2023 Full Year Results

Central Asia Metals PLC

25 March 2024

 

25 March 2024

CENTRAL ASIA METALS PLC

('CAML' or the 'Company')

2023 Full Year Results

Central Asia Metals plc (AIM: CAML) today announces its full year results for the 12 months ended 31 December 2023.

Financial summary

‣	Group gross revenue1 of $207.4 million (2022: $232.2 million)
-	Group net revenue of $195.3 million (2022: $220.9 million)
‣	Group earnings before interest, tax, depreciation, and amortisation ('EBITDA')1 of $96.5 million (2022: $131.6 million) at a margin of 47% (2022: 57%)
‣	Group free cash flow ('FCF')1 of $57.5 million (2022: $90.22 million)
‣	Capital investment of $27.8 million creating strong platform for long-term operational performance and growth
‣	Cash in the bank of $57.2 million3 (2022: $60.6million) as at 31 December 2023
‣	CAML remains debt free
‣	2023 full year dividend of 18 pence per share (2022: 20 pence)

Operational overview

Safe and consistent production

‣	Zero lost time injuries ('LTIs') at Kounrad (2022: zero) and one LTI at Sasa (2022: two)
‣	Copper production of 13,816 tonnes (2022: 14,254 tonnes)
‣	Zinc in concentrate production of 20,338 tonnes (2022: 21,473 tonnes)
‣	Lead in concentrate production of 27,794 tonnes (2022: 27,354 tonnes)

Investing in the future

‣	Completion of construction of Sasa's Paste Backfill ('PB') Plant and commencement of transition to paste fill mining methods
‣	Completion of initial phase of Sasa's new Central Decline
‣	Updated 2023 Mineral Resource Estimate ('MRE') demonstrates that an additional 2.4 million tonnes have been identified at Sasa under CAML ownership
‣	Completion of Kounrad Solar Power Project
‣	Formation of CAML Exploration ('CAML X') in Kazakhstan and approval received for two exploration licences to date

1. See Financial Review section for definition of non-IFRS alternative performance measures

2. The definition of FCF was updated to include interest received which changed the 2022 FCF to $90.2 million

3. The cash balance figure disclosed includes restricted cash balance

Post period end

‣	Intention to invest up to £5 million in Scottish copper and nickel explorer, Aberdeen Minerals, announced separately today

2024 outlook

‣	Production guidance
-	Copper, 13,000 to 14,000 tonnes
-	Zinc in concentrate, 19,000 to 21,000 tonnes
-	Lead in concentrate, 27,000 to 29,000 tonnes
‣	Completion of construction of Dry Stack Tailings ('DST') Plant and Landform at Sasa
‣	Completion of development of second phase of Central Decline at Sasa
‣	Increased exploration work planned in Kazakhstan through CAML X subsidiary as well as 6,600 metres of exploratory drilling planned at Sasa
‣	Continued active assessment of new business opportunities with increase in activity in the last six months
‣	Reporting to Global Industry Standard for Tailings Management ('GISTM')
‣	Reduced carbon emissions expected in 2024 due to contribution of solar power from new Kounrad facility

Nigel Robinson, Chief Executive Officer, commented:

"I am pleased to report a solid performance for CAML in 2023 in which we have met our production guidance in a safe environment at both sites and achieved an improvement in our lost time injury frequency rate ('LTIFR'). This performance has been achieved despite a challenging economic environment with metal prices deteriorating by an average of c.10% across our base metal portfolio and ongoing inflationary cost pressures. The Company has performed well due to our low-cost operations and strong balance sheet.

"It has also been a busy year of development and investment in our business both at Sasa and Kounrad.  At Sasa we made significant strides towards the completion of our transition to paste fill mining, whilst at Kounrad we completed the construction of the solar power project.

"Alongside the investment at both of our sites during 2023, we have been very active in trying to grow our business and have reviewed 37 opportunities, signed 17 NDAs and conducted seven site visits. 

"As part of our growth strategy, we set up our new exploration subsidiary, CAML X with a team of early-stage exploration geologists in Kazakhstan, and I am pleased to report we have been awarded two exploration licences to date.

"Following this performance, we propose a 9 pence per share final dividend, equating to a total dividend for 2023 of 18 pence per share. We are delighted to be able to propose this above-policy dividend, underscoring our track record of delivering attractive returns to shareholders in the absence of a material business development transaction and / or level of debt during the period.

"During 2024 we intend to complete the installation and commissioning of the DST Plant at Sasa and the transition to paste fill mining.  This will complete our capital investment programme at Sasa and will ensure the maximum extraction of resources in the safest and most environmentally friendly way through to at least 2039.

"We were delighted to have announced separately today our intention to invest up to £5 million in Scottish copper and nickel explorer, Aberdeen Minerals. We have been impressed with the Aberdeen team and the company's exploration potential and we look forward to working together to explore the prospective Northeast area of Scotland. We will continue to search for additional growth opportunities both at the early exploration stage and also the larger transformational transactions which will enhance shareholder value in the short to medium term."

Analyst conference call and webcast

A live conference call and webcast hosted by Nigel Robinson (Chief Executive Officer), Gavin Ferrar (Chief Financial Officer) and Louise Wrathall (Director of Corporate Development) will take place at 09:30 (GMT) today.

The conference call can be accessed by dialling [phone] and quoting the confirmation code 'Central Asia Metals - Results', and the webcast can be accessed using the link: 
https://brrmedia.news/CAML_FY

The presentation will be available on the Company's website and there will be a replay of the call available following the presentation at www.centralasiametals.com

Presentation via Investor Meet Company

The Company will also hold a live presentation relating to the 2023 Full Year Results via the Investor Meet Company platform on Monday 25 March 2023 at 16:30 (GMT). The presentation is open to all existing and potential shareholders. Questions can be submitted at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet Central Asia Metals Plc via: 

www.investormeetcompany.com/central-asia-metals-plc/register-investor

For further information contact:

Central Asia Metals	Tel: [phone]
Nigel Robinson
CEO
Gavin Ferrar
CFO
Louise Wrathall	[e-mail]
Director of Corporate Development
Emma Chetwynd Stapylton	[e-mail]
Investor Relations Manager
Peel Hunt (Nominated Advisor and Joint Broker)	Tel: [phone]
Ross Allister
David McKeown Georgina Langoulant
BMO Capital Markets (Joint Broker)	Tel: [phone]
Thomas Rider
Pascal Lussier Duquette
BlytheRay (PR Advisors)	Tel: [phone]
Tim Blythe
Megan Ray

Note to editors:

Central Asia Metals, an AIM-listed UK company based in London, owns 100% of the Kounrad SX-EW copper project in central Kazakhstan and 100% of the Sasa zinc-lead mine in North Macedonia. The CAML Exploration subsidiary was recently formed to progress early exploration opportunities in Kazakhstan.

For further information, please visit www.centralasiametals.com and follow CAML on Twitter at @CamlMetals and on LinkedIn at Central Asia Metals Plc.

CHAIRMAN'S STATEMENT

Fulfilling our purpose

Our 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 2023.

Our solid operational performance in 2023 generated EBITDA of $96.5 million, earnings per share ('EPS') of 20.51 cents and FCF of $57.5 million. Whilst this was significantly less than the prior year due to reduced commodity prices and inflationary cost pressures, it was a strong performance in a difficult market.

2023 has been a notable year for several reasons, not least the fact that, in Q3 2023, we reached the milestone of having generated over $1 billion in revenue from our Kounrad project. Operationally, in addition to completing construction of our Solar Power Project in Kazakhstan, we also completed the first part of the development of our Central Decline at Sasa, by joining the two tunnels totalling over two kilometres that had been simultaneously constructed from within the mine and from surface. Also, at Sasa, we completed construction of our PB Plant and began transitioning to our new paste fill mining methods, while starting construction of the final phase of our capital investment - the DST project.

In terms of developing our business for the long term, we continue to place much focus on appraising opportunities for future growth. In 2023, we were pleased to have entered into an arrangement with a team of experienced early-stage exploration geologists with international and significant Kazakhstan experience and a proven track record of discovery, and have set up our new exploration subsidiary, CAML X. The team is reviewing a series of potential target areas using historical data and its advanced database, and applications for several exploration licences in Kazakhstan have been made, with two already granted.

Sustainability

We have continued to advance our sustainability efforts during 2023. In Q2 2023, we published our fourth standalone Sustainability Report. This was the Company's third report drafted in accordance with the Global Reporting Initiative ('GRI') Standards, and the first to GRI's new Universal Standards.

We maintain our focus on minimising our environmental impacts on the areas surrounding our operations while creating value for our local stakeholders and, to that end, we have progressed in several key sustainability areas during 2023. We have established the template to estimate our Scope 3 greenhouse gas ('GHG') emissions, and these will be detailed in our forthcoming Climate Change Report for 2023 and also retrospectively for 2022. Our efforts towards conforming with the new GISTM have intensified and we remain confident that we will be able to comprehensively detail our progress and status at the end of H1 2024.

During Q4 2023, we also commenced projects on both biodiversity and occupational health, and we look forward to advancing our work and developing strategies for these two areas in 2024.

Governance

In April 2023, Nurlan Zhakupov left the CAML Board, we thank him for his 11 years of service as a Non-Executive Director.

We remain committed to strong corporate governance practices. Aside from Nurlan's departure, our Board and its committees have enjoyed a period of stability. Our Technical Committee visited Sasa twice to see progress and provide guidance to the team delivering the projects that will enable us to complete the transition to paste fill mining methods.

Our Audit Committee continues to oversee the financial aspects of our business as well as placing an increasing importance on risk management. CAML's Remuneration Committee continues to ensure clear and measurable targets for our Executive Directors and senior management team, which always incorporate sustainability-related targets, while our Nomination Committee aims to ensure we retain, develop, and attract the right talent for the future. Our Sustainability Committee has this year advised our charitable foundations regarding a longer-term approach to our community investments and has ensured Board oversight on our climate change initiatives and tailings management in particular.

Acknowledgements

At the end of 2023, Pavel Semenchenko retired as Kounrad's General Director. Pavel has been with us for 17 years, overseeing the construction and the safe and successful operation of Kounrad. My sincere thanks go to Pavel for all that he has done for Kounrad and for CAML and I am delighted that he has agreed to remain with us as our Regional Manager in Kazakhstan. I am confident that his replacements, Raulan Kozgambayev and Vitaliy Logachev, will continue to ensure Kounrad's success for the future.

I would like to thank the Board of Directors, our senior management team and all our employees for their dedication to our business during 2023. Your efforts are noted, and we very much appreciate your hard work. I would like to extend my thanks to our stakeholders for their support.

CHIEF EXECUTIVE OFFICER'S STATEMENT

2023 Financial overview

During 2023 we reported gross revenue of $207.4 million, an EBITDA of $96.5 million, at a margin of 47% and generated free cash flow of $57.5 million. Following this performance, we propose a 9 pence per share final dividend, equating to a total dividend for 2023 of 18 pence. We are delighted to be able to propose this above-policy dividend, underscoring our track record of providing attractive returns to shareholders in the absence of a material business development transaction during the period.

Our Kounrad operations continued to perform well, with production towards the upper end of our guidance range at 13,816 tonnes of copper. Kounrad's C1 cash cost of production remained very low by global standards at $0.74 per pound, despite inflationary pressures.

Meanwhile, at Sasa we produced 20,338 tonnes of zinc in concentrate and 27,794 tonnes of lead in concentrate, which was in the middle of our guidance range, at a C1 zinc equivalent cash cost of production of $0.68 per pound.

Despite the above solid financial and operational performance, CAML's shares performed poorly over the course of the year due to the challenging economic environment.

Kounrad

During the year at Kounrad, leaching operations performed well, as did the solvent extraction - electrowinning ('SX-EW') processing facilities with recorded 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, which has already delivered more copper than was originally anticipated.

In July 2023, our Board paid a successful visit to site, viewing both the leaching and SX-EW operations plus the construction progress of the Solar Power Project. The Board also took the opportunity to hold meetings with local management and various stakeholders in the area as well as visiting the Kounrad Foundation projects to see their development.

In Q4 2023, the Solar Power Project construction was completed, and I was delighted to officially open the facility. It is now generating renewable power and anticipated to provide 16-18% of the site's electrical needs on an annualised basis and reduce Kounrad's Scope 1 and 2 emissions by 10% versus 2020. The majority of the installation and other works were conducted in-house, and the project was completed on schedule and under budget at a final cost of $3.1 million.

I would like to join Nick Clarke in thanking Pavel Semenchenko who, after 17 years as General Director, is stepping away from the day-to-day running of the operations at Kounrad.

Sasa

During 2023, significant construction work took place at site as we built the infrastructure necessary for the transition to paste fill mining methods.

The initial development of the Central Decline is complete, and the decline is now operational with the completion of Phase 1 connecting surface to the 910 level in H1 2023. Phase 2 is scheduled to be completed by the end of H1 2024 and will connect 910 level with the 800 level.

Construction of the PB Plant is complete, and the plant is now effectively operational with cemented tailings being placed underground, and the extraction of ore at the 800 level in line with our new paste fill mining methods is underway.

In 2023, the final design and review process for the DST Plant was completed and the construction of the plant foundations and clearing of vegetation for the landform started in H2 2023. During 2024, the placement of dry stack tailings will commence, and the project is due to be completed by the end of the year.

Sustainability

To demonstrate our efforts and achievements, we will soon be publishing our fifth sustainability report, our fourth to GRI standards and our second to the new GRI 'universal standards'. During 2023, we undertook an internal review process to check the materiality of the topics and their priorities, and the new GRI mining sector standards were taken into account. From this process, we have made the decision to include human rights as an additional material topic. Diversity and inclusion have been identified as a key focus area and have also been added as a material topic. Therefore, we have begun to develop a diversity and inclusion strategy that will be built upon in 2024. Additionally, to support employees during the current global inflationary environment, all staff at both sites were given pay rises.

In 2023, we began to estimate our Scope 3 emissions for 2022 and 2023 and have included this data in our forthcoming 2023 Climate Change Report.

Our Health and Safety performance across the Group continues to be strong and we have always maintained a key focus on this aspect of our business.  We were disappointed to report one LTI at Sasa during the year but this is a continued improvement on previous years. We recorded zero LTIs at Kounrad and therefore our 2023 total as a Group was one, with a LTIFR of 0.40.

In Q4 2023, Sasa won a top national safety award from the Council of Health and Safety at work in North Macedonia, recognising that our work to implement effective safety training and supervision for our employees is a priority and is crucial to achieving an improving safety record.

We remain committed to reporting to GISTM for our 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 and Sasa's General Director, to ensure all workstreams are effectively covered.

In 2023, we reported that we would increase funding to both of our local Foundations from 0.25% from 0.50% of revenue. 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. At Kounrad, the Foundation contributed to equipment for the local hospital, computers for the medical college, educational support for children from low-income families and sports equipment for various youth teams amongst other causes. This year at Sasa, funds were allocated to various projects, including the reconstruction of the medical centre, support of youth sports teams and educational scholarships.

Additionally, we have purchased a foetal heart monitoring piece of equipment in Balkhash and funds have been allocated for an x-ray machine at Sasa to enhance the medical facilities for the local community.

In Kazakhstan, the Kounrad Foundation has engaged the Eurasia Foundation for Central Asia ('EFCA') to develop a long-term community investment strategy that will be implemented over the next five years. This plan will create new opportunities for the residents of Balkhash, working with local authorities, the community, and other stakeholders to improve their quality of life and the environment. Representatives from the Kounrad Foundation undertook a tour study of other Foundations in Kazakhstan in H1 2023, and a Strategic Plan has been drafted.

At Sasa, Phase 1 of the Local Economic Development Plan ('LEDP') and Local Environment Action Plan ('LEAP') activities was completed in 2023, comprising the development of a community-based tourism concept and the establishment of a brand identity for Makedonska Kamenica which was created by the community itself through workshops with community leaders and existing businesses.

Outlook

While we do foresee global challenges, we are confident that CAML will continue to perform robustly and that we have the teams in place to continue to deliver safe, consistent and low-cost production.

At Kounrad, we expect to produce between 13,000 and 14,000 tonnes of copper during 2024. Our production guidance for Sasa is 790,000 to 810,000 tonnes of ore, which should deliver 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 2024 will be the completion of DST Project as the final component of our investment in the infrastructure required to transition to the paste fill mining methods. Completion of these projects at Sasa will then enable us to extract the maximum resources in a safer, more sustainable and efficient manner.

In 2024, Sasa expects to spend between $8 million and $9 million in completing the construction of the DST Plant and Landform and completing Phase 2 of the Central Decline. This will bring to an end the major capital investment programme undertaken at Sasa over the past three years. CAML also expects to commit between $14 million and $16 million to sustaining capex across the Group in 2024.

We were extremely active throughout 2023 in terms of business development, having reviewed 37 opportunities, signed NDAs for 17 of them and conducted seven site visits. In December 2023, we were delighted to receive confirmation that one of our new licence applications for our target generation exploration programme in Kazakhstan had been granted and, in Q1 2024, we received confirmation of a second. We look forward to a full exploration season for our new CAML X entity this year.

This business development momentum has continued into 2024 and we remain in a strong position from which to grow through acquisition, building the business for the future and producing the base metals essential for modern living.

OPERATIONAL REVIEW

Kazakhstan

Health and safety

There were no LTIs at Kounrad during 2023, and there have now been 2,054 days since the last LTI to the end of 2023.

Leaching operations

Both the Eastern and Western Dumps were simultaneously leached during 2023, with the production split being 32% and 68%, respectively.

At the Eastern Dumps, the team focused on irrigating the side slopes of Dump 7 which had been levelled by a bulldozer during 2022. Additionally, commencing in early spring of 2023, the bulldozer was assigned to levelling the side slopes of the Dump 5 perimeter, thus exposing additional resources of previously unleached material. The leaching response from these two side slope areas was excellent, with the Eastern Dumps producing 4,382 tonnes of copper, a contribution last seen in 2020.

In other areas of the dumps, rotational 'rest and rinse' irrigation was continued, which continues to generate economic levels of PLS in the region of 0.5 to 0.7 grammes per litre ('gpl') copper. The late autumn/early winter temperatures were very mild in 2023 and allowed leaching of the uncovered summer blocks to be extended by a month longer than normal, assisting in overall production. The old winter blocks that are still covered with heat retaining high density polyethylene ('HDPE') sheeting, were brought under leach in the first week of December and will be on-line until Spring 2024. It should be noted that winter leaching of the Eastern Dumps will not be conducted after the current season has ended in March 2024, as the economics of placing the HDPE cover materials and the cost of heating the raffinate to this area are not justified. From 2024 onwards, leaching at the Eastern Dumps will be conducted only during the eight/nine warmer months of the year.

2023 production takes the total quantity of copper recovered from the Eastern Dumps, since operations commenced, to over 85,000 tonnes, 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 22 hectares, noting that winter leaching is restricted to an area of around 12 hectares.

The irrigation plan for 2024 is to focus on the 180,000 cubic metres of materials that were relocated from the edge of the railway link and placed atop Dumps 9-10. It is forecast that this material should produce approximately 1,000 tonnes of copper and will be supplemented with continued side slope irrigation of Dumps 5 and 7, together with rotational 'rest and rinse' from older blocks. It has been noted that a typical ore block that has been subjected to over 600 days of irrigation, through several 'rest/rinse' cycles, is still capable of producing economical PLS grades containing 0.6 to 0.7 gpl of copper pick-up.

The continued successful and economic generation of copper from the Eastern Dumps is anticipated to continue at least into 2025 and potentially beyond.

At the Western Dumps, the focus of irrigation remained on parts of Dumps 16, 21, 22 and 1A, from which 9,434 tonnes of copper were recovered, contributing approximately 68% of the total Kounrad copper production. The average daily area under irrigation on the Western Dumps slightly decreased to 34.6 hectares (38.2 hectares in 2022) of both new and previously leached material. This was as a result of the higher production level at the Eastern Dumps, allowing Western ore blocks to be leached for longer whilst still generating economic returns at planned production target levels. The volume of raffinate pumped around the site averaged 1,299 cubic metres per hour ('m³/hr'), an increase of 5% over 2022 rates. 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.

Application rates of solution to the dumps were maintained at a level of 2.44 litres per square metre per hour ('l/m²/hr') throughout the year, slightly higher than in 2022.

During the course of the year, the 890 metres of trenches excavated northwards around Dump 16 edge in 2022 were fully lined with HDPE and brought into operation. An extension of the trench encircling Dump 21 was undertaken this year, with 900 metres being excavated of which 450 metres were lined with HDPE, the balance to be completed in 2024.

Two bulldozers continued with levelling and shaping earthworks, primarily on the Western Dumps. At the Eastern Dumps, bulldozer work was relatively limited to the preparation of unleached side slope and road access areas.

The new winter irrigation/boiler measurement and control systems, which were designed and prepared in late 2021, continue to operate very effectively. Since 2021 there has been a stable reduction in coal consumption by 13%, with both 2022 and 2023 being within 100 tonnes of each other.

SX-EW plant

The SX-EW plant continued to operate efficiently during 2023 and the overall operational availability throughout the year was 99.4%. This was 0.1% above that of 2022, primarily due to a reduced number of power supply interruptions this year. With the process plant now having passed 10 years of permanent operations, for the first time the number of planned maintenance schedules were increased from two to three in an attempt to minimise unscheduled stoppages due to mechanical or electrical failure.

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 2.05 gpl, approximately 0.2 gpl lower than in 2022. Solution flow rates through the SX increased to 1,071 m³/hr for the year, with rates in Q3 2023 averaging over 1,200 m³/hr. During the year, each of the four extract settler units were taken off-line to facilitate inspection and undertake any necessary repairs. In addition, a new heat exchanger was installed on the solution line feeding the fourth mixer unit, which now allows it to be run through the winter with the aim of mitigating and optimising organic reagent consumption and therefore production costs through this period.

Operations within the electrowinning ('EW') sections were steady throughout the year, with the operations teams focusing on minimising reagent consumptions in the off gas scrubber units, whilst maintaining high efficiency levels. A further focus was placed on improving ventilation within the EW buildings, through comprehensive checks and renewal of the ventilation piping and increased frequency of atmospheric measurements. To this end gas sampling equipment was purchased, which allowed more frequent monitoring of this parameter. The EW plating bath units were cleaned of accumulated lead sludge in order to ensure high quality copper cathode quality. In Q4 2023, an order was placed for 1,064 new anode plates, with expected delivery to site being Q3 2024 and installation scheduled for the start of Q4 2024.

During the year, the site management team continued their emphasis on reagent consumptions and controls, particularly imported organic reagents such as LIX, achieving a saving of 7.5% compared to 2022. As a consequence of the lower copper grade entering the SX, levels of transferred iron into the rich electrolyte increased by almost 12% and was ameliorated by a higher level of bleeding and fresh make-up water. As such consumption levels of cobalt, acid and smoothing agent were slightly higher but assisted in maintaining the electrical power consumed per tonne of copper at a slightly lower level than 2022, at 4,252 kWh per tonne (4,266 kWh in 2022).

Copper sales

Throughout the year, the quality of CAML's copper cathode product has once again been maintained at high levels. Regular in-house and independent metallurgical analyses have consistently reported 2023 copper purity of around 99.998%. The Company continues to sell the majority of its copper production through offtake arrangements with Traxys.

2024 production guidance

The 2024 guidance for Kounrad's copper cathode production is between 13,000 and 14,000 tonnes.

Solar Power Project

Following approvals for the Solar Power Project capital expenditure by the CAML Board, all orders for the associated equipment and materials were placed in 2022, with the majority of items received at site during Q1 2023. Working with the technical oversight of a Kazakh licensed engineering consultant, TGS, an in-house team of construction and installation engineers were assembled to undertake the site installation works in March 2023 after earthworks associated with levelling the 10 hectare site had been completed in 2022. During Q4 2023, the installation of the 4.77 MW facility, comprising 8,850 solar panels, 24 DC-AC inverters and associated items was essentially completed and the plant commissioned. In November, the facility was officially opened by the CEO in the presence of regional dignitaries. Since then, the facility has generated over 709,000 kWh to year end, equating to 7% of the total site demand and in accordance with winter period forecasts estimated in the feasibility study.

With the vast majority of the installation and other works being conducted in-house, the project was completed under budget at a final cost of $3.1 million.

North Macedonia

In 2023, Sasa mined 805,621 tonnes of ore and processed 805,819 tonnes of ore. The average head grades for the year were 2.97% zinc and 3.70% lead and the average 2023 metallurgical recoveries were 85.0% for zinc and 93.1% for lead.

Sasa production statistics

	Units	2023	2022	2021
Ore mined	t	805,621	806,069	818,609
Plant feed	t	805,819	806,653	830,709
Zinc grade	%	2.97	3.15	3.14
Zinc recovery	%	85.0	84.6	84.9
Lead grade	%	3.70	3.63	3.52
Lead recovery	%	93.1	93.4	93.1
Zinc concentrate	t (dry)	40,226	42,824	44,383
- Grade	%	50.6	50.1	49.9
- Contained zinc	t	20,338	21,473	22,167
Lead concentrate	t (dry)	39,136	38,439	37,893
- Grade	%	71.0	71.2	71.8
- Contained lead	t	27,794	27,354	27,202

Health and safety

At Sasa, we continue to improve our health and safety standards reflected in a reduction in our LTIFR to 0.40 in 2023.

Mining

The ore was mined using a combination of sub-level caving and cut and fill mining methods during the year from the 990, 910 and 830 level production areas. The ore and waste from the underground operations is transported to surface via a combination of hoisting via the Golema Reka shaft and trucking via the existing XIVb decline and increasingly the Central Decline using a fleet of 20 tonne Epiroc trucks.

The average combined zinc and lead grade of the ore mined was 6.67%, compared to 6.78% in 2022.

Ore development across the three working areas totalled 6,549 metres, which was broadly in line with last year, included opening the new 830 production area in Q3 2023. Waste development for the year totalled 2,574 metres, approximately 8% above last year, and generated 104,048 tonnes of waste 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 909,669 tonnes of ore and waste during the year, approximately 1% more than last year.

Maintenance

The computerised maintenance management system ('CCMS') for surface and underground equipment is operational and in the process of being updated with additional mobile equipment and fixed plant. As part of the strategy to modernise the procedures, a new underground Wi-Fi communications system was completed across the main areas of the mine and is now in the process of being extended to all working areas.

During the year, certain equipment was purchased to maintain production and improve efficiency:

‣   an Epiroc Bolting Drill Rig Boltec S, for the safe and efficient installation of support including roof and cable bolts

‣   a Manitou MHT-X790 Mining, for installation of the underground reticulation system

‣   a Paus MinCa people transporter

‣   a CAT 320 excavator

‣   a Simba S7 long hole drilling machine

Processing

Sasa processed 805,819 tonnes of ore during the year which is consistent with 2022 production, and the plant had an overall availability of 95%.

In addition to the planned maintenance works completed during the year, the process of improving the automated oil lubrication systems and flow meter continues with additional units installed and commissioned during 2023.

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. An internal GISTM review was completed in Q3 and the new system captures all recommendations from the Knight Piésold Technical Reviewer, Independent Technical Reviewer ('ITR') and the Engineer of Record ('EoR') reports. Over the course of the year significant progress has been made towards conformance with GISTM in 2024.

During the year, construction of the TSF4 waste rock toe continued with the placement of 21,000 m³ waste rock from the underground mine.

A seismic monitoring system and piezometer sensors were installed in 2022 and additional piezometers have been added and commissioned in 2023 to continue the drive to automate and improve the TSF monitoring systems.

The rehabilitation of the TSF3.2 facility continued throughout the year with the placement of waste rock from the underground mine and is now 90% complete, including placement of rock armouring and topsoil of the face of TSF3.2 to reduce dust and comply with environmental legislation.

A total of 10,157 metres of exploitation drilling was completed during the year across the three working areas, the 830, 910, and 990 levels, to provide additional information on the grade and thickness of the three orebodies. During H1 2024, an additional production area on the 750 level is planned to come into operation to continue the transition to paste fill mining methods.

A total of 1,615 metres of exploration drilling was completed below the 830+14 metre level to improve the geological understanding of the mineralisation at Svinja Reka at depth.

A total of 3,541 metres of exploration drilling in eight holes was completed from surface at the Golema Reka deposit to improve understanding of the geology at depth below the 700 metre level. One hole intersected three zones of mineralisation down to at least the 580 metre level, demonstrating the extension of the mineralisation at depth to the south-west and adding to the Inferred Mineral Resources.

In Kozja Reka and the Gap target (the area between Golema Reka and Kozja Reka), 4,300 metres of exploration drilling was completed in 2023.

Capital investments

The transition to using paste fill at Sasa will create a safer and more sustainable underground mining operation for the long term and provide the ability to improve the overall recovery of metal from the orebody. Investments have been made in three key areas and consist of a PB Plant and the associated surface and underground reticulation, a DST Plant and associated Landform and the development of a new Central Decline.

PB Plant

Following the ESIA approval for the PB Plant in 2022, a contract was signed with local construction company, Aktiva, and excavation and civil works began shortly after. The PB Plant and associated surface and underground infrastructure is now complete and in operation with extension to the underground reticulation system continuing as the mine opens new production areas.

Central Decline

The development of the Central Decline continues to progress well and is now operational, with phase 1 complete in Q2 2023 connecting the surface to the 910 working level. During 2023, 1,056 metres of development were completed and as at the end of 2023, the Central Decline had been developed for a total of 2,610 metres from surface.

The Central Decline has been equipped with a new paste fill reticulation line and is fully serviced with power, stage pumping and cuddies mined at 200 metre intervals. In Q4 2023, a surface 75 kW fan was installed and commissioned, improving mine ventilation by up to 24m³ per second.

DST Plant

During 2023 the final design and review process for the DST Plant was completed, and construction of the plant foundations and clearing of vegetation for the landform started in Q4 2023. In H1 2024, the project is due to be complete and the placement of dry stack tailings will commence.

Tailings management

A key benefit to the transition to paste backfill mining is the improved storage of tailings. Previously, all tailings generated from Sasa's processing plant were stored in TSF4. For the remaining life of the mine, tailings will be stored in the following three locations; underground paste backfill, DST Landform and TSF4.

2024 Production guidance

The transition to the paste fill mining methods is underway. CAML maintains its ore mined guidance year on year of 790,000 to 810,000 tonnes. Expected metal production in 2024 is between 19,000 to 21,000 tonnes of zinc in concentrate and 27,000 to 29,000 tonnes of lead in concentrate.

Sasa Mineral Resources, Ore Reserves and life of mine ('LOM')

During 2023, the technical services team updated Sasa's Mineral Resource Estimate ('MRE') for the Svinja Reka and Golema Reka deposits and the Ore Reserves for the Svinja Reka deposit.

The updated work took into account recent additional drilling, mining depletion and changes to the metal price and transport charges used in the Net Smelter Return ('NSR') calculation. Sasa's MRE and Ore Reserves are shown in the following tables.

Total Sasa Mineral Resources increased by 0.9 million tonnes versus 2022. Svinja Reka Mineral Resources decreased to 11.5 million tonnes at grades of 4.3% lead and 2.9% zinc (2022: 12.3 million tonnes at grades of 4.2% lead and 2.9% zinc) due to mining depletion. Total Golema Reka Mineral Resources increased to 9.3 million tonnes at grades of 3.8% lead and 1.2% zinc (2022: 7.6 million tonnes at grades of 3.6% lead and 1.4%), due to changes in geological reinterpretation based on the results of the 2023 drilling and the use of a NSR cut-off value for reporting.

The Svinja Reka 2023 Ore Reserve is 9.0 million tonnes at grades of 4.0% lead and 2.6% zinc (2022: 8.8 million tonnes at grades of 3.9% lead and 2.6% zinc). Mining depletion of approximately 0.8 million tonnes has been offset by design changes associated with increased metal prices and additional geotechnical data. Based on the latest Mineral Resources and Ore Reserves, CAML expects Sasa to maintain annual production rates of between 800,000 and 830,000 tonnes per annum for an expected life of mine of 15 years until 2039.

Approximately 6,600 metres of exploration drilling is planned at Sasa for 2024, which will focus on underground drilling of the Kozja Reka deposit from the Central Decline to explore for down dip and northern extensions of the previously mined mineralisation. In addition, down dip exploration and infill drilling at Svinja Reka below the 750 level is planned, as well as a structural geology study of the Sasa area to assist with the definition of exploration targets.

Mineral Resource Estimate for Svinja Reka and Golema Reka

Sasa's technical services team has updated the Mineral Resource Estimate ('MRE') for the Svinja Reka and Golema Reka deposits as of 31 December 2023:

		Grades				Contained metal
Classification	Deposit	Mt	Pb (%)	Zn (%)	Ag(g/t)	Pb (kt)	Zn (kt)	Ag (koz)
Indicated Mineral Resources	Svinja Reka	9.6	4.6	3.0	34.6	441	286	10,634
	Golema Reka	1.9	4.0	1.3	13.5	77	26	841
	Total Indicated	11.5	4.5	2.7	31.0	518	312	11,475
Inferred Mineral Resources	Svinja Reka	2.0	2.5	2.4	19.5	48	47	1,221
	Golema Reka	7.3	3.7	1.2	12.8	274	87	3,031
	Total Inferred	9.3	3.5	1.5	14.2	322	135	4,242
Total Indicated and Inferred Resources		20.8	4.0	2.1	23.5	840	446	15,717

Notes

-    Mineral Resources have an effective date of 31 December 2023.

-    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 35 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 per tonne for  Sub-Level Caving and $53 per tonne for Cut and Fill and Long Hole Stoping and are based on metal price assumptions of $2,933 per tonne for zinc, $2,300 per tonne for lead and $26 per ounce for silver (these being 15% higher than the prices assumed for the Ore Reserve so as to include mineralisation that has "Reasonable prospects for eventual economic exploitation" but which is not economic assuming the prices used for reporting the Ore Reserve).

-    The Golema Reka Mineral Resource is reported based on a NSR cut-off of $53 per tonne for Cut and Fill Stoping.

-    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.

Svinja Reka Ore Reserve statement

The 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.

		Grades			Contained metal
Svinja Reka	Mt	Pb (%)	Zn (%)	Ag(g/t)	Pb (kt)	Zn (kt)	Ag(koz)
Probable	9.0	4.0	2.6	29.8	359	236	8,661
Total	9.0	4.0	2.6	29.8	359	236	8,661

Notes

-    Ore Reserves have an effective date of 31 December 2023.

-    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 40 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 per tonne for Sub-Level Caving, $53 per tonne for Cut and Fill and Long Hole Stoping and $37 per tonne for Ore Development drives that are required to establish stope access and are based on metal price assumptions of $2,550 per tonne for zinc, $2,000 per tonne for lead and $23 per ounce 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').

-    Ore reserves have been estimated utilising 3D modelling software (Deswik) and are reported within practical mining shapes.

SUSTAINABILITY SUMMARY

Sustainability is central in our approach to mining and how we do business. For our investors, it is critical we not only manage our sustainability risks but capture the opportunities that come with being a producer of sustainable metals. This enables us to ensure we have a positive environmental and socio-economic impact on the communities in which we work.

Overview

Producing base metals, 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 34 in our annual report. 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. Additionally, this allows 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 93 in our annual report.

In our fourth year of reporting in line with GRI standards, we have worked to further improve and develop disclosure. During 2023, we undertook an internal review of our materiality topics and their prioritisation.

CAML's sustainability strategy and practices continue to develop, and we have advanced our approach to contributing to the SDGs in 2023. 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.

Delivering value through stewardship

At 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.

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 employees. We strive to implement world-class health and safety practices across our operations. It is important that both management and staff 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.

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 to 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.

We conducted a scenario planning exercise in 2022 to increase our understanding of transition risks that may affect our operations as well as to extend our physical risk analysis to our supply chain. In 2023, we began to implement key recommended actions from the scenario planning exercise, including working on estimating our Scope 3 emissions for 2022 and 2023. Scope 3 emissions for 2023 were 272,123 tCO2e (2022: 267,892 tC02e), details of which are in the Climate Change Report.

Creating value for our communities

CAML 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 fostering sustainable development, facilitating socio-economic 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 total taxes of $55.6 million paid to the Governments of North Macedonia and Kazakhstan during the year and $349.2 million paid during our ownership.

Advancing our climate change work in 2023

We are committed to transparent disclosure of our climate impacts, risks, and opportunities. We report under TCFD in our Sustainability and Climate Change reports, despite the disbandment of TCFD in October 2023. We believe these standards continue to offer a fitting framework for our disclosures. Currently, we are reviewing the recommendations of the International Sustainability Standards Board (ISSB), particularly IFRS S1 General Requirements for Disclosure of Sustainability-related financial information and IFRS S2 Climate-related Disclosures. The latter aligns closely with the TCFD recommendations, and we aim to adhere to these standards in our reporting moving forward.

We 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 approach helps us integrate climate considerations into our decision-making processes and allows us to leverage best practices in reporting and disclosure. By building on our existing efforts in this area, we aim to enhance the quality and transparency of our disclosures while continuing our TCFD reporting roadmap. Through these actions, we seek to improve stakeholders' understanding of CAML's operational and business resilience to climate change, as well as our strategies for addressing climate-related risks and opportunities within our business model.

climate-related reporting

Progress report and next steps

We shared our climate strategy and our medium- and long-term goals which 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 41% reduction in our CAML Group GHG emissions in 2023 versus our base year (2020).

During 2023, we finalised the construction and commissioning of the 4.77 MW Solar Power Project at Kounrad. The facility is anticipated to contribute to 16-18% of Kounrad's total power needs, which equates to a 10% emissions (Scope 1 and Scope 2) reduction at Kounrad. Throughout 2023, we continued to receive solely renewable power for our Sasa operation, as confirmed in North Macedonia by PwC.

In 2021, we undertook a detailed review of fuel sources that could potentially replace coal for generating heat at Kounrad. Though the proposed alternatives were not 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. One of which was the installation of temperature sensors on the dripper lines on the Western Dumps during the 2021-2022 and 2022-2023 winter periods. The sensors allow the site team to monitor the temperature of the leaching solution at the end of the dripper lines and fuel the boilers accordingly to ensure the solution is kept at the optimum temperature and not heated unnecessarily.

During 2023, Sasa replaced its old compressors with three new and more efficient air compressors and, in association with this project, four air-water thermal pumps were installed to improve the regulation of heating across the site and to allow the hot water from the compressors to be recycled within the heating system. In 2023, Sasa planted 1,910 seedlings in the local area and is working with Public Enterprise National Forests to identify other areas for tree planting.

During 2023, we calculated our Scope 3 emissions for both 2022 and 2023, which are fully disclosed and reported in our Climate Change Report and GHG Methodology Report.

Financial review

CAML continues to plan for the future with significant capital investment in 2023 of $27.8 million across the Group including $14.0 million on the transition to paste fill mining at Sasa and $3.0 million on finalising the Solar Power Project at Kounrad.

CAML's strong operational performance during 2023 is reflected in our achieved EBITDA of $96.5 million, underscoring our reliable production and ability to control costs in an inflationary environment and despite the decline in the prices of our metals. We continue to provide returns to our shareholders with a final dividend announced of 9 pence equating to 18 pence for 2023.

We remain effectively debt free and have a strong balance sheet, ending 2023 with cash in the bank of $57.2 million.

2023 Market overview

In 2023, the CAML share price fluctuated between £1.57 and £2.93, closing the year at £1.81 reflecting the challenging trading conditions and geopolitical uncertainties experienced throughout the year.

Macroeconomic environment

Commodity prices

The prices of our base metals copper, zinc and lead are highly dependent on global economic conditions, including supply and demand dynamics. The fluctuation in prices directly affects our profitability, which has an impact on our share price.

Inflation

2023 inflation rates of 9.8% in Kazakhstan and 9.4% in North Macedonia have significantly impacted the cost of living for our local employees. As a result, we have made appropriate pay rises to ensure our remuneration remains competitive. Global inflationary rates have impacted the prices we pay for inputs into our mining processes including electricity, reagents and spare parts, which directly affect our profitability margins.

Currency fluctuations

Our operations' functional currencies are the North Macedonian Denar ('MKD') for Sasa and the Kazakhstan Tenge ('KZT') for Kounrad and therefore fluctuations in these currency exchange rates impact our financial results. During the year, the MKD and the KZT strengthened against the US dollar ('USD') by 3% and 2% respectively, and this led to an increased cost base. Historically, currencies have typically depreciated in value against the USD.

Copper

In 2023, copper prices peaked at $9,331 per tonne in January but stabilised around $8,000 per tonne for most of the year, before rising to $8,500 per tonne in December.

There was strong demand for copper in China, driven by its use in Lithium-ion batteries for renewable energy projects. In terms of supply, there were constraints driven by operational disruptions, labour strikes and regulatory hurdles in major copper-producing regions like Chile, Indonesia and Peru.

Zinc

Zinc ended 2023 at elevated levels, reaching prices above $2,600 per tonne after hitting lows of $2,200 per tonne in May. However, current prices remain below the levels of $3,508 per tonne reached in the early part of 2023.

Overall, 2023 was a volatile year for zinc, which at one point fell by approximately 36% from its year high. The weak pricing environment placed renewed focus on mines' operating costs and margins, in turn leading to multiple mine closures over the course of the year, including Boliden's Tara mine in Ireland and Nyrstar's Gordonsville and Cumberland mines in Tennessee, USA.

Lead

The lead price began 2023 at the $2,337 per tonne mark and remained relatively stable throughout the year, trading around $2,100 per tonne. Despite recording the best price performance of the year amongst base metals, lead ended 2023 on the weaker side, slipping to around S$2,000 per tonne in early December.

Lead held up generally well in 2023, despite the headwinds facing base metals markets. This can be attributed to strong auto sales and demand from China for use in lead-acid batteries and relatively consistent demand from battery replacement.

Geopolitical landscape

We continue to monitor the ongoing challenges of the geopolitical landscape and uncertain global economic situation. The recent energy crisis, Ukraine conflict and expanding sanctions regime, historically high inflation and potential economic recession and their impact on our operations are matters under close review.

Kazakhstan's proximity to Russia has a direct impact on its economy and has put pressure on its treasury. The impact has led to two tax changes, which translate to lower FCF from Kounrad. Effective from 1 January 2023, dividends paid from our Kazakhstan entities to our parent company are subject to withholding tax at a rate of 10%. Further to this, there was an increase in the Mineral Extraction Tax ('MET') rate in Kazakhstan from 5.7% to 8.55%. The tax is applied to the copper that we produce.

The conflict in Ukraine has had an impact on global inflation as there have been increases in the cost of living and in the electricity prices in North Macedonia in particular. The route to market for our copper has been altered to divert away from Russia.

The Israel/Hamas War and tensions in the Middle East present challenges in terms of transportation and, although the direct impact on global maritime logistics is expected to be minimal, we have taken steps to ensure our supply chain remains unaffected.

We continue to be proactive in managing our working capital by constantly reviewing our supply chain to ensure sufficient levels of inventory and stock are held on site to continue to operate without interruption.

How our metals support the drive to Net Zero and environmental sustainability

Copper

Copper demand continues to grow with the ongoing transition to a low-carbon global economy and a global shift towards renewable energy sources, such as wind and solar power. Copper is a vital component in renewable energy technologies, including photovoltaic cells, wind turbines and electric vehicle batteries. As countries commit to reducing carbon emissions and increasing renewable energy capacity, the demand for copper in the renewable energy sector increases.

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. This is due to its unique properties with high conductivity, ductility, efficiency and recyclability.

The metal will continue to maintain a significant role in the transition towards a green economy, powered by renewable power, and accompanied by an expectation of increased governmental incentives and subsidies that will steadily increase the uptake of copper-intensive clean technologies.

Zinc

Zinc will have a crucial role in the clean energy transition due to its versatile properties. It offers natural corrosion resistance, forming protective layers, and readily forms alloys with other metals, enhancing versatility. Zinc is utilised in various battery technologies, such as zinc-air batteries, contributing to energy storage solutions in the shift towards cleaner energy sources. Furthermore, its high recyclability promotes sustainability and aligns with the principles of a circular economy, supporting efficient material production and use.

It can be applied to battery technology, solar energy, galvanisation for corrosion protection, water purification and wind turbines.

Zinc demand is closely related to its uses in the manufacturing and construction sectors. Its importance, in particular from the sustainability perspective, is its anti-corrosion properties that prolong the useful life of steel products, thereby limiting the use for those raw materials.

Lead

Lead remains essential in lead-acid batteries and also in many healthcare applications, such as equipment for radiologists.

The market for lead is dependent on lead acid batteries which account of over 80% of its usage. There is potential for an increase in demand for lead for static battery storage systems. As the world transitions toward electric vehicles that are powered by technologies such as Lithium-ion batteries, we are reminded that electric vehicles also require a smaller lead acid battery. Therefore, we see an important use and maintained demand for lead into the future.

2024 Outlook

Copper

The outlook for 2024 is improved, with analysts reducing their forecasts of potential inventory build-ups, mostly due to a combination of limited new copper projects along with existing assets falling short of production targets. Hence, the small deficit experienced in 2023 is likely to carry over to 2024, as supply side challenges continue to mount amidst a backdrop of strong demand coming out of China.

Zinc

With multiple mine closures in 2023 and a major fire at the Ozernoe mine, global output is expected to fall, at least in the early part of 2024. This would help buoy short-term zinc prices. Longer term, supply of both concentrate and refined zinc is expected to rise, with increased mine production coming from new projects and mine life extensions to coincide with steadily growing demand.

Lead

In 2024, a modest market surplus is to be expected, while high energy costs and supply chain disruptions continue to affect lead production. Demand for lead is well positioned in the long term with the transition towards the green economy, as lead-acid batteries continue to be used in electric vehicles and energy storage potentially becomes a major demand driver.

Performance overview

CAML's 2023 gross revenue was down 11% versus 2022 to $207.4 million (2022: $232.2 million). The decrease was primarily driven by lower commodity prices for all base metals, especially the zinc price, which declined by 24% compared to the prior year.

The Group generated 2023 EBITDA of $96.5 million (2022: $131.6 million), at an EBITDA margin of 47% (2022: 57%) reflecting the lower revenue as well as an increase in our cost base. This increase was driven by higher MET rates introduced in 2023 in Kazakhstan and increased salaries across the Group in response to local inflationary pressures.

Group profit before tax from continuing operations increased by 19% versus 2022 to $65.1 million (2022: $54.6 million) primarily due to a non-cash impairment charge in the prior year. There was a foreign exchange loss of $3.4 million (2022: gain of $6.8 million) caused by the weakening of the US dollar against our local currencies.

EPS from continuing operations was higher than the previous year at 20.54 cents (2022: EPS of 19.10 cents). CAML generated free cash flow of $57.5 million (2022: $90.2 million), with a healthy net cash balance of $56.5 million (2022: $58.9 million), allowing the Board to propose a final 9 pence dividend.

Kounrad's 2023 EBITDA was $82.3 million (2022: $94.9 million), with a margin of 71% (2022: 77%). Kounrad's reduced EBITDA margin reflects lower gross revenue and an increase in costs due to higher MET rate, increased payroll and reagent prices.

Sasa's 2023 EBITDA was $35.7 million (2022: $56.4 million), with a margin of 39% (2022: 52%). The margin declined predominantly due to the average zinc price received, which decreased by 24% compared to 2022. Zinc treatment charges increased from April 2023 onwards due to reduced European smelter capacity resulting from the energy price crisis at the time of price negotiations. During the year, Sasa increased its headcount, and salaries were increased; however, the impact of cost increases has been largely mitigated by the 40% reduction in electricity prices.

Income statement

Revenue

CAML generated 2023 gross revenue of $207.4 million (2022: $232.2 million), reported after deduction of treatment charges but before deductions of offtake buyers' fees and silver purchases related to the Sasa silver stream. Net revenue after these additional deductions was $195.3 million (2022: $220.9 million).

Kounrad

Total Kounrad copper sales were 13,687 tonnes in 2023 (2022: 14,342 tonnes). 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.

Gross revenue decreased due to lower production than in 2022, a minor increase in copper inventory during 2023 and a 2% decrease in the copper price received to an average of $8,466 per tonne (2022: $8,625 per tonne). This generated gross revenue for Kounrad of $116.3 million (2022: $123.7 million). During 2023, the offtaker's fee for Kounrad decreased to $3.0 million (2022: $3.1 million) due to lower sales made during the year.

Sasa

Overall, Sasa generated 2023 gross revenue of $91.1 million (2022: $108.5 million). A total of 17,113 tonnes (2022: 17,862 tonnes) of payable zinc in concentrate and 26,298 tonnes (2022: 26,320 tonnes) of payable lead in concentrate were sold during 2023.

The zinc price received decreased by 24% to an average of $2,552 per tonne (2022: $3,358 per tonne), and for lead, the price decreased by 1% to an average of $2,085 per tonne (2022: $2,113 per tonne), resulting in an overall decrease in gross revenue generated from the mine.

Treatment charges during the year increased to $17.6 million (2022: $16.2 million) due to reduced European smelters' capacity resulting from the energy price crisis at the time of price negotiations. Going forward, Zinc treatment charges have been negotiated at a reduced rate for the period from April 2024 to April 2025.

During 2023, the offtake buyers' fee for Sasa, was $1.0 million (2022: $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.

Under a silver streaming agreement with Osisko Gold Royalties, Sasa receives approximately $6 per ounce for its silver production for the life of the mine.

Cost of sales

The Group cost of sales for the year was $92.9 million (2022: $87.3 million). This includes depreciation and amortisation charges of $27.4 million (2022: $26.7 million). The increase in cost of sales is due to higher MET rates in Kazakhstan and wages as the Group responded to local inflationary pressures by ensuring employee remuneration remains competitive. The Company continues to focus on factors such as disciplined capital investments, working capital initiatives, and other cost control measures.

Kounrad

Kounrad's 2023 cost of sales increased to $31.2 million (2022: $26.5 million). The main factor behind this was outside our control with a significant increase in the MET rate to 8.55% (2022: 5.7%). This led to an increase of $3.0 million with the total MET reaching $10.2 million (2022: $7.2 million).

Additionally, there was a $1.0 million salary increase, $0.4 million increase in reagent prices for Escaid and sulphuric acid and $0.2 million increase in power costs due to higher electricity rates.

Sasa

Sasa's cost of sales for the year increased only marginally by 1% compared to the previous year, reaching $61.7 million (2022: $60.8 million). Sasa faced some cost increases partially offset by a 40% decrease in electricity prices to an average of 11c/kWh.

Concession fees for 2023 were reduced to $2.5 million (2020: $2.9 million) due to lower zinc sales resulting from lower zinc production and the lower actual realised price, down 24%. This tax is calculated at the rate of 2% (2022: 2%) on the value of metal recovered during the year.

Distribution and selling costs

There was an increase in distribution and selling costs to $2.8 million (2022: $2.2 million) due to additional freight and forwarding costs incurred while shipping our lead concentrate further afield as we continue to diversify our customer base. The increase in costs was partly offset by some savings in lead treatment charges with new customers which had decreased since April negotiations during the energy crisis.

C1 cash cost of production

C1 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 not included in the calculation of the C1 cash cost.

Kounrad

Kounrad's C1 cash cost of copper production in 2023 was $0.74 per pound (2022: $0.65 per pound) remaining among the lowest in the copper industry. The increase in C1 cash cost compared to 2022 is primarily due to higher costs resulting from employee pay increases, higher reagent costs, higher electricity prices and lower production.

Sasa

Sasa's on-site operating costs increased by 5% to $47.2 million (2022: $44.8 million). The on-site unit cost increased by 5% to $58.6 per tonne (2022: $55.6 per tonne) due to the higher costs of salaries and increased spare parts expenditure while the total tonnes of ore mined remained consistent year on year.

Sasa's total C1 cash cost base, including realisation costs, increased to $68.6 million (2022: $64.3 million), and Sasa's C1 zinc equivalent cash cost of production decreased to $0.68 per pound (2022: $0.78 per pound). The $0.10 per pound decrease in the C1 calculation was primarily due to the change in pro-rata calculation of zinc sales.

Group

CAML 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 C1 copper equivalent cash cost in 2023 was $1.63 per pound (2022: $1.39 per pound). This figure is calculated based on Sasa's zinc and lead payable production in 2023, equivalent to 11,636 copper equivalent tonnes (2022: 13,402 copper equivalent tonnes), added to Kounrad's copper production in 2023 of 13,816 tonnes (2022: 14,254 tonnes). The C1 cash cost increase on a copper equivalent basis is due to the higher C1 cost base at both Sasa and Kounrad as well as lower copper equivalent tonnes produced.

CAML also reports a fully inclusive cost that encompasses sustaining capital expenditure, local taxes (including MET and concession fees), 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 $2.25 per pound (2022: $1.92 per pound).

Administrative expenses

During the year, administrative expenses increased to $31.2 million (2022: $27.1 million). The increase reflects our business development activities, including due diligence on new projects and work related to obtaining exploration licenses in Kazakhstan. Additionally, we committed to an increase in our annual contributions to our charitable foundations to 0.5% of revenue, with further focus on initiatives to promote sustainable development. Finally, there was also an increase in employee-related costs due to pay rises and appointments of senior technical staff overseeing the capital projects.

Foreign exchange loss

The Group incurred a non-cash foreign exchange loss of $3.4 million in 2023 (2022: gain $6.8 million). This loss resulted from the re-translation of USD-denominated monetary assets held by foreign subsidiaries with a local functional currency. The loss was due to the strengthening of the Kazakhstan Tenge and North Macedonian Denar versus the US dollar during the year.

Finance costs

The Group incurred finance costs of $1.9 million (2022: $2.1 million) which in 2023 primarily relate to non-cash unwinding charges of Group asset retirement obligations. The costs have lowered compared to last year resulting from reduced overdraft balances compared to prior year.

Taxation

In 2023, the Group's income tax rose to $27.7 million (2022: $20.6 million). This increase was primarily driven by the introduction of a 10% withholding tax on intercompany dividend distributions from Kazakhstan to the UK, effective from 1 January 2023, resulting in an additional charge to $7.5 million (2022: $nil). Additionally, the adoption of IAS 12 led to an increase in deferred tax liability on our asset retirement provisions and a $1.0 million non-cash increase in income tax (2022: decrease of $4.6 million)

However, the actual corporate income tax charge was reduced to $19.2 million (2022: $25.1 million), mainly due to lower profits at Kounrad, where taxes are levied at a corporate income tax rate of 20%, and at Sasa, taxed at a rate of 10%.

Discontinued operations

The Group continues to report the results of the Copper Bay entities within discontinued operations. These assets were fully written off in prior years.

Balance sheet

Capital expenditure

During the year, there were additions to property, plant, and equipment of $27.8 million (2022: $17.4 million).

Kounrad

The capital expenditure additions were a combination of $1.5 million (2022: $2.5 million) sustaining capital expenditure and $3.0 million on the construction of the Solar Power Project.

Kounrad's sustaining capital expenditure includes $0.5 million on a new irrigation system, $0.2 million down payment on new anodes and $0.2 million on dripper pipes. The $3.0 million on the Solar Power Project is an investment in our future working towards decarbonisation and will replace approximately 16-18% of the project's energy consumption with renewable energy.

Sasa

At Sasa, there was a total of $8.7 million (2022: $7.7 million) spent on sustaining capital and $14.0 million (2022: $7.2 million) in relation to the transition to paste fill mining.

Sasa's sustaining capital expenditure included capitalised mine development of $2.8 million, $1.7 million on flotation equipment and $2.8 million on mining equipment including underground fleet.

Transition to paste fill mining

The Group continues to invest significantly at Sasa with the continued transition to paste fill mining. During the year the PB Plant construction was completed with capital expenditure of $2.4 million in 2023 and is now operational. At year end, the total expenditure on this plant of $10.3 million was transferred from construction in progress to plant, property and equipment. The associated underground reticulation infrastructure expenditure amounted to $0.9 million in 2023.

The DST Plant and associated landform expenditure totalled $7.5 million in 2023 for the construction of the plant, equipment including the conveyor, and electrical installations.

The development of the Central Decline and equipment totalled $2.8 million in 2023 and it is now operational.

Exploration

During the year, CAML developed an arrangement with a team of experienced explorers and formed a new subsidiary, CAML X. Potential target areas have been reviewed and remain under review, and currently two exploration licences have been granted, with others in application. No significant expenditure has yet been incurred; however, the Company expects to spend between $2 million and $3 million during 2024 on continuing its target generation work in Kazakhstan and those post-licence exploration costs will be capitalised as intangible assets.

2024

CAML expects 2024 capital expenditure of between $22 million and $24 million, of which between $14 million and $16 million is expected to be committed to sustaining capex. CAML expects transition to paste fill mining capital expenditure in the order of between $8 and $9 million in 2024. This will be largely related to completion of the DST Plant and Landform, as well as further advancing the Central Decline.

Working capital

As at 31 December 2023, current trade and other receivables were $12.2 million (31 December 2022: $8.7 million). This increase from the prior year is mainly due to an overpaid Group corporate income tax balance of $6.8 million (31 December 2022: $1.1 million) which will be offset against corporate income tax liabilities arising in the same entities in the next financial year. Additionally, this balance also includes trade receivables from the offtake sales of $1.4 million (31 December 2022: $2.4 million) and $2.3 million in relation to prepayments and accrued income (31 December 2022: $3.0 million).

Non-current trade and other receivables were $13.8 million (31 December 2022: $11.5 million). This balance includes advances for plant, property and equipment amounting to $9.3 million (31 December 2022: $8.2 million) as our capital investment programme continues. As of 31 December 2023, a total of $4.5 million (31 December 2022: $3.4 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.

As at 31 December 2023, current trade and other payables were $17.3 million (31 December 2022: $16.6 million).

Cash and borrowings

As at 31 December 2023, the Group had cash in the bank of $57.2 million (31 December 2022: $60.6 million) and current borrowings of $0.3 million (31 December 2022: $1.4 million) which is our North Macedonian overdraft facilities.

Cash flows

Net cash flow generated from operations was $66.4 million (2022: $99.8 million).

In 2023, corporate income tax payments to governments totalled $27.5 million (2022: $22.2 million). This included $19.2 million (2022: $20.5 million) of Kazakhstan corporate income tax and the newly introduced Kazakhstan WHT of 10% on dividends amounting to $7.5 million (2022: nil) paid during the year. In North Macedonia $0.6 million (2022: $1.7 million) of corporate income tax was paid in cash in addition to a $5.5 million (2022: $4.5 million) non-cash payment offset against VAT and corporate income tax receivable. As a result, there was overpaid Group income tax of $6.8 million (31 December 2022: $1.1 million) which will be offset against corporate income tax liabilities arising in the same entities in the next financial year.

Taking into consideration the sustaining capital expenditure of $10.8 million, which excludes project capex of $17.0 million, CAML's free cash flow for 2023 was $57.5 million (2022: $90.2 million).

Dividend

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 plus interest received. 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.

During the year, the Company paid $41.5 million (2022: $48.2 million) which consisted of a 2023 interim dividend of 9 pence per share and 2022 final dividend of 10 pence per share (2022: 2022 interim dividend of 10 pence per share and 2021 final dividend of 12 pence per share).

In conjunction with CAML's 2023 annual results, the Board proposes a final 2023 dividend of 9 pence per Ordinary Share. This brings total dividends (proposed and declared) for the year to 18 pence (2022: 20 pence) which represents 69% of free cash flow. The final dividend is payable on 22 May 2024 to shareholders registered on 26 April 2024. This latest dividend will increase the amount returned to shareholders in dividends since the 2010 IPO listing to 170p per share or $339.0 million.

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 Kounrad SX-EW plant's forecasted output committed under this contract. 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 2023.

The Board has reviewed forecasts for the period to December 2026 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 information.

Non-IFRS financial measures

The 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 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:

	2023 $'000	2022 $'000
Profit for the year	37,382	33,805
Plus/(less):
Income tax expense	27,703	20,588
Depreciation and amortisation	28,192	27,285
Impairment of non-current assets	-	55,116
Foreign exchange loss/(gain)	3,378	(6,829)
Other income	(75)	(86)
Finance income	(1,992)	(515)
Finance costs	1,852	2,060
Loss from discontinued operations	63	187
EBITDA	96,503	131,611

Gross revenue

Gross 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 cash

Net 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 2022: $0.3 million):

	31-Dec-23 $'000	31-Dec-22 $'000
Borrowings	(326)	(1,390)
Cash and cash equivalents excluding restricted cash	56,832	60,298
Net cash	56,506	58,908

Free cash flow

Free 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 plus interest received and is presented as follows:

	2023 $'000	2022 $'000
Net cash generated from operating activities	66,410	99,845
Less: Purchase of property, plant and equipment	(10,726)	(10,124)
Less: Purchase of intangible assets	(54)	(68)
Add: Interest received	1,916	515
Free cash flow	57,546	90,168

The purchase of sustaining property, plant and equipment figure above does not include the $17.0 million (2022: $7.2 million) of capitalised expenditure on the transition to Sasa paste fill mining and Solar Power Project. These costs are not considered sustaining capital expenditure as they are expansionary development costs required for the transition to the paste fill mining techniques and our net zero commitment. The definition of FCF was updated to include interest received which changed the 2022 FCF to $90.2 million.

Sustainability reporting standards

Sustainability is at the core of our business values, and we have reported in accordance with GRI Standards for the period 1 January 2023 to 31 December 2023. 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 2023.

	Stakeholder	2023 $'m	2022 $'m
Direct economic value generated		207.4	232.2
Economic value distributed:
Operating expenses	Suppliers & contractors	53.7	57.8
Wages and other payments to employees	Employees	39.9	35.8
Dividend payments to shareholders	Shareholders	41.5	48.2
Payment to creditors: Interest payments on loans	Lenders	-	0.5
Payments of tax1	Government	39.8	35.5
Community investments	Local communities	1.1	0.5
Economic value distributed		176.0	178.4
Economic value retained (generated - distributed)		31.4	53.8

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 Board

Gavin Ferrar

Chief Financial Officer

24 March 2023

Consolidated Income Statement

for the year ended 31 December 2023

			Group
		Note	2023 $'000	2022 $'000
	Continuing operations
	Revenue	6	195,280	220,855
	Presented as:
	Gross revenue1	6	207,416	232,206
	Less:
	Silver stream purchases	6	(8,181)	(7,080)
	Offtake buyers' fees	6	(3,955)	(4,271)
	Revenue		195,280	220,855
	Cost of sales	7	(92,894)	(87,271)
	Distribution and selling costs	8	(2,844)	(2,166)
	Gross profit		99,542	131,418
	Administrative expenses	9	(31,231)	(27,092)
	Impairment of non-current assets	18,19	-	(55,116)
	Other income	10	75	86
	Foreign exchange (loss)/gain		(3,378)	6,829
	Operating profit		65,008	56,125
	Finance income	14	1,992	515
	Finance costs	15	(1,852)	(2,060)
	Profit before income tax		65,148	54,580
	Income tax	16	(27,703)	(20,588)
	Profit for the year from continuing operations		37,445	33,992
	Discontinued operations
	Loss for the year from discontinued operations	21	(63)	(187)
	Profit for the year		37,382	33,805
	Profit attributable to:
	Non-controlling interests	20	68	(6)
	Owners of the parent		37,314	33,811
	Profit for the year		37,382	33,805
	Earnings/(loss) per share from continuing and discontinued operations attributable to owners of the parent during the year (expressed in cents per share)		$ cents	$ cents
	Basic earnings/(loss) per share
	From continuing operations	17	20.54	19.10
	From discontinued operations		(0.03)	(0.10)
	From profit for the year		20.51	19.00
	Diluted earnings/(loss) per share
	From continuing operations	17	19.64	18.39
	From discontinued operations		(0.03)	(0.10)
	From profit for the year		19.61	18.29

1. Gross revenue is a non-IFRS financial measure that 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.

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2023

		Group
	Note	2023 $'000	2022 $'000
Profit for the year		37,382	33,805
Other comprehensive income/(expense): Items that may be subsequently reclassified to profit or loss:
Currency translation differences	26	12,925	(29,311)
Other comprehensive income/(expense) for the year, net of tax		12,925	(29,311)
Total comprehensive income for the year		50,307	4,494
Attributable to:
Non-controlling interests		68	(6)
Owners of the parent		50,239	4,500
Total comprehensive income for the year		50,307	4,494
Total comprehensive income/(expense) attributable to equity shareholders arises from: Continuing operations		50,370	4,681
Discontinued operations		(63)	(187)
		50,307	4,494

Statements of Financial Position

as at 31 December 2023

Registered no. 5559627

		Group		Company
	Note	2023 $'000	2022 $'000	2023 $'000	2022 $'000
Assets Non-current assets
Property, plant and equipment	18	338,121	322,197	1,851	184
Intangible assets	19	25,425	26,552	-	-
Deferred income tax asset	36	512	328	-	-
Investments	20	-	-	5,107	5,107
Other non-current receivables	22	13,801	11,478	282,244	268,750
		377,859	360,555	289,202	274,041
Current assets
Inventories	23	14,879	13,149	-	-
Trade and other receivables	22	12,224	8,715	11,515	19,577
Restricted cash	24	318	264	-	-
Cash and cash equivalents	24	56,832	60,298	45,326	35,812
		84,253	82,426	56,841	55,389
Assets of disposal group classified as held for sale	21	76	64	-	-
		84,329	82,490	56,841	55,389
Total assets		462,188	443,045	346,043	329,430
Equity attributable to owners of the parent
Ordinary shares	25	1,821	1,821	1,821	1,821
Share premium	25	205,725	205,437	205,725	205,437
Treasury shares	25	(15,413)	(15,831)	(15,413)	(15,831)
Currency translation reserve	26	(121,167)	(134,092)	-	-
Retained earnings		310,345	312,107	117,365	94,354
		381,311	369,442	309,498	285,781
Non-controlling interests	20	(1,254)	(1,322)	-	-
Total equity		380,057	368,120	309,498	285,781
Liabilities Non-current liabilities
Silver streaming commitment	29	16,042	17,085	-	-
Deferred income tax liability	36	18,983	17,286	-	-
Lease liability		1,325	10	1,197	-
Provisions for other liabilities and charges	31	26,801	20,744	94	-
		63,151	55,125	1,291	-
Current liabilities
Borrowings	30	326	1,390	-	-
Silver streaming commitment	29	1,002	1,095	-	-
Trade and other payables	28	17,327	16,643	35,116	43,471
Lease liability		176	295	138	178
Provisions for other liabilities and charges	31	55	333	-	-
		18,886	19,756	35,254	43,649
Liabilities of disposal group classified as held for sale	21	94	44	-	-
		18,980	19,800	35,254	43,649
Total liabilities		82,131	74,925	36,545	43,649
Total equity and liabilities		462,188	443,045	346,043	329,430

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 $62,087,000 (2022: $62,066,000).

Consolidated Statement of Changes in Equity

for the year ended 31 December 2023

Attributable to owners of the parent	Note	Ordinary shares $'000	Share premium $'000	Treasury shares $'000	Currency translation reserve $'000	Retained earnings $'000	Total $'000	Non-controlling interests $'000	Total equity $'000
Balance as at 1 January 2022		1,765	191,988	(2,360)	(104,781)	323,951	410,563	(1,316)	409,247
Profit/(loss) for the year		-	-	-	-	33,811	33,811	(6)	33,805
Other comprehensive expense - currency translation differences	26	-	-	-	(29,311)	-	(29,311)	-	(29,311)
Total comprehensive income/(expense)		-	-	-	(29,311)	33,811	4,500	(6)	4,494
Transactions with owners
Shares issued	25	56	13,440	(13,496)	-	-	-	-	-
Share-based payments	27	-	-	-	-	3,818	3,818	-	3,818
Exercise of options	27	-	9	25	-	(1,263)	(1,229)	-	(1,229)
Dividends	34	-	-	-	-	(48,210)	(48,210)	-	(48,210)
Total transactions with owners, recognised directly in equity		56	13,449	(13,471)	-	(45,655)	(45,621)	-	(45,621)
Balance as at 31 December 2022		1,821	205,437	(15,831)	(134,092)	312,107	369,442	(1,322)	368,120
Profit for the year		-	-	-	-	37,314	37,314	68	37,382
Other comprehensive income - currency translation differences	26	-	-	-	12,925	-	12,925	-	12,925
Total comprehensive income		-	-	-	12,925	37,314	50,239	68	50,307
Transactions with owners
Share-based payments	27	-	-	-	-	4,540	4,540	-	4,540
Exercise of options	27	-	288	418	-	(2,091)	(1,385)	-	(1,385)
Dividends	34	-	-	-	-	(41,525)	(41,525)	-	(41,525)
Total transactions with owners, recognised directly in equity		-	288	418	-	(39,076)	(38,370)	-	(38,370)
Balance as at 31 December 2023		1,821	205,725	(15,413)	(121,167)	310,345	381,311	(1,254)	380,057

Company Statement of Changes in Equity

for the year ended 31 December 2023

Company	Note	Ordinary  Shares $'000	Share  premium $'000	Treasury  shares $'000	Retained earnings $'000	Total  equity $'000
Balance as at 1 January 2022		1,765	191,988	(2,360)	77,943	269,336
Profit for the year		-	-	-	62,066	62,066
Total comprehensive income		-	-	-	62,066	62,066
Transactions with owners
Shares issued	25	56	13,440	(13,496)	-	-
Share-based payments	27	-	-	-	3,818	3,818
Exercise of options	27	-	9	25	(1,263)	(1,229)
Dividends	34	-	-	-	(48,210)	(48,210)
Total transactions with owners, recognised directly in equity		56	13,449	(13,471)	(45,655)	(45,621)
Balance as at 31 December 2022		1,821	205,437	(15,831)	94,354	285,781
Profit for the year		-	-	-	62,087	62,087
Total comprehensive income		-	-	-	62,087	62,087
Transactions with owners
Share-based payments	27	-	-	-	4,540	4,540
Exercise of options	27	-	288	418	(2,091)	(1,385)
Dividends	34	-	-	-	(41,525)	(41,525)
Total transactions with owners, recognised directly in equity		-	288	418	(39,076)	(38,370)
Balance as at 31 December 2023		1,821	205,725	(15,413)	117,365	309,498

Consolidated Statement of Cash Flows   

for the year ended 31 December 2023

	Note	2023 $'000	2022 $'000
Cash flows from operating activities
Cash generated from operations	32	93,985	122,565
Interest paid		(94)	(554)
Corporate income tax paid		(27,481)	(22,166)
Net cash flow generated from operating activities		66,410	99,845
Cash flows from investing activities
Purchase of property, plant and equipment		(27,807)	(17,396)
Proceeds from sale of property, plant and equipment		27	7
Purchase of intangible assets		(54)	(68)
Interest received		1,916	515
(Increase)/decrease in restricted cash		(50)	3,252
Net cash used in investing activities		(25,968)	(13,690)
Cash flows from financing activities
Repayment of overdraft	30	(1,090)	(7,531)
Repayment of borrowings	30	-	(23,820)
Dividends paid to owners of the parent	34	(41,525)	(48,210)
Cash settlement of share options		(1,394)	(1,939)
Receipt on exercise of share options	27	7	6
Net cash used in financing activities		(44,002)	(81,494)
Effect of foreign exchange gain/(loss) on cash and cash equivalents		105	(31)
Net (decrease)/increase in cash and cash equivalents		(3,455)	4,630
Cash and cash equivalents at the beginning of the year	24	60,361	55,731
Cash and cash equivalents at the end of the year	24	56,906	60,361

Cash and cash equivalents at 31 December 2023 includes cash at bank and on hand included in assets held for sale of $74,000 (31 December 2022: $63,000) (Note 21). The consolidated statement of cash flows does not include the restricted cash balance of $318,000 (2022: $264,000) (Note 24).

Corporate income tax paid includes $7,547,000 (2022: nil) of Kazakhstan withholding tax paid on intercompany dividend distributions.

The notes below are an integral part of the consolidated financial information.

Notes to the Financial information

for the year ended 31 December 2023

1. General information

Central 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 21 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 policies

The principal accounting policies applied in the preparation of the consolidated financial information are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation of the financial information

The financial information set out herein does not constitute the Group's statutory financial statements for the year ended 31 December 2023, but is derived from the Group's audited financial statements. The auditors have reported on the 2023 financial statements and their reports were unqualified and did not contain statements under s498(2) or (3) Companies Act 2006, nor did they contain a material uncertainty in relation to going concern. The 2023 Annual Report was approved by the Board of Directors on 24 March 2024, and will be mailed to shareholders in April 2024. The financial information in this statement is audited but does not have the status of statutory accounts within the meaning of Section 434 of the Companies Act 2006.

The Group's consolidated financial statements, which form part of the 2023 Annual Report, 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 that have been held at fair value. The accounting policies that follow set out those policies that apply in preparing the financial statements for the year ended 31 December 2023. The Group financial information is 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 CAML.

The preparation of the Group financial information 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 information, are explained in Note 4.

Going concern

The Group sells and distributes its Kounrad copper cathode product primarily through an annual rolling offtake arrangement with Traxys Europe S.A. ('Traxys') 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 2023.

The Board has reviewed forecasts for the period to December 2026 to assess the Group's liquidity, which demonstrates 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 that 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 information.

Please refer to Notes 6, 24 and 28 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 2023. The following have no impact on the current reporting period as they are either not relevant to the Group's activities or require accounting that is consistent with the Group's current accounting policies:

‣   IFRS 17 Insurance Contracts;

‣   Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2);

‣   Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors);

‣   International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income Taxes);

‣   Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes);

In May 2021, the IASB issued amendments to IAS 12, which clarify whether the initial recognition exemption applies to certain transactions that result in both an asset and a liability being recognised simultaneously (e.g. a lease in the scope of IFRS 16). The amendments introduce an additional criterion for the initial recognition exemption, whereby the exemption does not apply to the initial recognition of an asset or liability that at the time of the transaction, gives rise to equal taxable and deductible temporary differences.

An entity applying these amendments shall also, at the beginning of the earliest comparative period presented i.e. 1 January 2022:

a. recognise a deferred tax asset to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised and a deferred tax liability for all deductible and taxable temporary differences associated with:

i.  right-of-use assets and lease liabilities; and

ii. decommissioning, restoration and similar liabilities and the corresponding amounts recognised as part of the cost of the related asset; and

b. recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings at that date.

The application of this amendment for the first time in the current year resulted in an increase in Group deferred tax assets of $514,000, an increase in deferred tax liabilities of $2,075,000 and a net increase in the income tax expense of $1,561,000. There was no material impact on the comparative year consolidated financial statements. There was no significant impact on the Company financial statements.

New standards, interpretations, and amendments not yet effective

There are a number of standards, amendments to standards, and interpretations that have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.

The following amendments are effective for the period beginning 1 January 2024:

‣   Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases);

‣   Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements);

‣   Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and

‣   Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures).

The following amendment is effective for the period beginning 1 January 2025:

‣   Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates).

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 consolidation

The Group financial information consolidates the financial statements of CAML and the entities it controls drawn up to 31 December 2023.

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 with unrealised losses/gains eliminated on consolidation. 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 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, 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 (CGU) expected to benefit from the business combination in which the goodwill arose. See Note 19 for managements determination of CGUs. 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. Non-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 (see Note 20).

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 reporting

Operating 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 Macedonia

Included within the unallocated segment are corporate costs for Central Asia Metals Plc and other companies within the Group that are not separately reported to the Board.

Foreign currency translation

The 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 information is 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 other comprehensive income ('OCI') financial assets form part of the overall gain or loss in OCI recognised in respect of that financial instrument.

On consolidation, the results of overseas operations are translated into US dollar 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 OCI 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.

Depreciation is provided on all property, plant and equipment on a straight-line basis over its total expected useful life. As at 31 December 2023, the remaining useful lives were as follows:

‣   Construction in progress	- not depreciated
‣   Land	- not depreciated
‣   Plant and equipment	- over 5 to 15 years
‣   Mining assets	- over 2 to 15 years
‣   Motor vehicles	- over 2 to 10 years
‣   Office equipment	- over 2 to 10 years
‣   Right-of-use assets	- term of lease agreement

Mineral 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 that 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 values 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.

Leases

Leases 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.

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 amortisation and provision for impairment, where required.

b) Mining licences, permits and computer software

The 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 years
Mining licences and permits	- over the duration of the legal agreement

The 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 assets

The 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 CGU'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 CGU 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 that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

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. Revenue is net of treatment charges, as the cost of smelting and refining is borne by the customer and the transaction price is agreed to be net of these charges. 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 Group 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). Offtaker fees and silver purchases are deducted from revenue as they represent a reduction in the amount of net revenue received by the company rather than a direct cost of sale being incurred.

Inventory

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method.

The 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 coordinated 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.

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 that 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, measures 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.

Deferred 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 that 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 equivalents

Cash 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 cash

Restricted 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.

Investments

Investments in subsidiaries are recorded at cost less provision for impairment.

Share capital

Ordinary 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 shares

Where 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 compensation

Where 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. Additionally, the fair value of the options includes considerations of dividends employees are entitled to 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 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.

The Company may in limited circumstances have no choice but to settle in cash. The cash payment is accounted for as the repurchase of an equity interest, i.e. as a deduction from equity..

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, that 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 months of expected credit losses along with gross 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 payables

Trade 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 commitment

The 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 UoP 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.

Leases

Lease liabilities are recognised in non-current and current liabilities. On inception, the lease liability is recognised as the present value of the expected future lease payments, calculated using a discount rate.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured if there is a change to the forecast lease payments. When the lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset.

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 drawdown 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.

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 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.

Provisions

The Group has recognised provisions for liabilities of uncertain timing or amount including those for leasehold dilapidations, legal disputes and the following:

a) 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 an interest expense.

b) Employee benefits - pension

The Group, in the normal course of business, makes payments on behalf of its employees for pensions, healthcare, 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 awards

Pursuant to the labour law prevailing in the North Macedonian subsidiaries, the Group is obliged to pay retirement benefits to employees 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 31). 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.

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 cooperation 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
	2023	2022	Movement	2023	2022	Movement
Kazakhstan tenge	456.18	460.15	-1%	454.56	462.65	-2%
Macedonian denar	56.85	58.36	-3%	55.65	57.65	-3%
British pound	0.81	0.80	+1%	0.79	0.83	-5%

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:

	Group
	2023
In $'000 equivalent	USD	EUR	GBP
Cash and cash equivalents	3,942	226	505
Trade and other receivables	109	-	10
Trade and other payables	-	(268)	(3,516)
Net exposure	4,051	(42)	(3,001)

	Group
	2022
In $'000 equivalent	USD	EUR	GBP
Cash and cash equivalents	20,055	556	886
Trade and other receivables	-	2	167
Trade and other payables	(20)	(333)	(3,268)
Net exposure	20,035	225	(2,215)

Trade and other receivables excludes prepayments and tax receivable, and trade and other payables excludes corporation tax, social security and other taxes as they are not considered financial instruments.

At 31 December 2023, if the foreign currencies had weakened/strengthened by 10% against the US dollar, post-tax Group profit for the year would have been $101,000 lower/higher (2022: $1,804,000 lower/higher).

Commodity price risk

The Group has a hedging policy in place to manage commodity price risk; however, the Directors elected not to hedge during the year and the prior year.

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 Group may mitigate commodity price risk by fixing the price in advance for its copper cathode sales with the offtake partner; however, this option was not utilised during the year and the prior year.

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.

	Estimated effect on earnings and equity
	2023 $'000	2022 $'000
10% increase in copper, zinc and lead price	21,437	23,931
10% decrease in copper, zinc and lead price	(21,437)	(23,931)

Liquidity risk

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.

	Group
Future expected payments:	31 Dec 23 $'000	31 Dec 22 $'000
Trade and other payables within one year	13,101	12,751
Borrowings payable within one year (Note 30)	326	1,390
Lease liability payable within one year	248	295
Lease liability payable later than one year but not later than five years	1,487	10
	15,162	14,446

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.

Consistent with others in the industry, the Group monitors capital on the basis of the following gearing ratio:

Net cash

	Note	2023 $'000	2022 $'000
Cash and cash equivalents excluding restricted cash	24	56,832	60,298
Bank overdraft	30	(326)	(1,390)
Net cash		56,506	58,908
Total equity		380,057	368,120
Net cash to equity ratio		15%	16%

Changes in liabilities arising from financing activities

The total borrowings as at 1 January 2023 were $1,390,000 (1 January 2022: $32,978,000). During the year, there were repayments on unsecured overdrafts of $1,090,000 (2022: $7,531,000). The corporate debt package was repaid in August 2022 (2022: $23,820,000). Other changes amounted to an increase of $26,000 (2022: reduction of $237,000) leading to a closing debt balance of $326,000 (2022: $1,390,000). See note 30 for more details.

The cash and cash equivalents including cash at bank and on hand in assets held for sale brought forward were $60,361,000 (2022: $55,731,000) with a net $3,455,000 outflow (2022: $4,630,000 inflow) during the year and, therefore, a closing balance of $56,906,000 (2022: $60,361,000).

Credit risk

Credit 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 24 and on its trade and other receivables as set out in note 22. 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. 92% 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- (2022: 91%). The rest of the Group's cash was held with a mix of institutions with credit ratings between A and BBB+ (2022: A and BB-). 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 22).

Interest rate risk

The Group's North Macedonian bank overdrafts denominated in Euros are payable at fixed interest rates ranging from 3.24% to 5.3%. The amount of interest paid during the year amounted to $46,000. There is some interest rate risk exposure linked to US dollar interest-earning bank balances with variable rates. At 31 December 2023, if interest rates on variable interest earning US dollar bank balances had been 150 basis points higher/lower, profit after tax for the year would have been $577,000 higher/lower. The Directors consider that 150 basis points is the maximum likely change in interest rates over the next year, being the period up to the next point at which the Group expects to make these disclosures.

Categories of financial instruments

Financial assets

	Group
Cash and receivables	31 Dec 23 $'000	31 Dec 22 $'000
Cash and cash equivalents including restricted cash (Note 24)	57,150	60,562
Trade and other receivables	1,899	3,083
	59,049	63,645

Trade and other receivables excludes prepayments and tax receivable as they are not considered financial instruments. All trade and other receivables are receivable within one year for both reporting years.

Financial liabilities

	Group
Measured at amortised cost	31 Dec 23 $'000	31 Dec 22 $'000
Trade and other payables within one year	13,101	12,751
Borrowings payable within one year (Note 30)	326	1,390
Lease liability within one year	176	295
Lease liability payable later than one year but not later than five years	1,325	10
	14,928	14,446

Trade and other payables excludes the silver streaming commitment, corporation tax, social security and other taxes as they are not considered financial instruments.

4. Critical accounting estimates and judgements

The preparation of the consolidated financial information 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 expenses. 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 and impairment reversals 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 or impairment reversal if updated events or changes in circumstances indicate the carrying value has significantly changed. 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 19.

Assets (other than goodwill) that have been previously impaired must be assessed for indicators of both impairment and impairment reversal. Such assets are generally carried on the balance sheet at a value close to their recoverable amount at the last assessment. Therefore, in principle any change to operational plans or assumptions or economic parameters could result in further impairment or impairment reversal if an indicator is identified.

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 that are not included in the life of mine plan or impairment test.

Decommissioning and site rehabilitation estimates

Provision 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 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. The estimated Sasa decommissioning costs included a reassessment of the lining of the tailing's facilities. Judgement is applied in determining appropriate contingency rates to cost estimates. Asset retirement obligations have been updated using latest assumptions on inflation rates and discount rates and to update the estimated costs at Sasa for the lining of the tailings facilities following discussions with the Regulators.

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 a 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 $5,234,000 on the provision for asset retirement obligation. A 2% change in the inflation rate would result in an impact of $7,046,000 on the provision for asset retirement obligation. A 20% change in cost would result in an impact of $2,647,000 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 has 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 2023.

The 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 information.

Tax

Management makes 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 judgements 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 from the amounts recorded, such differences will impact income tax in the period in which such determination is made.

5. Segmental information

The segmental results for the year ended 31 December 2023 are as follows:

	Kounrad $'000	Sasa  $'000	Unallocated  $'000	Total $'000
Gross revenue	116,323	91,093	-	207,416
Silver stream purchases	-	(8,181)	-	(8,181)
Offtake buyers' fees	(3,005)	(950)	-	(3,955)
Revenue	113,318	81,962	-	195,280
EBITDA	82,308	35,663	(21,468)	96,503
Depreciation and amortisation	(4,168)	(23,672)	(352)	(28,192)
Foreign exchange loss	(2,819)	(453)	(106)	(3,378)
Other income (Note 10)	75	-	-	75
Finance income (Note 14)	14	-	1,978	1,992
Finance costs (Note 15)	(430)	(1,372)	(50)	(1,852)
Profit/(loss) before income tax	74,980	10,166	(19,998)	65,148
Income tax	(24,866)	(2,837)	-	(27,703)
Profit for the year after tax from continuing operations	50,024	7,329	(19,998)	37,445
Loss from discontinued operations				(63)
Profit for the year				37,382

Depreciation and amortisation include $15,057,000 on the fair value uplift on the acquisition of Sasa and Kounrad.

The segmental results for the year ended 31 December 2022 are as follows:

	Kounrad  $'000	Sasa  $'000	Unallocated  $'000	Total $'000
Gross revenue	123,657	108,549	-	232,206
Silver stream purchases	-	(7,080)	-	(7,080)
Offtake buyers' fees	(3,090)	(1,181)	-	(4,271)
Revenue	120,567	100,288	-	220,855
EBITDA	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 18,19)	-	(55,116)	-	(55,116)
Other income (Note 10)	50	36	-	86
Finance income (Note 14)	29	-	486	515
Finance costs (Note 15)	(214)	(1,040)	(806)	(2,060)
Profit/(loss) before income tax	94,367	(19,735)	(20,052)	54,580
Income tax	(19,573)	(1,015)	-	(20,588)
Profit for the year after tax from continuing operations	74,794	(20,750)	(20,052)	33,992
Loss from discontinued operations				(187)
Profit for the year				33,805

Depreciation and amortisation include $15,419,000 on the fair value uplift on the acquisition of Sasa and Kounrad.

A reconciliation between profit for the year and EBITDA is presented in the Financial Review section.

Group segmental assets and liabilities for the year ended 31 December 2023 are as follows:

	Segmental assets		Additions to non-current assets		Segmental liabilities
	31 Dec 23  $'000	31 Dec 22  $'000	31 Dec 23  $'000	31 Dec 22  $'000	31 Dec 23  $'000	31 Dec 22  $'000
Kounrad	72,097	82,258	4,389	2,525	(17,570)	(13,928)
Sasa	342,197	324,197	22,066	14,920	(56,054)	(54,718)
Assets held for sale (Note 21)	76	64	-	-	(94)	(44)
Unallocated including corporate	47,818	36,526	2,092	19	(8,413)	(6,235)
	462,188	443,045	28,547	17,464	(82,131)	(74,925)

6. Revenue

Group	2023 $'000	2022 $'000
International customers (Europe) - copper cathode	116,086	122,371
International customers (Europe) - zinc and lead concentrate	88,844	106,578
Domestic customers (Kazakhstan) - copper cathode	237	1,286
International customers (Europe) - silver	2,249	1,971
Total gross revenue	207,416	232,206
Less:
Silver stream purchases	(8,181)	(7,080)
Offtake buyers' fees	(3,955)	(4,271)
Revenue	195,280	220,855

Kounrad

The 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 Group 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 2023, the Group sold 13,658 tonnes (2022: 14,192 tonnes) of copper through the offtake arrangements. Some of the copper cathodes are also sold locally, and during 2023, 29 tonnes (2022: 150 tonnes) were sold to local customers.

Sasa

The 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 17,113 tonnes (2022: 17,862 tonnes) of payable zinc in concentrate and 26,298 tonnes (2022: 26,320 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 29).

7. Cost of sales

Group	2023 $'000	2022 $'000
Reagents, electricity and materials	26,622	27,989
Depreciation and amortisation	27,443	26,709
Silver stream commitment (Note 29)	(1,136)	(1,269)
Royalties	12,692	10,117
Employee benefit expense	20,674	17,951
Consulting and other services	6,085	5,404
Taxes and duties	514	370
	92,894	87,271

8. Distribution and selling costs

Group	2023 $'000	2022 $'000
Freight costs	2,169	1,934
Transportation costs	28	24
Depreciation and amortisation	5	5
Materials and other expenses	642	203
	2,844	2,166

The above distribution and selling costs are those incurred at Kounrad and Sasa in addition to the costs associated with the offtake arrangements.

9. Administrative expenses

Group	2023 $'000	2022 $'000
Employee benefit expense	12,139	11,382
Share-based payments (Note 27)	4,540	4,494
Consulting and other services	10,730	8,090
Auditor's remuneration (Note 11)	574	486
Office-related and travel costs	2,089	1,652
Taxes and duties	415	417
Depreciation and amortisation	744	571
Total from continuing operations	31,231	27,092
Total from discontinued operations (Note 21)	382	179
	31,613	27,271

10. Other income

Group	2023 $'000	2022 $'000
Other income	75	86
	75	86

11. Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditor and its associates:

	2023 $'000	2022 $'000
Fees payable to BDO LLP the Company's auditor for the audit of the parent company and consolidated financial statements	297	243
Fees payable to BDO LLP the Company's auditor and its associates for other services: ‣   The audit of Company's subsidiaries	208	183
Fees payable to BDO LLP the Company's auditor and its associates for other services: ‣   Other assurance services	69	60
	574	486

12. Employee benefit expense

The aggregate remuneration of staff, including Directors, was as follows:

Group	2023 $'000	2022 $'000
Wages and salaries	24,689	22,374
Social security costs and similar taxes	2,846	2,859
Staff healthcare and other benefits	3,668	3,187
Other pension costs	4,158	2,929
Share-based payment expense (Note 27)	4,540	4,494
Total for continuing operations	39,901	35,843
Total for discontinuing operations (Note 21)	75	74
	39,976	35,917

The total employee benefit expense includes an amount of $2,548,000 (2022: $2,016,000), which has been capitalised within property, plant and equipment.

Company	2023 $'000	2022 $'000
Wages and salaries	6,961	6,779
Social security costs	1,016	1,328
Staff healthcare and other benefits	584	584
Other pension costs	145	108
Share-based payments (Note 27)	4,540	4,494
	13,246	13,293

Key management remuneration is disclosed in the Remuneration Committee Report.

13. Monthly average number of people employed

Group	2023 Number	2022 Number
Operational	962	937
Management and administrative	180	155
	1,142	1,092

The monthly average number of staff employed by the Company during the year was 20 (2022: 19).

14. Finance income

Group	2023 $'000	2022 $'000
Bank interest received	1,992	515
	1,992	515

15. Finance costs

Group	2023 $'000	2022 $'000
Provisions: unwinding of discount (Note 31)	1,707	1,088
Interest on borrowings (Note 30)	46	910
Lease interest expense and bank charges	99	62
Total for continuing operations	1,852	2,060

16. Income tax

Group	2023 $'000	2022 $'000
Current tax on profits for the year	19,150	25,142
Withholding tax on intercompany dividend distributions	7,547	-
Deferred tax debit/(credit) (Note 36)	1,006	(4,554)
Income tax expense	27,703	20,588

Taxation for each jurisdiction is calculated at the rates prevailing in the respective jurisdictions. The payment of 10% withholding tax on intercompany dividends from Kazakhstan was introduced from 1 January 2023.

The 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 is as follows:

Group	2023 $'000	2022 $'000
Profit before income tax	65,148	54,580
Tax calculated at domestic tax rates applicable to profits in the respective countries	12,202	10,117
Tax effects of:
Expenses not deductible for tax purposes	5,112	12,546
Withholding tax on intercompany dividend distributions	7,547	-
Deferred income tax debit/(credit) (Note 36)	1,006	(4,554)
Movement on unrecognised deferred tax - tax losses	1,836	2,479
Income tax expense	27,703	20,588

Corporate income tax is calculated at 23.5% (2022: 19%) of the assessable profit for the year for the UK parent company, 20% for the operating subsidiaries in Kazakhstan (2022: 20%) and 10% (2022: 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.

17. Earnings/(loss) per share

(a) Basic

Basic 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 25).

	2023 $'000	2022 $'000
Profit from continuing operations attributable to owners of the parent	37,377	33,998
Loss from discontinued operations attributable to owners of the parent	(63)	(187)
Profit attributable to owners of the parent	37,314	33,811

	2023 No.	2022 No.
Weighted average number of Ordinary Shares in issue	181,904,941	177,955,800

	2023 $ cents	2022 $ cents
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	20.54	19.10
From discontinued operations	(0.03)	(0.10)
From profit for the year	20.51	19.00

(b) Diluted

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.

	2023 No.	2022 No.
Weighted average number of Ordinary Shares in issue	181,904,941	177,955,800
Adjusted for:
‣   Share options	8,399,686	6,914,311
Weighted average number of Ordinary Shares for diluted earnings per share	190,304,627	184,870,111

Diluted earnings/(loss) per share	2023 $ cents	2022 $ cents
From continuing operations	19.64	18.39
From discontinued operations	(0.03)	(0.10)
From profit for the year	19.61	18.29

18. Property, plant and equipment

Group	Construction in progress $'000	Plant and equipment $'000	Mining assets $'000	Motor vehicles, office equipment and right-of-use assets $'000	Land $'000	Mineral rights $'000	Total $'000
Cost
At 1 January 2022	8,643	160,412	1,259	2,884	626	345,770	519,594
Additions	17,054	143	-	199	-	-	17,396
Disposals	-	(244)	-	(43)	-	-	(287)
Change in estimate - asset retirement obligation (Note 31)	-	1,153	-	-	-	-	1,153
Transfers	(9,282)	9,282	-	-	-	-	-
Exchange differences	(410)	(6,153)	(84)	(96)	(36)	(15,809)	(22,588)
At 31 December 2022	16,005	164,593	1,175	2,944	590	329,961	515,268
Additions	26,235	82	-	2,176	-	-	28,493
Disposals	-	(412)	-	(1,398)	-	-	(1,810)
Change in estimate - asset retirement obligation (Note 31)	-	3,687	-	-	-	-	3,687
Transfers	(29,713)	29,080	-	633	-	-	-
Exchange differences	511	3,040	22	38	22	7,329	10,962
At 31 December 2023	13,038	200,070	1,197	4,393	612	337,290	556,600

Group	Construction in progress $'000	Plant and equipment $'000	Mining assets $'000	Motor vehicles and right-of-use assets $'000	Land $'000	Mineral rights $'000	Total $'000
Accumulated depreciation and impairment
At 1 January 2022	-	61,782	503	1,882	-	70,538	134,705
Provided during the year	-	11,659	111	381	-	13,581	25,732
Impairment (Note 19)		-	-	-	-	34,195	34,195
Disposals	-	(144)	-	(42)	-	-	(186)
Exchange differences	-	(1,281)	(34)	(60)	-	-	(1,375)
At 31 December 2022	-	72,016	580	2,161	-	118,314	193,071
Provided during the year	-	12,576	90	641	-	13,298	26,605
Transfers	-	(277)	-	277	-	-	-
Disposals	-	(204)	-	(1,375)	-	-	(1,579)
Exchange differences	-	354	11	17	-	-	382
At 31 December 2023	-	84,465	681	1,721	-	131,612	218,479
Net book value at 31 December 2022	16,005	92,577	595	783	590	211,647	322,197
Net book value at 31 December 2023	13,038	115,605	516	2,672	612	205,678	338,121

The Company had $1,851,000 of property, plant and equipment at net book value as at 31 December 2023 (2022: $184,000).

The increase in estimate in the asset retirement obligation of $3,687,000, 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 31).

During the year, there were total disposals of plant, property and equipment at a cost of $1,810,000 (2022: $287,000) with accumulated depreciation of $1,579,000 (2022: $186,000). The Group received $27,000 (2022: $7,000) consideration for these assets and, therefore, a loss of $204,000 was recognised (2022: loss of $94,000).

Amounts recognised in the income statement

The income statement shows the following amounts relating to leases - depreciation charge right-of-use assets:

Depreciation charge of right-of-use assets	2023  $'000	2022  $'000
Office	366	48
Other	30	123
Total depreciation	396	171
Interest expense included in finance costs	50	18

19. Intangible assets

Group	Goodwill $'000	Mining licences and permits $'000	Computer software and website $'000	Total $'000
Cost
At 1 January 2022	29,872	35,024	324	65,220
Additions	-	-	68	68
Exchange differences	(1,536)	(1,654)	(3)	(3,193)
At 31 December 2022	28,336	33,370	389	62,095
Additions	-	-	54	54
Exchange differences	132	571	3	706
At 31 December 2023	28,468	33,941	446	62,855
Accumulated amortisation and impairment
At 1 January 2022	-	12,850	280	13,130
Provided during the year	-	1,689	23	1,712
Impairment	20,921	-	-	20,921
Exchange differences	-	(219)	(1)	(220)
At 31 December 2022	20,921	14,320	302	35,543
Provided during the year	-	1,778	47	1,825
Exchange differences	-	62	-	62
At 31 December 2023	20,921	16,160	349	37,430
Net book value at 31 December 2022	7,415	19,050	87	26,552
Net book value at 31 December 2023	7,547	17,781	97	25,425

The Company had nil intangible assets at net book value as at 31 December 2023 (2022: nil).

Impairment 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 is 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 and 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 CGU.

Kounrad project

The Kounrad project, located in Kazakhstan, has an associated goodwill balance of $7,547,000 (2022: $7,415,000), 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 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.

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 $8,696 per tonne (2022: $7,777 per tonne) and a long-term price of $8,444 per tonne (2022: $7,436 per tonne) based on market consensus prices and a discount rate of 8.07% (2022: 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 climate change impacts are also considered including potential impact of regulatory changes and physical risks to assets such as consideration of the impact on the Group asset retirement obligations.

The carrying value of the net assets is not currently sensitive to any reasonable changes in key assumptions. Management concluded that 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

The associated goodwill balance of the Sasa project was impaired by $20,921,000 to nil during the prior year. The business combination in 2017 was accounted for at fair value under IFRS 3, and 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 2023. 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.

The 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. The climate change impacts are also considered including potential impact of regulatory changes and physical risks to assets such as consideration of the impact on the Group asset retirement obligations.

As at 31 December 2023, the Group has reviewed the indicators for impairment/reversal of impairment, including forecasted commodity prices, treatment charges, discount rates, operating and capital expenditure, foreign exchange rates and the mineral reserves and resources' estimates.

The key changes in economic assumptions used in the review were:

1. A discount rate of 9.72% (31 December 2022: 12.52%) supported by a detailed WACC calculation applied to calculate the present value of the CGU. The reduction in discount rate from the prior year end was attributed to several factors. These include a reduction in the country risk premium, equity risk premium and favourable changes to the company risk premium and levered beta, driven by favourable mining market conditions.

2. The five-year forecast average nominal zinc and lead price of $2,537 (31 December 2022: $2,760) and $1,983 (2022: $2,081) per tonne, respectively, and a long-term real price of $2,535 (31 December 2022: $2,467) and $1,968 (31 December 2022: $1,874) per tonne, respectively, based on market consensus prices and then inflated at 3.5% over the life of mine.

At the balance sheet date, the impairment test concluded that an impairment or reversal of the prior year impairment is not necessary as there have been no significant indicators of a possible reversal identified due to commodity price risk and judgements applied in the discount rate. Management performed sensitivity analyses whereby certain parameters were flexed downwards by reasonable amounts for the CGU to assess whether the recoverable value for the CGU would result in an impairment charge.

The following sensitivities when applied in isolation would result in a breakeven position:

‣   discount rate increased to 11%;

‣   zinc price reduced by 6.3%;

‣   lead price reduced by 4.5%;

‣   operating expenditure increased by 5.5%; and

‣   capital expenditure increased by 23%.

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, consider that no reversal of impairment (excluding goodwill) or 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. Investments

Shares in Group undertakings:

	Company
	31 Dec 23 $'000	31 Dec 22  $'000
At 1 January / 31 December	5,107	5,107

Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid, less impairment.

Details of the Company holdings consolidated in the financial information are included in the table below:

Subsidiary	Registered office address	Activity	CAML %  2023	Non-controlling interest % 2023	CAML %  2022	Date of incorporation
CAML Exploration Limited	16, Turkistan Street, Office 56 Astana, District Esmil, Z05X0B4, Kazakhstan	Exploration	100	-	-	18 August 2023
CAML KZ Limited	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Holding company	100	-	100	28 June 2021
CAML MK Limited	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Seller of zinc and lead concentrate	100	-	100	5 September 2017
CAML Limited	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Dormant company	100	-	-	25 April 2023
CMK Mining B.V.	Prins Bernhardplein 200 1097 JB Amsterdam, The Netherlands	Holding company	100	-	100	30 June 2015
CMK Europe SPLLC Skopje	Ivo Lola Ribar no. 57-1/6, 1000 Skopje, North Macedonia	Holding company	100	-	100	10 July 2015
Copper Bay Limited	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Holding company	76	24	76	29 October 2010
Copper Bay (UK) Ltd	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Dormant company	76	24	76	9 November 2011
Copper Bay Chile Limitada	Ebro 2740, Oficina 603, Las Condes, Santiago, Chile	Holding company	76	24	76	12 October 2011
Kounrad Copper Company LLP	Business Centre No. 2, 4 Mira Street, Balkhash, Kazakhstan	Kounrad project (SX-EW plant)	100	-	100	29 April 2008
Minera Playa Verde Limitada	Ebro 2740, Oficina 603, Las Condes, Santiago, Chile	Exploration - Copper	76	24	76	20 October 2011
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 February 2006
Details of the Company holdings that are not consolidated in the financial information are:
Ken Shuak LLP	Business Centre No. 2, 4 Mira Street, Balkhash, Kazakhstan	Shuak project (exploration)	10	90	10	5 October 2016

CAML MK Limited

For the year ended 31 December 2023, 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 2023. 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.

CAML KZ Limited

For the year ended 31 December 2023, 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 2023. 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.

CAML Exploration Limited

During the year, CAML incorporated CAML Exploration Limited, in the Astana International Finance Centre ('AIFC'), initially owned 100% by CAML. In February 2024, CAML transferred a 20% ownership to a team of experienced explorers, Thaler Minerals LLP, a company organised by Terra Associates. The activity of CAML Exploration Limited is to look for exploration opportunities in Kazakhstan.

CAML Limited

For the year ended 31 December 2023, CAML Limited (registered number: 14826287) 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 Limited have not required it to obtain an audit of their financial statements for the year ended 31 December 2023. 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 Limited. As a dormant companies CAML Limited are also exempt from the requirement to prepare and file accounts at Companies House under s394A-C and s448A-C respectively.

Non-controlling interest

	31 Dec 23 $'000	31 Dec 22 $'000
Balance at 1 January	1,322	1,316
(Profit)/loss attributable to non-controlling interests	(68)	6
Balance at 31 December	1,254	1,322

Non-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.

21. Assets held for sale

The 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 2023 and the comparative year ended 31 December 2022 are shown within discontinued operations in the consolidated income statement.

Assets of disposal group classified as held for sale:

	31 Dec 23 $'000	31 Dec 22 $'000
Cash and cash equivalents	74	63
Trade and other receivables	2	1
	76	64

Liabilities of disposal group classified as held for sale:

	31 Dec 23 $'000	31 Dec 22 $'000
Trade and other payables	94	44
	94	44

During the year the following have been recognised in discontinued operations:

Loss from discontinued operations:

	2023 $'000	2022 $'000
General and administrative expenses	(382)	(179)
Foreign exchange gain/(loss)	319	(8)
Loss from discontinued operations	(63)	(187)

Cash flows of disposal group classified as held for sale:

	2023 $'000	2022 $'000
Operating cash flows	11	27
Total cash flows	11	27

22. Trade and other receivables

	Group		Company
	31 Dec 23 $'000	31 Dec 22 $'000	31 Dec 23 $'000	31 Dec 22 $'000
Current receivables
Receivable due from subsidiary	-	-	681	744
Loans due from subsidiary	-	-	10,100	18,100
Trade receivables	1,449	2,362	-	-
Prepayments and accrued income	2,328	2,991	342	334
VAT receivable	1,247	1,546	184	109
Corporate income tax receivable	6,750	1,095	-	-
Other receivables	450	721	208	290
	12,224	8,715	11,515	19,577
Non-current receivables
Loans due from subsidiary	-	-	282,244	268,750
Prepayments	9,326	8,221	-	-
VAT receivable	4,475	3,257	-	-
	13,801	11,478	282,244	268,750

The 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.

There are two loans due from subsidiaries. One loan is due from CAML MK Limited, a directly owned subsidiary for $292,142,000 (2022: $286,850,000), which accrues interest at a rate of 2.25% per annum (2022: 2.25%). There is another loan due from CAML Exploration Limited, a subsidiary, for $202,000 (2022: nil), which accrues interest at a rate of 6.90% per annum and is repayable on demand. The loans have 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 these loans can be repaid and the expected credit loss is immaterial.

Overpaid Group income tax of $6,750,000 (31 December 2022: $1,095,000) will be offset against corporate income tax liabilities arising in the same entities in the next financial year.

As at 31 December 2023, the total Group VAT receivable was $5,722,000 (2022: $4,803,000), which included an amount of $4,475,000 (2022: $3,399,000) of VAT owed to the Group by the Kazakhstan authorities. 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 primarily consists of prepaid capital expenditure on the Sasa Dry Stack Tailings Project.

23. Inventories

Group	31 Dec 23 $'000	31 Dec 22 $'000
Raw materials	12,955	11,917
Finished goods	1,924	1,232
	14,879	13,149

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 2023 and, therefore, there were no write-offs to the income statement during the year (2022: nil). The total inventory recognised through the income statement was $7,697,000 (2022: $6,527,000).

24. Cash and cash equivalents and restricted cash

	Group		Company
	31 Dec 23  $'000	31 Dec 22  $'000	31 Dec 23  $'000	31 Dec 22  $'000
Cash at bank and on hand	56,832	60,298	45,326	35,812
Cash and cash equivalents	56,832	60,298	45,326	35,812
Restricted cash	318	264	-	-
Total cash and cash equivalent including restricted cash	57,150	60,562	45,326	35,812

The restricted cash amount of $318,000 (2022: $264,000) is held at bank to cover Kounrad subsoil user licence requirements.

The Group holds an overdraft facility in North Macedonia, and these amounts are disclosed in Note 30 Borrowings.

Reconciliation to cash flow statements

The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year as follows:

	Group
	31 Dec 23 $'000	31 Dec 22 $'000
Cash and cash equivalents as above (excluding restricted cash)	56,832	60,298
Cash at bank and on hand in assets held for sale (Note 21)	74	63
Balance per statement of cash flows	56,906	60,361

25. Share capital and premium

	Number of shares	Ordinary shares $'000	Share premium  $'000	Treasury shares $'000
At 1 January 2022	176,498,266	1,765	191,988	(2,360)
Shares issued	5,600,000	56	13,440	(13,496)
Exercise of options	-	-	9	25
At 31 December 2022	182,098,266	1,821	205,437	(15,831)
Exercise of options	-	-	288	418
At 31 December 2023	182,098,266	1,821	205,725	(15,413)

The par value of Ordinary Shares is $0.01 per share and all shares are fully paid. During the prior year, the Company issued and allotted 5,600,000 Ordinary Shares to the trustee of the Central Asia Metals employee benefit trust ('EBT). These new Ordinary Shares were issued for the purposes of satisfying awards granted under the Company's Employee Share Plans.

During the year, there was an exercise of share options by employees and Directors that were partly settled by selling treasury shares. The proceeds of disposal of treasury shares exceeded the purchase price by $288,000 (2022: $9,000) and has been recognised in share premium. The remaining share options exercises during the year were cash settled amounting to $1,394,000 (2022: $1,939,000) and, therefore, a reduction in the share option reserve of $2,091,000 (2022: $1,263,000) to account for those share options now exercised.

	Treasury shares No.	EBT shares No.
At 1 January 2022	471,647	2,340,032
Disposal of trust shares	-	(9,280)
Shares issued	-	5,600,000
At 31 December 2022	471,647	7,930,752
Disposal of treasury shares	(278,322)	-
At 31 December 2023	193,325	7,930,752

26. 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 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 2023, a non-cash currency translation gain of $12,925,000 (2022: loss of $29,311,000) was recognised within equity.

27. 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 from 2012 to 2018 had straightforward conditions attached and were valued using the Black-Scholes model.

Share options granted in 2019 vested after three years depending on the achievement of the Group of the 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.

Share options granted in 2020 to 2023 vest after three years depending on a combination of the achievement of the Group of the 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 2023 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 2023 was $3,403,000 in total, which is recognised over the vesting period commencing 12 April 2023 until 31 March 2026. The following amounts were expensed during the year:

Group	2023 $'000	2022 $'000
2023 grants	826	-
2022 grants	1,165	613
2021 grants	938	938
2020 grants	232	942
2019 grants	-	82
Dividend related	1,379	1,242
Exercise of options	-	677
Total share-based payment charge	4,540	4,494

The model inputs for options granted during the year included:

	31 Dec 2023	31 Dec 2022
Vesting period	3 years 0 months	2 years 10 months
Exercise price	$0.01	$0.01
Grant date:	12 April 2023	22 June 2022
Expiry date:	11 April 2033	21 June 2032
Share price at grant date	$2.73	$2.82
Risk-free interest rate	3.48%	2.19%

As at 31 December 2023, 6,425,720 (2022: 5,467,454) 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:

	2023		2022
	Average exercise  price in $ per share option	Options (number)	Average exercise price in $ per share option	Options (number)
At 1 January	0.01	5,467,454	0.01	4,594,192
Granted	0.01	1,748,642	0.01	1,500,223
Exercised	0.01	(580,459)	0.01	(473,303)
Non-vesting	0.01	(209,917)	0.01	(153,658)
At 31 December	0.01	6,425,720	0.01	5,467,454

Non-vesting shares relates to options granted for which the performance targets were not met. Out of the outstanding options of 6,425,720 (2022: 5,467,454), 2,285,498 options (2022: 2,096,325) were exercisable as at 31 December 2023 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 $2.63 (2022: $3.32) per share. Share options exercised by the Directors during the year are disclosed in the Remuneration Committee Report.

Share options outstanding at the end of the year have the following expiry date and exercise prices:

Grant - vest	Expiry date of option	Option  exercise price $	2023 Options (number)	2022 Options (number)
8 May 12	7 May 22	0.01	-	76,032
24 Jul 13	23 Jul 23	0.01	36,801	36,801
3 Jun 14	2 Jun 24	0.01	93,064	143,064
8 Oct 14	7 Oct 24	0.01	160,000	160,000
22 Apr 15	21 Apr 25	0.01	212,121	212,121
18 Apr 16	17 Apr 26	0.01	338,940	338,940
21 Apr 17	20 Apr 27	0.01	279,763	296,591
2 May 18	1 May 28	0.01	484,090	484,090
30 May 19	29 May 29	0.01	349,269	355,103
16 Dec 20	15 Dec 30	0.01	337,866	979,548
15 Jul 21	14 Jul 31	0.01	974,392	974,392
22 Jun 22	21 Jun 32	0.01	1,410,772	1,410,772
22 Apr 23	21 Apr 33	0.01	1,748,642	-
			6,425,720	5,467,454

Employee Benefit Trust

The Company set up an 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.

28. Trade and other payables

	Group		Company
	31 Dec 23 $'000	31 Dec 22 $'000	31 Dec 23 $'000	31 Dec 22 $'000
Trade and other payables	5,473	6,722	462	365
Accruals	7,628	6,029	6,214	5,451
Corporation tax, social security and other taxes	4,226	3,892	294	246
Loan due to subsidiary	-	-	28,146	37,409
	17,327	16,643	35,116	43,471

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 $28,146,000 (2022: $37,409,000), which accrues interest at a rate of 6.90% 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.

29. Silver streaming commitment

The carrying amounts of the silver streaming commitment for silver delivery are as follows:

	Group		Company
	31 Dec 23 $'000	31 Dec 22 $'000	31 Dec 23 $'000	31 Dec 22 $'000
Current	1,002	1,095	-	-
Non-current	16,042	17,085	-	-
	17,044	18,180	-	-

On 1 September 2016, the CMK Group entered into a Silver Purchase Agreement. The CAML 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.

30. Borrowings

	Group		Company
	31 Dec 23 $'000	31 Dec 22 $'000	31 Dec 23 $'000	31 Dec 22  $'000
Unsecured: current
Bank overdraft	326	1,390	-	-
Total current	326	1,390	-	-

The carrying value of loans approximates fair value:

	Carrying amount		Fair value
	31 Dec 23 $'000	31 Dec 22 $'000	31 Dec 23 $'000	31 Dec 22 $'000
Bank overdrafts	326	1,390	326	1,390
	326	1,390	326	1,390

The movement on borrowings can be summarised as follows:

	Group		Company
	31 Dec 23 $'000	31 Dec 22 $'000	31 Dec 23  $'000	31 Dec 22  $'000
Balance at 1 January	1,390	32,978	-	23,406
Repayment of corporate borrowings	-	(23,820)	-	(23,820)
Repayments of overdraft	(1,090)	(7,531)	-	-
Finance charge interest	46	496	-	374
Finance charge unwinding of directly attributable fees	-	414	-	414
Interest paid	(46)	(511)	-	(374)
Foreign exchange	26	(636)	-	-
Balance at 31 December	326	1,390	-	-

During the year, overdrafts of $1,090,000 were repaid (2022: $7,531,000) with total interest paid of $46,000 (2022: $511,000). The corporate debt package with Traxys was repaid in full in August 2022.

The overdrafts are held with North Macedonian banks and are denominated in Euro and payable at fixed interest rates ranging from 3.24% to 5.3%.

As at 31 December 2023, the Group measured the fair value using techniques for which all inputs that 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); and

‣   inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

31. Provisions for other liabilities and charges

		Group
	Asset retirement obligation $'000	Employee retirement benefits $'000	Other employee benefits $'000	Leasehold dilapidation $'000	Legal claims $'000	Total $'000
At 1 January 2022	18,460	245	259	-	2	18,966
Change in estimate	1,153	40	62	-	-	1,255
Settlements of provision	-	(23)	(11)	-	-	(34)
Unwinding of discount (Note 15)	1,088	-	-	-	-	1,088
Exchange rate difference	(158)	(18)	(22)	-	-	(198)
At 31 December 2022	20,543	244	288	-	2	21,077
Change in estimate	3,687	62	99	93	-	3,941
Settlements of provision	-	(34)	(21)	-	-	(55)
Unwinding of discount (Note 15)	1,707	-	-	-	-	1,707
Exchange rate difference	163	10	12	1	-	186
At 31 December 2023	26,100	282	378	94	2	26,856
Non-current	26,100	242	363	94	2	26,801
Current	-	40	15	-	-	55
At 31 December 2023	26,100	282	378	94	2	26,856

a) Asset retirement obligation

The Group provides for the asset retirement obligation associated with the mining activities at Kounrad, estimated to be required in 2034. During 2022, 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, including a cost contingency of 10%, were projected over the useful life of the mining site and inflated using an inflation rate of 6.30% (2022: 5.85%) and discounted to 2023 terms using a nominal pre-tax risk-free discount rate of 6.70% (2022: 7.43%). The cost of the related assets are depreciated over the useful life of the assets and are included in property, plant and equipment.

The Group also provides for the asset retirement obligation associated with the mining activities at Sasa, estimated to be primarily required in 2039. During 2021, Sasa engaged an external expert consultant to prepare an updated conceptual closure plan. The expected current cash flows, including a cost contingency of 10%, were projected over the useful life of the mining site and inflated using a compounded inflation rate of 4.68% (2022: 3.53%) and discounted to 2023 terms using a discount rate of 9.14% (2022: 9.17%). 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 of $3,687,000 is due to a combination of additional estimated costs at Sasa surrounding the lining of the tailings facilities following discussions with Regulators and an update to the Kounrad and Sasa discount rates and inflations rates as explained above using latest assumptions.

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 2023 actuary assumptions are used as follows:

Discount rate:	5.5%
Expected rate of salary increase:	5.0%

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 information. 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. Cash generated from operations

Group	Note	2023 $'000	2022 $'000
Profit before income tax including discontinued operations		65,085	54,393
Adjustments for:
Depreciation and amortisation		28,192	27,285
Silver stream commitment		(1,136)	(1,971)
Loss on disposal of property, plant and equipment	18	204	94
Foreign exchange loss/(gain)		3,378	(6,829)
Share-based payments	27	4,540	4,494
Impairment of non-current assets	18,19	-	55,116
Finance income	14	(1,992)	(515)
Finance costs	15	1,852	2,060
Changes in working capital:
Increase in inventories		(1,846)	(2,538)
Increase in trade and other receivables		(5,784)	(10,503)
Increase in trade and other payables		1,547	1,513
Provisions for other liabilities and charges		(55)	(34)
Cash generated from operations		93,985	122,565

The increase in trade and other receivables of $4,719,000 (2022: $10,503,000) includes a movement in the Sasa VAT receivable balance of $5,530,000 (2022: $4,472,000), which is offset against corporate income tax payable during the year.

33. Commitments

Significant expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

Group	31 Dec 23 $'000	31 Dec 22 $'000
Property, plant and equipment	4,524	6,159
Other	-	170
	4,524	6,329

34. Dividend per share

During the year, the Company paid $41,525,000 (2022: $48,210,000), which consisted of a 2023 interim dividend of 9 pence per share and 2022 final dividend of 10 pence per share (2022: 2022 interim dividend of 10 pence per share and 2021 final dividend of 12 pence per share).

35. Related party transactions

Key management remuneration

Key management remuneration comprises the Directors' remuneration, including Non-Executive Directors and is as follows:

	2023 Basic salary/ fees $'000	2023 Annual bonus $'000	2023 Pension $'000	2023 Benefits in kind  $'000	2023 Employers NI $'000	2023 Total $'000	2022 Total $'000
Executive Directors:
Nigel Robinson	531	449	-	12	137	1,129	1,050
Gavin Ferrar	424	367	11	6	176	984	957
Louise Wrathall1	359	323	2	6	92	782	349
Non-Executive Directors:
Nick Clarke	217	-	-	-	29	246	246
Mike Armitage2	93	-	-	-	11	104	106
Roger Davey	106	-	-	-	13	119	110
Dr Gillian Davidson	106	-	-	-	14	120	113
Mike Prentis	107	-	-	-	15	122	115
David Swan	106	-	-	-	13	119	112
Nurlan Zhakupov3	23	-	-	-	-	23	93
Robert Cathery4	-	-	-	-	-	-	49
	2,072	1,139	13	24	500	3,748	3,300

1.  Appointed on 26 May 2022

2.  Appointed on 10 January 2022

3.  Resigned on 3 April 2023

4.  Resigned on 26 May 2022

During the year Gavin Ferrar exercised 203,442 (2022: 226,612) shares for a total share option gain of $505,000 (2022: $719,000); see the Directors' option awards table in the Remuneration Committee Report.

Kounrad Foundation

The Kounrad Foundation, a charitable foundation through which Kounrad donates to the community, was advanced $611,000 (2022: $300,000). 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 $455,000 (2022: $220,000). This is a related party by virtue of common Directors.

36. Deferred income tax asset and liability

Group

The movements in the Group's deferred tax asset and liability are as follows:

	At 1 January 2023 $'000	Currency translation differences $'000	(Debit)/credit to income statement $'000	At 31 December 2023 $'000
Other temporary differences	(326)	(5)	(2,050)	(2,381)
Fair value adjustment on Kounrad Transaction	(4,457)	(79)	277	(4,259)
Fair value adjustment on CMK acquisition	(12,175)	(423)	767	(11,831)
Deferred tax liability, net	(16,958)	(507)	(1,006)	(18,471)

Reflected in the statement of financial position as:			31 Dec 23 $'000	31 Dec 22 $'000
Deferred tax asset			512	328
Deferred tax liability			(18,983)	(17,286)

	At 1 January 2022 $'000	Currency translation differences $'000	Credit to income statement $'000	At 31 December 2022 $'000
Other temporary differences	(349)	23	-	(326)
Fair value adjustment on Kounrad Transaction	(5,069)	338	274	(4,457)
Fair value adjustment on CMK acquisition	(17,459)	1,004	4,280	(12,175)
Deferred tax liability, net	(22,877)	1,365	4,554	(16,958)

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 $1,042,000 during the year (2022: $4,554,000) to reflect the tax consequences of depreciating (2022: depreciating and impairing) the recognised fair values of the assets during the year.

As explained in Note 2, the application of the amendment to IAS 12 for the first time in the current year resulted in an increase in Group deferred tax assets of $514,000, an increase in deferred tax liabilities of $2,075,000 and a net increase in the income tax expense of $1,561,000, which is reported within other temporary differences.

	31 Dec 2023 $'000	31 Dec 2022 $'000
Deferred tax liability due within 12 months	(723)	-
Deferred tax liability due after 12 months	(18,260)	(17,286)
Deferred tax liability	(18,983)	(17,286)

All deferred tax assets are due after 12 months.

All amounts are shown as non-current on the face of the statement of financial position as required by IAS 12 Income Taxes.

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 $14,362,000 (2022: $13,917,000), arising from asset retirement obligations of $2,815,000 (2022: nil) and in respect of share-based payments of $260,000 (2022: $1,271,000) as there is insufficient evidence of future taxable profits within the entities concerned. Unrecognised losses can be carried forward indefinitely.

Company

At 31 December 2023 and 2022, respectively, the Company had no recognised deferred tax assets or liabilities.

At 31 December 2023, the Company had not recognised potential deferred tax assets arising from losses of $14,362,000 (2022: $12,911,000) as there is insufficient evidence of future taxable profits. The losses can be carried forward indefinitely.

At 31 December 2023, the Company had other deferred tax assets of $260,000 (2022: $1,271,000) in respect of share-based payments and other temporary differences that had not been recognised because of insufficient evidence of future taxable profits.

37. Events after the reporting period

During the year, CAML incorporated CAML Exploration Limited, in the Astana International Finance Centre ('AIFC'), initially owned 100% by CAML. In February 2024, CAML transferred a 20% ownership to a team of experienced explorers, Thaler Minerals LLP, a company organised by Terra Associates. The activity of CAML Exploration Limited is to look for exploration opportunities in Kazakhstan.

On the 24 March 2024, a Subscription Agreement was signed in respect of a conditional subscription for CAML to subscribe for 28.7% shareholding in Aberdeen Minerals Limited for £3.0 million. The investment is a subscription of 35,294,117 new ordinary shares at a price of 8.5 pence per ordinary share. In addition, CAML will receive warrants to invest an additional £2 million at a price of 11 pence per share, which would increase CAML's ownership of Aberdeen to 37.8%, assuming no further changes to Aberdeen's issued share capital.

 

END