ANNUAL REPORT AND ACCOUNTS 2022
BUILDING THE
BUSINESS FOR
THE FUTURE
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CENTRAL ASIA METALS IS
A RESOURCES COMPANY
FOCUSED ON LOW-COST
MINERAL ASSETS IN NORTH
MACEDONIA AND KAZAKHSTAN
Our purpose is to produce base metals, essential for
modern living, profitably in a safe and sustainable
environment for all our stakeholders.
DRAGANA JOVANOVA
Personnel Development
Specialist
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 01
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CONTENTS
12
Chief Executive Officer’s
Statement
36Operational
Review
OVERVIEW
Highlights
2022 a Year in Review
Our Purpose
Chairman’s Statement
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder engagement / Section 172
Operational Review
Financial Review
Risk Management
Principal Risks and Uncertainties
02
03
04
05
08
11
12
16
19
21
26
33
36
45
53
56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
GOVERNANCE
Introduction to Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
FINANCIAL STATEMENTS
Independent Auditors’ Report
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Glossary of Technical Terms
Directors, Secretary and Advisors
106
113
114
115
116
117
118
119
153
154
45Financial Review
26Sustainability Review
19Our Strategic Framework
08Business ModelHOMESEARCHPRINTPAGES 02
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
HIGHLIGHTS
DEMONSTRATING
OUR RESILIENCE
Overview
Strategic Report
Governance
Financial Statements
FINANCIAL HIGHLIGHTS
SAFETY AND OPERATIONAL HIGHLIGHTS
GROSS REVENUE
LOST-TIME INJURIES (‘LTIS’)
$232.2m
2021: $235.2m
2
2021: 4
LOST-TIME INJURY
FREQUENCY RATE (‘LTIFR’)
0.83
2021: 1.69
EBITDA
$131.6m
2021: $141.5m
EBITDA MARGIN
57%
2021: 60%
DIVIDEND
20p
2021: 20p
* See pages 51–52 for definition of non-IFRS
alternative financial performance measures.
ZINC IN CONCENTRATE
PRODUCTION
LEAD IN CONCENTRATE
PRODUCTION
21,473t
2021: 22,167 tonnes
27,354t
2021: 27,202 tonnes
COPPER CATHODE
PRODUCTION
14,254t
2021: 14,041 tonnes
COPPER SALES
14,342t
2021: 14,051 tonnes
OVERVIEW
Highlights
2022 a Year in Review
Our Purpose
Chairman’s Statement
02
03
04
05
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
SASA, NORTH MACEDONIAKOUNRAD, KAZAKHSTANHOMESEARCHPRINTPAGES
03
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
2022
A YEAR
IN REVIEW
APRIL
10-YEAR ANNIVERSARY
OF KOUNRAD
We celebrated the 10-year
anniversary of our Kounrad
copper production facility.
0CT0BER
AUGUST
CORPORATE DEBT
FACILITY PAID OFF
Overview
Strategic Report
Governance
Financial Statements
OCTOBER
SOLAR POWER PLANT
AT KOUNRAD
The earthworks began for the solar plant
at Kounrad which will produce 16-18% of
the electricity required at the facility.
NOVEMBER
5-YEAR ANNIVERSARY OF
THE OWNERSHIP OF SASA
Employees in both London and North
Macedonia celebrated the 5-year
anniversary of the ownership of Sasa.
APRIL
MAY
LOUISE WRATHALL
JOINS THE BOARD
Louise joined the Board
as Executive Director of
Corporate Development.
JULY
CENTRAL DECLINE
Our Central Decline reached
1 km in length towards the
Svinja Reka ore body.
JULY
SEPTEMBER
ANNOUNCED
RECORD INTERIM
RESULTS
DECEMBER
RESPONSIBLE BUSINESS
AWARD PRESENTED TO
KOUNRAD
The Kounrad Copper Company was awarded
the prestigious Responsible Business Award
presented by the President of Kazakhstan.
OVERVIEW
Highlights
2022 a Year in Review
Our Purpose
Chairman’s Statement
02
03
04
05
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HOMESEARCHPRINTPAGES 04
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
OUR PURPOSE-DRIVEN APPROACH
OVERVIEW
Highlights
2022 a Year in Review
Our Purpose
Chairman’s Statement
02
03
04
05
SUSTAINABILITY PILLARS
DELIVERING
VALUE THROUGH
STEWARDSHIP
MAINTAINING
HEALTH & SAFETY
FOCUSING ON
OUR PEOPLE
CARING FOR THE
ENVIRONMENT
UNLOCKING
VALUE FOR OUR
COMMUNITIES
DELIVERING GROWTH
This objective is a continuous
and underlying ambition
OUR PURPOSE-DRIVEN APPROACH
OUR PURPOSE IS TO PRODUCE BASE METALS, ESSENTIAL FOR MODERN LIVING,
PROFITABLY IN A SAFE AND SUSTAINABLE ENVIRONMENT FOR ALL OUR STAKEHOLDERS.
Our purpose shapes our business model and our strategic decisions.
It is underpinned by our values which inform the behaviour and standards
expected of all our colleagues in the business.
Together these determine how we identify and deliver our immediate and
long-term strategic objectives and generate sustainable, long-term returns
for all our stakeholders.
UNDERPINNED BY OUR VALUES
HEALTH & SAFETY
SUSTAINABILITY
EFFICIENCY & INNOVATION
RESPECT & TRUST
The safety of our employees is a core value
and we are passionate about protecting the
health and wellbeing of our people. We work
hard to monitor, assess and mitigate all the
risks that could potentially cause harm to our
employees. We strive to ensure that every
individual within the Company understands
that safety is their responsibility.
Taking responsibility for sustainable
development is our core objective and its
importance is considered in each decision
that we make. We aim to positively affect
our employees and local communities,
while minimising any adverse impacts
on the natural environment.
We encourage our team to embrace
change and commit to continuing to bring
technology and innovation together to
improve our operations. This approach
helps us to use our resources wisely
and efficiently in achieving long-term
sustainable production.
We encourage open and constructive
communications with team members and
value collaborative working. We accomplish
transparency through honest, fair and open
communication with all key stakeholders
built on disclosure, clarity and accuracy.
We are open to recognising our faults
and improving practices.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOW WE MEASURE OUR SUCCESSMeasuring success through KPIs and ensuring these are linked to remuneration where appropriateMANAGING OUR ASSOCIATED RISKSDelivering value through robust risk managementDELIVERING LONG-TERM SUSTAINABLE VALUE FOR OUR STAKEHOLDERS ▶Employees ▶Communities ▶Investors ▶Governments ▶SuppliersFOCUS ON SUSTAINABILITYThis objective ensures that sustainability remains a key priority in everything that we doTARGETING LOW COST, HIGH MARGINSThis objective is around our focus on low cost production which results in high marginsENSURING PRUDENT CAPITAL ALLOCATION This objective focuses on CAML’s ability to allocate capital efficientlyOUR STRATEGIC OBJECTIVESOUR IMMEDIATE STRATEGIC OBJECTIVESOUR LONG-TERM STRATEGIC OBJECTIVEHOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
05
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
CHAIRMAN’S STATEMENT
BUILDING THE BUSINESS
FOR THE FUTURE
5
QCA
Maintain the Board
as a well-functioning,
balanced team led
by the Chair.
I am pleased with our operational and financial
performance during 2022, which demonstrated
the strength of our business. We also had a
positive year in appointing two new Directors to
our Board, Dr Mike Armitage and Louise Wrathall,
both of whom have already brought their own
experiences to our discussions, and in the creation
of a new Technical Committee. We have advanced
our sustainability efforts on the ground and in
terms of reporting, and I was pleased that we
commenced construction of our Kounrad Solar
Power Plant towards the end of the year.
FREE CASH FLOW*
DIVIDEND PER SHARE
$89.7m
2021: $103.8m
* See pages 51–52 for definition of
non-IFRS alternative financial
performance measures.
20p
2021: 20p
NICK CLARKE
Non-Executive
Chairman
OVERVIEW
Highlights
2022 a Year in Review
Our Purpose
Chairman’s Statement
02
03
04
05
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 06
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
CHAIRMAN’S STATEMENT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
OVERVIEW
Highlights
2022 a Year in Review
Our Purpose
Chairman’s Statement
02
03
04
05
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
FULFILLING OUR PURPOSEOur purpose is to produce base metals, essential for modern living, profitably in a safe and sustainable environment for all our stakeholders and we have fulfilled this purpose during 2022.Our solid 2022 operational performance generated for CAML Earnings before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) of $131.6 million and free cash flow of $89.7 million. This has enabled us to continue deleveraging, and in August 2022 we made the final repayment of the debt that we borrowed in order to acquire Sasa in 2017. We were pleased to report adjusted (to exclude a non-cash impairment charge) EPS of 48.15 cents, above the 47.69 cents reported last year. We celebrated two anniversaries in 2022. In April, we marked 10 years of copper production from Kounrad, during which time we have produced over 130,000 tonnes of cathode, supported a solely Kazakh workforce of 337 employees and 78 contractors, invested capital totalling $81.9 million and generated $944.4 million in gross revenue. In November, we celebrated five years since we acquired Sasa. Under our ownership, we have maintained a workforce that is 98% North Macedonian, generated $525.0 million in gross revenue from zinc and lead sales and paid tax in excess of $71.0 million to the Government of North Macedonia. We have set up charitable foundations in both countries and continue to support the many worthy causes in both jurisdictions, as well as promoting long-term sustainable local development.SUSTAINABILITYWe have continued to devote much of our time and energy to advancing our sustainability efforts during 2022. In Q2 2022, we published our third standalone Sustainability Report. This was the Company’s second report drafted in accordance with the Global Reporting Initiative (‘GRI’) Standards ‘Core option’. As a result of technical work undertaken during 2021, we were able to set ourselves additional environmental targets on water abstraction and mineral waste to complement the greenhouse gas (‘GHG’)emission targets that we set ourselves last year. Importantly, we also set ourselves a target to increase our female employees by 25% by the end of 2025.Given GRI’s adjustment to the Universal Standards, we revisited our stakeholder-engagement based materiality assessment with assistance from consultants, Digby Wells, taking into account both societal and economic factors. The results of this survey have informed our updated material topics and we have reported on those in our forthcoming 2022 Sustainability Report.We also undertook climate change scenario analysis during the year, which has informed our risk management and climate strategy going forwards. In Q4 2022, we commenced construction of our Kounrad solar power plant which is one of our key initiatives that will help us to reduce our Scope 1 and Scope 2 emissions by 50% by 2030 from a 2020 base. GOVERNANCE In January 2022, CAML announced the appointment of Dr Mike Armitage to the Board as an Independent Non-Executive Director. Mike brings a wealth of international technical experience and has already supported management and advised the Board, both in terms of our current operations and with our business development activities. Mike’s long career with SRK in particular has seen him review, assist with due diligence and help to develop numerous mineral properties globally. Robert Cathery retired from the CAML Board at the conclusion of our 2022 Annual General Meeting (‘AGM’). I want to express my thanks to Bob for his hard work and dedication to the CAML business. His advice has been invaluable and, in particular in his role as Chair of the Remuneration Committee, he has been responsible for transforming our Long-Term Incentive Plan and incorporating our wider sustainability targets into Executive Director and management remuneration. Also, at the conclusion of the 2022 AGM, Louise Wrathall, our Director of Corporate Development, joined the CAML Board. Louise has been a key member of the senior management team since she joined CAML in 2015 and further enhances the skills of the Board, emphasising the importance we place on investor relations, business development and environmental, social and governance (‘ESG’) initiatives.During 2022, we made changes to our Board Committees as well. We created a new Technical Committee, chaired by Roger Davey and additionally comprising myself, Dr Mike Armitage and Nigel Robinson. During the year, the committee has reviewed the engineering aspects of the Kounrad solar power project and has provided guidance and support to Sasa’s Cut and Fill Project team, which included a specific Technical Committee site visit to review work underway. Mike Prentis agreed to chair our Remuneration Committee and he is now ably supported by Roger Davey and David Swan. The Nomination Committee continues to comprise solely non-executive directors, so now includes Dr Mike Armitage. Another key committee change was to invite Dr Gillian Davidson to join the Audit Committee. Gillian brings experience from other board roles as well as her expertise in sustainability. She is particularly focused on our risk management processes and reporting on non-financial information as well. ACKNOWLEDGEMENTSI would like to thank the Board of Directors, our senior management team and all of our employees for their dedication to our business during 2022. Your efforts do not go unnoticed, and we very much appreciate your hard work. I would like to extend my thanks to our stakeholders for their support.NICK CLARKENON-EXECUTIVE CHAIRMAN28 March 2023HOMESEARCHPRINTPAGES 07
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC
REPORT
12Chief Executive Officer’s Statement
08Business Model
11Investment Case
16Market Overview
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
Principal Risks and Uncertainties
08
11
12
16
19
21
26
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36
45
53
56
HOMESEARCHPRINTPAGES 08
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OUR BUSINESS MODEL - WHAT WE DO
OPERATING WITH
EXCELLENCE
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
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MINING ORE AND MINERAL
PROCESSING
IN SITU-DUMP LEACHING
AND SX-EW
GROSS REVENUE BY GEOGRAPHY
KAZAKHSTAN
$123.7m
NORTH MACEDONIA
$108.5m
GROSS REVENUE BY METAL
COPPER
$123.7m
LEAD
$55.2m
ZINC
$51.3m
SILVER
$2.0m*
* The silver revenue of $2.0m is recognised in relation to the
silver stream arrangement. Lead revenue of $55.2m
includes the silver by-product.
Sasa is a zinc, lead and silver
mine in North Macedonia,
approximately 150 km from the
capital city, Skopje.
The operation is an underground
mine, and the processing plant
uses froth flotation to produce
a zinc concentrate and a lead
concentrate containing silver.
These products are then delivered
to smelters to be processed
into metal.
CAML’s team has begun
construction work for the Cut and
Fill Project to enable the extraction
of the maximum resources in
a safer, more sustainable and
efficient manner as well as
improving the storage of tailings
for the life of the mine.
In 2022, the mine produced
21,473 tonnes of zinc in
concentrate and 27,354 tonnes
of lead in concentrate.
LIFE OF MINE TO
2039
2022 ORE MINED
806,069t
2022 ZINC GRADE
3.15%
2022 LEAD GRADE
3.63%
Read more about
our operations in
North Macedonia
on pages 36-40
In 2012, CAML completed
construction and began producing
copper from the Kounrad in-situ
dump leach and solvent extraction
electro-winning (‘SX-EW’)
operation close to Balkhash in
central Kazakhstan.
LIFE OF OPERATION TO
2034
ESTIMATED REMAINING
RECOVERABLE COPPER
METAL
Two expansions followed, and the
Company has now fully developed
Kounrad, with copper production
expected to continue until the end
of the licence in 2034.
Since production commenced,
138,395 tonnes of copper have
been produced at Kounrad, at
costs that are amongst the lowest
in the world.
111,600t
2022 COPPER PRODUCTION
14,254t
2022 COPPER SALES
14,342t
Read more about
our operations in
Kazakhstan
on pages 41-44
HOMESEARCHPRINTPAGES
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
09
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OUR BUSINESS MODEL – OUR INPUTS
WHAT SETS US APART
Overview
Strategic Report
Governance
Financial Statements
PEOPLE & SKILLS
LONG-LIFE ASSETS
RELATIONSHIPS
INVESTMENT
We are proud of the experienced and capable teams that we have
at Sasa and Kounrad, and now employ over 1,000 people, with 12
expatriates combined at both of our sites. We provide wide-ranging
training programmes for our operational teams and in some cases
tertiary education for key talent. We have a strong Board with
complementary skills and a London-based senior management team.
Sasa currently has reserves and
resources to support a life of
mine to
2039
Maintaining strong employee,
community and national
relationships in our countries of
operation are key to us retaining
the strong licence to operate
that we currently enjoy.
In order to ensure efficient and
optimal operations, we must
ensure that Sasa and Kounrad
are well funded, and that
we also invest in developing
our employees so that they
can operate to the highest
standards.
% OF LOCAL EMPLOYED STAFF
2022 TOTAL CAPEX
99%
$17.4m
Kounrad has the recoverable
copper resources to support
a life of operation to the end
of the licence in
2034
KAZAKHSTAN
31%
NORTH MACEDONIA
67%
UK
2%
EMPLOYEES
BY GEOGRAPHY
SUSTAINABILITY
In order to operate effectively
and responsibly, we ensure
that sustainability underpins
our business model.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Read more about our sustainability strategy on pages 26-29
DELIVERING
VALUE THROUGH
STEWARDSHIP
MAINTAINING
HEALTH &
SAFETY
FOCUSING
ON OUR
PEOPLE
CARING
FOR THE
ENVIRONMENT
UNLOCKING
VALUE FOR OUR
COMMUNITIES
HOMESEARCHPRINTPAGES 10
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
OUR BUSINESS MODEL - OUR OUTPUTS AND OUTCOMES
THE VALUE WE DELIVER
1
QCA
Establish a strategy and business
model which promotes long-term
value for shareholders
OUTPUTS
STAKEHOLDERS
OUTCOMES
2022 COPPER
Production - 14,254t
Costs - $0.65/lb
2022 SASA PRODUCTION
Zinc production - 21,473t
Lead Production - 27,354t
Costs - $0.78/lb Zn Eq
2022 GHG EMISSIONS
59,082t CO2e
INVESTORS
Financial returns and
long-term growth
opportunities
EMPLOYEES
Wide-ranging training
programmes, competitive
salaries
ADJUSTED EPS
DIVIDEND FULL YEAR
48.15c
2021: 47.69c
20p
2021: 20p
SASA EMPLOYEES
KOUNRAD EMPLOYEES
735
2021: 712
337
2021: 323
GOVERNMENTS
Economic contribution
to the countries in which
we operate
TAX PAID IN NORTH
MACEDONIA SINCE 2017
TAX PAID IN KAZAKHSTAN
SINCE 2012
$71.1m
$222.5m
COMMUNITIES
Investment and jobs for
our local communities
SASA SOCIAL
CONTRIBUTIONS SINCE
2017
KOUNRAD SOCIAL
CONTRIBUTIONS SINCE
2012
2022 TAILINGS
725,390t
SUPPLIERS
Supporting local
responsible suppliers
$1.8m
$2.5m
SASA % IN-COUNTRY
PROCUREMENT
KOUNRAD % IN-COUNTRY
PROCUREMENT
65%
93%
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 11
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INVESTMENT CASE
A STRONG
SUSTAINABLE
BUSINESS
Overview
Strategic Report
Governance
Financial Statements
RESPONSIBILITY
ACCOUNTABILITY
SUSTAINABILITY
PRODUCTIVITY
PROFITABILITY
DEPENDABILITY
Our purpose is to produce
base metals essential for
modern living, profitably,
in a safe and sustainable
environment for all our
stakeholders. Our code
of conduct has been
developed to demonstrate
what is expected of our
employees, suppliers, and
stakeholders and to guide
them on how to promote
the strong principles of
our business.
Governance and
stewardship play
an important role in
our sustainability
framework. Our values
are underpinned by
robust company policies
and procedures which
we communicate to our
employees and more
widely to our other
stakeholders. Overall
responsibility for our
business lies with our
Board of Directors.
Taking responsibility
for sustainable
development underpins
our business and our
business decisions.
This is reflected in our
environmental, health
and safety, community
and governance-related
employee KPIs. We aim
to positively affect our
employees and local
communities, while
minimising any adverse
impacts on the natural
environment.
We encourage our team
to embrace change and
commit to continuing to
bring technology and
innovation together to
improve our operations.
This approach helps us to
use our resources wisely
and efficiently in achieving
long-term sustainable
production.
With a low-cost business
that is profitable and cash
generative, we are now
debt free, having made
our final repayment of the
$187 million debt which
we secured to acquire
Sasa less than five years
later. These repayments
have been made while we
delivered value for all our
stakeholders and invested
in our operations.
We have an experienced
Board and Management
team with a proven
international development
and operating track
record. We have
demonstrated over
the last decade that
we are committed to
returns to shareholders
in recognition of their
financial and ongoing
support. This is made clear
in our dividend policy,
which is for CAML to return
between 30-50% of our
free cash flow (‘FCF’) to
shareholders.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
12
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
CHIEF EXECUTIVE OFFICER’S STATEMENT
A STRONG
PERFORMANCE
IN THE FACE OF
GLOBAL PRESSURES
2022 has been a year of strong performance for
CAML. Global inflationary pressures which were
exacerbated by the conflict in Ukraine served to
highlight the underlying strength of CAML’s business
and balance sheet, and we are pleased with our
2022 results and to have made the final repayment
in August 2022 of the debt that we borrowed to
acquire Sasa in 2017.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
LTIFR
0.83
2021: 1.69
GROSS REVENUE
$232.2m
2021: $235.2m
NIGEL ROBINSON
Chief Executive Officer
HOMESEARCHPRINTPAGES 13
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
LOCAL EMPLOYMENT
99%
2021: 99%
EBITDA
$131.6m
2021: $141.5m
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
2022 FINANCIAL OVERVIEWSasa produced 21,473 tonnes of zinc in concentrate and 27,354 tonnes of lead in concentrate at a C1 zinc equivalent cash cost of production of $0.78 per pound, reflecting in particular elevated electricity costs incurred during H2 2022.Our Kounrad operations continued to perform well, and we increased our copper cathode production guidance to 13,500 – 14,000 tonnes during H2 2022 and ended the year reporting production in excess of that at 14,254 tonnes. Kounrad’s 2022 C1 copper cash cost of production remained very low by global standards at $0.65 per pound, despite inflationary pressures.Regardless of global challenges, the CAML business performed very well, due to its inherent low-cost base and strong balance sheet. We reported gross revenue of $232.2 million and an EBITDA of $131.6 million at an EBITDA margin of 57% for 2022. We reported adjusted (to exclude a non-cash impairment charge, arising following update to reserves & resources following Life of Mine (‘LoM’) study as well as inflationary pressures) EPS of 48.15 cents, higher than that reported in 2021. In August, we made our final repayment of the $187 million debt which we secured to acquire Sasa less than five years before. CAML ended 2022 with cash in the bank of $60.6 million.The Group generated 2022 free cash flow of $89.7 million, enabling us to recommend a 10 pence per share final dividend. This equates to a full-year dividend of 20 pence per share, which represents 47% of 2022 free cash flow.MARKET PERFORMANCEDuring 2022, the CAML share price traded within a range of £2.01 to £2.84, ending the year at £2.48, which represents a 4.2% decrease on the 31 December 2021 price of £2.59. CAML outperformed the FTSE AIM All Share/Basic Resources Index, which lost approximately 31.5% during 2022. The share price was supported by solid base metal prices and by its low cost base. Since the Company’s IPO in September 2010, CAML’s share price has significantly outperformed the FTSE AIM All Share/Basic Resources Index, primarily due to CAML’s strong operational performance, low production costs and consistent dividend payments.SUSTAINABILITYWe remain focused on safety and, while we were disappointed to report two LTIs at Sasa during the year, this was an improvement on the four we recorded during 2021. We recorded zero LTIs at Kounrad though, and therefore our 2022 total as a Group was two, with a LTIFR of 0.83, an improvement on our performance in 2021. As ever, effective safety training and supervision for our employees is a priority and is crucial to achieving an improving safety record.The strong financial performance we have reported underpins our business and we place significant emphasis on ensuring that we are sustainable for all stakeholders. To demonstrate our efforts and achievements, in this area, we will soon be publishing our fourth Sustainability Report, our third to GRI standards and our first to the new GRI ‘Universal Standards’. These standards are based on the concept of ‘double materiality’, looking at both the impact of the Company on society and the environment, as well as the impact of the material topics on the value of a company. Therefore, our updated materiality assessment considers both materiality aspects and has informed reporting for the Company’s 2022 Sustainability Report. In 2021, we began moving towards Taskforce on Climate related Financial Disclosures (‘TCFD’) reporting. We shared our climate strategy and our medium- and long-term goals that were the result of much internal work undertaken and, in our 2021 annual and sustainability reporting, we felt able to commit to a 50% reduction in our Kounrad and Sasa Scope 1 and Scope 2 emissions by 2030 from a 2020 base, and to being net zero by 2050. To understand our strategic resilience in terms of our climate risks and opportunities, we undertook scenario analysis work during 2022. This analysis has broadly validated our climate strategy and has helped us to identify our risks and opportunities as well as key workstreams for us to focus on going forwards. In 2023, we plan to collect data to enable us to report our Scope 3 emissions estimates in 2024 for the 2023 operating year.HOMESEARCHPRINTPAGES 14
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
CAML’S PRIMARY SDGS
ENSURE
HEALTHY LIVES
AND PROMOTE
WELL-BEING
FOR ALL AT
ALL AGES
BUILD RESILIENT
INFRASTRUCTURE,
PROMOTE
INCLUSIVE AND
SUSTAINABLE
INDUSTRIALISATION
AND FOSTER
INNOVATION
PROMOTE
SUSTAINED,
INCLUSIVE AND
SUSTAINABLE
ECONOMIC
GROWTH,
FULL AND
PRODUCTIVE
EMPLOYMENT
AND DECENT
WORK FOR ALL
ENSURE
SUSTAINABLE
CONSUMPTION
AND PRODUCTION
PATTERNS.
TAKE URGENT
ACTION TO
COMBAT CLIMATE
CHANGE AND ITS
IMPACTS
END POVERTY
IN ALL ITS FORMS
EVERYWHERE
ENSURE
ACCESS TO
AFFORDABLE,
RELIABLE,
SUSTAINABLE
AND MODERN
ENERGY FOR ALL
ENSURE
INCLUSIVE AND
EQUITABLE
QUALITY
EDUCATION
AND PROMOTE
LIFELONG
LEARNING
OPPORTUNITIES
FOR ALL
Our sustainability strategy and practices continue to develop and, having reviewed our material topics in 2022, we have also taken the opportunity to consider and advance our approach to the UN sustainable development goals (‘SDGs’). Following the review process, which involved mapping the underlying targets to our activities and considering their alignment to our overall strategy and approach, we have defined a two-tiered approach. We have identified a total of eight SDGs (five primary and three supporting) which are reflected in CAML’s material topics.WSP Golder delivered an Asset Retirement Obligation (‘ARO’) and site closure plan report for Kounrad in 2022, which covers the responsible closure of the leaching operations in the longer term. At Sasa, consultants PrimePoint were appointed to further develop the Local Environmental Action Plan (‘LEAP’) and Local Economic Development Plan (‘LEDP’) in conjunction with the local Municipality. During the year, several workshops were organised between PrimePoint, the Municipality and the Sasa Foundation to better assess the needs of the community and to identify sustainable development opportunities for Makedonska Kamenica and adjacent communities.We have committed to reporting to the Global Industry Standard for Tailings Management (‘GISTM’) for all tailings storage facilities (‘TSFs’) by end of H1 2024. A working group has been formed, comprising members of the production, tailings, sustainability, and communications teams, overseen by the Group Sustainability Director, to ensure all workstreams are effectively covered. To support employees during the current global inflationary environment, all staff at both sites were given pay rises of at least 15% in local currencies.During 2022, we spent a total of $0.3 million at Sasa and Kounrad supporting the local communities. This is a vital aspect of what we do in the areas close to our operations and, as a result, we enjoy good relations with our neighbours, and we believe we have brought some real, positive change. This year at Sasa funds were allocated for the renovation of the local medical centre. At Kounrad, we have financially supported a children’s rehabilitation centre and provided tuition fees for medical students from Balkhash. CAML’S SUPPORTING SDGSHOMESEARCHPRINTPAGES
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
SASADuring H1 2022, significant permitting work was undertaken in preparation for the construction phase of the Cut and Fill Project. The Environmental and Social Impact Assessment (‘ESIA’) Study was completed and submitted to the authorities. After the submission, a Public Hearing was held with representatives from the Ministry of Environment and Physical Planning (‘MoEPP’), the local municipality, including the Mayor of Makedonska Kamenica and representatives from the local community. Feedback from the public hearing was positive and Sasa achieved approval of the ESIA in August 2022. In H2 2022, construction of the Paste Backfill Plant began, this is now well underway and on track for completion in H1 2023. The Dry Stack Tailings part of the project is scheduled for construction during H2 2023, and key long-lead time item orders have been placed. We have made solid progress with over 1,000 metres of the Central Decline developed from both surface and underground during the year.KOUNRADDuring the year at Kounrad, leaching operations performed well, as did the SX-EW processing facilities which achieved availability of over 99%. We continued to develop more of the Western Dumps for future leaching operations, while focusing on maximising copper extraction in the Eastern Dumps. Capital expenditure remained low at $2.5 million and included $0.1 million on the commencement of construction activities related to the solar power plant in Q4 2022. The 4.77MW unit will be constructed by Kounrad’s engineering team and is expected to provide between 16-18% of the site’s electrical power requirements. OUTLOOKWhile we continue to foresee global challenges, we expect CAML to continue to perform very well relatively. Our production guidance for Sasa is 790,000 to 810,000 tonnes of ore, which should lead to between 19,000 and 21,000 tonnes of zinc in concentrate and between 27,000 and 29,000 tonnes of lead in concentrate. Our focus at Sasa during 2023 will be finalising the Cut and Fill Project, which will see us extract the maximum resources in a safer, more sustainable and efficient manner. From a permitting perspective, the Paste Backfill and Dry Stack Tailings aspects of the Cut and Fill Project are effectively viewed in North Macedonia as an overarching yet much improved tailings storage solution for the long term.At Kounrad, we expect to produce between 13,000 and 14,000 tonnes of copper. We also look forward to starting to generate our own renewable power once we have completed construction of the solar power plant this year.We expect 2023 Group 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. Total expected 2023 capex also includes approximately $5 million related to the Kounrad solar power plant. CAML expects Cut and Fill Project capital expenditure in the order of $12 million in 2023. Sasa has already generated EBITDA of $301.5 million during the last five years under our ownership and we look forward to a long mine life continuing to generate significant value from this asset until at least 2039. We were active throughout 2022 in terms of business development, having reviewed 40 opportunities, signed NDAs for 17 of them and conducted two site visits. This momentum has continued into 2023 and we remain in a very strong position from which to grow through acquisition, building the business for the future and producing the base metals essential for modern living. NIGEL ROBINSONCHIEF EXECUTIVE OFFICER28 March 2023HOMESEARCHPRINTPAGES 16
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
MARKET OVERVIEW
COPPER
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
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Overview
Strategic Report
Governance
Financial Statements
CONCLUSIONS
As supply is not expected to keep up with
the growth in demand, the copper market
is faced with a long-term structural deficit.
The anticipation of deficits to come will likely
apply upward pressure on the copper price,
as accumulated inventories are drawn
and consumed.
OPPORTUNITIES
‣ Global push towards renewable forms of
energy generation
‣ Electric vehicles and renewable energy
plants are more copper-intensive than
incumbents
‣ Large-scale infrastructure investment
packages underway
‣ Environmentally efficient housing to be
more copper intensive
THREATS
‣ Losing market share in low voltage and
communications cables
‣ Potential global recession ex-China could
hit demand
‣ New technology could make low grade
deposits more viable
Copper demand is exposed to a growth
trend associated with the ongoing
transition to a low-carbon global economy.
Copper itself is an essential component of
the mass electrification at the heart of this
transition, as it is used in wiring, electric
motors, wind turbines and many other
technologies. The surge in copper demand is
driven by the greater copper-intensity of many
core elements of the green economy. For
example, electric vehicles need around four
times more copper than those with internal
combustion engines (‘ICEs’), while solar
panels and wind farms need as much as five
times the amount of copper needed for fossil
fuel power generation.
In addition, copper is heavily used across
construction projects and major appliances.
In that sphere, copper will play a key role in
a push to boost building efficiencies through
wiring upgrades, LED lighting, and heat
pumps. Copper is also a major beneficiary of
the infrastructure investment plans that have
been rolled out worldwide in the economic
recovery phase of the Covid-19 pandemic.
However, copper may lose market share in
low voltage and communications cables, with
optical fibres potentially displacing some
demand for the material in this segment in
the medium term. In the long term, increasing
investments in the collection, sorting and
use of scrap, which are driven both by the
attractiveness of the projected market deficit
and by decarbonisation targets, may also
pose a risk to demand for the primary metal.
HOMESEARCHPRINTPAGES 17
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
MARKET OVERVIEW
ZINC
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
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Urbanisation and industrialisation in the
developing world continue to be a main
driver of growth in zinc demand.
An increasing portion of that growth
is expected to be driven by emerging
markets ex-China, as the Chinese economy
transitions from being driven by investment
in infrastructure and exports to domestic
consumption, making it less zinc intensive.
Sustainability initiatives to increase product
life span and reduce the need for replacement
parts have supported zinc demand through
legacy uses of the metal, since the prime use
of zinc is galvanising steel and iron to protect
against corrosion. This prevents the premature
replacement of these products as zinc coating
protects them. In parallel, rising wealth
in emerging markets is driving increased
investment into galvanisation to extend the life
cycle of steel and iron-based products.
In the coming decades non-traditional uses
of zinc are aslo likely to drive an increasing
portion of the metal’s demand growth. The
most significant of these zinc uses is as a
micro-nutrient in agricultural fertilisers, which
could drive meaningful growth in demand
were it to be widely adopted in the developing
world. Beyond 2030, additional upside could
come from the increased need to store energy
generated from renewable sources. At present,
the use of zinc-based battery systems in this
sector is negligible, but that could change
as renewable energy becomes ever more
prevalent and the need to store it grows.
On the other hand, zinc faces increasing
competition from aluminium in die-cast
alloys for automotive and other high-value
applications and, with recent technological
improvements, galvanisation has become less zinc-intensive, in turn reducing the metal’s demand. In addition, the fact that zinc smelting is very energy intensive exposes the smelting industry to the double whammy of higher energy costs and policy-linked constraints on power consumption, as was particularly evident in Europe over the course of 2022.CONCLUSIONSDespite the threat of substitution in zinc’s legacy uses, secular growth trends and new potential applications are set to outweigh any negative factors eating into the metal’s demand.In terms of supply, current smelting capacity and improvements in utilisation rates are projected to ensure sufficient refined metal supply until 2025. Thereafter, additional capacity will need to come online to meet forecast market demand.OPPORTUNITIES: ‣Rising wealth in emerging markets driving increased investment into galvanisation ‣Limited scrap recovery ‣New end uses such as fertilisers and zinc-based batteries ‣Upward pressure on prices from record-low inventoriesTHREATS: ‣Chinese economic growth to become less zinc-intensive ‣Risk of substitution from aluminium, for die-cast alloys in particular ‣Efficiency improvements in galvanisation techniquesHOMESEARCHPRINTPAGES 18
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
MARKET OVERVIEW
LEAD
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Lead-acid batteries represent lead’s
primary application, accounting for nearly
80% of total metal demand.
Such batteries play an essential role in the
functioning of society, enabling all forms
of commercial and leisure road mobility, as
well as supporting trucking’s pivotal role in
connecting global supply chains. Stationary
batteries are also essential for backup power
at hospitals, data centres, telecommunications
companies and other critical infrastructure.
Other uses of lead include a suite of
applications in the realm of radiation
protection in hospitals, nuclear reactors and
containers transporting radioactive material;
as well as ammunition and industrial sheets
made to dampen noise and vibrations.
Although lead-acid batteries undoubtedly
have a place in the green economy, they are
facing increasing competition from alternative
battery chemistries, in particular from lithium-
ion batteries both as a power storage source
and among automotive applications. However,
there are limitations to lithium-ion battery
adoption, as lead-acid batteries provide a
cheaper solution and are proven to work
better in high-power vehicles.
Lead demand has also been affected by the
large amount of regulation passed in recent
decades to control lead exposure and protect
both the workforce and the environment from
its toxicity. This has been accompanied by
the creation of wide-reaching lead recycling
infrastructure and a large secondary market
for recycled material, which has eaten into the
mined metal’s demand. Recycled lead now
accounts for around half of all lead production.
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CONCLUSIONSIn 2022, lead has outperformed most of its industrial peers on the back of relative market tightness. Robust battery demand was confronted by the supply backdrop, driven by closures of several smelters and restrained scrap supply from China. In the long run some of the supply constraints are expected to ease likely balancing the prices.OPPORTUNITIES: ‣Increasing need for uninterrupted power supply and rising energy storage application ‣Key role in electric vehicles as lead-acid batteries run most electrical systems ‣Potential substitute for other metals (i.e. cobalt, nickel and lithium) when their supply is limited ‣Start-stop auto technology is more lead-intensive ‣Upward pressure on prices from record-low inventoriesTHREATS: ‣Push for substitution due to environmental and safety concerns ‣Well established recycling network and secondary market ‣Long term risk of lead-acid battery substitution by nickel and lithium-ion batteriesHOMESEARCHPRINTPAGES 19
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OUR STRATEGIC FRAMEWORK
Overview
Strategic Report
Governance
Financial Statements
ALIGNING OUR
STRATEGIC OBJECTIVES
TO OUR PURPOSE
1
QCA
Establish a strategy and business
model which promotes long-term
value for shareholders
OUR IMMEDIATE
STRATEGIC OBJECTIVES
OUR LONG-TERM
STRATEGIC OBJECTIVE
See pages 21-25, Our
KPIs, for more
information on our
performance.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Details of our specific objects, progress in 2022 and our long-term targets can be seen on page 20
FOCUS ON SUSTAINABILITY This objective ensures that sustainability remains a key priority in everything that we doTARGETING LOW COST, HIGH MARGINSThis objective is around our focus on low-cost production which results in high marginsENSURING PRUDENT CAPITAL ALLOCATION This objective focuses on CAML’s ability to allocate capital efficientlyDELIVERING GROWTH This objective is a continuous and underlying ambitionIn this report, we demonstrate how our strategic objectives and our everyday working practices continue to be embedded in the Company to deliver long-term value for stakeholders.Our immediate strategic objectives of sustainability, low costs and high margins, and prudent capital allocation are underpinned by our longer-term ambition of growth through acquisition.We promote low-cost, sustainable, and ethical metal production to benefit our workforce, local communities, host governments and shareholders. We enrich communities close to our operations with employment opportunities and education, and other facilities, while at the same time focusing on the financial sustainability of our operations.HOMESEARCHPRINTPAGES 20
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OUR STRATEGIC FRAMEWORK CONTINUED
Overview
Strategic Report
Governance
Financial Statements
OUR IMMEDIATE STRATEGIC OBJECTIVES
PROGRESS IN 2022
OUR LONG-TERM OBJECTIVES
This objective ensures that sustainability remains
a key priority in everything that we do
‣ The health, safety and wellbeing of our
‣ Improved health and safety performance at Sasa,
with two LTIs versus four in 2021
‣ Strong health and safety performance at Kounrad
CAML 5-YEAR LTIFR
FATALITIES
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Risk Management
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FOCUS ON
SUSTAINABILITY
employees is our top priority
‣ Commenced construction of Kounrad solar
‣ Prevent, mitigate and control our
environmental impacts through a focus on
energy use and climate change, air quality and
pollution, water, waste and biodiversity
‣ Continue to drive social and economic value
in the communities in which we operate
power project
‣ Development of Sasa LEAP and LEDP programmes
‣ CAML Climate Change work progressed with
scenario analysis undertaken
This objective is around our focus on low-cost
production which results in high margins
‣ Copper production exceeded market guidance
‣ Zinc and lead production met market guidance
TARGETING
LOW COST,
HIGH MARGINS
‣ Consistently focus on maintaining low-cost
production while maintaining high margins
‣ Aim to continue efficient operations to unlock
maximum value and profitable operations
This objective focuses on CAML’s ability to
allocate capital efficiently
‣ Focus on capital allocation, including:
ENSURING
PRUDENT CAPITAL
ALLOCATION
‣ Investing in our operations
‣ Returns to shareholders
‣ Maintaining a strong balance sheet
‣ Controlled Sasa and Kounrad site costs despite
global inflationary pressures, particularly Sasa H2
2022 electricity costs
‣ Corporate debt facility repaid
‣ 2022 capital expenditure of $7.2 million related
to Sasa Cut and Fill Project
‣ Dividend payments during 2022 of $48.2 million
1.30
SEVERE OR MAJOR
ENVIRONMENTAL
INCIDENTS
0
0
SEVERE OR MAJOR
COMMUNITY INCIDENTS
0
MEETING ANNUAL
PRODUCTION TARGETS
STRONG COST
CONTROL
MAINTAIN A STRONG
BALANCE SHEET
DELIVER ON SASA CUT
AND FILL PROJECT
ENSURE DIVIDENDS ARE
WITHIN POLICY RANGE OF
BETWEEN
30–50%
OUR LONG-TERM STRATEGIC OBJECTIVE
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
DELIVERING
GROWTH
This objective is a continuous and
underlying ambition
‣ Focus on CAML’s ability to take advantage
of opportunities to grow the business
through acquisition
‣ Size and liquidity becoming more important
investment considerations
‣ Attractive base metals exposure
NAV/SHARE INCREASE
EBITDA/SHARE INCREASE
‣ Looking to acquire with manageable balance
EPS INCREASE
sheet implications
HOMESEARCHPRINTPAGES
21
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
KEY PERFORMANCE INDICATORS
MEASURING OUR
PERFORMANCE
We have identified a range of financial
and non-financial KPIs aligned to our
strategic objectives to measure our
performance, many of which are
directly related to Executive Director
and senior management remuneration.
Overview
Strategic Report
Governance
Financial Statements
LTIFR
FATALITIES
ENVIRONMENTAL INCIDENTS
0.83
0
0
We aim to provide a safe
working environment for our
people. LTIFR is lost time
injury frequency rate, which
is calculated as the number
of work lost-time injuries,
divided by the number of
hours worked, multiplied
by 1,000,000.
CAML has a target of no
fatalities and of zero harm
in the workplace, and firmly
believes that every employee
should go home safely to their
family at the end of their shift.
CAML strives for zero severe
environmental incidents
as a result of its operations
in Kazakhstan and
North Macedonia.
CAML’s 2022 safety
performance was excellent at
Kounrad, with zero lost time
injuries. At Sasa, two lost time
injuries were recorded.
There were no fatalities due
to a workplace safety incident
at either operation in 2022.
Indeed, there has never
been a fatality at a CAML
operated site.
There were no environmental
incidents at either operation.
FOCUS ON
SUSTAINABILITY
DEFINITION/
RATIONALE
2022
PERFORMANCE
RELATED TO
REMUNERATION
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
20220.8320211.6920200.00202202021020200202202021020201HOMESEARCHPRINTPAGES STRATEGIC REPORT
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22
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
KEY PERFORMANCE INDICATORS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
COMMUNITY INCIDENTS
HUMAN RIGHTS ABUSES
HEALTH AND SAFETY TRAINING
SUPPLIERS
FOCUS ON
SUSTAINABILITY
0
0
14%
92%
increase in total Health and Safety
training year on year
of new suppliers screened
to social assessment criteria1
CORPORATE GOVERNANCE
PLATFORM
98%
of top priority (risk assessed)
employees trained on new
corporate governance platform
DEFINITION/
RATIONALE
CAML strives for zero severe
community-related incidents
and recognises that strong
community support is crucial to
the Company’s effective licence
to operate.
Good governance is firmly
embedded in CAML’s approach
to sustainability and the
Company monitors human
rights abuses in Kazakhstan
and North Macedonia as one
barometer of governance.
2022
PERFORMANCE
RELATED TO
REMUNERATION
There were zero community
incidents related to CAML’s
operations during 2022.
Since the Company began
constructing the Kounrad
operation in 2010 and, since
it acquired Sasa in 2017,
there have been no severe
community related incidents.
There were zero human rights
abuses related to CAML’s
operations during 2022.
Since the Company began
constructing the Kounrad
operation in 2010 and, since
it acquired Sasa in 2017, there
have been no human rights
abuses recorded.
CAML believes that training
is one of the most effective
tools to improve health and
safety culture and practices
and should therefore result
in a safer workplace. The
Company aims to ensure that all
employees are well trained and
develop their understanding of
how to contribute to a safe and
healthy work environment.
As part of our efforts to
encourage ethical practices
within our supply chain
and combat human rights
abuses, including modern
slavery, we have developed
and implemented a social
assessment procedure
which takes the form of a
questionnaire to enable us to
screen potential new suppliers.
With proactive efforts
throughout the business, CAML
met this target, and delivered
over 10,000 training hours. This
was a 14% increase versus the
10% target.
Out of 86 new suppliers in 2022
with whom we have contracted,
79 have signed, giving us a 92%
completion rate of the social
assessment exercise.
It is considered a top priority
that all employees and
particularly those who are
top priority as identified by a
risk assessment are clear in
their understanding of what is
expected of them in terms of
their governance conduct.
For compliance training, 98%
completion for the Group overall.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
1 At Sasa, only suppliers with a materiality threshold >$5K were screened.
202202021020200202202021020200202214%202292%202298%HOMESEARCHPRINTPAGES 23
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
KEY PERFORMANCE INDICATORS CONTINUED
COPPER EQUIVALENT
PRODUCTION
27,656 t
TARGETING
LOW COST,
HIGH MARGINS
DEFINITION/
RATIONALE
CAML aims to meet annual production targets and continue
efficient operations to unlock maximum value and ensure a
profitable performance.
Overview
Strategic Report
Governance
Financial Statements
CASH COST, COPPER EQUIVALENT
EBITDA
$1.39/lb
$131.6m
EBITDA is a valuable indicator
of the Group’s underlying
profitability and is frequently
used in the mining sector by
investors and analysts for
valuation purposes. It is a non-
IFRS financial measure which is
reconciled on page 51.
Maintaining low costs at both of our
operations underpins profitability.
CAML reports its Group C1 cash
cost on a copper equivalent basis
incorporating production costs at
Sasa. C1 cash cost of production
is a standard metric used in the
mining industry to allow comparison
across the sector. CAML calculates
C1 cash cost by including all direct
costs of production (reagents, power,
production labour and materials,
as well as realisation charges such
as freight and treatment charges)
in addition to local administrative
expenses. Royalties, depreciation and
amortisation charges are excluded.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
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16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
2022
PERFORMANCE
2022 copper production at Kounrad exceeded market
guidance. Both 2022 zinc and lead production was
within market guidance.
CAML was pleased with overall cost
control given global inflationary
pressures which have adversely
affected the mining sector.
The Group generated 2022
EBITDA of $131.6 million,
as a result of strong base
metal production.
RELATED TO
REMUNERATION
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
14,041t27,202t22,167t13,855t29,742t23,815t20222021202014,254t27,354t21,473t2022$1.39/lb2021$1.32/lb2020$1.15/lb2022$131.6m2021$141.5m2020$95.7mCopperLeadZincHOMESEARCHPRINTPAGES 24
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
KEY PERFORMANCE INDICATORS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
CAPITAL EXPENDITURE
CORPORATE DEBT REPAYMENTS
NET CASH/(NET DEBT)
DEPENDABLE DIVIDENDS
$17.4m $23.8m $58.9m 20p
Capital expenditure reflects
the investment in the
operations and includes
sustaining capital expenditure
at both operations as well as
expenditure for Sasa’s Cut
and Fill project that is in the
construction phase during
2022 and 2023 and the Solar
Power Project at Kounrad
that began in Q4 2022 and is
expected to be completed in
the latter part of H2 2023.
During the year, Group capital
expenditure totalled $17.4
million, a combination of $2.5
million Kounrad sustaining
capital expenditure and $14.9
million at Sasa, of which $7.2
million was related to progress
of the Cut and Fill Project.
CAML’s focus is on its balance
sheet strength and ability to
maintain liquidity and service
any debt. The corporate debt
facility was repaid in
August 2022.
Net debt reflects the Group’s
financial liquidity. Net debt
is calculated as the total
of its borrowings and bank
overdrafts less the cash and
cash equivalents held at the
end of the year.
CAML has a dividend
policy of returning to its
shareholders between 30%
and 50% of its free cash
flow, defined as net cash
generated from operating
activities less sustaining
capital expenditure.
All contractual principal debt
repayments were made under
the borrowings held with
Traxys Europe S.A by
August 2022.
CAML completely repaid
its corporate debt facility in
August 2022 and is now in a
net cash position with its only
debt a small overdraft facility.
Total dividends related to
2022 (interim and final)
amounted to 20 pence per
share, which equated to 47%
of FCF.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
ENSURING
PRUDENT
CAPITAL
ALLOCATION
DEFINITION/
RATIONALE
2022
PERFORMANCE
RELATED TO
REMUNERATION
2022$17.4m2021$14.8m2020$8.5m2022$23.8m2021$48.4m2020$38.4m2022$58.9m2021$22.7m2020($36.2m)202220.0p202120.0p202014.0pHOMESEARCHPRINTPAGES 25
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
KEY PERFORMANCE INDICATORS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
BUSINESS DEVELOPMENT
OPPORTUNITIES REVIEWED
NON-DISCLOSURE AGREEMENTS
SIGNED
SITE VISITS UNDERTAKEN
40
17
2
Reviews of potential
opportunities for mergers and
acquisitions are undertaken
as a routine part of our
business and CAML has a
stated long-term strategic
objective to grow the
business by acquisition.
Signing a NDA gives
CAML access to company
information that is not in
the public domain. This
greatly improves the level
of due diligence that can
be undertaken on a
potential opportunity.
Senior management
undertaking a site visit
denotes an advanced level
of interest in a business
development opportunity.
CAML bolstered the
business development team
in 2022 and reviewed 40
opportunities during the
course of the year.
17 NDAs were signed in 2022.
Two site visits were
undertaken during the year.
DELIVERING
GROWTH
DEFINITION/
RATIONALE
2022
PERFORMANCE
RELATED TO
REMUNERATION
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
20224020213220202820221720211620205202222021120201HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
26
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
SUSTAINABILITY
TAKING A DOUBLE MATERIALITY
APPROACH TO KEY
SUSTAINABILITY TOPICS
Our sustainability strategy is built upon five pillars:
DELIVERING
VALUE THROUGH
STEWARDSHIP
MAINTAINING
HEALTH & SAFETY
FOCUSING
ON OUR PEOPLE
CARING FOR
THE ENVIRONMENT
UNLOCKING
VALUE FOR OUR
COMMUNITIES
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
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19
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
The framework is supported by long-term targets to drive performance and enable us to measure the success of our strategy.In order to show a strong commitment to aligning remuneration with stakeholder interests and to drive responsible performance throughout the Group, sustainability metrics are included as corporate performance targets in the Company’s remuneration practices.HOMESEARCHPRINTPAGESSee our 2022 Sustainability Report for more detail on our approach with regards to these key topics as well as achievements, challenges, data and targets.www.centralasiametals.com/sustainability Overview
Strategic Report
Governance
Financial Statements
27
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
SUSTAINABILITY FRAMEWORK
OUR DOUBLE
MATERIALITY APPROACH
GRI has published new Universal
Standards prompting enhanced
transparency in reporting information
about the most significant impacts of
activities and business relationships
on the economy, environment, and
people, including impacts on people’s
human rights.
Incorporating the double materiality
approach, GRI recognises that
the impacts of an organisation’s
activities and business relationships
can also have negative and positive
consequences for the organisation
itself. Even if not financially material
at the time of reporting, most become
financially material issues.
In 2022, CAML engaged external
consultants, Digby Wells, to undertake
a comprehensive analysis and
stakeholder engagement in order
to update and align our previous
materiality assessments with the
requirements of the revised GRI
Universal Standard and to reflect those
sustainability aspects that are material
to our business from a financial and an
impact perspective. To achieve this, we
undertook a double materiality process
as demonstrated, see right.
2
9 1
3
DELIVERING
VALUE THROUGH
STEWARDSHIP
MAINTAINING
HEALTH AND
SAFETY
UNLOCKING
VALUE FOR OUR
COMMUNITIES
5
6
FOCUSING ON
OUR PEOPLE
0
1
7
CARING FOR THE
ENVIRONMENT
4 2
1
11 8
HIGHEST PRIORITY
1 Environmental compliance
and management
HIGH PRIORITY
6 Community engagement
7 Labour rights, relations and
2 Responsible waste and tailings
remuneration
management
8 Air quality and emissions incl. GHG /
3 Occupational health and safety
energy consumption
4 Responsible water management
9 Anti-bribery and corruption
5 Local employment, community
development and socio-economic
contribution
compliance
10 Employee retention and development
11 Biodiversity
12 Responsible supply chain
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
PILLARMATERIALITYDELIVERING VALUE THROUGH STEWARDSHIPWe look to maintain the highest levels of ethical standards in our conduct and encourage the same for our suppliers whilst working in full compliance with the laws and regulations of our host countries. Robust corporate governance systems are the foundation from which we can promote optimal economic, social and environmental outcomes. MAINTAINING HEALTH AND SAFETYOur priority is to provide a safe and healthy working environment for our employees, contractors and visitors and work together towards the goal of zero harm in the workplace. We aim to eliminate occupational health risks brought about by our operations and support employee wellbeing, whilst monitoring the health of our people and promoting a healthy lifestyle. FOCUSING ON OUR PEOPLEWe are dedicated to treating all employees fairly, recognising core labour and human rights principles and supporting the right to freedom of association and collective bargaining, as well as respecting the right to be free of harassment or intimidation in the workplace. We look to promote our Company culture and provide a positive, stimulating and productive workplace, where continuous employee development is encouraged. CARING FOR THE ENVIRONMENTCAML has robust and comprehensive environmental management systems which aim to substantially reduce (if not avoid) the risk of any potential negative environmental impacts from our operations. We recognise our responsibility, as a contributor of greenhouse gas emissions, to identify and implement programmes to minimise energy usage where possible, as well as to mitigate and adapt to the impacts of climate change throughout the value chain. We monitor water use and aim to minimise freshwater withdrawal, whilst also carefully managing discharge water quality. We are committed to effectively and responsibly managing tailings storage facilities and proactively working to reduce and recycle non-mineral, hazardous and non-hazardous materials waste and preventing or reducing pollution. We aim to protect and promote biodiversity and will ensure a responsible approach to rehabilitation and closure planning to ensure a sustainable legacy, recognising the potential for an operation to impact on the environment and local society after the end life of the asset. UNLOCKING VALUE FOR OUR COMMUNITIESWe concentrate on developing positive, constructive and professional relationships with host governments and communities close to our operations, investing resources to understand their needs and promoting close collaboration to respect human rights and implement social investment strategies. We recognise our responsibility to create shared value for all our stakeholders. By hiring locally and providing fair wages and benefits, we wish to contribute not only to employees’ wellbeing, but also to the economic strength of the communities in which we operate. By procuring from local supply chains, paying taxes and royalties, providing education and internship opportunities and local community investment, we aim to contribute to socioeconomic development. HOMESEARCHPRINTPAGES
28
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY
SUMMARY
OVERVIEW
Producing base metals, which are essential
for modern living, profitably in a safe and
sustainable environment drives CAML’s
strategy and business model. In turn, our
sustainability strategy is built upon the
five pillars shown on page 27. This means
protecting the longevity of our operations
and working towards an enduring net positive
outcome after the end of asset life by
upholding strong ethical practices throughout
the Company and our supply chain, prioritising
the safety, health and development of
our people, conducting business in an
environmentally responsible manner and
positively contributing to our communities
and countries of operation.
CAML’s Board has accountability for risk
management, including those relating to
the Company’s impacts on the economy,
environment and people. Our Sustainability
Committee has overall responsibility for
overseeing these impacts and its report can
be found on page 79.
In our third year of reporting in line with
GRI standards, we have worked to further
improve and develop disclosure. We have
continued to engage with stakeholders
in 2022 and conducted a comprehensive
materiality process.
CAML’s sustainability strategy and practices
continue to develop, and we have advanced
our approach to contributing to the SDGs
in 2022. We recognise that all 17 SDGs
are important and that many of them are
interconnected, however for the purposes of
our sustainability activities, we believe that
it is helpful to prioritise and have therefore
identified these primary and supporting SDGs.
CAML’S PRIMARY SDGS
CAML’S SUPPORTING SDGS
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
SAFETY: LTIFR
LOCAL COMMUNITY SUPPORT
CARBON EMISSIONS INTENSITY
GENDER DIVERSITY
0.83
2021: 1.69
$0.3m
2021: $0.5m
2.14/t Cu eq
2021: 3.11/t Cu eq
13%
2021: 13%
DELIVERING VALUE THROUGH STEWARDSHIPAt CAML, we set high standards that are crucial for the effective running of our operations and the long-term sustainability of our business. With a robust framework to promote ethical behaviour and strong corporate governance, we believe we can contribute to a responsible and stable value chain and business environment. Leading from the top, the Board is responsible for setting the appropriate culture to drive good governance and ethical behaviour throughout the Company. We believe that a robust approach to human rights is vital to fulfilling our corporate responsibilities, not only in respect of our employees but for the workers along our supply chains and within the communities in which we operate.HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
29
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
SUSTAINABILITY SUMMARY CONTINUED
MAINTAINING HEALTH AND SAFETY
Safety has been identified both by the
Company and our stakeholders as one of
our key material issues and is at the heart
of everything we do. Our goal of achieving
zero harm in the workplace for all employees,
contractors and visitors, is laid out in the
Company’s Sustainability Policy and we have a
clear safety improvement target for the Group.
With fully integrated and robust health and
safety management systems at both sites, we
aim to ensure the wellbeing of all personnel.
We strive to implement world-class health
and safety practices across our operations.
It is important that both management and
personnel are aware of their responsibilities
and accountability, and that they feel
empowered to prioritise health and safety in
the workplace.
Wherever possible, we look to eliminate
occupational health risks and believe that
a strong workforce, supported by the
appropriate programmes to monitor and
promote health, is paramount in achieving
high levels of productivity.
FOCUSING ON OUR PEOPLE
We recognise core labour and human rights
principles and acknowledge workers’ freedom
of association and the right for our employees
to bargain collectively within prescribed
laws, communicating issues to management
through designated employee representatives.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
We believe that by encouraging employee development, we can also foster satisfaction and fulfilment amongst our employees. This involves a targeted approach to training facilitated by comprehensive needs analysis. Succession planning is a key focus for the Group in order to develop our leaders of tomorrow. CAML attaches importance on diversity, specifically when considering the breadth of thought, approach and opinion that can be fostered by a diverse group. By embracing diversity and fostering inclusion, we believe we can unlock the power of all talent and work collaboratively and effectively. Site-level diversity focus groups have been put in place to identify areas for improvement and we have implemented long-term targets to improve levels of gender diversity in the Group. We do not tolerate discrimination in any form and have mechanisms in place to raise any issues.CARING FOR THE ENVIRONMENT CAML has robust and comprehensive environmental management systems which aim to substantially reduce (if not avoid) the risk of any potential negative environmental impacts from our operations.We are mindful of our duty to manage and minimise waste responsibly and are firmly committed to environmental and socially responsible tailings and dump leach management, with safety at the centre of our approach.We employ water management strategies and aim to minimise freshwater or makeup usage wherever possible. Biodiversity, rehabilitation and closure programmes are in place across our assets to avoid or mitigate any adverse effects of our operations. Tackling climate change is one of the most important challenges of our time and we believe that every government, community, company and individual has a vital role to play in reducing carbon emissions and safeguarding the future of the planet. We recognise the growing importance of understanding and addressing the impact of climate change on the environment and its potential impact on the business. As such, we have adopted the TCFD framework.In line with TCFD recommendations, we conducted a scenario planning exercise in 2022 to increase our understanding of transition risks that may affect our operations as well as extending our physical risk analysis to our supply chain. In 2023 we will implement key recommended actions and will begin to estimate our Scope 3 emissions in advance of reporting them in 2024.See our 2022 Climate Change Report on our website www.centralasiametals.comUNLOCKING VALUE FOR OUR COMMUNITIESCAML aims to provide demonstrable benefits to stakeholders in our local communities and host countries. By contributing to the economic security of local workers, the provision of employment opportunities is one of the primary ways the Company can provide a positive impact and CAML therefore prioritises local hiring. The Company is committed to providing philanthropic support, fostering sustainable development, facilitating socioeconomic progress (specifically in the field of community training and education) and helping the youth and most vulnerable members of the community in line with our human rights commitments. Our economically robust business that underpins our ability to generate profits and dividends for our shareholders also ensures that our successes are shared with other important stakeholders. This aligns with international priorities such as the UN SDGs, in particular SDG 8 Decent Work and Economic Growth. We strongly believe that by creating shared value we are ensuring the long-term sustainability of our operations and acting as a good corporate citizen. CAML is proud of the value that it brings to its host countries, with taxes of $293.6 million paid to the Governments of North Macedonia and Kazakhstan during our ownership.Read more in CAML’s 2022 Sustainability ReportHOMESEARCHPRINTPAGES 30
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
ADVANCING OUR
CLIMATE CHANGE
WORK IN 2022
2022 CAML GROUP
CO2 EMISSIONS
2022 GROUP REDUCTION IN
GHG EMISSIONS SINCE 2020
59,082t
40%
CORE ELEMENTS OF RECOMMENDED
CLIMATE-RELATED FINANCIAL DISCLOSURES
G O V E RNANCE
S T R ATEGY
RI S
K M A NAGEM
E
N
T
METRICS &
TARGETS
GOVERNANCE
STRATEGY
RISK
MANAGEMENT
METRICS &
TARGETS
The organisation’s
governance around
climate-related risks
and opportunities.
The actual and
potential impacts of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy
and financial
planning.
The processes used
by the organisation
to identify, assess,
and manage climate-
related risks.
The metrics and
targets used
to assess and
manage relevant
climate-related risks
and opportunities.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
CAML’s purpose is to produce base metals, essential for modern living, profitability in a safe and sustainable environment for all our stakeholders. It is this purpose that shapes our business model and our strategic decisions. Our immediate strategic objectives of sustainability, low cost, high margins, and prudent capital allocation are underpinned by our longer-term ambition of growth through acquisition.As an organisation, we recognise the growing importance of understanding the impact of climate change on the environment in which we operate and its potential impact on the business. TCFD was established in 2015 to improve and increase reporting of climate-related financial information and provides information to investors about the actions companies are taking to mitigate the risks of climate change, as well as providing increased clarity on the way in which they are governed.We have adopted the TCFD framework and recommendations as a guide for our efforts to understand how climate change could impact a broad range of our business drivers. This provides a structured approach for us, to work towards embedding climate into our decision-making, and also enables us to learn from and apply best practice on reporting and disclosures. We see this as an opportunity to build on the work we have already done in this area, increase the quality of, and provide meaningful transparency in, our disclosures and continue our roadmap of TCFD reporting. In doing so, we hope to ensure our stakeholders have a better understanding of CAML’s operational and business resilience to climate change as well as how we are currently, and are planning to, incorporate the consideration of climate-related risks and opportunities into our business model. The table on page 32 provides a brief statement on our current activities to understand and begin aligning with the TCFD recommendations. For greater TCFD and climate-related information, please refer to our 2022 Sustainability Report. HOMESEARCHPRINTPAGES 31
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
ADVANCING OUR CLIMATE CHANGE WORK IN 2022 CONTINUED
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
PROGRESS REPORT & NEXT STEPS In our 2021 Sustainability Report, we began moving towards TCFD reporting. We shared our climate strategy and our medium- and long-term goals that were the result of much internal work undertaken and we felt able to commit to a 50% reduction in our Kounrad and Sasa Scope 1 and Scope 2 emissions by 2030 from a 2020 base, and to being net zero by 2050. To that end, we were delighted to report a 27% reduction in our CAML Group GHG emissions in 2022 versus 2021. During 2022 we confirmed our decision to go ahead and construct the Kounrad solar power plant. Earthworks for the 4.77MW facility that should contribute to 16-18% of Kounrad’s power needs commenced before Christmas in Q4 2022 and construction should be complete in H2 2023. We were also delighted to have sourced almost solely renewable power for our Sasa operations, as confirmed in North Macedonia by PwC. In 2021, we disclosed that we had undertaken a detailed review of fuel sources that could potentially replace coal at Kounrad. Though the proposed alternatives weren’t considered viable due to a combination of limited GHG reduction potential and significant operating and capital cost implications, opportunities to reduce coal consumption were identified. The Sasa team, alongside mobile plant contractors Epiroc, undertook an analysis into the practical and financial implications of purchasing electric underground machines for drilling, loading, and hauling of ore which will be considered if/when mobile plant is due to be replaced. In 2022, Sasa planted 6,000 seedlings in the local area and is working with ‘Public Enterprise National Forests’ to identify other areas for tree planting. During 2022, Sasa installed an energy monitoring system, Honeywell, throughout the milling process. We will continue to identify further energy saving measures in 2023.To understand our strategic resilience in terms of our climate risks and opportunities, we undertook scenario analysis work during 2022. This analysis has broadly validated our climate strategy and has helped us to identify our risks and opportunities as well as key workstreams for us to focus on going forwards. HOMESEARCHPRINTPAGES 32
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
ADVANCING OUR CLIMATE CHANGE WORK IN 2022 CONTINUED
In 2023, we plan to collect data to enable us to report our Scope 3 emissions
estimates in 2024 for the 2023 operating year.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
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RECOMMENDATION
GOVERNANCE
DISCLOSURE
TOPIC
Board
oversight
ALIGNMENT STATUS
Our Board receives regular climate-related updates
from Committees and Management in most meetings,
and these findings shape our strategies and decision-
making processes.
RECOMMENDATION
RISK
MANAGEMENT
Management’s
role
We have several committees and management-level
positions with climate-related responsibilities, including
assessing and managing climate-related risks.
DISCLOSURE
TOPIC
ALIGNMENT STATUS
Risk
identification
and assessment
We have identified existing and emerging physical and
transition climate risks and incorporated these into our
Group risk register.
Risk
management
Risk owners are identified, and we have established
measures to mitigate, transfer, accept or control the
impacts of identified climate-related risks. Risks, and
our response, are monitored on a quarterly basis.
STRATEGY
Risks and
opportunities
Impact on
organisation
Resilience of
strategy
Our 2021 climate risk assessment work resulted in us
developing a risk register and beginning to identify
risks and opportunities over the short, medium and
long term. Our 2022 scenario analysis work has
enabled us to appraise these risks and opportunities in
a fuller manner.
Our 2021 climate risk assessment work assisted us
in developing our climate change strategy. This was
further tested by our climate scenario analysis that was
undertaken in 2022, which deepened our understanding
of the direct and indirect climate-related impacts to our
business, financial planning, and strategy.
Following completion of our scenario analysis in Q4 2022,
we have been able to understand and test our strategic
resilience under three possible climate futures. While our
strategic rationale has been broadly confirmed by this
work, we have identified a list of recommendations on
which to work. This helped to validate our existing strategy
and further develop our risk assessments. In 2023, we
will assess our risk mitigation and opportunity realisation
options and will refine our climate change strategy or take
further action, as appropriate.
METRICS AND
TARGETS
Integration
of risk
management
Our identified climate-related risks are included in our
Group-level risk register and are integrated into our
established risk management practises.
Climate-related
metrics
We assess emissions, and proportion of renewable
energy. We have established a shadow carbon price,
which can be applied to our financial models to aid
decision-making. We will continue to evaluate other
relevant metrics as we further analyse the results
of the risk assessment and begin to act on our
Climate Strategy.
Scope 1,2,3
We report Scope 1 and 2 emissions and are working
towards reporting Scope 3 emissions for the 2023
operating year in 2024.
Climate related
targets
We are targeting a 50% reduction in Scope 1 and 2
combined GHG emissions by 2030 from a 2020 base.
We are also aiming for net zero by 2050. We will
continue to evaluate other potential targets, such as for
Scope 3 or for risk and opportunity management.
HOMESEARCHPRINTPAGES 33
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
STAKEHOLDER ENGAGEMENT / SECTION 172
STAKEHOLDER
ENGAGEMENT
Overview
Strategic Report
Governance
Financial Statements
2
QCA
Seek to understand and
meet shareholder needs
and expectations
3
QCA
Take into account wider
stakeholder and social
responsibilities and
their implications for
long-term success
10
QCA
Communicate how the company
is governed and is performing
by maintaining dialogue
with shareholders and other
relevant stakeholders
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
The Board of Directors has always been mindful of the duties of Directors under s172 of the Companies Act 2006.All Directors act in a way they consider, in good faith, to be most likely to promote the success of the Company for the benefit of its members. In doing so, they each have regard to a range of matters in making decisions for its success over the long term. Key decisions and matters that are of strategic importance to the Company are appropriately influenced by the matters set out in s172.Our purpose is to produce base metals, essential for modern living, profitably in a safe and sustainable environment for all our stakeholders. This purpose is underpinned by our values which inform the behaviour and standards expected throughout the Group. This purpose-driven approach determines how we identify and deliver our immediate and long-term strategic objectives and generate sustainable, long-term returns for all our stakeholders.Throughout the year we continually engage, both formally and informally, with our key stakeholders. This enables us to assess and clearly understand their needs, consider their perspectives, expectations and monitor their impact on our strategic ambition. This invaluable engagement helps us to identify factors that should be taken into consideration as part of the Board’s decision-making process. When considered appropriate, we also undertake independent stakeholder engagement with external consultants in order to ascertain shareholder views with regard to specific matters. In 2022, we repeated the process of conducting an assessement of material sustainability topics as we did in 2020, working with consultants, corporately and for both of our operations.The Board and its Committees are mindful of the potential impact of decisions on relevant stakeholders whilst also having regard to a number of broader factors, including the need to foster the Company’s business relationships with suppliers, customers and others. Particular consideration is given to the impact of the Company’s operations on the community and environment, responsible business practices and the likely consequences of principal Board decisions in the long term.Examples of this can be seen in the ongoing long-term planning for the operation of the Group’s key assets in Kazakhstan and North Macedonia, ensuring that this continues to take account of the interests and views of our stakeholder groups.Remuneration is another area in which the Group takes account of the views of its stakeholders, through employees and their representatives and, at a senior level, through the views of investors. The Remuneration Committee of the Board works closely in consultation with the Sustainability Committee to ensure that the sustainability performance targets included in both its short-term and long-term incentive plans are appropriately stretching, clearly defined and quantative and that these are linked to the Group’s long-term strategy and value creation. It also monitors progress against these measures to ensure that, through our incentive plan performance targets, Executive Director (and senior management) remuneration is aligned with the stakeholder experience. See the Report of the Remuneration Committee on pages 91 to 101 for further detailsThe importance of good governance has always been recognised within CAML and its role in the management of the Company has been key to building and sustaining value over the long term. In 2022, the Board decided to further strengthen its governance processes with the establishment of two new Committees to provide support and guidance in addition to the four existing principal Board Committees. This update to our governance framework resulted in the addition of a Technical Committee to assist the Board in its review of major projects, and an Advisory Committee through which the Board can access the historical knowledge and perspectives of former Directors and senior managers who have retired from the Group. In addition, we assessed the memberships of each of the Committees to ensure that memberships were optimised to utilise the skills and experience of each of our Directors in the best way possible.Further examples of how the Company has had regard to the matters set out in section 172(1)(a)-(f) when discharging its duties can be found throughout the Strategic Report. The table on pages 34 to 35 sets out our key stakeholder groups and how we engaged with them during the year.Further examples of how the Company has had regard to the matters set out in section 172(1)(a)-(f) when discharging its duties can be found throughout the Strategic Report. The table on pages 34-35 sets out our key stakeholder groups and how we engaged with them during the year.HOMESEARCHPRINTPAGES 34
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
STAKEHOLDER ENGAGEMENT / SECTION 172 CONTINUED
STAKEHOLDERS
HOW THE BOARD AND COMPANY ENGAGE WITH THEM
KEY TOPICS RAISED
OUTCOMES OF ENGAGEMENT
SHAREHOLDERS
Our shareholders play an
important role in supporting
our Company. We recognise
the importance of the
activities and outcomes of
stewardship and regularly
engage with investors on
our financial performance,
strategy, and business model
and our ESG performance.
EMPLOYEES AND
CONTRACTORS
Our employees are our most
important asset. They want to
work in an environment where
they are safe and respected,
and have the opportunity to
learn, reach their potential and
develop successful careers
in a Company they can be
proud of.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
‣ Regular one-on-one meetings with Executive Directors and Director
‣ Capital allocation
of Corporate Relations
‣ Investor presentations (Executive Directors)
‣ AGM (all Directors)
‣ AGM held through Investor Meet Company retail investor platform
‣ In-person and virtual industry conferences (including Executive
Directors)
‣ Social media
‣ Business development
‣ Inflation
‣ Kazakhstan political risk
‣ Climate change
‣ Diversity and inclusion
‣ Newsletters
‣ Email
‣ Briefings
‣ HR discussions
‣ Notice boards and suggestion boxes
‣ Local website at both operations
‣ Union representatives at Sasa and Employee representative group
at Kounrad
‣ Video presentations (including Executive Directors)
‣ Wages with regard to in-country inflation
‣ Job postings
‣ Amendments or introduction of new policies
or initiatives
‣ Briefing of Company performance and KPIs
‣ Introduction and onboarding of new hires and
health and safety rules and procedures
‣ Stakeholder engagement-based materiality assessment
undertaken, and material sustainability topics adjusted to
reflect their views
‣ Views sought on capital allocation from largest
shareholders in light of CAML’s debt free position
‣ Regular dialogue maintained by Executive Directors on
business development strategy with largest shareholders
and retail shareholders
‣ Clear communication given to market by Executive
Directors on CAML inflation risks
‣ Personal phone call to largest shareholders from
Kazakhstan Executive Director of Corporate Development
to explain Kazakhstan unrest in January 2022, as well as
answering many queries from retail shareholders
‣ Executive Director discussions with shareholders at
results meetings
‣ Stakeholder engagement-based materiality assessment
undertaken and material sustainability topics adjusted to
reflect their views
‣ Support provided to site staff via inflation-beating 2022
pay rises in excess of 15%
‣ New role of Internal Communications
Coordinator developed
‣ Executive Director of Corporate Development
presentation to Kounrad workforce on CAML commitment
and support
‣ Found suitable candidates for vacancies at our operations
‣ Employees informed of Company vision and short-term
focus areas
‣ New hires informed about the Company’s ethos, Group
policies, their colleagues and safety rules, to help them
settle into the role quickly
HOMESEARCHPRINTPAGES 35
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
STAKEHOLDER ENGAGEMENT / SECTION 172 CONTINUED
STAKEHOLDERS
HOW THE BOARD AND COMPANY ENGAGE WITH THEM
KEY TOPICS RAISED
OUTCOMES OF ENGAGEMENT
GOVERNMENTS, NGOS
Building trust and partnership
with the governments
that host our operations is
very important to us while
minimising any adverse
impacts on the natural
environment.
‣ Meetings with Company management (including Executive Directors)
‣ Permitting for the Cut and Fill Project
‣ National government engagement (including Executive Directors)
‣ Inflation
‣ Local government officials – meeting with Non-Executive Directors
‣ Ensuring a generally positive impact of the
and Chair of Sustainability Committee
mining industry in North Macedonia
‣ Site visits by government officials and ministers (including
Executive Directors)
‣ Significant technical input by professors of local technical universities
COMMUNITIES
‣ Local media
‣ Local jobs
‣ Drop-in community relations centre at Sasa
‣ Support for local communities
‣ Public meetings
‣ Local websites at both operations
‣ Local community events
‣ Communication by telephone and email
‣ Sponsor of university students
‣ Sasa training centre
‣ Preferential local procurement imbedded within our Procurement Policy
‣ Communication regarding Company values and policies, which are
signed off by the Board, and which cover governance and ethics topics
Building trust and partnership
with the communities
closest to our operations is
very important to us while
minimising any adverse
impacts on the natural
environment.
SUPPLIERS
We have established long-
term partnerships that
complement our in-house
expertise and have built
a network of suppliers
who share our Company
values both on a local and
international level.
‣ Stakeholder engagement-based materiality assessment
undertaken and material sustainability topics adjusted to
reflect their views
‣ ESIA and other necessary permits approved for Sasa Cut
and Fill project
‣ Kounrad won award for its social responsibility (medium-
sized business) and was presented award by Kazakh
president, Tokayev
‣ Stakeholder engagement-based materiality assessment
undertaken and material sustainability topics adjusted to
reflect their views
‣ LinkedIn page now live for local recruitment at Sasa
‣ Held successful local community consultation over ESIA
‣ Long-term sustainable development plans
(Sasa)
‣ Impacts of change to paste fill mining
approach
‣ PrimePoint appointed to work with Sasa and local
‣ Community health issues in Kounrad/
municipality
Balkhash
‣ Sponsorship of five student doctors to go through
university
‣ Supplier Code of Conduct containing social
assessment rolled out to new suppliers and
met with some reluctance to complete the
exercise
‣ Addressing and monitoring trade sanctions
within supply chains and procurement
policies
‣ Unauthorised migrants found in supplier
delivery vehicles
‣ Stakeholder engagement-based materiality assessment
undertaken, and material sustainability topics adjusted to
reflect their views
‣ Social assessment questionnaire to be presented
alongside tendering. Environmental assessment aspects
to be introduced into the questionnaire
‣ Annual compliance training for on-site contractors/
suppliers and dissemination of human rights letters to top
suppliers continues
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Further examples of how the Company has had regard to the matters set out in section 172(1)(a)-(f) when discharging its duties can be found throughout the Strategic Report. HOMESEARCHPRINTPAGES 36
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW
Overview
Strategic Report
Governance
Financial Statements
NORTH MACEDONIA
SKOPJE
SASA
MINE
ZINC
LEAD
SILVER
In 2022, Sasa mined 806,069 tonnes of
ore and processed 806,653 tonnes of
ore. The average head grades for the
year were 3.15% zinc and 3.63% lead
and the average 2022 metallurgical
recoveries were 84.6% for zinc and
93.4% for lead.
LOCAL EMPLOYMENT
AT SASA
98%
HOW WE PRODUCE ZINC AND LEAD
Sasa produces a zinc concentrate and a
separate lead concentrate. Total production for
2022 was 42,824 tonnes of zinc concentrate at
an average grade of 50.1% and 38,439 tonnes 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,
total 2022 payable sales were 17,862 tonnes
of zinc in concentrate and 25,689 tonnes of
lead in concentrate.
During 2022, Sasa sold 316,757 ounces of
payable silver to Osisko Gold Royalties in
accordance with its streaming agreement.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Mine Sub-level caving underground mine with ore transported to surface by shaft (70%) and by truck (30%)Crush and screen Jaw and cone crushersMill Rod mills, spiral classifiers and ball mills. Ore milled to c.74 micronsFroth flotation Two concentrates produced – lead containing silver, and zincRemove moisture Thickened and pressed to de-waterStorage Saleable concentrate products stored in sheds awaiting loadingTo market Concentrate trucked to smeltersHOMESEARCHPRINTPAGES 37
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
SASA PRODUCTION STATISTICSUnits202220212020Ore minedt806,069818,609826,421Plant feedt806,653830,709820,215Zinc grade%3.153.143.37Zinc recovery%84.684.986.1Lead grade%3.633.523.85Lead recovery%93.493.194.3Zinc concentratet (dry)42,82444,38347,583 – Grade%50.149.950.0 – Contained zinct21,47322,16723,815Lead concentratet (dry)38,43937,89341,289 – Grade%71.271.872.0 – Contained leadt27,35427,20229,742Ore development in the two working areas totalled 3,114 metres, which was approximately 14% more than last year and involved accessing additional sub-levels below the 910 metre level during H2 2022. Waste development for the year totalled 2,378 metres, approximately 9% above last year for approximately 92,000 tonnes of waste, generated from internal ramp access and crosscuts to the ore body, raise development and the development of the Central Decline. The mine produced a total of 898,069 tonnes of ore and waste during the year, approximately 1% more than last year.MAINTENANCE A computerised maintenance management system for surface and underground equipment is in the process of being commissioned. Underground communications were improved with the introduction of underground Wifi, which will be completed by the end of H1 2023. During the year, certain equipment was purchased to increase efficiency: ‣an Epiroc Bolting Drill Rig Boltec S for the safe and efficient installation of roof bolts; ‣two Paus utility units fitted with interchangeable platforms and hydraulic hammers for rock scaling; ‣a Putzmeister SPM 4210 wet shotcrete unit and mixer to enable in-cycle support, replacing the handheld shotcrete units previously used underground; ‣a Manitou MHT-X790 Mining for installation of underground reticulation system; ‣a Paus Bus (Minca); and ‣a CAT rock crusher.PROCESSINGSasa processed 806,653 tonnes of ore during the year, a fall of approximately 3% versus 2021, and the plant had an overall availability of 95% – an improvement of 2% on 2021. In addition to the planned maintenance works completed during the year, automated oil lubrication systems and flow meters were installed and commissioned on all of the mills. In November 2022, the reconfiguration of the tertiary crusher and feed arrangements were completed and commissioned.The tailings storage facility systems at Sasa ran to a high standard and without incident during the year, managed by a designated tailings management team. Knight Piésold audited the TSFs in H2 2022 and CAML appointed an experienced Independent Technical Reviewer, who also reviewed the management of Sasa’s TSFs. Sasa is currently actioning the recommendations from both reports and working to conformance with GISTM in H1 2024.During the year, construction of the TSF4 waste rock toe continued with the placement of 37,000 m3 of waste rock from the Sasa underground mine. A new bridge transporting tailings to TSF4 from the processing plant was constructed over the Soborski Dol River.A seismic monitoring system and piezometer sensors were installed as part of an overall drive to automate TSF monitoring systems and commissioning is underway. The rehabilitation of the TSF3.2 facility continued throughout the year with the placement of waste rock from the Sasa underground mine. HEALTH AND SAFETYAt Sasa, there were two LTIs, two medical treatment injuries (‘MTIs’) and one restricted work case (‘RWC’) during the year. MININGA total of 806,069 tonnes of ore were mined using the sub-level caving method during the year from the 990 metre and 910 metre working areas. The ore from the underground operations is hoisted via the Golema Reka shaft to surface (c.73%) and the remainder is trucked to surface via the existing XIVb decline using a fleet of 20 tonne Epiroc trucks.The average combined grade of the ore mined was 6.78% zinc and lead, approximately 2% higher than 2021.HOMESEARCHPRINTPAGES 38
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
DRILLINGA total of 6,670 metres of exploitation drilling was completed during the year on the two working areas, the 910 metre and 990 metre levels, to provide additional information on the grade and thickness of the three orebodies on the sub-levels.A total of 5,760 metres of exploration drilling was completed below the 830+14 metre level to improve the geological understanding of the mineralisation at depth. A total of 2,950 metres of exploration drilling in three holes was completed from surface to test the geology at depth below the 700 metre level. One hole intersected three zones of mineralisation down to at least the 580 metre level proving the extension of the mineralisation at depth to the south-west and adding to the Inferred Mineral Resources. The second and third hole proved the limits of the north-western extents of the mineralisation.There was no exploration drilling completed at Kozja Reka or Golema Reka during the year.A comprehensive dewatering programme was also completed during the year with over 250 metres of drainage holes drilled.2023 PRODUCTION GUIDANCEAt Sasa, 2023 will be a year of transition from the current sub-level caving mining method to a paste fill mining approach. Therefore, CAML maintains its ore mined guidance year on year of 790,000 to 810,000 tonnes. The Company expects some adjustment in the split of its metal products this year, and therefore provides production guidance of 19,000 to 21,000 tonnes of zinc in concentrate and 27,000 to 29,000 tonnes of lead in concentrate. CUT AND FILL PROJECTThe transition to using paste fill at Sasa will create a safer and sustainable underground mining operation for the long term. The Cut and Fill Project comprises the construction of a Paste Backfill Plant and associated reticulation, development of a new Central Decline and the Dry Stack Tailings Plant and associated landform.Paste Backfill PlantFollowing the ESIA approval for the Paste Backfill Plant in Q3 2022, a contract was signed with local construction company, Activa, and excavation and civil works began shortly after. The construction of the steel structure began during Q4 2022 with 95% of the structural elements now complete. Also, during Q4 2022, internal works started with the installation of the continuous mixer. All equipment for the Paste Backfill Plant has been ordered and any outstanding items are due for delivery in H1 2023, and the overall project remains on track. The underground reticulation required to transport the paste backfill material to the voids underground consists of two phases and connects the surface Paste Backfill Plant with the working areas on 910 and 990 metre levels, via the XIVb and the Central Decline accesses. In Q3 2022, a designated and trained team commenced the underground installation of 2,109 metres of pipes and associated infrastructure (including 457 metres in the Central Decline). This project was completed during Q4 2022. The construction of the services culvert from the processing plant to the Paste Backfill Plant started during Q3 2022. Concrete and steel works have been completed, including the bridge over the Kozja Reka River, all necessary equipment, pipes and valves were delivered to site in Q4 2022 for this aspect of the project, and the installation of the pipes and electrical cable are on track to be completed during H1 2023. Central DeclineThe 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 metre production level by the end of H1 2023. The Central Decline is fully serviced with power, stage pumping and cuddies mined at c. 200 metre intervals. In Q4 2022, a surface 75kW fan was installed and commissioned, producing up to 24m3 per second for ventilation. Dry Stack Tailings Plant Following an ongoing review of the dry stack tailings plant and landform conducted by Knight Piésold, as well as local experts, Geing and Atrium and local academic Professors, a number of enhancements have been included in the Dry Stack Tailings project. The review will be completed in H1 2023, and construction is scheduled to start in H2 2023 and be completed during that period. Orders for long-lead items such as the Metso-Outotec filter press have been placed. Tailings Management A key benefit to the Cut and Fill Project is the improved storage of tailings. Currently, all tailings generated from Sasa’s processing plant are stored in TSF4. During the life of the mine, tailings will be stored in the following three locations: ‣Backfill: 34% of the flotation tailings will be used to produce paste backfill. ‣Dry Stack Tailings: Sasa aims to introduce dry stack storage technology for 35% of the flotation tailings. ‣TSF4: Approximately 31% of tailings will be stored in the existing storage facility using the existing methodology.Investigation is underway to identify additional voids to store tailings as paste backfill underground to allow for any extensions to Sasa’s life of mine. HOMESEARCHPRINTPAGES 39
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
SASA MINERAL RESOURCES, ORE RESERVES AND LIFE OF MINE (‘LOM’)During Q4 2021, CAML bolstered its technical team, in particular with the recruitment of a new Group Geologist and Group Technical Services Director. During 2022, the technical services team revisited Sasa’s Mineral Resource Estimate (‘MRE’) for its Svinja Reka deposit, as well as its Ore Reserves. The updated work took into account recent additional drilling at depth and was completed using new modelling software as well as incorporating the net smelter return (‘NSR’) cut-off method for polymetallic orebodies instead of the cut-off grade method previously applied. Sasa’s MRE and Ore Reserves are shown in the following tables. Total Svinja Reka Mineral Resources have decreased to 12.3Mt at 4.2% Pb and 2.9% Zn compared to 13.5Mt at 4.6% Pb and 3.0% Zn reported as of 31 December 2021. This is due to 2022 mining depletion and an adjustment of approximately 0.5Mt due to geological reinterpretation based on the results of the recent exploration drilling.The Svinja Reka Ore Reserve has decreased to 8.8Mt at 3.9% Pb and 2.6% Zn from 9.5Mt at 4.1% Pb and 2.8% Zn reported as of 31 December 2021. The most material factors in this adjustment are related to 2022 mining depletion, resource model changes, the inclusion of some deeper Indicated Resources not previously included and mine design changes, including the use of Long Hole Stoping with paste fill as an additional mining method. The introduction of Long Hole Stoping will support a reduced minimum mining width and reduced dilution as well as enable an increased sub-level height, reducing development requirements and improving overall mine productivities.Following review of the Mineral Resources and Ore Reserves, detailed mine planning work was undertaken and CAML now plans for a maximum production from Svinja Reka of 830,000 tonnes per year, reduced from the 900,000 tonnes per year previously anticipated for the longer term. As a result, Sasa’s expected LoM has increased to 2039 from 2037. Approximately 10,600 metres of exploration drilling is planned at Sasa for 2023, which will focus on underground drilling of the Kozja Reka deposit from the Central Decline to explore for down dip extensions of the previously mined mineralisation. In addition, surface drilling into the Golema Reka deposit is planned, as well as down dip exploration and infill drilling at Svinja Reka. Mineral resource estimate for Svinja Reka and Golema RekaSasa’s technical services team has updated the Mineral Resource Estimate (‘MRE’) for the Svinja Reka deposit as of 31 December 2022. The Golema Reka MRE was updated on 1 January 2020.GradesContained metalClassificationDepositMtPb (%)Zn (%)Ag(g/t)Pb (kt)Zn (kt)Ag(koz)Indicated Mineral ResourcesSvinja Reka10.34.53.031.645930610,499Golema Reka1.33.81.613.04820528Total Indicated11.64.42.829.550932711,042Inferred Mineral ResourcesSvinja Reka2.02.92.421.656471,354Golema Reka6.33.51.412.0217862,444Total Inferred8.33.41.614.32731333,798Total Indicated and Inferred Resources19.94.02.323.278246014,840Notes- Mineral Resources have an effective date of 31 December 2022. - The Competent Person for the declaration of Mineral Resources is Graham Greenway, BSc.Honours (Geology), PGeo. Graham Greenway, CAML’s Group Geologist, is a Practising Registrant of the Professional Geoscientists of Ontario and has over 34 years’ experience in the exploration, definition and mining of precious and base metal Mineral Resources, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a ‘Competent Person’ as defined by JORC and as required by the June 2009 Edition of the AIM Note for Mining and Oil & Gas Companies. He has reviewed, and consents to, the inclusion in the Annual Report of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.- Mineral Resources are reported inclusive of Ore Reserves.- The Svinja Reka Mineral Resource is reported based on a NSR cut-off of $46/t for Sub-Level Caving and $53/t for Cut and Fill and Long Hole Stoping and are based on metal price assumptions of $2,755/t for zinc, $2,290/t for lead and $22/oz for silver. - The Golem Reka Mineral Resource is reported above a cut-off grade of 2% combined lead and zinc.- Mineral Resources are reported as undiluted. No mining recovery has been applied in the Statement.- Tonnages are reported in metric units, grades in percent (%) or grams per tonne (g/t), and the contained metal in metric units or ounces. Tonnages, grades, and contained metal totals are rounded appropriately.- Rounding may result in apparent summation differences between tonnes, grade and contained metal content.HOMESEARCHPRINTPAGES 40
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
SASA SUSTAINABILITY HIGHLIGHTS
DELIVERING VALUE
THROUGH STEWARDSHIP
MAINTAINING
HEALTH & SAFETY
FOCUSING
ON OUR PEOPLE
CARING FOR
THE ENVIRONMENT
UNLOCKING VALUE
FOR OUR COMMUNITIES
Completed Human Rights
Impact Assessment, taking
into account GISTM
requirements and Cut and
Fill Project
Significant incident and
root cause investigation
training
Partnered with local
schools to create a dual
education programme that
focuses on attracting and
training students into the
mining industry
Received approval
of the ESIA for the Cut
and Fill Project
Development of the LEDP
and LEAP plans at Sasa
with workshops being held
between the local
municipality and Sasa to
finalise the plans
Svinja Reka Ore Reserve StatementThe following Ore Reserve Statement has been prepared by Sasa’s technical services team based on a LoM plan that includes a transition from the Sub-Level Caving mining method to Cut and Fill as well as Long Hole Stoping with paste backfill. The Ore Reserve Statement considers the updated Indicated Resources constrained within a practical and economic mine design only. NSR cut-off values and design modifying factors for each mining method were applied as follows: ‣Sub-Level Caving, ‣NSR Cut-Off Value = $46/t ‣Planned Dilution 25% ‣Mining Recovery 85% ‣Cut and Fill ‣NSR Cut-Off Value = $53/t ‣Planned Dilution 5% ‣Mining Recovery 98% ‣Long Hole Stoping ‣NSR Cut-Off Value = $53/t ‣Planned Dilution 17.4% ‣Mining Recovery 90% ‣Ore Development ‣NSR Cut-Off Value = $37/t ‣Planned Dilution 5% ‣Mining Recovery 98%GradesContained metalSvinja RekaMtPb (%)Zn (%)Ag(g/t)Pb (kt)Zn (kt)Ag(koz)Probable8.83.92.627.03462327,662Total8.83.92.627.03462327,662Notes- Ore Reserves have an effective date of 31 December 2022.- The Competent Person who has reviewed the Ore Reserves is Scott Yelland, C. Eng, FIMMM, MSc, who is a full-time employee and Chief Operating Officer of CAML. He is a mining engineer with over 38 years’ experience in the mining and metals industry, including operational experience in underground zinc and lead mines, and as such qualifies as a Competent Person as defined in the JORC Code (2012).- The Ore Reserve is reported using a NSR cut-off of $46/t for Sub-Level Caving, $53/t for Cut and Fill and Long Hole Stoping and $37/t for Ore Development drives that are required to establish stope access and are based on metal price assumptions of $2,395/t for zinc, $1,992/t for lead and $19.3/oz for silver.- Rounding may result in apparent summation differences between tonnes, grade and contained metal content.- The Mineral Resources and Ore Reserves are reported in accordance with the guidelines of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’).HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
COPPER
ASTANA
KOUNRAD
OPERATION
ALMATY
41
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
KAZAKHSTAN
The Kounrad team was proud to
exceed its production target during
2022. Most importantly, this copper
was produced safely and, to
31 December 2022, there have
been 1,689 days since the last
LTI at Kounrad.
2022 CATHODE PRODUCTION
The SX-EW plant produced a record 14,254
tonnes of copper cathode during 2022, a
slight increase from the previous year of
14,041 tonnes. The total Kounrad copper
production since operations commenced in
April 2012 is now 138,395 tonnes, equating
to 55% of the forecast life of operation
extractable tonnage.
During 2022, copper was leached from the
Eastern and Western Dumps, with both areas
performing well.
LOCAL EMPLOYMENT
AT KOUNRAD
100%
HOW WE PRODUCE COPPER
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Irrigation Irrigation of dumps Leaching Leaching of copper into PLS solution Extraction Extraction of copper from PLS Stripping Stripping of copper from organic solution Electro-Winning Electro-winning of copper from electrolyte Copper Cathode Production of copper cathode HOMESEARCHPRINTPAGES 42
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
KOUNRAD COPPER OPERATION
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
RESOURCES MAP
Estimated remaining copper to be recovered
Western
Dumps
c. 106,200t
Original
pit
Eastern
Dumps
c.5,400t
Kounrad
village
Plant
This takes the total quantity of copper recovered from the Eastern Dumps, since operations commenced, to over 82,000 tonnes, slightly higher than the quantity forecast at the time of the CAML Initial Public Offering (‘IPO’) in 2010. Typically, the daily average area under irrigation at the Eastern Dumps during the year was 18.5 hectares, noting that winter leaching is restricted to an area of around 12 hectares.The project to relocate approximately 180,000 cubic metres of material, containing approximately 2,000 tonnes of copper close to the Kazakhmys railway line, was completed by the end of April 2022 using a local contractor. A cut-back leaving a 30-metre distance to the railway line from the dump toe has now been completed, through which a lined trench extension of 876 metres has been installed. This newly exposed area of fresh, previously unleached material is scheduled for irrigation during 2023, although depending upon overall outputs this might be deferred until 2024.The continued successful and economic generation of copper from the Eastern Dumps is anticipated to continue into 2025.HEALTH AND SAFETYThere were no LTIs, RWCs or MTIs at Kounrad during 2022. There have now been 1,689 days since the last LTI at Kounrad.LEACHING OPERATIONSBoth the Eastern and Western Dumps were simultaneously leached during 2022, with the production split being 18% and 82% respectively.In the Eastern Dumps, the team focused on irrigating previously leached blocks in order to maximise the recovery of copper from the resource. This technique was implemented on various blocks that had been allowed to rest for periods of, in some cases, almost two years. During this rest period, bacterial and chemical activity continued to degrade and solubilise copper mineralisation, especially the more leach resistant species such as chalcopyrite. In addition, with the purchase of a new bulldozer, the summer period was spent pushing and levelling side walls along Dump 7. This new area of exposed material will be leached during 2023. Adopting these approaches resulted in the typical pregnant leach solution (‘PLS’) grade pick-up averaging about 0.7 grammes per litre (‘gpl’), similar to that achieved in 2021. This was somewhat better than anticipated due to leaching the fresher, side slope material and resulted in extracted copper of around 2,625 tonnes from this area.HOMESEARCHPRINTPAGES 43
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Risk Management
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KOUNRAD COPPER PRODUCTION
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
2012Annual production (t)16,00014,00012,00010,0008,0006,0004,0002,0000Cumulative annual production (t)140,000160,000120,000100,00080,00060,00040,00020,00002013201420152016201720182019202020212022Copper productionCumulative copper productionKOUNRAD COPPER PRODUCTIONAt the Western Dumps, the focus of irrigation remained on parts of Dumps 16, 21, 22 and 1A, from which 11,629 tonnes of copper were recovered, contributing approximately 82% of the total Kounrad copper production. The average daily area under irrigation on the Western Dumps increased to 38.2 hectares (37.5 hectares in 2021) of both new and previously leached material. The volume of raffinate pumped around the site averaged 1,228 cubic metres per hour (‘m3/hr’). As in previous summer periods, a proportion of the off-flow solutions from the Eastern Dumps were recycled across to the Western Dumps with the aim of maintaining broadly stable PLS grades to the solvent extraction (‘SX’) plant.The second phase of the Intermediate Leaching System (‘ILS’) was completed in mid-July and at the beginning of August was commissioned and put into test operation. All aspects of the engineering design parameters were validated, and the test was operated with a flow rate of 340m3/hr for six weeks until mid-September, when it was stopped to commence winter leaching switch-over preparations. Whilst the test run was quite short indications of additional pick-up from leaching old blocks appeared positive, with a typical gain of around 0.7 grams per litre (‘gpl’) achieved during this trial period. However, the very positive leaching performance of the dumps, which continues to generate the required copper transfer to the SX-EW facility, confirms that the ILS circuit will probably not be required as an integral component of the circuit until 2025 or so. During the intervening period we are undertaking additional column tests, replicating the ILS system, in order to better advance our understanding of optimum parameters for when it is utilised more permanently. The first such samples have been collected, prepared, and loaded to columns with testing scheduled to start in January 2023.Application rates of solution to the dumps were maintained at a level of 2.32 litres per square metre per hour (‘l/m2/hr’) throughout the year, slightly higher than in 2021.During the course of the year, 820 metres of the extended interceptor trench around Dump 21 were lined with HDPE and are ready for operations in 2023. Additionally, the extension of the trench encircling Dump 16 by 890 metres, between blocks 22 and 32 was fully excavated but the HDPE lining will only be installed as leaching of the relevant side blocks commences.Our two dozers continued with their work of significant levelling and shaping earthworks, primarily on the Western Dumps. At the Eastern Dumps, dozer work was relatively limited to the preparation of unleached side slope and road access areas.The new winter measurement and control systems, which were designed and prepared in late 2021, operated extremely well during the winter period through to March 2022. They allowed excellent control of dripper end temperatures and resulted in an optimised consumption of coal by the three Western Dump area boilers, with a saving of around c.15% compared to the previous winter.HOMESEARCHPRINTPAGES 44
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
OPERATIONAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
KOUNRAD SUSTAINABILITY HIGHLIGHTS
DELIVERING VALUE
THROUGH STEWARDSHIP
MAINTAINING
HEALTH & SAFETY
FOCUSING
ON OUR PEOPLE
CARING FOR
THE ENVIRONMENT
UNLOCKING VALUE
FOR OUR COMMUNITIES
Responsible Business
Award presented to
Kounrad by the President of
Kazakhstan
Implementation of a
Group strategy with
regards to change
safety culture
Created a mentoring
programme to help
onboard new staff into
the business
Received the required
environmental permitting
for the Kounrad Solar
Power Plant and
commenced preparatory
ground works
Sponsorship of five
student doctors through
university to assist with
reducing the shortage of
medical professionals in
the local community
SX-EW PLANTThe SX-EW plant continued to operate efficiently during 2022 and the overall operational availability throughout the year was 99.3%. This was 0.1% below that of 2021, primarily due to a planned increase in maintenance schedules to reflect the needs of the process equipment which has been in almost permanent operation for 10 years.With the average Western Dumps copper grade of around 0.1% and largely fully leached Eastern Dump materials, the average PLS grade for the year was 2.25gpl, approximately 0.1gpl lower than in 2021. Solution flow rates through the SX averaged 1,018m3/hr, with summer rates averaging approximately 1,150m3/hr. During the year, each of the four extract settler units were taken off-line to facilitate inspection and any necessary repairs and, after 10 years of operation, their condition was found to be excellent.At the start of Q2 2022, 960 anodes were renewed in the EW2 building, these being the first replacements in that plating unit for seven years. As a consequence, both EW sections are fitted with excellent quality anodes and no replacement orders are expected to be made until around 2024. In respect of cathodes a local factory has been identified that can refurbish them, without the requirement to send them to either Chile or Germany. This has obvious cost benefits in terms of shipment and other savings, and of course means that turnaround of the plates is faster and therefore more flexible.During the year, increased focus on reagent consumptions and controls, particularly imported organic reagents, was made by the operations team with success. Additionally, due to supply chain disruptions, it was decided to increase on-site storage of the Escaid reagent and, by December, an additional two tanks with storage capacity of 180m3 were installed and filled.The focus for the operations team has been on continued safe, efficient plant operations and the tight control of all operating costs. The management changes introduced in Q3 2021 are now fully embedded and working extremely well under the guidance and control of the site based Technical Director.COPPER SALESThroughout the year, the quality of CAML’s copper cathode product has once again been maintained at high levels both chemically and visually and there have been no negative quality claims. Regular in-house and independent metallurgical analyses have consistently reported 2022 copper purity of around 99.998%. The Company continues to sell the majority of copper production through its off take arrangements with Traxys.2022 PRODUCTION GUIDANCEThe 2023 guidance for Kounrad’s copper cathode production is between 13,000 and 14,000 tonnes.SOLAR POWER PROJECTFollowing detailed engineering works by TGS, a Kazakh engineering firm specialising in renewable energy installations, the CAML Board approved the construction of a 4.77MW solar panel facility in 2022.The facility has an estimated capital cost of up to $5 million and is forecast to generate approximately 9.2 million kWh per year or around 16 to 18% of annual power consumption. This is expected to reduce Kounrad’s Scope 1 and 2 GHG emissions by c.10% versus 2020.Upon receipt of all necessary regulatory approvals, the levelling earthworks on the 10-hectare site were undertaken during Q4 2022 and were fully completed by year end. Additionally, by late December the orders were placed for the two long-lead components of the project, which are 8,850 solar panels and 24 DC-AC inverters.The project will be undertaken by our in-house engineering and procurement teams, supported by TGS especially during the commissioning phase. Provided there are no issues with supply chain delivery, the forecast completion and commissioning date is scheduled for H2 2023.HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
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45
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW
STRONG
BALANCE SHEET
CAML reports a 2022 Group EBITDA of
$131.6 million. This result was achieved
despite global inflationary pressures
resulting in some cost increases which
were mitigated by weaker operating
currencies. CAML has now completely
repaid the $187.0 million debt which
was secured to acquire Sasa. These
repayments have been made while we
remained consistently among the sector
leading dividend payers, delivered value
for all our stakeholders, and invested in
our operations.
GROSS REVENUE
$232.2m
2021: $235.2m
EBITDA
$131.6m
2021: $141.5m
EBITDA MARGIN
57%
2021: 60%
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
GAVIN FERRAR
Chief Financial
Officer
HOMESEARCHPRINTPAGES 46
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
1 JAN 2022
$9,741/t
-14%
31 DEC 2022
$8,365/t
COMMODITY MARKET
$/t AVERAGE
$8,823/t
1 JAN 2022
$3,590/t
-16%
31 DEC 2022
$3,003/t
COMMODITY MARKET
$/t AVERAGE
$3,486/t
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
2022 MARKET OVERVIEW KazakhstanAccording to the National Bank of Kazakhstan, where CAML produces its copper, Kazakhstan’s 2022 GDP expanded by 3.2%, and official inflation was 20.3%. Copper During 2022 copper prices have been hit by two significant macro headwinds: China’s Zero Covid policy and the US’s monetary policy tightening. While China’s Zero Covid policy has resulted in a marked slowdown in domestic economic growth and weaker end-user consumption in China, the normalisation of the US monetary policy tightening has led to a firmer dollar, tighter financial conditions and weaker economic growth globally, which has also undermined copper consumption and prices. Copper prices rebounded in December 2022 as a result of China’s reopening plans, weakening dollar and low visible copper inventories. During the year the increase in demand of 3.0% has slightly lagged behind the increase in supply of refined copper production of 3.5%. The International Copper Study Group (‘ICSG’) indicated a 2022 global refined copper deficit of 376,000 tonnes.COPPERZINCNorth Macedonia According to the National Bank of North Macedonia, North Macedonia’s 2022 GDP is expected to have expanded by 2.1%, with inflation of 14.2%. Zinc The zinc price in 2022 remained robust but volatile, averaging $3,486 per tonne. The factors affecting the zinc (and lead) markets and balances were largely macroeconomic. The rise in energy costs due to the conflict in Ukraine interrupted trade patterns and hit the energy-intensive metal refining industry in Europe. The proportion of energy costs in smelting is estimated to have risen from 55% pre-pandemic to 72% in 2022, hence smelters’ closure. In 2022 zinc mine production remained similar to 2021 at approximately 13 million tonnes, but zinc smelting saw a 4% drop. This is equivalent to 500,000 tonnes of metal and approximately c.50% of the drop was at European smelters. The zinc concentrate market moved from a deficit in the first half with a tight spot market, to becoming relatively weak in Q4 2022 as concentrate supply exceeded demand.The 2022 Benchmark treatment charges (‘TCs’) increased from $159 to $230 per dry metric tonne (‘dmt’), while spot concentrate TCs reached $260-300/dmt by year end.Zinc demand, in contrast, flattened during the first half 2022 and further weakened in the second half. The main reasons were China (representing c.50% of global zinc demand) maintaining its Zero Covid policy until late in the year and fears of a recession in Europe, the region most affected by the conflict in Ukraine. Smelter cutbacks meant that global metal inventories fell, particularly on the LME. Metal premiums charged by smelters reached historical highs in Q4 2022, which enabled some smelter capacity to reopen, but not enough to dampen the strong metal price. The global refined zinc market recorded a further sizable monthly deficit in December 2022, bringing the overall deficit last year to 306,100 tonnes, according to initial estimates from the International Lead & Zinc Study Group (‘ILZSG’), broadly aligned with the 291,000-tonne deficit implied by our supply-demand model. HOMESEARCHPRINTPAGES 47
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
1 JAN 2022
$2,338/t
-0.1%
31 DEC 2022
$2,337/t
COMMODITY MARKET
$/t AVERAGE
$2,152/t
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
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Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Lead The global refined lead market recorded a further modest monthly deficit totaling 6,100 tonnes in December, according to initial estimates from the ILZSG. Global lead production was less affected by energy price rises and demand continued to grow (+1.3% vs 2021).The overall lead market is driven by the availability of scrap, which comprises c.65% of the global market. This continued to be tight. Lead mine production in 2022 fell by c.2.3% which helped to keep the concentrate market tight throughout the year, in spite of the fact that one large European smelter remained closed (Stolberg).At the end of 2022 the market was becoming stronger again as spot TCs fell. LEADPERFORMANCE OVERVIEWGroup profit before tax from continuing operations decreased by 50% to $54.6 million (2021: $109.3 million). This result reflects a non-cash impairment charge of $55.1 million related to the Sasa operation as explained below. There was a foreign exchange gain of $6.8 million (2021: $1.2 million) and reduced finance costs of $2.1 million (2021: $3.9 million) due to the repayment of the corporate debt during the year. Recent global inflation has adversely affected several key costs such as electricity and salaries which have increased the Group cost base.CAML’s 2022 gross revenue was $232.2 million (2021: $235.2 million). In H1 2022, record interim financial results were reported, aided by the strength in the metal prices and strong markets. During H2 2022, market conditions worsened as metal prices generally fell and inflation affected operations, not least the electricity prices in North Macedonia. The Group generated 2022 EBITDA of $131.6 million (2021: $141.5 million), and an EBITDA margin of 57% (2021: 60%) which, despite the global inflationary pressures, reflects the Group’s ability to maintain relatively low costs across the operations.Adjusted earnings per share (‘EPS’) from continuing operations was higher than the previous year at 48.15 cents (2021: 47.69 cents). EPS from continuing operations, including the impairment charge, was 19.10 cents (2021: 47.69 cents). See note 18 to the financial statements for more information. CAML generated free cash flow of $89.7 million (2021: $103.8 million), allowing the Board to propose a final 10 pence dividend within policy. The Group fully repaid the corporate debt during the year. As at 31 December 2022, drawn overdraft facilities totalled $1.4 million (2021: $9.6 million) resulting in net cash of $58.9 million (2021: $22.7 million).Sasa’s 2022 EBITDA was $56.4 million (2021: $57.5 million), with a margin of 52% (2021: 56%). The average zinc price received increased by 11% and the average lead price received decreased by 4% compared to the prior year. Treatment charges reduced from April 2022 onwards. Sasa faced some cost increases due to inflationary pressures including an increase in electricity costs. The impact of cost increases has been reduced by a favourable movement in the North Macedonian Denar exchange rate to the US Dollar.Kounrad’s 2022 EBITDA was $94.9 million (2021: $106.0 million), with a margin of 77% (2021: 80%). Kounrad’s gross revenue decreased due to the average copper price received decreasing by 8%. Kounrad’s EBITDA reflects an increase in costs due to employee pay rises. The impact of cost increases has been somewhat mitigated by a favourable movement in the Kazakhstan Tenge exchange rate to the US Dollar.INCOME STATEMENTRevenueCAML generated 2022 gross revenue of $232.2 million (2021: $235.2 million), which is reported after deduction of treatment charges, but before deductions including offtake buyers’ fees and silver purchases for the Sasa silver stream. Net revenue after these deductions was $220.9 million (2021: $223.4 million).HOMESEARCHPRINTPAGES 48
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
KounradA total of 14,192 tonnes (2021: 13,983 tonnes) of copper cathode from Kounrad were sold as part of the Company’s offtake arrangement with Traxys. The offtake arrangement with Traxys has been extended from 1 January 2023 on a one-year rolling basis. The commitment is for a minimum of 95% of Kounrad’s annual production. A further 150 tonnes (2021: 68 tonnes) were sold locally. Total Kounrad copper sales were 14,342 tonnes (2021: 14,051 tonnes).Gross revenue decreased due to the copper price received decreasing by 8% to an average of $8,625 per tonne (2021: $9,384 per tonne). This generated gross revenue for Kounrad of $123.7 million (2021: $132.0 million). During 2022, the offtaker’s fee for Kounrad increased to $3.1 million (2021: $2.6 million) due to higher transportation costs as a result of the conflict in Ukraine.Cost of salesThe Group cost of sales for the year was $87.3 million (2021: $80.5 million). This includes depreciation and amortisation charges of $26.7 million (2021: $28.9 million). Global macro-economic conditions led to an increase in key production cost components such as electricity and salaries. The impact of these cost increases has been somewhat mitigated by favourable foreign exchange movements during the year. The Company continues to focus on factors such as disciplined capital investments, working capital initiatives and other cost control measures.SasaSasa’s cost of sales for the year was 10% higher than the previous year at $60.8 million (2021: $55.4 million). During the year, Sasa faced some cost increases due to inflationary pressures including an increase in electricity costs of $5.5 million, as spot energy prices increased throughout 2022 during which time Sasa had a largely fixed price contract that expired in June. The impact of these overall cost increases was mitigated by a weakening in the North Macedonian Denar. The Denar, which is pegged to the Euro, weakened by 12% to an average of 58.36 against the US Dollar versus a 2021 average of 52.06. 2022 depreciation decreased by $2.0 million versus 2021, due primarily to the weakening of the local currency.2022 royalties were $2.9 million (2021: $2.8 million). This tax is calculated at the rate of 2% (2021: 2%) on the value of metal recovered during the year. KounradKounrad’s 2022 cost of sales was $26.5 million (2021: $25.1 million).There was an increase of $1.7 million due to employee pay rises during the year. There was a $0.2 million decrease in reagent costs due to temporary increased consumption in the prior year which occurred due to a metallurgical adjustment arising from solely leaching the Western Dumps during the prior winter period. The depreciation and amortisation charges during the year reduced to $3.7 million (2021: $3.9 million). Mineral Extraction Tax (‘MET’) is a royalty charged by the Kazakhstan authorities at the rate of 5.7% (2021: 5.7%) on the value of metal recovered during the year. MET for the year was $7.2 million (2021: $7.3 million). From 1 January 2023, the MET rate increased to 8.55%.The impact of the above cost increases was mitigated by a 8% weakening in the Kazakhstan Tenge. The Tenge weakened to an average of 460 against the US Dollar versus a 2021 average of 426.C1 cash cost of productionC1 cash cost of production is a standard metric used in the mining industry to allow comparison across the sector. In line with the industry standard, CAML calculates C1 cash cost by including all direct costs of production at Kounrad and Sasa (reagents, power, production labour and materials, as well as realisation charges such as freight and treatment charges), in addition to local administrative expenses. Royalties, depreciation, and amortisation charges are excluded from C1 cash cost. SasaSasa’s on-site operating costs increased by 24% to $44.8 million (2021: $36.1 million). The on-site unit cost increased by 26% to $55.6 per tonne (2021: $44.1 per tonne) due to the higher costs explained above and a 2% reduction in tonnes of ore mined in 2022 versus 2021. Sasa’s total C1 cash cost base, including realisation costs, increased to $64.3 million (2021: $58.2 million), and Sasa’s C1 zinc equivalent cash cost of production increased to $0.78 per pound (2021: $0.63 per pound). The $0.15 per pound increase in the C1 calculation was primarily due to the decreased production volumes of zinc and higher electricity costs.SasaOverall, Sasa generated 2022 gross revenue of $108.5 million (2021: $103.1 million). A total of 17,862 tonnes (2021: 18,586 tonnes) of payable zinc in concentrate and 26,320 tonnes (2021: 25,245 tonnes) of payable lead in concentrate were sold during 2022. The payable lead in concentrate sales is 631 tonnes higher than that disclosed in the Operational Review as the final lead concentrate shipment of the prior year was delayed until January 2022 and, under the Free on Board (‘FOB’) terms, this revenue was recognised in the 2022 financial year.The zinc price received increased by 11% to an average of $3,358 per tonne (2021: $3,036 per tonne) and, for lead, the price decreased by 4% to an average of $2,113 per tonne (2021: $2,209 per tonne), leading to an overall increase in gross revenue generated from the mine. Treatment charges during the year reduced to $16.2 million (2021: $18.8 million) due to improved negotiated terms for both zinc and lead. Lead treatment charges are expected to decrease in 2023 whilst zinc treatment charges are expected to increase as a result of the higher availability of zinc concentrate. During 2022, the offtake buyers’ fee for Sasa was $1.2 million (2021: $1.2 million).Zinc and lead concentrate sales agreements have been extended with Traxys on a one year rolling basis for 100% of Sasa production. Sasa has an existing silver streaming agreement with Osisko Gold Royalties whereby Sasa receives approximately $6 per ounce for its silver production for the life of the mine.HOMESEARCHPRINTPAGES 49
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Impairment of non-current assetsAt 31 December 2022, the Group recognised an impairment charge of $55.1 million related to the Sasa operation due to the following factors: ‣Completion of the life of mine study at the year end and therefore amending the financial model inputs for updated reserves, resources and expected 830,000 tonne long-term plant throughput capacity per annum (reduced from 900,000 tonnes). The Resource and Reserves are both reported using Net Smelter Return cut-off values and the Resources have decreased due to management’s assessment of those which are economically viable and capable of future extraction. ‣An increase in the discount rate used to calculate the net present value of future cash flows to 12.52% (2021: 10.21%) due to external economic conditions. ‣Cost increases for energy and wages to reflect near-term inflationary pressures. ‣The key economic assumptions used in the review were a five-year forecast average nominal zinc and lead price of $2,760 and $2,081 per tonne respectively and a real long-term price of $2,467 and $1,874 per tonne respectively with an inflationary factor applied.Administrative expensesDuring the year, administrative expenses increased to $27.1 million (2021: $22.1 million), largely due to an increased non-cash share-based payment charge of $4.5 million (2021: $2.4 million). This increase was due to options exercised at a share price more than the fair value of the options at the date of grant, arising from the Company electing to partly settle in cash, as well as recognising a full year’s charge in relation to the 2021 mid-year share option grants. There was also an increase in employee-related costs due to staff pay increases and new hires as well as an increase in business travel costs. Other losses During the prior year, the Group entered into commodity price hedge contracts resulting in $6.7 million of realised losses on financial derivatives. These financial instruments expired at the end of 2021 and the Group has not put in place any further hedge contracts.Foreign exchange gain The Group incurred a foreign exchange gain of $6.8 million (2021: $1.2 million) resulting from the retranslation of USD denominated monetary assets held by foreign subsidiaries with a local functional currency. The gain was significant due to the weakening of the Kazakhstan Tenge and North Macedonian Denar as mentioned above.Finance costsThe Group incurred lower finance costs of $2.1 million (2021: $3.9 million) resulting from the scheduled debt repayments during the year. Taxation2022 Group corporate income tax decreased to $20.6 million (2021: $25.1 million) as a result of lower profits at Kounrad taxed at a corporate income tax rate of 20% and at Sasa taxed at a corporate income tax rate of 10%. The decrease also resulted from a reduction in the deferred tax liability due to the Sasa impairment charge. Discontinued operationsThe Group continues to report the results of the Copper Bay entities within discontinued operations. These assets were fully written off in prior years.BALANCE SHEETCapital expenditureDuring the year, there were additions to property, plant, and equipment of $17.4 million (2021: $14.8 million). The additions were a combination of $2.5 million (2021: $2.7 million) Kounrad sustaining capital expenditure, $7.7 million (2021: $6.2 million) Sasa sustaining capital expenditure and $7.2 million (2021: $5.9 million) in relation to the Sasa Cut and Fill Project. Sasa sustaining capital expenditure includes capitalised mine development of $2.5 million, $1.4 million on flotation equipment and $1.7 million on underground fleet. Kounrad’s sustaining capital expenditure includes $0.5 million on new anodes, $0.6 million on dripper pipes and $0.1 million on the solar power plant. Cut and Fill ProjectThe Group continues to invest significantly at Sasa with the implementation of the Cut and Fill Project, comprising the construction of a Paste Backfill Plant and associated underground reticulation infrastructure, a Dry Stack Tailings Plant and associated landform and the development of the new Central Decline.KounradKounrad’s 2022 C1 cash cost of copper production was $0.65 per pound (2021: $0.57 per pound) which remains amongst the lowest in the copper industry. The increase in C1 cash cost versus 2021 is due primarily to higher costs resulting from employee pay increases and higher transportation costs. GroupCAML reports its Group C1 cash cost on a copper equivalent basis incorporating the production costs at Sasa and by also converting lead and zinc production into copper equivalent tonnes. The Group’s 2022 C1 copper equivalent cash cost was $1.39 per pound (2021: $1.32 per pound). This number is calculated based on Sasa’s 2022 zinc and lead payable production, which equated to 13,402 copper equivalent tonnes (2021: 11,959 copper equivalent tonnes) added to Kounrad’s 2022 copper production of 14,254 tonnes (2021: 14,041 tonnes). The C1 cash cost increase on a copper equivalent basis is due to the higher C1 cost base at both Sasa and Kounrad. CAML also reports a fully inclusive cost that includes sustaining capital expenditure, local taxes including MET and concession fees, interest on loans and corporate overheads associated with the Kounrad and Sasa projects as well as the C1 cost component. The Group’s fully inclusive copper equivalent unit cost for the year was $1.92 per pound (2021: $1.89 per pound). The increase is a result of the higher C1 cost components at Sasa and Kounrad somewhat offset by a reduction in interest on loans.HOMESEARCHPRINTPAGES 50
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
As at 31 December 2022, current trade and other payables were $16.6 million (31 December 2021: $16.1 million).Asset retirement obligationDuring the year, an updated Kounrad conceptual closure plan was prepared by independent external consultants WSP Golders. The report re-assessed the estimated closure costs at the end of the life of the operation including rehabilitation, remediation, decommissioning and demolition. The Group asset retirement obligation provision has been increased by $1.2 million to account for additional estimated costs in aggregate across Kounrad and Sasa and using latest assumptions on discount and inflation rates.Cash and borrowingsAs at 31 December 2022, the Group had cash in the bank of $60.6 million (31 December 2021: $59.2 million) and current borrowings of $1.4 million (31 December 2021: $33.0 million). Current borrowings comprise $1.4 million of North Macedonian overdraft facilities. The corporate debt facility with Traxys was repaid in full in August 2022. The reduction in current borrowings of $31.6 million reflects corporate debt repaid during the year of $23.8 million, repayments of overdrafts of $7.5 million, a foreign exchange impact of $0.6 million as well as an effective interest rate amount of $0.4 million relating to unwinding directly attributable fees. Allotment and issue of sharesIn September 2022, the Company issued and allotted 5,600,000 Ordinary Shares of $0.01 each (the ‘New Ordinary Shares’) to the trustee of the Central Asia Metals employee benefit During 2022, capital expenditure on the Cut and Fill Project totalled $11.9 million of which $7.2 million has been capitalised and $4.7 million prepaid. This includes $2.6 million of Central Decline costs and $5.6 million on the Paste Backfill Plant. There was a further $1.6 million spent on underground reticulation and $1.8 million spent on the Dry Stack Tailings Plant and associated landform.CAML expects 2023 capital expenditure of between $28.0 million and $30.0 million, of which between $11.0 million and $13.0 million is expected to be committed to sustaining capex. Total expected 2023 capex also includes approximately $5.0 million related to the Kounrad solar power plant. CAML expects Cut and Fill Project capital expenditure in the order of $12.0 million in 2023. This will be largely related to construction of the dry stack tailings landform as well as capitalised decline development. Working capitalAs at 31 December 2022, current trade and other receivables were $8.7 million (31 December 2021: $6.2 million), which includes trade receivables from the offtake sales of $2.4 million (31 December 2021: $1.2 million) and $3.0 million in relation to prepayments and accrued income (31 December 2021: $2.5 million). Non-current trade and other receivables were $11.5 million (31 December 2021: $7.3 million). As at 31 December 2022, a total of $3.4 million (31 December 2021: $3.3 million) of VAT receivable was owed to the Group by the Kazakhstan authorities. Recovery is still expected through a continued dialogue with the authorities for cash recovery and further offsets.trust. These New Ordinary Shares were issued for the purposes of satisfying current awards granted under the Company’s Employee Share Plans together with any future awards that may be granted by the Company. Under the Trust deed the trustee must waive dividends and refrain from voting unless the Board directs otherwise. The New Ordinary Shares rank pari passu with the existing issued Ordinary Shares of the Company. CASH FLOWSNet cash flow generated from operations was $99.8 million (2021: $112.6 million).During the year, corporate debt repayments of $23.8 million were made in relation to the Traxys loan (2021: $48.4 million) and a further $7.5 million of overdraft was repaid (2021: net drawdown $0.6 million). In addition, interest of $0.6 million was paid (2021: $2.4 million). In 2022, corporate income tax payments to governments totalled $22.2 million (2021: $21.6 million). This included $1.7 million (2021: $0.5 million) of North Macedonia corporate income tax paid in cash in addition to a $4.5 million (2021: $3.5 million) non-cash payment offset against VAT and corporate income receivable. $20.5 million (2021: $21.1 million) of Kazakhstan corporate income tax was paid during the year.Considering sustaining capital expenditure, excluding project capex, CAML’s free cash flow for 2022 was $89.7 million (2021: $103.8 million).DIVIDENDThe Company’s dividend policy is to return to shareholders a range of between 30% and 50% of free cash flow, defined as net cash generated from operating activities less sustaining capital expenditure. The dividends will only be paid provided there is sufficient cash remaining in the Group to meet any contractual debt repayments and that any banking covenants are not breached.Total dividends paid to shareholders during the year of $48.2 million comprised the final 2021 dividend of 12 pence per Ordinary Share and the interim 2022 dividend of 10 pence per Ordinary Share.In conjunction with CAML’s 2022 annual results, the Board proposes a final 2022 dividend of 10 pence per Ordinary Share. This brings total dividends (proposed and declared) for the year to 20 pence (2021: 20 pence) which represents 47% of free cash flow. The final dividend is payable on 23 May 2023 to shareholders registered on 28 April 2023. This latest dividend will increase the amount returned to shareholders in dividends since the 2010 IPO listing to $299.0 million.GOING CONCERNThe Group sells and distributes its copper cathode product primarily through an annual rolling offtake arrangement with Traxys Europe S.A. with a minimum of 95% of the SX-EW plant’s forecasted output committed as sales. The Group sells Sasa’s zinc and lead concentrate product through an annual rolling offtake arrangement with Traxys. The commitment is for 100% of the Sasa concentrate production.The Group meets its day-to-day working capital requirements through its profitable and cash generative operations at Kounrad and Sasa. The Group manages liquidity risk by maintaining adequate committed borrowing facilities and the Group has substantial cash balances as at 31 December 2022. HOMESEARCHPRINTPAGES 51
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
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280
245
210
175
140
105
70
35
0
20122013201420152016201720182019202020212022DIVIDENDThe Board has reviewed forecasts for the period to December 2024 to assess the Group’s liquidity which demonstrate substantial headroom. The Board has considered additional sensitivity scenarios in terms of the Group’s commodity price forecasts, expected production volumes, operating cost profile and capital expenditure. The Board has assessed the key risks which could impact the prospects of the Group over the going concern period including commodity price outlook, cost inflation and supply chain disruption with reverse stress testing of the forecasts in line with best practice. Liquidity headroom was demonstrated in each reasonably possible scenario. Accordingly, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.OUTLOOKDuring the second half of the year commodity prices declined and inflation increased which brought into focus the Company’s cost control measures. The full repayment of debt provided additional liquidity which mitigated against any cost increases that were outside of the Company’s control, such as electricity prices. However, actions taken by governments to increase gas storage in the latter part of the year as well as a mild winter resulted in easing of energy prices and alleviated cost pressures for the Company. Demand for the metals produced by the Group remains robust and metal stocks are at low levels which should continue to support prices and allow the Company to maximise cash flow and hence value creation. Non-IFRS financial measuresThe Group uses alternative performance measures, which are not defined by generally accepted accounting principles (‘GAAP’) such as IFRS, as additional indicators. These measures are used by management, alongside the comparable GAAP measures, in evaluating the business performance. The measures are not intended as a substitute for GAAP measures and may not be comparable to similarly reported measures by other companies. The following non-IFRS alternative performance financial measures are used in this report:Earnings before interest, tax, depreciation and amortisation (EBITDA)EBITDA is a valuable indicator of the Group’s ability to generate liquidity and is frequently used by investors and analysts for valuation purposes. It is also a non-IFRS financial measure which is reconciled as follows:2022$’0002021$’000Profit for the year33,80584,176Plus/(less):Income tax expense20,58825,147Depreciation and amortisation27,28529,572Impairment of non-current assets55,116–Foreign exchange gain(6,829)(1,214)Other income(86)(166)Other expenses–139Finance income(515)(74)Finance costs2,0603,920Loss from discontinued operations1874EBITDA131,611141,504CASH FLOW$mCumulative shareholder returns401801601401201008060$mCash 1 January 202259.2122.6Generated from operationsIncome tax paid -22.2Interest paid -0.6Capex-17.4Other -1.5Repayment of overdrafts-7.5Dividends-48.2Repayment of borrowings-23.860.6Cash 31 December 2022HOMESEARCHPRINTPAGES 52
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
FINANCIAL REVIEW CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Gross revenueGross revenue is presented as the total revenue received from sales of all commodities after deducting the directly attributable treatment charges associated for the sale of zinc, lead and silver. This figure is presented as it reflects the total revenue received in respect of the zinc and lead concentrate and is used to reflect the movement in commodity prices and treatment charges during the year. The Board considers gross revenue, together with the reconciliation to net IFRS revenue to provide valuable information on the drivers of IFRS revenue.Net cashNet cash is a measure used by the Board for the purposes of capital management and is calculated as the total of the borrowings held plus the cash and cash equivalents held at the end of the year. This balance does not include the restricted cash balance of $0.3 million (31 December 2021: $3.5 million):31-Dec-22$’00031-Dec-21$’000Borrowings(1,390)(32,978)Cash and cash equivalents excluding restricted cash60,29855,695Net cash58,90822,717Free cash flowFree cash flow is a non-IFRS financial measure of the cash from operations less sustaining capital expenditure on property, plant and equipment and intangible assets and is presented as follows:2022$’0002021$’000Net cash generated from operating activities99,845112,605Less: Purchase of property, plant and equipment(10,124)(8,750)Less: Purchase of intangible assets(68)(56)Free cash flow89,653103,799The purchase of sustaining property, plant and equipment figure above does not include the $7.2 million (2021: $5.9 million) of capitalised expenditure on the Sasa Cut and Fill Projects. These costs are not considered sustaining capital expenditure as they are expansionary development costs required for the transition to the paste fill mining techniques. These exceptional costs are expected to continue until 2024.Sustainability reporting standardsSustainability is at the core of our business values, and we have reported in accordance with GRI Standards for the period 1 January 2022 to 31 December 2022. We have an economically robust business that underpins our ability to generate profits and dividends for our shareholders and ensures that our successes are also felt by other important stakeholders. We strongly believe that by creating shared value we are ensuring the long-term sustainability of our operations and acting as a good corporate citizen. The table below highlights the economic value that has been distributed amongst CAML stakeholders during 2022.Stakeholder2022$’m2021$’mDirect economic value generated232.2235.2Economic value distributed:Operating expensesSuppliers & contractors58.048.6Wages and other payments to employeesEmployees35.830.5Dividend payments to shareholdersShareholders48.238.8Payment to creditors: Interest payments on loansLenders0.52.4Payments of tax1Government35.536.7Community investmentsLocal communities0.30.5Economic value distributed178.4157.5Economic value retained (generated – distributed)53.877.71 The tax disclosed is the total corporate income tax recognised in the income statement, MET, concession fees and property taxes. The figure excludes the payroll taxes and additional cash payments made on corporate income tax during the year.On behalf of the BoardGAVIN FERRARCHIEF FINANCIAL OFFICER28 March 2023HOMESEARCHPRINTPAGES 53
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
RISK MANAGEMENT
IDENTIFYING AND
MANAGING RISKS
Overview
Strategic Report
Governance
Financial Statements
OUR RISK MANAGEMENT FRAMEWORK
BOARD OF DIRECTORS
AUDIT COMMITTEE
SUSTAINABILITY COMMITTEE
GROUP RISK COMMITTEE
SENIOR MANAGEMENT
SUSTAINABILITY
TEAM
Embed effective risk management, considering both opportunities and
threats, throughout the organisation.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
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SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Risk management within the Company is an ongoing evolutionary process and we have made significant progress during 2022 ensuring stronger focus and engagement from all levels of management. The Board is ultimately responsible for CAML’s Risk Management and Internal Control systems and for reviewing their effectiveness in operation. CAML’s Group Internal Controls and Risk Manager is responsible for coordinating the risk management processes both corporately and at our operations, and to report on principal risks to the Group Risk Committee (‘GRC’) and the Board’s Audit Committee.Risk management is led by the Executive Directors and senior management. On a quarterly basis, risk coordinators facilitate the site level risk review process by engaging relevant on-site management as well as on-site risk and sustainability committees, and reporting findings to the Group Internal Controls and Risk Manager for consolidation into one risk register at the Group level. From this database, principal risks are identified, based on their risk severity from the Company perspective. The quarterly principal risks are presented to the GRC to obtain further feedback on the appropriateness of risk mitigation plans and identification of any top-down emerging risks. At least once annually, the Chair of the GRC meets with the Audit Committee and reports on the material risks to the business and what is being done to mitigate them.In 2022, we continued to further engage the various levels of management at the sites to actively participate in risk review processes and bring emerging risks to the attention of senior management. During the year, a risk identification and analysis training programme commenced at both sites to support the implementation of new Health and Safety risk management procedures among CAML’s employees (see further details in 2022 Sustainability Report), which will be completed in 2023. Furthermore, in 2023, risk management training workshops will be delivered to employees across the Company to enhance the understanding of wider enterprise risk management principles as well as to encourage greater ‘buy-in’ from the site-based management.Insurance is a risk management tool that we employ to minimise financial impact to the Company. The independent survey reports we receive from insurance groups provide useful insight into risks and typically help us identify areas that might require further mitigation. While insurance markets are typically becoming more expensive, we were pleased to be able to keep our Company 2022 insurance rates at levels similar to previous years and maintain the required level of coverage.HOMESEARCHPRINTPAGES 54
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
RISK MANAGEMENT CONTINUED
RISK MANAGEMENT PROCESS
Communication and Consultation
There is continual consultation with the relevant
parties throughout the process to ensure
consistency and appropriate decision-making
across the Group towards risk management.
Overview
Strategic Report
Governance
Financial Statements
COMMUNICATION AND
CONSULTATION
There is continual
consultation with
the relevant parties
throughout the process to
ensure consistency and
appropriate decision-
making across the
Company towards
risk management.
IDENTIFICATION
ANALYSIS
EVALUATION
MITIGATION
MONITORING/REVIEW
Risks are identified by all
levels of management,
along with their teams,
across the Company. The
Group Internal Controls
and Risk Manager
and site-based risk
coordinators facilitate risk
management processes,
including providing
guidance in the risk
identification process.
For identified risks, further
analysis is conducted to
understand root causes
of each risk and an
estimate of the likelihood
of risk occurrence and its
potential consequences,
including financial and
non-financial impacts to
the Company. Subsequent
risk analysis is performed
as part of ongoing risk
monitoring and
review processes.
The results of risk analysis
are used to determine the
overall level of the risk,
its significance to the
Company and whether
risk mitigation plans
need to be implemented
to reduce the risk to an
acceptable level. The
risk assessment criteria
and risk appetite are
determined by the Board
of Directors.
An agreed risk treatment
plan is put in place to
reduce the risk’s likelihood
of occurrence and to
manage consequences of
the risk’s occurrence. This
should result in a decrease
of the overall risk level
to an acceptable degree
as determined by the
Company’s risk appetite.
Regular supervision
and observation are
conducted to monitor
changes in risk attributes,
such as likelihood and
potential consequence
and effectiveness of
current risk treatment
plans to ensure that the
risk level is maintained
within an acceptable
level. If necessary, risk
treatment plans are
modified to address
identified gaps.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
EMERGING RISKSCurrently emerging risk identification is integrated as part of ongoing risk management discussions at the operations and the Company level. In 2022, emerging risks have been discussed as part of the quarterly GRC meetings. For 2022, we have elevated the ‘people’ risk to the list of principal risks and plotted it on our risk heat map for the first time. The people risk was elevated following a decision by GRC members considering the significance of employee-related matters across the Company, in particular for the successful delivery of the Sasa Cut and Fill Project. In addition, one element previously included within our ‘mining and processing’ risks has now been disclosed as a separate principal risk, namely ‘fire’ at the processing facilities (Risk #9). We believe that the nature and significance of the risk element justifies this being considered separately. The safety aspect of mining operations was incorporated into our existing health and safety risk (Risk #4). The conflict in Ukraine was identified as an emerging risk last year and, during 2022, its impact on the global economy and CAML became more apparent. The complete uncertainty of the conflict’s resolution and timeline raises geopolitical risk to an unprecedented level. The indirect consequences of the conflict such as energy crisis, expanding sanctions regime, high inflation and others have been considered when assessing and putting mitigating measures in place for related principal risks.HOMESEARCHPRINTPAGES 55
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
RISK MANAGEMENT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
1 Environment – Leaching
2 TSFs failure
3 Governance & compliance
4 Health & safety
5 Climate change
6 Geopolitical
7 People
8 Leaching operations
9 Fire
10 TSF capacity
11 Cut and Fill project
12 Tax
13 Commodity markets
14 Inflation & cost pressures
Risk movement
Risk profile remains the
same since Q4 2021
New Risk
6
4
1
8
11
10
2
9
14
12
13
3
7
5
g
n
i
s
a
e
r
c
n
i
d
o
o
h
i
l
e
k
i
L
Consequence increasing
RISK APPETITEThe Company’s appetite to risk has changed little since last year. We continue to focus on health and safety as an area where there is little risk appetite. The Company has also very limited risk appetite for other areas of sustainability, such as the environment, community, and employee risks, as well as governance. The Company’s appetite for financial risk is more forgiving as we have low-cost operations and therefore can withstand certain unfavourable pricing and cost developments.In 2022, we commenced discussions around development and reporting on the Company’s risk appetite. In 2023, we will work together with the senior management team and the Audit Committee to discuss and refine risk appetite for the principal risk areas. Furthermore, we aim to enhance our risk reporting processes to have a clearer link between reported risks and the Company’s approved risk appetite.OUR RISK HEAT MAPHOMESEARCHPRINTPAGES
56
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES
PRINCIPAL RISKS
AND UNCERTAINTIES
Overview
Strategic Report
Governance
Financial Statements
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Operating in the mining sector brings with it inherent risk in the extraction and processing of natural resources. This section sets out principal risks and uncertainties identified by CAML which could adversely impact the Company’s ability to meet its strategic objectives. This section also includes a description of the actions that have been undertaken by management in response to these risks.FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES 57
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUSTAINABILITY RISKS
Overview
Strategic Report
Governance
Financial Statements
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
1
ENVIRONMENT –
LEACHING
KPIs
‣ Sustainability
‣ At Kounrad the most
‣ Extensive groundwater modelling and testing is routinely conducted to understand the
Director
‣ General Director
at Kounrad
‣ Technical Director
significant environmental risk
is the potential pollution of
groundwater from operating an
in-situ dump leach project.
interaction of leaching and groundwater.
‣ Management put in place a comprehensive groundwater monitoring programme, which covers
new leaching blocks at the Western Dumps as well as long-term monitoring of blocks at the
Eastern Dumps.
‣ As part of the groundwater monitoring programme, an extensive array of boreholes has been
installed around the dumps. Should monitoring boreholes identify any seepage of concern,
leaching of the block would stop and remedial actions implemented, including solution
extraction directly from the boreholes.
2
TSF FAILURE
KPIs
‣ Sustainability
Director
‣ COO
‣ General Director
at Sasa
‣ TSFs that are not constructed
or managed correctly can fail,
leading to potentially significant
damage to people, property,
the environment, and the
Company’s reputation.
‣ Management completed the implementation of remedial measures following the TSF4 incident
in 2020. Retraining of all TSF operational personnel has been conducted, the team bolstered,
and operating procedures have been updated to incorporate revised controls.
‣ Biodiversity monitoring is undertaken bi-annually, and the latest results show algae and micro-
fauna has broadly returned to the base line conditions.
‣ Ongoing mitigation measures are focused on monitoring, prediction, and prevention of an
incident. Regular internal monitoring is undertaken for all aspects of the TSF operations,
including movement and water levels. In addition, the collected data is regularly reviewed by
external parties. In 2022, an internal automated monitoring system was developed, which will
be commissioned in H1 2023.
‣ TSF4 has been found by Knight Pièsold to meet the minimum guideline factor of stability for
post-earthquake conditions, in accordance with the Canadian Dam Association (2019).
‣ In addition, in 2022 Knight Pièsold undertook an annual audit of the Company’s TSFs and no
new major findings were identified. Management plans to commence implementation of the
identified audit recommendations in 2023.
‣ CAML has committed to reporting to the GISTM for all TSFs by 2024.
‣ Implementation of a community audio alarm system for the local community in the event of a
failure has been approved in principle by the Sustainability Committee.
‣ All of Sasa’s TSFs are of a ‘downstream’ construction type which is generally regarded as the
safest option.
‣ Further details of the TSF safety and monitoring related initiatives undertaken in 2022 are set
out in the Sustainability Report.
RISK MOVEMENT
‣ During 2022, the risk profile remained
the same. The leaching operations at
Kounrad have been predominately at
the Western Dumps with fewer blocks
still operated at the Eastern Dumps.
Regular water sampling and monitoring
shows no abnormal values and does
not confirm a discernible impact on
quality of groundwater above the
baseline. However, the risk remains
high and has to be closely monitored
going forward.
‣ In 2022 the risk level has decreased
following management actions
implemented to reduce likelihood of
the risk. The potential consequences of
TSF failure remain catastrophic for the
Company and therefore this remains a
principal risk for CAML.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES 58
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUSTAINABILITY RISKS CONTINUED
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
3
GOVERNANCE
& COMPLIANCE
KPIs
‣ CEO
‣ General Counsel
‣ There are multiple governance-
based risks which may have an
impact on the business. The
Company operates within a
complex regulatory environment
which focuses on accountability.
Failure to comply with
regulations, including sanctions
regimes as well as applicable
licences required for continuous
operations, or failure to follow
expected social and business
conduct could cause potential
interruption or stoppage of
operations, potential financial
loss and reputational damage.
‣ The Company maintains strong principles of corporate governance supported by a capable and
experienced Board and reinforced by several Committees supporting the Board in its role.
‣ The Company has implemented governance policies and procedures. The effective
implementation of policies is further supported by annual compliance training of employees
and contractors across the Company that are facilitated via an online training platform that was
introduced in 2022 and on-site training workshops.
‣ During 2022, the Company worked on implementation of a number of additional measures to
further improve governance processes and mitigate risks associated with legal and regulatory
compliance across the Company.
‣ In relation to sanctions, management’s focus is to ensure full compliance and proactively
monitor any changes in sanctions legislation. In 2022, management further improved controls
surrounding supplier due diligence, reinforcing mandatory sanction checks, and taking a
uniform approach in relation to suppliers from high-risk jurisdictions.
‣ In 2022, social assessment questionnaires and the supplier charter/code of conduct were
requested from new suppliers in addition to existing key suppliers as part of the supplier due
diligence process.
‣ The Company continues its engagement with local authorities and communities to follow
good governance.
‣ Further details of governance initiatives undertaken are set out in the 2022
Sustainability Report.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Overview
Strategic Report
Governance
Financial Statements
RISK MOVEMENT
‣ Although management has established
an ongoing training programme, has
requested suppliers to complete
questionnaires, and has introduced
other mitigating measures, the overall
risk profile remains the same. This
is primarily due to the continuation
of the conflict in Ukraine resulting in
continuous expansions of sanctions
across various jurisdictions.
The complexity and expanding nature
of sanctions creates persistent
challenges to adapt control
mechanisms to ensure compliance,
and the overall potential impact to
the Company’s reputation in case of
non-compliance could be significant.
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES
Overview
Strategic Report
Governance
Financial Statements
RISK MOVEMENT
‣ The risk profile increased in 2022.
The change of mining method at
Sasa incorporating paste fill in the
operation will ensure a safer and more
sustainable extraction of ore in the
near term. However, the inherent risks
associated with the transition period
and employee readiness for a new
operating process raised the overall
level of this risk.
59
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUSTAINABILITY RISKS CONTINUED
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
4
HEALTH & SAFETY
‣ Sustainability
Director
KPIs
‣ COO
‣ General Directors
(Kounrad & Sasa)
‣ Mining operations by their very
nature are dangerous working
environments. In particular,
working underground presents
significant challenges which,
if not managed, could lead to
serious injuries and a loss of life.
‣ In addition, the safe extraction of
ore reserves at Sasa presented
challenges that have led the
Board to approve the transition
to the paste fill mining methods
from the current sub-level caving
method of extraction.
‣ The health and safety of our employees is our top priority. Significant capital is deployed to
ensure that our employees have all the necessary personal protective equipment. The dedicated
health and safety teams conduct regular training for employees on the appropriate use of
PPE, as well as performing their duties in line with safe operating procedures. Managers and
supervisors are responsible for ensuring employees always adhere to all safety procedures.
‣ Policies and procedures are in place to identify and mitigate risks and provide clear guidance
on conducting operational processes appropriately and safely. In 2022, the risk identification
procedures as well as incident investigation were revised to incorporate best practices and
improve processes, and training delivered to embed understanding.
‣ The Health and Safety teams conduct frequent internal inspections to confirm safe
working practices and identify further improvement opportunities and recommendations
for management.
‣ Underground mines present safety challenges. In 2022, management undertook various
actions to improve safety underground and continue focus on employee training, skills
and knowledge. Procedures of working in high-risk zones were revised to provide further
guidance on identifying and assessing ‘red’ zones and performing works in those zones.
The underground fleet upgrade with remote operating capabilities has further assisted in
reducing the risk of potential miners’ injuries.
‣ Further details of the Company’s health and safety initiatives and health and safety
performance are set out in the 2022 Sustainability Report.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES 60
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUSTAINABILITY RISKS CONTINUED
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
5
CLIMATE CHANGE
KPIs
‣ CEO
‣ Sustainability
Director
‣ Executive Director
of Corporate
Development
‣ The Company’s operations may
be affected by the physical risks
identified and caused by climate
change, which might lead to a
disruption in operations. Policy
and regulatory changes may
present further transition risks
to the Company, as regulators
increasingly incorporate
climate risk considerations
into financial regulations and
disclosures, and countries
increasingly move to incentivise
or penalise companies in
order to effect change and
reduce GHG emissions to meet
decarbonisation targets.
‣ CAML’s Climate Change Strategy was approved by the Board in 2021. The strategy sets out key
elements of the Company’s approach to the climate change agenda, including targets and a
timeline for reduction of its GHG emissions. Further details of CAML’s Climate Change Strategy
are presented as part of its inaugural TCFD report in the 2021 Annual Report and 2022 progress
is reported in the 2022 Sustainability Report
‣ In-country teams are monitoring local policies and regulations in relation to GHG emissions,
including limits, mandatory reporting and required disclosures.
‣ In 2021, a comprehensive risk assessment study was conducted to understand climate-
related risks present across the Company. Physical risks were identified at Sasa and Kounrad,
and relevant mitigation actions have been identified and, where possible to date, actioned.
Transition risks have also been identified and addressed as part of the strategy implementation.
‣ In 2022, scenario planning workshops were conducted with the senior management across the
Company. Any new physical and transition risks identified as part of the scenario planning will
be further considered by management in 2023 with the focus on building CAML’s resilience and
adaptability to withstand climate change-related shocks.
‣ Progress with respect to climate change mitigation and decarbonisation is also being driven
by the investment communities and CAML’s Executive Director of Corporate Development
maintains a dialogue with key investors to understand their aspirations for the companies in
which they invest.
‣ Further details of the Company’s climate change initiatives are set out in the 2022
Sustainability Report.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Overview
Strategic Report
Governance
Financial Statements
RISK MOVEMENT
‣ The risk profile in 2022 remains the
same. Although management has
undertaken a number of actions to
identify risks associated with climate
change and progressed with initiatives
aimed at building resilience for the
future, the risk remains the same due
to potential challenges in achieving
GHG emission reduction targets and
reporting against those targets to the
ever-evolving regulatory conditions
for climate change. In the coming
years, GHG emissions may materially
impact CAML’s cost of capital and
value if adequate progress in reducing
emissions is not made.
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES
61
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUSTAINABILITY RISKS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
RISK MOVEMENT
6
POLITICAL &
GEOPOLITICAL
KPIs
‣ CEO
‣ CFO
‣ General Directors
(Kounrad & SASA)
‣ The Company’s operations and
overall financial performance
could be adversely impacted by
any new regulations which are
introduced by the governments
of the countries where we
operate, such as revisions of
mining law, restrictions on
foreign ownership of assets,
the remittance of funds or rates
of taxation.
‣ In addition, any increased
requirements relating to
regulatory, environmental, and
social approvals in the countries
in which we operate could result
in significant delays in obtaining
necessary approvals for capital
projects and ultimately have an
adverse impact on enhancement
of existing operations and the
financial results of the Company.
‣ Senior management at the Company’s operations have built relationships with local authorities
‣ This risk has increased in 2022. The
and government ministries.
‣ Through these relationships and a proactive approach to engagement, management aims to
anticipate changes to legislation and plan accordingly.
‣ Due to conflict in Ukraine and the sanctions regime impacting availability of insurance for
transportation through conflict territories, CAML, together with our offtaker, adjusted its route
for copper cathode transportation to maintain appropriate insurance coverage in case of
potential losses.
Kazakhstan government’s continuous
‘shake-up’ following the January 2022
unrest, out-of-term early presidential
elections, as well as recent changes
to rates of taxation might indicate the
future changes.
‣ Also, there is a risk that the current
political stance of the Republic of
Kazakhstan government in relation to
ongoing military conflict in Ukraine
might change due to political and
economic pressure from Russia.
Management closely monitors the local
situation, but this Kazakh country risk
is out of our control.
‣ At Sasa, the Company is in the process
of transitioning to a paste fill mining
approach. As part of the project, CAML
is required to obtain approvals for
licences and permits for various project
stages from government ministries
or institutions. In August 2022, CAML
received approval for the ESIA study,
which was imperative to progressing
the transition project. Subsequently
Sasa received the construction
permit within the time schedule and
commenced construction. The process
for obtaining approvals once submitted
is largely out of our control.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES
62
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
SUSTAINABILITY RISKS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
RISK
7
PEOPLE
KPIs
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
‣ CEO
‣ CAML’s growth and future
‣ Group People
Manager
success depends on its ability
to attract, retain and motivate
employees and key members
of management. Failure to
adequately maintain the quality
of the Company’s talent could
have an adverse impact on
operations and therefore CAML’s
reputation. The location of
our operations might provide
further challenges in candidate
recruitment or retention.
‣ The Company is committed to the recruitment of experienced staff across all our locations,
including London, Kazakhstan and North Macedonia. The Human Resources (‘HR’) team
actively monitors the labour market across the Company’s operating locations to ensure that
remuneration remains competitive.
‣ In 2022, the HR team partnered with local unions and representatives to address inflationary
pressures and granted material pay increases for local workforces.
‣ The HR team partnered with the site leadership teams to identify key positions for all of our
Company’s operations and subsequently developed succession plans. Management and
leadership training programmes were also developed to support them in managing people
through times of change.
‣ Further details of the Company’s HR initiatives are set out in the 2022 Sustainability Report.
RISK MOVEMENT
‣ New principal risk in 2022.
‣ The recruitment of experienced
technical personnel to ensure the
successful delivery of the Sasa
transition project, as well as the
necessity to ensure that the workforce
is appropriately trained and ready
for the transition is essential for the
Company. Additionally, there is a
scarcity in technically skilled mining
expertise. This risk has therefore been
elevated to the principal risk in 2022.
OPERATIONAL RISKS
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
8
LEACHING
OPERATIONS
KPIs
‣ Technical Director
‣ The nature of in-situ leaching
‣ COO
‣ General Director
(Kounrad)
means that grades and flows of
copper-bearing solution from
dumps is dependent upon the
geology of the dump material
and the hydrogeology of the
underlying formations. Should
the flow rates and/or grade drop,
this could lead to a reduction in
copper cathode produced.
‣ Extensive studies have been completed at Kounrad to Kazakh and international standards
to ascertain the characteristics of copper mineralisation within the dumps. The results
of operations for over ten years have shown a good correlation to the initial study work
undertaken which gives management confidence for future operations.
‣ Should solution be lost to the ground, there is an extensive array of boreholes surrounding the
dumps to identify issues and from which solution can be extracted.
RISK MOVEMENT
‣ This risk remains stable. However,
as operations focus on the Western
Dumps, regular geological and
hydrogeological monitoring must
be maintained to ensure an ongoing
understanding of any likely solution
related risks for the future.
‣ In 2022, the production of PLS was in
line with technical expectations and
there was no significant deviation or
deterioration noted in grades.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
OPERATIONAL RISKS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
RISK
9
FIRE
KPIs
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
‣ COO
‣ Technical Director
‣ General Directors
(Kounrad & Sasa)
‣ A significant fire at one of our
sites constitutes the single
biggest potential impact on
our operations. The SX facility
at Kounrad contains highly
flammable solutions which, if
set alight, would be difficult to
extinguish. At Sasa, a fire in the
processing facility would have a
prolonged impact on our ability
to operate.
‣ Fire suppression systems have been installed in the SX facility and in other key installations at
the sites, both at Sasa and Kounrad.
‣ Sasa furthered strengthened its fire suppression systems through the installation of a fire
hydrant system around the explosives storage area and other facilities; these systems will allow
the rescue team to tackle fires within the facilities, in addition to forest fires.
‣ The full replacement of the Tungus power fire-fighting modules in the SX facility was
completed in 2021. In 2022, additional modules were installed over Spintek tanks and the SX-
EW’s plant fire-resistant metal coating was refreshed.
‣ An independent audit of the SX facility fire prevention and liquidation procedures is conducted
annually to ensure compliance with applicable legislation. The financial impact to the Company
in the eventuality of a fire is covered by the Property Damage and Business Interruption (‘PDBI’)
policy currently in place.
RISK MOVEMENT
‣ The fire risks discussed are considered
stable but remain high given perceived
challenges in extinguishing a fire in the
Kounrad processing facility. Mitigation
measures currently in place at Kounrad
are considered adequate by both
insurers and management.
10
TSF CAPACITY
KPIs
‣ COO
‣ General Director
(Sasa)
‣ Failure to identify long-term
storage capacity for tailings
could result in an inability to
process mined ore.
‣ The transition of Sasa’s mining method to incorporate paste fill, developed in part from tailings
as well as the proposed dry stack tailings, will provide additional tailings storage and augment
the life of TSF4.
‣ This risk has increased as it is highly
dependent on the delivery of the Cut
and Fill Project at Sasa and we are now
in the implementation phase. Delays
in commissioning the Paste Backfill
Plant and Dry Stack Tailings Plant and
landform would further increase
any risk.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
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64
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
OPERATIONAL RISKS CONTINUED
Overview
Strategic Report
Governance
Financial Statements
RISK
RESPONSIBILITY
RISK AND IMPACT
MITIGATION
RISK MOVEMENT
11
CUT AND FILL
PROJECT
KPIs
‣ CEO
‣ COO
‣ General Director
(Sasa)
‣ As part of the transition to a
paste fill mining approach, a
number of capital projects are
currently underway at Sasa,
including the Paste Backfill
Plant, Dry Stack Tailings Plant
and development of Central
Decline all of which are referred
to as the Cut and Fill Project.
The implementation of these
projects may prove to be more
complex or technically difficult
than originally envisaged,
resulting in delays and higher
project costs. Local permits are
required for these projects and if
these approvals take longer than
anticipated, this may also result
in delays to the project timeline.
Delays in this transition of mining
method might potentially have
an adverse impact on production
and tailings volumes into the
current TSF4.
‣ A dedicated project management team has been assigned to oversee delivery of the project.
A detailed project timeline has been developed and project performance is reviewed against
milestones and budgets on a regular basis. Periodic updates on the project implementation are
provided to the Board.
‣ The risk profile associated with the
transition project has increased
in 2022.
‣ The consequences of the risk remain
‣ External engineering specialists were engaged to assist with development of detailed designs
and will be assisting throughout the project implementation stage. The project team was also
strengthened by experienced new recruits dedicated to the transition plan development.
‣ Third party contractors were engaged to assist with the construction phase of the project,
and the work is closely monitored and overseen by the engineering specialists and the
project team.
‣ Strong relationships are maintained with local and national stakeholders which should ensure
that permitting processes are as prompt as possible.
very high due to its importance
for Sasa’s long-term operations,
in particular the TSF4 capacity. In
addition, as the transition of mining
method is approaching its first
commissioning milestone, risks
associated with the readiness for
safe commissioning and start-up
have increased.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Overview
Strategic Report
Governance
Financial Statements
BUSINESS RISKS
RISK
12
TAX
KPIs
RESPONSIBILITY RISK AND IMPACT
MITIGATION
RISK MOVEMENT
‣ CFO
‣ The Company is subject to taxation
‣ Management is committed to ensuring compliance with tax requirements in every jurisdiction
‣ This risk has increased in 2022
that the Company operates, and to both minimising and managing risks associated
with taxation.
‣ We focus on understanding developments in tax legislation, as well as building and
maintaining good and constructive working relationships with all relevant tax authorities.
‣ Although we have strong in-house specialists, we also seek the advice of independent tax
consultants where necessary.
in its jurisdictions of operation. There
are inherent risks associated with
the complexities of tax legislation,
differences in interpretation of the
applicable legislation and there can be
changes in tax laws and regimes that
might increase the tax burden of the
Company. Increased scrutiny of taxation
measures or revisiting interpretations
on prior taxation decisions by the
governments in our countries of
operation may lead to the Company
paying increased taxes for current
or prior periods, or adversely impact
recoverability of tax receivable balances.
as number of amendments were
introduced into the Tax code that
have and/or might result in higher
taxes paid by the Company in the
Republic of Kazakhstan. In July 2022,
it was confirmed that the MET rate
will increase to 8.55% effective from
January 1, 2023. The Company expects
the introduction of Withholding Tax
(‘WHT’) on dividends from Kazakhstan
in 2023.
‣ The risk has further increased in 2022
as governments globally have been
struggling fiscally in the post COVID-19
years and are further impacted by the
energy crisis, inflationary pressures,
and fears of recession.
‣ CFO
13
COMMODITY
MARKETS
KPIs
‣ A significant decrease in copper, zinc or
lead commodity prices would negatively
impact Company revenues.
‣ In addition, changes in demand for zinc
and lead concentrates might cause
adverse movement in zinc and/or lead
treatment charges, which could have an
impact on Sasa’s profitability.
‣ As a low-cost producer of our metals, we are able to withstand depressed commodity prices
‣ In H2 2022, commodity prices
for a period of time.
‣ The team works hard to ensure that Sasa’s metal concentrates remain of high quality
as to be as marketable and, therefore, as attractive as possible. In addition, an ongoing
communication with offtaker and customers is maintained to manage expectations with
regard to contracted production volumes.
‣ In 2022, Sasa has continued working with its established regional and international smelters.
Small volumes of production are occasionally allocated to new customers for
diversification purposes.
‣ CAML has historically used hedging agreements for a portion of its production to allow the
Company to lock in some certainty of commodity prices and may elect to hedge its exposure
again in the future.
generally decreased due to reduced
demand and increased fear of a global
recession. Therefore, the risk profile
has increased.
‣ In addition, the energy crisis had an
adverse impact on smelters activity
globally, and this may potentially
rebalance European zinc and lead
concentrate market resulting in
higher TCs for zinc and lead in our
local markets.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
FOCUS ON SAFETY & SUSTAINABILITY TARGETING LOW COST, HIGH MARGINSENSURING PRUDENT CAPITAL ALLOCATION DELIVERING GROWTH HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
RISK MOVEMENT
‣ This risk has increased in 2022 due
to a number of factors including
already high inflation in the Company’s
operating jurisdictions, the energy
crisis, the ongoing conflict in Ukraine,
supply chain issues and other events.
This resulted in elevated prices for
consumables and equipment, higher
delivery costs and payroll pressures
as well.
‣ Significant overall increase in energy
prices (including fuel and coal) resulted
in an adverse financial performance in
particular at Sasa.
66
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ANNUAL REPORT & ACCOUNTS 2022
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
BUSINESS RISKS
RISK
RESPONSIBILITY RISK AND IMPACT
MITIGATION
14
INFLATION & COST
PRESSURES
KPIs
‣ CFO
‣ The Company’s cost base is highly
‣ The main mitigation actions include placing orders earlier, achieving lower prices,
signing long-term contracts with fixed prices, and establishing strategic relationships
with key suppliers.
susceptible to inflationary pressures. In
cycles of high commodity prices, input
costs, such as wages, consumables,
diesel, and energy often increase
at a rate higher than that of general
inflation. Rising costs, which could be
triggered by and therefore offset by
higher commodity prices, have a direct
impact on the Company’s profitability. In
addition, inflationary pressures have an
impact on capital expenditure, including
the Cut and Fill Project.
STRATEGIC REPORT
Business Model
Investment Case
Chief Executive Officer’s
Statement
Market Overview
Our Strategic Framework
Key Performance Indicators
Sustainability
Stakeholder Engagement /
Section 172
Operational Review
Financial Review
Risk Management
08
11
12
16
19
21
26
33
36
45
53
Principal Risks and Uncertainties 56
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
GOVERNANCE
86Nomination Committee Report
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
71Board of Directors
83Audit Committee Report
91Remuneration Committee Report
79Sustainability Committee Report
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
HOMESEARCHPRINTPAGES 68
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INTRODUCTION TO CORPORATE GOVERNANCE
LETTER FROM
THE CHAIRMAN
Overview
Strategic Report
Governance
Financial Statements
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
DEAR SHAREHOLDER,
The past year has been another period
of development for the Board and its
Committees as well as the Group’s business.
Continuous improvement is important for
maximising value in all areas and this includes
the ongoing development of the Board, and
its Committees, the individual Directors, and
succession planning to ensure this continues
over the long term.
This approach to corporate governance has
always been important to the way we manage
the Group. We view it as a key element of
building shareholder value and stakeholder
interests on a sustainable basis over the short,
medium and long terms.
It remains the way we will continue to
approach our activities going forward both in
identifying and capitalising on opportunities
and anticipating and addressing challenges.
As well as in the management of the Group,
there have been a number of key areas of
development in the Board and Committees
over the past year.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
NICK CLARKE
Non-Executive Chairman
1.
The entire Board visited Sasa over the course of a
week, meeting with staff, touring the facilities both
under and above ground, inspecting progress in
the capital projects and reviewing the sustainability
aspects of the operations.
The majority of Directors had visited the site
previously and this visit provided an update on Sasa’s
development. For the newer Directors, this visit brought
to life the briefings from both the Group and local
management they had received since joining the Board.
The Board plans to visit Kounrad later this year.
2. Our newly appointed Technical Committee commenced
its work inputting its views both to management and
the Board. The Committee acts in an advisory capacity,
with management and the Board able to draw on the
extensive experience of its members. The Committee
visited Sasa to review its operations and work on its
capital projects during the year, in addition to the visit
of the Board as a whole.
3. The transition to Mike Prentis as the new Chairman
of the Remuneration Committee was successfully
completed, aided by him having served as a member
for the previous year, and building on the work of the
Remuneration Committee with management. The
work of this Committee is summarised in its report
commencing on page 91.
The continuing developments in our corporate governance are part of an ongoing process of improvement in a similar way to the progression of our business and its strategy. The Board and its Committees view this regular evolution of the Group’s governance as a key part of building and sustaining value in CAML over the longer term.HOMESEARCHPRINTPAGES
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
INTRODUCTION TO CORPORATE GOVERNANCE CONTINUED
4. Mike Prentis was also appointed as our
Senior Independent Director (‘SID’). This
is a new role within CAML and one that
will become increasingly important in the
future succession planning for the Group.
Mike also continues to be an alternative
point of contact available for shareholders
if required in addition to the Executive
Directors and myself.
7.
5. The succession planning for the Board and
its Committees continued. Over the last
three and a half years, we have appointed
four new Directors – Louise Wrathall as an
Executive Director and, as non-Executive
Directors, Dr Gillian Davidson, Mike Prentis
and Dr Mike Armitage.
Nigel Hurst-Brown and Bob Cathery
stepped down during the same period
and, with succession plans completed or
in place for their areas of expertise, we are
now working on succession planning for
the Chair of the Audit Committee.
I am grateful that David Swan is continuing
in this role while this is undertaken
over the coming year. We are mindful in
succession planning of the long cycles for
our industry and business operations and
accordingly wish to ensure the progressive
refreshment of the Board over the
appropriate periods of time.
6. As mentioned in my letter on governance
to shareholders last year, and again in
the context of the Group’s long business
cycles, we have established an Advisory
Committee of former long-serving
Directors with deep knowledge of the
Group and the context in which it operates.
The members of this Committee currently
comprise Nigel Hurst-Brown and Bob
Cathery and they are available to provide
input to the Board generally as well as
myself as and when we feel their particular
knowledge and experience provides
additional value to our deliberations.
Our long-standing Sustainability
Committee (previously the CSR
Committee) has continued its work
commenced at the time of its original
constitution 10 years ago. As well as
having a broad membership itself, the
Committee reports on its work to the
Board which reviews sustainability matters
of key importance as well. I am grateful
for the work of Dr Gillian Davidson as
Committee Chair, the Committee’s other
members and of management in ensuring
sustainability matters continue to be at the
core of how we operate.
8. Indeed, the Chairs of each of our Board
Committees now provide the Board with
enhanced reports on the work of their
Committees. This ensures integration of
their work with that of the Board and of the
other Committees and helps to maximise
the value of the contributions made by all
of our Directors in each of their roles.
9. Our evaluation of the Board and its
10. Our Nomination Committee undertook
an in-depth succession planning and
developmental discussion in relation to the
Board over the long term. This continues
to map out plans over the coming
years, ensuring that both continuity and
progression are maintained in balance and
that we continue to be able to retain and,
where appropriate, recruit the high-calibre
directors that we wish to continue to serve
on the Board.
The coming year will be another of
development for the Board and Committees
as well as the ongoing management of the
Group’s business. As well as the Board’s
planned trip to Kounrad, I hope we will be
able to make an additional appointment to
the Board further building on its diversity. I
recommend to you the following reports by
the Board and its Committees for further
details and look forward to reporting to you
next year.
KEY ISSUES AND ACTIVITIES IN 2022
STAKEHOLDERS
‣ see page 78
DIVERSITY
‣ see page 87
INDEPENDENCE
‣ see page 76
CULTURE
‣ see page 77
RISK AND INTERNAL CONTROL
‣ see page 85
EFFECTIVENESS REVIEW
‣ see pages 89 to 90
NICK CLARKE
NON-EXECUTIVE CHAIRMAN
28 March 2023
Committees this year focused on the areas
identified as open to further enhancement
in the prior year’s evaluation. This both
confirmed the actions taken and benefits
achieved and areas in which ongoing
actions were planned remained appropriate.
5
QCA
Maintain the board as a well-functioning, balanced
team led by the chair.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES
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ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
INTRODUCTION TO CORPORATE GOVERNANCE CONTINUED
THE QCA CORPORATE GOVERNANCE
CODE
CAML complies with the Quoted Companies
Alliance Corporate Governance Code for
small and mid-sized companies and has
incorporated a set of robust principles
based on its guidelines into our corporate
governance procedures. The Directors
believe this reinforces the strong corporate
governance systems and processes that
are vital in building a successful business,
maximising value and maintaining the high
standards that we set for ourselves. Our QCA
Code disclosures within this Annual Report
are summarised in the table below.
In addition, full details of how we have applied
each of the 10 principles of the QCA Code
can be found on our website at https://www.
centralasiametals.com/corporate-governance.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
1
QCA
2
QCA
3
QCA
4
QCA
Principle
Establish a strategy
and business model
which promotes
long-term value for
shareholders
Seek to understand
and meet shareholder
needs and
expectations
Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success
Embed effective
risk management,
considering both
opportunities and
threats, throughout the
organisation
Disclosure within
this report
see pages
10, 19-25, 74
see pages
33-35, 77-78
see pages
26-35, 79-82
see pages
53-66, 85
Principle
5
QCA
6
QCA
7
QCA
8
QCA
Maintain the board
as a well-functioning,
balanced team led by
the chair
Ensure that, between
them, the Directors
have the necessary
up-to-date experience,
skills and capabilities
Evaluate Board
performance
based on clear and
relevant objectives,
seeking continuous
improvement
Promote a corporate
culture that is based
on ethical values
and behaviours
Disclosure within
this report
see pages
5, 68-70
see pages
74, 76
see pages
89-90
see pages
4, 77, 79-82
Principle
9
QCA
10
QCA
Maintain governance
structures and
processes that are
fit-for-purpose and
support good decision-
making by the Board
Communicate how the
company is governed
and is performing by
maintaining dialogue
with shareholders
and other relevant
stakeholders
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Disclosure within
this report
see page
73
see pages
33-35, 77-78
HOMESEARCHPRINTPAGES GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
71
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
BOARD OF
DIRECTORS
Overview
Strategic Report
Governance
Financial Statements
NICK CLARKE
NON-EXECUTIVE CHAIRMAN
NIGEL ROBINSON
CHIEF EXECUTIVE OFFICER
GAVIN FERRAR
CHIEF FINANCIAL OFFICER
LOUISE WRATHALL
DIRECTOR OF CORPORATE
DEVELOPMENT
DR MIKE ARMITAGE
NON-EXECUTIVE DIRECTOR
Committees
N T
Appointed
April 2009
S T
April 2009
June 2016
May 2022
Skills and
experience
Nick has over 40 years of mining experience,
including 16 years spent within senior
management positions in production
and technical services in South Africa,
Ghana and Saudi Arabia. Nick served as
managing director of Oriel Resources
until its acquisition by OAO Mechel for
$1.5 billion in 2008. In addition, Nick was
managing director at Wardell Armstrong
International, where he managed numerous
multidisciplinary consulting projects in the
resource sector. In 2013, Nick was named
CEO of the year at the Mining Journal
outstanding achievements awards. He joined
CAML in 2009 as Chief Executive Officer
prior to the Company’s IPO in 2010, and
assumed the role of Chairman in June 2016.
Nigel started his career as a Royal Naval
Officer in the Fleet Air Arm where he served
an eight-year short career commission.
Upon leaving the Royal Navy, he qualified
as a Chartered Accountant with KPMG
in the North West of England, where he
stayed for a further three years before
leaving the profession to work in commerce.
He initially joined one of KPMG’s clients,
British Aerospace, working in the internal
audit department before relocating to
London where he worked for six years in
management with British Airways. In 2002
he left to become more involved in smaller
enterprises and joined CAML in 2007 as
Group Financial Controller. Prior to his
appointment as CEO in April 2018, he had
been the CFO of the Group since he joined
the Board in April 2009 and was instrumental
in growing the business.
Education/
qualifications
Nick graduated in 1974 from the Camborne
School of Mines, ACSM. He is a Chartered
Engineer and a Member of the Institute of
Materials, Minerals and Mining, IOM3.
Nigel has an engineering degree from
Lancaster University and is a member of
the Institute of Chartered Accountants in
England & Wales.
Gavin has been involved in the mining
sector for over 25 years. His career in the
industry began with Anglo American in
its New Mining Business Division where
he worked in a target generation and due
diligence team and subsequently managed
projects from greenfields exploration
through to a feasibility study on a gold
project. He then spent 11 years in the London
investment banking sector focusing on
debt and derivative financing for mining
clients of Barclays Capital and equity and
debt investments for Investec. After leaving
the banking sector he advised a variety
of private mining investors and junior
companies on project development and
funding before joining the Company in June
2014 as Business Development Director. He
was appointed CFO on 16 April 2018 and
Gavin continues to serve as the Business
Development Director for the Company.
Gavin holds post-graduate degrees
in geology from the University of the
Witwatersrand, Johannesburg and from the
University of Natal. He also holds an MBA in
finance from Imperial College, London.
Following a two-year period working in the
UK quarrying industry, Louise spent much
of her early career working for almost 10
years as a mining equity analyst focused on
London-listed companies. Most recently in
this role, she worked as part of the research
team at Investec covering a wide range of
companies including those in the FTSE100
index, as well as junior miners and explorers.
Louise joined CAML in 2015, and was
appointed to the CAML Board of Directors in
May 2022.
Louise has a degree in geology from the
University of Liverpool and a Master’s degree
in mining geology from the Camborne School
of Mines, University of Exeter.
S A
T N
January 2022
Mike has some 35 years’ experience in the
mining industry. He spent his early career
working underground as a geologist in
South Africa and then completed his PhD
assessing alternative methods of reserve
estimation at the Renco Mine in Zimbabwe.
He then joined SRK Consulting in 1991
and over the next 30 years held various
technical and management roles before
leaving in early 2022. These roles included
being managing director and chairman of
SRK’s UK practice and chairman of SRK’s
Russia and Kazakhstan practices as well as
SRK Exploration Services. He also spent six
years as chairman of SRK Global. He is also a
founding director of Sarn Helen Gold.
Mike holds a BSc (Hons) in Mineral
Exploitation from the University of Cardiff
and a PhD in Mineral Resource Estimation
from the University of Bristol. He is also
a Chartered Geologist and Fellow of the
Geological Society and a Chartered Engineer
and a Member of the Institute of Materials,
Minerals and Mining, IOM3.
Mike currently serves as a non-executive
director of Tertiary Minerals.
External
appointments
Nick joined the board of Caledonia Mining as
a non-executive director in September 2019.
Treasurer (Pro bono) of the Fleet Air Arm
Officer’s Association.
SUSTAINABILITY REPORT 2022
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Committees
A
Audit
N
Nomination
R
Remuneration
S
Sustainability
T
Technical
Chair of Committee
HOMESEARCHPRINTPAGES 72
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
BOARD OF
DIRECTORS
CONTINUED
Overview
Strategic Report
Governance
Financial Statements
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
ROGER DAVEY
NON-EXECUTIVE DIRECTOR
DR GILLIAN DAVIDSON
NON-EXECUTIVE DIRECTOR
MIKE PRENTIS
NON-EXECUTIVE DIRECTOR AND
SENIOR INDEPENDENT DIRECTOR
DAVID SWAN
NON-EXECUTIVE DIRECTOR
NURLAN ZHAKUPOV
NON-EXECUTIVE DIRECTOR
Committees
T N R S
Appointed
December 2015
S A N
December 2019
R A N
March 2021
A N R
June 2014
N S
October 2011
Skills and
experience
Education/
qualifications
Roger has over 40 years’ operational
experience at senior management and
director level in the international mining
industry covering feasibility studies,
financing, construction, development,
commissioning and operational management
of both underground and surface mining
operations in gold and base metals. Previous
positions include senior mining engineer
at NM Rothschild (London) in the Mining
and Metals project finance team (1997 to
2010); director, vice-president and general
manager of Minorco (AngloGold) subsidiaries
in Argentina (1994 to 1997), for the
development of the Cerro Vanguardia, open
pit gold-silver mine in Patagonia; operations
director of Greenwich Resources plc, London
(1984 to 1992); production manager for Blue
Circle Industries in Chile (1979 to 1984);
and various production roles from graduate
trainee to mine manager, in Gold Fields of
South Africa (1971 to 1978).
Roger holds a Master of Science in Mineral
Production Management from the Royal
School of Mines, Imperial College, London
and a Master of Science in Water Resource
Management and Water Environment from
Bournemouth University. He is an Associate
of the Camborne School of Mines (‘ACSM’),
a Chartered Engineer, a European Engineer
and a Member of the Institute of Materials,
Minerals and Mining, IOM3.
Gillian has over 25 years of sustainability
experience in the extractives and natural
resources sectors. Gillian was, until 2017,
Head of Mining & Metals at the World
Economic Forum, leading global and
regional initiatives for responsible and
sustainable development. Prior to this, she
was director of social responsibility at Teck
Resources. Gillian previously served on the
board of Lydian International Limited and
has held senior roles in mining companies,
government, academia and consultancy.
Mike has 33 years of investment
management experience, most recently
at BlackRock where he was a managing
director and fund manager. For many years
he managed funds investing in listed UK
small and mid-cap companies. These funds
included BlackRock Smaller Companies
Trust plc (2002 to 2019) and BlackRock
Throgmorton Trust plc (2008 to 2018), both
now FTSE250 constituents. He was Head
of the BlackRock UK Small and Mid-Cap
Equities Team (2015 to 2017). Previously, he
worked in private equity, mainly helping to
put together management buyouts; he was a
local director for 3i Group plc.
Mike qualified as a Chartered Accountant
with Peat Marwick Mitchell (now KPMG)
prior to commencing his investment
management career.
David has extensive commercial experience
across the natural resources sector
internationally in Australia, Europe, Central
Asia, Africa, US and Russia. He has had
experience as a director of companies listed
on the Australian, Canadian and UK stock
exchanges. David has been involved with
numerous corporate transactions, including
IPOs, RTOs, mergers and acquisitions and
project funding. Company experience has
included exploration, mine start-up, open
cast and underground mining operations.
Nurlan is a Kazakh national and currently
works in the capacity of chief executive
officer of Kazakhstan Investment
Development Fund Management Company
Ltd. (‘KIDF’). He has extensive experience
in capital markets and has held positions at
Rothschild & Co Global Advisory team, UBS
and RBS and Credit Suisse. He was CEO of
SPK Astana, a Kazakh regional development
institution. He has previously held a number
of managerial positions in the Kazakhstan
resource sector for Kazatomprom, Tau-Ken
Samruk (the national mining company),
Chambishi Metals and ENRC.
Gillian holds an MA (Hons) in Geography
from the University of Glasgow, a PhD in
Development Economics and Economic
Geography from the University of Liverpool
and is an alumnus of the Governor General‘s
Canadian Leadership Conference.
Mike holds an MA in Geography from the
University of Cambridge, where he was at
Trinity College. He is an Associate of the
Institute of Chartered Accountants in
England & Wales.
David holds a Bachelor of Commerce from
the University of WA and is a Fellow of
the Institute of Chartered Accountants in
Australia and New Zealand (‘ICAANZ’) and
of the Institute of Chartered Accountants in
England and Wales (‘ICAEW’).
Nurlan holds Bachelor’s and Master’s
degrees in economics from the Moscow
State Institute for International Relations.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
External
appointments
Roger is also a non-executive director
of Atalaya Mining, where he serves as
chairman, and of Tharisa and Highfield
Resources.
Gillian is an independent sustainability adviser
and currently serves as a non-executive
director on the board of Horizonte Minerals
plc, New Gold Inc. and Lundin Gold. She is
also chair of the Global Battery Alliance and
chair of International Women in Mining.
Mike is also a non-executive director of
Invesco Perpetual UK Smaller Companies
Investment Trust plc and a member of the
Finance & Resources Committee of
MidKent College.
Committees
A
Audit
N
Nomination
R
Remuneration
S
Sustainability
T
Technical
Chair of Committee
Nurlan is chief executive officer of
Kazakhstan Investment Development Fund
Management Company Ltd. (‘KIDF’).
HOMESEARCHPRINTPAGES 73
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
BOARD REPORT
OUR APPROACH
TO GOVERNANCE
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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Maintain governance structures and processes that are
fit-for-purpose and support good decision-making by
the Board
9
QCA
Overview
Strategic Report
Governance
Financial Statements
Our governance structures are summarised
as follows:
BOARD
A strong independent representation on the
Board with five independent Non-Executive
Directors, The Board of Directors leads the
Company in making key decisions about
strategy, financial planning, its Directors and
its operations and is supported by the four
main Committees.
SUSTAINABILITY COMMITTEE
Although not a QCA Code requirement, as
this is an area the Board views as critically
important to the way CAML operates, we have
a Sustainability Committee, chaired by Dr
Gillian Davidson. This Committee comprises
Executive and Non-Executive Directors
and closely involves members of the senior
management team, including our Sustainability
Director. The Sustainability Committee enables
us to maintain our strong focus on our people,
their health and safety, environmental matters,
and the local communities in which we
operate. The Committee is responsible for the
review of the Group’s corporate environmental,
social and governance (‘ESG’) performance, in
particular in relation to governance.
AUDIT COMMITTEE
Our Audit Committee, consisting of four
independent Non-Executive Directors, is led
by David Swan as its Chairman. The Audit
Committee assists the Board in its oversight
of the Company’s financial reporting,
regulatory compliance, and internal control.
It also oversees risk management, including
receiving reports from management on key
business, operational and sustainability risks.
In addition, the Audit Committee reviews, on
a regular basis, the independence, objectivity,
and effectiveness of the external Auditors.
NOMINATION COMMITTEE
Our Nomination Committee is chaired by Nick
Clarke. The members of this Committee are
our other six Non-Executive Directors. The
Nomination Committee leads the process
and makes recommendations to the Board
in relation to Director appointments. It also
reviews the composition and structure of the
Board with regard to Director independence,
and evaluates the balance of skills, strengths,
diversity, knowledge, experience and tenure
of the Directors. The Committee reports
on the annual internal review process for
evaluating the Board’s performance and
effectiveness, and assists the Board with
its progressive refreshment and ongoing
succession planning.
REMUNERATION COMMITTEE
Our Remuneration Committee, led by Mike
Prentis, is comprised solely of independent
Non-Executive Directors. The Remuneration
Committee determines the remuneration
of our Executive Directors, oversees the
remuneration of our senior management and
approves awards under the Company’s Long-
Term Incentive Plan. In doing so, it ensures
our incentive schemes are aligned with our
business and sustainability priorities.
TECHNICAL AND ADVISORY COMMITTEES
As mentioned in the Chairman’s letter on
page 69, in addition to the four principal
Committees, in 2022 we established a
Technical Committee to assist the Board in
its review of major projects, and an Advisory
Committee through which the Board can
access the historical knowledge and
perspectives of former Directors and senior
managers who have retired from the Group.
On the following pages are further details of
each of our individual Directors and separate
reports of our Board, and its Sustainability,
Audit, Nomination and Remuneration
Committees. These are intended to provide
an insight into the robust governance
structure of the Company and the value that
we continue to place on good corporate
governance processes.
These Committees support the Board in
ensuring the relevant level of focus on their
specific areas of responsibility and each have
their own terms of reference which provide the
necessary authorities for them to operate as
they consider appropriate.
Each Committee reports to the Board through
its respective Chair, providing invaluable
contributions to the Board’s effectiveness
through their work.
These arrangements form part of our ongoing
commitment to create value for all our
stakeholders through the long-term success
of the business.
In structuring its governance framework, CAML takes guidance from the principles of the QCA Code. The Board is supported by four Committees, specifically the Sustainability, Audit, Nomination and Remuneration Committees. These standing Committees focus on four areas of the Group’s operation which the Board views as having key importance to the Company’s shareholders and other stakeholders. The Board also benefits from the expertise and guidance provided by our additional Technical and Advisory Committees.HOMESEARCHPRINTPAGES GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
74
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
BOARD REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
The Board is comprised of a diverse group of
experienced Directors, both from the UK and
abroad, each with a wealth of expertise and
a depth of knowledge. Many have worked
across a variety of jurisdictions and have
extensive business and financial experience
in the sector in which the Group operates.
This ensures that each member of the Board
is able to fully contribute to the effectiveness
of the Board as a whole, and in doing so have
collective responsibility for promotion of the
interests of the Company, participation in
its decision-making and the definition and
setting of its governance arrangements. We
believe this leads to better performance,
sustainable growth and value in the business
for its shareholders and other stakeholders in
the long term.
KEY STRENGTHS
The table below shows the range of our Board’s key strengths. In addition, further detailed
biographies of each of our Directors are shown on pages 71 to 72:
Natural
Resources
Sustainability
Financial
Governance,
Risk and
Controls
People
Strategy
International
Capital
Markets
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Name
Nick Clarke
Nigel Robinson
Gavin Ferrar
Louise Wrathall
Dr Mike Armitage
Roger Davey
Dr Gillian Davidson
Mike Prentis
David Swan
Nurlan Zhakupov
1
QCA
THE ROLE OF OUR BOARD
In leading the Company, the Board defines
the purpose of the Group and makes key
decisions in relation to strategic matters to
deliver this. The Board is also responsible for
making key decisions about financial planning,
review of financial performance, setting the
cultural tone for the Group and ensuring
its values are upheld, review of operational
matters, the governance framework,
investments and Director appointments. In
doing so, the Board draws on each Director’s
unique skill set, personal attributes and
wide range of experience in the mining
industry, financial and operational aspects of
businesses, public markets and of different
geographies around the world.
Our Board meets at least five times a year
and at other times where required for arising
matters. During 2022 we returned to fully
in-person Board and Committee meetings,
having used a combination of video-
conference and face-to-face meetings in the
prior year. The virtual meeting format has
been increasingly helpful to the Company in
recent years, with improvements in technology
allowing efficient meetings to take place over
video and, although this cannot fully replace
in-person interactions, the ability to increase
meeting frequency, particularly in dealing with
critical or urgent matters, has been greatly
beneficial to the Board’s effectiveness. Whilst
our scheduled Board meetings have now
reverted back to the preferred face-to-face
format, virtual meetings will continue to be
utilised when additional or short-notice Board
meetings are required.
Throughout the year, in addition to the five
main Board meetings held, we also held one
additional Board update meeting to consider
specific matters. As well as the Executive
Directors, senior management are invited to
attend and present at meetings of the Board
and its Committees where appropriate.
All Directors devote ample time in order to
discharge their duties both at and outside
of Board meetings. Board and Committee
meetings normally take place over the course
of one or two days. At these meetings,
strategy-specific matters in the Group are a
regular area of focus and one meeting during
2022 was entirely devoted to this area to
ensure matters could be fully considered.
Meetings are also attended by local
operational management as appropriate. In
addition, Non-Executive as well as Executive
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Establish a strategy and business model which
promotes long-term value for shareholders.
6
QCA
Ensure that, between them, the Directors have
the necessary up-to-date experience, skills
and capabilities.
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ANNUAL REPORT & ACCOUNTS 2022
BOARD REPORT CONTINUED
Directors visit the Group’s operations when
opportunities to do so arise. In June 2022,
the Board, along with members of senior
management, were able to visit our operations
in North Macedonia. The photograph on the
previous page shows the Board on site during
this visit.
In October 2022, members of the Technical
Committee also travelled to Sasa. A trip to visit
operations on site in Kazakhstan is planned for
the Board in H2 2023.
The Board is well briefed in advance of meetings
and receives high-quality, comprehensive
reports to ensure matters can be given thorough
consideration. Following the Board evaluation
carried out in 2021, particular areas of focus
identified were followed up during 2022 and
actioned through increased reporting at Board
meetings, both in terms of the content of papers
received in advance and on specific items
to be considered. As a result of this, risk and
reports of each of the Committees are now
included as standing agenda items at all main
Board meetings. For further details of how the
Board has implemented the findings of its Board
evaluation, see pages 89 to 90 of the Nomination
Committee Report.
There is an appropriate balance of influence
within the Board which, as a result, is not
dominated by one person or group of individuals.
The Independent Non-Executive Directors
constructively challenge the Executive Directors
and the resulting Board debates are always
robust and sometimes lively. The open and direct
forum for discussion ensures the deliberations
during meetings lead to decisions reached by
the Board collectively in alignment with the core
values of the Company.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Overview
Strategic Report
Governance
Financial Statements
ATTENDANCE AT BOARD MEETINGS
The attendance of current Board and Committee members at the scheduled meetings and calls, as compared with the number of
meetings held during 2022 is shown below.
Name
Nick Clarke
Nigel Robinson
Gavin Ferrar
Louise Wrathall2
Mike Armitage3,6
Robert Cathery4
Roger Davey
Dr Gillian Davidson
Mike Prentis5
David Swan
Nurlan Zhakupov
Board
(6 meetings)
Audit
(4 meetings)
Nomination
(2 meetings)
Remuneration
(3 meetings)
Sustainability
(3 meetings)
1
1
1
1
1
1
Meetings attended
Board or Committee member not present
Non-Committee member invited to attend some or all of meeting
1 Denotes Chairman status.
2 Appointed to the Board on 26 May 2022.
3 Appointed to the Board and a member of the Sustainability and Nomination Committees on 10 January 2022.
4 Stepped down from the Board and as Chairman of the Remuneration Committee on 26 May 2022.
5 Became Chairman of the Remuneration Committee on 26 May 2022.
6 Dr Mike Armitage was unavoidably unable to attend one Sustainability Committee meeting due to the meeting being rearranged at a time he was unavailable. Mike was
fully briefed after the meeting.
7 Nurlan Zhakupov was unavoidably unable to attend one Sustainability Committee meeting due to urgent matters he was required to attend in Kazakhstan.
Directors do not attend meetings (or parts of meetings) of the Remuneration Committee when the Committee is deciding matters in relation to such
Directors’ Remuneration.
All Directors on the Board at that time attended the AGM.
HOMESEARCHPRINTPAGES
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
BOARD REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
BOARD COMPOSITION
We have a well-balanced Board, constituted as follows:
Non-Executive Chairman:
‣ Nick Clarke
Three Executive Directors:
‣ Nigel Robinson
‣ Gavin Ferrar
‣ Louise Wrathall
Six Non-Executive Directors (in addition to the
Chairman):
Five are considered
fully independent:
One is based
in Kazakhstan:
‣ Dr Mike Armitage
‣ Nurlan Zhakupov
‣ Roger Davey
‣ Dr Gillian Davidson
‣ Mike Prentis
‣ David Swan
Nurlan Zhakupov is
not considered fully
independent, having
previously received share
awards from the Company
in 2017.
1
1
1
2
1
Non-Executive Chairman
Executive Director (male)
Executive Director (female)
Independent Non-Executive
Director (male)
Independent Non-Executive
Director (female)
4
Non-Independent Non-Executive
Director
BOARD INDEPENDENCE
In line with the QCA Code, during the year, the Board
has considered the independence of each Non-
Executive Director, including assessment of their
character, judgement, length of tenure, any business
and other relationships which could significantly
interfere with their ability to effectively discharge
their duties. As such, after taking account of all of
these factors, the Board continues to consider Dr
Mike Armitage, Roger Davey, Dr Gillian Davidson, Mike
Prentis and David Swan to be independent Directors.
The Board believes that the combination of
independent Board members and our other Non-
Executive Director, Nurlan Zhakupov, together with our
Executive Directors, enhances the balance of views and
personal qualities as well as strengthening the range of
skills and depth of experience within the Board.
BOARD CHANGES
Our succession planning for the Board continued
during the year and as mentioned in the Chairman’s
letter, Robert Cathery stepped down as a Director
following the Company’s 2022 AGM. The role of
Chairman of the Remuneration Committee was
transitioned to Mike Prentis at that time. Mike’s
background in fund management overseeing the
management and performance in a variety of
companies provides the relevant skills and experience
to lead the Remuneration Committee.
In addition to the changes to the Non-Executive
Directors set out above, as mentioned previously,
Louise Wrathall (previously Director of Corporate
Relations) joined the Board as an Executive Director
responsible for corporate development effective from
the conclusion of the 2022 AGM.
Following this phase of progressive succession, we
have also refreshed our Committee memberships,
ensuring we continue to utilise the skills and
experience of each of our Directors in the best
way possible, maximising their contributions to the
operation of the Board and its Committees. Details of
the current Committee memberships are set out on
pages 71 to 72.
Further details in relation to the Director selection and
appointment process are set out in the Report of the
Nomination Committee on page 87.
SUPPORT TO DIRECTORS
All Directors on the Board have access to, and the
support of, the Company Secretary who acts as
secretary to the Board and its Committees, reporting
directly to their Chairs, advising on, and assisting on
compliance with relevant governance regulations and
procedures. In addition, all Directors have unrestricted
access to the Company’s external advisers. Resources
and training for their own personal development are
accessible to Directors on an ongoing basis ensuring
they have the necessary knowledge and skills to
fulfil their roles effectively and the Executive team
are always available to keep the Board informed on
relevant matters.
The role of the Company’s Auditors is explained in
more detail in the Audit Committee Report on pages
83 to 85.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 77
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ANNUAL REPORT & ACCOUNTS 2022
BOARD REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
THE BOARD AND CULTURE
SHAREHOLDER ENGAGEMENT
Of course, commitment to good corporate
governance in the boardroom is just one part
of setting and maintaining an appropriate
culture that aligns with our purpose, strategic
goals and values.
The Board and its Committees set the tone for,
and promote, a healthy culture of openness,
honesty, engagement and respect throughout
the Group and with all of its stakeholders.
The Board welcomes an open dialogue
with these stakeholders, be they investors,
employees, governmental authorities or local
communities. Decisions made by the Board
collectively, supported by management, are
taken in the context of this shared sense
of purpose that comes with the continuous
focus on culture throughout the Group’s
operations. We highlight the importance of
communication and the flow of information
throughout the Group to ensure consistency
in our procedures. Our Group People Manager
regularly undertakes exercises on site to revisit
the Company’s values ensuring these align
with our Group commitment.
We also maintain strong internal policies
including those relating to anti-bribery, share-
dealing, trade sanctions, the Modern Slavery
Act, human rights and our code of conduct
and whistleblowing which are implemented
by our teams and regularly reviewed. The
Board promotes the corporate culture of
the Group with the support of the
Sustainability Committee.
10
QCA
Communicate how the company is governed and is
performing by maintaining dialogue with shareholders
and other relevant stakeholders.
As mentioned above, we have embedded
into our culture as a Group that maintaining
a continual, open and active dialogue with
our shareholders and other stakeholders
plays an essential part in building a mutual
understanding of views and ensuring the
long-term success of the Company. It is
important that our shareholders and other
stakeholders have clear points of contact
when seeking to engage with the Company.
During 2022 we strengthened our shareholder
liaisons with the introduction of new roles to
enhance this area. As mentioned on page 76,
as part of our Board changes during the year,
following the Company’s 2022 Annual General
Meeting in May, Louise Wrathall, our Director
of Corporate Relations was appointed to the
Board as an Executive Director responsible
for Corporate Development. We believe
Louise’s appointment further emphasises
the importance we place on her areas of
responsibility, including investor relations,
business development and ESG.
Whilst most engagement with the Company’s
institutional investors is through the
Executive Directors, valuable feedback from
shareholders is also communicated to, and
discussed with, the other Board members.
To strengthen the structure of the Board
further, we appointed Mike Prentis in the new
role of Senior Independent Director. In this
role Mike will also be available as an additional
point of contact for shareholders. Given his
background and substantial experience as
an investor, we felt Mike would be an ideal
appointment for this position. In addition, we
created a new role, Group Investor Relations
Manager, to support the Director of Corporate
Development, responsible for Investor
Relations and external communications.
The Board as a whole recognises that the
views of our investors should be considered
as an important part of the Board’s
deliberations and decision-making processes
as the Board has a duty to safeguard the
interests of all stakeholders. As well as the
shareholder liaison contacts mentioned
above, all Directors are also available to
meet with investors where requested and all
shareholders also have the opportunity to
attend and ask questions in relation to matters
at the Company’s Annual General Meeting.
The Board welcomes the ongoing feedback
from our shareholders and other stakeholders
as this plays an important part in ensuring our
long-term success.
Details of our stakeholder engagement
activities during 2022 are set out in the table
on page 78.
ANNUAL GENERAL MEETING (‘AGM’)
Over the past couple of years, the impact and
unpredictablility of the COVID-19 situation
and associated restrictions has been taken
into account when planning our AGMs,
however in 2022, we were once again able
to offer shareholders the opportunity to
attend the meeting in person if they wished
to do so. We also gave consideration to those
shareholders who preferred not to travel or
attend in person by utilising the technology
available to us to enable them to view the
meeting via video. At the 2022 AGM, for the
first time, shareholders and others were able
to watch the proceedings of the AGM via
the online platform Investor Meet Company
and immediately following the AGM, a
management presentation on the Group and
its business was also broadcast. Questions
submitted in relation to this presentation and
the business generally were then answered
following the presentation.
Recognising that the AGM is an important
event for shareholders in the corporate
calendar, as a Company we are committed to
ensuring that all shareholders can exercise
their right to vote and ask questions in
connection with the business of the AGM in
advance of the meeting itself, with responses
provided by email as appropriate. A separate
communication will be sent to shareholders
and published on the Company’s website
regarding the Company’s 2023 AGM
Where appropriate, we also engage with our
key shareholders on specific governance
matters. The Board welcomes the opportunity
to understand the reasons behind any
particular voting decisions, as well as the
ongoing feedback from our shareholders and
other stakeholders.
Material information in relation to the
Company is made publicly available via the
London Stock Exchange’s Regulatory News
Service (‘RNS’). Presentations on our full year
and interim results are given to analysts and
investors shortly after publication and these
are published on our website.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
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71
73
79
83
86
91
102
104
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BOARD REPORT CONTINUED
STAKEHOLDER ENGAGEMENT ACTIVITIES
Overview
Strategic Report
Governance
Financial Statements
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
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2
QCA
Seek to understand and meet shareholder needs and
expectations.
Q1
Q2
Q3
Q4
‣ 2021 Operations Update (11
‣ Q1 2022 Operations Update
‣ H1 2022 Operations Update
‣ Q3 2022 Operations Update
January 2022).
(7 April 2022).
(12 July 2022).
(10 October 2022).
‣ Mike Armitage joins CAML
‣ Executive Directors present
‣ Executive Director marketing
‣ Technical Committee site visit
trip to Paris.
to Sasa.
‣ Sustainability-focused
investor meetings with
Executive Director of Corporate
Development and Sustainability
Director.
‣ Executive Director of
Corporate Development and
CFO accompany CAML analysts
on Sasa site visit.
‣ CEO presents at ShareSocUK
‣ 2022 interim results
webinar.
announcement (14 September
2022) and results attended by
Executive Directors.
‣ Executive Directors present
to private/retail shareholders
on Investor Meet Company
platform.
‣ As part of ESG week Dr Gillian
Davidson spoke at The Natural
Resources Forum on the Social
Impact of Modern Slavery and
Supply Chains.
‣ CEO presents at Minex 2022.
‣ Participation in Mines and
Money conference
(CEO, CFO and Director of
Corporate Development).
‣ CAML nominated for ESG
producer of the year award
at Mines and Money dinner.
Board as new NED.
‣ Preparations for 2021 Annual
Report, presentation of annual
results and 2022 Annual
General Meeting.
‣ Executive Director attendance
at BMO virtual Global Metals
and Mining Conference,
March 2022.
‣ 2021 results announcement
(29 March 2022) and 2021
results roadshow attended
by Executive Directors and
Director of Corporate Relations.
to private/retail shareholders
on Investor Meet Company
platform.
‣ Annual Report publication
‣ Engagement with proxy
advisers in connection with
publication of 2021 Annual
Report and Notice of 2022
AGM.
‣ Sustainability Report
publication.
‣ Publication of CAML’s first
Climate Change Report.
‣ Annual General Meeting
immediately followed by
presentation by Executive
Directors to private/retail
shareholders on Investor
Meet Company platform.
‣ Following the 2022 AGM
(26 May 2022) Louise Wrathall
(previously Director of
Corporate Relations) joins the
Board as Executive Director
of Corporate Development.
‣ CFO presents at Proactive
One2One Virtual Forum.
‣ CAML Board site visit to
Sasa, including meetings
with local stakeholders.
HOMESEARCHPRINTPAGES Overview
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Financial Statements
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ANNUAL REPORT & ACCOUNTS 2022
SUSTAINABILITY COMMITTEE REPORT
SUSTAINABILITY
COMMITTEE REPORT
SUSTAINABILITY COMMITTEE MEMBERS
Chair – Dr Gillian Davidson
Dr Mike Armitage
Roger Davey
Nigel Robinson
Nurlan Zhakupov
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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DR GILLIAN
DAVIDSON
Chair of the
Sustainability
Committee
As a Company, one of our core values is our responsibility for sustainable development and this is of great importance in the decision-making process at every level of the business.Achievements in 2022 ‣Worked with the Remuneration Committee to further develop KPIs and 2022 LTIP award targets focused on a key areas and quantifiable ESG objectives. ‣Worked closely with Audit Committee on monitoring and mitigation following climate change being identified as an emerging risk for the Group. ‣Undertook scenario analysis to deepen our understanding of climate related risks and opportunities and further inform our climate change strategy. ‣Completed human rights due diligence assessment with zero violations identified. ‣Commenced initial disclosures towards TCFD reporting. ‣Undertook a double materiality assessment in preparation for reporting to GRI Universal Standards in the future.Objectives for 2023 ‣Continue to develop reporting on sustainability matters, building further on the enhancements to disclosures made during 2022. ‣Further develop CAML’s sustainability strategy and targets. ‣Maintain ongoing stakeholder engagement. ‣Continue to enhance TCFD reporting disclosures. ‣Continue to work with the Remuneration Committee in setting appropriate sustainability performance measures in our long and short-term incentive plans. ‣Continue to work on implementing the Global industry standard on tailings management (‘GISTM’) action plan by 2024. HOMESEARCHPRINTPAGES
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SUSTAINABILITY COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
DELIVERING VALUE
THROUGH STEWARDSHIP
MAINTAINING
HEALTH & SAFETY
FOCUSING ON
OUR PEOPLE
CARING FOR THE
ENVIRONMENT
UNLOCKING VALUE FOR
OUR COMMUNITIES
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
DEAR SHAREHOLDER
As a Company, one of our core values is our responsibility for
sustainable development and this is of great importance in the
decision-making process at every level of the business. With
this clear purpose, our aim is to positively affect our employees
and local communities, while minimising any adverse impacts
on the natural environment. Our sustainability strategy is built
on the five pillars within which are the material topics we have
identified as high priority. The five pillars as shown in the
diagram above include: delivering value through responsible
stewardship, maintaining health, safety and wellbeing, focusing
on our people, caring for the environment and unlocking value
for our communities. We endeavour to ensure these areas are
fully integrated within our operations.
During the year we have maintained our strong focus on
sustainability matters throughout the Group, and I am pleased
to report that we continue to make considerable progress
in developing this area. We believe our continuing efforts to
strengthen our reporting, enhance our shareholder engagement,
introduce new initiatives and maintain emphasis on community
development are critical in ensuring the long-term success of
the business, driving value for all our stakeholders.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
3
QCA
8
QCA
Take into account wider stakeholder
and social responsibilities and their
implications for long-term success.
Promote a corporate culture that
is based on ethical values and
behaviours.
Whilst sustainability activity within CAML is first and foremost
focused on its operational sites at Sasa and Kounrad, the
management team, with the guidance of the Committee, aims
to ensure that the high sustainability standards that we set for
ourselves are observed throughout the Group.
ROLE OF OUR SUSTAINABILITY COMMITTEE
The Sustainability Committee, tasked with overseeing
sustainability matters in the Group, has been in place since
2012. The Committee (which was formerly known as the CSR
Committee) was established in recognition of the significance
of activities in this area which form a core part of the Company’s
strategy and values. The Committee also plays an important
role in ensuring our business and sustainability priorities are
integrated and aligned. CAML’s long-standing commitment in
this area supports our view that we consider, as an international
and expanding Company, these areas to be fundamental in the
operation of an ethical and sustainable business.
COMMITTEE FUNCTION
The Committee’s membership comprises both Executive and
Non-Executive Directors from both the UK and Kazakhstan.
This ensures a full breadth of perspectives are brought to the
Committee’s important and varied activities.
The Committee met three times during 2022. In addition, regular
update meetings were held between the formal meetings to
oversee various matters as they arose.
The Committee also works closely with the other standing
Committees of the Board and its newly formed Technical
Committee on specific matters as required. This interaction
ensures the Committee benefits from technical, auditing and
financial perspectives in its decision-making processes and
reporting and the Committee is equally available to reciprocate
when its guidance is sought.
At every main meeting, the Committee:
‣ Reviews matters arising and approves minutes of
previous meetings.
‣ Reviews and considers regular reports on the following key
areas of importance in line with our sustainability strategy:
health and safety, environmental matters, local community
projects/social matters, people and governance.
‣ Within governance matters, considers the following
specific areas:
Օ Ensuring legal and regulatory requirements and
applicable industry standards are complied with.
Օ Review and implementation of relevant Group ESG
policies and initiatives.
‣ Considers specific sustainability aspects of the Group’s
operation as they arise, determining appropriate action.
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SUSTAINABILITY COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
The Sustainability Committee provides guidance on integrating
both business and sustainability priorities so that the Company
can thrive. Our environment, health and safety, people and
governance are key components of our sustainability strategy.
Our Committee focuses on these areas and has, over the last
couple of years, overseen our work to support these strategies
and plans to continue the development of these components
in 2023. For example, in 2022 we created and implemented a
climate change strategy. This is commented upon further under
‘TCFD and climate change’. In 2023, we will be working on a
strategy focusing on diversity and inclusion and the importance
of having an equitable workplace.
The Committee reviews and makes recommendations to the
Board in relation to the Group’s local community projects where
we place a strong focus on health and education in partnership
with local organisations. The Committee also receives
presentations from members of operational management
as appropriate and liaises closely with Nick Shirley, our
Sustainability Director, who coordinates all site-based health
and safety, environment and social activities and ensures that
the Board is updated on matters from every meeting.
ANNUAL EFFECTIVENESS REVIEW
The actions taken by, and ongoing areas of focus for, the
Committee during the year following the outcomes of the
Board’s effectiveness review are detailed on page 90.
SCOPE AND TERMS OF REFERENCE
We have adopted formal terms of reference defining the scope
and responsibilities of the Sustainability Committee. These have
been closely aligned with that of the Audit Committee to ensure
both Committees are able to operate together as efficiently as
possible, each covering their relevant areas of responsibility to
minimise overlap in their duties. This enables the Sustainability
Committee to focus on the health and safety, environmental,
employees, diversity, social and corresponding governance
and compliance aspects of its remit. The Committee’s terms of
reference can be found on the Group’s website together with
the Group’s Sustainability Policy.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
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71
73
79
83
86
91
102
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TASK FORCE ON CLIMATE-RELATED FINANCIAL
DISCLOSURES (‘TCFD’) AND CLIMATE CHANGE
As the necessity to move towards a decarbonised global
economy becomes increasingly evident in the emerging
scientific data, as an organisation, we are committed to
exploring and understanding the impacts of climate change on
the environment in which we operate and its potential effects on
our business. We also recognise our role as a mining company
with regard to producing base metals, which are essential for
the future decarbonised economy, in a safe and sustainable
environment for all our stakeholders.
As mentioned previously, one of the most important advances
for CAML in recent years has been the development of our
Group Climate Change Strategy during 2021. This sets out our
targets to reduce Group greenhouse gas (‘GHG’) emissions
by 50% by 2030 and to reach net zero by 2050. The strategy
is based on five pillars comprising: producing metals which
contribute positively to the energy transition; working towards
decarbonisation; ensuring we are operationally resilient;
focusing on our strategic and business resilience; and delivering
clear and transparent climate-related reporting and disclosures.
The Committee also oversaw the formulation of a standalone
Group Climate Change Policy and strategy for decarbonisation
and energy efficiency for its operations which was approved by
the Board in 2022. The Sustainability Committee is responsible
for overseeing progress in relation to climate change initiatives
and compliance with the policy, and reports regularly on this to
the Board of Directors. During the year, we undertook climate
scenario analysis to deepen our understanding of climate
related risks and opportunities and the findings from this will
further inform our climate change strategy.
In addition, CAML is fully supportive of the recommendations
of the TCFD. The TCFD’s objectives have been established
to improve and increase reporting of climate-related financial
CORE ELEMENTS OF RECOMMENDED CLIMATE-RELATED FINANCIAL DISCLOSURES
Governance
Strategy
The organisation’s governance
around climate-related risks
and opportunities.
The actual and potential impacts
of climate-related risks and
opportunities on the organisation’s
businesses, strategy and
financial planning.
Risk Management
Metrics & Targets
The processes used by the
organisation to identify, assess, and
manage climate-related risks.
The metrics and targets used to
assess and manage relevant climate-
related risks and opportunities.
G O V E RNANCE
S T R ATEGY
RI S
K M A NAGEM
E
N
T
METRICS &
TARGETS
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SUSTAINABILITY COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
information to ensure investors are well informed about the
actions companies are taking are to mitigate the risks of climate
change, as well as providing increased clarity on the way
in which they are governed. The TCFD’s recommendations
cover governance, strategy, risk management and metrics and
targets. As a Group we have adopted this framework to guide
the development of our enhanced disclosures of actual and
potential impacts of climate-related risks related to these areas.
During the year, we commenced initial disclosures towards TCFD
reporting. Further details on this are set out on pages 30 to 32.
SUSTAINABILITY REPORT
We published our annual standalone 2021 Sustainability Report
in Q2 2022. Our 2022 Sustainability Report will be published
in Q2 2023 and will be available on the Company’s website:
www.centralasiametals.com. This provides a comprehensive
overview of our ongoing sustainability approach. During 2022,
we re-visited CAML’s material sustainability topics for both of
the Group’s operations through an independent stakeholder
engagement process, as we did in 2020, and findings from this
double materiality assessment will be taken into consideration
in our future Sustainability Report publications.
As a Group, our achievements, in terms of corporate social
responsibility, particularly in relation to our ongoing partnership
with the communities in which we work, is something we are
proud of. We strongly believe that the health and safety of our
employees and contractors, preserving the environment, and
supporting vibrant and sustainable communities are extremely
important. A more detailed summary of sustainability matters
in the Group is given in on pages 26 to 32 and, as mentioned
above, in our separate Sustainability Report.
STAKEHOLDER ENGAGEMENT
The Sustainability Committee supports the Board as it
seeks to build good relationships through ongoing dialogue
with stakeholders including workforce, local communities,
investors, suppliers and customers, NGOs and governments
and continuously aims to understand their needs, interests
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
and expectations. Where appropriate we implement the
findings of this invaluable engagement and take feedback into
consideration in our decision-making process. The Directors
meet with shareholders and stakeholders, including workforce
representatives, community leaders and government officials
where appropriate. During 2022 the Executive Director of
Corporate Development and Sustainability Director had
meetings with major investors which focused on the Company’s
sustainability matters. Feedback from investors from these
meetings genuinely identified areas that were either already
being handled by the Company or plans were being progressed
to implement the changes. Details of stakeholder engagement
activities during the year are set out in the table on page 78 and
in the s172 statement on pages 33 to 35.
CAML’S PRIMARY SDGS
CAML’S SUPPORTING SDGS
SUSTAINABILITY TARGETS
See page 14 for full description of CAML’s SDGS.
ENVIRONMENTAL IMPACT
As part of CAML’s commitment to reducing the impact of its
activities on the environment, shareholders can help us by
choosing to receive future communications in electronic
format by visiting our Registrar Computershare’s website
at www.investorcentre.co.uk/ecomms and providing an
email address.
As it did during the prior year, during 2022, the Sustainability
Committee continued to work closely with the Remuneration
Committee to consider, set and monitor ESG performance
targets in the Group’s long- and short-term incentive plans.
The ongoing integration of these measures confirms that
Executive Director and senior management remuneration is
intrinsically linked to sustainability performance and aligned
with the Group’s long-term strategy and purpose. The first set
of Long-Term Incentive Plan awards including ESG performance
targets are due to vest in Q1 2023 and, following year end, the
Committee has been assisting the Remuneration Committee in
assessing the out-turn of performance against these objectives.
Further details are included in the report of the Remuneration
Committee on page 95.
THE FUTURE FOR SUSTAINABILITY
I look forward to reporting to you next year on our progress and
activities during 2023.
DR GILLIAN DAVIDSON
CHAIR OF THE SUSTAINABILITY COMMITTEE
28 March 2023
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Financial Statements
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ANNUAL REPORT & ACCOUNTS 2022
AUDIT COMMITTEE REPORT
AUDIT
COMMITTEE REPORT
AUDIT COMMITTEE MEMBERS
Chairman – David Swan
Dr Mike Armitage
Dr Gillian Davidson
Mike Prentis
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
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86
91
102
104
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DAVID SWAN
Chairman of the
Audit Committee
The Committee’s responsibilities include risk management, regulatory compliance and effective financial reporting to ensure the integrity of its financial statements. Achievements in 2022 ‣Conducted a ‘deep dive’ on risk in the Group at a dedicated risk focused meeting. ‣Working with the Sustainability Committee, continued to develop a transparent and relevant reporting framework. ‣Ensured regular updates on risk matters were given to the Board as a standing agenda item at every main Board meeting. ‣Met with Auditors and with management in order to agree items for the audit of accounts including: preliminary planning report, final audit plan, review of audit scope and materiality. ‣Updated the Committee’s membership as part of an overall review of all of our Board Committee memberships. ‣Reviewed and agreed with management’s periodic assessment of impairment, going concern and asset retirement obligations.Objectives for 2023 ‣Review and recommendation to the Board for approval of the Group’s half year and annual results, including the report from the CFO and from the Auditors. ‣Together with the Sustainability Committee conduct an internal review of the work of the Sasa and Kounrad Foundations. ‣Continue to work with the Sustainability Committee to develop the bases of information upon which reporting disclosures are made and to ensure that future trends and new developments will be monitored to ensure that our reporting is relevant and up-to-date. ‣Continue to review the adequacy of the internal control mechanisms in place. ‣Monitor, in particular, emerging risks to ensure they are being appropriately identified, acted upon and mitigated.HOMESEARCHPRINTPAGES
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AUDIT COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
DEAR SHAREHOLDER
The Audit Committee’s main function is to assist the Board in
the fulfilment of its responsibilities by overseeing key areas
such as financial reporting, regulatory compliance and risk
management. The Audit Committee’s essential work ensures the
effectiveness of the Group’s internal controls and the integrity
of its financial accounts.
The Audit Committee has the responsibility of overseeing
the Risk Committee which reports into it on key business,
operational and sustainability risks.
During the past year we have continued to monitor the ongoing
challenges of the uncertain global economic situation. In
particular, the Audit Committee was mindful of the developing
energy crisis, Ukraine conflict and expanding sanctions regime,
historically high inflation and potential economic recession,
keeping these matters under close review and assessing their
impact on our operations as they developed throughout the year.
SIGNIFICANT ISSUES CONSIDERED BY THE COMMITTEE
IN RELATION TO THE 2022 FINANCIAL STATEMENTS
‣ The Committee assessed management’s determination of
cash-generating units and review of impairment indicators
at Kounrad and impairment indicators and impairment test at
Sasa as at 31 December 2022. The Committee considered
the key judgements made by management in relation to
discount rates, commodity price forecasts, operating and
capital expenditure, and the mineral reserves and resources
estimates. The Committee reviewed management’s
assessment of the amount of the impairment related to
Sasa and the disclosures related to the impairment and
the appropriateness of sensitivity rates in note 20 of the
financial statements.
‣ At the year end, independent experts prepared an
assessment of the potential restoration and closure costs
as a basis for the asset retirement obligation for Kounrad.
The Committee reviewed the increase in estimate of closure
costs. They also considered the key judgements made in
relation to future expected costs, discount rates and life of
mine for both Sasa and Kounrad and reviewed disclosures in
note 32 of the financial statements.
‣ The Committee reviewed management’s going concern
assessment by reviewing the cash flow forecasts to the
end of December 2024, considering the potential risks to
the Group, and being aware of the stress tests and the
underlying assumptions which have been approved by
the Board. The Committee reviewed disclosures related
to the going concern basis of preparation in note 2 of the
financial statements.
FINANCIAL REPORTING
The Audit Committee monitors the accuracy and completeness
of the financial statements by reviewing them for consistency
and appropriate disclosures and ensuring that they are
understandable to shareholders as well as compliant with
regulatory requirements. In doing so, it maintains a high level
of engagement with management to ensure a comprehensive
assessment is performed. Throughout the year and alongside
ordinary business, the Audit Committee considered issues
relating to the appropriateness of key accounting policies and
key judgements and estimates.
INDEPENDENCE OF THE AUDITORS
The Audit Committee reviewed, as it does on an annual
basis, the independence, objectivity and effectiveness of the
external Auditors. BDO LLP will again be recommended for
reappointment by shareholders at the forthcoming 2023 AGM,
having been proposed and duly reappointed at the 2022 AGM.
To safeguard the independence and objectivity of the external
Auditors, we have put in place a policy for non-audit services
to mitigate any risks threatening, or appearing to threaten,
the external audit firm’s independence and objectivity arising
through the provision of non-audit services.
COMMITTEE FUNCTION
All Committee members are independent Non-Executive
Directors.The members of the Audit Committee have the
appropriate experience and skill sets to support the Company’s
governance systems, oversee internal controls, and review
the presentation of the financial statements. During the year,
we updated the Committee’s membership as part of an overall
governance review to ensure the expertise and experience of
each of the Directors is utilised in the most effective way. David
Swan is a qualified chartered accountant bringing a breadth of
financial expertise to the role and Mike Prentis has extensive
fund management and capital markets experience. Dr Gillian
Davidson, who was appointed to the Committee during the year,
is a an experienced company director and industry leader in
sustainability, with over 20 years of experience in the extractives
and natural resources sectors and is particularly focused on
our risk management processes and reporting on non-financial
information. Dr Mike Armitage was appointed to the Committee
in March 2023 and brings additional technical expertise.
TERMS OF REFERENCE
We have adopted formal terms of reference defining the scope
and responsibilities of the Audit Committee. These have been
closely aligned with that of the Sustainability Committee
to ensure both Committees are able to operate together as
efficiently as possible, each covering their relevant areas of
responsibility to minimise overlap in their duties. This enables
the Audit Committee to focus on the relevant aspects of its
remit. The Committee’s terms of reference can be found on the
Group’s website.
ANNUAL EFFECTIVENESS REVIEW
The actions taken by, and ongoing areas of focus for, the
Committee during the year following the outcomes of the
Board’s effectiveness review are detailed on page 90.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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AUDIT COMMITTEE REPORT CONTINUED
INTERNAL CONTROL
The Committee is responsible for oversight of the effectiveness
of the Company’s systems of internal controls. During the year
the Committee assisted the Board in monitoring and review of
key areas of this as follows:
We consider the Committee’s oversight in these areas to be key
to the long-term sustainability of the Group and achievement
of its ongoing success in continuing to generate and preserve
value for our shareholders and other stakeholders over the
long term.
‣ As part of the Committee’s review of management’s going
RISK MANAGEMENT
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
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concern, impairment and asset retirement and assessments,
reviewed the adequacy of both the budgeting and long-term
forecasting processes and procedures.
‣ Management reporting – each month, monitored the Group’s
financial performance and strength against the budget and
reported to the Board formally once a quarter.
‣ The Group does not have an internal audit function. For the
size of the Group, the Committee believes that the existing
internal controls and work conducted by our Group Risk and
Internal Control Manager are adequate for the time being.
‣ Monitoring – the Audit Committee engaged in regular
monitoring of internal controls through external audit and
reviews conducted by the Group Risk and Internal Control
Manager as well as third-party assurance work.
‣ The introduction of ISA 315 resulted in an adequate and
acceptable increase in audit fees. It also gave cause for
the Audit Committee to review the Group’s internal control
environment and has resulted in further documentation
and checks on compliance with existing internal control
measures. Notwithstanding our absence of a formal internal
control function, we undertook a detailed review of the Sasa
procurement function during the year. Specific areas and
accounting functions will continue to be selected for review
as appropriate.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Embed effective risk management, considering both opportunities
and threats, throughout the organisation
4
QCA
The Audit Committee has responsibility for monitoring the
Group’s risk management on behalf of the Board, including the
Group Risk Committee. As well as its regular meetings, during
2022, one of the four meetings held by the Audit Committee
focused specifically on risk. At this risk-specific meeting,
the Committee conducted an in-depth review of the Group’s
principal risks and progress of risk mitigation measures,
including new and emerging risks, and revisited the risk
reporting framework in the Group.
The Group Risk Committee comprises senior executive
management, is responsible for managing risk within the Group
for the Audit Committee, and meets on a quarterly basis. Our
Group Risk and Internal Control Manager attends the quarterly
meetings of the Group Risk Committee and the risk-specific
meetings of the Audit Committee to ensure continuity between
the work of the Group Risk Committee and the Audit Committee.
The Group Risk and Internal Control Manager and other Group
Risk Committee members report on progress to the Audit
Committee towards an efficient and effective management of
the risks which are relevant to the Group’s business.
At its regular meetings, the Group Risk Committee ensures that
risk management is addressed in an orderly and systematic
way and that key risks identified are brought to the attention
of the Audit Committee. The Audit Committee actively reviews
the risk register and assesses the actions being taken by senior
management to monitor and mitigate the risks. Management
is responsible for taking particularly significant risks, as
appropriate, to the Board which are then considered under a
standing agenda item at each main Board meeting. How we
identify and manage risks is set out on pages 53 to 66. This
includes CAML’s risk management process and its framework,
Overview
Strategic Report
Governance
Financial Statements
our risk appetite, updates on principal risks and uncertainties as
well as emerging risks, including the conflict in Ukraine. During
the year, ‘People’ was elevated to the list of principal risks as
succession planning for key positions across the Group was
recognised as one of the key elements within this risk category.
The Committee will work with the Board and the Nomination
Committee where work is already underway in this critical area.
The conflict in Ukraine was identified as an emerging risk
last year and, during 2022, its impact on the global economy
and on CAML became more apparent. The uncertainty of the
conflict’s resolution and timeline raised geopolitical risk to an
unprecedented level.
The indirect consequences of the conflict such as the energy
crisis, expanding sanctions regime, historically high inflation
and others have been considered when assessing and putting
mitigating measures in place for related principal risks.
WHISTLEBLOWING
In addition to internal grievance mechanisms, the Group
continues to maintain an independently managed external
whistleblowing system, which extends to all employees across
each site, providing them with the facility to confidentially
express any concerns. The system is tested on a monthly
basis and is also open to suppliers and contractors. We believe
that such efforts to ensure open channels of communication
cultivate a truly sustainable business with sound principles and
robust corporate governance practices. Our Whistleblowing
Policy can be found on the CAML website:
https://www.centralasiametals.com/corporate-governance/
company-policies/
COMING YEAR
I will report to you again next year on our ongoing developments
and other activities we intend to carry out during 2023.
DAVID SWAN
CHAIRMAN OF THE AUDIT COMMITTEE
28 March 2023
HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
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CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
NOMINATION COMMITTEE REPORT
NOMINATION
COMMITTEE REPORT
NOMINATION COMMITTEE MEMBERS
Chairman – Nick Clarke
Dr Mike Armitage
Roger Davey
Dr Gillian Davidson
Mike Prentis
David Swan
Nurlan Zhakupov
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
NICK CLARKE
Chairman,
Nomination
Committee
The Committee believes that having comprehensive succession plans in place for the Board and senior management is critical in ensuring the success of the Company can be sustained in the long term.Achievements in 2022 ‣Continued progressive refreshment of the Board: ՕAppointment of new Non-Executive Director, Dr Mike Armitage in Q1. ՕAppointment of Louise Wrathall as Executive Director for Corporate Development in Q2. ՕImplementation of planning for retirement of Bob Cathery from the Board in Q2. ‣Transition to Mike Prentis as new Remuneration Committee Chairman in conjunction with Bob Cathery’s retirement. ‣Appointment of Mike Prentis as Senior Independent Director, a newly created role in the Group. ‣Regular briefings on employee matters. ‣Continued development for increased diversity in the Group.Objectives for 2023 ‣Further progress plans for the ongoing succession planning for the Board over the coming years and into the longer term. ‣Review of ongoing succession plans for key senior management roles below Board level in the Group. ‣Implementation of any further actions arising from the review of the evaluation outcomes process. ‣Continued enhancement of talent development and management processes in the Group, working with the Group People Manager. ‣Continue to focus on diversity.HOMESEARCHPRINTPAGES
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ANNUAL REPORT & ACCOUNTS 2022
NOMINATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
DEAR SHAREHOLDER
The Nomination Committee was established in July 2018 and
is responsible for the review of the composition and balance
of the Board and its Committees and for succession planning
within the Board.
In carrying out this duty, the Committee makes
recommendations to the Board in relation to the appointment of
Directors and the proactive succession planning for the Board.
INDUCTION AND ONGOING SUPPORT AND DEVELOPMENT
After a new Director is recruited, they receive an induction to
familiarise themselves with the Company and its business. In
addition, all Directors have unrestricted access to, and receive
regular updates from, management to keep them abreast of the
latest developments. Each of the Directors has access to the
Company Secretary to provide such support as appropriate.
Directors also have ongoing access to resources as appropriate
for the update of their skills and knowledge.
APPOINTMENT OF NEW DIRECTORS TO THE BOARD
The diagram on the right shows the selection process for the
external recruitment of new Board members as followed by the
Nomination Committee. This is the process followed for our most
recently appointed Non-Executive Director, Dr Mike Armitage,
who joined the Board effective 10 January 2022. The Committee
assessed his suitability for the role as an Independent Non-
Executive Director and recommended this appointment to the
Board. Mike’s appointment was in part guided by feedback
from the prior year’s annual Board evaluation process during
which the areas of technical experience was identified as a key
consideration for future recruitments.
As well as external recruitments, we believe the encouragement
and development of internal talent not only benefits the
individual in their career progression, but also the Group as their
particular skill set and knowledge of our Company is retained.
Last year, Louise Wrathall, our then Director of Corporate
Relations was appointed to the Board as an additional Executive
Director responsible for Corporate Development. Louise has
been a key member of the senior management team since
she joined CAML in 2015 and further enhances the skills
of the Board, emphasising the importance we place on her
areas of responsibility, including our investors and in business
development and ESG matters. A Q&A with Louise on her
transition from senior management to Board member can
be found on page 89.
BOARD BALANCE
The Nomination Committee keeps the balance of skills,
strengths, diversity, experience, independence and tenure of
the Board under review. Maintaining this balance and ensuring
we consistently have a range of high-calibre individuals on
the Board is a key objective of the Committee. Over the past
year, this has been an area of continued focus in the context of
succession plans for the coming years and into the longer term
to ensure the continued effectiveness, and to avoid substantial
changes to the Board composition taking place over a short
period of time.
Biographies of our current Board members can be found on
pages 71 to 72, and the composition and key strengths of its
members are set out on page 74.
BOARD DIVERSITY
In making recommendations for appointment, the Nomination
Committee considers suitably qualified, high calibre candidates
of any ethnic background or gender. It also considers having
a diversity of personal attributes as well as skills on the Board
to be another important factor when selecting potential
candidates. Roles are awarded on merit using objective criteria.
On the Board we have Directors from four continents with a
gender mix which increased during the year and also with
ethnic diversity.
SELECTION PROCESS FOR THE
RECRUITMENT OF NEW BOARD MEMBERS
1
2
3
4
5
An appropriate process is agreed for the
recruitment utilising the assistance of the
NOMAD and other advisors to the Company
in identifying and initiating contact with
potential candidates.
A specification for candidates is prepared
setting out the agreed key skills being sought
to fit with the current balance, membership
and dynamics of the Board.
A long list of candidates
meeting the specification
is then identified.
A shortlist of candidates
is selected by the
Nomination Committee.
Following interviews carried out by
representatives of the Nomination Committee,
the preferred candidate is recommended to the
Board by the Nomination Committee.
The preferred candidate also meets with the
Executive Directors prior to Board approval for
the appointment to be made.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES Overview
Strategic Report
Governance
Financial Statements
CONFLICTS OF INTEREST
It is a principle of law (enshrined in the Companies Act 2006)
that a Director should avoid a situation in which his or her duty
to the Company conflicts with his or her other duties or interests.
Such conflicts may arise as a result of other involvements with
significant shareholders, suppliers or customers of the Group
or otherwise. This is distinct from transactions or arrangements
between the Company and the Director.
The Company’s Articles of Associated permit the Directors to
give authorisations in respect of any matter or circumstance
which gives rise to, or may give rise to, a conflict. Any such
conflicts or changes would be notified before they arise in order
that they can be considered and, if appropriate, approved by
the Board.
88
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ANNUAL REPORT & ACCOUNTS 2022
NOMINATION COMMITTEE REPORT CONTINUED
We feel that this inclusive approach to recruitment throughout
the Company, not just at Board level, enables us to maintain
the appropriate balance of skills, in particular with regard to
emerging trends and key areas of focus in the sector and
geographies in which we operate. As our Board membership
continues to change over time, as mentioned in my Chairman’s
letter on page 69, diversity will remain a priority for the
Nomination Committee and we hope to make an additional
appointment to the Board further building on its existing
diversity at Board and management levels.
SUCCESSION PLANNING
The Nomination Committee assesses the developing needs of
the Company, not just in relation to the periodic refreshment
of the Board but also to ensure contingency plans are in place
for unexpected changes, in addition to those being planned for
the longer term, both at, and below, Board level. During 2022,
we continued with our progressive succession plans as Bob
Cathery, one of our longer-serving Directors, retired from the
Board at the Company’s 2022 AGM following a transition of his
role as Remuneration Committee Chairman to Mike Prentis.
At the same time, Mike also stepped into the newly created role
of Senior Independent Director. Though not an AIM requirement,
as part of the continuing evolution of the Company and
responsibilities of our Board members, we felt it appropriate to
further develop the structure of the Board as well as giving our
investors an additional point of contact should they wish this.
As previously mentioned Louise Wrathall was appointed to the
Board as Director of Corporate Development at the conclusion
of our 2022 AGM. Louise provides a valuable additional
Executive perspective in the Board’s deliberations.
Following the Board changes during the year, the Nomination
Committee undertook an in-depth succession planning and
developmental discussion in relation to the Board and the
long term. The focus of this discussion was to outline plans
to maintain both continuity and progression over the coming
years and into the longer term, ensuring the appropriate balance
between these two key aspects of succession planning. This
should enable the continued retention and recruitment of high-
calibre staff as appropriate.
Following these changes to the Board, Committee memberships
were refreshed, ensuring we continue to utilise the skills and
experience of each of our Directors in the best way possible,
maximising their contributions to the operation of the Board and
its Committees. Details of the current Committee memberships
are set out on pages 71 to 72.
As mentioned previously, we believe ongoing succession
planning below Board level is also of particular importance. Key
areas of focus for 2023 will continue to be succession planning
for existing resource, talent development and increased
emphasis on people, recognising that people are critical to the
continued long-term success of the business.
A future area we intend to address as part of implementation
of our succession plans relates to the role of Chair of the Audit
Committee. We are pleased that David Swan has agreed to
continue in this role, and the Board remains fully satisfied with
regard to his independence as a Director. Given the importance
of this role and the long business and project cycles within
which the Group operates and reports on, we intend to ensure
that a transition is fully complete before any change is finalised.
RE-ELECTION
In accordance with the Company’s Articles of Association, at
every AGM, any Director who has been a Director at each of
the two last AGMs and was not appointed or reappointed at
either of those meetings, is required to retire and is eligible for
reappointment. In 2022, Dr Mike Armitage and Roger Davey
offered themselves for reappointment in this manner and were
both duly reappointed.
This year Nick Clarke, Nigel Robinson, Gavin Ferrar and Dr
Gillian Davidson are required to retire and be reappointed
in this manner. Following review of their performance and
commitments to their roles, the Committee is satisfied with the
continued effectiveness of Nick, Nigel, Gavin and Gillian and
recommends each of their reappointments to the Board subject
to shareholder approval at the 2023 AGM. In addition, as Louise
Wrathall was appointed to the Board since the last AGM, she will
accordingly retire and seek reappointment at this meeting.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 89
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
NOMINATION COMMITTEE REPORT CONTINUED
DISCUSSION/Q&A WITH NEW EXECUTIVE
DIRECTOR OF CORPORATE DEVELOPMENT
I have been with CAML for seven years and
was delighted to transition from the senior
management team to the Board at an exciting
time for the Company.
LOUISE WRATHALL
EXECUTIVE DIRECTOR OF CORPORATE DEVELOPMENT
(APPOINTED 26 MAY 2022)
WHAT WOULD YOU SAY YOU BRING TO THE BOARD?
LW: I think I have been very fortunate to have received a good technical grounding through my
education and subsequent industry experience. My analyst career enabled me to develop
a strong grasp of the financial aspects of mining and of capital markets, and a good
understanding of what equity investors typically look for in a company. I have an outward
and future looking viewpoint in terms of my corporate development role, aiming to help
to ensure we continue to evolve and grow our business to create value for the long term.
WHAT WOULD YOU SAY YOU ARE PASSIONATE ABOUT?
LW: Over the last four years, I have been very involved in the sustainability aspects of our
business and I firmly believe that a good company with a solid strategy should not have to
compromise to be both profitable and responsible. Generating strong returns is of course
key to a sustainable business, and I am passionate that our financial performance should
be felt by all our stakeholders, particularly those in our countries of operation.
WHERE WOULD YOU LIKE TO SEE THE BUSINESS TO GO IN THE FUTURE?
LW: I believe that the current CAML business, comprising two high-quality, low-cost and
long-life assets is a great platform from which to grow. Our purpose is to produce base
metals essential for modern living, safely and sustainably, and this is our focus in terms of
business development. Right now is an exciting time to be in the mining industry, with a
modern industrial revolution underway in terms of energy transition and our green future,
and I believe we are well positioned to play an active role in producing those commodities
essential to foster that global development.
Overview
Strategic Report
Governance
Financial Statements
EFFECTIVENESS REVIEW
In line with the QCA Code, we carry out an internal effectiveness review of the Board
overseen by the Committee, led by me as Chairman, usually on an annual basis. This review
considers the effectiveness of the Board as a unit, its Committees and of the individual
Directors. In 2022 we undertook an enhanced review of progress against previously agreed
actions arising from our 2021 effectiveness review. This ensured we were able to track
actions taken in areas identified for improvement through to their conclusion and report on
those outcomes. It also allowed us to set objectives and identify areas for continued focus
in the coming year. We believe the evaluation process should continually evolve and as
implementation of actions resulting from this process can often span more than one year,
this cycle varies as appropriate to accommodate this. Following this pattern also ensures
the process remains fresh and effective.
The diagram below shows the cycle of our internal effectiveness review.
BOARD EFFECTIVENESS REVIEW CYCLE
REVIEW ACTIONS
Set objectives for the
following year’s review
5
1
CONDUCT REVIEW
Usually by interview with
the Chairman or
completion of
questionnaire
DISCLOSURE
Draft disclosure for
the Annual Report
4
REVIEW PROGRESS
Review actions taken at
Board meeting
2
DISCUSS OUTCOMES
Assign actions and
responsibilities
3
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 90
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
NOMINATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
The areas of focus arising from the 2021 evaluation and actions taken in 2022 in response to these are shown in the table below:
AREAS OF FOCUS ARISING FROM
OUTCOMES OF 2021 EVALUATION
ACTION IN 2022 IN RESPONSE TO
OUTCOMES OF 2021 EVALUATION
7
QCA
Evaluate board performance based on clear and
relevant objectives, seeking continuous improvement
FURTHER ACTION PLANNED FOR 2023
Management Reporting
‣ Ongoing enhancement of already comprehensive management reporting - Board and Committee papers continue to be
‣ Will be kept under review.
developed where considered appropriate.
Strategy
‣ Strategic presentations were given to, and discussed by, the Board in both May and July in addition to the regular updates at
‣ A two-day strategy meeting has been scheduled to take
each main meeting.
place in September 2023.
Succession Planning
‣ Staff succession planning and talent development commented upon in Business Updates at Board meetings.
‣ Appointment of Dr Mike Armitage as Non-Executive Director.
‣ Appointment of Louise Wrathall to the Board.
‣ Updated Committee memberships as appropriate in line with Board changes.
‣ Appointment of Mike Prentis as Senior Independent Director.
‣ Retirement of Bob Cathery from the Board.
‣ Board succession planning discussed at Nomination Committee meeting in December.
‣ Management succession planning and talent development to
be discussed at a Nomination Committee meeting in 2023.
People and Innovation
‣ Business reports to the Board have each included sections focused on employee matters and, where relevant, innovation.
‣ To be kept under review as further updates are provided.
Technical Committee
‣ A Technical Committee has been established to assist the Board and provide guidance to Executive management on
technical matters. This Committee comprises Roger Davey (Chairman), Mike Armitage Nick Clarke and Nigel Robinson.
‣ Its activities have included a site visit to Sasa in October.
‣ A comprehensive report on the work of the Technical Committee was made to the December Board meeting.
‣ Standing agenda items on Board agenda with updates given on recent meetings by each Committee Chair.
‣ Comprehensive reports from each of the Committees given to the December 2022 Board meeting.
‣ Executive summary of risk review by Audit Committee being included in December 2022 Board papers.
Committee Reporting
Risk
‣ Risk reports are included in finance report at each main Board meeting.
‣ November Audit Committee meeting focused on risk.
‣ Executive summary of risk review by Audit Committee included in December 2022 Board papers.
‣ To be kept under review.
‣ As part of a visit by the whole Board, the members of the
Technical Committee plan to visit Kounrad during 2023.
‣ The Committee also plans further visits to Sasa.
‣ Deep dive on Sustainability planned for September 2023.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
Advisory Committee
‣ An Advisory Committee to retain the historical experience of founder Directors after retirement from the Board has been
‣ Identify any additional matters on which the Board or
appointed. This initially comprises Robert Cathery and Nigel Hurst-Brown to provide input where requested by the Board or
Executive management.
management may wish to draw on the members of the
Advisory Committee.
Director Development
COMING YEAR
‣ Meetings have taken place met with the Board and members of the Advisory Committee.
‣ Board visit to Sasa in June 2022
‣ Executive summary of risk review by Audit Committee included in December 2022 Board papers.
‣ Annual briefings from brokers.
‣ Regular jurisdictional updates.
‣ Board visit to Kounrad in July 2023.
‣ Deep dive on work of Committees planned when appropriate.
‣ Identify any additional areas for further development.
We will report to you again next year on the results of our ongoing succession planning and other activities we intend to carry out during 2023.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
NICK CLARKE
CHAIRMAN OF THE NOMINATION COMMITTEE
28 March 2023
HOMESEARCHPRINTPAGES Overview
Strategic Report
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Financial Statements
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ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT
REMUNERATION
COMMITTEE REPORT
REMUNERATION COMMITTEE MEMBERS
Chairman – Mike Prentis
(Bob Cathery until he retired from
the Board on 26 May 2022)
Roger Davey
David Swan
MIKE PRENTIS
Chairman of the
Remuneration
Committee
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
We continue to keep our incentive plans under review to ensure our Executive remuneration is aligned with CAML’s values and purpose, business strategy and sustainability priorities.Achievements in 2022 ‣Transitioned to a new Committee Chairman, Mike Prentis, following the retirement from the Board of the Committee’s long-standing Chairman, Bob Cathery. ‣Monitored progress against targets for our LTIP awards – including the 2020 awards, the first to include sustainability targets, due to vest this year. ‣Continued to work with the Sustainability Committee on sustainability matters and on setting LTIP sustainability targets. ‣Renewed our LTIP plan following its expiry at the end of 2021, updating provisions to include malus and clawback. ‣Continued to ensure the balance between short- and long-term incentives aligned with the Group’s overall strategy.Objectives for 2023 ‣Ensure appropriate structure and levels of remuneration at a Board level. ‣Review of pension arrangements as a whole. ‣Continue to take account of investors’ views on remuneration. ‣Continue to develop and keep under review short- and long-term incentive targets appropriate to the economic environment. ‣Following the calculation of the vesting level of the sustainability and relative Total Shareholder Return (‘TSR’) proportions of the first batch of LTIPs granted in 2020 to include this additional sustainability metric, consider whether any changes are appropriate in relation to future LTIP grants.HOMESEARCHPRINTPAGES
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ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
DEAR SHAREHOLDER
I cover three key areas of our work:
This is my first report to you as Chairman
of the Remuneration Committee having
been appointed to this role in May 2022
following the retirement from the Board of
the Committee’s long-standing Chairman,
Bob Cathery. I thank Bob for ensuring a
smooth transition to me as incoming Chairman
following his extensive work in establishing
CAML’s robust remuneration arrangements
during his tenure. With my colleagues on the
Remuneration Committee, I plan to build on
the good work already undertaken in this
area to progress remuneration matters in the
current year and beyond.
The role of the Committee is to decide the
remuneration of the Executive Directors and
the Chairman, to oversee wider remuneration,
and to determine participation and award
levels under the Group’s Long-Term Incentive
Plan (‘LTIP’). With the Committee’s focus on
development our current LTIP structure over
the past few years, in 2022 we felt confident
that the LTIP arrangements in place were
appropriately fair and robust. We therefore
decided not to make any changes to this
structure for the awards granted during the
year and intend to continue with this structure
and similar targets in 2023.
In this report, I aim to give you an insight into
our activities in the year, which are driven
by our aim to incentivise management in
the interests of our shareholders and other
stakeholders over the long term.
‣ The ongoing operation of our LTIP.
‣ The annual bonus out-turn for 2022 and
plans for 2023.
‣ Other elements of the remuneration of our
Executive Directors.
LONG-TERM INCENTIVE PLAN
Background
The Committee has been operating the LTIP
since 2011. The LTIP has helped incentivise
the Executive Directors and senior managers
and we believe that this has been reflected
in the total shareholder return (‘TSR’), which
combines share price changes and dividends.
Commencing in 2020 the LTIP has also
incorporated sustainability targets.
Key terms for LTIP awards in 2020 onwards
The terms of LTIP awards for Directors are
substantially unchanged since 2020:
‣ The awards are granted over shares with
the face value of 150% of salary.
‣ The awards do not vest until the third year
after the date of grant (on 31 March to ensure
consistent vesting dates for each award).
‣ Awards vest only to the extent that
performance targets measured over three
years are achieved.
‣ Targets are in relation to the following
performance conditions:
Overview
Strategic Report
Governance
Financial Statements
PROPORTION
OF AWARD
PERFORMANCE MEASURE
75%
The ‘TSR Performance Target’
Relative TSR measured over a period of three calendar years relative to the constituents of the
AIM Basic Resources Index. Vesting on the following basis:
‣ for below median performance, no part of this portion of the award will vest;
‣ for median performance, 25% of this portion of the award will vest;
‣ for between median and upper quartile performance, between 25% and 100% of this portion
of the award will vest (on a straight-line scale); and
‣ on achievement of above upper quartile performance, 100% of this portion of the award
will vest.
25%
The ‘Sustainability Performance Target’
The sustainability targets are based on the Remuneration Committee’s assessment, taking
account of the views of the Sustainability Committee, of the Group’s overall performance
against targets in the following specific areas:
‣ Health and Safety – nil fatalities and improvement on the LTIFR average of the previous
five-year period.
‣ Environment – nil severe or major environmental incidents at either site.
‣ Community– nil severe or major community incidents at either site.
In 2022 sustainability targets were widened also to include:
‣ Nil severe or major human rights incidents.
‣ Targets for female interviewees for eligible roles from 2023 onwards.
‣ Commit to reporting to GTISM by 2024.
‣ Maintain community support at levels set by the Board.
The 2023 LTIP targets are intended to follow a similar structure to that set out above.
In 2022, we reviewed LTIP rules in the context of the current good practice on AIM. As a result,
updates included the introduction of malus and clawback provisions which were then approved
by the Committee and the Board. These new provisions apply to LTIP awards granted from
2022 onwards.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 93
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
ANNUAL BONUS
NON-EXECUTIVE DIRECTOR REMUNERATION
ANNUAL EFFECTIVENESS REVIEW
Our Executive Directors’ annual bonuses for 2022 were linked
to production, cost and sustainability targets and personal
objectives similar to those in the prior year and those for the
coming year. As detailed in the table on page 95, the out-
turn for Executive Directors for 2022 was a payment of 89%
of the maximum bonus potential which is 100% of salary. The
maximum possible 2023 bonus for Executive Directors remains
at the same level as 2022, at 100% of salary.
The annual bonuses of other corporate team members are
linked to the same or similar targets with amounts adjusted as
appropriate to the role within the organisation. Annual bonuses
for senior management in the Group’s operations are similar
though linked to performance of the relevant site at which they
are employed.
OTHER ELEMENTS OF REMUNERATION
As well as deciding to maintain the same level and similar
structure of LTIP awards, we have considered the other
elements of the remuneration of the Executive Directors.
In the context of current inflation levels and in line with the
standard increase of UK based staff, Nigel Robinson and Gavin
Ferrar were awarded 5% increases in salary effective from 1
January 2023. As a result, Nigel Robinson’s salary as CEO is
now £404,250 per annum and Gavin Ferrar’s salary as CFO is
£330,750 per annum. Following her appointment to the Board
in May 2022 as an additional Executive Director responsible for
Corporate Development, we conducted a benchmarking exercise
for her new role and additional responsibilities. Taking account
of this benchmarking exercise, Louise Wrathall’s salary has been
reviewed and is now £275,000 with effect from 1 January 2023.
We also benchmarked remuneration for our other corporate team
members and adjusted these in a similar way where appropriate.
We are now comfortable that the salaries as now set are at
appropriate levels.
The remuneration of the Non-Executive Directors is determined
by the Chairman of the Board and the Executive Directors.
The Remuneration Committee plays no part in this. The fees of
Non-Executive Directors were last reviewed as at January 2020.
The Board determined that these fees should be reviewed as at
January 2023 taking account of the increased responsibilities
of the Chairs of each of the Committees, as well as the ongoing
time commitments of all Non-Executive Directors, for example
in relation to overseas site visits. Following consideration of
data from comparable companies, the Board has increased fees
for Committee Chairs from £5,000 per annum to £10,000 per
annum from 1 January 2023.
REMUNERATION IN THE GROUP MORE WIDELY
Our overall remuneration structure as set out in the policy table
on pages 98 to 101 applies to Executive Directors but also senior
management. The levels stated in the policy table relate only to
the Executive Directors. Remuneration in the Group generally
is considered as part of the Remuneration Committee’s work in
deciding on Executive Remuneration.
PENSIONS
During the year, the Committee reviewed pension arrangements
in the Group. This included the corporate contribution levels and
local contexts in each of the Group’s jurisdictions, noting that
these provisions were quite specific in Kazakhstan and North
Macedonia. Consistency between Executive Directors and the
rest of the UK team has been confirmed.
INVESTOR FEEDBACK
We continue to welcome investor feedback and take this into
account in our deliberations.
The actions taken by the Committee during the year following
the outcomes of the Board’s effectiveness review are detailed
on page 90.
TRANSPARENCY IN REPORTING
Our report aims to give shareholders insight into our
considerations and reasoning in arriving at the current
remuneration structure. We believe this to be appropriate,
both in terms of transparency, and to enable shareholders to
form their own views on the actions we take. Investors with
any questions regarding our remuneration are encouraged to
contact me as Chairman of the Committee. I can be reached
through contact with the Company Secretary.
Following this letter is a table summarising implementation
of our remuneration policy in both 2021 and 2022. After
that implementation report follows a table summarising the
remuneration policy itself. Whilst variations are possible, this is
the policy that we have followed since 2019 and are continuing
to follow in 2023. We intend to continue with this approach
going forward unless the Remuneration Committee considers
variations are justified.
CONCLUSION
Again, I would like to thank Bob Cathery for his leadership of
the Remuneration Committee over past years. Whilst we will
continue to look at matters afresh, I believe the structures
that have been established serve the Company and its
shareholders well. I look forward to reporting to you on
developments during 2023 next year.
MIKE PRENTIS
CHAIRMAN OF THE REMUNERATION COMMITTEE
28 March 2023
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
94
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
IMPLEMENTATION REPORT
As an AIM-quoted company following the QCA Code, CAML is not required to have a binding
remuneration policy for its Directors. Nonetheless both the Board and the Remuneration
Committee believe that transparency of the policy under which Directors’ remuneration is
structured is beneficial to shareholders. The report below summarises implementation of our
remuneration policy in 2021 and 2022. This is followed by a table summarising the remuneration
policy itself.
Directors’ remuneration
The table below sets out the total remuneration in respect of qualifying services for both
Executive and Non-Executive Directors for the financial year 2022:
Executive Directors:
Nigel Robinson
Gavin Ferrar
Louise Wrathall1
Non-Executive Directors:
Nick Clarke
Dr Mike Armitage2
Roger Davey
Dr Gillian Davidson
Mike Prentis
David Swan
Nurlan Zhakupov
Robert Cathery3
Nigel Hurst-Brown
Directors’ aggregate
emoluments
2022
Basic salary/
fees
$’000
509
416
165
217
93
98
99
101
99
93
44
–
2022
Annual
bonus
$’000
403
330
138
–
–
–
–
–
–
–
–
–
1,934
871
2022
Pension
$’000
2022
Benefits
in kind
$’000
2022
Total
$’000
924
746
307
217
93
98
99
101
99
93
44
–
2021
Total
$’000
938
760
–
242
–
103
110
80
110
51
110
82
12
–
4
–
–
–
–
–
–
–
–
–
16
2,821
2,586
–
–
–
–
–
–
–
–
–
–
–
–
–
Overview
Strategic Report
Governance
Financial Statements
The benefits receivable by Executive Directors include private medical and dental insurance and
travel allowance.
The aggregate emoluments of the highest paid Director totalled $924,000 (2021: $938,000). No
Director has a service agreement with the Company that is terminable on more than six months’
notice. Details of Executive Director service agreements are set out on page 100.
During the year Gavin Ferrar exercised 226,612 shares for a total share option gain of $719,000.
See the Directors’ option awards table on page 96.
Salaries for Executive Directors for 2023
The Executive Directors have each signed a service agreement with the Company. Under the
terms of these service agreements, the Executive Directors are entitled to a salary (which is
denominated in pounds Sterling) as set out below.
Nigel Robinson (Chief Executive Officer)
Gavin Ferrar (Chief Financial Officer)
Louise Wrathall (Director of Corporate Development)1
1 Appointed to the Board on 26 May 2022.
2023
Salary
£’000
404
331
275
2022
Salary
£’000
385
315
225
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
1 Appointed to the Board on 26 May 2022. The above figures only include remuneration earned since joining the Board.
2 Appointed to the Board on 10 January 2022.
3 Stepped down from the Board on 26 May 2022.
HOMESEARCHPRINTPAGES 95
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
Annual bonus measures
Annual bonus out-turn
The table below sets out the performance measures and weightings between
these:
In 2022, Executive Directors earned 89%. In 2021, the Executive Directors at that time earned 80% of the maximum
bonus potential. Further details of the bonus out-turn for 2022 are included in the table below:
Metric
Production
Production across all operations
Financial/Operational
C1 cash cost and unit cost of mined ore
Health and Safety; Environmental; Community;
People; and Governance
Personal performance
Individual assessment
2023
Weighting
2022
Weighting
40%
20%
20%
20%
40%
20%
20%
20%
Executive Directors can earn up to a maximum bonus potential of 100% of
salary based on the measures set out above.
Metric
Copper Production
Lead Production
Zinc Production
Kounrad C1 cost base
Sasa ROM cost base
Subtotal
Sustainability
% of total bonus
potential
originally
available for this
metric
20%
10%
10%
10%
10%
60%
Achievement
Target/range
14,254 tonnes
12,150- 13,500 tonnes1
27,354 tonnes 25,650 – 28,500 tonnes1
21,473 tonnes
19,350-21,200 tonnes1
$20.70m
$44.67m
$21m - $23m2
$44m - $48m2
20% Governance, health and safety, people, environment
and community targets
Personal objectives - CEO,
CFO and Executive Director
of Corporate Development
20%
‣ CAML strategic development, with a focus on key
areas of business development, sustainability and
innovation – CEO, CFO and Executive Director of
Corporate Development.
‣ Advancement of Sasa Cut and Fill project
(operationally and financially) to ensure project
delivery in line with agreed timescales – CEO, CFO
‣ Progression of sustainability targets, including
enhanced data collection and controls for
sustainability reporting – CFO, Executive Director of
Corporate Development.
‣ Enhanced business development processes –
Executive Director of Corporate Development.
Total
% of total bonus
potential earned
for this metric
20%
6%
10%
10%
9%
55%
19%
15%
89%
1 These targets were subject to an overriding discretion of the Remuneration Committee to adjust the formulaic out-turn (including downwards)
where this did not fairly reflect the overall performance of the Company. No such discretion has been exercised in respect of the 2022 outcomes.
2 Due to the nature of their calculation and the number of factors that can affect the out-turns, these targets were subject to an overriding
discretion of the Remuneration Committee to adjust the formulaic out-turn including where there had been an anomalous result due to factors
not considered in the calculation of the original target. No such discretion has been exercised in respect of the 2022 outcomes.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 96
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
Directors’ option awards
The options in the table below have been granted to the Directors under the Central Asia Metals Employee Share Plan 2011, the Central Asia Metals Non-Executive
Director Share Plan 2012 and the Central Asia Metals Long-Term Incentive Plan 2022:
Nick Clarke
Nigel Robinson
Gavin Ferrar
Louise Wrathall4
Nurlan Zhakupov
Total
As at
1 Jan 2022
Number1,5
1,869,875
1,298,032
705,671
128,392
242,272
Granted/awarded
Number2
–
241,127
197,286
140,918
–
Dividends
Number
173,196
127,215
59,392
12,554
23,225
Lapsed
Number3
(63,258)
(88,561)
(72,115)
–
–
Exercised
Number
–
–
(226,612)
–
–
As at
31 Dec 2022
Number1
1,979,813
1,577,813
663,622
281,864
265,497
Exercisable at
31 Dec 2022
Number1
1,979,813
778,405
7,515
–
265,497
4,244,242
579,331
395,582
(224,402)
(226,612)
4,768,609
3,031,230
1 This includes the number of shares covered by such awards increased in terms of the relevant plan rules by the value of dividends as if these were reinvested in Company shares at the dates of payment.
2 Before any adjustments for accrued dividends.
3 Represents shares that lapsed on 31 March 2022 having not met the performance targets for the 2019 awards in full.
4 Appointed to the Board on 26 May 2022.
5 Louise Wrathall’s opening balance of share options is shown as at the date of appointment as a Director on 26 May 2022, not as at 1 January 2022.
‣ Options granted from 2020 onwards are subject to two performance targets. Of each Award, 75% was to be subject to a performance target relating to the
performance of the Company’s total shareholder return relative to the constituents of the AIM Basic Resources Index over a period of three years (the ‘TSR
Performance Target’). The other 25% of each Award was to be subject to a sustainability target, (the ‘Sustainability Performance Target’). Awards do not vest
until 31 March in the third year from the year of grant. Further details of the TSR and Sustainability Performance Targets are set out on page 92.
‣ The performance targets for the options granted in 2020 were substantially met to the extent of 71.43% for the TSR target (which represents 75% of the overall
award) and 100% of the sustainability target (which represents 25% of the overall award) and will therefore vest at an overall level of 73.57 % on 31 March 2023.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 97
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
DIRECTORS’ INTERESTS
2023 LTIP KPIs
The Directors of the Company who were in office during the year and up to the date of signing
the financial statements and their interest in the issued Share Capital of the Company during the
year were as follows:
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
Nick Clarke (Chairman)1
Nigel Robinson (Chief Executive Officer)1
Gavin Ferrar (Chief Financial Officer)
Louise Wrathall (Director of Corporate Development)2
Dr Mike Armitage3
Roger Davey
Dr Gillian Davidson
Mike Prentis
David Swan
Nurlan Zhakupov
Robert Cathery4,5
Total Directors’ interests
Shares held
as at
31 Dec 2022
Shares held
as at
31 Dec 2021
1,379,644
1,379,644
646,715
646,715
–
9,280
16,156
–
–
13,080
3,000
–
N/A
2,067,875
–
–
–
–
–
7,330
3,000
–
1,355,254
3,391,943
The plans and performance measures for the LTIP grants planned to be made in 2023 are
commented upon on page 92.
Non-Executive Director remuneration
The Non-Executive Directors, including the Chairman, have each signed a letter of appointment.
Under the terms of these letters, the Non-Executive Directors are entitled to an annual fee as
set out below (which is denominated in pounds Sterling) and paid on a quarterly basis. Base and
Committee Chair fee levels were reviewed in January 2023.
Nick Clarke (Non-Executive Chairman)
Dr Mike Armitage (appointed to the Board on 10 January 2022)
Roger Davey2
Dr Gillian Davidson3
Mike Prentis4
David Swan5
Nurlan Zhakupov
2023 Fee
£’000*1
2022 Fee
£’000*1
175
75
85
85
90
85
75
175
75
80
80
85
80
75
* The amounts as set out in the table above are paid in £ and reported in US$ on page 94.
1 All Non-Executive Directors (with the exception of the Chairman) receive a base fee of £75,000 per annum.
1 Of these shares, the numbers set out below are held jointly with the Company’s EBT under a joint share ownership plan.
2 This also includes a Committee Chair fee for the role of Chairman of the Technical Committee of £5,000 in 2022 and of
All share awards were made prior to the 2010 IPO and vested upon its successful completion.
– Nick Clarke: 1,342,887
– Nigel Robinson: 646,715
£10,000 from 1 January 2023.
3 This also includes a Committee Chair fee for the role of Chair of the Sustainability Committee of £5,000 in 2022 and of
£10,000 from 1 January 2023.
2 Appointed to the Board on 26 May 2022 – shareholding remains unchanged since date of appointment.
4 This also includes, with effect from the conclusion of the 2022 AGM on 26 May when Mike Prentis assumed these roles,
3 Appointed to the Board on 10 January 2022.
4 530,254 shares held in the name of Robert Cathery; 425,000 shares held by Elizabeth Cathery, the wife of Robert
Cathery and a Person Closely Associated to Mr Cathery; and 400,000 shares held jointly by Robert and Elizabeth
Cathery in the Cathery Family Trust, a Person Closely Associated to Mr Cathery, are included in the above amounts.
5 Stepped down from the Board on 26 May 2022. Mr Cathery is not required to disclose his shareholding after that date.
a £5,000 fee for the role of Senior Independent Director and a Committee Chair fee for the role of Chairman of the
Remuneration Committee of £5,000 in 2022 and of £10,000 from 1 January 2023.
5 This also includes a Committee Chair fee for the role of Chairman of the Audit Committee of £5,000 in 2022 and of
£10,000 from 1 January 2023.
Further details on the Non-Executive Director and Non-Executive Chairman letters of
appointment are set out under ‘Service Contracts’ on page 100.
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 98
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
DIRECTORS’ REMUNERATION POLICY
The Remuneration Policy is set out in the table below. It is subject to variation where the
Remuneration Committee considers appropriate. No variations were made in 2022 and none are
intended in 2023 with the exception of the introduction of malus and clawback provisions under
the LTIP rules, which apply to LTIP awards granted from 2022 onwards, as set out on page 92.
Overview
Strategic Report
Governance
Financial Statements
Element and purpose
Benefits
To provide benefits valued by recipients.
Policy and operation
Remuneration Policy table
Element and purpose
Base salary
This is the core element of pay and reflects the individual’s role and responsibilities within the Group
with some adjustment to reflect their capability and contribution.
Policy and operation
Base salaries are determined each year by the Committee.
Level
Level
Salary levels are reviewed by reference to public companies in the sector
of a similar size and complexity. The Committee also has regard to other
relevant factors including corporate and individual performance and any
changes in an individual’s role and responsibilities.
Base salary is paid monthly in cash.
Changes to base salaries normally take effect from 1 January.
The Remuneration Committee will apply the factors set out in the section
above in considering any salary adjustments during the duration of
this policy. Increases in base salaries for Executive Directors will be
generally guided by any increases for the broader employee population,
but on occasion may need to recognise, for example, an increase in the
scale, scope or responsibility of the role. No increase will be made if it
would take an Executive Director’s salary above the level the Committee
considers is justified by these factors.
The Group provides benefits to all employees, including the Executive
Directors. The Executive Directors receive private medical cover and
insurance benefits. The Remuneration Committee reserves discretion to
introduce new benefits where it concludes that it is in the interests of CAML
to do so, having regard to the particular circumstances and market practice.
Where appropriate, the Company may meet certain costs relating to
Executive Director relocations and (if appropriate) expatriate benefits.
The Remuneration Committee sets such benefits within overall market
practice and ensures that the overall costs do not increase by more
than the Remuneration Committee considers to be appropriate in all the
circumstances.
Performance measures N/A
Element and purpose
Pension
To provide retirement benefits.
Policy and operation
Level
Executive Directors receive pension contributions to Company or personal
pension arrangements, or an amount can be paid as a cash supplement in
lieu of pension contributions (reduced for the impact of employers’ National
Insurance Contributions).
The amount of employer’s contribution is approximately 6% of base salary
per annum which is aligned with other employees.
Performance measures N/A
Performance measures N/A
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 99
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
Element and purpose
Annual Bonus Plan
Element and purpose
Long-term incentives
To motivate employees and incentivise delivery of performance over a one-year operating cycle,
focusing on the short/medium-term elements of our strategic aims.
To motivate and incentivise delivery of sustained performance over the long term, and to promote
alignment with shareholders’ interests, the Group operates a Long-Term Incentive Plan.
Policy and operation
Annual Bonus Plan levels and the appropriateness of measures are reviewed
annually to ensure they continue to support the Group’s strategy.
Policy and operation
Level
Annual Bonus Plan outcomes are calculated following the determination of
achievement against performance measures and targets.
The normal maximum of Annual Bonus Plan outcome for an Executive
Director is 100% of base salary per annum.
Performance measures The performance measures applied may be financial or non-financial,
corporate, divisional or individual and in such proportions as the
Remuneration Committee considers appropriate. They are typically
a blend of corporate targets such as production, cost control and
sustainability achievements as well as individual KPIs.
Once set, performance measures and targets will generally remain
unchanged for the year, except to reflect events (such as major
transactions) where the Committee considers it necessary in its judgement
to make appropriate adjustments to the targets applying before such event.
The Annual Bonus Plan remains a discretionary arrangement and the
Remuneration Committee retains a standard power to apply its judgement
to adjust the outcome of the Annual Bonus Plan for any performance
measure (from zero to any cap) should it consider that to be appropriate.
Level
Awards under the LTIP are typically granted as options which vest to the
extent that performance conditions are satisfied over a period of at least
three years.
Awards are normally granted at nominal cost ($0.01) per share although
can be granted at nil-cost under the rules.
Under the LTIP rules, vested awards may also be settled in cash
(although this will typically be the case only if decided appropriate by the
Committee in particular circumstances).
If appropriate, dividend entitlements will accrue until the end of the
holding period in respect of performance-vested shares and be delivered
as additional vesting shares.
The normal level under the LTIP for an Executive Director is for awards
over shares worth 150% of base salary in a financial year. This excludes
any dividend equivalent accruals.
Performance measures The Remuneration Committee may set such performance measures
on LTIP awards as it considers appropriate (whether financial or non-
financial, and whether corporate, divisional or individual).
Once set, performance measures and targets will generally remain
unaltered unless events occur which, in the Remuneration Committee’s
opinion, make it appropriate to alter the performance conditions in such
manner as the Committee thinks fit. Performance conditions would only
be altered this way for factors that could not be foreseen at the time of
grant of the awards and significantly distort the operation of the intended
performance conditions (positively or negatively). Performance may be
measured over such periods as the Remuneration Committee selects at
grant, which will not normally be less than, but may be more than, three
financial years. Performance measures for the LTIP awards intended to be
granted in 2023 are summarised in the table on page 92.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 100
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Element and purpose
Chairman and other Non-Executive Director fees
To enable the Company to recruit and retain a Chairman and Non-Executive Directors of the highest
calibre, at the appropriate cost.
Policy and operation
Level
Share awards
The fees paid to the Chairman and the fees of the other Non-Executive
Directors aim to be competitive with other listed companies of equivalent
size and complexity, and to take account of the time commitment of
the Directors.
The fees payable to the Non-Executive Directors are determined by
the Board. The fees payable to the Chairman are determined by the
Remuneration Committee.
All fees will be subject to periodic review. For Non-Executive Directors,
the fee structures may involve separate fees for chairing, for membership
of Board Committees or for acting as Deputy Chairman or Senior
Independent Director, or for performing specific services.
No benefits are normally envisaged for the Non-Executive Directors but
the Company reserves the right to provide benefits (including travel and
office support).
Fees are paid monthly in cash.
The Chairman and Non-Executive Directors are paid fees comparable
in relation to other companies taking account of their respective roles,
responsibilities and time commitment. Any increases made will be
appropriately disclosed.
Share awards will not normally be granted to Non-Executive Directors. If
exceptional share awards are granted to Non-Executive Directors, those
Non-Executive Directors shall not normally be counted amongst the
independent Directors under the Quoted Companies Alliance (‘QCA’) Code.
Performance measures N/A
Overview
Strategic Report
Governance
Financial Statements
SERVICE CONTRACTS
Executive Directors
The Committee’s policy is that each Executive Director’s service agreement should be of
indefinite duration, subject to termination by the Company or the individual on six months’
notice. The service agreements of the Executive Directors comply with that policy. In addition,
the Company has the discretion to pay them in lieu of their notice period or to place them on
gardening leave. In the event of a change of control of the Company as defined in the service
agreements, the Executive Directors shall be entitled to receive a compensation payment of 12
months’ basic salary.
Other fixed elements of the Executive Directors’ remuneration comprise private medical insurance
and Company pension contributions. The service agreements also contain customary post-
termination restrictions.
The date of each Executive Director’s service agreement is:
Name
Nigel Robinson
Gavin Ferrar
Louise Wrathall
Date of service contract
24 September 2010
4 December 2017
26 May 2022
The service agreements of the Executive Directors are available for inspection at the Company’s
registered office during normal business hours and at the Company’s AGM, including the 15
minutes preceding the meeting.
Chairman and Non-Executive Directors
Each Non-Executive Director appointment is subject to periodic renewal, in terms of the
Company’s Articles of Association, at the AGM. For Non-Executive Directors, other than the
Chairman, these engagements can be terminated by either party on one month’s notice. For the
Chairman, the appointment is subject to termination by the Company or the individual on six
months’ notice.
The Chairman and Non-Executive Directors are not entitled to any pension benefits and are not
entitled to any payment in compensation for early termination of their appointment beyond the
notice periods referred to above.
The letters of appointment of the Non-Executive Directors are available for inspection at the
Company’s registered office during normal business hours and at the Company’s AGM, including
the 15 minutes preceding the meeting.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 101
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
REMUNERATION COMMITTEE REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
TERMINATION POLICY SUMMARY
EXTERNAL APPOINTMENTS
It is appropriate for the Committee to consider treatment on a termination having regard for all
of the relevant facts and circumstances available at that time. This policy applies both to any
negotiations linked to notice periods on a termination (see ‘Service Contracts’ on page 100) and
any treatments that the Committee may choose to apply under the discretions available to it
under the terms of the Annual Bonus Plan and the LTIP.
The potential treatments on termination under these plans are summarised in the table below.
The Company’s policy is to permit an Executive Director to serve as a Non-Executive Director
elsewhere when this does not conflict with the individual’s duties to the Company and, where an
Executive Director takes such a role, they will be entitled to retain any fees which they earn from
that appointment.
STATEMENT OF CONSIDERATION OF EMPLOYMENT CONDITIONS ELSEWHERE IN THE
GROUP
Other exceptional cases,
e.g. change in control
Pay and employment conditions generally in the Group are taken into account when setting
Executive Directors’ remuneration.
Incentives
If a leaver is deemed to be a ‘good
leaver’, e.g. leaving through disability
or otherwise at the discretion of the
Committee
If a leaver is
leaving for
other reasons
Annual
Bonus Plan
LTIP
No awards made. The Committee has the
discretion to determine
the annual bonus.
LTIP
Receive a prorated award subject to the
application of the performance conditions
at the end of the normal vesting period.
All awards will
normally lapse.
The Committee retains standard
discretions to vary time prorating, release
any holding period, or accelerate vesting
to the date of cessation (determining the
performance conditions at that time) for a
good leaver.
Receive a prorated award
subject to the application
of the performance
conditions at the date
of the event, subject
to standard Committee
discretions to vary
time prorating.
The Company has the power to enter into settlement agreements with Directors and to pay
compensation to settle potential legal claims. In addition, and consistent with market practice,
in the event of the termination of an Executive Director, the Company may pay a contribution
towards that individual’s legal fees and fees for outplacement services as part of a negotiated
settlement. Any such fees will be disclosed as part of the detail of termination arrangements.
For the avoidance of doubt, the policy does not include an explicit cap on the cost of
termination payments.
The Committee receives regular updates on overall pay and conditions in the Group.
The same reward principles guide reward decisions for all Group employees, including Executive
Directors, although remuneration packages differ to take into account appropriate factors in
different areas of the business:
‣ Annual bonus – the majority of Group employees participate in an Annual Bonus Plan,
although the quantum and balance of corporate to individual objectives varies by level.
‣ LTIP – key Group employees participate in the LTIP currently based on the same performance
conditions as those for Executive Directors, although the Committee reserves the discretion
to vary the performance conditions for awards made to employees below Board level.
CONSIDERATION OF SHAREHOLDERS’ VIEWS
The Remuneration Committee takes into account the approval levels of remuneration-related
matters at our AGM in determining that the current Directors’ Remuneration Policy remains
appropriate for the Company, and considers any specific representations made by our
shareholders on pay matters.
The Remuneration Committee also seeks to build an active and productive dialogue with
investors on developments on the remuneration aspects of corporate governance generally
and any changes to the Company’s Executive pay arrangements in particular.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 102
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
DIRECTORS’ REPORT
The Directors present their report and the audited
consolidated financial statements for the year
ended 31 December 2022.
There were no significant events since the balance sheet date
as confirmed in note 38 to the financial statements.
PRINCIPAL ACTIVITIES
Central Asia Metals plc (‘CAML’ or the ‘Company’) is the holding
Company for a group of companies (the ‘Group’). CAML owns
100% of the Sasa zinc-lead mine in North Macedonia and 100%
of the Kounrad SX-EW copper project in central Kazakhstan.
CAML is domiciled and incorporated in the UK with the
registration number 5559627 and the registered office is:
Masters House, 107 Hammersmith Road, London, W14 0QH.
REVIEW OF BUSINESS
A review of the current and future development of the Group’s
business is given in the Strategic Report on pages 7 to 66
which forms part of, and by reference is incorporated in, this
Directors’ Report.
Financial risk management has been assessed within note 3
to the financial statements.
DIVIDENDS
The Company’s dividend policy is to return to shareholders a
range of between 30% and 50% of free cash flow, defined as
net cash generated from operating activities less sustaining
capital expenditure.
The final 2021 dividend of 12 pence per Ordinary Share of $0.01
each (‘Share’) was paid on 30 May 2022 and a 2022 interim
dividend of 10 pence per Share was paid on 21 October 2022.
Overview
Strategic Report
Governance
Financial Statements
The Directors recommend a final dividend for the year ended
31 December 2022 of 10 pence per Share payable, subject
to the approval of shareholders, on 23 May 2023, to those
shareholders on the Company’s register on 28 April 2023. This
will take the total dividend for 2022 to 20 pence per Share.
DIRECTORS AND DIRECTORS’ INTERESTS
The Directors of the Company who were in office during the
year and up to the date of signing the financial statements were
as follows:
‣ Nick Clarke (Non-Executive Chairman)
‣ Nigel Robinson (Chief Executive Officer)
‣ Gavin Ferrar (Chief Financial Officer)
‣ Louise Wrathall (Director of Corporate Development)
(Appointed 26 May 2022)
‣ Dr Mike Armitage (Appointed 10 January 2022)
‣ Robert Cathery (Stepped down on 26 May 2022)
‣ Roger Davey
‣ Dr Gillian Davidson
‣ Mike Prentis
‣ David Swan
‣ Nurlan Zhakupov
In addition, as Louise Wrathall was appointed to the Board
since the last AGM, she will accordingly also retire and seek
reappointment at this meeting.
DIRECTORS’ INDEMNITY INSURANCE
During the year, Directors’ and Officers’ liability insurance was
maintained for Directors and other Officers of the Group.
SUBSTANTIAL SHAREHOLDING
At the date of this report the Company has been notified or is
aware of the following interests in the Shares of the Company
of 3% or more of the Company’s total issued share capital
(excluding treasury shares).
No. of
Shares
% of
voting
rights1
T Rowe Price International Limited
15,296,979 8.42
FIL Investment International
13,522,223 7.45
BlackRock Investment Management (UK)
Limited
12,575,620 6.92
JO Hambro Capital Management Limited
10,785,965 5.94
JPMorgan Asset Management (UK) Limited
7,602,192 4.19
Polar Capital LLP
7,209,859 3.97
Biographical details of the current Directors are set out on
pages 71 to 72. The Directors’ interests in the Ordinary Share
capital of the Company and any interests known to the
Company of their connected persons are set out in the Report
of the Remuneration Committee commencing on page 91.
At 28 March 2023, the total voting rights attached to the issued
share capital of the Company comprised 181,626,619 Ordinary
Shares each of $0.01 nominal value, being the 182,098,266
Ordinary Shares in issue, less 471,647 Ordinary Shares currently
held in treasury.
At every Annual General Meeting (‘AGM’), any Director who
has been a Director at each of the two last AGMs and was
not appointed or reappointed at either of those meetings, is
required to retire and is eligible for reappointment. This year,
Nick Clarke, Nigel Robinson, Gavin Ferrar and Gillan Davidson
are required to retire and be reappointed in this manner.
The Company received no notifications of interests indicating a
different whole percentage holding at 31 December 2022.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 103
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
DIRECTORS’ REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
CHANGES IN SHARE CAPITAL
SECTION 172 STATEMENT
On 27 September 2022, the Company allotted and issued
5,600,000 Ordinary Shares to the trustee of the Central Asia
Metals Limited Share Trust (the ‘Employee Benefit Trust’).
A statement of how the Board has performed its duties under
section 172 of the Companies Act 2006 (‘the Act’) can be found
on pages 33 to 35 of the Strategic Report.
As at 31 December 2022, 182,098,266 Shares were in
issue including the 471,647 Shares held in treasury pending
their cancellation or possible use in the Company’s share
option schemes.
AGM NOTICE
A separate communication will be sent to shareholders and
published on the Company’s website regarding the Company’s
2023 AGM.
STREAMLINED ENERGY AND CARBON REPORTING
(‘SECR’) FOR BUSINESSES
SECR regulations came into effect on 1 April 2019. CAML is
classified as a large, unquoted company given it has greater
than 250 employees, annual turnover greater than £36 million
and a balance sheet larger than £18 million. This classification
means that a company must report its UK energy consumption
and resultant carbon emissions as well as a suitable
intensity ratio if it has UK energy usage above 40 megawatt
hours (‘MWh’).
CAML’s UK operations comprise solely a London-based head
office and electricity usage is significantly below 20MWh.
Therefore, CAML is classified as a ‘low energy user’ and as
such, SECR disclosures have not been included in these
financial statements.
However, CAML does disclose in its annual Sustainability
Reports the energy consumption, as well as Scope 1 and Scope
2 emissions and an intensity calculated on a per tonne of
copper equivalent basis, for its operations in Kazakhstan and
North Macedonia. The 2022 Sustainability Report containing
the most up-to-date information will be published in Q2 2023.
AUDITORS AND DISCLOSURE OF INFORMATION TO
AUDITORS
Each Director in office at the date of approval of this report has
confirmed that:
‣ so far as he or she is aware, there is no relevant audit
information of which the Company’s Auditors are unaware;
and
‣ he or she has taken all reasonable steps that he or she ought
to have taken as a Director in order to make himself or herself
aware of any relevant audit information and to establish that
the Company’s Auditors are aware of that information.
The Group’s Auditors, BDO LLP, have indicated their willingness
to continue in office and, on the recommendation of the Audit
Committee and in accordance with section 489 of the Act, a
resolution for their reappointment will be put to the 2023 AGM.
POLITICAL DONATIONS
During the year the Group did not make any political donations.
CORPORATE GOVERNANCE
The Governance Report can be found on pages 67 to 101.
The Governance Report forms part of this Directors’ Report and
is incorporated by cross reference.
Approved by the Board of Directors and signed on its behalf
GAVIN FERRAR
CHIEF FINANCIAL OFFICER
28 March 2023
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 104
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the
Annual Report and the financial statements in
accordance with applicable law and regulation.
The Directors are also responsible for safeguarding the
assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
Overview
Strategic Report
Governance
Financial Statements
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Company
and enable them to ensure that the financial statements comply
with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
On behalf of the Board
GAVIN FERRAR
CHIEF FINANCIAL OFFICER
28 March 2023
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance
with UK adopted International Financial Reporting Standards
(‘IFRS’) and Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising FRS 101
‘Reduced Disclosure Framework’, and applicable law). Under
company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Company and
of the profit or loss of the Group for that period. The Directors
are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies
trading securities on AIM. In preparing the financial statements,
the Directors are required to:
‣ select suitable accounting policies and then apply
them consistently;
‣ state whether applicable UK adopted IFRS have been
followed for the Group financial statements and United
Kingdom Accounting Standards, comprising FRS 101, have
been followed for the Company financial statements, subject
to any material departures disclosed and explained in the
financial statements;
‣ make judgements and accounting estimates that are
reasonable and prudent; and
‣ prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business.
GOVERNANCE
Introduction to
Corporate Governance
Board of Directors
Board Report
Sustainability Committee Report
Audit Committee Report
Nomination Committee Report
Remuneration Committee Report
Directors’ Report
Statement of
Directors’ Responsibilities
68
71
73
79
83
86
91
102
104
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 105
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
FINANCIAL
STATEMENTS
115
Statements of Financial Position
118Consolidated Statement of
113
Consolidated Income Statement
Cash Flows
119
Notes to the Financial Statements
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements
119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
HOMESEARCHPRINTPAGES 106
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT
to the members of Central Asia Metals plc
OPINION ON THE FINANCIAL STATEMENTS
In our opinion:
‣ the financial statements give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 31 December 2022 and of the Group’s profit for the year
then ended;
‣ the Group financial statements have been properly prepared in accordance with UK
adopted international accounting standards;
‣ the Parent Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
‣ the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Central Asia Metals plc (the ‘Parent Company’)
and its subsidiaries (the ‘Group’) for the year ended 31 December 2022 which comprise the
consolidated income statement, the consolidated statement of comprehensive income, the
Group and Company statements of financial position, the consolidated statement of changes in
equity, the Company statement of changes in equity, the consolidated statement of cash flows
and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the Group
financial statements is applicable law and UK adopted international accounting standards.
The financial reporting framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Overview
Strategic Report
Governance
Financial Statements
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to
continue to adopt the going concern basis of accounting included:
‣ We evaluated the Directors’ base case cash flow, assessed the integrity of the cash flow
model and critically assessed the assumptions including production, commodity pricing,
treatment charges, operating costs and capital expenditure. Our procedures to assess the
reasonabless of these assumptions are as set out in the Key Audit Matters section of
our report.
‣ We assessed the continued impact of the Ukraine conflict and associated Russian sanctions
on areas such as the Group’s supply chain, macro economic variables, customer offtake and
commodity prices that are relevant to the Group’s business model and operations.
‣ We obtained the Directors’ reverse stress testing analysis which was performed to
determine the point at which liquidity breaks and considered whether such scenarios,
including significant reductions in commodity prices and production were reasonably
possible. This included consideration of the Group’s trading to date and the extent and
likelihood of production or pricing disruption required to break liquidity.
‣ We assessed forecast commodity prices and forecast refinery treatment charges as set out
in the Key Audit Matter.
‣ We assessed the Group’s cash resources post year end against the approved budget.
‣ We reviewed the adequacy and consistency of going concern related disclosures in the
financial statements with reference to the Directors going concern assessment.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt on
the Group and the Parent Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 107
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT CONTINUED
OVERVIEW
Coverage
98% (2021: 100%) of Group profit before tax
100% (2021: 100%) of Group revenue
98% (2021: 92%) of Group total assets
Key audit matters
Carrying value of Sasa mining assets
Materiality
Group financial statements as a whole
Overview
Strategic Report
Governance
Financial Statements
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement
needed in order to be able to conclude whether sufficient appropriate audit evidence has
been obtained as a basis for our opinion on the Group financial statements as a whole. Our
involvement with component auditors included the following:
2022
✔
2021
✔
The Group audit team was actively involved in the direction and supervision of the audits
performed by the component auditors along with the consideration of findings and
determination of conclusions drawn.
As part of our audit strategy, we issued detailed group audit instructions to component
auditors detailing the audit procedures to be performed, we held physical and virtual
meetings with local management and the component auditors during the planning and
execution phases of the audit; and we performed a detailed review of the component audit
files. Visits to the operations were conducted by senior members of the Group audit team.
$5.5m (2021: $5.5m) based on 5% of profit before tax excluding impairment
(2021: based on 5% of profit before tax).
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Our Group audit was scoped by obtaining an understanding of the Group and its environment,
including the Group’s system of internal control, and assessing the risks of material
misstatement in the financial statements. We also addressed the risk of management override
of internal controls, including assessing whether there was evidence of bias by the Directors
that may have represented a risk of material misstatement.
We determined that there were five significant components. Four of these were subject to
full scope audits for Group purposes (one in North Macedonia, two in Kazakhstan and the
Parent Company). A further significant component in North Macedonia was subject to specific
audit procedures related to significant risk areas (2021: Five significant components,four of
these were subject to full scope audits for Group purposes (one in North Macedonia, two in
Kazakhstan and the Parent Company). A further significant component in North Macedonia
was subject to specific audit procedures related to significant risk areas).
The audits of the North Macedonian and Kazakh significant components were performed
in North Macedonia and Kazakhstan respectively, by local BDO network member firms. The
audits of the Parent Company and the Group consolidation were performed in the United
Kingdom by the Group audit team. The Group audit team performed additional procedures in
respect of certain of the significant risk areas that represented Key Audit Matters in addition
to procedures performed by the component auditors.
The remaining components of the Group were considered non-significant and the financial
information of these components were principally subject to analytical review procedures
performed by the Group audit team.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
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HOMESEARCHPRINTPAGES 108
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in
the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key audit matter
Carrying
value of Sasa
mining assets
(as detailed in
note 20)
Prior to the current year impairment, the Sasa
cash generating unit (“CGU”) included goodwill
of $20.9m (FY2021: $21.9). The Group is
required by applicable accounting standards to
perform an annual impairment test.
Management prepared a discounted cash flow
valuation model based on the Life of the Mine,
the details of which are disclosed in note 20.
As a result of the impairment test Management
recorded an impairment charge of $55.1m,
recognised as $20.9m against the total Sasa
goodwill in intangible assets and the remaining
$34.2m against mineral rights in property, plant
and equipment (note 19) which were originally
recognised as fair value uplift for the Sasa
acquisition by the Group.
The appropriateness of judgments and estimates
applied in the determination of the recoverable
amount represented a significant focus area
for our audit, including forecast commodity
prices, refinery treatment costs, production and
discount rates, together with forecast operating
and capital costs given the ongoing transition
from a sub level caving mining method to cut
and fill mining.
Given the estimation and judgment required
to be applied by Management and the
appropriateness of disclosures related to the
impairment charge and sensitivities associated
with alternative potential inputs into the model
this represented a key audit matter.
How the scope of our audit addressed the key audit matter
Our specific procedures included the following:
‣ We compared 2022 performance for key metrics against budget to assess the quality and accuracy of management’s forecasting.
Where significant variances were identified, we obtained an understanding of the causes, evaluated mitigating actions and assessed
the extent to which the forecasts incorporate relevant risks of the factors recurring.
‣ We compared the forecast production to the updated internal Competent Person’s Reserves and Resources Statement, met with the
Group’s geologists to assess areas such as resource to reserve conversion against empirical data such as updated drilling results and
previous conversion trends and reviewed the reconciliation of movements in ore reserves and resources against the previous Reserves
and Resources Statement. In doing so, we evaluated the basis for revisions to indicated and inferred resources included in the plan.
‣ In placing reliance on management’s experts in relation to Reserves and Resources estimation we performed procedures to evaluate
their competence, objectivity and independence.
‣ We compared the forecast pricing assumptions to 2022 independently sourced broker consensus data and spot price.
‣ We compared the forecasted treatment charges in the short term to agreements with the Group’s refineries, evaluated the Group’s
recent trends in treatment charges and considered management’s longer term forecast reduction in treatment charges and performed
sensitivity analyses thereon.
‣ We compared forecast inflation rates, including energy costs, to recent actuals and market forecast data.
‣ We assessed the appropriateness of the forecasted operating costs and capital expenditure. In doing so we reviewed budgeted costs
and assessed them against actual costs incurred to date. We also obtained an update on the status of the Cut and Fill project through
inquiries of mine level management and confirmed that budgeted costs which were deferred to 2023 at 31 December 2022 had been
reflected accordingly in the impairment model.
‣ With the assistance of our internal valuation experts we evaluated the appropriateness of the discount rate used by management.
‣ We reviewed management’s sensitivity analysis and performed our own sensitivity analysis over individual key inputs including pricing,
production, treatment charges, expenditure and discount rate together with a combination of sensitivities over such inputs in order to
assess the potential impact on the sufficiency of the impairment that has been recognised.
‣ We evaluated the adequacy of the disclosures given in Note 20 regarding assumptions and sensitivities with reference to IAS 36
Impairment of assets and consistency with Management’s assessment.
Key observations
‣ We found Management’s assessment appropriately considered the estimates and judgements in respect of its assessment of the
carrying value of the Sasa mine.
‣ We found the key assumptions made by Management in respect of the judgements in the life of mine models and around the carrying
value of the Sasa mine to be acceptable.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 109
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT CONTINUED
OUR APPLICATION OF MATERIALITY
Overview
Strategic Report
Governance
Financial Statements
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements,
including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of
testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Materiality
2022 $m
5.5
2021 $m
5.5
2022 $m
3.1
2021 $m
0.6
Basis for determining materiality
5% of profit before tax excluding impairment
5% of profit before tax
5% of profit before tax
Group financial statements
Parent company financial statements
Rationale for the benchmark
applied
Performance materiality
Basis for determining
performance materiality
Rationale for the percentage
applied
Component materiality
Profit before tax, excluding impairment, was
determined an appropriate basis as the Group is
profit oriented and as such this is the financial
metric of most interest to the users of the financial
statements. Impairment charges were excluded to
reflect the underlying trading of the Group.
Profit before tax, was determined an appropriate
basis as the Group is profit oriented and as such this
is the financial metric of most interest to the users of
the financial statements.
Profit before tax was determined an appropriate basis as
the Parent Company is dividend paying and as such this is
the financial metric of most interest to the users of the
financial statements.
3.8
3.8
2.2
0.42
Performance materiality was set at 70% of the above materiality level.
The percentage applied to performance materiality was determined taking into consideration factors
including the nature of the Group’s activities, historical misstatements and Management’s attitude
towards proposed adjustments.
Performance materiality was set at 70% of the above
materiality level.
The percentage applied to performance materiality was
determined taking into consideration factors including the nature
of the Parent Company’s activities, historical misstatements and
Management’s attitude towards proposed adjustments.
For the purposed of our Group audit opinion, we set materiality for each significant component of the Group based on a percentage of between 20% and 66% (2021: 11% and 80%) of Group
materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from $1.1m to $3.6m. (2021: $0.6m to $4.1m). In the
audit of each component, we further applied performance materiality levels of 70% (2021: 70%) of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated and to sufficiently address aggregation risk .
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of $110,000 (2021: $110,000). We also agreed to report differences below this
threshold that, in our view, warranted reporting on qualitative grounds.
HOMESEARCHPRINTPAGES 110
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT CONTINUED
OTHER INFORMATION
The Directors are responsible for the other information. The other information comprises
the information included in the Annual Report and Accounts 2022 other than the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does
not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our responsibility is
to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course
of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Overview
Strategic Report
Governance
Financial Statements
OTHER COMPANIES ACT 2006 REPORTING
Based on the responsibilities described below and our work performed during the course
of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain
opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
‣ the information given in the Strategic report and the Directors’ report
for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
‣ the Strategic report and the Directors’ report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic
report or the Directors’ report.
Matters on which we are
required to report by
exception
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
‣ adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
‣ the Parent Company financial statements are not in agreement with
the accounting records and returns; or
‣ certain disclosures of Directors’ remuneration specified by law are
not made; or
‣ we have not received all the information and explanations we require
for our audit.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
111
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT CONTINUED
Overview
Strategic Report
Governance
Financial Statements
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the statement of Directors’ responsibilities, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s
and the Parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
‣ With the assistance of tax specialists from our local BDO network member firms in
Kazakhstan and North Macedonia we evaluated the Group’s compliance with relevant tax
legislation considered of most significance to the Group’s operations;
‣ With the assistance of internal tax specialists we assessed the overall UK tax position and
group tax reconciliation: and
‣ Testing the financial statement disclosures to supporting documentation.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including
fraud and considered areas of the financial statements subject to elevated potential fraud
risks. We considered the significant fraud risk areas to be in relation to revenue recognition
and management override of controls.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our procedures included:
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
We obtained an understanding of the legal and regulatory framework applicable to the Group
and Parent Company and the industry in which they operate. We considered the applicable
accounting frameworks and the associated mining, environmental and taxation laws and
regulations of North Macedonia and Kazakhstan to be the most significant to the Group and
Parent Company given the Geographical areas of focus of the Group.
‣ In respect of the risk of fraud in revenue recognition our procedures included cut-
off procedures which included testing sales made close to year end, vouching these
to appropriate supporting documents to verify the date on which revenue is to be
contractually recognised, a review of credit notes raised post year end to determine
whether these had any impact on revenue recognised for the current year and obtaining
third party confirmations of revenue from the Group’s offtakers;
‣ Engaging internal BDO specialists to support the fraud risk assessment process;
‣ In addressing the risk of management override of controls, performing targeted journal entry
testing based on identified characteristics the audit team considered could be indicative of
fraud, for example unusual journal entries to revenue, cash and capital expenditure as well as
entries with unusual descriptions by agreeing these to supporting documentation;
‣ Issuing fraud questionnaires to a sample of employees to understand the overall fraud risk
environment as well as to identify whether any incidents that had occurred during the year;
‣ Critically assessing areas of the Financial Statements which include judgment and estimates,
as set out in note 4 to the financial statements and in the key audit matters noted above;
‣ Obtaining an understanding of the bonus metrics and the extent to which these may create
an incentive to perpetrate fraud;
‣ Testing consolidation entries to supporting documentation to confirm their validity;
We assessed compliance with these laws and regulations through:
‣ Reviewing of the whistleblowing hotline register for any relevant matters;
‣ Discussion with Management and those charged with governance;
‣ Performing enquiries of non-finance personnel regarding their knowledge of any alleged or
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
‣ Inquiries of local management teams regarding new taxation legislation issued or enacted
during the year and compliance with laws and regulations related to the mining activities;
actual fraud.
HOMESEARCHPRINTPAGES 112
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
INDEPENDENT AUDITORS’ REPORT CONTINUED
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members including component engagement teams who were all deemed
to have appropriate competence and capabilities and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit. For component
engagement teams, we also reviewed the result of their work performed in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the
financial statements, recognising that the risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the further removed
non-compliance with laws and regulations is from the events and transactions reflected in the
financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Overview
Strategic Report
Governance
Financial Statements
USE OF OUR REPORT
This report is made solely to the Parent Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that
we might state to the Parent Company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the
Parent Company’s members as a body, for our audit work, for this report, or for the opinions
we have formed.
RYAN FERGUSON
SENIOR STATUTORY AUDITOR
For and on behalf of BDO LLP, Statutory Auditor
London, UK
28 March 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered
number OC305127).
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES 113
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2022
Overview
Strategic Report
Governance
Financial Statements
Profit attributable to:
Non-controlling interests
Owners of the parent
Profit for the year
Earnings/(loss) per share from continuing and discontinued
operations attributable to owners of the parent during the year
(expressed in cents per share)
Basic earnings/(loss) per share
From continuing operations
From discontinued operations
From profit for the year
Diluted earnings/(loss) per share
From continuing operations
From discontinued operations
From profit for the year
Group
Note
2022
$’000
2021
$’000
21
(6)
(1)
33,811
33,805
84,177
84,176
18
18
$ cents
$ cents
19.10
(0.10)
47.69
–
19.00
47.69
18.39
(0.10)
18.29
46.23
–
46.23
1
Gross revenue is a non-IFRS financial measure which is used by management, alongside the comparable GAAP
measures, in evaluating the business performance. The measures are not intended as a substitute for GAAP measures
and may not be comparable to similarly reported measures by other companies.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
NoteGroup2022$’0002021$’000Continuing operationsRevenue6220,855223,372Presented as:Gross revenue16232,206235,152Less: Silver stream purchases6(7,080)(8,040)Offtake buyers’ fees6(4,271)(3,740)Revenue220,855223,372Cost of sales7(87,271)(80,511)Distribution and selling costs8(2,166)(2,116)Gross profit131,418140,745Administrative expenses9(27,092)(22,077)Impairment of non-current assets19,20(55,116)–Other losses 10–(6,875)Other income1186166Foreign exchange gain6,8291,214Operating profit56,125113,173Finance income1551574Finance costs16(2,060)(3,920)Profit before income tax54,580109,327Income tax 17(20,588)(25,147)Profit for the year from continuing operations33,99284,180Discontinued operationsLoss for the year from discontinued operations 22(187)(4)Profit for the year33,80584,176HOMESEARCHPRINTPAGES
114
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
NoteGroup2022$’0002021$’000Profit for the year33,80584,176Other comprehensive income/(expense):Items that may be subsequently reclassified to profit or loss:Currency translation differences 27(29,311)(31,283)Other comprehensive income/(expense) for the year, net of tax(29,311)(31,283)Total comprehensive income for the year4,49452,893Attributable to:Non-controlling interests(6)(1)Owners of the parent4,50052,894Total comprehensive income for the year4,49452,893Total comprehensive income/(expense) attributable to equity shareholders arises from:Continuing operations4,68152,897Discontinued operations(187)(4) 4,49452,893 HOMESEARCHPRINTPAGES 115
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2022
Registered no. 5559627
Overview
Strategic Report
Governance
Financial Statements
Group
Company
Group
Company
Note
2022
$’000
2021
$’000
2022
$’000
2021
$’000
Note
2022
$’000
2021
$’000
2022
$’000
2021
$’000
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred income tax asset
Investments
Other non-current receivables
Current assets
Inventories
Trade and other receivables
Restricted cash
Cash and cash equivalents
19
20
37
21
23
24
23
25
25
322,197
384,889
184
410
Silver streaming commitment
Liabilities
Non-current liabilities
26,552
52,090
328
–
352
–
–
–
–
–
Deferred income tax liability
Lease liability
11,478
7,347
268,750
269,241
360,555
444,678
274,041
274,758
Current liabilities
Borrowings
13,149
10,452
–
–
Silver streaming commitment
8,715
264
6,210
3,516
19,577
34,204
Trade and other payables
–
3,284
Lease liability
31
30
29
60,298
55,695
35,812
40,189
Provisions for other liabilities and charges
32
Assets of disposal group classified
as held for sale
82,426
75,873
56,789
77,677
22
64
38
–
–
82,490
75,911
55,389
77,677
Liabilities of disposal group classified
as held for sale
Total assets
443,045
520,589
329,430
352,435
Total liabilities
30
37
17,085
18,220
17,286
23,229
10
334
55,125
60,700
1,390
32,978
1,095
1,229
–
–
–
–
–
–
–
–
–
199
–
199
23,406
–
16,643
16,056
43,471
59,311
295
333
302
49
178
–
183
–
19,756
50,614
43,649
82,900
22
44
28
–
–
19,800
50,642
43,649
82,900
74,925
111,342
43,649
83,099
5,107
5,107
Provisions for other liabilities and charges
32
20,744
18,917
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
Equity attributable to owners of the parent
Total equity and liabilities
443,045
520,589
329,430
352,435
Ordinary shares
Share premium
Treasury shares
Currency translation reserve
Retained earnings
26
26
26
27
1,821
1,765
1,821
1,765
205,437
191,988
205,437
191,988
(15,831)
(2,360)
(15,831)
(2,360)
(134,092)
(104,781)
–
–
312,107
323,951
94,354
77,943
369,442
410,563
285,781
269,336
The Company has elected to take the exemption under section 408 of the Companies
Act 2006 not to present the parent company income statement or statement of
comprehensive income. The profit for the parent company for the year was $62,066,000
(2021: $13,585,000).
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Non-controlling interests
21
(1,322)
(1,316)
–
–
Total equity
368,120
409,247
285,781
269,336
HOMESEARCHPRINTPAGES
116
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
Overview
Strategic Report
Governance
Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Attributable to owners of the parentNoteOrdinary shares$’000Share premium$’000Treasury shares$’000Currency translation reserve$’000Retained earnings$’000Total$’000Non-controlling interests$’000Total equity$’000Balance as at 1 January 20211,765191,537(3,840)(73,498)278,103394,067(1,315)392,752Profit for the year ––––84,17784,177(1)84,176Other comprehensive expense – currency translation differences 27–––(31,283)–(31,283)–(31,283)Total comprehensive income/(expense)–––(31,283)84,17752,894(1)52,893Transactions with ownersShare based payments28––––2,4492,449–2,449Exercise of options 28–4511,480–(1,931)–––Dividends35––––(38,847)(38,847)–(38,847)Total transactions with owners, recognised directly in equity–4511,480–(38,329)(36,398)–(36,398)Balance as at 31 December 20211,765191,988(2,360)(104,781)323,951410,563(1,316)409,247Profit for the year––––33,81133,811(6)33,805Other comprehensive expense – currency translation differences27–––(29,311)–(29,311)–(29,311)Total comprehensive income/(expense)–––(29,311)33,8114,500(6)4,494Transactions with ownersShares issued265613,440(13,496)–––––Share based payments28––––3,8183,818–3,818Exercise of options 28–925–(1,263)(1,229)–(1,229)Dividends35––––(48,210)(48,210)–(48,210)Total transactions with owners, recognised directly in equity5613,449(13,471)–(45,655)(45,621)–(45,621)Balance as at 31 December 2022 1,821205,437(15,831)(134,092)312,107369,442(1,322)368,120HOMESEARCHPRINTPAGES 117
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Overview
Strategic Report
Governance
Financial Statements
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
CompanyNoteOrdinary Shares $’000Share premium $’000Treasury shares $’000Retained earnings$’000Total equity$’000Balance as at 1 January 2021 1,765191,537(3,840)102,687292,149Profit for the year–––13,58513,585Total comprehensive income –––13,58513,585Transactions with owners Share based payments28–––2,4492,449Exercise of options 28–4511,480(1,931)–Dividends35 –––(38,847)(38,847)Total transactions with owners, recognised directly in equity–4511,480(38,329)(36,398)Balance as at 31 December 20211,765191,988(2,360)77,943269,336Profit for the year–––62,06662,066Total comprehensive income –––62,06662,066Transactions with owners Shares issued265613,440(13,496)––Share based payments28–––3,8183,818Exercise of options 28–925(1,263)(1,229)Dividends35 ––(48,210)(48,210)Total transactions with owners, recognised directly in equity5613,449(13,471)(45,655)(45,621)Balance as at 31 December 20221,821205,437(15,831)94,354285,781HOMESEARCHPRINTPAGES 118
CENTRAL ASIA METALS PLC
ANNUAL REPORT & ACCOUNTS 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2022
Overview
Strategic Report
Governance
Financial Statements
Cash and cash equivalents at 31 December 2022 includes cash at bank and on hand included
in assets held for sale of $63,000 (31 December 2021: $36,000) (note 22). The consolidated
statement of cash flows does not include the restricted cash balance of $264,000
(2021: $3,516,000) (note 25).
The notes below are an integral part of the consolidated financial statements.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Note2022$’0002021$’000Cash flows from operating activitiesCash generated from operations33122,565136,555Interest paid(554)(2,378)Corporate income tax paid (22,166)(21,572)Net cash flow generated from operating activities 99,845112,605Cash flows from investing activities Purchase of property, plant and equipment(17,396)(14,692)Proceeds from sale of property, plant and equipment716Purchase of intangible assets(68)(56)Interest received1551574Decrease in restricted cash253,252125Net cash used in investing activities (13,690)(14,533)Cash flows from financing activities Drawdown of overdraft31–644Repayment of overdraft31(7,531)–Repayment of borrowings 31(23,820)(48,400)Dividends paid to owners of the parent35(48,210)(38,847)Cash settlement of share options(1,939)–Receipt on exercise of share options 28 613Net cash used in financing activities (81,494)(86,590)Effect of foreign exchange loss on cash and cash equivalents(31)(38)Net increase in cash and cash equivalents4,63011,444Cash and cash equivalents at the beginning of the year2555,73144,287Cash and cash equivalents at the end of the year25 60,36155,731HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
The preparation of Group financial statements in conformity with IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group’s accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are explained in note 4.
Going concern
The Group sells and distributes its copper cathode product primarily through an annual rolling
offtake arrangement with Traxys Europe S.A. with a minimum of 95% of the SX-EW plant’s
forecasted output committed as sales. The Group sells Sasa’s zinc and lead concentrate
product through an annual rolling offtake arrangement with Traxys. The commitment is for
100% of the Sasa concentrate production.
The Group meets its day to day working capital requirements through its profitable and cash
generative operations at Kounrad and Sasa. The Group manages liquidity risk by maintaining
adequate committed borrowing facilities and the Group has substantial cash balances as at
31 December 2022.
The Board has reviewed forecasts for the period to December 2024 to assess the Group’s
liquidity which demonstrate substantial headroom. The Board have considered additional
sensitivity scenarios in terms of the Group’s commodity price forecasts, expected production
volumes, operating cost profile and capital expenditure. The Board have assessed the key
risks which could impact the prospects of the Group over the going concern period including
commodity price outlook, cost inflation and supply chain disruption with reverse stress testing
of the forecasts in line with best practice. Liquidity headroom was demonstrated in each
reasonably possible scenario. Accordingly, the Directors continue to adopt the going concern
basis in preparing the consolidated financial statements.
Please refer to notes 6, 25 and 29 for information on the Group’s revenues, cash balances and
trade and other payables.
New and amended standards and interpretations adopted by the Group
The Group has adopted the following standards and amendments for the first time for the
annual reporting period commencing 1 January 2022, however there is no impact on the
current reporting period:
IAS 37 – Onerous Contracts – Cost of Fulfilling a Contract amending the standard regarding
costs a company should include as the cost of fulfilling a contract when assessing whether a
contract is onerous.
1. GENERAL INFORMATIONCentral Asia Metals plc (‘CAML’ or the ‘Company’) and its subsidiaries (the ‘Group’) are a mining organisation with operations in Kazakhstan and North Macedonia and a parent holding company based in England in the United Kingdom (‘UK’).The Group’s principal business activities are the production of copper cathode at its Kounrad operations in Kazakhstan and the production of lead, zinc and silver at its Sasa operations in North Macedonia. CAML owns 100% of the Kounrad SX-EW copper project in Kazakhstan and 100% of the Sasa zinc-lead mine in North Macedonia. The Company also owns a 76% equity interest in Copper Bay Limited which is currently held for sale. See note 22 for details.CAML is a public limited company, which is listed on the AIM market of the London Stock Exchange and incorporated and domiciled in England, UK. The address of its registered office is Masters House, 107 Hammersmith Road, London, W14 0QH. The Company’s registered number is 5559627.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.Basis of preparationThe Group’s consolidated financial statements have been prepared in accordance with international accounting standards as adopted in the United Kingdom and the Companies Act 2006. The consolidated financial statements have been prepared under the historical cost convention with the exception of assets held for sale which have been held at fair value. The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2022. The Group financial statements are presented in US Dollars ($) and rounded to the nearest thousand.The parent company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council. The parent company financial statements have therefore been prepared in accordance with FRS 101 (Financial Reporting Standard 101) ‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council. As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to share-based payments, financial instruments, fair value measurements, capital management, presentation of a cash flow statement, new standards not yet effective, impairment of assets and related party transactions. Where relevant, equivalent disclosures have been given in the Group financial statements of Central Asia Metals plc.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The Group recognises any
non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair
value or at the non-controlling interest’s proportionate share of the recognised amounts of
the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and
reported within other expenses.
Goodwill
The excess of the consideration transferred of a business combination, the amount of any
non-controlling interest in the acquired entity, and acquisition-date fair value of any previous
equity interest in the acquired entity over the fair value of the net identifiable assets acquired
is recorded as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the business acquired, the difference is recognised directly in profit or loss as
a bargain purchase. Goodwill is capitalised as an intangible asset with any impairment in
carrying value being charged to the consolidated statement of comprehensive income.
Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair
value of consideration paid, the excess is credited in full to the consolidated statement of
comprehensive income on the acquisition date.
After initial recognition, goodwill is stated at cost less any accumulated impairment losses,
with the carrying value being reviewed for impairment, at least annually and whenever events
or changes in circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill is allocated to the cash-generating unit
expected to benefit from the business combination in which the goodwill arose. Where the
recoverable amount is less than the carrying amount, including goodwill, an impairment loss is
recognised in the income statement. The carrying amount of goodwill allocated to an entity is
taken into account when determining the gain or loss on disposal of the unit.
Where settlement of any part of cash consideration is deferred, the amounts payable in the
future are discounted to their present value as at the date of exchange. The discount rate
used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing
could be obtained from an independent financier under comparable terms and conditions.
Non-controlling interests
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries
that are not held by the Group and are presented separately within equity in the consolidated
statement of financial position distinct from parent shareholder’s equity.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDIAS 16 – Property, Plant and Equipment – Proceeds before Intended Use regarding proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management. New standards, interpretations, and amendments not yet effectiveCertain new accounting standards and interpretations have been published that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Group. These standards include:IAS 1 – Presentation of Financial statements – The classification of liabilities as current or non-current basing the classification on contractual arrangements at the reporting date. These amendments are effective for periods beginning 1 January 2024.Amendments to IAS 8 - Definition of Accounting Estimates effective 1 January 2023.Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting policies effective 1 January 2023.These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.Basis of consolidationThe Group financial statements consolidate the financial statements of CAML and the entities it controls drawn up to 31 December 2022.Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.Intercompany transactions, balances and unrealised losses/gains on transactions between Group companies are eliminated. Unrealised losses/gains are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.Business combinations The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
On consolidation, the results of overseas operations are translated into USD at rates
approximating to those ruling when the transactions took place. All assets and liabilities of
overseas operations, including goodwill arising on the acquisition of those operations, are
translated at the rate ruling at the reporting date. Exchange differences arising on translating
the opening net assets at opening rate and the results of overseas operations at actual rates are
recognised in other comprehensive income and accumulated in the foreign exchange reserve.
On disposal of a foreign operation, the cumulative exchange differences recognised in the
foreign exchange reserve relating to that operation up to the date of disposal are transferred to
the consolidated statement of comprehensive income as part of the profit or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the foreign entity and translated at the closing rate.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. Cost comprises the aggregate amount paid and the fair value
of any other consideration given to acquire the asset and includes costs directly attributable
to making the asset capable of operating as intended.
The cost of the item also includes the cost of decommissioning any buildings or plant and
equipment and making good the site, where a present obligation exists to undertake the
rehabilitation work.
Development costs relating to specific mining properties are capitalised once management
determines a property will be developed. A development decision is made based upon
consideration of project economics, including future metal prices, reserves and resources,
and estimated operating and capital costs. Capitalisation of costs incurred and proceeds
received during the development phase ceases when the property is capable of operating at
levels intended by management and is considered commercially viable. Costs incurred during
the production phase to increase future output by providing access to additional reserves, are
deferred and depreciated on a units-of-production basis over the component of the reserves
to which they relate. Ore reserves may be declared for an undeveloped mining project before
its commercial viability has been fully determined. Development costs incurred after the
commencement of production are capitalised to the extent they are expected to give rise to a
future economic benefit. Development costs are not depreciated until such time as the areas
under development enter production.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Where losses are incurred by a partially owned subsidiary, they are consolidated such that the non-controlling interests’ share in the losses is apportioned in the same way as profits. Where profits are then made in future periods, such profits are then allocated to the parent company until all unrecognised losses attributable to the non-controlling interests but absorbed by the parent are recovered at which point, profits are allocated as normal.Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker which is considered to be the Board. The Group’s segmental reporting reflects the operational focus of the Group. The Group has been organised into geographical and business units based on its principal business activities of mining production, having two reportable segments as follows: ‣Kounrad (production of copper cathode) in Kazakhstan ‣Sasa (production of lead, zinc and silver) in North MacedoniaIncluded within the unallocated segment are corporate costs for Central Asia Metals Plc and other holding companies within the Group which are not separately reported to the Board.Foreign currency translationThe functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. The consolidated financial statements are presented in US Dollars, which is the Group and Company presentation currency. The functional currency of the Company is US Dollars.Transactions in currencies other than the currency of the primary economic environment in which they operate are initially recorded at the rate ruling at the date of the transaction. Foreign currency monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss. Exchange gains and losses arising on the retranslation of monetary financial assets are treated as a separate component of the change in fair value and recognised in profit or loss. Exchange gains and losses on non-monetary OCI financial assets form part of the overall gain or loss in OCI recognised in respect of that financial instrument.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
‣ fixed payments (including in-substance fixed payments), less any lease incentives
receivable and variable payments based on index or rate;
‣ amounts expected to be payable by the Group under residual value guarantees; and
‣ payments of penalties for terminating the lease, if the lease term reflects the Group
exercising that option.
Lease payments to be made under reasonably certain extension options are also included in
the measurement of the liability. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that
the individual lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
The Group leases offices and equipment. Rental contracts are typically made for fixed
periods of six months to five years and have extension options. Lease terms are negotiated
on an individual basis and contain a wide range of different terms and conditions. The
lease agreements do not impose any covenants other than the security interests in the
leased assets that are held by the lessor. Leased assets may not be used as security for
borrowing purposes.
Intangible assets
a) Exploration and evaluation expenditure
Capitalised costs include costs directly related to any Group exploration and evaluation
activities in areas of interest for which there is a high degree of confidence in the feasibility
of the project. Exploration and evaluation expenditure capitalised includes acquisition of
rights to explore, topographical, geological, geochemical and geophysical studies, exploration
drilling, trenching, sampling and activities in relation to the evaluation of the technical
feasibility and commercial viability of extracting a mineral resource.
Exploration and evaluation assets are measured at cost less provision for impairment,
where required.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDDepreciation is provided on all property, plant and equipment on a straight-line basis over its total expected useful life. As at 31 December 2022 the remaining useful lives were as follows: ‣Construction in progress – not depreciated ‣Land – not depreciated ‣Plant and equipment – over 5 to 16 years ‣Mining assets – over 2 to 16 years ‣Motor vehicles – over 2 to 10 years ‣Office equipment – over 2 to 10 years ‣Right of use assets – term of lease agreementMineral rights are depreciated on a Unit of Production basis (‘UoP’), in proportion to the volume of ore mined in the year compared with total proven and probable reserves as well as measured, indicated and certain inferred resources which are considered to have a sufficiently high certainty of commercial extraction at the beginning of the year. Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on a straight-line basis. Construction in progress is not depreciated until transferred to other classes of property, plant and equipment.The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed annually and where adjustments are required, these are made prospectively.An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset is included in the income statement.LeasesLeases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Revenue
IFRS 15 establishes a comprehensive framework for determining whether, how much and
when revenue is recognised. These steps are as follows: identification of the customer
contract; identification of the contract performance obligations; determination of the contract
price; allocation of the contract price to the contract performance obligations; and revenue
recognition as performance obligations are satisfied.
Under IFRS 15, revenue is recognised when the performance obligations are satisfied and the
customer obtains control of the goods or services, usually when title has passed to the buyer
and the goods have been delivered in accordance with the contractual delivery terms.
Revenue is measured at the fair value of consideration received or receivable from sales of
metal to an end user, net of any buyers’ discount, treatment charges and value added tax. The
Group recognises revenue when the amount of revenue can be reliably measured and when it
is probable that future economic benefits will flow to the entity.
The value of consideration is fair value which equates to the contractually agreed price.
The offtake agreements provide for provisional pricing i.e. the selling price is subject to final
adjustment at the end of the quotation period based on the average price for the month
following delivery to the buyer. Such a provisional sale contains an embedded derivative
which is not required to be separated from the underlying host contract, being the sale of
the commodity. At each reporting date, if any sales are provisionally priced, the provisionally
priced copper cathode, zinc and lead sales are marked-to-market using forward prices, with
any significant adjustments (both gains and losses) being recorded in revenue in the income
statement and in trade receivables in the statement of financial position.
The Company may mitigate commodity price risk by fixing the price in advance for its copper
cathode with the offtake partner and also its zinc and lead sales with the banks where a
facility has been set up and agreed. The price fixing arrangements are outside the scope of
IFRS 9 Financial Instruments: Recognition and Measurement and do not meet the criteria for
hedge accounting.
The Group reports both a gross revenue and revenue line. Gross revenue is reported after
deductions of treatment charges but before deductions of offtaker fees and silver purchases
under the Silver Stream (note 6).
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost is determined using
the weighted average method.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDb) Mining licences, permits and computer softwareThe historical cost model is applied, with intangible assets being carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets with a finite life have no residual value and are amortised on a straight-line basis over their expected useful lives with charges included in either cost of sales or administrative expenses:Computer software – over 2 to 5 yearsMining licences and permits – over the duration of the legal agreementThe carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.Impairment of non-financial assetsThe Group carries out impairment testing on all assets when there exists an indication of an impairment. If any such indication exists, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell or its value in use.Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the income statement.In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.The best evidence of an asset’s fair value is the value obtained from an active market or binding sale agreement. Where neither exists, fair value less costs to sell is based on the best available information to reflect the amount the Group could receive for the cash-generating unit in an arm’s length sale. In some cases, this is estimated using a discounted cash flow analysis on a post-tax basis.A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a reversal of the conditions that originally resulted in the impairment. This reversal is recognised in the income statement and is limited to the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised in prior years.Goodwill is also reviewed annually, as well as whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non-financial assets other than goodwill which have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Current and deferred income tax
The current income tax charge is calculated based on the tax laws enacted or substantively
enacted at the reporting date in the countries where the Group’s subsidiaries operate and
generate taxable income.
Deferred income tax assets and liabilities are recognised where the carrying amount of an
asset or liability in the consolidated statement of financial position differs from its tax base,
except for differences arising on:
‣ the initial recognition of goodwill,
‣ the initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of the transaction affects neither accounting or taxable profit,
and
‣ investments in subsidiaries and joint arrangements where the Group is able to control the
timing of the reversal of the difference and it is probable that the difference will not reverse
in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that
taxable profit will be available against which the difference can be utilised. The amount of
the asset or liability is determined using tax rates that have been enacted or substantively
enacted by the reporting date and are expected to apply when the deferred tax liabilities/
(assets) are settled/(recovered). When there is uncertainty concerning the Group’s filing
position regarding the tax bases of assets or liabilities, the taxability of certain transactions or
other tax-related assumptions, then the Group:
‣ considers whether uncertain tax treatments should be considered separately, or together
as a group, based on which approach provides better predictions of the resolution;
‣ determines if it is probable that the tax authorities will accept the uncertain tax treatment;
and
‣ if it is not probable that the uncertain tax treatment will be accepted, measure the tax
uncertainty based on the most likely amount or expected value, depending on whichever
method better predicts the resolution of the uncertainty. This measurement is required to
be based on the assumption that each of the tax authorities will examine amounts they
have a right to examine and have full knowledge of all related information when making
those examinations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDThe cost of finished goods and work in progress comprises raw materials, direct labour and all other direct costs associated with mining the ore and processing it to a saleable product.Net realisable value is the estimated selling price in the ordinary course of business, less any further costs expected to be incurred to completion. Provision is made, if necessary, for slow-moving, obsolete and defective inventory.Non-current assets (or disposal groups) held for sale and discontinued operations Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement. An impairment loss is recognised for any Initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition. Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised. Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet. A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of comprehensive income. HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
cumulative amount recognised over the vesting period is based on the number of options that
eventually vest. Non-vesting conditions and market vesting conditions are factored into the
fair value of the options granted. As long as all other vesting conditions are satisfied, a charge
is made irrespective of whether the market vesting conditions are satisfied. The cumulative
expense is not adjusted for failure to achieve a market vesting condition or where a non-
vesting condition is not satisfied. An option pricing model is used to measure the fair value of
the options.
Where the terms and conditions of options are modified before they vest, the increase in
the fair value of the options, measured immediately before and after the modification, is
also charged to the consolidated statement of comprehensive income over the remaining
vesting period.
Where the Company has no choice but to settle in cash, for example due to the inability to
settle in shares, the Company shall recognise an additional expense for the excess value
given at the settlement date.
Trade and other receivables
Trade and other receivables are accounted for under IFRS 9 using the expected credit loss
model and are initially recognised at fair value and subsequently measured at amortised cost
less any allowance for expected credit losses.
Impairment of financial assets
Impairment provisions for current and non-current trade receivables are recognised based
on the ‘simplified approach’ within IFRS 9 using a provision matrix in the determination of
the lifetime expected credit losses. During this process the probability of the non-payment
of the trade receivables is assessed. This probability is then multiplied by the amount of the
expected loss arising from default to determine the lifetime expected credit loss for the trade
receivables. For trade receivables, which are reported net, such provisions are recorded in a
separate provision account with the loss being recognised in profit or loss. On confirmation
that the trade receivable will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Impairment provisions for receivables from subsidiaries and loans to subsidiaries are
recognised based on the ‘general approach’ within IFRS 9. The methodology used to
determine the amount of the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial asset with the assessment also
taking into account the ability of the subsidiary to repay the receivable or loan in the event
that it was called due. For those where the credit risk has not increased significantly since
initial recognition of the financial asset, twelve month expected credit losses along with gross
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDDeferred income tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: ‣the same taxable group company, or ‣different group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered. Cash and cash equivalentsCash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.Restricted cashRestricted cash is cash with banks that is not available for immediate use by the Group. Restricted cash is shown separately from cash and cash equivalents on the statement of financial position. InvestmentsInvestments in subsidiaries are recorded at cost less provision for impairment.Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.Treasury sharesWhere any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.Share based compensationWhere equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings
are subsequently measured at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in profit or loss over the period
of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw
down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and
amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss
as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period.
Derivative financial instruments
The Group may use commodity price contracts to reduce its exposure to risks from commodity
price movements. Derivative financial instruments are primarily used as a means of managing
exposure to price in line with the Group risk management strategy. Derivative financial
liabilities are initially recognised and measured at fair value on the date a derivative contract is
entered into and then subsequently re-measured at fair value by reference to valuation models
and the probability of outcome scenarios and categorised as level 2 measurements:
‣ quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
‣ inputs other than quoted prices within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2)
‣ inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (level 3). For the derivative contracts held the Group are recognising
the financial instruments with level 2 data as the valuation is obtained using MTM market
data using the forward curve of the commodity prices. However, there is no readily
observable market information for these exact derivative instruments. The realised losses
gains are recognised in other gains and losses in the income statement.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of the loan whereas twelve month expected credit losses are a portion of lifetime expected credit losses that represent the expected credit losses that result from default events that are possible within twelve months of the reporting date. From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in the consolidated statement of comprehensive income (operating profit). Trade and other payablesTrade and other payables are not interest bearing and are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.Silver stream commitmentThe silver stream arrangement has been accounted for as a commitment as the Group has obligations to deliver silver to a third party at a price below market value. On acquisition, following completion of the business combination, the silver stream commitment was identified as an unfavourable contract and recorded at fair value. Payments received under the arrangement prior to the acquisition by the Group were not considered to be a transaction with a customer. Management has determined that the agreement is not a derivative as it will be satisfied through the delivery of non-financial items (i.e. silver commodity from the Company’s production), rather than cash or financial assets. Subsequent to initial recognition the silver stream commitment is not revalued and is amortised on a units of production basis to cost of sales. The fair value of consideration received for delivered silver under the agreement is recorded as revenue. In addition, silver produced in conjunction with the Group’s lead and zinc production and sold under the offtake agreement is recorded in gross revenue with a corresponding deduction for silver purchased to deliver under the silver stream recorded in arriving at net revenue. HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks; market price risk (including
foreign currency exchange risk, commodity price risk and interest rate risk), liquidity risk,
capital risk and credit risk. These risks are mitigated wherever possible by the Group’s
financial management policies and practices described below. The Group’s risk management
is carried out by a central treasury department (Group treasury) under policies approved
by the Board. Group treasury identifies, evaluates and hedges financial risks in close co-
operation with the Group’s operating units.
Foreign currency exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from
various currency exposures. The primary Group currency requirements are US Dollar,
British Pound, Kazakhstan Tenge, Euro and North Macedonian Denar.
The following table highlights the major currencies the Group operates in and the movements
against the US Dollar during the course of the year:
Average rate
Reporting date spot rate
2022
2021
Movement
2022
2021
Movement
Kazakhstan Tenge
460.15
425.91
Macedonian Denar
British Pound
58.36
0.80
52.06
0.73
8%
12%
10%
462.65
431.67
57.65
0.83
54.37
0.74
7%
6%
12%
Foreign exchange risk does not arise from financial instruments that are non-monetary items
or financial instruments denominated in the functional currency. Kazakhstan Tenge and North
Macedonian Denar denominated monetary items are therefore not reported in the tables
below, as the functional currency of the Group’s Kazakhstan-based and North Macedonian-
based subsidiaries is the Tenge and Denar respectively.
The Group’s exposure to foreign currency risk based on US Dollar equivalent carrying
amounts at the reported date:
In $’000 equivalent
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net exposure
Group
2022
EUR
556
2
USD
20,055
–
GBP
886
167
(20)
(333)
(3,268)
20,035
225
(2,215)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDProvisionsa) Asset retirement obligation Provisions for environmental restoration of mining operations are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are not recognised for future operating losses.Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the cash flows incorporate assessments of risk. The increase in the provision due to passage of time is recognised as interest expense.b) Employee benefits – pensionThe Group, in the normal course of business, makes payments on behalf of its employees for pensions, health-care, employment and personnel tax, which are calculated based on gross salaries and wages according to legislation. The cost of these payments is charged to the consolidated statement of comprehensive income in the same period as the related salary cost.c) Employee benefits – retirement benefits and jubilee awardsPursuant to the labour law prevailing in the North Macedonian subsidiaries, the Group is obliged to pay retirement benefits for an amount equal to two average monthly salaries, at their retirement date. According to the collective labour agreement, the Group is also obliged to pay jubilee anniversary awards for each ten years of continuous service of the employee. Due to the long-term nature of these plans, such estimates are subject to uncertainty. Retirement benefit obligations arising on severance pay are stated at the present value of expected future cash payments towards the qualifying employees. These benefits have been calculated by an independent actuary in accordance with the prevailing rules of actuarial mathematics and recognised as a liability with no pension plan assets (note 32). Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to profit and loss over the employees’ expected average remaining working lives.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
10% increase in copper, zinc and lead price
10% decrease in copper, zinc and lead price
Liquidity risk
Estimated effect on earnings
and equity
2022
$’000
2021
$’000
23,931
17,312
(23,931)
(17,535)
Liquidity risk relates to the ability of the Group to meet future obligations and financial
liabilities as and when they fall due. The Group currently has sufficient cash resources and a
material income stream from the Kounrad and Sasa projects.
The following table sets out the contractual maturities (representing undiscounted contractual
cash-flows) of financial liabilities. They agree to those amounts presented in the statement of
financial position because the impact of discounting is immaterial.
Future expected payments:
Trade and other payables within one year
Borrowings payable within one year (note 31)
Lease liability payable within one year
Lease liability payable later than one year but not later than five years
Group
31 Dec 22
$’000
31 Dec 21
$’000
12,751
1,390
295
10
8,224
32,978
302
334
14,446
41,838
Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue
as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal structure to reduce the cost of capital.
The Group manages its capital in order to provide sufficient funds for the Group’s activities.
Future capital requirements are regularly assessed and Board decisions taken as to the most
appropriate source for obtaining the required funds, be it through internal revenue streams,
external fund raising, issuing new shares or selling assets. In order to maintain or adjust the
capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUEDIn $’000 equivalentGroup2021USDEURGBPCash and cash equivalents10,4958652,452Trade and other receivables203151187Trade and other payables(66)(353)(3,395)Net exposure10,632663(756)Trade and other receivables excludes prepayments and VAT receivable and trade and other payables excludes corporation tax, social security and other taxes as they are not considered financial instruments. At 31 December 2022, if the foreign currencies had weakened/strengthened by 10% against the US Dollar, post-tax Group profit for the year would have been $1,804,000 lower/higher (2021: $1,021,000 lower/higher). Commodity price riskThe Group has a hedging policy in place to manage commodity price risk however the Directors elected not to hedge during 2022.The offtake agreement at Kounrad and Sasa provides for the option of provisional pricing i.e. the selling price is subject to final adjustment at the end of the quotation period based on the average price for the month following delivery to the buyer. This could result in fluctuations of revenue recognised ultimately. The Company may mitigate commodity price risk by fixing the price in advance for its copper cathode sales with the offtake partner.The following table details the Group’s sensitivity to a 10% increase and decrease in the copper, zinc and lead price against the invoiced price. 10% is the sensitivity used when reporting commodity price internally to management and represents management’s assessment of the possible change in price. A positive number below indicates an increase in profit for the year and other equity where the price increases. HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
was held with a mix of institutions with credit ratings between A to BB- (2021: A to BBB-).
The Directors have considered the credit exposures and do not consider that they pose a
material risk at the present time. The credit risk for cash and cash equivalents is managed by
ensuring that all surplus funds are deposited only with financial institutions with high quality
credit ratings.
The expected credit loss for intercompany loans receivable is considered immaterial (note 23).
Interest rate risk
The Group’s main interest rate risk arose from the corporate debt which was repaid during
the year.
Categories of financial instruments
Financial assets
Cash and receivables:
Cash and cash equivalents including restricted cash (note 25)
Trade and other receivables
Group
31 Dec 22
$’000
31 Dec 21
$’000
60,562
4,178
59,211
2,343
64,740
61,554
Trade and other receivables excludes prepayments and VAT receivable as they are not
considered financial instruments. All trade and other receivables are receivable within one
year for both reporting years.
Financial liabilities
Measured at amortised cost:
Trade and other payables within one year
Borrowings payable within one year (note 31)
Lease liability within one year
Lease liability payable later than one year but not later than five years
Group
31 Dec 22
$’000
31 Dec 21
$’000
12,751
1,390
295
10
8,224
32,978
334
302
14,446
41,838
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Trade and other payables excludes the silver streaming commitment, corporation tax, social
security and other taxes as they are not considered financial instruments.
3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT CONTINUEDConsistent with others in the industry, the Group monitors capital on the basis of the following gearing ratio:Net cashNote2022$’0002021$’000Cash and cash equivalents excluding restricted cash2560,29855,695Bank overdraft31(1,390)(9,572)Borrowings repayable within one year 31–(23,406)Net cash58,90822,717Total equity368,120409,247Net cash to equity ratio16%6%Changes in liabilities arising from financing activities The total borrowings as at 1 January 2022 were $32,978,000 (1 January 2021: $80,412,000). During the year, total repayments on the corporate debt package were $23,820,000 (2021: $48,400,000). During the year, there were drawdowns on unsecured overdrafts of $nil (2021: $644,000) and repayments of $7,531,000 (2021: $nil). Other changes amounted to a reduction of $237,000 (2021: increase of $322,000) leading to a closing debt balance of $1,390,000 (2021: $32,978,000). See note 31 for more details.The cash and cash equivalents including cash at bank and on hand in assets held for sale brought forward were $55,731,000 (2021: $44,287,000) with a net $4,630,000 inflow (2021: $11,444,000 inflow) during the year and therefore a closing balance of $60,361,000 (2021: $55,731,000). Credit riskCredit risk refers to the risk that the Group’s financial assets will be impaired by the default of a third party. The Group is exposed to credit risk primarily on its cash and cash equivalents as set out in note 25 and on its trade and other receivables as set out in note 23. The Group sells a minimum of 95% of Kounrad’s copper cathode production to the offtake partner which pays on the day of dispatch and during the year 100% of Sasa’s zinc and lead concentrate was sold to Traxys which assumes the credit risk. For banks and financial institutions, only parties with a minimum rating of BBB- are accepted. 91% of the Group’s cash and cash equivalents including restricted cash at the year-end were held by banks with a minimum credit rating of A- (2021: 98%). The rest of the Group’s cash HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
The estimated Sasa decommissioning costs included a re-assessment of the surrounding
managing surface water in-line with the GISTM and lining of the tailings facilities as well as
updating the discount rate using latest assumptions on inflation rates and discount rates.
During the year, the Group engaged an external expert consultant to prepare a conceptual
closure plan and asset retirement obligation for the Kounrad operation and associated
infrastructure. The increase in estimate in relation to the asset retirement obligation is
primarily due to additional estimated costs.
The discounted provision recognised represents management’s best estimate of the costs
that will be incurred, and many of these costs will not crystallise until the end of the life of the
mine. Estimates are reviewed annually and are based on current contractual and regulatory
requirements and the estimated useful life of mines. Engineering and feasibility studies are
undertaken periodically and in the interim management make assessments for appropriate
changes based on the environmental management strategy; however significant changes in
the estimates of contamination, restoration standards, timing of expenditure and techniques
will result in changes to provisions from period to period.
The Group has performed sensitivity analysis of reasonable possible changes in the
significant assumptions taking into account historical experience, however the estimates
may vary by greater amounts. A 2% change in the discount rate would result in an impact
of $4,591,000 on the provision for asset retirement obligation. A 2% change in the inflation
rate would result in an impact of $6,339,000 on the provision for asset retirement obligation.
A 20% change in cost would result in an impact of $3,976,000 on the provision for asset
retirement obligation.
Mineral reserves and resources
The major value associated with the Group is the value of its mineral reserves and resources.
The value of the reserves and resources have an impact on the Group’s accounting estimates
in relation to depreciation and amortisation, impairment of assets and the assessment
of going concern. These resources are the Group’s best estimate of product that can be
economically and legally extracted from the relevant mining property.
The Group’s estimates are supported by geological studies and drilling samples to determine
the quantity and grade of each deposit. The Group estimates its mineral reserves and
resources based on information compiled by Competent Persons as defined in accordance
with the Joint Ore Reserves Committee (JORC) code. The Kounrad resources were classified
as JORC Compliant in 2013 and mineral resources were estimated in June 2017 and the Sasa
JORC ore reserves and mineral resources were estimated on 31 December 2022 and are
included on pages 39-40.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSThe preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expense. Actual results may differ from these judgements and estimates. The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. Significant accounting estimates and judgements The following are significant accounting estimates and judgements that have a significant risk of a material change to the carrying value of assets and liabilities within the next financial year:Impairment of non-current assets The carrying value of the goodwill generated by accounting for the business combination of the Group acquiring an additional 40% in the Kounrad project in May 2014 (the “Kounrad Transaction”) and the CMK Resources Limited acquisition in November 2017 requires an annual impairment review. The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. This review determines whether the value of the goodwill and property, plant and equipment can be justified by reference to the carrying value of the business assets and the future discounted cash flows of the respective CGUs. The key assumptions used in the Group’s impairment assessments and sensitivity analysis are disclosed in note 20. Estimates are required periodically to assess assets for impairment. The critical accounting estimates are future commodity prices, treatment charges, future ore production, discount rates and projected future costs of development and production. Ore reserves and resources included in the forecasts include certain resources considered to be sufficiently certain and economically viable. The Group’s resources statements include additional resources which are not included in the life of mine plan or impairment test.Decommissioning and site rehabilitation estimatesProvision is made for the costs of decommissioning and site rehabilitation costs (“asset retirement obligation”) when the related environmental disturbance takes place. External expert consultants conducted an independent assessment and judgement and experience is used in determining the expected timing, closure and decommissioning methods, which can vary in response to changes in the relevant legal requirements or decommissioning technologies. HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
5. SEGMENTAL INFORMATION
The segmental results for the year ended 31 December 2022 are as follows:
Gross revenue
Silver stream purchases
Offtake buyers’ fees
Revenue
EBITDA
Kounrad
$’000
Sasa
$’000
Unallocated
$’000
Total
$’000
123,657
108,549
–
(7,080)
(3,090)
(1,181)
120,567
100,288
–
–
–
–
232,206
(7,080)
(4,271)
220,855
94,920
56,397
(19,706)
131,611
Depreciation and amortisation
(3,705)
(23,330)
(250)
(27,285)
Foreign exchange gain
3,287
3,318
224
6,829
Impairment of non-current assets (note 19,20)
Other income (note 11)
Finance income (note 15)
Finance costs (note 16)
–
50
29
(55,116)
36
–
–
–
486
(55,116)
86
515
(214)
(1,040)
(806)
(2,060)
Profit/(loss) before income tax
94,367
(19,735)
(20,052)
54,580
Income tax
Profit for the year after tax from continuing
operations
Loss from discontinued operations
Profit for the year
(20,588)
33,992
(187)
33,805
Depreciation and amortisation include amortisation on the fair value uplift on acquisition of
Sasa and Kounrad of $15,419,000.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS CONTINUEDThe estimation of mineral reserves and resources requires judgement to interpret available geological data to select an appropriate mining method. Estimation requires assumptions about future commodity prices, exchange rates, production costs, closure costs and discount rates. Ore resource estimates may vary from period to period. This judgement has a significant impact on impairment consideration and the period over which capitalised assets are depreciated within the financial statements.TaxManagement make judgements in relation to the recognition of various taxes payable and receivable by the Group and VAT recoverability for which the recoverability and timing of recovery is assessed. The Group operates in jurisdictions which necessarily require judgment to be applied when assessing the applicable tax treatment for transactions and the Group obtains professional advice where appropriate to ensure compliance with applicable legislation. To the extent that a final tax outcome is different than the amounts recorded, such differences will impact income tax in the period in which such determination is made.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
Group segmental assets and liabilities for the year ended 31 December 2022 are as follows:
Segmental
assets
Additions to
non-current assets
Segmental
liabilities
31 Dec 22
$’000
31 Dec 21
$’000
31 Dec 22
$’000
31 Dec 21
$’000
31 Dec 22
$’000
31 Dec 21
$’000
82,258
70,316
2,525
2,704
(13,928)
(11,637)
324,197
405,928
14,920
12,104
(54,718)
(69,980)
64
38
36,526
44,307
–
19
–
(44)
(28)
17
(6,235)
(29,697)
443,045
520,589
17,464
14,825
(74,925)
(111,342)
Kounrad
Sasa
Assets held for sale
(note 22)
Unallocated including
corporate
6. REVENUE
Group
2022
$’000
2021
$’000
122,371
131,464
International customers (Europe) – copper cathode
International customers (Europe) – zinc and lead concentrate
106,578
101,241
Domestic customers (Kazakhstan) – copper cathode
International customers (Europe) – silver
Total gross revenue
Less:
Silver stream purchases
Offtake buyers’ fees
Revenue
1,286
1,971
574
1,873
232,206
235,152
(7,080)
(8,040)
(4,271)
(3,740)
220,855
223,372
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
5. SEGMENTAL INFORMATION CONTINUEDThe segmental results for the year ended 31 December 2021 are as follows:Kounrad $’000Sasa $’000 Unallocated $’000 Total$’000 Gross revenue132,039103,113–235,152Silver stream purchases–(8,040)–(8,040)Offtake buyers’ fees(2,586)(1,154)–(3,740)Revenue129,45393,919–223,372EBITDA105,96657,472(21,934)141,504Depreciation and amortisation(4,007)(25,321)(244)(29,572)Foreign exchange gain/(loss)673599(58)1,214Other income (note 11)147712166Other expenses (note 10)(4)–(135)(139)Finance income (note 15)14–6074Finance costs (note 16)(157)(479)(3,284)(3,920)Profit/(loss) before income tax102,63232,278(25,583)109,327Income tax(25,147)Profit for the year after tax from continuing operations84,180Loss from discontinued operations(4)Profit for the year84,176Depreciation and amortisation include amortisation on the fair value uplift on acquisition of Sasa and Kounrad of $16,900,000.A reconciliation between profit for the year and EBITDA is presented in the Financial Review section.HOMESEARCHPRINTPAGES
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
7. COST OF SALES
Group
Reagents, electricity and materials
Depreciation and amortisation
Silver stream commitment (note 30)
Royalties
Employee benefit expense
Consulting and other services
Taxes and duties
8. DISTRIBUTION AND SELLING COSTS
Group
Freight costs
Transportation costs
Depreciation and amortisation
Materials and other expenses
2022
$’000
27,989
26,709
2021
$’000
21,157
28,937
(1,971)
(1,873)
10,117
17,951
6,106
370
87,271
2022
$’000
1,934
24
5
203
2,166
10,062
16,356
5,491
381
80,511
2021
$’000
1,800
19
11
286
2,116
The above distribution and selling costs are those incurred at Kounrad and Sasa in addition to
the costs associated with the offtake arrangements.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
6. REVENUE CONTINUED KounradThe Group sells and distributes its copper cathode product primarily through an offtake arrangement with Traxys. The offtake arrangements are for a minimum of 95% of the SX-EW plant’s output. Revenue is recognised at the Kounrad mine gate when the goods have been delivered in accordance with the contractual delivery terms. The offtake agreement provides for the option of provisional pricing i.e. the selling price is subject to final adjustment at the end of the quotation period based on the average price for the month following delivery to the buyer. The Company may mitigate commodity price risk by fixing the price in advance for its copper cathode sales with the offtake partner.The costs of delivery to the end customers have been effectively borne by the Group through means of an annually agreed buyer’s fee which is deducted from the selling price.During 2022, the Group sold 14,192 tonnes (2021: 13,983 tonnes) of copper through the offtake arrangements. Some of the copper cathodes are also sold locally and during 2022, 150 tonnes (2021: 68 tonnes) were sold to local customers. SasaThe Group sells Sasa’s zinc and lead concentrate product to smelters through an offtake arrangement with Traxys. The commitment is for 100% of the Sasa concentrate production. The agreements with the smelters provide for provisional pricing i.e. the selling price is subject to final adjustment at the end of the quotation period based on the average price for the month, two months or three months following delivery to the buyer and subject to final adjustment for assaying results. The Group sold 17,862 tonnes (2021: 18,856 tonnes) of payable zinc in concentrate and 26,320 tonnes (2021: 25,245 tonnes) of payable lead in concentrate. The revenue arising from silver relates to a contract with Osisko Gold Royalties where the Group has agreed to sell all of its silver at approximately $6 per ounce for the life of the mine, significantly below market value and arising from the silver stream commitment inherited on acquisition (note 30).HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
11. OTHER INCOME
Group
Gain on disposal of property, plant and equipment
Other income
2022
$’000
–
86
86
2021
$’000
2
164
166
12. AUDITORS’ REMUNERATION
During the year, the Group obtained the following services from the Company’s Auditors and
its associates:
Fees payable to BDO LLP the Company’s Auditors for the audit of the
parent company and consolidated financial statements
Fees payable to BDO LLP the Company’s Auditors and its associates
for other services:
2022
$’000
2021
$’000
243
230
– The audit of Company’s subsidiaries
183
145
Fees payable to BDO LLP the Company’s Auditors and its associates
for other services:
– Other assurance services
60
486
55
430
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
9. ADMINISTRATIVE EXPENSES Group2022$’0002021$’000Employee benefit expense11,38210,360Share based payments (note 28)4,4942,449Consulting and other services8,0907,114Auditors’ remuneration (note 12)486430Office-related and travel costs1,652922Taxes and duties417178Depreciation and amortisation571624Total from continuing operations27,09222,077Total from discontinued operations (note 22) 1791827,27122,09510. OTHER LOSSESGroup2022$’0002021$’000Realised losses on financial derivatives–6,736Other expenses –139–6,875During 2021, the Group entered into commodity price hedge contracts for a portion of its 2021 metal production. As a result of these financial instruments, in the prior year ended 31 December 2021, the Company recognised $6,736,000 of realised losses. These financial instruments expired at the end of 2021 and therefore there are were no hedging gains or losses during the year ending 31 December 2022. The Group did not put in place any further hedge contracts during the year. HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
14. MONTHLY AVERAGE NUMBER OF PEOPLE EMPLOYED
Group
Operational
Management and administrative
2022
Number
944
148
2021
Number
934
133
1,092
1,067
The monthly average number of staff employed by the Company during the year was 19
(2021: 18).
15. FINANCE INCOME
Group
Bank interest received
16. FINANCE COSTS
Group
Provisions: unwinding of discount (note 32)
Interest on borrowings (note 31)
Lease interest expense and bank charges
2022
$’000
515
515
2022
$’000
1,088
910
62
2021
$’000
74
74
2021
$’000
347
3,483
90
Total for continuing operations
2,060
3,920
17. INCOME TAX
Group
Current tax on profits for the year
Deferred tax credit (note 37)
Income tax expense
2022
$’000
2021
$’000
25,142
26,610
(4,554)
(1,463)
20,588
25,147
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Taxation for each jurisdiction is calculated at the rates prevailing in the respective jurisdictions.
13. EMPLOYEE BENEFIT EXPENSE The aggregate remuneration of staff, including Directors, was as follows:Group2022$’0002021$’000Wages and salaries22,37419,878Social security costs and similar taxes2,8592,802Staff healthcare and other benefits 3,1872,141Other pension costs2,9293,238Share based payment expense (note 28)4,4942,449Total for continuing operations35,84330,508Total for discontinuing operations (note 22)747535,91730,583The total employee benefit expense includes an amount of $2,016,000 (2021: $1,418,000) which has been capitalised within property, plant and equipment. Company2022$’0002021$’000Wages and salaries6,7796,091Social security costs1,3281,098Staff healthcare and other benefits 584595Other pension costs108114Share based payments (note 28)4,4942,44913,29310,347Key management remuneration is disclosed in the Remuneration Committee report. HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
Profit from continuing operations attributable to owners of the parent
33,998
84,181
2022
$’000
2021
$’000
Loss from discontinued operations attributable to owners of
the parent
Profit attributable to owners of the parent
(187)
(4)
33,811
84,177
2022
No.
2021
No.
Weighted average number of Ordinary Shares in issue
177,955,800 176,498,266
Earnings/(loss) per share from continuing and discontinued
operations attributable to owners of the parent during the year
(expressed in $ cents per share)
From continuing operations
From discontinued operations
From profit for the year
(b) Diluted
2022
$ cents
2021
$ cents
19.10
(0.10)
19.00
47.69
–
47.69
The diluted earnings/(loss) per share is calculated by adjusting the weighted average number
of ordinary shares outstanding after assuming the conversion of all outstanding granted
share options.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
17. INCOME TAX CONTINUEDThe tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:Group2022$’0002021$’000Profit before income tax 54,580109,327Tax calculated at domestic tax rates applicable to profits in the respective countries 10,11719,244Tax effects of: Expenses not deductible for tax purposes12,5464,309Deferred income tax credit (note 37)(4,554)(1,463)Movement on unrecognised deferred tax – tax losses 2,4793,057Income tax expense 20,58825,147Corporate income tax is calculated at 19% (2021: 19%) of the assessable profit for the year for the UK parent company, 20% for the operating subsidiaries in Kazakhstan (2021: 20%) and 10% (2021: 10%) for the operating subsidiaries in North Macedonia. Expenses not deductible for tax purposes includes share-based payment charges, transfer pricing adjustments in accordance with local tax legislation, impairment and depreciation and amortisation charges. Deferred tax assets have not been recognised on tax losses primarily at the parent company as it remains uncertain whether this entity will have sufficient taxable profits in the future to utilise these losses. 18. EARNINGS/(LOSS) PER SHARE(a) BasicBasic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of the Company by the weighted average number of Ordinary Shares in issue during the year excluding Ordinary Shares purchased by the Company and held as treasury shares (note 26).HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
The adjusting items are shown in the table below:
2022
$’000
2021
$’000
Profit from continuing operations attributable to owners of the parent
33,998
84,181
Adjustments:
Impairment of non-current assets
Deferred tax movement resulting from impairment of mineral rights
Adjusted profit from continuing operations attributable
to owners of the parent
Loss from discontinued operations attributable to owners of the parent
55,116
(3,419)
85,695
(187)
–
–
–
(4)
Adjusted profit attributable to owners of the parent
85,508
84,177
Adjusted earnings/(loss) per share from continuing and discontinued
operations attributable to owners of the parent during the year
(expressed in $ cents per share)
From adjusted continuing operations
From discontinued operations
From adjusted profit for the year
(d) Adjusted diluted earnings per share
Adjusted diluted earnings/(loss) per share
From adjusted continuing operations
From discontinued operations
From adjusted profit for the year
2022
$ cents
2021
$ cents
48.15
(0.10)
47.69
–
48.05
47.69
2022
$ cents
46.35
(0.10)
2021
$ cents
46.23
–
46.25
46.23
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
18. EARNINGS/(LOSS) PER SHARE CONTINUED2022No.2021No.Weighted average number of Ordinary Shares in issue177,955,800176,498,266Adjusted for:– Share options 6,914,3115,589,467Weighted average number of Ordinary Shares for diluted earnings per share184,870,111182,087,733Diluted earnings/(loss) per share2022 $ cents2021 $ centsFrom continuing operations18.3946.23From discontinued operations(0.10)–From profit for the year18.2946.23(c) Adjusted basis earnings per shareTo allow comparability, the Directors believe that the Adjusted EPS provides a more appropriate representation of the underlying earnings of the Group adjusting for the impairment of non-current assets and the corresponding deferred tax movement arising from the impairment of mineral rights. This is considered a one-off impairment and not expected to be recurring.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
Group
Construction
in progress
$’000
Plant and
equipment
$’000
Mining
assets
$’000
Motor
vehicles
and ROU
assets
$’000
Land
$’000
Mineral
rights
$’000
Total
$’000
Accumulated depreciation
and impairment
At 1 January 2021
Provided during the year
Disposals
Exchange differences
At 31 December 2021
Provided during the year
Impairment (note 20)
Disposals
Exchange differences
At 31 December 2022
Net book value at
31 December 2021
Net book value at
31 December 2022
–
–
–
–
–
–
–
–
–
–
50,266
12,006
(19)
(471)
61,782
11,659
–
(144)
401
112
–
(10)
1,532
380
(8)
(22)
503
1,882
111
–
–
381
–
(42)
(60)
(1,281)
(34)
72,016
580
2,161
–
–
–
–
–
–
–
–
–
–
55,164
107,363
15,374
27,872
–
–
(27)
(503)
70,538 134,705
13,581
25,732
34,195
34,195
–
–
(186)
(1,375)
118,314 193,071
8,643
98,630
756
1,002
626
275,232 384,889
16,005
92,577
595
783
590
211,647 322,197
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
19. PROPERTY, PLANT AND EQUIPMENTGroupConstruction in progress $’000Plant and equipment $’000Mining assets$’000Motor vehicles and ROU assets $’000Land$’000Mineral rights$’000Total $’000Cost At 1 January 20214,737146,7991,2922,874677369,029525,408Additions14,268456–45––14,769Disposals(17)(24)––(41)Change in estimate – asset retirement obligation (note 32)–8,981––––8,981Transfers(9,846)9,843–3–––Exchange differences(499)(5,643)(33)(38)(51)(23,259)(29,523)At 31 December 20218,643160,4121,2592,884626345,770519,594Additions17,054143–199––17,396Disposals–(244)–(43)––(287)Change in estimate – asset retirement obligation (note 32)–1,153––––1,153Transfers(9,282)9,282–––––Exchange differences(410)(6,153)(84)(96)(36)(15,809)(22,588)At 31 December 202216,005164,5931,1752,944590329,961515,268HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
20. INTANGIBLE ASSETS
Group
Cost
At 1 January 2021
Additions
Exchange differences
At 31 December 2021
Additions
Exchange differences
At 31 December 2022
Accumulated amortisation and impairment
At 1 January 2021
Provided during the year
Exchange differences
At 31 December 2021
Provided during the year
Impairment
Exchange differences
At 31 December 2022
Goodwill
$’000
Mining licences
and permits
$’000
Computer
software and
website
$’000
Total
$’000
31,553
36,160
–
–
271
56
67,984
56
(1,681)
(1,136)
(3)
(2,820)
29,872
35,024
324
65,220
–
–
(1,536)
(1,654)
68
(3)
68
(3,193)
28,336
33,370
389
62,095
–
–
–
–
–
20,921
–
11,082
1,847
(79)
12,850
1,689
–
(219)
262
11,344
17
1
280
23
–
(1)
1,864
(78)
13,130
1,712
20,921
(220)
20,921
14,320
302
35,543
Net book value at 31 December 2021
29,872
22,174
Net book value at 31 December 2022
7,415
19,050
44
87
52,090
26,552
The Company had nil intangible assets at net book value as at 31 December 2022 (2021: nil).
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
19. PROPERTY, PLANT AND EQUIPMENT CONTINUEDThe Company had $184,000 of office equipment at net book value as at 31 December 2022 (2021: $410,000).The increase in estimate in the asset retirement obligation of $1,153,000, in relation to both Kounrad and Sasa, is due to a combination of adjusting the provision recognised at the net present value of future expected costs using latest assumptions on inflation rates and discount rates as well as updating the provision for management’s best estimate of the costs that will be incurred based on current contractual and regulatory requirements (note 32). During the year there were total disposals of plant, property and equipment at cost of $287,000 (2021: $41,000) with accumulated depreciation of $186,000 (2021: $27,000). The Group received $7,000 (2021: $16,000) consideration for these assets and therefore a loss of $94,000 was recognised (2021: gain of $2,000). Amounts recognised in the income statementThe income statement shows the following amounts relating to leases: 2022 $’0002021 $’000Depreciation charge of right-of-use assetsOffice48171Other123121171292Interest expense included in finance costs1877HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
The discount rate reflects equity risk premiums over the risk-free rate, the impact of the
remaining economic life of the CGU and the risks associated with the relevant cash flows
based on the country in which the CGU is located. These risk adjustments are based on
observed equity risk premiums, country risk premiums and average credit default swap
spreads for the period.
The Kounrad cash flows have been projected until 2034, the remaining life of operation, and
the key economic assumptions used in the review were a five-year forecast average nominal
copper price of $7,777 per tonne (2021: $7,914 per tonne) and a long-term price of $7,436
per tonne (2021: $7,592 per tonne) based on market consensus prices and a discount rate of
8.07% (2021: 8.07%) as well as market inflation rates. Assumptions in relation to operational
and capital expenditure are based on the latest budget approved by the Board.
The carrying value of the net assets is not currently sensitive to any reasonable changes in key
assumptions. Management concluded and the net present value of the asset is significantly in
excess of the net book value of assets, and therefore no impairment has been identified.
Sasa project
Prior to the current year impairment, the Sasa project located in North Macedonia, had an
associated goodwill balance of $20,921,000 (2021: $21,924,000), the movement being solely
due to foreign exchange differences.
The business combination in 2017 was accounted for at fair value under IFRS 3 and therefore
recoverable value is sensitive to changes in commodity prices, operational performance,
treatment charges, future cash costs of production and capital expenditures. In accordance
with IAS 36 ‘Impairment of assets’ and IAS 38 ‘Intangible Assets’, a review for impairment of
goodwill is undertaken annually or at any time an indicator of impairment is considered to exist
and in accordance with IAS 16 ‘Property, plant and equipment’, a review for impairment of long-
lived assets is undertaken at any time an indicator of impairment is considered to exist.
The assessment compared the recoverable amount of the Sasa Cash CGU with cash
flows projected until 2040, over the remaining life of mine and post closure costs with its
carrying value for the year ended 31 December 2022. The recoverable amount of the CGU is
assessed by reference to the higher of VIU, being the NPV of future cash flows expected to
be generated by the asset, and FVLCD. The FVLCD has been derived using discounted cash
flow techniques (NPV of expected future cash flows of a CGU), which incorporate market
participant assumptions. Cost to dispose is based on management’s best estimates of future
selling costs at the time of calculating FVLCD. Costs attributable to the disposal of the CGU
are not considered significant. The methodology used for the fair value is a level 3 valuation.
20. INTANGIBLE ASSETS CONTINUEDImpairment assessment In accordance with IAS 36 “Impairment of assets” and IAS 38 “Intangible Assets”, a review for impairment of goodwill is undertaken annually or at any time an indicator of impairment is considered to exist and in accordance with IAS 16 “Property, plant and equipment”, a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist. The recoverable amounts of the goodwill and property, plant and equipment were measured based on net present value. The net present value of all CGUs are determined by discounted cash flow techniques based on the most recent approved financial budgets, underpinned and supported by the life of asset plans of the respective operations. The valuation models use a combination of internal sources and those inputs available to a market participant, which comprise the most recent reserve and resource estimates, relevant cost assumptions and where possible, market forecasts of commodity price and foreign exchange rate assumptions, discount rates. The valuations generally remain most sensitive to price and a deterioration/improvement in the pricing outlook may result in additional impairments/reversals. When undertaken, an impairment review is completed for each Cash Generating Unit (CGU).Kounrad projectThe Kounrad project located in Kazakhstan has an associated goodwill balance of $7,415,000 (2021: $7,948,000), the movement being solely due to foreign exchange differences. In accordance with IAS 36 ‘Impairment of assets’ and IAS 38 ‘Intangible Assets’, a review for impairment of goodwill is undertaken annually or at any time an indicator of impairment is considered to exist and in accordance with IAS 16 ‘Property, plant and equipment’, a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist. The discount rate applied to calculate the present value is based upon the nominal weighted average cost of capital applicable to the cash generating unit (‘CGU’). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of the CGU is assessed by reference to the higher of value in use (‘VIU’), being the net present value (‘NPV’) of future cash flows expected to be generated by the asset, and fair value less costs to dispose (‘FVLCD’). The FVLCD is considered to be higher than VIU and has been derived using discounted cash flow techniques (NPV of expected future cash flows of a CGU), which incorporate market participant assumptions.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
These revised changes resulted in a reduction of Sasa’s estimated recoverable value
to $257,525,000 recognising an impairment charge of $55,116,000 through the income
statement. This has been recognised as $20,921,000 against the total Sasa goodwill in
intangible assets. The impairment charge of $34,195,000 related to property, plant and
equipment has been recorded against mineral rights as the impairment is largely due to a
reduction to the ore reserves and resources and consequential extraction profile, such that
certain ore reserves and resources are excluded from the Life of Mine and the related mineral
rights impaired accordingly. The fair value of the mineral rights was initially determined as
part of the purchase price allocation (‘PPA’) when CAML acquired the Sasa mine in 2017.
Management have performed sensitivity analyses whereby certain parameters were flexed
upwards and downwards by reasonable amounts for the CGU to assess whether this would
increase the impairment charge or reduce the impairment. The following sensitivities were
applied as part of the assessment:
Parameter
Zinc price
Lead price
Sensitivity applied
(5%)/5% change
(5%)/5% change
Discount rate
Increase to 15%/decrease to 10%
Treatment charges
20%/(20%) change
Head grade
(5%)/5% change
Capital expenditure
10%/(10%)
Increased
impairment
$’000
Reduced
impairment
$’000
14,100
(13,800)
20,400
(22,100)
27,600
(34,100)
19,800
(19,800)
29,500
(29,500)
7,200
(7,200)
The Group exercises judgement in making assumptions on the inputs into the model and
are comfortable the most reliable inputs have been applied in assessment the FVLCD and
therefore the downward sensitivities outlined above are as likely as upward sensitivities and
therefore feel no further impairment is necessary.
The Group has measured the FVLCD using various fair value measurements obtaining
inputs from market data. It has used quoted prices (level 1) inputs for its commodity price
assumptions, inflation rates, exchange rates and discount rate. The treatment charges have
been forecast over life of mine using assumptions based on market data (level 2).
At the balance sheet date, the Board considers the base case forecasts to be appropriate and
balanced best estimates.
20. INTANGIBLE ASSETS CONTINUEDThe expected future cash flows utilised in the FVLCD model are derived from estimates of projected future revenues based on broker consensus commodity prices, treatment charges, future cash costs of production and capital expenditures contained in the life of mine (‘LOM’) plan, and as a result FVLCD is considered to be higher than VIU. The Group’s discounted cash flow analysis reflects probable reserves as well as indicated resources and certain inferred resources which are considered sufficiently certain and economically viable, and is based on detailed research, analysis and modelling. The forecast operational and capital expenditure reflects the transition of mining method from sub-level caving to cut and fill stoping.At 31 December 2022, the Group has reviewed the indicators for impairment, including forecasted commodity prices, treatment charges, discount rates, operating and capital expenditure, and the mineral reserves and resources’ estimates. Following an analysis management have decided to recognise an impairment charge due to the following factors: ‣Completion of the life of mine study at the year end and therefore amending the financial model inputs for updated reserves, resources and expected 830,000 tonne long-term plant throughput capacity per annum (reduced from 900,000 tonnes). The Resource and Reserves are both reported using Net Smelter Return cut-off values and the Resources have decreased due to management’s assessment of those which are economically viable and capable of future extraction. ‣An increase in the discount rate to 12.52% (2021: 10.21%) supported by a detailed WACC calculation considering both the country and company risk premiums. These are affected by external economic conditions with significant global inflation and an increase in risk applied to calculate the present value of the CGU. The main factor behind the increase in discount rate is the rise US treasury yields and a higher country risk premium given where the Group operates. ‣The key economic assumptions used in the review were a five-year forecast average nominal zinc and lead price of $2,760 and $2,081 per tonne respectively and a long-term price of $2,467 and $1,874 per tonne respectively based on market consensus prices inflated at 3.1%. ‣The financial model calculation also factors in cost increases for energy and wages to reflect near-term inflationary pressures facing the Group reflecting the current macroeconomic environment using market inflation rates. ‣Indicated and 30% of inferred resources from Golema Reka have been added to the end of life of mine in accordance with the Resources statement in the Competent Person Report are considered to have a sufficient level of confidence of economic extraction.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Subsidiary
Copper Bay
(UK) Ltd
Registered office
address
Masters House, 107
Hammersmith Road, London,
W14 0QH, United Kingdom
Activity
Holding
Company
Copper Bay
Chile Limitada
Ebro 2740, Oficina 603, Las
Condes, Santiago, Chile
Holding
Company
Ken Shuak LLP Business Centre No. 2,
4 Mira Street, Balkhash,
Kazakhstan
Shuak project
(exploration)
Kounrad
Copper
Company LLP
Business Centre No. 2,
4 Mira Street, Balkhash,
Kazakhstan
Kounrad
project (SX-
EW plant)
CAML
%
2022
Non-
controlling
interest %
2022
CAML
%
2021
Date of
incorporation
76
24
76
9 Nov 11
76
10
24
76
12 Oct 11
90
10
5 Oct 16
100
–
100 29 Apr 08
Minera Playa
Verde Limitada
Ebro 2740, Oficina 603, Las
Condes, Santiago, Chile
Exploration –
Copper
76
24
76
20 Oct 11
Rudnik SASA
DOOEL
Makedonska
Kamenica
28 Rudarska Str,
Makedonska
Kamenica, 2304, North
Macedonia
Sasa project
100
–
100
22 June
2005
Sary Kazna LLP Business Centre No. 2,
4 Mira Street, Balkhash,
Kazakhstan
Kounrad
project (SUC
operations)
100
–
100
6 Feb 06
CAML MK
For the year ended 31 December 2022, CAML MK Limited (registered number: 10946728)
has opted to take advantage of a statutory exemption from audit under section 479A of the
Companies Act 2006 relating to subsidiary companies. The members of CAML MK Limited
have not required it to obtain an audit of their financial statements for the year ended
31 December 2022. In order to facilitate the adoption of this exemption, Central Asia Metals
plc, the parent company of the subsidiaries concerned, undertakes to provide a guarantee
under Section 479C of the Companies Act 2006 in respect of CAML MK Limited.
21. INVESTMENTSShares in Group undertakings:Company31 Dec 22 $’00031 Dec 21 $’000At 1 January5,1075,491Impairment of investment in KBV–(384)At 31 December 5,1075,107Investments in Group undertakings are recorded at cost which is the fair value of the consideration paid, less impairment.Details of the Company holdings are included in the table below:SubsidiaryRegistered office addressActivityCAML % 2022Non-controlling interest % 2022CAML % 2021Date of incorporationCAML KZ LimitedMasters House, 107 Hammersmith Road, London, W14 0QH, United KingdomHolding Company100–10028 June 2021CAML MK Limited Masters House, 107 Hammersmith Road, London, W14 0QH, United KingdomSeller of zinc and lead concentrate100–1005 Sep 17CMK Mining B.V. Prins Bernhardplein 200 1097 JB Amsterdam, The NetherlandsHolding Company100–10030 June 2015CMK Europe SPLLC Skopje Ivo Lola Ribar no. 57-1/6, 1000 Skopje, North Macedonia Holding Company100–10010 July 2015Copper Bay LimitedMasters House, 107 Hammersmith Road, London, W14 0QH, United KingdomHolding Company76247629 Oct 10HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
Liabilities of disposal group classified as held for sale:
Trade and other payables
31 Dec 22
$’000
31 Dec 21
$’000
44
44
28
28
During the year the following have been recognised in discontinued operations:
Loss from discontinued operations:
General and administrative expenses
Foreign exchange (loss)/gain
Loss from discontinued operations
Cash flows of disposal group classified as held for sale:
Operating cash flows
Total cash flows
2022
$’000
(179)
(8)
(187)
2022
$’000
27
27
2021
$’000
(18)
14
(4)
2021
$’000
(19)
(19)
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
21. INVESTMENTS CONTINUEDCAML KZFor the year ended 31 December 2022, CAML KZ Limited (registered number: 13479896) has opted to take advantage of a statutory exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies. The members of CAML KZ Limited have not required it to obtain an audit of their financial statements for the year ended 31 December 2022. In order to facilitate the adoption of this exemption, Central Asia Metals plc, the parent company of the subsidiaries concerned, undertakes to provide a guarantee under Section 479C of the Companies Act 2006 in respect of CAML KZ Limited.Non-controlling interest31 Dec 22$’00031 Dec 21$’000Balance at 1 January1,3161,315Loss attributable to non-controlling interests61Balance at 31 December1,3221,316Non-controlling interests were held at year end by third parties in relation to Copper Bay Limited, Copper Bay (UK) Limited, Copper Bay Chile Limitada and Minera Playa Verde Limitada.22. ASSETS HELD FOR SALEThe assets and liabilities of the Copper Bay entities continue to be presented as held for sale in the statement of financial position. The exploration assets and property, plant and equipment held in Copper Bay were fully written off in prior periods. The results of the Copper Bay entities for the year ended 31 December 2022 and the comparative year ended 31 December 2021 are shown within discontinued operations in the consolidated income statement.Assets of disposal group classified as held for sale:31 Dec 22$’00031 Dec 21 $’000Cash and cash equivalents6336Trade and other receivables126438HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
The Group is working closely with its advisors to recover the remaining portion. The planned
means of recovery will be through a combination of the local sales of cathode copper to
offset VAT recoverable and by a continued dialogue with the authorities for cash recovery and
further offsets.
Non-current prepayments have increased as a result of prepaid capital expenditure on the
Sasa Cut and Fill Project.
24. INVENTORIES
Group
Raw materials
Finished goods
31 Dec 22
$’000
31 Dec 21
$’000
11,917
1,232
9,208
1,244
13,149
10,452
The Group recognises all inventory at the lower of cost and net realisable value and did not
have any slow-moving, obsolete or defective inventory as at 31 December 2022 and therefore
there were no write-offs to the income statement during the year (2021: nil). The total
inventory recognised through the income statement was $6,527,000 (2021: $6,599,000).
25. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash at bank and on hand
Cash and cash equivalents
Restricted cash
Group
Company
31 Dec 22
$’000
31 Dec 21
$’000
31 Dec 22
$’000
31 Dec 21
$’000
60,298
60,298
264
55,695
55,695
3,516
35,812
35,812
–
40,189
40,189
3,284
Total cash and cash equivalent including
restricted cash
60,562
59,211
35,812
43,473
The restricted cash amount of $264,000 (2021: $3,516,000) is held at bank to cover Kounrad
subsoil user licence requirements (2021: to cover corporate debt service compliance and
Kounrad subsoil user licence requirements).
The Group holds an overdraft facility in North Macedonia and these amounts are disclosed in
note 31 Borrowings.
23. TRADE AND OTHER RECEIVABLESGroupCompany31 Dec 22 $’00031 Dec 21 $’00031 Dec 22 $’00031 Dec 21 $’000Current receivablesReceivable due from subsidiary ––744581Loan due from subsidiary––18,10032,900Trade receivables 2,3621,249––Prepayments and accrued income2,9912,545334422VAT receivable 1,5461,322109110Other receivables 1,8161,0942901918,7156,21019,57734,204Non-current receivables Loan due from subsidiary––268,750269,241Prepayments8,2214,308––VAT receivable 3,2573,039––11,4787,347268,750269,241The carrying value of all the above receivables is a reasonable approximation of fair value. There are no amounts past due at the end of the reporting period that have not been impaired apart from the VAT receivable balance as explained below. Trade and other receivables and loan due from subsidiary are accounted for under IFRS 9 using the expected credit loss model and are initially recognised at fair value and subsequently measured at amortised cost less any allowance for expected credit losses.The loan due from subsidiary is owed by CAML MK Limited, a directly owned subsidiary for $286,850,000 (2021: $302,141,000), which accrues interest at a rate of 2.25% per annum (2021: 2.25%). The loan has been assessed for expected credit loss under IFRS 9, however as the Group’s strategies are aligned there is no realistic expectation that repayment would be demanded early ahead of the current repayment plans. The expected future cash flows arising from the asset exceed the intercompany loan value under various scenarios considered which are outlined in the intangible assets impairment assessment so it is believed this loan can be repaid and the expected credit loss is immaterial. As at 31 December 2022, the total Group VAT receivable was $4,803,000 (2021: $4,361,000) which included an amount of $3,399,000 (2021: $3,299,000) of VAT owed to the Group by the Kazakhstan authorities. During the year, the Kazakhstan authorities refunded $718,000.HOMESEARCHPRINTPAGES
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
At 1 January 2021
Disposal of trust shares
At 31 December 2021
Disposal of trust shares
Shares issued
At 31 December 2022
Treasury
shares
No.
EBT
shares
No.
471,647
3,052,633
–
(712,601)
471,647 2,340,032
–
–
(9,280)
5,600,000
471,647
7,930,752
27. CURRENCY TRANSLATION RESERVE
Currency translation differences arose primarily on the translation on consolidation of the
Group’s Kazakhstan-based and North Macedonian-based subsidiaries whose functional
currency is the Tenge and North Macedonian Denar respectively. In addition, currency
translation differences arose on the goodwill and fair value uplift adjustments to the carrying
amounts of assets and liabilities arising on the Kounrad Transaction and CMK Resources
acquisition which are denominated in Tenge and Denar respectively. During 2022, a non-
cash currency translation loss of $29,311,000 (2021: loss of $31,283,000) was recognised
within equity.
28. SHARE BASED PAYMENTS
The Company provides rewards to staff in addition to their salaries and annual discretionary
bonuses, through the granting of share options in the Company. The Company share option
scheme has an exercise price of effectively nil for the participants.
The share options granted during 2012 until 2018 were based on the achievement by
the Group and the participant of the performance targets as determined by the CAML
Remuneration Committee that are required to be met in year one and then options could be
exercised one third annually from the end of year one. Options granted during 2012 to 2018
had straight forward conditions attached and were valued using a Black-Scholes model.
Share options granted in 2019 vested after three years depending on achievement of
the Group of performance target relating to the level of absolute total shareholder return
compound annual growth rate of the value of the Company’s shares over the performance
period of three financial years ending 31 December 2021.
25. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH CONTINUED Reconciliation to cash flow statementsThe above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year as follows: Group31 Dec 22 $’000 31 Dec 21 $’000Cash and cash equivalents as above (excluding restricted cash) 60,29855,695Cash at bank and on hand in assets held for sale (note 22)6336Balance per statement of cash flows 60,36155,73126. SHARE CAPITAL AND PREMIUMNumber of sharesOrdinary shares $’000Sharepremium $’000Treasury shares $’000At 1 January 2021176,498,2661,765191,537(3,840)Exercise of options ––4511,480At 31 December 2021176,498,2661,765191,988(2,360)Shares issued5,600,0005613,440(13,496)Exercise of options ––925At 31 December 2022182,098,2661,821205,437(15,831)The par value of ordinary shares is $0.01 per share and all shares are fully paid. On 27 September 2022, the Company issued and allotted 5,600,000 ordinary shares to the trustee of the Central Asia Metals employee benefit trust (the “EBT”). These new ordinary shares have been issued for the purposes of satisfying current awards granted under the Company’s Employee Share Plans together with any future awards that may be granted by the Company. During the year there was an exercise of share options by employees and Directors which were partly settled by selling trust shares. The proceeds of disposal of trust and treasury shares exceeded the purchase price by $9,000 (2021: $451,000) and has been recognised in share premium. The remaining share options exercises during the year were cash settled amounting to $1,939,000 (2021: nil) with a reduction in share option reserve of $1,263,000 (2021: $1,931,000) to account for those now exercised.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
As at 31 December 2022, 5,467,454 (2021: 4,594,192) options were outstanding. Share
options are granted to Directors and selected employees. The exercise price of the granted
options is presented in the table below for every grant. The Company has the option but not
the legal or constructive obligation to repurchase or settle the options in cash.
Movements in the number of share options outstanding and their related weighted average
price are as follows:
At 1 January
Granted
Exercised
Non-vesting
At 31 December
2022
2021
Average
exercise price
in $ per share
option
Average
exercise price
in $ per share
option
Options
(number)
Options
(number)
0.01
4,594,192
0.01
4,420,348
0.01
1,500,223
0.01
1,009,284
0.01
(473,303)
0.01
(153,658)
0.01
5,467,454
0.01
0.01
0.01
(439,020)
(396,420)
4,594,192
Non-vesting shares relates to options granted for which the performance targets were
not met. Out of the outstanding options of 5,467,454 (2021: 4,594,192), 2,096,325 options
(2021: 1,741,528) were exercisable as at 31 December 2022 excluding the value of additional
share options for dividends declared on those outstanding. The related weighted average
share price at the time of exercise was $3.32 (2021: $3.49) per share. Share options exercised
by the Directors during the year are disclosed in the Remuneration Committee Report.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
28. SHARE BASED PAYMENTS CONTINUED Share options granted in 2020 to 2022 vest after three years depending on a combination of the achievement of the Group of performance target relating to the level of absolute total shareholder return compound annual growth rate of the value of the Company’s shares over the performance period of three financial years relative to the constituents of a selected group mining index of companies as well as sustainability performance targets. The fair value at grant date of the 2019 to 2022 grants are independently determined using a Monte Carlo simulation model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the option, and the correlations and volatilities of the share price. The assessed fair value at grant date of options granted during the year ended 31 December 2022 was $3,232,000 in total which is recognised over the vesting period commencing 22 June 2022 until 31 March 2025 and $613,000 was recognised during the year. For the 2021 options $938,000 (2021: $435,000) was expensed for the year ended 31 December 2022. For the 2020 options $942,000 (2021: $980,000) was expensed for the year ended 31 December 2021. For the 2019 share options $82,000 (2021: $290,000) was expensed for the year ended 31 December 2022. An additional dividend related share option charge of $1,242,000 (2021: $720,000) was recognised and also additional costs associated when share options were exercised of $677,000 (2021: $24,000). The number of shares covered by such awards is increased by up to the value of dividends declared as if these were reinvested in Company shares at the dates of payment. The outstanding share options included in the calculation of diluted earnings/(loss) per share (note 18) includes these additional awards but they are excluded from the disclosures in this note. In total, an amount of $4,494,000 (2021: $2,449,000) has been expensed within employee benefits expense from continuing operations for share based payment charges for the year ended 31 December 2022.The model inputs for options granted during the year included:31 Dec 202231 Dec 2021Vesting period2 years 10 months2 years 9 monthsExercise price$0.01$0.01Grant date:22 June 202215 July 2021Expiry date:21 June 203214 July 2031Share price at grant date$2.82$3.27Risk-free interest rate2.19%0.38%HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
29. TRADE AND OTHER PAYABLES
Trade and other payables
Accruals
Corporation tax, social security and
other taxes
Group
Company
31 Dec 22
$’000
31 Dec 21
$’000
31 Dec 22
$’000
31 Dec 21
$’000
6,722
6,029
3,363
4,861
365
5,451
363
4,401
3,892
7,832
246
1,147
Loan due to subsidiary
–
–
37,409
53,400
16,643
16,056
43,471
59,311
The carrying value of all the above payables is equivalent to fair value.
The loan due to subsidiary is payable to Kounrad Copper Company LLP, an indirectly owned
subsidiary for $37,409,000 (2021: $53,400,000), which accrues interest at a rate of 4.40%
per annum and is repayable on demand.
All Group and Company trade and other payables are payable within less than one year for
both reporting periods.
30. SILVER STREAMING COMMITMENT
The carrying amounts of the silver streaming commitment for silver delivery are as follows:
Current
Non-current
Group
Company
31 Dec 22
$’000
31 Dec 21
$’000
31 Dec 22
$’000
31 Dec 21
$’000
1,095
17,085
18,180
1,229
18,220
19,449
–
–
–
–
–
–
On 1 September 2016, the CMK Group entered into a Silver Purchase Agreement. The Group
acquired this agreement as part of the acquisition of the CMK Group and inherited a silver
streaming commitment related to the production of silver during the life of the mine. The
reduction in the silver streaming commitment is recognised in the income statement within
cost of sales as the silver is delivered based on the units of production and is updated to
reflect the latest estimate of Reserves.
28. SHARE BASED PAYMENTS CONTINUED Share options outstanding at the end of the year have the following expiry date and exercise prices:Grant – vestExpiry date of optionOption exercise price $2022Options (number)2021Options (number)8 May 127 May 220.0176,03276,03224 Jul 1323 Jul 230.0136,80136,8013 Jun 142 Jun 240.01143,064143,0648 Oct 147 Oct 240.01160,000160,00022 Apr 1521 Apr 250.01212,121212,12118 Apr 1617 Apr 260.01338,940338,94021 Apr 1720 Apr 270.01296,591296,5912 May 181 May 280.01484,090560,42830 May 1929 May 290.01355,103752,06816 Dec 2015 Dec 300.01979,5481,008,86315 Jul 2114 Jul 310.01974,3921,009,28422 Jun 2221 Jun 320.011,410,772– 5,467,4544,594,192Employee Benefit TrustThe Company set up an Employee Benefit Trust (‘EBT’) during 2009 as a means of incentivising certain Directors and senior management of CAML prior to the Initial Public Offering (‘IPO’). All of the shares awarded as part of the EBT scheme vested on the successful completion of the IPO on 30 September 2010.2,534,688 Ordinary Shares were initially issued as part of the arrangements in December 2009 followed by a further issue of 853,258 in September 2010. The shares were issued at the exercise price of $0.68, which was the best estimate of the Company’s valuation at the time. Details of the awards to Directors of the Company are contained in the Remuneration Committee Report.HOMESEARCHPRINTPAGES
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
During the year, $23,820,000 (2021: $48,400,000) of the principal amount of corporate debt
was repaid as well as $7,531,000 repayment of overdrafts (2021: nil) with total interest paid of
$511,000 (2021: $2,398,000).
The Group held one corporate debt package with Traxys with a variable interest rate
which was repaid in full in August 2022. Security was provided over the shares in CAML
Kazakhstan BV, certain bank accounts and the Kounrad offtake agreement as well as over
the Sasa offtake agreement. The debt was subject to financial covenants which included the
monitoring of gearing and leverage ratios, and these were all complied with.
The overdraft is held with a North Macedonian bank and is denominated in Euro payable at
1.98% above the National Bank of North Macedonia reference rate.
As at 31 December 2022, the Group measured the fair value using techniques for which all
inputs which have a significant effect on the recorded fair value are observable, either directly
or indirectly (Level 2).
The different levels have been defined as follows:
‣ Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
‣ Inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
‣ Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (Level 3).
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
31. BORROWINGSGroupCompany31 Dec 22$’00031 Dec 21$’00031 Dec 22$’00031 Dec 21 $‘000Secured: CurrentBank loans–23,406–23,406Unsecured: CurrentBank overdraft1,3909,572––Total current1,39032,978–23,406The carrying value of loans approximates fair value:Carrying amountFair value31 Dec 22 $’00031 Dec 21 $’00031 Dec 22 $’00031 Dec 21 $’000Traxys Europe S.A.–23,406–23,406Bank overdrafts1,3909,5721,3909,5721,39032,9781,39032,978The movement on borrowings can be summarised as follows:GroupCompany31 Dec 22$’00031 Dec 21$’00031 Dec 22 $‘00031 Dec 21 $‘000Balance at 1 January 32,97880,41223,40670,720Repayment of corporate borrowings(23,820)(48,400)(23,820)(48,400)Repayments of overdraft(7,531)–––Drawdown of overdraft –644––Finance charge interest4962,3983742,162Finance charge unwinding of directly attributable fees4141,0864141,086Interest paid(511)(2,398)(374)(2,162)Foreign exchange(636)(764)––Balance at 31 December1,39032,978–23,406HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
During 2021, Sasa engaged an external expert consultant to prepare an updated conceptual
closure plan. The expected current cash flows were projected over the useful life of the mining
site and inflated using an inflation rate of 3.53% (2021: 2.0%) and discounted to 2022 terms
using a discount rate of 9.17% (2021: 5.50%). The cost of the related assets are depreciated
over the useful life of the assets and are included in property, plant and equipment. During
the year, the cost estimate has been amended by management to build in an additional cost
contingency of 10%, the selection of such a contingency requires judgement.
b) Employee retirement benefits
All employers in North Macedonia are obliged to pay employees minimum severance pay on
retirement equal to two months of the average monthly salary applicable in the country at the
time of retirement. The retirement benefit obligation is stated at the present value of expected
future payments to employees with respect to employment retirement pay. The present value
of expected future payments to employees is determined by an independent authorised
actuary in accordance with the prevailing rules of actuarial mathematics.
c) Other employee benefits
The Group is also obliged to pay jubilee anniversary awards in North Macedonia for each
ten years of continuous service of the employee. Provisions for termination and retirement
obligations are recognised in accordance with actuary calculations. Basic 2022 actuary
assumptions are used as follows:
Discount rate: 5%
Expected rate of salary increase: 4.7%
d) Legal claims
The Group is party to certain legal claims and the recognised provision reflects management’s
best estimate of the most likely outcome. The Group reviews outstanding legal cases
following developments in the legal proceedings and at each reporting date, in order to
assess the need for provisions and disclosures in its financial statements. Among the factors
considered in making decisions on provisions are the nature of litigation, claim or assessment,
the legal process and potential level of damages in the jurisdiction in which the litigation,
claim or assessment has been brought, the progress of the case (including the progress after
the date of the financial statements but before those statements are issued), the opinions
or views of legal advisers, experience on similar cases and any decision of the Group’s
management as to how it will respond to the litigation, claim or assessment.
32. PROVISIONS FOR OTHER LIABILITIES AND CHARGESGroupAsset retirement obligation$’000Employee retirement benefits$’000Other employee benefits$’000Legal claims$’000Total$’000At 1 January 20219,196239235169,686Change in estimate8,981485669,091Settlements of provision–(23)(12)(20)(55)Unwinding of discount (note 16)347–––347Exchange rate difference(64)(19)(20)–(103)At 31 December 202118,460245259218,966Change in estimate1,1534062–1,255Settlements of provision–(23)(11)–(34)Unwinding of discount (note 16)1,088–––1,088Exchange rate difference(158)(18)(22)–(198)At 31 December 202220,543244288221,077Non-current20,265204273220,744Current 2784015–333At 31 December 202220,543244288221,077a) Asset retirement obligationThe Group provides for the asset retirement obligation associated with the mining activities at Kounrad, estimated to be required in 2034. During the year, the Group engaged an external expert consultant to prepare a conceptual closure plan and asset retirement obligation for the leaching and Kounrad operation and associated infrastructure. The expected current cash flows were projected over the useful life of the mining site and inflated using an inflation rate of 5.85% (2021: 3.77%) and discounted to 2022 terms using a nominal pre-tax risk free discount rate of 7.43% (2021: 8.07%). The cost of the related assets are depreciated over the useful life of the assets and are included in property, plant and equipment. The increase in estimate in relation to the asset retirement obligation is primarily due to additional estimated costs and management has built in an additional cost contingency of 10%, the selection of such a contingency requires judgement.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
34. COMMITMENTS
Significant expenditure contracted for at the end of the reporting period but not recognised
as liabilities is as follows:
Group
Property, plant and equipment
Other
35. DIVIDEND PER SHARE
31 Dec 22
$’000
31 Dec 21
$’000
6,159
170
6,329
8,241
396
8,637
In line with the Company dividend policy, during the year the Company paid $48,210,000
(2021: $38,847,000) which consisted of a 2022 interim dividend of 10 pence per share and
2021 final dividend of 12 pence per share (2021: 2021 interim dividend of 8 pence per share
and 2020 final dividend of 8 pence per share).
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
33. CASH GENERATED FROM OPERATIONSGroupNote2022$’0002021$’000Profit before income tax including discontinued operations54,393109,323Adjustments for: Depreciation and amortisation 27,28529,572Silver stream commitment(1,971)(1,369)Loss/(gain) on disposal of property, plant and equipment 1994(2)Foreign exchange gain(6,829)(1,214)Share based payments284,4942,449Impairment of non-current assets 19,2055,116–Finance income15(515)(74)Finance costs162,0603,920Changes in working capital:Increase in inventories (2,538)(2,622)Increase in trade and other receivables(10,503)(6,216)Increase in trade and other payables1,5132,843Provisions for other liabilities and charges(34)(55)Cash generated from operations122,565136,555The increase in trade and other receivables of $10,503,000 (2021: $6,216,000) includes a movement in the Sasa VAT receivable balance of $4,472,000 (2021: $3,468,000) which is offset against corporate income tax payable during the year.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
The Kounrad Foundation, a charitable foundation through which Kounrad donates to the
community, was advanced $300,000 (2021: $214,000). This is a related party by virtue of
common Directors.
Sasa Foundation
The Sasa Foundation, a charitable foundation through which Sasa donates to the
community, was advanced $220,000 (2021: $320,000). This is a related party by virtue of
common Directors.
37. DEFERRED INCOME TAX ASSET AND LIABILITY
Group
The movements in the Group’s deferred tax assets and liabilities are as follows:
Other temporary differences
Deferred tax liability on fair value adjustment
on Kounrad Transaction
Deferred tax liability on fair value adjustment
on CMK acquisition
Deferred tax liability, net
Reflected in the statement of financial position as:
Deferred tax asset
Deferred tax liability
At 1
January
2022
$’000
(349)
Currency
translation
differences
$’000
Credit to
income
statement
$’000
At 31
December
2022
$’000
23
–
(326)
(5,069)
338
274
(4,457)
(17,459)
(22,877)
1,004
1,365
4,280
4,554
(12,175)
(16,958)
31 Dec 22
$’000
31 Dec 21
$’000
328
352
(17,286)
(23,229)
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
36. RELATED PARTY TRANSACTIONSKey management remuneration Key management remuneration comprises the Directors’ remuneration, including Non-Executive Directors and is as follows:2022 Basic salary/ fees$’0002022 Annual bonus$’0002022 Pension$’0002022 Benefits in kind $’0002022 Employers NI$’0002022 Total $’0002021Total$’000Executive Directors:Nigel Robinson509403–121261,0501,061Gavin Ferrar416330––2119571,011Louise Wrathall1165138–442349–Non-Executive Directors:Nick Clarke217–––29246273Mike Armitage293–––13106–Roger Davey98–––12110116Dr Gillian Davidson99–––14113125Mike Prentis3101–––1411591David Swan99–––13112124Nurlan Zhakupov93––––9351Robert Cathery444–––549124Nigel Hurst-Brown5––––––911,934871–164793,3003,0671. Appointed on 26 May 20222. Appointed on 10 January 20223. Appointed 31 March 20214. Resigned on 26 May 20225. Resigned on 31 July 2021 During the year Gavin Ferrar exercised 226,612 shares for a total share option gain of $719,000, see the Directors’ option awards table in the Remuneration Committee Report.HOMESEARCHPRINTPAGES NOTES TO THE FINANCIAL STATEMENTS CONTINUED
for the year ended 31 December 2022
At 31 December 2022, the Group had other deferred tax assets of $1,271,000
(2021: $1,440,000) in respect of share-based payments and other temporary differences
which had not been recognised because of insufficient evidence of future taxable profits
within the entities concerned.
There are no significant unrecognised temporary differences associated with undistributed
profits of subsidiaries at 31 December 2022 and 2021, respectively.
Company
At 31 December 2022 and 2021 respectively, the Company had no recognised deferred tax
assets or liabilities.
At 31 December 2022, the Company had not recognised potential deferred tax assets arising
from losses of $12,911,000 (2021: $11,445,000) as there is insufficient evidence of future
taxable profits. The losses can be carried forward indefinitely.
At 31 December 2022, the Company had other deferred tax assets of $1,271,000 (2021:
$1,440,000) in respect of share-based payments and other temporary differences which had
not been recognised because of insufficient evidence of future taxable profits.
38. EVENTS AFTER THE REPORTING PERIOD
There were no events after the reporting period.
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
37. DEFERRED INCOME TAX ASSET AND LIABILITY CONTINUED At 1 January 2021$’000Currency translation differences $’000Credit to income statement $’000At 31 December 2021$’000Other temporary differences(553)11193(349)Deferred tax liability on fair value adjustment on Kounrad Transaction(5,501)136296(5,069)Deferred tax liability on fair value adjustment on CMK acquisition (19,909)1,476974(17,459)Deferred tax liability, net(25,963)1,6231,463(22,877)A taxable temporary difference arose as a result of the Kounrad Transaction and CMK Resources Limited acquisition, where the carrying amount of the assets acquired were increased to fair value at the date of acquisition but the tax base remained at cost. The deferred tax liability arising from these taxable temporary differences has been reduced by $4,554,000 during the year (2021: $1,270,000) to reflect the tax consequences of impairing and depreciating the recognised fair values of the assets during the year.31 Dec 2022 $’00031 Dec 2021 $’000Deferred tax liability due within 12 months(1,135)(1,463)Deferred tax liability due after 12 months(19,570)(21,766)Deferred tax liability(20,705)(23,229)All deferred tax assets are due after 12 months.Where the realisation of deferred tax assets is dependent on future profits, the Group recognises losses carried forward and other deferred tax assets only to the extent that the realisation of the related tax benefit through future taxable profits is probable.The Group did not recognise other potential deferred tax assets arising from losses of $13,917,000 (2021: $18,471,000) as there is insufficient evidence of future taxable profits within the entities concerned. Unrecognised losses can be carried forward indefinitely.HOMESEARCHPRINTPAGES GLOSSARY OF TECHNICAL TERMS
Ag
Assay
Cu
Grade
Chemical symbol for silver
Mineral Resource
Laboratory test conducted to determine the proportion of a mineral
within a rock or other material
Chemical symbol for copper
The proportion of a mineral within a rock or other material. For zinc
and lead mineralisation this is usually reported as a percentage of
zinc and lead per tonne of rock
NSR cut off
Ore Reserve
g/t
Grammes per tonne
Indicated Mineral Resource An Indicated Mineral Resource is that part of a Mineral Resource
for which quantity, grade or quality, densities, shape and physical
characteristics are estimated with sufficient confidence to allow
the application of Modifying Factors in sufficient detail to support
mine planning and evaluation of the economic viability of the
deposit. Geological evidence is derived from adequately detailed
and reliable exploration, sampling and testing and is sufficient to
assume geological and grade or quality continuity between points
of observation. An Indicated Mineral Resource has a lower level of
confidence than that applying to a Measured Mineral Resource and
may only be converted to a Probable Ore Reserve
Inferred Mineral Resource An Inferred Mineral Resource is that part of a Mineral Resource for
A Mineral Resource is a concentration or occurrence of solid material
of economic interest in or on the Earth’s crust in such form, grade
or quality and quantity that there are reasonable prospects for
eventual economic extraction. The location, quantity, grade or quality,
continuity and other geological characteristics of a Mineral Resource
are known, estimated or interpreted from specific geological
evidence and knowledge, including sampling
The lowest net smelter return (‘NSR’) value of mineralised material
that qualifies as potentially economically mineable
An Ore Reserve is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined
or extracted and is defined by studies at Pre-Feasibility or Feasibility
level as appropriate that include application of Modifying Factors.
Such studies demonstrate that, at the time of reporting, extraction
could reasonably be justified. The reference point at which Reserves
are defined, usually the point where the ore is delivered to the
processing plant, must be stated. It is important that, in all situations
where the reference point is different, such as for a saleable product,
a clarifying statement is included to ensure that the reader is fully
informed as to what is being reported
Pb
Chemical symbol for lead
Probable Ore Reserve
A Probable Ore Reserve is the economically mineable part of an
Indicated, and in some circumstances, a Measured Mineral Resource.
The confidence in the Modifying Factors applying to a Probable Ore
Reserve is lower than that applying to a Proved Ore Reserve
Zn
Chemical symbol for zinc
which quantity and grade or quality are estimated on the basis of
limited geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade or quality
continuity. An Inferred Mineral Resource has a lower level of
confidence than that applying to an Indicated Mineral Resource and
must not be converted to an Ore Reserve. It is reasonably expected
that the majority of Inferred Mineral Resources could be upgraded to
Indicated Mineral Resources with continued exploration
The Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves, as published by the Joint Ore Reserves
Committee of The Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
JORC
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES DIRECTORS, SECRETARY AND ADVISORS
BOARD OF DIRECTORS
Nick Clarke, Non-Executive Chairman
Nigel Robinson, Chief Executive Officer
Gavin Ferrar, Chief Financial Officer
Louise Wrathall, Director of Corporate Development
Dr Mike Armitage, Non-Executive Director
FINANCIAL STATEMENTS
Roger Davey, Non-Executive Director
Independent Auditors’ Report
106
Dr Gillian Davidson, Non-Executive Director
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
Mike Prentis, Non-Executive Director
David Swan, Non-Executive Director
Nurlan Zhakupov, Non-Executive Director
PRINCIPAL PLACES OF BUSINESS
UK
Sackville House
40 Piccadilly
London W1J 0DR
United Kingdom
Kazakhstan
Business Centre No.2
4 Mira Street
Balkhash
Kazakhstan
North Macedonia
Sasa Dooel
28 Rudarska Street
Makedonska Kamenica
North Macedonia
COMPANY SECRETARY
Tony Hunter
REGISTERED ADDRESS
Masters House
107 Hammersmith Road
London W14 0QH
United Kingdom
REGISTERED NUMBER
5559627
COMPANY WEBSITE
www.centralasiametals.com
NOMINATED ADVISOR AND JOINT BROKER
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
United Kingdom
JOINT BROKER
BMO Capital Markets
95 Queen Victoria Street
London EC4V 4HG
United Kingdom
HOMESEARCHPRINTPAGES DIRECTORS, SECRETARY AND ADVISORS CONTINUED
LEGAL ADVISORS
As to English Law
Fieldfisher LLP
Riverbank House
2 Swan Lane
London EC4R 3TT
United Kingdom
As to Kazakh Law
Haller Lomax LLP
6/1 Kabanbai Batyr Ave.
16th floor
Kaskad Business Center
Astana
Kazakhstan
As to North Macedonian Law
Karanovic Partners
Bulevar Partizanski Odredi 14
“Aura” Business Center III/5
Skopje
North Macedonia
FINANCIAL STATEMENTS
Independent Auditors’ Report
106
Consolidated Income Statement
113
Consolidated Statement of
Comprehensive Income
Statements of Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
114
115
116
117
118
Notes to the Financial Statements 119
Glossary of Technical Terms
153
Directors, Secretary and Advisors 154
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
INDEPENDENT AUDITORS
BDO London
55 Baker Street
London W1U 7EU
United Kingdom
PUBLIC RELATIONS
BlytheRay
4-5 Castle Court
London EC3V 9DL
United Kingdom
REGISTRARS
Computershare Investor Services
The Pavilions
Bridge Road
Bristol BS13 8AE
United Kingdom
HOMESEARCHPRINTPAGES NOTES
SUSTAINABILITY REPORT 2022
CENTRALASIAMETALS.COM/SR22
HOMESEARCHPRINTPAGES Sackville House
40 Piccadilly
London W1J 0DR
United Kingdom
www.centralasiametals.com