Q3 2020 Operations Update

8 October 2020

CENTRAL ASIA METALS PLC

('CAML' or the 'Company')

Q3 2020 Operations Update

Central Asia Metals plc (AIM: CAML) today provides a Q3 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').

Summary

-      No lost time injuries ('LTIs') at either operation

-      Kounrad

o  Q3 2020 copper produced, 3,883 tonnes

o  First nine months of 2020, 10,490 tonnes of copper produced

-      Sasa

o  Q3 2020

§ Zinc in concentrate produced, 5,764 tonnes

§ Lead in concentrate produced, 7,159 tonnes

o  First nine months of 2020

§ Zinc in concentrate produced, 17,966 tonnes

§ Lead in concentrate produced, 22,300 tonnes

-      30 September 2020 cash in the bank of $55.2 million (inclusive of $10.0 million drawdown in overdraft facilities)

Outlook

-      2020 copper production guidance, increased from between 12,500 tonnes and 13,500 tonnes to between 13,500 tonnes and 14,000 tonnes

-      Post period end, Sasa processing operations have resumed after tailings storage facility 4 ('TSF4') leakage on 14 September 2020

o  Original 2020 zinc and lead production guidance maintained

CAML production summary

Nigel Robinson, Chief Executive Officer, commented:

"After a challenging month with the incident at TSF4, we are delighted to be able to announce an increase in our Kounrad copper production guidance, despite the changes in operating procedures due to COVID-19, and to reiterate our original 2020 Sasa zinc and lead production guidance. This has been possible as we have been able to resume operations at Sasa after making the necessary changes to ensure the long-term safe operation of the tailings dam.

"We have made good progress on the environmental side as well, having already cleaned up a high priority part of the local river and developed, with international consultants, robust plans for the entire clean-up process. Of most importance, no one was harmed in this incident and indeed we have had no LTIs at either operation during the Q3 2020 period.

"At the time of our H1 2020 Results, we deferred a decision on our interim dividend given the TSF4 incident. We intend to update the market in this regard during the coming weeks, however, our current focus remains on remediating the environmental aspects of the incident, completing the independent technical work on the causes of the leakage and returning the operation to 100% production."

COVID-19 update

There are currently two Sasa employees who are positive for COVID-19 and zero Kounrad employees. All previously stated COVID-19 related health measures remain in place at the two sites. 

Safety

No LTIs were reported at either Kounrad or Sasa during Q3 2020. Also, there were no medical treatment injuries ('MTIs') at either operation and therefore zero Group total recordable injuries ('TRIs') during the quarter.

Kounrad

Kounrad Q3 2020 copper production of 3,883 tonnes brings output for the first nine months of 2020 to 10,490 tonnes. Total Kounrad copper production since operations commenced in 2012 is now 106,735 tonnes. 

With less than three months until the end of the year, the Company is increasing its 2020 copper production guidance from between 12,500 tonnes and 13,500 tonnes to between 13,500 tonnes and 14,000 tonnes. This is due to a higher contribution from the Eastern Dumps, as pick-up grades have been better than were projected in the initial annual production plan forecasts.

Copper sales during Q3 2020 were 3,988 tonnes, bringing the total for the first nine months of the year to 10,588 tonnes.

Sasa

TSF4

On 14 September 2020, there was a short-term leakage of approximately 8,000m³ of tailings from Sasa's TSF4 into the local river. The leakage was stopped soon after and nobody was harmed.

CAML has retained the consulting services of Knight Piésold, to advise on the tailings dam, including an independent investigation into the incident as well as recommendations for the future, and Wardell Armstrong, which is advising the Company on the environmental clean-up of the river channel. 

Following an initial orderly shutdown of Sasa's processing facilities, the mine was given permission from the authorities to store tailings in the prior facility, TSF3.2, for up to 10 days. This period expired and the processing of ore stopped on 26 September, although mining operations continued to the end of the quarter. In total, Sasa's processing facilities were not operational for eight days during Q3 2020.

Sasa resumed ore processing on 2 October 2020, following the completion of all repairs and engineering improvements required for TSF4. The plant is currently operating at a reduced rate of approximately 50% for a trial period while the technical team confirms the safe operation of the facility. This trial period is expected to be in the order of one week before the ramp up to full production.

Production

In Q3 2020, mined and processed ore were 202,185 tonnes and 192,859 tonnes respectively, bringing the total for the first nine months of 2020 to 618,240 tonnes of ore mined and 612,716 tonnes of ore processed. The average head grades for the quarter were 3.49% zinc and 3.95% lead, and for the first nine months of the year were 3.41% and 3.86% respectively. The average 2020 metallurgical recoveries to 30 September were 86.1% for zinc and 94.2% for lead.

Sasa produces a zinc concentrate and a separate lead concentrate. In Q3 2020, 11,448 tonnes of concentrate containing 50.3% zinc and 9,969 tonnes of concentrate containing 71.8% lead were produced. Total production for the first nine months of 2020 was 35,958 tonnes of zinc concentrate at an average grade of 50.0% and 31,005 tonnes of lead concentrate at an average grade of 71.9%.  

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, Q3 2020 payable production of zinc was 4,848 tonnes and of lead was 6,802 tonnes, bringing total 2019 payable production for the nine-month period to 15,090 tonnes of zinc and 21,185 tonnes of lead.

Sales

Payable base metal in concentrate sales from Sasa in Q3 2020 were 4,873 tonnes of zinc and 6,860 tonnes of lead and for the nine-month period were 15,146 tonnes of zinc and 21,305 tonnes of lead. 6,463 tonnes of lead concentrate containing 4,443 tonnes of lead have been sold to Chinese smelters during Q2 and Q3 2020.

During Q3 2020, Sasa sold 92,922 ounces of payable silver to Osisko Gold Royalties and during the nine-month period Sasa sold 269,576 ounces, in accordance with its streaming agreement. 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014

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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