12 January, 2023

North Macedonia, Central Asia Metals has provided a Q4 and full year 2022 operations update

Central Asia Metals has provided a Q4 and full year 2022 operations update for the Kounrad dump leach, solvent extraction and SX-EW copper recovery plant in Kazakhstan and the Sasa zinc-lead mine in North Macedonia.In 2022 summary there were zero lost time injuries (LTIs) at Kounrad and two LTIs at Sasa. There was record copper production at Kounrad, above guidance range at 14,254 t of copper produced. Zinc and lead production at Sasa was within guidance range with zinc in concentrate production of 21,473 t and lead in concentrate production of 27,354 t. For 2023 production guidance for Kounrad is 13,000 to 14,000 t. At Sasa, zinc in concentrate is expected to be 19,000 to 21,000 t and lead in concentrate, 27,000 to 29,000 t.

Nigel Robinson, Chief Executive Officer, commented: “I am delighted to report strong production from both of our operations during 2022. At Kounrad, we had a record year and exceeded our guidance, producing over 14,000 t of copper cathode into a broadly strong pricing environment. At Sasa, I am proud of our team’s hard work and efforts throughout the year to ensure that we met our guidance and began progressing the Cut and Fill Project. Two LTIs at Sasa were disappointing, and we have adapted training to mitigate against further similar incidents.”

He continued: “As part of the Cut and Fill Project, construction of the paste backfill plant has begun with good progress and therefore remains on schedule for H1 2023. Additionally, work on the Central Decline continues to progress towards the Svinja Reka ore body, with 1,051 m being developed during the year bringing the total advanced to 1,554 m. At Kounrad, earthworks undertaken by our own team have begun for the construction of the Solar Power Project, which is on schedule for completion during H2 2023. We enter 2023 in a debt-free position and look forward to delivering another year of strong base metal production and beginning the transition to the cut and fill mining method at Sasa. Our 2022 annual results are scheduled to be released on 29 March 2023, when our final dividend for 2022 will also be announced.”In more detail, Kounrad delivered Q4 2022 copper production of 3,569 t, bringing output for 2022 to 14,254 t, a production record for CAML.Copper sales during Q4 2022 were 3,843 t, bringing the total for 2022 to 14,342 t. Earthworks for the Solar Power Project began in Q4 2022 at a 10 ha site close to the SX-EW plant. Project construction being undertaken by Kounrad’s in-house engineering team is expected to be complete in the latter part of H2 2023.At Sasa in Q4 2022, mined and processed ore were 203,483 t and 202,175 t respectively, bringing the total for 2022 to 806,069 t of ore mined and 806,653 t of ore processed. The average head grades for the quarter were 3.11% zinc and 3.54% lead, and for the year were 3.15% and 3.63% respectively. The average 2022 metallurgical recoveries were 84.6% for zinc and 93.4% for lead. Sasa produces a zinc concentrate and a separate lead concentrate. In Q4 2022, 10,500 t of concentrate containing 50.1% zinc and 9,268 tonnes of concentrate containing 71.5% lead were produced. Total production for 2022 was 42,824 t of zinc concentrate at an average grade of 50.1% and 38,439 t of lead concentrate at an average grade of 71.2%.

Sasa typically receives from smelters approximately 84% of the value of its zinc in concentrate and approximately 95% of the value of its lead in concentrate. Accordingly, Q4 2022 payable production of zinc was 4,423 t and of lead was 6,297 t, bringing total 2022 payable production to 18,048 t of zinc and 25,987 t of lead. Payable base metal in concentrate sales from Sasa in Q4 2022 were 4,323 t of zinc and 6,219 t of lead and for 2022 were 17,862 t of zinc and 25,689 t of lead.

The Sasa Cut and Fill Project, which comprises the construction of a paste backfill plant and associated reticulation, a dry stack tailings plant and associated landform, and development of a new decline, will ensure maximum extraction of Sasa’s resources, in the safest way, with minimal water usage and improved tailings management. At Sasa, 2023 will be a year of transition from the current sub-level caving mining method to cut and fill stoping. Therefore, CAML maintains its ore mined guidance year on year of 790,000 to 810,000 t.

Given that a major component of the backfill material will be tailings generated from the Sasa processing plant, it is estimated that over 40% of Svinja Reka’s life of mine tailings will be stored underground. Approximately 30% of tailings will be stored in the current TSF4, and the remainder are expected to be filter pressed to remove much of the moisture and then stacked on a dry stack tailings landform. This is seen as a more environmentally attractive waste storage approach to a traditional wet tailings storage facility. This, in combination with other site initiatives, has enabled CAML to set a target of a 75% reduction in Sasa’s fresh water abstraction by the end of 2026.Development of the Central Decline continues to progress well, with 1,051 metres developed during 2022, and 1,554 metres in total and is on schedule to complete phase 1 to connect surface with the 910 production level by the end of H1 2023. Construction of the Paste Backfill Plant on surface and the associated underground infrastructure remains on schedule to be completed in H1 2023. Additionally, orders have been placed for key items required for the Dry Stack Tailings plant, which will be constructed during H2 2023.Given the ongoing Sasa Cut and Fill Project, CAML expects group 2023 capital expenditure of between $28 million and $30 million, of which between $11 million and $13 million is expected to be committed to sustaining capex. The project capital expenditure also includes construction of the Kounrad Solar Power Project which is expected to cost between $4 million and $5 million, IM-Mining writes.