Central Asia Metals PLC Half-year Report

Central Asia Metals PLC Half-year ReportCentral Asia Metals plc (AIM: CAML) is pleased to announce its unaudited interim results for the six months ended 30 June 2016 (“H1 2016” or the “Period”).
RNS Number : 4637J

Central Asia Metals PLC

12 September 2016

Central Asia Metals plc

(the “Group”, the “Company” or “CAML”)

Interim Results for the Six Months Ended 30 June 2016

Central Asia Metals plc (AIM: CAML) is pleased to announce its unaudited interim results for the six months ended 30 June 2016 (“H1 2016” or the “Period”).

The Company is also pleased to declare an interim dividend of 5.5 pence per ordinary share (H1 2015: 4.5 pence), which equates to 26% of gross revenue for the period.

Operational Highlights

   --       H1 2016 copper production of 6,908 tonnes, an increase of 27% vs. H1 2015 (5,444 tonnes) 
   --       H1 2016 copper sales of 6,355 tonnes, an increase of 24% vs. H1 2015 (5,120 tonnes)

— No Lost Time Injuries (“LTIs”) in the period and LTI free hours now exceed one million man hours

   --       Average SX-EW plant availability of over 98% 
   --       Stage 2 Expansion, on schedule and approximately 25% under budget

Financial Highlights

   --       H1 2016 gross revenue of $30.9 million (H1 2015: $30.3 million) 
   --       Average copper price received of $4,903 per tonne (H1 2015: $5,936 per tonne) 
   --       Continued focus on maintaining low costs of production:

– C1 cash costs of production down 40% vs. H1 2015 to $0.40 per pound (H1 2015: $0.67 per pound)

– Fully absorbed unit costs down 48% vs. H1 2015 to $0.97 per pound (H1 2015: $1.87 per pound)

— H1 2016 EBITDA of $17.4 million (H1 2015: $16.0 million) and a margin of 56% (H1 2015: 53%)

   --       H1 profit before tax up 49% vs. H1 2015 to $15.0 million (H1 2015: $10.1 million)

— 2016 interim dividend of 5.5 pence per ordinary share to be paid on 28 October 2016 (H1 2015: 4.5 pence)

— Group cash balance of $30.2 million as at 30 June 2016 (31 December 2015: $42.0 million), with no debt

Business Development

   --       Copper Bay Definitive Feasibility Study ("DFS") underway, results due Q4 2016 
   --       Management continues to look for additional growth opportunities

Outlook

   --       On track to achieve 2016 production guidance of between 13,000 and 14,000 tonnes

— Continued focus on operational and capital cost discipline in current challenging commodity price environment

   --       Kazakhstan Tenge devaluation helps support low cost of production

— Stage 2 Expansion 25% under budget and completion on track for Q4 2016, with leaching of the Western Dumps to commence in Q2 2017

Nick Clarke, Executive Chairman, commented:

“I am pleased to report another record period of copper production, resulting in a continued strong financial performance for the Group. Indeed, during a time when the copper price has remained under considerable pressure, we have today reported a 49% increase in profit before tax when compared to H1 2015. The devaluation of the local currency, the Kazakhstan Tenge, has been a key factor in our reduced C1 cash costs of production and we are proud to be one of the very lowest cost copper producers in the world.

“While the devaluation of the local currency has helped CAML to maintain low costs of production, it has brought some economic challenges for our staff. We place great importance on our corporate social responsibilities and, as a result, we increased wages for our Kazakhstan based employees by 25% from January 2016. Meanwhile, we continue to focus on supporting local communities through health, education and charitable donations.

“At a time when many mining companies are cutting costs, we are pleased to be rewarding our investors with a dividend of 5.5 pence per share for the interim period. Once this dividend is paid, we will have returned over 135% of the $60 million raised at IPO through dividends and share buy backs.”

For further information please visit www.centralasiametals.com. (The content of the CAML website should not be considered to form part of or be incorporated into this announcement)

Enquiries:

 
 Central Asia Metals     Nick Clarke,           +44 (0)20 7898 
                          Executive Chairman     9001 
                          Nigel Robinson, 
                          CFO                    louise.wrathall@centralasiametals.com 
                          Louise Wrathall, 
                          Investor Relations 
----------------------  ---------------------  --------------------------------------- 
 Peel Hunt (Nominated 
  Adviser & Joint        Matthew Armitt         +44 (0)20 7418 
  Broker)                 Ross Allister          8900 
----------------------  ---------------------  --------------------------------------- 
 Mirabaud Securities                            +44 (0) 20 7878 
  (Joint Broker)         Peter Krens             3362 
----------------------  ---------------------  --------------------------------------- 
                                                +44 (0) 20 3772 
                                                 2468 
                         Aarti Iyer              +44 (0) 20 3772 
 Bell Pottinger           Richard Crowley        2556 
----------------------  ---------------------  --------------------------------------- 

Analyst presentation conference call

An analyst presentation on the Company’s interim results hosted by management will take place at 09:30 (BST) on Monday 12 September 2016 at the offices of Bell Pottinger and will be accompanied by a live conference call.

The accompanying presentation slides will be available on the Company’s website. The conference call can be accessed by dialling 020 3059 8125 (from the UK) or + 44 20 3059 8125 (from all other locations) and quoting the confirmation code ‘Central Asia Metals Interim Results’. A replay of the call will be available following the presentation at http://www.centralasiametals.com.

Executive Chairman Review

The Board of CAML is pleased to declare an interim dividend of 5.5 pence per ordinary share. This represents 26% of gross revenue for the reporting period, and is in excess of the Group’s stated dividend policy of 20%. Once the 2016 interim dividend is paid, CAML will have returned almost $82 million to shareholders in the form of dividends and share buy backs.

CAML has achieved another record six months in terms of copper cathode production from Kounrad, Kazakhstan. The 6,908 tonnes of copper produced represents an increase of 27% on the corresponding H1 2015 period, and demonstrates the success of the Stage 1 Expansion project that was completed in May 2015. Annual production is firmly on track and CAML is confident in reiterating full year 2016 production guidance of between 13,000 and 14,000 tonnes.

While CAML’s operational performance continues to be robust, one of the most notable features of the H1 2016 results is the reduction in Kounrad’s cost base due primarily to the devaluation of the Kazakhstan Tenge. Approximately 60% of the total cost base in Kazakhstan is Tenge denominated and, in H1 2016, the average exchange rate was 346 Tenge to 1 US Dollar, compared to 186 Tenge to 1 US Dollar in H1 2015. This has been the largest factor in the reduction of CAML’s C1 cash costs by 40% to $0.40 per pound when compared to the previous corresponding period.

This reduction in costs, combined with changes to the Company’s depreciation policy, has meant that, while CAML’s received copper price for the period at $4,903 per tonne was 17% lower than that received in H1 2015, the Company’s profit before tax increased by 49%. In addition to the Company’s strong financial performance, CAML has maintained safe operations at Kounrad and, during H1 2016, no Lost Time Injuries (“LTI”) were reported, with the total LTI free man hours now exceeding one million.

During H1 2016, CAML completed much of the Stage 2 Expansion work. The Group remains on schedule to complete this project in Q4 2016 although, as previously announced, leaching of the Western Dumps is not scheduled to commence until early Q2 2017, so as to facilitate an easier start-up post the colder winter months. The total project capex is now estimated to be approximately 25% below the original $19.5 million budget, due primarily to cost savings associated with the weaker local currency.

Looking ahead, the Copper Bay definitive feasibility study (“DFS”) is progressing well, and CAML expects to report the findings of this work in Q4 2016. The economics of the project will be considered carefully in light of current commodity prices and long term expectations for the copper price, and a development decision will be made thereafter. CAML continues to look for additional attractive growth opportunities.

Operating Review

Kazakhstan (Kounrad)

Operations

CAML is pleased to report a period of strong operational performance at Kounrad, with copper cathode production for the first six months of 2016 of 6,908 tonnes, a 27% increase on the corresponding period of 2015. This is due in part to a warmer winter than previous years, and largely to Kounrad operating at increased capacity for a full six month period post the completion of the Stage 1 Expansion in May 2015.

H1 2016 copper cathode sales of 6,355 tonnes represent an increase of 24% on H1 2015. The copper was sold predominantly through the sales agreement with Traxys, CAML’s off-take partner, and 3,125 tonnes were sold in Q2 2016 at a fixed price of $5,025 per tonne. The average copper price received for all copper sales during H1 was $4,903 per tonne. The technical quality of the copper cathode remains high and continues to meet the requirements of CAML’s customers.

Utilisation of the SX-EW facility remains at high levels, with an average of 98% achieved during the reported period. In Q1 2016, all the anodes within the original EW house were replaced with new ones of superior design and quality.

Leaching of Dump 5 commenced in late Q1 2016 and early results indicate good solution returns and leach rates in accordance with expectations.

Following the organic reagent loss incident at Kounrad in June 2015, an insurance claim was submitted. In March 2016, the Group received notification that the merits of the claim had been accepted and negotiations are ongoing as to the quantum. No receivable was recognised for the claim at 30 June 2016.

Kounrad Stage 2 Expansion and Lake Balkhash Pipeline project

During H1 2016, construction of the buildings, collector trenches, ponds and pipeline infrastructure to connect the SX-EW plant to the Western Dumps area progressed on schedule and under budget.

Installation of the 12km 10kV overhead power-line was completed, which has enabled site construction power to be provided by the permanent supply rather than generators. Construction of the main buildings consisting of pump houses and a boiler house is completed, with boilers in position and the chimney erected. Three solution ponds have been excavated and lined, whilst the installation of the 24km solution transfer pipeline infrastructure for pregnant leach solution (“PLS”) and raffinate is progressing well.

CAML completed an access ramp to the top of the Initial Leach Area (45 metre height), which has enabled dozer preparation and levelling works to commence in readiness for the installation of the irrigation system.

The water pipeline that will supply water to the site from Lake Balkhash is complete and commissioning is underway.

The scheduled completion date of the Stage 2 Expansion remains Q4 2016, with leaching operations on the Western Dumps planned to commence in Q2 2017. Completion of this project will extend the life of the Kounrad operation beyond 2030. Due primarily to the devaluation of the Kazakhstan Tenge, the cost of completion of the overall project including the Lake Balkhash water pipeline is now expected to be approximately 25% below the original $19.5 million budget.

Corporate and Social Responsibility (“CSR”)

In H1 2016, CAML recorded no Lost Time Injuries (“LTI”) with the total LTI free man hours now exceeding one million. During the reporting period, CAML increased its focus on embedding the concept of risk within the workforce, ensuring that all safety risks are recognised and mitigated as necessary and that there is an overall drive to continue to improve the safety culture.

In conjunction with SRK Consulting, a further programme of environmental and hydrogeological site investigations focussed on the Western Dumps commenced in H1 2016. The studies included a programme of surface geophysics to identify the subsurface geology in specific areas, core drilling and the drilling of 40 monitoring holes that will be used for future environmental checks once leaching commences in this area.

Several routine state inspections relating to health and safety and environmental aspects of the operations were undertaken during the period, with the outcome being that CAML adheres to all relevant regulations at Kounrad.

The Company continues to actively engage with the local community, with the focus remaining on health and education, particularly with regards to children, and charitable organisations based in Kounrad and Balkhash.

Operations outside of Kazakhstan

Copper Bay Project – Chile

The definitive feasibility study (“DFS”) on the Copper Bay project that commenced in H2 2015 is on track for completion in Q4 2016. Results from additional infill drilling have been incorporated into resource and reserve estimates, geotechnical studies and mine design and scheduling. Each component of the DFS is being carried out by appropriate independent consultants and engineers, and the overall study is being managed in-house through a dedicated project management team.

If the results of the DFS are positive, a decision whether or not to advance the project to construction will be made taking into account both the fundamental outlook for the copper market and the availability of capital for construction.

Business Development

Business development activities continue with regular review of merger and acquisition opportunities in the context of prevailing market conditions. CAML continues to seek transactions that are attractive from a growth and value perspective, predominantly in commodities such as copper and base metals that fall within the team’s core areas of expertise.

Financial Review

Overview

CAML’s financial performance during the period demonstrated the Company’s resilience to the weakening copper price. Despite the copper price falling by 17% compared to the first six months of 2015, the Company continued to be highly profitable through its Kounrad operation due to sustained low costs of copper production.

Despite the weaker copper price environment, the Group generated EBITDA of $17.4 million (H1 2015: $16.0 million), representing an EBITDA margin of 56% (H1 2015: 53%) for the six month period ended 30 June 2016. The strong financial performance during the reported period combined with a robust balance sheet and reducing capital commitments means the Company is well positioned to both maintain its dividend policy and to look for attractive growth opportunities.

Income statement

Net profit after tax from continuing operations increased to $10.6 million (H1 2015: $6.0 million) primarily as a result of a reduction in the Group’s depreciation charge and the benefits of the local currency devaluation. Earnings per share increased to 9.50 cents (H1 2015: 4.88 cents), an increase of 95%.

Revenue

A total of 6,250 tonnes (H1 2015: 4,938 tonnes) of copper cathode from Kounrad were sold as part of the Company’s off-take arrangements with Traxys and a further 105 tonnes (H1 2015: 182 tonnes) were sold locally. Total sales at Kounrad were 6,355 tonnes (H1 2015: 5,120 tonnes) representing a 24% increase in volumes.

As mentioned above, while copper cathode sales volumes have increased when compared to H1 2015, Group revenue was adversely impacted by the decline in copper prices and an average selling price of $4,903 per tonne was achieved (H1 2015: $5,936 per tonne) representing a 17% decrease in prices. This generated gross revenues for the Group of $30.9 million (H1 2015: $30.3 million).

The commercial terms of the off-take contract have been agreed and fixed for a three year period through to 31 December 2018. This provided additional cost savings in the reporting period due to a marked reduction in the cost per tonne of exporting the copper cathode from the site at Kounrad. The contractual commitment is for a minimum of 90% of the Kounrad copper cathode production.

Cost of sales

Cost of sales for the period was $8.3 million (H1 2015: $13.4 million) representing a decrease of $5.1 million. $1.2 million of this reduction is due to lower costs associated with the production of copper cathode at Kounrad primarily due to savings associated with the Kazakhstan Tenge currency devaluation.

$3.9 million of this reduction is due to changes to the depreciation policy. Total depreciation and amortisation charges recognised within cost of sales for the period were $2.2 million (H1 2015: $6.1 million). Following receipt of the regulatory approvals required for the Kounrad Stage 2 Expansion in November 2015, management has extended the useful economic lives of certain property, plant and equipment and the fair value uplift on the Kounrad Transaction. The original estimate of 10 years useful economic life has now been increased through to 2034 which represents the end of the subsoil use licence. This change in estimate was applied from 1 January 2016 and has resulted in a reduction in the depreciation and amortisation charge of $3.9 million for H1 2016 compared to H1 2015.

The above reduction in the depreciation charge has also been affected by the devaluation in the local currency. This significant devaluation has effectively halved the US Dollar value of the balance sheet assets.

C1 cash cost of production

The C1 cash cost of production is now reported using the Wood Mackenzie industry definition which excludes all local taxes including mineral extraction tax, but includes local administrative expenses. CAML started reporting its C1 cash cost of production under this definition for the year ending 31 December 2015. The C1 cash cost of production reported for the six months ended 30 June 2015 was $0.74 per pound and this has now been recalculated as $0.67 per pound using the revised industry definition.

Kounrad’s C1 cash costs of production remain in the lowest quartile on the industry cost curve at $0.40 per pound (H1 2015: $0.67 per pound). This represents a 40% decrease from the prior period primarily as a result of cost savings form the local currency devaluation, increased production volumes and the reduction in off-take costs.

The Group’s fully inclusive unit costs for the period, including depreciation and amortisation charges, all local taxes including mineral extraction tax and corporate overheads associated with the Kounrad project, were $0.97 per pound (H1 2015: $1.87 per pound). The prior period includes a one-off charge of $0.7 million, equating to $0.06 per pound, arising from the write-off of organic inventory. The reduction in the fully inclusive unit cost is due to the lower C1 cash costs and depreciation and amortisation charges as explained above.

Administrative expenses

During the period, administrative expenses were $5.9 million (H1 2015: $5.6 million). The Group recognised a share based payment charge of $1.4 million (H1 2015: $1.1 million) in relation to the Company’s Share Option Schemes.

Discontinued operations

The Group continues to hold for sale the assets it owns in Mongolia. These assets were fully written off in prior periods.

Kazakhstan Tenge devaluation

The Tenge devalued in August 2015 resulting in a total devaluation during 2015 of approximately 85%. The Board’s response was to increase salaries for staff at Kounrad by 25% from 1 January 2016 to compensate for the devaluation.

Given that the Group’s operations in Kazakhstan generate income in US Dollars (“USD”) through the export of copper cathode, the immediate financial impact is positive as approximately 60% of the total cost base in Kazakhstan is denominated in Tenge and 70% of C1 cash costs are Tenge (“KZT”) denominated. The average exchange rate for the six month period ended 30 June 2016 was 346 KZT/USD (H1 2015: 186 KZT/USD), representing an 86% devaluation, which equates to US Dollar equivalent savings of 46% on Tenge denominated costs.

There has been a desire on the part of Kazakhstan Government to contain any inflationary pressures caused by the devaluation. The official rate of inflation for the first six months of 2016 was published at 4.4%, which is a reduction from the 2015 official rate of 13.6%. It is expected that some of the cost benefits seen during the first six months of 2016 may be eroded by potential inflationary pressures during H2 2016.

Balance sheet

During the period, there were additions to property, plant and equipment of $9.6 million (H1 2015: $6.6 million). The majority of this expenditure was incurred on the construction work at Kounrad for the Stage 2 Expansion, which is due to be completed in early Q4 2016. A further $0.8 million was capitalised in relation to exploration and evaluation costs incurred on the Copper Bay project.

As at 30 June 2016, current trade and other receivables were $3.1 million (31 December 2015: $2.6 million) and non-current trade and other receivables were $2.1 million (31 December 2015: $4.3 million).

In February 2016, the Kazakhstan authorities refunded a portion of outstanding VAT totalling $1.7 million. As at 30 June 2016, a total of $3.8 million (31 December 2015: $4.4 million) of VAT receivable was still owed to the Group relating to historical expenditure on site at Kounrad. A further $1.9 million was refunded in August 2016 bringing the total VAT successfully refunded in 2016 to $3.6 million.

The $1.9 million refunded after the reporting date is classified within current receivables as at 30 June 2016. The Group still remains confident about its prospects to recover the remaining portion outstanding of $1.9 million and is working closely with its advisers and local partners to achieve this. The planned means of recovery will be through a combination of the local sales of copper cathode to effectively offset VAT liabilities and by a successful appeal to the authorities.

As at 30 June 2016, current trade and other payables were $4.2 million (31 December 2015: $6.3 million).

The Group had cash of $30.2 million on 30 June 2016 (31 December 2015: $42.0 million) and no debt.

Cash flows

The continued strong operational performance of the Kounrad project and the associated low costs of production resulted in robust cash flows for the Group. Cash generated from operations increased to $13.8 million (H1 2015: $7.4 million) and during the period $12.5 million was returned to shareholders as dividends (H1 2015: $12.8 million) and a further $9.6 million was invested in the Kounrad Stage 2 Expansion project and sustaining capital expenditure (H1 2015: $7.2 million).

$3.6 million of Kazakhstan corporate income tax was paid during the period (H1 2015: $5.7 million). Payments made during 2016 included $3.1 million towards the 2016 corporate income tax liability and $0.5 million of 2015 corporate income tax paid in April 2016.

Dividend

The Company’s dividend policy is that it will return a minimum of 20% of the gross revenues generated from the Kounrad project to shareholders.

The CAML Board has declared an interim dividend for the period of 5.5 pence per ordinary share. The interim dividend equates to approximately 26% of the gross revenue for the period and will be payable on 28 October 2016 to shareholders registered on 7 October 2016.

CONDENSED INTERIM INCOME STATEMENT (unaudited)

for the six months period ended 30 June 2016

 
                                                         Six months 
                                                            ended 
                                                  ------------------------- 
                                                     30-Jun-16    30-Jun-15 
                                            Note         $'000        $'000 
------------------------------------------  ----  ------------  ----------- 
Continuing operations 
Gross revenue                                5          30,884       30,323 
------------------------------------------  ----  ------------  ----------- 
Revenue                                                 29,728       29,035 
------------------------------------------  ----  ------------  ----------- 
Cost of sales                                          (8,309)     (13,356) 
------------------------------------------  ----  ------------  ----------- 
Gross profit                                            21,419       15,679 
------------------------------------------  ----  ------------  ----------- 
 
Distribution and selling costs                           (341)        (133) 
Administrative expenses                                (5,911)      (5,616) 
Inventory write-off                                          -        (715) 
Other income                                                72            8 
Foreign exchange rate (loss)/gain                        (246)        1,091 
Operating profit                                        14,993       10,314 
------------------------------------------  ----  ------------  ----------- 
 
  Finance income                                            39           21 
Finance costs                                             (71)        (257) 
Profit before income tax                                14,961       10,078 
Income tax                                             (4,331)      (4,093) 
------------------------------------------  ----  ------------  ----------- 
Profit from continuing operations                       10,630        5,985 
------------------------------------------  ----  ------------  ----------- 
Discontinued operations 
 Loss from discontinued operations                        (77)        (112) 
------------------------------------------  ----  ------------  ----------- 
Profit for the period                                   10,553        5,873 
------------------------------------------  ----  ------------  ----------- 
Profit attributable to: 
 
        *    Non-controlling interests                    (46)          431 
 
        *    Owners of the parents                      10,599        5,442 
------------------------------------------  ----  ------------  ----------- 
                                             5          10,553        5,873 
------------------------------------------  ----  ------------  ----------- 
Earnings/(loss) per share from continuing 
 and discontinued operations attributable 
 to owners of the parent during the                    $ cents      $ cents 
 period (expressed in cents per share) 
 Basic earnings/(loss) per share 
------------------------------------------  ----  ------------  ----------- 
From continuing operations                   6            9.57         4.98 
From discontinued operations                            (0.07)       (0.10) 
------------------------------------------  ----  ------------  ----------- 
From profit for the period                                9.50         4.88 
------------------------------------------  ----  ------------  ----------- 
Diluted earnings/(loss) per share 
From continuing operations                   6            9.35         4.86 
From discontinued operations                            (0.07)       (0.10) 
------------------------------------------  ----  ------------  ----------- 
From profit for the period                                9.28         4.76 
------------------------------------------  ----  ------------  ----------- 

The comparative figures for the six months ended 30 June 2015 include a reclassification of land rental, property tax and contractual payments under the subsoil use contract incurred at Kounrad from administrative expenses to cost of sales totalling $442,000.

The comparative figures for earnings/(loss) per share from continuing and discontinued operations attributable to owners of the parent for the six months ended 30 June 2015 have been amended to exclude profit attributable to non-controlling interests (see note 6).

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (unaudited)

for the six months period ended 30 June 2016

 
                                                   Six months 
                                                      ended 
--------------------------------------------  -------------------- 
                                              30-Jun-16  30-Jun-15 
                                                  $'000      $'000 
--------------------------------------------  ---------  --------- 
Profit for the period                            10,553      5,873 
Other comprehensive income/(expense): 
Items that may be reclassified subsequently 
 to profit or loss: 
Currency translation differences                    405    (1,258) 
Other comprehensive income/(expense) 
 for the period, net of tax                         405    (1,258) 
--------------------------------------------  ---------  --------- 
Total comprehensive income for the period        10,958      4,615 
--------------------------------------------  ---------  --------- 
  Attributable to: 
 
        *    Non-controlling interests             (46)        431 
 
        *    Owners of the parents               11,004      4,184 
--------------------------------------------  ---------  --------- 
Total comprehensive income for the period        10,958      4,615 
--------------------------------------------  ---------  --------- 

Total comprehensive income/(expense) attributable to equity shareholders arises from:

 
   - Continuing operations     11,035   4,727 
   - Discontinued operations     (77)   (112) 
-----------------------------  ------  ------ 
                               10,958   4,615 
-----------------------------  ------  ------ 

CONDENSED INTERIM BALANCE SHEET

as at 30 June 2016

 
                                              Unaudited       Audited     Unaudited 
                                           ------------  ------------  ------------ 
                                              30-Jun-16     31-Dec-15     30-Jun-15 
                                     Note         $'000         $'000         $'000 
----------------------------------  -----  ------------  ------------  ------------ 
  Assets 
  Non-current assets 
  Property, plant and equipment         7        49,145        40,800        75,061 
  Intangible assets                     8        40,178        40,267        78,290 
  Other non-current receivables         9         2,127         4,250         7,100 
----------------------------------  -----  ------------  ------------  ------------ 
                                                 91,450        85,317       160,451 
----------------------------------  -----  ------------  ------------  ------------ 
  Current assets 
  Inventories                                     4,110         3,031         3,755 
  Trade and other receivables           9         3,131         2,648         7,070 
  Restricted cash                                    94           494           569 
  Cash and cash equivalents                      30,107        41,502        35,206 
----------------------------------  -----  ------------  ------------  ------------ 
                                                 37,442        47,675        46,600 
----------------------------------  -----  ------------  ------------  ------------ 
  Assets of the disposal 
   group classified as held 
   for sale                                          72            83           109 
----------------------------------  -----  ------------  ------------  ------------ 
                                                 37,514        47,758        46,709 
----------------------------------  -----  ------------  ------------  ------------ 
  Total assets                                  128,964       133,075       207,160 
----------------------------------  -----  ------------  ------------  ------------ 
 
    Equity attributable to 
    owners of the parent 
  Ordinary shares                      10         1,121         1,121         1,121 
  Share premium                        10             -             -             - 
  Treasury shares                      10       (7,810)       (7,810)       (8,146) 
  Other reserves                               (88,064)      (88,469)      (12,375) 
  Retained earnings                             206,240       209,120       199,239 
----------------------------------  -----  ------------  ------------  ------------ 
                                                111,487       113,962       179,839 
----------------------------------  -----  ------------  ------------  ------------ 
  Non-controlling interests                    218                264           431 
----------------------------------  -----  ------------  ------------  ------------ 
  Total equity                                  111,705       114,226       180,270 
----------------------------------  -----  ------------  ------------  ------------ 
  Liabilities 
  Non-current liabilities 
  Deferred income tax liability                  10,258        10,240        20,562 
  Provision for other liabilities 
   and charges                                    2,398         1,916         2,306 
----------------------------------  -----  ------------  ------------  ------------ 
                                                 12,656        12,156        22,868 
----------------------------------  -----  ------------  ------------  ------------ 
  Current liabilities 
----------------------------------  -----  ------------  ------------  ------------ 
  Trade and other payables                        4,166         6,261         3,572 
----------------------------------  -----  ------------  ------------  ------------ 
                                                  4,166         6,261         3,572 
----------------------------------  -----  ------------  ------------  ------------ 
  Liabilities of disposal 
   group classified as held 
   for sale                                         437           432           450 
----------------------------------  -----  ------------  ------------  ------------ 
                                                  4,603         6,693         4,022 
----------------------------------  -----  ------------  ------------  ------------ 
  Total liabilities                              17,259        18,849        26,890 
----------------------------------  -----  ------------  ------------  ------------ 
  Total equity and liabilities                  128,964       133,075       207,160 
----------------------------------  -----  ------------  ------------  ------------ 

CONDENSED INTERIM STATEMENT OF CHANGES OF EQUITY (unaudited)

for the six months period ended 30 June 2016

 
                                                                                                  Non-controlling 
                     Ordinary        Share      Treasury         Other      Retained                     interest 
                       Shares      Premium        Shares      Reserves      Earnings       Total                        Total 
---------------  ------------  -----------  ------------  ------------  ------------  ----------  ---------------  ---------- 
                        $'000        $'000         $'000         $'000         $'000       $'000            $'000       $'000 
---------------  ------------  -----------  ------------  ------------  ------------  ----------  ---------------  ---------- 
At 31 December 
 2015                   1,121            -       (7,810)      (88,469)       209,120     113,962              264     114,226 
---------------  ------------  -----------  ------------  ------------  ------------  ----------  ---------------  ---------- 
Profit/(loss) 
 for the period             -            -             -             -        10,599      10,599             (46)      10,553 
Other 
 comprehensive 
 income - 
 currency 
 translation 
 differences                -            -             -           405             -         405                -         405 
Total 
 comprehensive 
 income                     -            -             -           405        10,599      11,004             (46)      10,958 
---------------  ------------  -----------  ------------  ------------  ------------  ----------  ---------------  ---------- 
Transactions 
 with owners 
Share based 
 payments                   -            -             -             -         1,392       1,392                -       1,392 
Exercise of 
 options                    -            -             -             -       (2,349)     (2,349)                -     (2,349) 
Dividends                   -            -             -             -      (12,522)    (12,522)                -    (12,522) 
Total 
 transactions 
 with owners, 
 recognised 
 directly 
 in equity                  -            -             -             -      (13,479)    (13,479)                -    (13,479) 
---------------  ------------  -----------  ------------  ------------  ------------  ----------  ---------------  ---------- 
At 30 June 2016         1,121            -       (7,810)      (88,064)       206,240     111,487              218     111,705 
---------------  ------------  -----------  ------------  ------------  ------------  ----------  ---------------  ---------- 
 
 
                                                                                           Non-controlling 
                      Ordinary         Share       Treasury          Other       Retained         interest 
                        Shares       Premium         Shares       Reserves       Earnings                        Total 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 
                         $'000         $'000          $'000          $'000          $'000            $'000       $'000 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 
At 31 December 
 2014                    1,121        67,079        (9,644)       (11,117)        140,484                -     187,923 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 
Profit for the 
 period                      -             -              -              -          5,873                -       5,873 
Other 
 comprehensive 
 income - 
 currency 
 translation 
 differences                 -             -              -        (1,258)              -                -     (1,258) 
Total 
 comprehensive 
 income                      -             -              -        (1,258)          5,873                -       4,615 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 
Transactions 
with 
owners 
Capital 
 reduction 
 (note 10)                   -      (67,079)              -              -         67,079                -           - 
Share based 
 payments                    -             -              -              -          1,110                -       1,110 
Exercise of 
 options                     -             -          1,327              -        (1,189)                -         138 
Sales of EBT 
 shares                      -             -            171              -          (171)                -           -
Dividends                    -             -              -              -       (12,787)                -    (12,787) 
Copper Bay 
 acquisition                 -             -              -              -        (1,160)              431       (729) 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 
Total 
 transactions 
 with owners, 
 recognised 
 directly in 
 equity                      -      (67,079)          1,498              -         52,882              431    (12,268) 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 
At 30 June 2015          1,121             -        (8,146)       (12,375)        199,239              431     180,270 
---------------  -------------  ------------  -------------  -------------  -------------  ---------------  ---------- 

CONDENSED INTERIM STATEMENT OF CASH FLOWS (unaudited)

for the six months period ended 30 June 2016

 
                                                               Six months 
                                                                  ended 
                                                         30-Jun-15      30-Jun-15 
                                                  Note       $'000          $'000 
-------------------------------------------  ---------  ----------  ------------- 
 
 
                  Cash flows from operating 
                                 activities 
             Cash generated from operations         11      17,395         13,250 
  Income tax paid                                          (3,602)        (5,739) 
  Interest paid                                                (2)          (134) 
-------------------------------------------  ---------  ----------  ------------- 
  Net cash generated from operating 
   activities                                               13,791          7,377 
-------------------------------------------  ---------  ----------  ------------- 
  Cash flows from investing 
   activities 
  Purchases of property, plant 
   and equipment                                           (9,596)        (7,197) 
  Purchase of intangible assets                              (780)          (159) 
  Interest received                                             39             21 
  Acquisition of subsidiary 
   net of cash acquired                                          -          1,053 
  Discontinued operations                                        -           (40) 
-------------------------------------------  ---------  ----------  ------------- 
  Net cash used in investing 
   activities                                             (10,337)        (6,322) 
-------------------------------------------  ---------  ----------  ------------- 
  Cash flows from financing 
   activities 
   Dividend paid to owners 
   of the parent                                          (12,522)       (12,787) 
  (Settlement)/receipt on exercise 
   of share options                                        (2,349)            125 
  Restricted cash decrease/(increase)                          400          (421) 
-------------------------------------------  ---------  ----------  ------------- 
  Net cash used in financing 
   activity                                               (14,471)       (13,083) 
-------------------------------------------  ---------  ----------  ------------- 
 
                Effect of foreign exchange 
                (losses)/gains on cash and 
                     cash equivalents                        (390)          1,090 
  Net decrease in cash and 
   cash equivalents                                       (11,407)       (10,938) 
-------------------------------------------  ---------  ----------  ------------- 
  Cash and cash equivalents 
   at 1 January                                             41,524         46,159 
-------------------------------------------  ---------  ----------  ------------- 
  Cash and cash equivalents 
   at 30 June                                               30,117         35,221 
-------------------------------------------  ---------  ----------  ------------- 

Cash and cash equivalents at 30 June 2016 includes cash at bank on hand included in assets held for sale of $10,000 (30 June 2015: $15,000).

NOTES TO THE INTERIM FINANCIAL INFORMATION

For the six months period ended 30 June 2016

1. General information

Central Asia Metals plc (“CAML” or the “Company”) and its subsidiaries (the “Group”) are a mining and exploration organisation with operations primarily in Kazakhstan and a parent holding company based in the United Kingdom (“UK”).

The Group’s principal business activity is the production of copper cathode at its Kounrad operations in Kazakhstan. The Group also owns two exploration projects in Mongolia which are held for sale and owns a 75% shareholding in the Copper Bay tailings project in Chile.

CAML is a public limited company, which is listed on the AIM market of the London Stock Exchange and incorporated and domiciled in the UK. The address of its registered office is Masters House, 107 Hammersmith Road, London, W14 0QH. The Company’s registered number is 5559627.

The condensed consolidated interim financial information incorporate the results of Central Asia Metals plc and its subsidiary undertakings as at 30 June 2016 and was approved by the Directors for issue on 12 September 2016. This condensed interim financial information does not constitute accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2015 were approved by the Board of Directors on 8 April 2016 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified.

The condensed consolidated interim financial information has not been audited.

2. Basis of preparation

The condensed interim financial information for the six months ended 30 June 2016 has been prepared in accordance with IAS 34, ‘Interim financial reporting’. The condensed interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with IFRS.

3. Accounting policies

The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group’s audited financial statements for the year ended 31 December 2015.

After review of the Group’s operations, financial position and forecasts, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the unaudited interim financial information.

4. Estimates

The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed interim financial information, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2015.

5. Segmental information

The Board is the Group’s chief operating decision-maker. Management have determined the operating segments based on the information reviewed by the Board for the purposes of allocating resources and assessing performance. The Board considers the business from a geographic perspective.

The Group had two business segments consisting of an SX-EW copper plant at Kounrad in Kazakhstan and the Copper Bay project in Chile. The Group operations are controlled from a head office in London, UK but this does not represent a separate business segment.

The Board assesses the performance of the Kounrad project based on a number of key operational and financial measures which relate to copper production output, revenues from the sales of copper and the overall costs of producing the copper.

The segments results for the period ended 30 June 2016 are as follows:

 
                                                                     Unaudited 
----------------------------------   --------  -------  -----------  --------- 
                                      Kounrad   Copper  Unallocated      Total 
                                                   Bay 
----------------------------------   --------  -------  -----------  --------- 
                                        $'000    $'000        $'000      $'000 
                                     --------  -------  -----------  --------- 
                      Gross revenue    30,884        -            -     30,884 
  Off-take buyers' fees               (1,156)        -            -    (1,156) 
-----------------------------------  --------  -------  -----------  --------- 
  Revenue                              29,728        -            -     29,728 
-----------------------------------  --------  -------  -----------  --------- 
  Kounrad EBITDA                       22,168        -            -     22,168 
  Copper Bay administrative 
   expenses                                 -    (449)            -      (449) 
  Unallocated costs including 
   corporate                                -        -      (4,303)    (4,303) 
-----------------------------------  --------  -------  -----------  --------- 
  Group continuing operations 
   EBITDA                              22,168    (449)      (4,303)     17,416 
  Depreciation and amortisation       (2,207)        -         (42)    (2,249) 
  Foreign exchange rate 
   gain/(loss)                             31       62        (339)      (246) 
  Other income                             72        -            -         72
  Finance income                            5        -           34         39 
  Finance costs                          (71)        -            -       (71) 
-----------------------------------  --------  -------  -----------  --------- 
  Profit before income tax             19,998    (387)      (4,650)     14,961 
-----------------------------------  --------  -------  -----------  --------- 
  Income tax                          (4,331)        -            -    (4,331) 
-----------------------------------  --------  -------  -----------  --------- 
  Profit for the period 
   after taxation from continuing 
   operations                          15,667    (387)      (4,650)     10,630 
-----------------------------------  --------  -------  -----------  --------- 
  Loss from discontinued 
   operations                                                             (77) 
-----------------------------------  --------  -------  -----------  --------- 
  Profit for the period                                                 10,553 
-----------------------------------  --------  -------  -----------  --------- 

The comparative segmental results for the six months period ended 30 June 2015 do not include the results of the Copper Bay project which was consolidated from 30 June 2015 following the increase in CAML’s shareholding from 50% to 75%. The segments results for the period ended 30 June 2015 are as follows:

 
                                                            Unaudited 
----------------------------------    -------  -----------  --------- 
                                      Kounrad  Unallocated      Total 
----------------------------------    -------  -----------  --------- 
                                        $'000        $'000      $'000 
                                      -------  -----------  --------- 
                       Gross revenue   30,323            -     30,323 
  Off-take buyers' fees               (1,288)            -    (1,288) 
------------------------------------  -------  -----------  --------- 
  Revenue                              29,035            -     29,035 
------------------------------------  -------  -----------  --------- 
  Kounrad EBITDA                       20,509            -     20,509 
  Unallocated costs including 
   corporate                                -      (4,524)    (4,524) 
------------------------------------  -------  -----------  --------- 
  Group continuing operations 
   EBITDA                              20,509      (4,524)     15,985 
  Depreciation and amortisation       (6,033)         (22)    (6,055) 
  Inventory write-off                   (715)            -      (715) 
  Foreign exchange rate 
   gain                                   197          894      1,091 
  Other income                              8            -          8 
  Finance income                           14            7         21 
  Finance costs                         (257)            -      (257) 
------------------------------------  -------  -----------  --------- 
  Profit before income tax             13,723      (3,645)     10,078 
------------------------------------  -------  -----------  --------- 
  Income tax                          (4,093)            -    (4,093) 
------------------------------------  -------  -----------  --------- 
  Profit for the period 
   after taxation from continuing 
   operations                           9,630      (3,645)      5,985 
------------------------------------  -------  -----------  --------- 
  Loss from discontinued 
   operations                                                   (112) 
------------------------------------  -------  -----------  --------- 
  Profit for the period                                         5,873 
------------------------------------  -------  -----------  --------- 

Group segmental assets and liabilities for the six months ended 30 June 2016 are as follows:

 
                           Segmental Assets         Segmental 
                                                    Liabilities 
-----------------------  --------------------  -------------------- 
                         30-Jun-16  31-Dec-15  30-Jun-16  31-Dec-15 
-----------------------  ---------  ---------  ---------  --------- 
                             $'000      $'000      $'000      $'000 
-----------------------  ---------  ---------  ---------  --------- 
  Kounrad                  100,856     94,666   (15,954)   (15,536) 
  Copper Bay                 5,061      5,369      (271)      (330) 
  Assets held for sale          72         83      (437)      (432) 
  Corporate                 22,975     32,957      (597)    (2,551) 
-----------------------  ---------  ---------  ---------  --------- 
  Total                    128,964    133,075   (17,259)   (18,849) 
-----------------------  ---------  ---------  ---------  --------- 

6. Earnings per share

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of the Company by the weighted average number of Ordinary Shares in issue during the period excluding Ordinary Shares purchased by the Company and held as treasury shares.

   (a)         Basic 
 
                                                          Six months 
                                                             ended 
-------------------------------------------------  ------------------------ 
                                                     30-Jun-16    30-Jun-15 
-------------------------------------------------  -----------  ----------- 
                                                         $'000        $'000 
-------------------------------------------------  -----------  ----------- 
  Profit from continuing operations attributable 
   to owners of the parent                              10,676        5,554 
-------------------------------------------------  -----------  ----------- 
  Loss from discontinued operations attributable 
   to owners of the parent                                (77)        (112) 
-------------------------------------------------  -----------  ----------- 
  Total                                                 10,599        5,442 
-------------------------------------------------  -----------  ----------- 
  Weighted average number of Ordinary 
   Shares in issue                                 111,558,091  111,558,091 
-------------------------------------------------  -----------  ----------- 
  Earnings/(loss) per share from continuing 
   and discontinued operations attributable 
   to owners of the parent during the 
   period (expressed in $ cents per share)             $ cents      $ cents 
  From continuing operations                              9.57         4.98 
  From discontinued operations                          (0.07)       (0.10) 
-------------------------------------------------  -----------  ----------- 
  From profit for the period                              9.50         4.88 
-------------------------------------------------  -----------  ----------- 

The comparative figures for the six months ended 30 June 2015 have been amended to exclude non-controlling interests from profit from continuing operations attributable to owners of the parent.

The diluted earnings/(loss) per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding after assuming the conversion of all outstanding granted share options.

   (b)         Diluted 
 
                                                              Six months 
                                                                 ended 
-------------------------------------------------  -------------------------------- 
                                                       30-Jun-16         30-Jun-15* 
-------------------------------------------------  -------------  ----------------- 
                                                           $'000              $'000 
-------------------------------------------------  -------------  ----------------- 
  Profit from continuing operations attributable 
   to owners of the parent                                10,676              5,554 
-------------------------------------------------  -------------  ----------------- 
  Loss from discontinued operations attributable 
   to owners of the parent                                  (77)              (112) 
-------------------------------------------------  -------------  ----------------- 
  Total                                                   10,599              5,442 
-------------------------------------------------  -------------  ----------------- 
  Weighted average number of ordinary 
   shares in issue                                   111,558,091        111,558,091 
  Adjusted for: 
   - Share Options                                     2,643,025          2,736,700 
  Weighted average number of ordinary 
   shares for diluted earnings per share             114,201,116        114,294,791 
 
  Diluted earnings per share                             $ cents            $ cents 
  From continuing operations                                9.35               4.86 
  From discontinued operations                            (0.07)             (0.10) 
-------------------------------------------------  -------------  ----------------- 
  From profit for the period                                9.28               4.76 
-------------------------------------------------  -------------  ----------------- 

7. Property, plant and equipment

 
                                                                                 Motor 
                                  Construction            Plant    Mining     vehicles 
                                   in progress    and equipment    assets   and office     Total 
                                                                             equipment 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 Group                                   $'000            $'000     $'000        $'000     $'000 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 Cost 
 At 1 January 2015                       7,683           81,990         -        1,715    91,388 
 Additions                               6,416              935         -          486     7,837 
 Disposals                                   -             (76)         -         (65)     (141) 
 Change in estimate 
  - asset retirement 
  obligation                                 -              207         -            -       207 
 Transfers                             (9,668)            9,658         -           10         - 
 Acquisition of Copper 
  Bay                                        -                3         -            -         3 
 Transfer from intangible 
  assets                                     -                -     1,601            -     1,601 
 Exchange differences                  (2,428)         (43,309)         -        (845)  (46,582) 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 At 31 December 2015                     2,003           49,408     1,601        1,301    54,313 
 Additions                               9,291              226         -           79     9,596 
 Disposals                                   -            (223)         -          (3)     (226) 
 Change in estimate 
  - asset retirement 
  obligation                                 -              150         -            -       150 
 Transfers                             (1,360)            1,356         -            4         - 
 Exchange differences                      171               51         3            3       228 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 At 30 June 2016                        10,105           50,968     1,604        1,384    64,061 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 
 Accumulated depreciation 
 At 1 January 2015                           -           16,000         -          727    16,727 
 Provided during the 
  year                                       -            7,630         -          164     7,794 
 Disposals                                   -             (69)         -         (56)     (125) 
 Transfer from intangible 
  assets                                     -                -        62            -        62 
 Exchange differences                        -         (10,608)         -        (337)  (10,945) 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 At 31 December 2015                         -           12,953        62          498    13,513 
 Provided during the 
  period                                     -            1,497        19           72     1,588 
 Disposals                                   -            (223)         -          (3)     (226) 
 Exchange differences                        -               31         -           10        41 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 At 30 June 2016                             -           14,258        81          577    14,916 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 
 Net book value at 
  31 December 2015                       2,003           36,455     1,539          803    40,800 
--------------------------  ------------------  ---------------  --------  -----------  -------- 
 Net book value at 
  30 June 2016                          10,105           36,710     1,523          807    49,145 
--------------------------  ------------------  ---------------  --------  -----------  -------- 

Following receipt of the regulatory approvals required for the Kounrad Stage 2 Expansion in November 2015, management has extended the useful economic lives of certain property, plant and equipment and the fair value uplift on the Kounrad Transaction. The original estimate of 10 years useful economic life has now been increased through to 2034 which represents the end of the subsoil user licence. This change in estimate was applied from 1 January 2016 and has resulted in a reduction in the Group depreciation charge.

The change in estimate in relation to the asset retirement obligation of $150,000 is as a result of adjusting the provision recognised to take into account the expansion of the SX-EW plant at Kounrad. The net present value of future expected costs has been calculated using an inflation rate of 5.68% (H1 2015: 4.30%) and discount rate of 7.27% (H1 2015: 8.07%) representing the risk free rate (pre-tax) for Kazakhstan.

The fall in value of the Tenge during 2015 resulted in non-cash foreign exchange losses within property, plant and equipment for the year ended 31 December 2015. This is due to the translation on consolidation of the Group’s Kazakhstan based subsidiaries whose functional currency is the Tenge as well as the goodwill and fair value uplift adjustments to the carrying amounts of assets and liabilities arising on the Kounrad Transaction which are denominated in Tenge.

8. Intangible assets

 
                                            Exploration 
                                                    and         Mining 
                                             evaluation       licences    Computer 
                                  Goodwill        costs    and permits    software     Total 
------------------------------  ----------  -----------  -------------  ----------  -------- 
Group                                $'000        $'000          $'000       $'000     $'000 
------------------------------  ----------  -----------  -------------  ----------  -------- 
Cost 
At 1 January 2015                   20,291        2,805         60,399          55    83,550 
Additions                                -          542              -          14       556 
Transfers to property, 
 plant and equipment                     -      (1,601)              -           -   (1,601) 
Acquisition of Copper 
 Bay                                     -        1,641        (3,222)           -   (1,581) 
Exchange differences              (10,185)      (1,348)       (26,546)        (31)  (38,110) 
------------------------------  ----------  -----------  -------------  ----------  -------- 
At 31 December 2015                 10,106        2,039         30,631          38    42,814 
Additions                                -          763              4          13       780 
Exchange differences                    18            -          (114)           -      (96) 
------------------------------  ----------  -----------  -------------  ----------  -------- 
At 30 June 2016                     10,124        2,802         30,521          51    43,498 
------------------------------  ----------  -----------  -------------  ----------  -------- 
 
  Accumulated amortisation 
At 1 January 2015                        -           64          1,850          31     1,945 
Provided during the year                 -           41          2,668          11     2,720 
Transfers to property, 
 plant and equipment                     -         (62)              -           -      (62) 
Exchange differences                     -         (43)        (1,994)        (19)   (2,056) 
------------------------------  ----------  -----------  -------------  ----------  -------- 
At 31 December 2015                      -            -          2,524          23     2,547 
Provided during the period               -            -            758          11       769 
Exchange differences                     -            -              4           -         4 
------------------------------  ----------  -----------  -------------  ----------  -------- 
At 30 June 2016                          -            -          3,286          34     3,320 
------------------------------  ----------  -----------  -------------  ----------  -------- 
 
Net book value at 31 December 
 2015                               10,106        2,039         28,107          15    40,267 
------------------------------  ----------  -----------  -------------  ----------  -------- 
Net book value at 30 June 
 2016                               10,124        2,802         27,235          17    40,178 
------------------------------  ----------  -----------  -------------  ----------  -------- 

The fall in value of the Tenge during 2015 has resulted in non-cash foreign exchange losses within intangible assets for the year ended 31 December 2015. This is due to the translation on consolidation of the Group’s Kazakhstan based subsidiaries whose functional currency is the Tenge as well as the goodwill and fair value uplift adjustments to the carrying amounts of assets and liabilities arising on the Kounrad Transaction which are denominated in Tenge.

   9.    Trade and other receivables 
 
                              30-Jun-16  31-Dec-15 
  Current receivables             $'000      $'000 
--------------------------   ----------  --------- 
  Trade receivables                  14          - 
  Prepayments                       645        836 
  VAT receivable                  2,441      1,769 
  Other receivable                   31         43 
                                  3,131      2,648 
 --------------------------  ----------  --------- 
  Non-current receivables
  Prepayments                       221      1,493 
  VAT receivable                  1,906      2,757 
                                  2,127      4,250 
 --------------------------  ----------  --------- 

In February 2016, the Kazakhstan authorities refunded a portion of outstanding VAT totalling $1.7 million. As at 30 June 2016, a total of $3.8 million (31 December 2015: $4.4 million) of VAT receivable was still owed to the Group relating to historical expenditure on site at Kounrad. A further $1.9 million was refunded in August 2016 bringing the total VAT successfully refunded in 2016 to $3.6 million.

The $1.9 million refunded after the reporting date is classified within current receivables as at 30 June 2016. The Group still remains confident about its prospects to recover the remaining portion outstanding of $1.9 million and is working closely with its advisers and local partners to achieve this. The planned means of recovery will be through a combination of the local sales of copper cathode to effectively offset VAT liabilities and by a successful appeal to the authorities.

   10.        Share capital and premium 
 
                               Number     Ordinary         Share     Treasury 
                            of Shares       Shares       Premium       Shares 
----------------------   ------------  -----------  ------------  ----------- 
                                   No        $'000         $'000        $'000 
----------------------   ------------  -----------  ------------  ----------- 
  At 1 January 2015       112,069,738        1,121        67,079      (9,644) 
-----------------------  ------------  -----------  ------------  ----------- 
  Capital reduction                 -            -      (67,079)            - 
  Exercised options                 -            -             -        1,663 
  Sales of EBT shares               -            -             -          171 
  At 31 December 2015 
   / 30 June 2016         112,069,738        1,121             -      (7,810) 
-----------------------  ------------  -----------  ------------  ----------- 

On 13 May 2015, the Company completed a Court approved capital reduction scheme, which resulted in $67.1 million being transferred from the share premium account to distributable reserves. There were no movements in share capital and premium during the six months ended 30 June 2016.

   11.         Cash generated from operations 
 
                                                                                                         Six months 
                                                                                                            ended 
                                                                                                    -------------------- 
                                                                                                    30-Jun-16  30-Jun-15 
                                                                                                        $'000      $'000 
--------------------------------------------------------------------------------------------------  ---------  --------- 
 
  Profit before income tax including 
   discontinued operations                                                                             14,884      9,966 
  Adjustments for: 
  Depreciation                                                                                          1,361      4,620 
  Amortisation                                                                                            888      1,434 
  Change in provision for doubtful receivables                                                              -        (2) 
  Foreign exchange loss/(gain)                                                                            246    (1,091) 
  Share based payments                                                                                  1,392      1,110 
  Write-off of inventory                                                                                    -        715 
  Finance income                                                                                         (39)       (21) 
  Finance costs                                                                                            71        257 
  Charges in working capital: 
  Inventories                                                                                         (1,079)      (416) 
  Trade and other receivables                                                                           1,640    (3,723) 
  Trade and other payables                                                                            (1,969)        400 
  Movement in provisions                                                                                    -          1 
 
                                                                                        Cash 
                                                                                        generated 
                                                                                        from 
                                                                                        operations     17,395     13,250 
--------------------------------------------------------------------------------------------------  ---------  --------- 
 
   12.         Commitments

Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

 
                                   30-Jun-16  30-Jun-15 
                                       $'000      $'000 
--------------------------------  ----------  --------- 
  Property, plant and equipment          309        298 
  Intangible assets                        -        108 
  Other                                1,269      1,454 
--------------------------------  ----------  --------- 
  Total                                1,578      1,860 
--------------------------------  ----------  --------- 
 
   13.        Dividend per share

An interim dividend of 5.5 pence per ordinary share (2015: 4.5 pence per share) was declared by the CAML Board on 12 September 2016.

   14.        Related party transactions

During the six month period ending 30 June 2016, the Group had no transactions with related parties with the exception of the Company’s subsidiaries.

Mr Kenges Rakishev became a major shareholder of CAML on 23 May 2014 following completion of the Kounrad Transaction. He was appointed to the CAML Board on 9 December 2013 following the completion of the first part of the transaction. Consequently, Kenges Rakishev is considered a related party in any dealings he has with the Group. As part of the obligations on Kenges Rakishev for completing the Kounrad Transaction, he signed a relationship agreement with CAML setting out the terms of the relationship between himself and the Group.

Kenges Rakishev is the chairman of the board of directors of JSC Kazkommertsbank (“KKB”) and has full control over the voting and other rights of a combined 71.31% stake in KKB’s issued and outstanding share capital, made up of shares in KKB held by Kenges Rakishev directly and indirectly. The Group uses the facilities of KKB within Kazakhstan for its normal day-to-day banking and has insurance agreements with a subsidiary of KKB. As at 30 June 2016, the Group held $5,290,000 with KKB (31 December 2015: $6,107,000).

   15.         Events after the reporting period

VAT recoverability

The Group’s main receivable is the VAT incurred on purchases within Kazakhstan as explained in note 9. As at 30 June 2016 a total of $3.8 million (31 December 2015: $4.4 million) of VAT receivable was still owed to the Group by the Kazakhstan authorities. An amount of $1.9 million was refunded from the authorities in August 2016 and has been reclassified from non-current to current trade and other receivables as at 30 June 2016.

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