3D modelling software (Deswik) and are reported within practical mining shapes.
SUSTAINABILITY SUMMARY
Sustainability is central in our approach to mining and how we do business. For our investors, it is critical we not only manage our sustainability risks but capture the opportunities that come with being a producer of sustainable metals. This enables us to ensure we have a positive environmental and socio-economic impact on the communities in which we work.
Overview
Producing base metals, essential for modern living, profitably in a safe and sustainable environment drives CAML's strategy and business model. In turn, our sustainability strategy is built upon the five pillars shown on page 34 in our annual report. This means protecting the longevity of our operations and working towards an enduring net positive outcome after the end of asset life by upholding strong ethical practices throughout the Company and our supply chain. Additionally, this allows prioritising the safety, health and development of our people, conducting business in an environmentally responsible manner and positively contributing to our communities and countries of operation.
CAML's Board has accountability for risk management, including those relating to the Company's impacts on the economy, environment and people. Our Sustainability Committee has overall responsibility for overseeing these impacts, and its report can be found on page 93 in our annual report.
In our fourth year of reporting in line with GRI standards, we have worked to further improve and develop disclosure. During 2023, we undertook an internal review of our materiality topics and their prioritisation.
CAML's sustainability strategy and practices continue to develop, and we have advanced our approach to contributing to the SDGs in 2023. We recognise that all 17 SDGs are important and that many of them are interconnected; however, for the purposes of our sustainability activities, we believe that it is helpful to prioritise and have therefore identified these primary and supporting SDGs.
Delivering value through stewardship
At CAML, we set high standards that are crucial for the effective running of our operations and the long-term sustainability of our business. With a robust framework to promote ethical behaviour and strong corporate governance, we believe we can contribute to a responsible and stable value chain and business environment.
Leading from the top, the Board is responsible for setting the appropriate culture to drive good governance and ethical behaviour throughout the Company. We believe that a robust approach to human rights is vital to fulfilling our corporate responsibilities, not only in respect of our employees but for the workers along our supply chains and within the communities in which we operate.
Maintaining health and safety
Safety has been identified both by the Company and our stakeholders as one of our key material issues and is at the heart of everything we do. Our goal of achieving zero harm in the workplace for all employees, contractors and visitors is laid out in the Company's Sustainability Policy, and we have a clear safety improvement target for the Group.
With fully integrated and robust health and safety management systems at both sites, we aim to ensure the wellbeing of all employees. We strive to implement world-class health and safety practices across our operations. It is important that both management and staff are aware of their responsibilities and accountability, and that they feel empowered to prioritise health and safety in the workplace.
Wherever possible, we look to eliminate occupational health risks and believe that a strong workforce, supported by the appropriate programmes to monitor and promote health, is paramount in achieving high levels of productivity.
Focusing on our people
We recognise core labour and human rights principles and acknowledge workers' freedom of association and the right for our employees to bargain collectively within prescribed laws, communicating issues to management through designated employee representatives.
We believe that by encouraging employee development, we can also foster satisfaction and fulfilment amongst our employees. This involves a targeted approach to training facilitated by comprehensive needs analysis. Succession planning is a key focus for the Group in order to develop our leaders of tomorrow.
CAML attaches importance to diversity, specifically when considering the breadth of thought, approach and opinion that can be fostered by a diverse group. By embracing diversity and fostering inclusion, we believe we can unlock the power of all talent and work collaboratively and effectively. Site-level diversity focus groups have been put in place to identify areas for improvement and we have implemented long-term targets to improve levels of gender diversity in the Group. We do not tolerate discrimination in any form and have mechanisms in place to raise any issues.
Caring for the environment
CAML has robust and comprehensive environmental management systems which aim to substantially reduce (if not avoid) the risk of any potential negative environmental impacts from our operations. We are mindful of our duty to manage and minimise waste responsibly and are firmly committed to environmental and socially responsible tailings and dump leach management, with safety at the centre of our approach.
We employ water management strategies and aim to minimise freshwater or makeup usage wherever possible. Biodiversity, rehabilitation and closure programmes are in place across our assets to avoid or mitigate any adverse effects of our operations.
Tackling climate change is one of the most important challenges of our time and we believe that every government, community, company and individual has a vital role to play in reducing carbon emissions and safeguarding the future of the planet. We recognise the growing importance of understanding and addressing the impact of climate change on the environment and its potential impact on the business.
We conducted a scenario planning exercise in 2022 to increase our understanding of transition risks that may affect our operations as well as to extend our physical risk analysis to our supply chain. In 2023, we began to implement key recommended actions from the scenario planning exercise, including working on estimating our Scope 3 emissions for 2022 and 2023. Scope 3 emissions for 2023 were 272,123 tCO2e (2022: 267,892 tC02e), details of which are in the Climate Change Report.
Creating value for our communities
CAML aims to provide demonstrable benefits to stakeholders in our local communities and host countries. By contributing to the economic security of local workers, the provision of employment opportunities is one of the primary ways the Company can provide a positive impact and CAML therefore prioritises local hiring.
The Company is committed to fostering sustainable development, facilitating socio-economic progress (specifically in the field of community training and education) and helping the youth and most vulnerable members of the community in line with our human rights commitments.
Our economically robust business that underpins our ability to generate profits and dividends for our shareholders also ensures that our successes are shared with other important stakeholders. This aligns with international priorities such as the UN SDGs, in particular SDG 8 'Decent Work and Economic Growth'. We strongly believe that by creating shared value we are ensuring
the long-term sustainability of our operations and acting as a good corporate citizen.
CAML is proud of the value that it brings to its host countries, with total taxes of
Advancing our climate change work in 2023
We are committed to transparent disclosure of our climate impacts, risks, and opportunities. We report under TCFD in our Sustainability and Climate Change reports, despite the disbandment of TCFD in October 2023. We believe these standards continue to offer a fitting framework for our disclosures. Currently, we are reviewing the recommendations of the International Sustainability Standards Board (ISSB), particularly IFRS S1 General Requirements for Disclosure of Sustainability-related financial information and IFRS S2 Climate-related Disclosures. The latter aligns closely with the TCFD recommendations, and we aim to adhere to these standards in our reporting moving forward.
We adopted the TCFD framework and recommendations as a guide for our efforts to understand how climate change could impact a broad range of our business drivers. This approach helps us integrate climate considerations into our decision-making processes and allows us to leverage best practices in reporting and disclosure. By building on our existing efforts in this area, we aim to enhance the quality and transparency of our disclosures while continuing our TCFD reporting roadmap. Through these actions, we seek to improve stakeholders' understanding of CAML's operational and business resilience to climate change, as well as our strategies for addressing climate-related risks and opportunities within our business model.
climate-related reporting
Progress report and next steps
We shared our climate strategy and our medium- and long-term goals which were the result of much internal work undertaken and we felt able to commit to a 50% reduction in our Kounrad and Sasa Scope 1 and Scope 2 emissions by 2030 from a 2020 base, and to being net zero by 2050. To that end, we were delighted to report a 41% reduction in our CAML Group GHG emissions in 2023 versus our base year (2020).
During 2023, we finalised the construction and commissioning of the 4.77 MW Solar Power Project at Kounrad. The facility is anticipated to contribute to 16-18% of Kounrad's total power needs, which equates to a 10% emissions (Scope 1 and Scope 2) reduction at Kounrad. Throughout 2023, we continued to receive solely renewable power for our Sasa operation, as confirmed in
In 2021, we undertook a detailed review of fuel sources that could potentially replace coal for generating heat at Kounrad. Though the proposed alternatives were not considered viable due to a combination of limited GHG reduction potential and significant operating and capital cost implications, opportunities to reduce coal consumption were identified. One of which was the installation of temperature sensors on the dripper lines on the Western Dumps during the 2021-2022 and 2022-2023 winter periods. The sensors allow the site team to monitor the temperature of the leaching solution at the end of the dripper lines and fuel the boilers accordingly to ensure the solution is kept at the optimum temperature and not heated unnecessarily.
During 2023, Sasa replaced its old compressors with three new and more efficient air compressors and, in association with this project, four air-water thermal pumps were installed to improve the regulation of heating across the site and to allow the hot water from the compressors to be recycled within the heating system. In 2023, Sasa planted 1,910 seedlings in the local area and is working with Public Enterprise National Forests to identify other areas for tree planting.
During 2023, we calculated our Scope 3 emissions for both 2022 and 2023, which are fully disclosed and reported in our Climate Change Report and GHG Methodology Report.
Financial review
CAML continues to plan for the future with significant capital investment in 2023 of
CAML's strong operational performance during 2023 is reflected in our achieved EBITDA of
We remain effectively debt free and have a strong balance sheet, ending 2023 with cash in the bank of
2023 Market overview
In 2023, the CAML share price fluctuated between
Macroeconomic environment
Commodity prices
The prices of our base metals copper, zinc and lead are highly dependent on global economic conditions, including supply and demand dynamics. The fluctuation in prices directly affects our profitability, which has an impact on our share price.
Inflation
2023 inflation rates of 9.8% in
Currency fluctuations
Our operations' functional currencies are the North Macedonian Denar ('MKD') for Sasa and the Kazakhstan Tenge ('KZT') for Kounrad and therefore fluctuations in these currency exchange rates impact our financial results. During the year, the MKD and the KZT strengthened against the US dollar ('USD') by 3% and 2% respectively, and this led to an increased cost base. Historically, currencies have typically depreciated in value against the USD.
Copper
In 2023, copper prices peaked at
There was strong demand for copper in
Zinc
Zinc ended 2023 at elevated levels, reaching prices above
Overall, 2023 was a volatile year for zinc, which at one point fell by approximately 36% from its year high. The weak pricing environment placed renewed focus on mines' operating costs and margins, in turn leading to multiple mine closures over the course of the year, including Boliden's Tara mine in
Lead
The lead price began 2023 at the
Lead held up generally well in 2023, despite the headwinds facing base metals markets. This can be attributed to strong auto sales and demand from
Geopolitical landscape
We continue to monitor the ongoing challenges of the geopolitical landscape and uncertain global economic situation. The recent energy crisis,
The conflict in
The
We continue to be proactive in managing our working capital by constantly reviewing our supply chain to ensure sufficient levels of inventory and stock are held on site to continue to operate without interruption.
How our metals support the drive to Net Zero and environmental sustainability
Copper
Copper demand continues to grow with the ongoing transition to a low-carbon global economy and a global shift towards renewable energy sources, such as wind and solar power. Copper is a vital component in renewable energy technologies, including photovoltaic cells, wind turbines and electric vehicle batteries. As countries commit to reducing carbon emissions and increasing renewable energy capacity, the demand for copper in the renewable energy sector increases.
Copper itself is an essential component of the mass electrification at the heart of this transition, as it is used in wiring, electric motors, wind turbines and many other technologies. This is due to its unique properties with high conductivity, ductility, efficiency and recyclability.
The metal will continue to maintain a significant role in the transition towards a green economy, powered by renewable power, and accompanied by an expectation of increased governmental incentives and subsidies that will steadily increase the uptake of copper-intensive clean technologies.
Zinc
Zinc will have a crucial role in the clean energy transition due to its versatile properties. It offers natural corrosion resistance, forming protective layers, and readily forms alloys with other metals, enhancing versatility. Zinc is utilised in various battery technologies, such as zinc-air batteries, contributing to energy storage solutions in the shift towards cleaner energy sources. Furthermore, its high recyclability promotes sustainability and aligns with the principles of a circular economy, supporting efficient material production and use.
It can be applied to battery technology, solar energy, galvanisation for corrosion protection, water purification and wind turbines.
Zinc demand is closely related to its uses in the manufacturing and construction sectors. Its importance, in particular from the sustainability perspective, is its anti-corrosion properties that prolong the useful life of steel products, thereby limiting the use for those raw materials.
Lead
Lead remains essential in lead-acid batteries and also in many healthcare applications, such as equipment for radiologists.
The market for lead is dependent on lead acid batteries which account of over 80% of its usage. There is potential for an increase in demand for lead for static battery storage systems. As the world transitions toward electric vehicles that are powered by technologies such as Lithium-ion batteries, we are reminded that electric vehicles also require a smaller lead acid battery. Therefore, we see an important use and maintained demand for lead into the future.
2024 Outlook
Copper
The outlook for 2024 is improved, with analysts reducing their forecasts of potential inventory build-ups, mostly due to a combination of limited new copper projects along with existing assets falling short of production targets. Hence, the small deficit experienced in 2023 is likely to carry over to 2024, as supply side challenges continue to mount amidst a backdrop of strong demand coming out of
Zinc
With multiple mine closures in 2023 and a major fire at the Ozernoe mine, global output is expected to fall, at least in the early part of 2024. This would help buoy short-term zinc prices. Longer term, supply of both concentrate and refined zinc is expected to rise, with increased mine production coming from new projects and mine life extensions to coincide with steadily growing demand.
Lead
In 2024, a modest market surplus is to be expected, while high energy costs and supply chain disruptions continue to affect lead production. Demand for lead is well positioned in the long term with the transition towards the green economy, as lead-acid batteries continue to be used in electric vehicles and energy storage potentially becomes a major demand driver.
Performance overview
CAML's 2023 gross revenue was down 11% versus 2022 to
The Group generated 2023 EBITDA of
Group profit before tax from continuing operations increased by 19% versus 2022 to
EPS from continuing operations was higher than the previous year at
Kounrad's 2023 EBITDA was
Sasa's 2023 EBITDA was
Income statement
Revenue
CAML generated 2023 gross revenue of
Kounrad
Total Kounrad copper sales were 13,687 tonnes in 2023 (2022: 14,342 tonnes). The offtake arrangement with Traxys has been extended from 1 January 2023 on a one-year rolling basis. The commitment is for a minimum of 95% of Kounrad's annual production.
Gross revenue decreased due to lower production than in 2022, a minor increase in copper inventory during 2023 and a 2% decrease in the copper price received to an average of
Sasa
Overall, Sasa generated 2023 gross revenue of
The zinc price received decreased by 24% to an average of
Treatment charges during the year increased to
During 2023, the offtake buyers' fee for Sasa, was
Under a silver streaming agreement with Osisko Gold Royalties, Sasa receives approximately
Cost of sales
The Group cost of sales for the year was
Kounrad
Kounrad's 2023 cost of sales increased to
Additionally, there was a
Sasa
Sasa's cost of sales for the year increased only marginally by 1% compared to the previous year, reaching
Concession fees for 2023 were reduced to
Distribution and selling costs
There was an increase in distribution and selling costs to
C1 cash cost of production
C1 cash cost of production is a standard metric used in the mining industry to allow comparison across the sector. In line with the industry standard, CAML calculates C1 cash cost by including all direct costs of production at Kounrad and Sasa (reagents, power, production labour and materials, as well as realisation charges such as freight and treatment charges), in addition to local administrative expenses. Royalties, depreciation, and amortisation charges are not included in the calculation of the C1 cash cost.
Kounrad
Kounrad's C1 cash cost of copper production in 2023 was
Sasa
Sasa's on-site operating costs increased by 5% to
Sasa's total C1 cash cost base, including realisation costs, increased to
Group
CAML reports its Group C1 cash cost on a copper equivalent basis, incorporating the production costs at Sasa and by also converting lead and zinc production into copper equivalent tonnes. The Group's C1 copper equivalent cash cost in 2023 was
CAML also reports a fully inclusive cost that encompasses sustaining capital expenditure, local taxes (including MET and concession fees), and corporate overheads associated with the Kounrad and Sasa projects, as well as the C1 cost component. The Group's fully inclusive copper equivalent unit cost for the year was
Administrative expenses
During the year, administrative expenses increased to
Foreign exchange loss
The Group incurred a non-cash foreign exchange loss of
Finance costs
The Group incurred finance costs of
Taxation
In 2023, the Group's income tax rose to
However, the actual corporate income tax charge was reduced to
Discontinued operations
The Group continues to report the results of the Copper Bay entities within discontinued operations. These assets were fully written off in prior years.
Balance sheet
Capital expenditure
During the year, there were additions to property, plant, and equipment of
Kounrad
The capital expenditure additions were a combination of
Kounrad's sustaining capital expenditure includes
Sasa
At Sasa, there was a total of
Sasa's sustaining capital expenditure included capitalised mine development of
Transition to paste fill mining
The Group continues to invest significantly at Sasa with the continued transition to paste fill mining. During the year the PB Plant construction was completed with capital expenditure of
The DST Plant and associated landform expenditure totalled
The development of the Central Decline and equipment totalled
Exploration
During the year, CAML developed an arrangement with a team of experienced explorers and formed a new subsidiary, CAML X. Potential target areas have been reviewed and remain under review, and currently two exploration licences have been granted, with others in application. No significant expenditure has yet been incurred; however, the Company expects to spend between
2024
CAML expects 2024 capital expenditure of between
Working capital
As at 31 December 2023, current trade and other receivables were
Non-current trade and other receivables were
As at 31 December 2023, current trade and other payables were
Cash and borrowings
As at 31 December 2023, the Group had cash in the bank of
Cash flows
Net cash flow generated from operations was
In 2023, corporate income tax payments to governments totalled
Taking into consideration the sustaining capital expenditure of
Dividend
The Company's dividend policy is to return to shareholders a range of between 30% and 50% of free cash flow, defined as net cash generated from operating activities less sustaining capital expenditure plus interest received. The dividends will only be paid provided there is sufficient cash remaining in the Group to meet any contractual debt repayments and that any banking covenants are not breached.
During the year, the Company paid
In conjunction with CAML's 2023 annual results, the Board proposes a final 2023 dividend of
Going concern
The Group sells and distributes its copper cathode product primarily through an annual rolling offtake arrangement with Traxys Europe S.A. with a minimum of 95% of the Kounrad SX-EW plant's forecasted output committed under this contract. The Group sells Sasa's zinc and lead concentrate product through an annual rolling offtake arrangement with Traxys. The commitment is for 100% of the Sasa concentrate production.
The Group meets its day-to-day working capital requirements through its profitable and cash generative operations at Kounrad and Sasa. The Group manages liquidity risk by maintaining adequate committed borrowing facilities and the Group has substantial cash balances as at 31 December 2023.
The Board has reviewed forecasts for the period to December 2026 to assess the Group's liquidity which demonstrate substantial headroom. The Board has considered additional sensitivity scenarios in terms of the Group's commodity price forecasts, expected production volumes, operating cost profile and capital expenditure. The Board has assessed the key risks which could impact the prospects of the Group over the going concern period including commodity price outlook, cost inflation and supply chain disruption with reverse stress testing of the forecasts in line with best practice. Liquidity headroom was demonstrated in each reasonably possible scenario. Accordingly, the Directors continue to adopt the going concern basis in preparing the consolidated financial information.
Non-IFRS financial measures
The Group uses alternative performance measures, which are not defined by generally accepted accounting principles ('GAAP') such as IFRS, as additional indicators. These measures are used by management, alongside the comparable GAAP measures, in evaluating the business performance. The measures are not intended as a substitute for GAAP measures and may not be comparable to similarly reported measures by other companies. The following non-IFRS alternative performance financial measures are used in this report:
Earnings before interest, tax, depreciation and amortisation
EBITDA is a valuable indicator of the Group's ability to generate liquidity and is frequently used by investors and analysts for valuation purposes. It is also a non-IFRS financial measure which is reconciled as follows:
|
|
2023
|