Central Asia Metals joins AIM ahead of production start at Kazakhstan copper project

The company’s market capitalisation in admission was £82.7m and proceeds from the fundraising have been earmarked for the construction of a commercial SX-EW plant at Kounrad in Kazakhstan. The move follows a successful existing pilot scale operation at the project, which will produce 10,000 tonnes of copper per year, with first production expected in the fourth quarter of 2011. Proceeds will also be used to develop the company's copper/gold exploration assets at Alag Bayan and molybdenum project at Handgait, both in Mongolia.

Central Asia Metals is a UK incorporated company that currently has interests in a number of copper, gold and molybdenum mining exploration and development assets in Kazakhstan and Mongolia. In Kazakhstan, the company has advanced plans for the construction of a plant at the former Kounrad copper mine that will have the capacity to deliver 10,000 tonnes per annum of near term, low-cost copper production.

Kounrad was acquired in September 2007 and is the most developed asset. It was formerly an open-pit copper mine in Kazakhstan that was operated between 1936 and 2005. The site around the mine contains a number of dumps of waste material from the mine from which copper can be extracted through an in-situ leaching process followed by Solvent Extraction - Electro-Winning ('SX-EW'). A pilot scale SX-EW plant has been commissioned at the site and has been operating successfully since August 2008. To date the company has produced over 320 tonnes of cathode copper from the processing of material in the dumps for sale to third parties. Initial construction ground-works for the commercial SX-EW plant have already been started. Central Asia Metals plans to construct a commercial SX-EW plant at the old Kounrad mine in a joint venture with a Kazakh government entity, Saryarka. Capital expenditure for the commercial SX-EW plant is estimated to be US$46.9m with low direct cash operating cost estimated at US$0.38 per pound of copper produced.

Central Asia Metals also has exploration opportunities with the potential to deliver substantial additional upside. One of these is Alag Bayan, an early stage exploration project in Mongolia, where the company is focused on outlining a potentially significant copper/gold porphyry target. This asset is situated close to the Oyu Tolgoi copper mine being developed by Rio Tinto (LON:RIO) and Ivanhoe Mines. In addition Central Asia Metals plans to develop further its molybdenum exploration project, Handgait, in Mongolia.

Nick Clarke, the chief executive of Central Asia Metals, said: “We are delighted that the company's shares have commenced trading on AIM. Central Asia Metals has a well balanced asset portfolio of production, development and exploration assets, with the Kounrad Project on track to increase production at a very low operating cost. We already have an established presence in Kazakhstan and Mongolia along with a track record of successful operations in each country.We also have the added benefit of being in close proximity to China, which is by far the world's largest consumer of copper and many other industrial commodities.”

Source: Stockopedia.co.uk