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Central Asia Metals meets production guidance, plans to drop Shuak project

Central Asia Metals PLC met its 2018 production guidance for copper, zinc and lead and plans to return its Shuak exploration property to a partner in the project due to insufficient scale to warrant its development, the company said in a Jan. 9 statement.

The company's Kounrad Dump copper project in central Kazakhstan produced 3,363 tonnes of copper in the fourth quarter, bringing total production for 2018 to 14,049 tonnes, a 0.4% decrease from the previous year but just ahead of its guidance range of 13,000 to 14,000 tonnes.

Central Asia Metals, listed on the London Stock Exchange's AIM segment, produced 22,532 tonnes of zinc and 29,388 tonnes of lead in 2018 at its SASA underground mine in northeastern Macedonia, an increase of 4.4% and a decrease of 1.6%, respectively, on the previous year.

The company is targeting copper production of between 12,500 and 13,500 tonnes of copper cathode in 2019, of which it expects about 70% to be leached from Kounrad's western dumps.

Central Asia Metals said it expects underground ore production of between 800,000 and 825,000 tonnes at Sasa in 2019, which should translate to zinc-in-concentrate production of between 22,000 and 24,000 tonnes and lead-in-concentrate production of between 28,000 and 30,000 tonnes.

While the miner said drilling at the Shuak project in northern Kazakhstan during 2018 turned up "encouraging" results, the project is unlikely to be of sufficient scale to warrant development, and it plans to return the license to unnamed 20% shareholders.

The company will retain a 1.25% net smelter return royalty, as per the original agreement to acquire its stake in the copper exploration project. Central Asia Metals was due to invest US$2 million for exploration of Shuak over five years under the agreement to acquire its 80% stake, struck in 2016.

During the second half of 2018, the company said it began a life-of-mine study at Sasa and did 3,000 meters of diamond drilling at its current mining area, Svinja Reka, and at an area that was mined between 1981 and 2010, known as Golema Reka, with "encouraging" results.

An updated JORC-compliant mineral resource estimate, reflecting both drilling programs, is expected during the first quarter, according to CEO Nigel Robinson.

Svinja Reka has JORC-compliant inferred mineral resources of 2.7 million tonnes containing 3.2% lead and 2.1% zinc, while Golema Reka has 7.4 million tonnes containing 3.7% lead and 1.5% zinc.

The company said is reviewing two additional base metals opportunities and had US$39 million cash as of the end of December 2018.