Central Asia Metals

SPECULATIVE BUY

20/07/2011 Robert Tyerman

Copper waste play Central Asia Metals (CAML) says it is fully funded to generate cash flow within 15 to 18 months from Kounrad in Kazakhstan. Steered by Nick Clarke, formerly of Oriel Resources, the company, which came to AIM in September with a £38m funding at 96p, has 60% of Kounrad, where it currently reckons there are more than 733,000 tonnes of copper left in waste dumps from 70 years of earlier mining.

Clarke says CAML, which has had a feasibility study done by experts from Beijng, expects to have a plant ready within budget by the end of this year to handle10,000 tonnes of copper annually. He talks of 50%-plus recovery rates and cites anticipated production costs falling after an initial ramp up to 38 US cents a lb, against present market prices of more than $4 a lb.

With a formal resource estimate expected late next year, CAML also has several interests in Mongolia, notably 70% of the Alag Bayan copper-gold project, 80% of the Handgait molybdenum project and 85% of Ereen, a gold project with a target of one million oz or more which the company says is for sale. Since floating, the shares have drifted down to 85p and might repay a medium term punt.

Tags: Ereen, Handgait, Kounrad

Sector: Mining

Companies: Central Asia Metals

Market cap: £73.2m

PE Forecast: n/a

Share price: 85p