INTERVIEW: Central Asia Metals reviews operations daily amid pandemic:CEO

Copper, zinc and lead producer Central Asia Metals (CAML) continues to be fully operational but is monitoring production on a daily basis amid the COVID-19 pandemic, CEO Nigel Robinson said Wednesday.

The governments in Kazakhstan, where CAML's Kounrad copper mine is located, and in North Macedonia, where its Sasa zinc and lead mine is, have both declared states of emergency although borders are still open for trade, Robinson said Wednesday in an interview. There are no specific lockdowns in the mine areas.

This means that Kounrad can still export copper cathode via trader Traxys, mainly to a Turkish wire drawer, while Sasa is exporting lead and zinc concentrates to smelters in Bulgaria and Poland, also via Traxys.

"However, the smelters could potentially call force majeure on their contracts," Robinson said. Should this occur, Sasa would need to stop operations as it has only a month's storage space at site, he said on a later webcast.

Kounrad could however continue producing longer even if it was unable to export because it can store 5,000 mt of copper at site, he said.

CAML's 2019 production reached or exceeded guidance, at 13,771 mt of copper, 23,369 mt zinc in concentrate and 29,201 mt of lead in concentrate. The London-listed company reported Wednesday a group net revenue of $171.8 million (2018: $194.4 million), with a group profit before tax of $67.8 million (2018: $72.7 million).

No dividend proposed

Although the company considers itself to be in a relatively strong cash flow position despite last year's lower commodity prices, reduced its debt last year and reported lower copper cash costs, the decision has been taken not to propose a dividend payment for 2019 during the current period of uncertainty, Robinson said.

"This is not so much due to metals prices – we are profitable at current metals prices, but to preserve cash," Robinson told S&P Global Platts, noting that unit costs would rise if the company had to put its operations onto care and maintenance.

"We remain confident for the medium- and long-term future of our business," he said.

CAML is targeting 2020 Kounrad copper cathode production of between 12,500 and 13,500 mt, of which approximately 75% is to be leached from the Western Dumps.

At Sasa, CAML expects 2020 underground ore production of between 825,000 mt and 850,000 mt. This should result in zinc in concentrate of between 23,000 mt and 25,000 mt and lead in concentrate of between 30,000 mt and 32,000 mt.

Given a fleet replacement program underway at Sasa, CAML expects its group capital expenditure to be between $12 million and $14 million in 2020, up from $11 million last year, but analysis of current capex levels is underway, Robinson said.

The company is providing generators, protective equipment and funding to local hospitals in both Kazakhstan and North Macedonia to help combat the spread of COVID-19, he said.