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VSA Capital Market Movers - Central Asia Metals

Central Asia Metals (LON:CAML) has announced a tailings leakage at Sasa from Tailings Storage Facility 4 into the local river. The leak has been halted and was brief in nature reportedly occurring at 5am this morning and stopped shortly after.

Central Asia Metals Ltd - VSA Capital Market Movers - Central Asia Metals

VSA Morning Miner, 15/09/20

Central Asia Metals (LON:CAML)

Central Asia Metals (LON:CAML) has announced a tailings leakage at Sasa from Tailings Storage Facility 4 into the local river. The leak has been halted and was brief in nature reportedly occurring at 5am this morning and stopped shortly after.

CAML is working with the relevant authorities to quantify the volume of material leaked as well as the cause. TSF 4 was recently completed and in March 2019 CAML commissioned an audit of its tailings’ facilities including TSF 4 which was in the process of construction at the time. Golder Associates who conducted the audit confirmed the integrity and robust nature of the existing tailings dams and their design as well as the design and progress of TSF 4.

In response the Sasa processing plant is not in operation implying an impact on lead and zinc output, whether this is material is not yet clear and our estimates which were within the guidance range remain unchanged, awaiting further guidance.

The company’s prudent approach to finances in 2020 has clearly been vindicated leaving the company in a more robust position to deal with unforeseeable events. Furthermore, CAML has placed a strong emphasis in recent years on sustainability with expert hires; whilst this does not eradicate the environmental risk it does mean the company is extremely well placed, in our view, to minimise the direct local impact and resolve any underlying issues quickly and efficiently.  

We reiterate our Buy recommendation and target price of £2.19/sh.

Oliver O'Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]
Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: [email protected]

VSA Capital Research | T: +44 (0)20 3005 5000 | E: [email protected]

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