10 September 2024

Central Asia Metals plc

(the 'Group', the 'Company' or 'CAML')

Interim Results for the Six Months Ended 30 June 2024

Central Asia Metals plc (AIM: CAML) is pleased to announce its unaudited interim results for the six months ended 30 June 2024 ('H1 2024' or 'the period').

H1 2024 financial summary

-         Strong financial performance

o  Group gross revenue¹ of $103.8 million (H1 2023: $99.3 million) and Group net revenue of $97.5 million (H1 2023: $93.6 million)

o  Group earnings before interest, tax, depreciation and amortisation ('EBITDA'¹) of $49.1 million (H1 2023: $48.9 million)

o  EBITDA margin¹ of 47% (H1 2023: 49%)

o  Group free cash flow ('FCF'¹) of $30.0 million (H1 2023 adjusted FCF: $24.1 million)

o  H1 2024 dividend of 9 pence per share (H1 2023: 9 pence)

-         Flexible balance sheet

o Debt free

o At 30 June 2024, cash in the bank of $56.3 million² (31 December 2023: $57.2 million)

o Providing a powerful platform for growth

H1 2024 operational summary

-         Kounrad copper production of 6,608 tonnes (H1 2023: 6,716 tonnes) and sales of 6,415 tonnes (H1 2023: 6,315 tonnes)

-         Sasa zinc-in-concentrate production of 9,014 tonnes (H1 2023: 9,764 tonnes) and payable zinc sales of 7,674 tonnes (H1 2023: 8,382 tonnes)

-         Sasa lead-in-concentrate production of 12,872 tonnes (H1 2023: 13,734 tonnes) and payable lead sales of 12,535 tonnes (H1 2023: 12,416 tonnes)

-         One Group Lost Time Injury ('LTI'); Group Lost Time Injury Frequency Rate ('LTIFR'³) of 0.80 (H1 2023: 0.80)

-         Investment of $3.8 million in Aberdeen Minerals, with drilling under way post period-end; and exploration ramping up in Kazakhstan through CAML Exploration ('CAML X'), an 80%-owned subsidiary

-         Achieved conformance with the Global Industry Standard on Tailings Management ('GISTM'), ensuring tailings storage meets the highest standards of international best practice

1 See Financial Review section for definition of non-IFRS alternative performance measures

2 The cash balance figure disclosed includes restricted cash but excludes cash held in discontinued operations - see Financial Review section

3 The rate per million person-hours worked

2024 outlook and deliverables

-         On track to meet copper production guidance at Kounrad of 13,000-14,000 tonnes

-         Production at Sasa expected to be around the lower end of previous guidance (zinc-in-concentrate production of 19,000-21,000 tonnes and lead-in-concentrate production of 27,000-29,000 tonnes)

-         Continuation of transition to paste-fill mining methods at Sasa

-         Completion of the Dry-Stack Tailings Plant and initial placement of filter cake on the engineered landform scheduled for Q4 2024

-         Completion of the Central Decline and connection with the 750-metre level planned for Q4 2024

Nigel Robinson, Chief Executive Officer, commented:

"I am delighted to report Group EBITDA of $49.1 million, driven by strong prices for our three main products, particularly in Q2, and underpinned by a solid operational performance from our two existing operations. We remain debt free and, with cash in the bank of $56.3 million and continued strong operational cash flows, we feel confident to fund both our important capex programme at Sasa and an attractive interim dividend, which we have declared at 9 pence per share.

"Our safety performance in H1 2024 was once again encouraging, with just one LTI during the period. Kounrad performed well and remains on track to meet the production guidance we gave at the start of the year. Meanwhile, at Sasa the challenges posed by the transition to a new mining method resulted in a modest reduction in mined tonnages in H1, but we are certain this investment will benefit all stakeholders in the longer-term, by sustaining the life of both the underground mine and its associated tailings storage facilities. We look forward to the substantial completion of this programme by year-end.

"Our efforts to grow the business remain a key priority. During the period we formally established CAML X, an 80%-owned subsidiary focused on early-stage exploration for base metals in Kazakhstan, and we made an initial investment of $3.8 million in Aberdeen Minerals, a privately-owned company exploring for base metals in Scotland. Both of these initiatives are early-stage in nature, and our search continues for an opportunity providing existing, or near-term, cash flow to establish a project pipeline.

"Sustainability is fundamental to everything we do, and this commitment was again demonstrated immediately post-period by CAML achieving conformance with GISTM with respect to our Sasa operation. This standard of international best practice for tailings management has been adopted by CAML on a voluntary basis, representing the culmination of a three-year work programme, and is independently audited by third-party consultants.

"To conclude, this will be my final set of financial results as CEO of CAML. It has been a privilege to lead the Group for the past six years, and I would like to take this opportunity to thank all stakeholders for their support. I believe the Group is in a strong position, both financially and operationally, and I am delighted to be remaining on the Board and to be able to continue working with the executive team."

Analyst conference call

There will be an analyst conference call and Q&A today at 09:30 (BST). The call can be accessed by dialling +44 (0)330 551 0200 (UK) or +1 786 697 3501 (USA Local) and quoting the confirmation code 'CAML - H1' when prompted by the operator, and the webcast can be accessed using the link: https://brrmedia.news/CAML_HY_2024

The presentation will be available on the Company's website, and there will be a replay of the call available following the presentation at https://www.centralasiametals.com

Investor Meet Company

The Company will also hold a live presentation relating to the 2024 Interim Results via the Investor Meet Company platform at 16:30 (BST) today. 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:

https://www.investormeetcompany.com/central-asia-metals-plc/register-investor

For further information contact:

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. The Company also owns an 80% interest in CAML Exploration, a subsidiary that was formed to progress early-stage exploration opportunities in Kazakhstan, and a 28.7% interest in Aberdeen Minerals Ltd, a privately-owned UK company focused on the exploration and development of base metals opportunities in northeast Scotland.

For further information, please visit www.centralasiametals.com and follow CAML on X at @CamlMetals and on LinkedIn at Central Asia Metals Plc

Chief Executive Officer's Review

The Kounrad operation in Kazakhstan had another safe six months, with no recordable injuries, and the Sasa zinc and lead mine in North Macedonia recorded just one LTI. The Group continues its drive to achieve zero harm.

Gross revenue in H1 2024 totalled $103.8 million, a 4% increase compared with the corresponding period in 2023 as strong average prices for copper and lead, backed by steady copper and lead sales, more than offset a marginal decrease in the average zinc price and slightly lower sales of zinc-in-concentrate. Group EBITDA was steady at $49.1 million, as the increase in revenue was effectively matched by a rise in operating costs. The increase in costs largely reflected general inflationary pressure on wages and consumables, plus additional costs associated with the move to paste-fill mining methods at Sasa. However, these increased costs bring tangible benefits, as maintaining salaries in real terms is important in supporting good employee relations, and the transition to paste-fill mining is both extending Sasa's life-of-mine and reducing the quantity of tailings stored on surface.

The consistent EBITDA performance during the period combined with a reduction in corporate income tax paid, owing principally to overpayments in the corresponding period last year, resulted in a 24% increase in FCF compared with H1 2023, and the Group ended H1 2024 with a strong cash position of $56.3 million.

Based on the Company's strong cash flow and balance sheet, the CAML Board is pleased to declare an interim dividend of 9 pence per ordinary share. This represents 70% of our $30.0 million FCF, which exceeds the Company's stated policy of 30-50% of FCF. However, with cash-on-hand at a strong level, and in the absence of a material transaction, as in certain prior periods the Board determined a distribution exceeding the policy to be appropriate.

This dividend will be paid on 22 October 2024 to shareholders registered on 27 September 2024.

Growth is always at the forefront of management's thinking, and to this end the Company made a significant investment in Aberdeen Minerals during the period, purchasing a 28.7% shareholding in this highly prospective company for $3.8 million. Drilling commenced at the Arthrath project in northeast Scotland post period-end, and initial indications based on visual core logging are positive. The exploration target is high-grade copper and nickel mineralisation, and the drilling is testing deeper targets than have previously been evaluated at this project. Meanwhile CAML X, the Company's 80%-owned exploration subsidiary in Kazakhstan, ramped up its activities during H1 2024, focusing on target generation and licence applications. These activities represent potential long-term growth, and are complementary to the Company's continued search for an existing or near-term cash-flowing opportunity that would transform the business in the immediate future.

The programme of Capital Projects at Sasa achieved several key milestones during the period, with mining by both cut-and-fill and long-hole stoping under way, connection of the Central Decline to the 800-metre level and completion of the construction of the initial landform for the Dry-Stack Tailings ('DST'). The Paste Backfill ('PBF') Plant operated consistently during H1 2024, filling a large volume of existing mined voids and thus stabilising the ground for future mining. Looking ahead to H2 2024, the key targets of the Capital Projects remain completion of the main building for the DST Plant and the initial placement of filter cake on the DST landform.

Community engagement remained a key focus of the Group's sustainability programme during H1 2024. A total of $0.2 million was provided by the two foundations at Kounrad and Sasa to fund collaborative projects aimed at sustainable development for the benefit of the local communities, consistent with CAML's existing funding commitment. Additionally, a further $0.1 million was allocated to support communities affected by flooding in northern Kazakhstan earlier this year. In April 2024, CAML published its fifth stand-alone Sustainability Report covering activities for the year ended 31 December 2023. The Solar Power Plant at Kounrad, operational since November 2023, provided an average of 15% of Kounrad's total electricity requirement during H1 2024, making a significant contribution to the Group's efforts to help combat climate change.

The Group enters H2 2024 with consistent, low-cost operations and a strong and flexible balance sheet, providing resilience to any changes in market conditions, while underpinning returns to shareholders and providing the executive management team with the ability to seize new opportunities to add value.

Operations Review

Kounrad

Production

CAML delivered copper cathode production of 6,608 tonnes from Kounrad for H1 2024, compared with 6,716 tonnes in the corresponding period in 2023.

Copper sales during H1 2024 were 6,415 tonnes, with the cathode sold to CAML's offtake partner, Traxys Europe S.A. The quality of cathode produced remains excellent, at purity levels of more than 99.99%, and continues to meet the requirements of customers.

Throughout the period leaching was conducted at both the Eastern and Western Dumps, with the Eastern Dumps contributing almost 30% of metal output as previously unleached, reprofiled side dump slopes were brought under irrigation. The leaching characteristics of both dumps continue to meet, and in some instances exceed, the forecasts for recovery predicted at the feasibility stage.

Despite Q1 winter temperatures being significantly lower than the previous two equivalent periods, the improvements made to control of the boilers and the dripper solution monitoring system allowed uninterrupted operation throughout.

Perimeter trench extension works continued adjacent to Dumps 21 and 22 in the Western Dumps, with 450 metres of trench being lined during the period. In addition, a new collection pond, pumphouse and delivery pipeline were constructed and commissioned around Dump 22.

The Solvent Extraction Electro-Winning ('SX-EW') facility operated extremely well at 99.6% availability, with the only down time associated with a planned maintenance period during which 1,000 anodes were replaced in the EW1 tank house. During the period, repairs were also made to the acid-resistant linings in the EW2 section electrolyte and SX electrolyte storage tanks, with no negative impact on output.

Operationally, Kounrad continues to be unaffected by the conflict in Ukraine and resulting international sanctions.

Solar Power Plant

The 4.77MW Solar Power Plant operated continuously throughout the period, generating 4.42 million kWh equivalent to 15.4% of total power consumption. During the month of June, the facility produced 926,000 kWh, being 19% of demand and more than double the quantity generated in January.

Sasa

Production

In H1 2024, 365,652 tonnes of ore were mined and 368,075 tonnes were processed. The average head grades achieved for H1 2024 were 2.86% zinc and 3.70% lead. The average H1 2024 metallurgical recoveries were 85.5% for zinc and 94.4% for lead. Plant availability during H1 2024 was 94%, with throughput averaging 90 tonnes per hour.

Sasa produces a zinc concentrate and a separate lead concentrate. Total H1 2024 production was 17,913 tonnes of zinc concentrate at an average grade of 50.3% and 18,186 tonnes of lead concentrate at an average grade of 70.8%.

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, total payable production for H1 2024 was 7,581 tonnes of zinc and 12,228 tonnes of lead. Sales were made to European customers via CAML's offtake contract with Traxys. Payable base metal-in-concentrate sales for the six-month period were 7,674 tonnes of zinc and 12.535 tonnes of lead.

During H1 2024, Sasa sold 174,916 ounces of payable silver to Osisko Gold Royalties, in accordance with its streaming agreement.

Underground mining

Total development-in-ore for H1 2024 was approximately 3,000 metres, which contributed 39% of total ore tonnes mined. The overall dilution for the period was in line with plan, as more-efficient mining methods have been introduced and orebody contouring improved.

As part of this transition to new mining methods, in addition to the start of cut-and-fill mining, the first long-hole stopes have also been put into production, and additional long-hole stopes will follow during H2 2024 and in 2025.

Development-in-waste during the period was 1,775 metres, up 36% compared with H1 2023. Strategically the focus of the first six months of the year has been connecting the new Central Decline with the 800-metre level, developing ventilation raises and the excavation of interconnecting ramps to access production areas. Approximately 3,200 metres of the Central Decline have now been developed, and connection with the 750-metre level is planned for Q4 2024.

The availability of Sasa's Epiroc fleet of equipment during the period was 75% for the production drills, 82% for the loaders and 86% for the trucks. During H1 2024, new underground equipment was delivered as part of the replacement strategy to aid production and ground-support works in future.

Paste Back Fill Plant and Underground Reticulation

During H1 2024, the Paste Backfill ('PBF') Plant operated consistently, with placement of paste fill between the 990-metre and 910-metre levels in existing voids, and in the 800-metre level cut-and-fill drives. By the end of H1 2024, the total amount of paste fill pumped underground had reached just over 130,000 tonnes.

Some of these previously mined voids are proving to be of greater volume than anticipated, requiring more paste fill, which in turn has restricted initial stoping operations under the new mining method. However, this void-filling provides the necessary ground stability for current and future mining, whilst increasing the volume of tailings stored underground and thus further reducing the quantity that needs to be stored on surface.

In H1 2024, operations continued to install steel pipes in the newly developed areas, bringing the total reticulation pipe network for PBF to more than 5.5 kilometres.

Dry Stack Tailings Project

The Dry Stack Tailings ('DST') project comprises two separate aspects: design and construction of the landform on which the dry tailings are stacked; and the design and construction of the processing plant.

Construction of the DST Plant is under way, with construction of the main building on track for completion during Q4 2024. This will be followed by the automation and electrical work. Initial placement of filter cake on the engineered landform is scheduled by the end of this year.

The equipment is largely being sourced from Metso Outotec, and construction is being undertaken by a North Macedonian construction company, Aktiva Ltd, which was also responsible for building the PBF plant. Knight Piésold has completed the detailed design work for the DST landform, and construction of the initial phase of the landform has been completed.

Sustainability

H1 2024 health and safety statistics

During H1 2024, no Lost Time Injuries ('LTI') were recorded at Kounrad and one LTI was recorded at Sasa. CAML Group therefore reports one LTI and one Total Recordable Injury ('TRIs') for the six-month period. CAML's H1 2024 LTIFR and Recordable Injury Frequency Rate ('TRIFR') is 0.80.

Health and safety update on 2024 focus areas

In H1 2024, both operations maintained a strong focus on safety-culture change and occupational health. At Kounrad, key work included a review of the findings of the Group Occupational Health Study. Sasa progressed its site-specific occupational health plan, building on insights from both the Group and local Occupational Health Studies, with finalisation expected in H2 2024. The health and safety teams at both sites, in collaboration with the corporate sustainability team, conducted a comprehensive review of the Group's health and safety culture to establish a safety-culture baseline. Based on this review, CAML will develop its long-term safety-culture strategy in H2 2024.

Sasa successfully rolled out its '9 Golden Safety Rules' and carried out an internal emergency response drill for the Tailings Storage Facilities ('TSFs'), with an external drill scheduled for H2 2024. Additionally, Sasa installed a sprinkler fire-protection system on the crusher conveyor belts. At Kounrad, a Fire Safety Audit was conducted, with positive results confirming robust safety standards.

Governance update on 2024 focus areas

Good progress was made during H1 2024 on governance and stewardship-focused sustainability goals. The Group has committed to conducting a Human Rights Impact Assessment ('HRIA') on its operations every three years and is currently halfway through the process. Following a risk-mapping exercise and desktop review, the HRIA was initiated via a site visit to Kounrad in August 2024, whereby interviews were held with the identified departments. This will be replicated for the Sasa operation by the end of 2024, with the reports due to be presented in early 2025.

Additionally, the Group is undertaking an internal assessment of its supplier-screening process. Responses to the environmental and social criteria within the Supplier Code of Conduct questionnaire will be reviewed and analysed to produce meaningful insights into the process, which will help inform the Group's future efforts to ensure an ethical supply chain. The results of the internal assessment (spanning a sample size of responses received between August 2023 and August 2024) are expected to be issued by year-end. The Group also continues to conduct training on modern slavery and human rights to both risk-assessed employees and on-site contractors. There were no human rights abuses reported at either site during the period.

People update on 2024 focus areas

CAML undertook a succession-planning project across the Group in H1 2024, in which potential successors for management positions were identified. As part of this project, the Group assessed other key positions within the business, the roles of expatriates and potential skills gaps, to identify where action may be required. This initiative is designed to ensure the retention of key people and to maintain a talent pipeline, which is a fundamental challenge in the mining industry.

During June, the Company announced upcoming changes to its executive leadership team. Nigel Robinson is to step down as Chief Executive Officer ('CEO') effective 30 September 2024 and Gavin Ferrar will become CAML's CEO effective 1 October 2024. Also effective from that date, Louise Wrathall will assume the role of Chief Financial Officer. Nigel will remain an Executive Director initially, moving to a Non-Executive Director role effective 1 April 2025.

Regular meetings with unions and employee representatives continued to be held throughout the period at both operations. Kounrad successfully renewed its collective agreement with unions, and the Group anticipates finalising Sasa's collective agreement by the end of Q1 2025.

CAML is once again taking part in the International Women in Mining Mentoring Programme, with five women from the Group taking part this year (two from each site and one from corporate). One of CAML's senior leaders was selected to act as a mentor this year.

The training department at Sasa has been active with various workshops and instruction in the new mining method, safety and change-management initiatives. Additionally at Sasa, the Group continues to partner with local schools for the Dual Education Programme. This programme provides each participant with practical work in an established company with which the school has signed a memorandum of co-operation. Eighteen students joined the programme this year, which brings the total number to 90.

Environmental update on 2024 focus areas

In H1 2024, Sasa continued its efforts to review water usage across the site, aligning with the Group's long-term target of a 75% reduction in Sasa's surface-water abstraction by the end of 2026 (compared with the 2020 baseline). A key project initiated during the period involves using adit water within the milling circuit. This project, expected to commence in Q3 2024, aims to achieve an approximate 15% reduction in surface-water usage, and other plans are in progress to achieve the first phase of the overall target.

The Kounrad Solar Power Plant, operational since November 2023, provided an average of 15% of Kounrad's total electricity requirement during H1 2024. This contribution is expected to increase to between 16% and 18% by year-end, as the summer months enhance solar generation.

Work on the Group Biodiversity Strategy has continued, with plans for its rollout in H2 2024. Additionally, during H1 2024, Sasa developed a pilot project which will assess which species are best to plant on TSF 3.2 for biological remediation, as part of the TSF's closure design.

There were no significant environmental incidents reported at Sasa or Kounrad during H1 2024.

Community update on 2024 focus areas

During H1 2024, the Kounrad Foundation, in association with the Eurasia Foundation for Central Asia ('EFCA'), supported a Science, Technology, Engineering, Arts and Mathematics ('STEAM') programme. Training days were conducted for 69 teachers from 16 different schools. This initiative aims to enhance the quality of education in the STEAM subjects. Progress was also made on the Balkhash Youth Centre, where the final design was approved. The tendering phase is now under way to select a contractor for construction.

At Sasa, the X-ray machine purchased by the Sasa Foundation was delivered to the medical centre at the local town, Makedonska Kamenica. Additionally, an early-warning system communication plan, part of Sasa's tailings management, was developed and will be communicated to stakeholders during H2 2024.

There were no community incidents at either operation during H1 2024.

Sustainability reporting

H1 2024 sustainability reporting update

CAML has reported in accordance with the Global Reporting Initiative ('GRI') Universal Standards for the period 1 January 2023 to 31 December 2023, and this is the Group's fifth stand-alone Sustainability Report. CAML has further increased transparency to its stakeholders by using the GRI Mining Sector Standards, which were published in February 2024, as well as mapping the report to the Sustainability Accounting Standards Board ('SASB') for the metals and mining industry. CAML's 2024 Sustainability report covers the Group's approach to transparent business conduct, maintaining safe operations and healthy working environments, and its efforts to manage any potential environmental or social impacts. Furthermore, CAML has committed to the following specific long-term targets and will report on its performance in these key areas in next year's Sustainability Report. Please refer to CAML's 2023 Sustainability report for details. Additional targets will be set in future as appropriate.

H1 2024 climate-change reporting update

Following the development of its climate-change strategy in 2021, CAML continued during H1 2024 on its path towards reporting to the Task Force on Climate-related Financial Disclosures ('TCFD') framework, publishing the Group's third stand-alone Climate Change Report. This report details progress towards CAML's long-term goals of a 50% reduction in its Scope 1 & 2 GHG emissions by 2030 (versus the 2020 baseline) and achieving net zero by 2050. In addition, the Group has for the first time disclosed its Scope 3 emissions in alignment with its long-term target, utilising the GHG Protocol's Corporate Value Chain (Scope 3) Accounting Reporting Standard for its calculations. The Group's own data was used wherever possible, supplemented by global and regional emissions standards and guidelines where necessary. More information on the methodology used can be found in the GHG Emissions Methodology Report on CAML's website.

Global Industry Standard on Tailings Management ('GISTM') update

CAML is committed to transparent disclosure for all its TSFs. In 2021, CAML committed to report in accordance with GISTM within a three-year period. In H1 2024, CAML engaged Knight Piésold Consulting to conduct an independent third-party audit of Sasa TSFs and tailings management system. The audit, conducted in accordance with the ICMM Conformance Protocols, confirmed that all GISTM requirements (Principles 1-15) have either been fully met or are 'met with a plan in place'. CAML achieved an overall conformance rate of 92% plus 8% meeting with a plan, and therefore CAML conforms to GISTM. The 8% meeting with a plan is being actively addressed, with completion expected by Q1 2025.

Business Development Review

Summary

CAML continued to place a high priority on its business development efforts during H1 2024, both in seeking acquisition opportunities offering existing or near-term cash flow and with respect to the Company's longer-term exploration investments. The new opportunities CAML reviewed during H1 2024 were all selected in line with the Company's business development strategy as previously outlined.

H1 2024 activities

Transformational opportunities

The CAML team remains focused on identifying transformational opportunities to grow the business, whilst recognising the need for such developments to be accretive to earnings and valuation. During H1 2024, a total of 23 potential acquisitions were appraised, seven non-disclosure agreements were signed and three site visits undertaken. Within this activity, the business development team spent significant time on five opportunities in particular. Following extensive evaluation, none of these remain active. However, the team has entered H2 2024 with a pipeline of opportunities to pursue, and remains focused on developing the business for the long term.

CAML X

CAML X has undertaken its first full exploration season during the summer of 2024. This fieldwork remains predominantly target-generative in nature, with a view to applying for additional exploration licences. There is increasing competition for licences in Kazakhstan, making licensing attractive properties more challenging in some locations. However, the Group regards this increased competition as reinforcing the rationale behind the decision to create CAML X, which is now fully active in this sector.

In addition to the fieldwork, the team continues its desk-based work to identify potential target areas using historical data with a view to narrowing down areas of interest for forthcoming field visits and additional licence applications.

Aberdeen Minerals

CAML completed its initial investment into Aberdeen Minerals on 31 May 2024, and now owns 28.7% of that company.

CAML's investment represents a low-cost entry for CAML into a focused junior exploration company which is actively exploring the Arthrath Project in Aberdeenshire, northeast Scotland, and several promising targets in the underexplored surrounding district. The investment into Aberdeen will fund a significant drilling programme of 10,000 metres that will be undertaken in several phases.

The first phase (six holes totalling 2,650 metres) of this drilling programme is now under way. Three holes have been drilled to date, and visual results from core logging are positive. The drilling is designed to test the exploration model of increasing metal grades at depth, and these holes (of up to 550m) are testing deeper geology than has ever been drilled in the area before. The work also includes the first use of down-hole geophysics on the project, which maximises the data gained from each hole.

Financial Review

Market overview

Copper prices surged during the first half of 2024, peaking at record highs in May of over $11,000 per tonne, reflecting higher demand from the energy sector, and supply disruptions and delays, with the positive sentiment further driven by the prospect of a cut in US interest rates. Although copper prices have since retreated somewhat, post period-end they remained higher than at the start of H1 2024. Furthermore, copper's critical role in electrification, which lies at the heart of the transition to a low-carbon global economy, and ongoing supply constraints suggest a bullish market outlook for the long-term.

Zinc and lead prices held up generally well in H1 2024, driven principally by supply tightness. However, like copper, these prices have also since retreated, particularly post period-end, owing chiefly to concerns over global economic conditions, especially in China, but also in part to seasonal effects on activity.

Although inflation rates remain elevated, driven by a continued surge in food prices and energy in Kazakhstan, there has been a noticeable slowdown in the inflation rate in both Kazakhstan and North Macedonia. This deceleration is attributed to effective monetary policy conducted by the respective national banks and the measures taken to mitigate import-price pressures.

Finally, the weakening in the US dollar relative to sterling has had a negative impact in US dollar terms on the Group's administrative costs, and on the value of cash outflows to pay dividends.

Performance overview

The H1 2024 results demonstrate CAML's consistent financial performance in terms of EBITDA, whilst also reflecting the Company's continued strong free cash flow ('FCF').

Revenue

The Group reported increased revenues for the period, driven by an increase in copper sales of 100 tonnes and higher metal prices received for both copper and lead. Specifically, the received copper price rose by 6% compared with H1 2023, and lead prices received increased by 3%. As a result, gross revenue for H1 2024 grew by 4% to $103.8 million (H1 2023: $99.3 million).

Earnings per share and EBITDA

This increase in revenue has directly influenced both profit before tax ('PBT') and resulting earnings per share ('EPS'). EPS from continuing operations rose to 13.14 cents (H1 2023: 11.41 cents), reflecting stable operating profitability augmented by a positive foreign-exchange swing of $3.4 million.

Group H1 2024 EBITDA was consistent at $49.1 million (H1 2023: $48.9 million). The transition to paste-fill mining methods requires the operation of the Paste Backfill ('PBF') Plant, and this incurred additional operating costs of $0.8 million. Furthermore, inflationary pressures have led to increased employee-related costs across the Group, rising by $2.0 million, which also included the hiring of senior technical staff for the Capital Projects at Sasa and higher national insurance contributions. Costs for reagents, technical materials and spare parts also rose, by $1.3 million. These additional costs contributed to a modest reduction in EBITDA margin to 47% (H1 2023: 49%).

At the operating level, Kounrad's H1 2024 EBITDA was $42.3 million (H1 2023: $39.2 million), with a margin of 72% (H1 2023: 72%). Sasa's H1 2024 EBITDA was $16.7 million (H1 2023: $18.2 million), with a margin of 37% (H1 2023: 41%).

Free cash flow and taxation

CAML generated an improved H1 2024 FCF of $30.0 million (H1 2023: adjusted FCF of $24.1 million), with a resulting healthy net cash balance allowing the Board to declare an interim dividend of 9 pence. The increase in FCF was due principally to the prior period including substantial cash outflows for tax payments, including Kazakhstan withholding tax paid on intercompany dividend distributions. During H1 2024, $3.4 million in overpaid Group income tax was applied to offset current income tax liabilities, with an additional $3.4 million expected to be utilised in H2 2024.

During H1 2024, the Group paid $2.6 million (H1 2023: $7.0 million) of Kazakhstan withholding tax on intercompany dividend distributions, with a further $2.5 million already paid in H2 2024 as these intercompany dividend distributions have been spread throughout the year in 2024.

Income statement

Revenue

CAML generated H1 2024 gross revenue of $103.8 million (H1 2023: $99.3 million), which is reported as standard practice after the deduction of zinc and lead treatment charges, but before deductions including offtake buyer's fees and silver purchases for the Sasa silver stream. Net revenue after these deductions was $97.5 million (H1 2023: $93.6 million).

Kounrad

Kounrad generated gross revenue of $59.1 million for H1 2024 (H1 2023: $54.7 million). A higher volume of copper cathode was sold compared with H1 2023, totalling 6,415 tonnes (H1 2023: 6,310 tonnes) driven by the strong production performance. These sales were made under the Company's offtake arrangement with Traxys, which has been extended on a one-year rolling basis from 1 January 2024 and commits a minimum of 95% of Kounrad's annual production.

The average copper price received increased by 6% to $9,221 per tonne (H1 2023: $8,668 per tonne), while the offtaker's fee for Kounrad remained consistent at $1.4 million (H1 2023: $1.4 million).

Sasa

Sasa generated gross revenue of $44.7 million for H1 2024 (H1 2023: $44.6 million). This steady performance was due to a 3% rise in the average price received for lead during H1 2024, to $2,112 per tonne (H1 2023: $2,051 per tonne), alongside a higher volume of payable lead-in-concentrate sold, totalling 12,535 tonnes (H1 2023: 12,416 tonnes). These positive factors were offset by the average zinc price received, which fell by 1% to $2,644 per tonne (H1 2023: $2,662 per tonne), and by a decrease in the volume of payable zinc-in-concentrate, to 7,674 tonnes (H1 2023: 8,382 tonnes), owing to a reduction in ore processed and lower zinc grades.

Treatment charges during the period reduced slightly to $7.8 million (H1 2023: $7.9 million), as zinc rates reduced and the offtake buyer's fee for Sasa remained consistent at $0.5 million (H1 2023: $0.5 million).

Zinc and lead concentrate sales agreements have been arranged with Traxys on a one-year rolling basis for 100% of Sasa production.

Sasa has an existing silver streaming agreement with Osisko Gold Royalties whereby Sasa receives approximately $7 per ounce for its silver production for the life of the mine.

Cost of sales

The Group cost of sales for the period was $46.9 million (H1 2023: $44.6 million). This figure includes depreciation and amortisation charges of $13.1 million (H1 2023: $13.4 million). The increase in cost of sales was due principally to higher wages as the Group responded to local inflationary pressures by ensuring employee remuneration remains competitive, as well as inflation relating to technical materials and reagents. From an overall perspective, the Group continues to focus on discipline in its capital investments, initiatives to maximise working-capital efficiency and other cost-control measures.

Kounrad

Kounrad's cost of sales for H1 2024 increased to $16.2 million (H1 2023: $14.5 million), owing primarily to a $0.6 million rise in salaries. Additionally, there was an increase of $0.4 million for key processing inputs in copper production, including a 29% rise in electricity prices and increases of 8% and 4% for the key reagents, Escaid and LIX, respectively. There was also an additional $0.3 million for depreciation, including an element recognised on the newly constructed solar farm which was completed at the end of 2023.

Mineral Extraction Tax ('MET') is a form of royalty charged by the Kazakhstan authorities at the rate of 8.55% on the value of metal recovered. MET for the period remained stable at $4.9 million (H1 2023: $4.9 million).

Sasa

Sasa's cost of sales for the period was broadly the same as in H1 2023, despite some cost pressures, amounting to $30.7 million (H1 2023: $30.1 million). This stability was primarily due to a $0.6 million reduction in electricity expenses, driven by a 28% reduction in electricity prices in North Macedonia.

The main factor contributing to the minor increase in cost of sales was the full operation of the PBF Plant during H1 2024, leading to a rise in the cost of technical materials by $0.5 million. In particular this included the consumption of cement used in the backfilling process, and the use of pipes and connectors for the backfill reticulation system as Sasa transitions to paste-fill mining methods. There were also marginally increased mining costs, by $0.3 million, which arose mainly from work on the 830-metre level for ground support in the implementation of the new mining method. Additionally, Sasa faced some general cost pressures, including an increase in salaries of $0.4 million owing to an increase in headcount for the mining transition phase and higher wages agreed with employees. Finally, there were additional costs of $0.2 million to bring Sasa into conformance with the Global Industry Standard on Tailings Management.

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 excluded from the C1 cash cost.

Kounrad
Kounrad's H1 2024 C1 cash cost of copper production was $0.78 per pound (H1 2023: $0.67 per pound), which remains amongst the lowest in the copper industry. The increase in C1 cash cost versus H1 2023 was due primarily to higher costs resulting from employee pay increases and increases in prices of key reagents and power.

Sasa
Sasa's on-site operating costs were $23.1 million (H1 2023: $22.3 million), resulting in on-site unit costs of ore mined of $63.1 per tonne (H1 2023: $56.2 per tonne). The increase was due mainly to the modest reduction in mined tonnage for the period and the additional costs for the full operation of the PBF plant.

Sasa's total C1 cash cost base, including realisation costs, was broadly stable at $32.3 million (H1 2023: $32.1 million), whereas there was a marginal reduction in Sasa's C1 unit cash cost of production when measured in zinc-equivalents, to $0.70 per pound (H1 2023: $0.72 per pound). This was due to a lower proportion of costs being attributed to Sasa's zinc production in H1 2024, as the costs are assigned to Sasa's zinc and lead based on their respective revenue contributions, and there was a decrease in zinc's share of revenue relative to that of lead between the comparative periods.

Group
CAML reports its Group C1 unit cash costs on a copper-equivalent basis, incorporating the production costs at Sasa with those of Kounrad and correspondingly converting Sasa's zinc and lead production into copper-equivalent. The Group's H1 2024 C1 copper-equivalent cash cost was $1.70 per pound (H1 2023: $1.56 per pound). This is calculated based on Sasa's H1 2024 payable zinc and lead production, which equated to 5,071 tonnes of copper-equivalent (H1 2023: 5,512 tonnes of copper-equivalent), added to Kounrad's H1 2024 copper production of 6,608 tonnes (H1 2023: 6,716 tonnes), making a copper-equivalent total of 11,679 tonnes (H1 2023: 12,228 tonnes). The increase in Group C1 unit cash costs on a copper-equivalent basis was thus due largely to a combination of the higher C1 cost base at Kounrad and less copper-equivalent tonnes from Sasa, with the latter caused mainly by the relative outperformance of the copper price versus those of zinc and lead, plus slightly lower zinc production.

CAML also reports a fully inclusive cost that includes sustaining capital expenditure, local taxes (including MET and concession fees), interest on any loans, and applicable corporate overheads, as well as the C1 cost component. The Group's fully inclusive copper-equivalent unit cost for the period was $2.35 per pound (H1 2023: $2.11 per pound). The increase was due principally to the lower copper-equivalent tonnes from Sasa, as noted above, and the higher C1 cost component at Kounrad.

Administrative expenses

During the period, administrative expenses increased to $13.9 million (H1 2023: $12.4 million), owing largely to an additional $0.7 million in employer's national insurance contributions related to exercised share options, as well as an increased non-cash accrual for employer's national insurance liability. This increase was driven both by the number of newly granted options and by the rise in the Company's share price at the end of June 2024 compared with a year earlier. There were also higher non-cash share-based payments, up by $0.2 million, owing to the quantum of granted share options. In addition, there was an increase in foreign-exchange costs of $0.2 million, owing to the movement of sterling against the US dollar, as well as a $0.1 million staff payroll increase, and costs of $0.3 million for the newly-formed exploration team in Kazakhstan at CAML X, which was focused on exploration-target generation during the period.

Foreign exchange

The Group incurred a foreign exchange gain of $0.9 million (H1 2023: loss of $2.5 million), resulting from the retranslation of US dollar-denominated monetary assets held by foreign subsidiaries with a local functional currency and related to the weakening of the Kazakh tenge during the period.

At 30 June 2024, the Kazakh tenge weakened to 471.46 against the US dollar, down from 454.56 on 1 January 2024 (30 June 2023: 454.13, up from 462.65 on 1 January 2023). Similarly, the Macedonian denar had weakened marginally to 57.48 against the US dollar, down from 55.65 on 1 January 2024 (30 June 2023: 56.35 up from 57.65 on 1 January 2023).

Finance income

The Group received finance income of $1.2 million (H1 2023: $1.0 million) owing predominantly to higher interest rates.

Finance costs

The Group incurred finance costs during H1 2024 of $1.2 million (H1 2023: $0.9 million). These costs were primarily due to the non-cash asset unwinding of asset-retirement obligations totalling $1.1 million plus some minor overdraft costs.

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.

Statement of comprehensive income

Currency translation differences arose primarily on the translation on consolidation of the Group's Kazakh-based and North Macedonian-based subsidiaries whose functional currency is the tenge and denar, respectively. In addition, currency translation differences arose on the goodwill and fair value uplift adjustments to the carrying amounts of assets and liabilities arising on the Kounrad Transaction and CMK Resources acquisition, which are denominated in tenge and denar, respectively. During H1 2024, a non-cash currency translation loss of $12.3 million (H1 2023: gain of $9.2 million) was recognised within equity.

Statement of financial position

Investments

On 31 May 2024, CAML completed its investment of $3.8 million (£3.0 million) in Aberdeen Minerals Ltd ('Aberdeen'), acquiring a 28.7% shareholding. The investment is accounted for as an associate using the equity method, as CAML is deemed to have significant influence.

CAML holds warrants to invest an additional £2 million at a price of 11 pence per share which, if exercised, would bring CAML's ownership to 37.8%, assuming no further changes to Aberdeen's issued share capital. The warrants are financial assets held at fair value through profit and loss ('FVTPL') and have been valued at $0.4 million using the Black-Scholes model.

Capital expenditure

During the period, there were additions to property, plant and equipment ('PP&E') of $12.0 million (H1 2023: $17.1 million). H1 2024 cash outflow on purchases of PP&E was lower, at $8.3 million, due to cash prepayments made during the year ended 31 December 2023 which were subsequently capitalised during H1 2024.

The cash additions to PP&E were a combination of $1.7 million (H1 2023: $1.2 million) for sustaining capital expenditure at Kounrad, $3.4 million (H1 2023: $5.0 million) sustaining capital expenditure at Sasa, $3.1 million (H1 2023: $8.2 million) in relation to the Sasa's Capital Projects and $0.1 million for motor vehicles and office equipment at CAML X.

Sasa's sustaining capital expenditure included capitalised mine development of $1.4 million, $0.7 million on flotation equipment and $1.0 million on underground equipment including additions to the mining fleet. Kounrad's sustaining capital expenditure included $0.6 million for anodes.

H2 2024 capital expenditure is anticipated to increase versus H1 2024, owing principally to planned increased spending on Sasa's Capital Projects, including finalising commissioning of the Dry-Stack Tailings ('DST') Plant. Additionally, there will be further sustaining capital, including investment in underground vehicles and other mining equipment.

Capital Projects

The Group continues to invest significantly at Sasa to enable the transition to paste-fill mining methods and the storage of waste in a more environmentally responsible manner. This work comprises the construction of the PBF Plant and associated underground reticulation infrastructure, the DST Plant and associated landform and the development of the new Central Decline.

During H1 2024, capitalised additions to PP&E on the Capital Projects totalled $5.8 million. Capitalised additions include $1.1 million of Central Decline costs and $3.9 million spent on the DST Plant and associated landform. There was a final $0.4 million spent on the PBF plant and $0.4 million on underground reticulation.

CAML expects full-year 2024 capital expenditure of between $22.0 million and $25.0 million, of which between $14.0 million and $16.0 million is expected to be committed to sustaining capex. CAML also expects capital expenditure on Sasa's Capital Projects to be in the order of $8.0 million to $9.0 million in 2024. This will be largely related to completion of the DST Plant and the initial landform, as well as Central Decline development.

Working capital

At 30 June 2024, current trade and other receivables were $13.3 million (31 December 2023: $12.2 million), which included trade receivables from offtake sales of $2.3 million (31 December 2023: $1.4 million) and $4.6 million in relation to prepayments and accrued income (31 December 2023: $2.3 million). Trade and other receivables also included $3.4 million (31 December 2022: $6.8 million) of overpaid Group corporate income tax which will be offset against corporate income tax liabilities arising in the same entities in the current and next financial periods.

Non-current trade and other receivables were $8.9 million (31 December 2023: $13.8 million) which reduced owing to capitalising prepayment advances made on capital items in 2023 into PP&E in the reporting period. At 30 June 2024, a total of $6.8 million (31 December 2023: $5.7 million) of VAT receivable was owed to the Group by the Kazakh and North Macedonian authorities. Recovery is expected through a continued dialogue with the authorities for cash recovery and further offsets.

Cash and borrowings

At 30 June 2024, the Group had cash in the bank of $56.3 million (31 December 2023: $57.2 million) and a $0.4 million overdraft (31 December 2023: $0.3 million).

Taxation

During H1 2024, tax paid to host governments totalled $8.2 million (H1 2023: $18.5 million). Of this, $5.5 million (H1 2023: $11.0 million) was paid as Kazakh corporate income tax ('CIT'). In North Macedonia, $0.1 million (H1 2023: $0.5 million) CIT was paid in cash. The decrease in CIT payments was primarily due to tax instalments being based on the previous year's taxation charge, resulting in overpayments in 2023 owing to the higher profits in 2022 for both Kounrad and Sasa.

Additionally, there was $2.6 million (H1 2023: $7.0 million) of Kazakhstan withholding tax paid on intercompany dividend distributions.

Free cash flow

Net cash generated from operating activities plus interest received in H1 2024 totalled $35.3 million (H1 2023: $25.1 million), and FCF, a non-IFRS financial measure, for the period was $30.0 million (H1 2023: $24.1 million, adjusted). The prior year FCF had been adjusted to more reasonably apportion H1 2023 withholding tax payments evenly over the full year. No adjustment was required for H1 2024 as dividends have been distributed across the year, with $2.6 million in H1 2024 and a further $2.6 million already paid in H2 2024.

Six months ended

Dividend

Total dividends paid to shareholders during the period of $20.1 million comprised the final 2023 dividend of 9 pence per Ordinary Share.

The Company's underlying dividend policy is to return to shareholders a range of between 30% and 50% of FCF, defined as net cash generated from operating activities, plus interest received, less sustaining capital expenditure. However, when cash-on-hand is at a strong level, and in the absence of a material transaction, the Board may determine a distribution exceeding this policy to be appropriate.

The FCF of $30.0 million has been used as the basis of the interim dividend for the current period and the Board has agreed a payout of approximately 70%. This has resulted in the Board declaring an interim dividend of 9 pence per Ordinary Share.

The interim dividend is payable on 22 October 2024 to shareholders registered on 27 September 2024. This latest dividend will increase the amount returned to shareholders in dividends since the 2010 IPO to approximately $359.6 million.

Going concern

The Group sells and distributes its copper product primarily through an annual rolling offtake arrangement with Traxys Europe S.A., with a minimum of 95% of Kounrad's SX-EW plant's forecast output committed as sales. The Group sells Sasa's zinc and lead concentrate through an annual rolling offtake arrangement with Traxys. The commitment is for 100% of Sasa's 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 had substantial cash balances as of 30 June 2024.

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, together 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.

Outlook

The Company remains on track to meet its 2024 production guidance for Kounrad and expects Sasa to achieve the lower end of previous guidance. CAML's low costs of operations provides the Company with the ability to withstand a decline in commodity prices and inflationary cost pressures. CAML has a strong statement of financial position, with $56.3 million in cash and no material debt as of 30 June 2024. This enables CAML to continue to pay an attractive dividend whilst actively considering business development opportunities.

Non-IFRS financial measures

The Group uses alternative performance measures, which are not defined by the generally accepted accounting principles ('GAAP') such as IFRS, as additional indicators. These measures are used by management, alongside the comparable GAAP measures, in evaluating 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')

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:

Six months ended

Gross revenue

Gross revenue is presented as the total revenue received from sales of all commodities after deducting the directly attributable treatment and refining charges associated with the sale of zinc, lead and silver. This figure is presented as it reflects the total revenue received in respect of the zinc and lead concentrates and is used to reflect the movement in commodity prices and treatment charges during the period. The Board considers gross revenue, together with its reconciliation to net IFRS revenue to provide valuable information to users of the interim results.

Six months ended

Net cash

Net cash is a measure used by the Board for the purposes of capital management, and is calculated as the total of the bank overdrafts plus the cash and cash equivalents held at the end of the period. This balance does not include the restricted cash balance of $0.3 million (31 December 2023: $0.3 million):

Free cash flow

FCF is a non-IFRS financial measure of the net cash generated from operating activities, plus interest received, less sustaining capital expenditure on PP&E and intangible assets. It is a key measure for the Company as the dividend policy is based on this periodic measure of performance.

The purchase of sustaining PP&E in H1 2024 totalled $5.2 million (H1 2023: $4.2 million), which does not include $3.1 million (H1 2023: $4.4 million) expended on the Sasa Capital Projects. These costs are not considered sustaining capital expenditure as they are development costs associated with the Capital Projects.

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge, the interim financial information has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the United Kingdom and the AIM Rules for Companies, and that the interim results include a fair review of the information required.

On behalf of the Board

Gavin Ferrar

Chief Financial Officer

9 September 2024