Central Asia Metals plc (CAML) Earnings Call Transcript & Summary

Good afternoon and welcome to the Central Asia Metals plc full year results investor presentation. [Operator Instructions] The company may not be in a position to answer every question it received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. [Voting]

I would now like to hand you to CEO Gavin Ferrar. Good afternoon to you, sir.

Good afternoon. And good afternoon to all of those joining today. And welcome to the Central Asia Metals 2024 financial results. Before we start, I'd just like to send our condolences to our colleagues and everyone else in North Macedonia who's been affected by the recent tragic events in Kocani, which is a town not very far away from where we operate there. And the whole country is in mourning currently, and we sympathize with everybody out there. Thank you very much. To go and do an overview of our performance for the year: We're pretty pleased with this, this very robust performance financially, $214 million of revenue translating to just a shade under $102 million of EBITDA; and an EBITDA margin of 47%, which is a very respectable margin for a mining company, but we importantly generated $65.7 million of free cash flow during the year. That's an important number for us and our shareholders. That's the number we use to calculate the dividend from. And we're also pleased to announce today a 9p final dividend, bringing the total for the year to 18p, which represents 63% of that free cash flow that I mentioned before. The underlying operating performance that drove those financial results was good. Kounrad produced 13,439 tonnes of copper. That was right in the middle of the guidance range -- and produced that extremely profitably. At Sasa, we produced 26,617 tonnes of lead and 18,572 tonnes of zinc, just fractionally short of guidance due to sort of challenges posed by our transition in terms of mining methods and the placement of the paste underground, but we still managed to achieve a decent EBITDA margin of 35%, again, above the sort of mining industry average. So very solid financial base underpinning that business. That production performance was conducted as safely as we could. We clearly aim at 0 harm and, unfortunately, have to report 2 lost-time injuries. We were fortunate in these cases that neither of these injuries were serious, but we do take away a lot of learning from these incidents, to try and prevent these sorts of incidents happening again. So just give you an overview of our operations. The top 2 are the -- effectively the engine room of the business. Those 2 are the ones that are generating cash by producing metals: on the left-hand side, Sasa, the lead, zinc mine that we've owned since 2017. It's been on, in operation for a very long time. Actually it's been operating since the 1960s, and we have a life of mine there out to 2039. Kounrad, on the right-hand side, as I said, very profitable. We've been operating that since 2012. We actually built and put that into production in 2012. That is an in situ dump leach mine and producing copper cathode. And we have a license out to 2034, and we'll talk about sort of potential beyond that as well later on. The other 2 boxes represent the longer-term opportunities within our business. The left, Aberdeen Minerals, that is an investment we made into a private company which is exploring for copper and nickel in Scotland. We put $3.8 million in there, and we own 28.4%. That business in CAML X is a greenfield exploration venture that we established last year alongside some very seasoned explorers in Kazakhstan. We own 80% of that business. And we're going into our first full year of exploration, and I'll tell you more about that later too. If we go to the Kounrad operation. We're now in our 13th year of operation at Kounrad. It remains a unique asset. We've never seen anything like this anywhere else where we are actually treating waste material. These are dumps previously mined or at least have been placed on service by sort of the previous operator, Kazakhmys, and before that, during Soviet times. We simply irrigate these dumps with what we call a raffinate solution. That solution allows us to leach the copper into the solution. We collect that solution and put it into an SX-EW plant which produces high-quality LME-grade copper cathode ready for sale into the market. [indiscernible]. So if we look at the diagram then. We've got the eastern dumps and western dumps, to give you a view of production. The eastern dumps produced around 27% of our copper during 2024, the balance coming from what we call the western dumps, the bottom left-hand side of that image. And we believe that, the eastern dumps, whilst they were originally forecast to sort of halt production, we believe that production will continue well beyond 2025 for those dumps now. Copper production, as I said before, was a shade under 13,500 tonnes. And we're guiding 2025 between 13,000 and 14,000 tonnes of copper again. That 85,000 tonnes of minimum recoverable copper. That is, I mean, based on our sort of theoretical models, but the diagram in the right -- bottom right-hand side shows us the actual performance, it's the solid line, against the predicted performance. And what that's showing you is that these -- the western dumps in this case are actually outperforming. So we're actually recovering slightly more copper than we originally forecast, which is good news for the future. Because we've experienced exactly the same on the east, as I mentioned before. And that allows us to look at options for Kounrad into the future that potentially and possibly stretch beyond 2024. Up until that time, up until now at least, the copper production has remained fairly consistent. We do have many of these dumps maturing, so -- and if you divide that 85,000 that I mentioned before by the 9 years left that we've got there, it doesn't come to the guidance range we're getting now. So we are going to see in future production tailing off at Kounrad, but as I said, there is a possibility to be tailing off slower and will last for longer. Now Sasa. We produce lead and zinc. This is a more traditional operation in North Macedonia. The key thing here is we've actually transitioned our mining method from what was called sublevel cave, [ which is semi-bulk ] mining methods, to much more selective mining methods called cut and fill and long-holed stoping. Those 2 methods are allied with what we called paste backfill. And we've had our paste backfill plant in operation for a full year now. We've put about 240,000 tonnes of paste underground using that plant -- putting [indiscernible] 240,000 tonnes of tailings as part of a cemented paste product that we put back underground. And these methods allow us to extend that mine life out to 2039. Majority of the concentrate that we produce there is shipped to EU smelters. So very simple from a working capital and logistics perspective. And lastly, we've also had some good replacements of depleted reserves during 2024, so there's again potential here to extend that life beyond the 2039 number. Zinc and lead production. We can see that sort of solid line in the histogram. As I said earlier, we were fractionally below guidance. You can see that solid line on top of that histogram tailing off from 2023 to 2024. Our aim is to get that back up to the 800,000-ish tonne level. And you can see in the table on the right-hand side we're about 43,000 tonnes short in terms of tonnage when we compare 2024 to 2023. That was mainly as a result, as I said, of that transition from sublevel cave to cut and fill and long-hole stoping. It's fairly disruptive when we're trying to introduce 2 new mining methods into an operating mine, also introducing all of that paste back underground as well, so in the context of those projects, the guys actually did fairly well to get to that 762,000 tonnes, but we are really focused this year on getting back up to that 800,000 tonnes of throughput. I've mentioned these transition projects a couple of times. Just to cover them off, well, hopefully, finally, because we're pretty much done with them: The paste backfill plant, we actually completed construction at the end of 2023; and have spent the first quarter commissioning it and getting that recipe of that paste backfill correct and allowing us to sort of modify the recipe, depending on where that fill is going. As I said before, we've put 240,000 tonnes. It represents around about 1/3 of the tailings that we produced in 2024, and that's going to be the target. We're going to be looking to put about 30% to 40% of our tailings back underground using that paste backfill plant for the rest of the life of the mine. That paste backfill goes into 2 areas. 1 is what we call voids. These are all mined-out areas, particularly in the sublevel caves, the large areas underground, that we can place this material. And then also into the new stopes that we're using -- we're creating using cut and fill and long-hole stoping. That makes the mine much more stable at depth and also allows us to more selectively mine the ore body. As the ore body goes to depth, it is getting slightly narrower, is bending and swirling and moving around, so we do need to mine it a little bit more precisely. And that ensures that we get better recoveries out of that ore body. Dry stack tailing, in the middle. We're really in the last throes of that part of the project now, with wet commissioning taking place as we speak. And we're looking to put filter cake, which is a really dried-out tailings product, onto a dry stack tailings landfill by the end of this month. So good news there. And the central decline, which is the last key limit to this transition project, that, we completed at the end of 2024, right down to what we call the 750-meter level. That's the lowest level in the mine that this is going down to right now. The effect is already being felt on the mine, where we've seen improvement in cycle times. We're getting ore out of the mine a lot quicker than we used to via the trucks. And we're also seeing a greater proportion of ore being hauled on these trucks. That has traditionally been done -- we used to have a split between the central -- or the declines and the shaft. And ultimately we'll be [ phasing out any ] ore hoisting on that shaft in the future, which will again increase efficiencies on the mine. One of the things we've done here is we've designed this, the central decline, to accommodate much larger trucks than we currently have in our fleet. We're running a fleet of 20-tonne trucks. We are testing a 30-tonne truck right now. We might even test a 40-tonne truck, but it does give us further opportunities to improve haulage efficiencies out of that central decline, so good news is that, from a mining perspective, it's all about stabilizing that asset now using these 3 new elements to the mine to their best capacity. So going on to the sustainability. Look. It's always been a key area for CAML. We believe that operating sustainably and in an environmentally responsible manner is -- sort of is good business sense, anyway. It basically ensures that your relationships with your local communities and the governments that you're operating within remained stable. And that is a key thing in our industry. What we do is we measure ourselves using KPIs. And we've established those KPIs against the 5 key pillars of our sustainability strategy. Those are down in the left-hand column. In the right-hand box, in the green, those are the key areas that we focused on for this year. And I'd only draw your attention really to the reduction in greenhouse gas emissions, where we've got a target of 50% by 2030 off a 2020 base. We're already 44% on that. We're also about to publish our fifth sustainability report. I think it's a great achievement for a small mining company like ours. A few initiatives we've undertaken, including a biodiversity strategy, tightening up on health and safety. That's always a key to an industry like ours. And undertaking a human rights assessment covers off a lot of the areas that we wanted to complete in 2024. Getting more sort of zeroing in on the 2 assets here. So at Kounrad itself, we are proud to say we employ 100% locals. We pay our taxes. We've got a great relationship through the foundation that we've established there; plus also ad hoc sort of donations we make in terms of some critical kind of natural disasters, in one case, and a fire in a local village. And in total, we've spent around $3.2 million on the local community at Kounrad. The key thing here to point out as well is our solar power plant has now been operating for about -- for 1 year, during 2024. It's full year of operation at least. That generated 14% of our power, but importantly, it's also generating power at -- much cheaper than the grid electricity. Grid electricity in Kazakhstan is very low, in comparison to a lot of its competing countries, but we're effectively generating, including depreciation, power around 2/3 of the cost of the electricity from the grid. Moving on to Sasa. We've, again, spent around $2.3 million, since we've owned that, on the local community initiatives. Again local employment is really high at 98%. And key to our sustainability activities there is that we've achieved conformance with the global industry standard on tailings management. Now if you can -- that doesn't trip off the tongue, we can just call it GISTM. This is a voluntary initiative that we've undertaken. It's taken us 3 years to get there. And in July last year, we had an audit, which confirmed that we conformed with those standards. What that means for us is that we now have best operational practices in place for our tailings dams, which is really important. Plus, also it complies with a bunch of ESG targets as well, which is -- gives it a nice holistic kind of view of life on the tailings there. So let's move on to the financial results. And for that, I'm going to hand over to Louise, our CFO.

Thanks, Gavin, yes. If we start by looking at the market conditions that set the scene for the results that we've announced this morning: commodity markets, firstly. Commodity markets were generally pretty supportive for us in 2024. And we saw a 9% increase in the copper price versus 2023, an 8% increase in the zinc price and just a 3% decrease in the lead price year-on-year. In terms of inflation, this was a little bit more helpful to us than the previous year. We saw inflation still high in Kazakhstan at 8.6%, coming down significantly to 3.5% in North Macedonia, versus 2023 where inflation in Kazakhstan was almost 10%. And actually, North Macedonia, it was over 9% as well. In terms of foreign exchange, a couple of key movements there. Firstly, we've seen a weakening of the U.S. dollar against sterling. And what that does for us is it means that there is effectively an increase in our group admin costs because we report those in dollars. It also increased the costs of our dividend, which we pay in pounds. And then we've seen a weakening of the local currencies where we operate, the Kazakh tenge and the North Macedonian denar, versus the dollar. That's generally positive for our operating costs there. And also we've seen, particularly with the weakening of the tenge, that's resulted in a significant foreign exchange gain on our income statement. And that's been a swing of 9 million year-on-year versus 2023. Just to set the scene for the income statement. We have been -- over the last few months, we've been communicating with the Financial Reporting Council, the FRC. And they have made 2 key recommendations to the way that we report our accounts. And we've incorporated those changes into our 2024 accounts and also restated them for 2023 to make sure that we're comparing like-for-like. One of those was on revenue, and the other was on share-based payments. So on the revenue one, what we used to do was net up from our revenue the costs of us buying silver on the open market to fulfill our Sasa silver streaming obligation that we have with Osisko, but the FRC suggested that arguably a more appropriate accounting treatment for that is to move that into cost of sales. What that does is effectively it increases our revenue and it increases our cost of sales by the same amount, so there's no change to profitability. In terms of the share-based payments, in the recent past, we have typically been cash settling more of our employee options than equity settling them. This is because we've had excess cash. We haven't had any debt. And we haven't wanted to introduce unnecessary dilution, but the FRC believes that we have now effectively set a past practice of cash settling and so therefore we should account for those as such. What that means is the previously equity-settled options move from the equity part of the balance sheet into a liability part of the balance sheet. The fair value gain or loss on those annually goes through the P&L, in a new line. And the old equity-settled share-based payment charges that were in admin have now removed -- been removed from admin. We've put a slide in the appendix explaining what we did report in 2023 versus the restated 2023 number so you can compare the two, for any eager accountants out there. So now in terms of the actual 2024 results. And we are now comparing apples with apples. We have reported a 5% increase in revenue year-on-year, up to $214 million. That was driven by 8.5 million increase in Kounrad's revenue and a $2.6 million increase in Sasa's revenue. Our cost of sales increased by 8%. That was just under $8 million increase, and there's 2 main components actually that accounted for over half of that. One is just over $2 million to operate this new paste backfill plant that Gavin has mentioned. We operated that for a full year at Sasa. And also we have incurred increased silver purchases of almost $2 million due to a higher silver price in 2024 than it was in 2023, but bear in mind we also have got that increased revenue now in the revenue line as well to offset that. Our group admin costs rose by about $2 million, but actually that's pretty much all attributed to our business development activities and our growth aspirations. Just under $1 million was additional BD costs that we have spent last year looking for a material transaction. And also we had an additional $1 million of costs, first full year of CAML Exploration's expenses coming through our income statement as well. So all that led us to report a consistent EBITDA year-on-year of $101.8 million at a margin of 47%. We've also reported EPS from continued operations of $0.289. That's a 42% increase year-on-year, and that significant increase is driven largely by foreign exchange gain and also lower tax. We now look at the cost base for the 2 operations. At Kounrad, we have reported a C1 cash cost of $0.80 per pound. That's an increase of $0.06 per pound. 33% of that C1 increase is actually related to the fact that we had lower copper production year-on-year so we're splitting those costs over a smaller number of tonnes. 2 of the key areas where we have seen cost increases. 1 of those is reagents. We've had increased consumption in 2 key reagents called LIX and Escaid, which are important for the solvent extraction part of our operations. And that's accounted for $0.02 per pound. We also had an increase in payroll and consultancy costs of about $0.03 per pound. That's largely related to a 10% pay rise which we gave to the employees last year to compensate them for the high in-country inflation. All that means is that we have had a C1 cost base increase of just over $1 million or 5%, which we think is impressive in U.S. dollar terms given that we've had inflation in country of around about 9%. And that leads us to a very impressive EBITDA margin for Kounrad of 73%. Turning now to Sasa. Our run-of-mine cost on a per-tonne basis at Sasa was $64.6 per tonne, and that's an $8.4 per tonne increase year-on-year. Importantly, 58% of that increase was related to 5% lower run-of-mine tonnes mined at the mine in that year, so the actual increases in dollar terms were actually pretty minimal. The main increase at Sasa was this new paste backfill plant, $2.1 million or $2.7 per tonne. Our C1 cost base benefited significantly from lower realization costs. And that's reduced treatment charges from the smelters of $2.9 million and also lower freight costs as well. So that meant that, all in all, our costs at Sasa only increased by $0.5 million year-on-year. And that allowed us to report an EBITDA margin for Sasa of 35%. Moving on to CapEx. We spent just under $21 million on CapEx during 2024, which was just below the lower end of our guidance, with a small amount carried into 2025. Key part of that CapEx is capital projects of $6.4 million. That's really as we're coming to conclude those capital projects that Gavin run through. And that's significantly lower than the $14 million which we spent in 2023. So we've just got some costs for the dry stack tailings and in particular increasing the size of the landform that will come through this year, in 2025. Sustaining CapEx at Kounrad was as expected at $2.5 million. We move on to the balance sheet. We have a strong and flexible balance sheet. We've reported group cash of $67.6 million as of the 31st of December last year. And we have no material debt. The only debt we have is just under $300,000 of an overdraft facility in North Macedonia, but importantly, we've got about $10 million worth of facilities available [ there ] with 2 Macedonian banks. Just a couple of other aspects to point out, investment in associates and also a component of other assets. That represents our investment into Aberdeen Minerals, where we've spent $3.8 million buying a 28.4% shareholding. In other assets, we have $0.4 million worth of warrants, which if we exercise those will increase our shareholding to 37.6%. We also show on the balance sheet there this new line. It's called SBP liability. This is these new share-based payments liabilities that I mentioned on the income statement slide, and they've been reallocated out of the equity and reserves line on this slide. And then finally for me, moving on to our cash flow slide. So if you look at the waterfall chart: We have produced from our operations $94 million of cash from operations. We paid just under $41 million out in dividends. That's the 2023 final dividend and the 2024 interim dividend. Our income tax and withholding tax paid at just under $20 million was a significant improvement on 2023 where that was $27 million. CapEx, we've just discussed, of $20.8 million. We can see the investments in Aberdeen there, $3.9 million, which is the investment plus a little bit on costs. And that really brings us to the cash position at the end of last year of $67.6 million. We've added the little table in at the top which means that you can use the waterfall chart to get to the free cash flow number of $65.7 million for us last year, which is an important number because that's [ how ] we use to calculate the dividend. On that note, I'll hand back to Gavin to run through the capital allocation and outlook for us.

Thank you, Louise. Well, I'll start with our growth strategy because I know there's a lot of people wondering what we're going to be doing on that front. And we've been very transparent about it for the last few years, that we are on the lookout for new assets. So just quickly run through what sort of types of opportunities that we're interested in. We've got the earlier-stage exploration opportunities in our existing jurisdictions. We clearly have an eye out for those. And we can talk about CAML X in a minute. We're looking at increasing our scale through the acquisition of large, cash-flowing in-production assets. And then the third is what -- are there any assets out there that are what we call an overlooked. Are they development assets that are -- there's no discovery risk. There's a resource, but possibly the company doesn't have enough money to develop the asset. Or they don't have the wherewithal to finance the construction of it or something like that. So we do focus on those 3 things, the timing of which is a bit difficult to control, but I think it's fair to say that our more recent focus has been on the ad hoc overlooked things and potentially some of these larger acquisitions given that we've got 2 things at the earlier stage in the portfolio already. Where are we looking? We're trying to keep things as simple as possible, so we talk about this European time zone. That does include a few select countries in Africa that we would look at and, of course, Kazakhstan. We know it well. We're operating well there and we have done successfully for a number of years. And it is got -- is a highly prospective country, so that is a clear area of focus for us as well. We're going to stick with our commodities that we're in now. I think we know our way around what we're doing. And they do align with our purpose of producing base metals essential for modern living, so that's where we want to stay. We have considerable borrowing capacity off of that balance sheet Louise talked you through, so things are quite affordable from that perspective. I mean we can pay cash for things, but the main thing is it's got to be accretive to our shareholders, all right? So we're not going to look at anything that is not going to provide value to shareholders from day 1, onwards. And from a sustainability perspective, we're clearly not going to buy anything that's going to dilute our sustainability ratings or our own standards that we set for ourselves in terms of environmental protections and the community around us. I mean key thing is here we're looking really to get a third part of that portfolio. That first slide I showed you with the operating assets and then the longer-term opportunities, getting something in between there is something that we'd love to do as well, where we've got something that's either in cash flow or much more near-term cash flows than we presented. And what did we do last year? We reviewed 37 opportunities. It sounds a lot, but we do have a fairly formal process to do that. We signed 13 nondisclosure agreements so that we can look more closely at a lot of these; and attended 6 site visits, some of which actually led to us making offers on things, which unfortunately for us all, no one is more disappointed than the team here that we couldn't consummate any of these deals, but we -- it's not through lack of trying. So let's just talk about a couple of things we did get right. Aberdeen Minerals is exploring the Arthrath project in Aberdeenshire. We believe it's got very good potential. And our geologists have noted analogs to existing mines that they've worked on in the past. So we put $3.8 million in there for a 28.4% shareholding. That investment has funded a drilling campaign. 7 deep holes, as you can see, down to 520 meters were drilled between July and October. We've now got the assay results, and they basically validate the exploration model. And what we've seen [ in the core ] is some very encouraging mineralization, visible mineralization, of massive and what we call net-textured sulfides. The remainder of the -- well, we're going to use some of that money again to commence the next round of drilling which kicks off in May this year. And we have the option, I guess, off the back of those results really, to invest more in this business going forward if those results are positive. And going back to Kazakhstan, as I mentioned earlier. We've established this company called CAML X. We own 80% of it. The other 20% is owned by some very experienced geologists that we've effectively partnered up with. These guys have been working in that region for a long time. They understand the Kazakh geology. They've worked for big Kazakh companies and have helped us to identify what is now 4 licenses that we have. And they will be running their first full field program through 2024 -- 2025, I beg your pardon. That's going to involve surface mapping, soil geochemical sampling, some geophysical surveys to look a little bit beneath the surface, which will, hopefully, then guide us, guide the exploration for the next couple of years, with the ultimate aim of really getting some drill targets going in Kazakhstan. So like I said earlier, early stage, not spending a lot of money there. We spent $1.3 million last year. We're probably going to spend in the order of sort of $3.5 million to $5 million on it over the next few years progressing these projects, but we're still looking for more prospective ground in Kazakhstan. You will have seen that Kazakhstan is attracting the attention of a lot of the major mining companies now. So still a lot of opportunity out there in Kazakhstan itself. We talk about returns to shareholders. That is probably why most of you are on the call today and really why we're in business. We've got a -- since the IPO, I think CAML has stood out as a junior mining company that's has paid dividends, but it's an extraordinary stat here: that we've paid back $380 million to shareholders via dividends since that IPO. We've only raised $214 million from the market, at IPO and then when we bought Sasa. So that gives you some context in terms of the capital returns that our shareholders have enjoyed. Now we've got that dividend policy of 30% to 50% of free cash flow Louise mentioned, and we've paid outside of it for the last few cycles. 63% is what that 18p in bold letters there represent. We believe that's the correct thing to do for the time being. We're going to keep that dividend consistent. And that's in the absence of a material transaction. There's no reason for us to change capital allocation sort of methods right now because getting that third asset in would maybe change that up a little bit. We might have some debt to repay. We might have some engineering work to finance. We might have some construction to fund, so it's at that point that we'll start [ redoing ], but the only time we will do that is when we believe that growth is available to the shareholders via the capital appreciation of the shares through those activities that we're looking to undertake. So it remains a core sort of fundamental part of our DNA. In terms of, I guess, my last slide now is really summary and outlook. So where do we go from here? I mean we've got the production guidance which is unchanged from the previous year. As I said earlier, the challenge now is to get Sasa back up to what we were used to before we put these -- we disrupted everybody's sort of day jobs by putting them under pressure with 3 projects and a change in mining method, but a lot of training, a lot of experience has been built up there now, so that 800,000 tonnes looks achievable. We've completed the -- all of the sort of works around this transition to the paste fill mining method, so -- and we're looking to put dry stack tailings [ on the ground ] at the end of Q1. We'll continue to invest in our business. In terms of capital allocation, we've got CapEx at Sasa and Kounrad which Louise spoke you through but whilst continuing a disciplined search for new opportunities. That dividend of 9p is going to be payable on the 20th of May, assuming shareholders approve it at the AGM, but then in future, what we've got is a great platform here. We've got that fixable balance sheet. We're debt free at the moment. We've got $67.5 million in the bank and strong cash flows, so what that means is that we can self-finance any internal projects that we may have without tapping the market. We also have the ability to borrow for longer-term capital requirements as well, so therefore, no -- or little to no dilution for our shareholders. And really looking forward to the rest of 2025. I think it's going to be an exciting year from an operational perspective, but we've got a really active BD program going on as well and are hoping to come back to you with good news at some point later in the year. At this point, I'm going to open up to questions. And I think Richard has got a few questions. So he can read them out and we can go through those.

Right. Okay, our first question is from [ Andrew B ]. And he asks, if a project in Kazakhstan could be found, would we be able to develop it from free cash flow?

It's a good question, Andrew. I think it all depends on what the size of the project is and what the entry price is. So if we could pick something up that we could pay for with our existing cash, I guess Louise and her team will then map out our cash flows over a fine grain basis over the next few -- over the months that we'd need to develop that asset and ensure that we've got the liquidity to do that from our own balance sheet. Now remember Louise also mentioned we've got that $10.2 million of overdraft facility available to us. And whilst that's in North Macedonia, we can apply that across the group if we need to.

Right. Next question is from [ Mike W ]. And he asks, "Are Aberdeen Minerals and CAML Exploration distractions from the search for a substantial earnings-enhancing acquisition?"

Mike, I think the simple answer to that is no, and I'll tell you why. It's because one of the key reasons or the key things that attracted us to Aberdeen Minerals was the quality of their team. They are, again, seasoned and veteran explorers. They've got a good sort of advisory group around them, so they don't really need a lot of input from us. We do, however, make our geologist, Graham, available to them, who goes up once a month to Aberdeen. It takes him a couple of days, so not a lot of his time on that. Louise sits on the Board. And I think they have quarterly board meetings...

Yes.

Yes. So it's not hugely time consuming, from our perspective. And I think what we like about that is the -- we understand -- Graham understands the geology because he's seen it in the previous life. He's able to provide input when required, but Fraser and his team, we completely trust them to do the work to a high quality. So happy with that.

All right. And our next question is from [ Richard L ]. And he, [ Richard ], asks, given the growing importance of copper in electrification and renewable energy, does CAML have any strategic plans to increase copper-focused exploration or acquisitions?

Again, [ Richard ], there's quite an easy answer to that, which is yes. We are -- we've always said that copper is our favorite metal. It's -- I think it's everybody's favorite metal, so it does make competition a lot higher. And in an ideal world, we'd be focusing almost entirely on copper, but I think we've had some success in zinc. We do believe fundamentally in all of the metals that we produce right now. And the key thing here is to make profits for our shareholders and generate returns for you, so that's really the way we look at these things. We're in this business to make money and make profits so that we can distribute those out to everyone and use them to grow the business even further, but yes, you're right. Copper is -- it's probably everybody's favorite, but it does make the competition a little tougher.

All right, next question, from [ Colin C ]: What are the key criteria for M&A? And how soon do you expect to close a deal?

Well, I'll take the second part of your question, first. That is very difficult to predict. I think we do constantly search for opportunities through our own networks. The three of us here are -- we've all been in the industry for a long time. We've got some very experienced Board members who through their network show us opportunities as well. Plus, we get some inbound coming in via the sort of investment -- via the investment banking community, but we do have an active WIP list. Whether or not we can conclude one of those things is down to the results of due diligence, meeting of the minds on negotiation and so on and so forth, so a lot of variables at stake here. The [indiscernible] question...

It was key criteria...

On key criteria. Sorry. Yes. I think the -- I was sort of running through the strategy that we look at there, but I think one of the things we do look at, which is maybe not explicit in there, is it's got to be accretive for shareholders. And the way we try and start the analysis is by saying, "Okay, well, we produce around $100 million of EBITDA as a business, so what is a meaningful and value-accretive change to that?" And that's really going to be around $50 million of EBITDA. And that's the kind of starting point. And then you say, "Well, can you produce that profitably, safely?" all those sort of things. And then we sort of -- we drive down from there. And ultimately we run the analysis that makes sure that, on the income segment, we're doing an accretive transaction on a per share basis for our shareholders.

All right, next question is from [ Colin Harrison ]. "Can you comment on the life of mine for Kounrad? And is there any possibility of conventional mining at the existing Kounrad site, or is it exhaustive?"

Well, look. Taking again the second part of your question first. We don't actually own that mine. Our license is -- it's kind of carved out from our license area. And it is owned and occasionally operated by the existing owners. When I say occasionally: They own a large smelting complex about 20 kilometers away from the site. And they will scrape away at what little bits of ore are left in that mine, to blend with ore that's coming in from all over the place, but it's not a fully functioning and operational mine. So I think, to answer your question, it probably is exhaustive. And certainly, if it was run by a Western company, it probably wouldn't be operated at all. In terms of the life of mine. As I said, we're at the very early stages now that we've got this body of evidence that the leach curves are outperforming that we are starting to look at ways in which we could potentially extend that life of mine, but it's at a very conceptual stage at the moment. We've done the study work on that, so it's kind of watch the space [indiscernible].

Okay, I've got one that came in by e-mail there. And it's from [ Ted Coleman ], and he asks: "At the moment, there is an unusually large difference between the London and New York prices for copper, driven by Americans rushing to import copper before possible tariffs. Today, London's -- or today's London LME price is roughly 4.50 a pound, whereas the New York price, the one we see on our screens, is roughly $5.12." I think he wrote this last night actually, yes. "Is the price CAML is receiving nearer the London price or the New York price?"

Well, thanks for the question, [ Ted ]. I think the -- we do receive LME prices. So it would be the London price for our copper. I think this dislocation between the prices is -- it's obviously driven by protectionism and trade wars and tariffs. They are going to be part of, I think -- I guess it's really just the U.S. and everyone else at the moment, in a way. I mean I'm not really qualified to comment on that properly, but it appears that the tariff regime that's being proposed has driven a kind of dislocation in the prices between the U.S. -- for copper. And you will probably see that for many other goods as well [ and materials ].

Okay. Another one, on commodity prices. [ Ben G ] asks, "Given the volatility in commodity prices, how do you assess potential risks to revenue and cash flow in 2025?"

Let's split...

Yes. [ Do you want to deal with that? Yes ].

Yes, sure. So when we get our accounts for 2024 audited, we go through a very detailed going-concern type process with the auditors. And we look at various scenarios and how different commodity prices could affect our revenue and our cash flow. And we're extremely fortunate that both of our operations are actually very low cost. So there's no conceivable commodity price that we see at the moment that would have us lying awake at night worrying about losing money at either of our operations. This is also supported by the fact that we haven't got debt either at the moment. If the question is along the lines of do we hedge. We do have a hedging policy. We don't typically hedge unless we have a specific reason to. So a specific reason could be, if we've done an acquisition and we have debt, then we may hedge to be able to ensure our debt repayments. In the past, we have -- when we first started the capital project investment at Sasa, we did hedge at that point to sort of defend our budget, but typically we don't tend to hedge. As I say, we have low-cost operations. We are debt free, and so we can reasonably take some commodity price risk.

Right. Next question, from [ Mark A ]. "Have you lobbied the U.K. government regarding the halving of IHT relief on AIM? And if so, have you received any feedback?"

Our brokers have. And we have...

Our brokers have. I'm going to say -- and we've contributed to that exercise, yes.

Yes.

So we haven't directly, [ Mark ], but through our brokers. They have been quite actively doing that and, I guess, seeking feedback from ourselves and our peers to feed into that [ program ].

All right, next question. Does the low share price, I assume our share price, reflect political risk, the political risk, of Putin invading Kazakhstan?

Look. Again, [ Mike ], I don't -- the share price is probably a function of a lot of things, but I don't think the risk of Putin invading Kazakhstan is one of those. I think the government of Kazakhstan has walked a diplomatic tightrope in terms of the Ukraine situation whilst, on the one hand, providing some aid to Ukraine and -- but at the same time recognizing that Russia is a key trading partner for them. I think, if we go back to -- well, I think, in 2023. When President Xi from China was in town, he effectively kind of [ underwrote ] the sort of sovereignty and border security of Kazakhstan, anyway. So I don't think that that's a risk and certainly not one that's on our register. We do spend quite a lot of time monitoring geopolitical events in all of the jurisdictions we work in, and that's not been raised in any reports I've seen.

Next question, from [ Steve Y ]. There are plenty of gold projects in Kazakhstan. Is it worth looking at metal projects other than base metals?

[indiscernible]

Yes. Look. I think there are some gold projects. I think Kazakhstan is -- and those that are there are large, all right? And I think there have been a couple for sale since we've been up and running in Kazakhstan but way beyond our sort of range of affordability. I think the other thing is that gold sort of changes the investment thesis for CAML. Gold is a little bit of a different commodity to all the base metals, with minimal sort of industrial applications, in comparison, so I think we're going to stick with the base metals. And we understand those markets. And we understand how to mine and process them and so on.

All right, next question, from [ Kiriakos W ]. What does the Board think of the performance of the share price? And is there any intention to initiate a buyback program and/or a special dividend, as the cash balances are growing?

[ Kiriakos ], I think, at the moment, the answer is -- look. I mean everyone is disappointed with the performance of the share price over the last sort of 6 to 12 months or so. There have been quite a lot of factors affecting that, not least of which have been more recently these trade wars affecting the copper price. Now the copper price has responded positively to it, so I don't think that the commodity prices really know what to do here either, but the -- in terms of managing our sort of capital allocation program, I think, if we look at the forecasts and we look at what Louise was saying about CapEx coming down over the next few years -- we're generating cash. We will -- in the absence of doing a transaction, we may start building a larger cash pile. And it's at that point that we'll start considering these things so that we can allocate capital back to our shareholders in one of those ways, but I think, for the time being, this dividend paying outside of the policy and rewarding our shareholders with good returns that way is the way to go whilst trying to execute on this growth prospect.

And that is effectively a special dividend as well.

It is...

Even if it's not marketed as such, we are paying above the policy. So that's our chosen capital allocation approach in terms of the growing cash balance.

All right, next question, from [ Mark A ]. Is there any prospect of disposing off Copper Bay? And what is its book value?

So [ Mark ], in -- I think it was the 2021 accounts, I believe. We actually wrote that down to 0, so the carrying value on the books is nothing, but it is an asset that's held for sale. And we do have an adviser appointed to assist us with that sale program. And we're trying as hard as we can to...

Well, we've announced in the results that...

Well, [ we have an agreement with them ].

Yes. [ We've reached it ].

I mean it should be -- hopefully, we've got some good news on that coming out soon...

Yes. If you look in the results statement, there is a note to the effect that we have agreed the disposal.

[ Yes ].

All right, any more questions? I think we're probably at the end now.

Perfect.

Well, that's all.

Gavin, Louise, Richard, thank you very much for answering those questions from investors. Of course, the company can review all the questions submitted today. And we will publish those responses out on the Investor Meet Company platform, but just before redirecting investors to provide you their feedback, which I know is particularly important to the company, Gavin, could I just ask you for a few closing comments?

Yes. Thanks very much. Well, firstly, thank you, everyone, for attending. We do appreciate your continued support. We do think all of our investors are important, so we're glad we can interact with you in this way. I think that we've got a fantastic platform as a business, cash flowing, stable production. And it's going to be an exciting couple of years, I think, [ for us ].

That's great. And thank you once again for updating investors today. Can I please ask investors not to close this session? As you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete but, I'm sure, will be greatly valued by the company. On behalf of the management team of Central Asia Metals plc, we'd like to thank you for attending today's presentation. And good afternoon to you all.