Central Asia Metals plc

Good afternoon ladies and gentlemen and welcome to the Central Asia Metals PLC full year results investor presentation. Questions are encouraged, they can be submitted at any time via the Q&A tab that is just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself, however the company can review all questions submitted today and will publish those responses where it is appropriate to do so on the InvestorMeet company platform. Before we begin, as usual, we would just like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Central Asia Metals PLC. Gavin, good afternoon, sir.

Good afternoon, everyone, and thank you for joining us in this presentation of Central Asia Metals' annual results for 2025. I'll start by giving you a snapshot of the results for the end of the year. We have solid business with strong underlying operational performance during the year. And these have driven a really solid set of financial numbers. What you can see on your screen there is the production achieved at Qunrad in Kazakhstan in Sassa, North Macedonia. We produced 13,311 tons. of copper during the year, 17,881 tons of zinc and 25,156 tons of lead. The revenue generated from the sales of those metals amounted to $230 million for EBITDA of $102 million and an EBITDA margin of 44%. Cash in the bank at the end of the year was $80 million and that was generated by free cash flow of $56 million. which in turn translates into a final dividend, which we intend to pay, of 7.5p, taking the total dividend for the year to 12p. Now, 12p equates to $28 million, and is therefore 50% of our annual free cash flow that we generated. That is the top end of the dividend policy range of 30% to 50%. Most of you know us pretty well by now. I'll give you a quick overview of our asset base and where our current operations reside. We have the Kunrad asset in Kazakhstan. That is a copper production facility and it remains the bedrock of our business. It has been producing copper cathode at a high profit margin since inception in 2012. Sasa, a lead-zinc mine in North Macedonia, which we acquired in 2017, has produced consistently since and has undergone modernisation under our ownership. We have Aberdeen Minerals. It's an investment in a private company. This is exploring for base mineralisation in Scotland at its Arthrath project, and we own 32% of that. Plus, also, we have an exploration programme live in Kazakhstan, through CamelX and CamelXD. That is an asset that we own 80%, 20% of the remaining ownership is in the hands of the geologists, so they are very well geared towards success there and we're looking to drill on a couple of licenses and I'll tell you a bit more about that in a minute in 2026. Before we get there though, Louise is going to walk us through the financial results.

Thanks Gavin. Firstly we'll look at the market conditions that informed our 2025 financial results. So firstly looking at commodity markets. Commodity markets were generally pretty supportive for us during the year. While the lead price was down 2%, the zinc price during the year was up 3% versus 2024. and the copper price was up 10%, and we achieved an average copper price of over $10,000 per tonne during the financial year. Looking at some other important macroeconomic aspects, firstly, treatment charges. It was a positive year for us in terms of treatment charges. And just to give you some comparisons, in 2024, we paid $15 million in treatment charges, and last year, that was down to $8 million. a $7 million reduction in the treatment charges that we incurred last year. Looking now at SASA in terms of currencies, there was a challenge there because the US dollar weakened 5% versus the DINAR. The DINAR is the Macedonian currency, but that is pegged to the euro. So really we're looking at the US dollar euro exchange rate. And the impact of that is effectively to increase our cost base in US dollar terms. At Qumrad, the story was the opposite way around, where the local currency, the Kazakh tenge, weakened 11% versus the dollar, so that helps us with our costs in Kazakhstan. Inflation, still in double digits for Kazakhstan inflation, 12.3%, and inflation for 2025 in North Macedonia was 4.1%. So if we now look at the income statement, We've reported revenue of $230 million this morning. That's up 7% year on year. And that's really been driven by those high commodity prices that I mentioned on the previous slide, but also a 55% increase in the silver price. The silver that we produce at SASA has been streamed off, but we receive the fixed silver price from the smelters. But in cost of sales, we have to buy that exact amount of silver for pretty much the exact price. So that number comes off in cost of sales as well. But that has been a factor in our increasing revenue. We were also positively affected by those lower treatment charges because they're already netted off in the revenue line that we report. Cost of sales was up 14% year on year. A few of the main aspects there, 4.1 million of those silver purchases that I've just mentioned, We have an extra $3 million of SASA depreciation, and that's because we completed the commissioning of the dry stack tailings, landform, and plants at the end of Q1 last year. We also have 3.5 million extra in revenue royalties. That was about 2.5 million extra at SASA because the government doubled the rates at the beginning of last year, and also higher what we call MET royalty in Kazakhstan, and that was because of the higher copper prices. And all that at Stasa was overlaid by effectively this strong operating currency. Admin expenses, they're up 12% year on year, which sounds like a big percentage. In absolute terms, that's 3.4 million. But just to highlight that during the year, we spent 3.6 million on business development. That was mainly the New World Resources bid. We also incurred costs of 0.4 million because we disposed of the Copper Bay entity, which we'd written off some years previously in the first half of last year. And also, we incurred some additional exploration-related admin costs in Cadbex Stamp for the CamelX business. So taking those things into account, this morning we reported EBITDA of just under $102 million at a margin of 44%. Looking at some of the other important factors in the P&L, key to these results has been the impairment that we've announced this morning of $117.5 million for SASA. That was flagged in our announcement on the 3rd of March. And there's also a very small impairment of $0.3 million for one of the Camelot exploration licenses that we're no longer interested in. It's also important to highlight almost a $10 million negative swing in foreign exchange from 2024 to 2025 as well and that obviously adversely affects our profitability. Tax, that's down and that looks considerably lower than 2024. That tax number has been positively impacted by the impairment because we're reflecting lower deferred tax liability effectively within that taxation line and that impairment-related positive tax number is about $10.9 million. And then just finally to point out EPS, we've stated our EPS there as a negative 42.56 cents, but we adjusted the EPS to 18.51 cents. That's stripping out the impairment, stripping out the, sorry, the impairment for SASA and the impairment for CAMELX, and also $1.2 million of unrealized hedges. We, right at the end of December, we put two hedge positions in place for Sasa. It was a 50% hedge of our zinc production for 2026 and a 50% of our operating costs exposure to the Euro. And we put those hedges in place. Because we put them in place within 2025, we've effectively got to value them and report this unrealised loss at the end of 2025. we look now at the cost base for the two operations i couldn't rather that was a very positive year for us in terms of costs our costs in absolute terms were up by only 0.2 million dollars or two cents per pound from 80 cents to 82 cents per fat per pound and that was uh reflecting strong cost control but also the 10 gauge evaluation which helps our cost base we have 0.4 million Lower costs are reagents and electricity. Those are variable costs, and they're reflecting the fact that we've produced slightly less copper in 2025 than we did produce in 2024. We've got a little bit of an increase of payroll costs of $200,000, and that was in inflation-related salary rises, but that was in large part offset by the 10-gauge evaluation as well. And we've also reported a slightly higher taxes offtake fee of one cent per pound. And taking all that into account, we reported an EBITDA margin for the Cunrad business of 75% for 2025. If we look now at Sasa, during the year, our run of mine costs were up $5 per tonne. That's really related to three key factors, which is an increase in payroll costs, about $2.5 million. An increase in the costs for us to dispose of the tailings in the two new methods, the dry stack tailing and the paste backfill. That was an increase of $1.5 million versus 2024. And there was also a rise in some key inputs for reagents, power, et cetera. Those are the main aspects that increased the unit cost base by $5 per tonne for last year. Well, if we look at our C1 costs in absolute terms for SASA, they were lower year-on-year by $0.4 million. That's reflecting the lower treatment charges, which I mentioned previously. That's within that realization figure, and that's $6.6 million lower year-on-year. For SASA, we've reported an EBITDA margin of 26% for 2025. If we look now at our capital expenditure, Our group capex for 2025 was 19 million. That's down by 1.8 million versus the previous year. At SASA, we spent $14.1 million. 11.3 million of that was sustaining capex. And 2.8 million was on concluding the capital projects that we've been running for some years. And that was the dry stack tailings plan and the landform. Going forward, we do expect some additional costs on the landform in particular as we continue to expand that in the next few years but we're going to be treating that as sustaining capex now. At Qumrad our capex was higher than our usual at 4.9 million and one of the more notable aspects for that is we spent a million dollars relocating a portion of dump 15. Our capex at Qumrad will be back to much more normal levels around the 2 million mark for 2026 and all in all for 2026 we're expecting capex giving guidance between $14.5 million and $17.5 million. We've also capitalised more exploration in 2025 versus 2024, and that's really largely because these projects in Kazakhstan through CAMEL-X have matured to the point where they're specific projects which we've done dedicated exploration work on. So not dissimilar to previous years, we spent $0.3 million on SASA capitalised exploration. We spent $1.4 million on Capital X during 2025. And actually in 2026, we expect to increase that between $3 and $3.5 million. Looking now at the balance sheet, probably the key factor to point out again there is that that impairment for SASA of £117.5 million, that comes through the PPE line that you can see there. We've reported strong cash balances of £80.1 million. That includes restricted cash of £0.4 million. The investment in the associate, that's our investment in Aberdeen Minerals. At the end of, sorry, Post the period end in January this year, we exercised a portion of our warrants, £850,000 and $1.1 million. And so we've now increased our ownership from 28.4% to 32.6% in Aberdeen Minerals. The only other aspect I wanted to point out on this slide is we have had a prior year adjustment and re-spaced our 2024 accounts. This was due to an error made when we had infantry movements between our two Kazakh subsidiaries. These should have been reversed out on consolidation into camel PLC, but they haven't been doing. So this restatement increases infantry, reduces costs, and therefore increases our retained earnings, which occurs within the equity and reserves line. It increases the retained earnings by 3.6 million. That's because these minor adjustments have been added up over the years. The actual change to 2024 itself in terms of costs and inventory is about $500,000. I move to my final slide, which is to look at our cash flow and our free cash flow. So starting on the waterfall chart on the left-hand side, we started 2025 with $67.6 million of cash in the bank. We generated $89.6 million of cash from our operations. During the year, we paid $31.4 million of dividends. That represents the 2024 final dividend of 9 pence and the H1 2025 interim dividend of 4.5 pence that was paid in the year. Our income tax and withholding tax of 25.9 million. That was considerably from 19.6 million in 2024. That's pretty much all related to Kazakhstan. 5 million increase in corporate income tax and around about 1 million increase in withholding tax. We've talked about CapEx and capitalized exploration. The 4.1 million you can see there in the middle of the waterfall chart, That's our break fee of $1.6 million for the New World Resources transaction, which didn't conclude. And also, we made a gain on selling the shares that we'd acquired as part of that process of $2.5 million. At the interim stage last year, when we announced our results in September, we announced a $10 million share buyback. We'd undertaken $5.2 million of that in 2025, and we've concluded that programme in 2026. Taking all that into account, we've ended the year with cash in the bank of $80.1 million. That does include an overdraft of $0.9 million, and also that restricted cash of $0.4 million. That leads to an adjusted free cash flow for us for the year of $56 million. I'll hand back to Gavin now to run through the operations.