Central Asia Metals completes Kounrad copper plant under budget
Feb 02. Proactive Investors UK
By Giles Gwinnett
Central Asia Metals (LON:CAML) today announced the completion of its copper plant at Kounrad in Kazakhstan and expects to put it into action at the end of this month.
The solvent-extraction electrowinning facility (SX-EW) will process around 10,000 tonnes of copper cathode a year and the company said it expects first copper production in April this year.
Importantly, the firm thinks it will deliver this first production and complete the construction phase of the project for less than the budgeted amount of $46.9 million stated in the Kounrad feasibility study in March 2010.
The company also announced today the increase of ownership in the project up to 100 per cent.
Chief executive Nick Clarke said: “There has been extremely encouraging progress at Kounrad over the last quarter.
“The ability to achieve material completion of the project under budget and broadly in line with our initial schedule is a testament to our staff and partners in Kazakhstan.
“We remain confident that we will achieve our goal of commercial copper cathode production at Kounrad in April 2012 without additional funding.”
Central Asia Metals added that it had hired Australia-based PPM Solutions to oversee and assist in the phased commissioning of the plant.
Charles Cooper, of Oriel Securities, described the update as “highly positive”. He rated the stock a ‘buy’ with a target price of 196 pence.
“Project construction is now largely complete and under budget which should provide significant working capital flexibility during the commissioning and ramp-up phase. We estimate that the company currently has at least US$9 million in cash,” he said.
Also, in today’s statement, the firm said SaryArka Social Entrepreneurial Corporation National Company JSC had carried out a tender process for the sale of its 40 per cent stake in the project.
And the company together with the SAT Group won the tender. The firm has an agreement to subsequently buy the 40 per cent of the project in exchange for 8,616,593 company shares, representing 9.1 per cent of the share capital.
As at 3.57pm, the shares were up 14.94 per cent, to trade at 75 pence each.
Central Asia Metals Plc (“CAML” or the “Company”) is an AIM-listed UK company based in London. Its main countries of operation are Kazakhstan and Mongolia. CAML is a precious and base metals mining, exploration and development company with majority stakes in copper, gold and molybdenum projects throughout Central Asia.