Central Asia Metals to increase focus on mine project acquisitions: CEO

London — Copper, zinc and lead miner Central Asia Metals aims to "put more focus" on its search for new growth opportunities this year, as its operations pull away from the lingering impacts of COVID-19, CEO Nigel Robinson said in an interview March 30.

"With metals prices where they are, there may be a favorable environment for a transaction within the next year or two," he said, indicating that the company's initial spend in any transaction might be in the region of $400 million, with preference for a production rather than an exploration project.

"Copper, then zinc and then lead are our priorities," Robinson said. As far as jurisdiction is concerned, the company is "comfortable" with Kazakhstan, where its first mine, the Kounrad copper leaching operation, is located. In late 2017, it went on to acquire the Sasa zinc and lead mine in North Macedonia.

The company has also looked at investing in Africa and the Americas, Robinson said.

There are not a lot of growth opportunities at either Kounrad or Sasa, even though these both have a long mine life, he said.

Market prospects for the company's products are good, with copper seen as the "favourite" metal for use in renewable energy and electrification installations, giving it an underlying fundamental market strength which could keep it near the $9,000/mt price mark, the CEO said.

The LME cash copper price closed March 30 at $8,749/mt, down 1.48% on the day.

Low copper cash cost

Kounrad's C1 copper cathode cash cost, a basic measure of production cost, is currently $1,124/mt, and it is one of the world's lowest cost copper producers, according to Robinson. Kounrad reprocesses copper-containing waste from an old Soviet copper open-pit mine, using a solvent extraction electrowinning system.

Demand for zinc, which is primarily used in galvanizing steel, is growing around 1.5%-2% a year, Robinson said.

The favorable market conditions are allowing Central Asia Metals to pay off its debt, which stood at around $80.4 million gross debt at the end of 2020, and is expected to be fully paid off by October 2022. The company paid off $38.4 million of debt in 2020.

European trading company Traxys offtakes Central Asia Metals' production -- comprising copper cathode and zinc and lead concentrates.

The company's 2021 production guidance is currently similar to 2020 levels, Robinson noted. Guidance for copper is 12,500-13,500 mt; for zinc in concentrate 23,000-25,000 mt; and for lead in concentrate it's 30,000-32,000 mt.

In 2020, production totaled 13,855 mt of copper, 23,815 mt of zinc and 29,742 mt lead -- all slightly higher than 2019 levels, the company said.