Central Asia Metals

Central Asia Metals is listed on AIM (London’s secondary market) and is active primarily in Kazakhstan and Mongolia in the field of exploration and production of metals such as copper.

Large-scale operation

Central Asia Metals was the largest mining IPO in 2010, raising US$60m to develop and commission a full-scale copper cathode production facility in Kounrad, Kazakhstan. Mirabaud acted as sole lead manager and broker for the new shares issues at 96p per share – a role it continues to hold for the company. The transaction took the form of a cash placement with institutional investors.

Production on the rise

Founded in 2005, Central Asia Metals began operating a leaching pilot-plant at its Kounrad site in 2008 to test a copper extraction process combining solvent extraction and electrowinning (SX-EW) as part of the waste recovery process. The first commercial-scale SX-EW plant commenced production in mid-2012. Approximately 10,000 tonnes of copper cathodes were produced commercially in 2013. The company produced 11,136 tonnes the following year, and should reach 15,000 tonnes p.a. by 2016. In 2014 Central Asia Metals consolidated its ownership of the Kounrad project to 100%, from 60% previously, via the purchase of the outstanding 40% for US$21.21m.

Distribution of dividends

Central Asia Metals has distinguished itself from most other mid-cap resources stocks by paying regular dividends, targeting a minimum pay-out of 20% of its revenue. In 2013 it distributed US$12.6m, or 23% of attributable revenue. The company also engaged in a share buy-back programme in 2012 which, combined with the dividends, has resulted in a total of US$28.6m thus far being returned to shareholders, equivalent to half of the money raised at IPO. Since early 2011, Central Asia Metals has outperformed the copper price, distinguishing itself in a sector where equities rarely outperform their underlying commodities over the long-term.