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Central Asia Metals ramps up production

RESULTS: Central Asia Metals is starting to roll out the copper cathodes and rake in the cash
September 28, 2012

Half-year figures from Central Asia Metals (CAML) are just a teaser as to how profitable its Kounrad copper project in Kazakhstan could be. They include only two months of production since Kounrad's processing plant was commissioned in April - but cash is already flowing and is quickly picking up pace.

IC TIP: Buy at 99.5p

The operation is working at or above designed production capacity, churning out 1,728 tonnes of copper cathodes in its first two months and a total of 4,318 tonnes to date - meaning Central Asia is on track to beat its 5,000-tonne target for the year. Management has conservatively placed a new 5,750-tonne target for 2012, building in plenty of slack to their revised guidance to allow for lower winter production rates.

Production costs were kept low at 48¢ (29.6p) a pound and, including cost of sales and duties, total costs came in at 85¢ a pound. General and administrative costs were higher than expected at $3.9m, but this mainly reflected a one-off staff completion bonus.

Broker Canaccord Genuity forecasts full-year adjusted EPS of 11¢ (2011: 1¢ loss per share).

CENTRAL ASIA METALS (CAML)

ORD PRICE:99.5pMARKET VALUE:£85.1m
TOUCH:98-100p12-MONTH HIGH:107pLOW: 54p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:77¢NET CASH:$10.3m

Half-year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (p)
20111.13-1.75-2.00nil
20126.780.531.00nil
% change+500---

£1=$1.62