Jul. 18 (Bloomberg) –Central Asia Metals Plc (CAML), an unprofitable developer of copper projects in Kazakhstan and Mongolia, is targeting annual output of 20,000 tons by 2014 once production starts in the fourth quarter.
The company will report positive cash flow next year when copper cathode production from a waste dump at its Kounrad project in Kazakhstan reaches full capacity of 10,000 tons, Chief Executive Officer Nick Clarke said in an interview today in London. Copper cathode is a finished form of the metal.
"Our focus is to start production at Kounrad and then build a second plant to reach a 20,000 ton-capacity," he said. Central Asia Metals may decide on building the second plant in a year, Clarke said. Construction will take 18 to 24 months and the cost will be similar to the $47 million of the first plant.
Central Asia Metals, which raised $60 million in an initial public offering in London in September to finance the first facility, also owns copper, molybdenum and gold projects in Mongolia. Molybdenum is a material used to harden steel.
The London-based company is in talks with a potential buyer of its gold project, Clarke said. "We will probably complete the sale by the end of the year," he said, without elaborating.
The Kounrad mine, which was operated by Kazakhmys Plc until 2007 when it was shut, holds an estimated 733,200 tons of copper metal in waste dumps, made up of pieces of rocks, with an average metal grade of 0.12 percent, Clarke said.
"It's very economic to extract the metal from the rocks," Clarke said. "It doesn't require mining, it's all out there on the surface; we'll run the solution through it and leach the metal out."
The company reported a loss of 5.84 million pounds ($9.4 million) in 2010.