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CAML brings back dividend

Payout suspended after tailings dam failure that saw waste from the zinc and lead mine spread over 13km
November 11, 2020
  • Miner to pay 6p per share next month
  • Sasa operation back to full production
IC TIP: Buy at 189p

Central Asia Metals (CAML) will hand shareholders 6p a share next month after getting its Sasa mine in Macedonia back to production, following a rupture in its tailings dam sending waste into the surrounding environment in September. 

The company is cleaning a 13km stretch of river affected by the spill. CAML estimates the overall cost will be "below $1.5m" (£1.1m). 

Investors were looking at a rare year without a CAML dividend before the reinstatement.

The company did not pay a final dividend for 2019 given the Covid-19 uncertainty, but since then cash flow has remained positive on stronger copper prices and continued operations at the Kounrad mine in Kazakhstan, despite the pandemic.

CAML stopped production of zinc and lead at Sasa following the tailings spill, but this has been back to normal for a month or so. 

The 6p payout is a drop from last year's half-year dividend of 6.5p. The pay date is 11 December and ex-dividend date 19 November. 

The company’s share price was up 4 per cent on the news, marking a recovery since the 25 per cent drop on the tailings announcement. 

The mining world has promised again and again to get better at managing its waste, following disasters in Brazil that wiped away whole villages. The Sasa accident was on an entirely different scale, with no one hurt and the leak quickly stopped, but still shows more work is needed. CAML's cheap Kazakhstan copper production and swift reaction to the leak means we maintain a positive rating. Buy at 189p.