CAML reports another strong quarter

Yerkin AbdrakhmanovJanuary 08, 2015

Today, Central Asia Metals reported preliminary production results for 2014.

The company produced 11,136 tons of copper (+6% yoy) and sold 11,160 tons (+4,6% yoy). The company’s cash balance as of December 31, 2014 was $46,7mn. The production guidance for 2015 was reaffirmed at 13,000 tons. Kounrad Stage One expansion plan is progressing as planned – on time and on budget, with 70% of the planned $13,4mn spent to date.

Our view. Results beating guidance, the news is positive for the stock price. We overestimated production by 4%, expecting the excellent 3Q2014 to continue through 4Q. Nonetheless, we are optimistic because the company continues to deliver on promises. We slightly downgrade our 12-month target price to GBp 226 and maintain a Buy recommendation. The downgrade is related to adjusted operational results, lower commodity prices mostly compensated by a stronger dollar.