Interview with Gavin Ferrar, CEO of Central Asia Metals PLC

Our previous interview: https://www.cruxinvestor.com/posts/central-asia-metals-lsecaml-plugging-into-profits-and-growth-in-the-base-metals-sector-6334

Recording date: 1st April 2025

Central Asia Metals PLC (CAML), an AIM-listed base metals producer with operations in Kazakhstan and North Macedonia, has reported strong financial results for 2024. The company generated $214 million in revenue and nearly $102 million in EBITDA, achieving an impressive 47% EBITDA margin that CEO Gavin Ferrar described as "super respectable" for a mining company.

CAML ended the year with approximately $68 million in cash after generating just under $66 million in free cash flow. This strong financial position enabled the company to pay a generous full-year dividend of 18 pence per share, representing about 63% of free cash flow—significantly exceeding their stated policy of 30-50%. Ferrar explained this generous distribution as compensation to shareholders for the lack of completed M&A transactions.

Despite actively pursuing acquisition opportunities (with 13 NDAs and 6 site visits last year), CAML remains selective in its M&A strategy, focusing on base metals assets that would generate at least $50 million in EBITDA. The company's strong balance sheet provides flexibility for future acquisitions without necessarily requiring shareholder dilution.

Operationally, CAML has made significant progress at the Sasa mine in North Macedonia, where its paste backfill plant successfully operated for the full year in 2024, placing 240,000 tons of tailings back underground—approximately one-third of the total produced. The company is also completing a dry stack tailings plant, which will handle another 30-40% of tailings, eliminating the need for additional wet tailings facilities.

In Kazakhstan, the Kounrad operation continues to outperform expectations. The Eastern dumps, which according to the original 2012 plan should have ceased production years ago, contributed approximately 27% of the company's copper last year. With production costs of 80 cents per pound against a copper price around $5, the operation maintains impressive margins.

CAML has developed significant expertise in its operating regions, with Ferrar strongly defending Kazakhstan as an investment-grade country with increasing Western capital inflows. The company's established presence provides strategic advantages in navigating permitting processes and accessing regional opportunities.

Beyond operational efficiency, CAML maintains a strong commitment to ESG initiatives, particularly in community engagement. The company operates its own foundation in Kazakhstan, making targeted investments including a center for disabled children, a facility for victims of domestic violence, and a recently refurbished youth center.

As CAML continues to seek transformative M&A opportunities, it remains focused on maximizing returns from existing assets, controlling costs, and maintaining operational efficiency to remain profitable throughout market cycles.

View Central Asia Metals' company profile: https://www.cruxinvestor.com/companies/central-asia-metals

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