Good morning, ladies and gentlemen. Welcome to the Central Asia Metals Plc Annual General Meeting and Investor Presentation. Throughout this recorded presentation, on the Investor Meet Company platform, attendees will be in listen only mode. Questions are encouraged and in connection with the investor presentation and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Just please simply type in your questions and press send. The company may not be in a position to answer every question it receives today. All questions will be reviewed with responses published on the Investor Meet Company platform, where it's appropriate to do so. I'd now like to hand over to the chairman of Central Asia Metals, Mr. Nick Clarke.
Good morning. My name is Nick Clarke, I would like to welcome you to this Annual General Meeting of Central Asia Metals Plc, our 13th AGM since our listing on AIM in 2010. I would also like to welcome those watching online via the Investor Meet Company platform. With us today are my colleagues on the board, Nigel Robinson, our Chief Executive Officer, Gavin Ferrar, our Chief Financial Officer, Louise Wrathall, our Director of Corporate Development. Mike Armitage, Roger Davey, Mike Prentice, and David Swann, our non-exec directors, are with me in the venue. Gillian Davidson, our other non-executive director, is with us via telephone today. Before we proceed, I would like to set out the running order for today's proceedings in line with the notice of meeting sent to shareholders in April.
First will be the formal AGM, at which we will handle the formalities required in connection with this. The voting of this will be by a poll to ensure all votes lodged in advance are taken into account, and the results of the AGM will be announced to the market later today. Once this formal AGM has concluded, we will then move on to the presentation from management. Turning to the formal business of the AGM, the necessary quorum being present, I now declare the annual general meeting open. The business of the meeting is set out in a notice of meeting contained in the circular to shareholders dated 20 April 2023 and distributed with the annual report and accounts. With your approval, I would like to take the notice of meeting as read. Is that agreed? Thank you. The notice is taken as read.
I would now be happy to answer any questions in connection with the business of the annual general meeting, as I intend to call a poll on all resolutions. I should be grateful if all questions in connection with the business of the annual general meeting be asked at this stage. There will be an opportunity to ask general questions during the investor presentation after the formal meeting is concluded. As there are no questions, and in connection with the business of the AGM, I shall now turn to the formal business of the meeting, being the resolutions set out in the notice of meeting. In accordance with the company's articles of association and to enable all proxies lodged in advance to be taken into account, I now demand a poll be taken on all of the resolutions set out in the notice of meeting. There are 13 resolutions.
Resolutions 1 to 10 are being taken as ordinary resolutions, which require a simple majority of the votes cast to be passed. Resolutions 11 to 13 are being taken as special resolution, which require approval of at least 75% of votes cast to be passed. Before we proceed to the voting, I will give a brief summary of each of the resolutions being proposed. Resolution 1 is an ordinary resolution to receive and adopt the Directors' Report and accounts for the period ended 31st of December, 2022, distributed previously to shareholders and available on the company's website. Resolution 2 is an ordinary resolution to approve the board's recommendation that a final dividend for the year ended 31st of December, 2022, of 10 pence per share be declared payable.
In accordance with the company's articles of association, certain directors retire by rotation at this meeting, and resolutions 3 to 7 are ordinary resolutions to reappoint myself, Nick Clarke, Nigel Robinson, Gavin Ferrar, Gillian Davidson, and Louise Wrathall as directors. Resolution numbers 8 and 9 are ordinary resolutions to reappoint the auditors and to authorize the directors to fix their remuneration in accordance with normal practice. Resolution 10 is an ordinary resolution to allot shares and grant rights to subscribe for or convert any security into shares. This is a renewal of the current standing authority, as is usual in publicly quoted companies. Resolutions 11 and 12 are special resolutions to also authorize the directors to exercise all powers of the company to allot equity securities for cash, otherwise than pro rata to existing shareholders, up to the level set out in the notice.
These levels are as recommended in the most recent guidelines published by the Pre-Emption Group that represents the interests of shareholders in relation to such authorities. Resolution 13 is a special resolution to authorize the company to purchase its own shares and to apply limits to this authority. Again, this is a renewal of a standing authority in place in the company. All these resolutions are being proposed at this meeting. Now, moving on to voting. I now declare the poll open. Will those shareholders, proxy holders, and corporate representatives wishing to vote, please complete a poll card now and pass these to the company secretary. If any shareholder, proxy holder, or corporate representative wishes to vote and does not already have a poll card to do so, please raise your hand and the company secretary will pass you a poll card for completion.
I plan to close the poll shortly. If there are any other poll cards to be submitted, please pass those to the company secretary now. Thank you. There being no further poll cards to be submitted, the poll is now closed. Our company secretary and registrars will be counting the votes cast at this meeting. The result of the poll will be available later today and will be announced to the London Stock Exchange as soon as practical. This concludes the business of the AGM. I now declare the AGM meeting closed. I will now hand over to Nigel Robinson, our CEO, to give a presentation of the company. Nigel.
Thanks very much, Nick. Well, good morning, everybody, welcome to everybody physically here in the room and also online. Just a quick presentation to remind people of the company's performance in 2022. Standard disclaimer, read at your leisure, so to speak. Just to remind people where we operate. We have two operations. First one that we started back in 2007 when we first acquired the licenses there is at Kounrad in Kazakhstan. This is an in-situ dump leach operation with an SXEW. That stands for Solvent Extraction Electrowinning processing facility. That's in central Kazakhstan, just north of Lake Balkhash, and south of Astana and north of Almaty. It's been in production now for 11 years. The life of operation has got another 11 years to go out to 2034.
In 2022, we had a record year. Production was at 14,254 tons of cathode copper, and our guidance this year is in similar ranges, 13,000-14,000 tons of copper. On the back of the success at Kounrad, we then invested in acquiring an underground lead and zinc mine in North Macedonia, slightly smaller country in the Balkan region. That's, as I say, an underground mine. A very different operation from Kounrad. Production commenced, though, actually back in the 1960s, and we've now owned it since 2000 and late 2000 and 17. The life of mine is out to 2039, so another 16 years of life remaining on that particular asset. 2022 production was 21,500 tons of zinc and 27,300 tons of lead.
Our guidance this year, as you can see there on the slide, is 19,000-21,000 tons of zinc and 27,000-29,000 tons of lead. Just moving on to remind people about the performance for 2022. We had a good financial performance. Generated revenue of $232 million with an associated EBITDA, that's earnings before interest, tax, and depreciation, of $131.6 million. That's represents a margin of about 57%. On the back of that, the free cash flow, it's an important number for the company 'cause our dividend is based on that number, was just under $90 million.
On the back of that Free Cash Flow for the year, we announced a final dividend of 10 pence, making 20 pence for the full year last year, which at the moment represents a yield of around about 10% on the current share price. We are now debt-free. We repaid all of our debt last August on the amount we generated to acquire the Sasa operation back in 2017. That was paid back over the 5 years of the life of that debt. We are now completely debt-free. We have cash in the bank at the year-end of just over $60 million. The number you see just at the bottom there, LTIFR, that stands for Lost Time Injury Frequency Rate. We had two incidents, unfortunately.
Two is too many. We're working to reduce that on site on both at Sasa. That represented in terms of the numbers of million man-hours that we worked a ratio of 0.83. We have announced our Q1 operations update in early April. That shows that we're on track for our guidance this year. We announced production for the first quarter of this year of just over 3,000 tons of copper at Kounrad, nearly 5,000 tons of zinc and 6,500 tons of lead, as you can see on the numbers there, which means we're on track for our full-year guidance that I've just mentioned. Just moving along to a little bit more on the Kounrad operation. Many of you will have seen this slide several times.
We've been operating there, as I said, for 11 years now, and you can see the Eastern dumps and the Western dumps. Most of the production now, about 85% of it this year, we expect to come from the Western dumps, which is where we've moved to, and about 15% will come from the Eastern dumps. We estimate in total, there's about 112,000 tons of recoverable copper out to the end of life of mine at 2034. Cost. It's a very low-cost operation. We don't move any of the ore in. It's in situ. As I said before, we have an EBITDA margin there of 77% at Kounrad. It's an extremely good margin. Our C1 cash cost, which we announced at the year-end, was $0.65 per pound.
If you think in tons of copper, that's about $1,400 per ton of copper. Copper is currently selling just over $8,000 per ton. You can see why it's a strong margin and why it's a low-cost operation. There's a table there which highlights the relevant costs that go into that production of the copper, reagents, power, et cetera, all of which are relatively small. A total cost base on site of just over $20 million. Like everybody else in the world, we're not immune to inflationary pressures, and last year we experienced around about 15% inflation, if you can see the numbers from 2021 out to 2022 there. One thing we are doing, which we're really proud of in Kazakhstan, is building a solar power plant.
This will contribute around about 16%-18% of our electrical requirements to the SXEW plant and will reduce our greenhouse gas emissions in Kazakhstan by around about 10%. The capital cost of that plant, which is only a fairly small plant by international standards, is just under $5 million. That will be completed this year and will be online later this year to be providing electricity from a solar farm to the SXEW plant, as I say. Moving on to Sasa quickly. Lovely picture there. You can see it's in a valley up at around about 1,000 meters above sea level. Skarn-hosted deposit in North Macedonia. It's an underground mine, this one.
Very different, as I said, from Kazakhstan. We are changing the method of mining from what was a sublevel caving operation when we acquired it five years ago to now a paste fill mining approach in 2023. That will start transitioning to that method of mining later this year, and I'll touch on the infrastructure projects that support that transition to paste fill mining. We have resources and reserves out to 2039 at Sasa. On the costs, as you can see the cost table there, the total cost on site at Sasa, around about $45 million. Inflation and one of the big factors that affected our operation in the second half of last year was a huge increase in the electricity costs, which we generally experienced across the European mainland and internationally as well.
They have actually abated quite significantly. In the first half of last year, we were paying $0.10 per kWh on a fixed rate contract. The costs at the moment are getting close to that number, around about $0.12-$0.13 per kWh. We expect to see, in this current year, some benefits from that, but it certainly affected some of the costs that we experienced last year. The margin at Sasa, slightly less than Kounrad at 52% EBITDA margin at Sasa. I mentioned the infrastructure projects to facilitate us going over to paste backfill mining. There's effectively three aspects to it. One is a new decline, which we're building, and we expect to hole through from surface to the 990 level later this month.
We've drilled around about 2 kilometers in total as we sit here today, as I say, we expect to hole through later this month. That's, we've got a new decline that goes all the way from the surface down to 990 level. We'll then continue further down. The end of that new decline will be around 2024 when we'll have drilled 4 kilometers down into the ore body. It'll improve the access into the ore body, improve ventilation, and improve the optimization of accessing the ore body, as I say. The paste backfill plant, a key part of the operation moving forward. Construction's well underway.
We start commissioning this month, dry commissioning, and then in the next 2 to 3 months, we'll be wet commissioning the plant with the intention that it gets into operation later this year and start doing the first paste backfill mining later this year. The last part of the equation effectively is dry stack tailings, such that we'll be managing waste on-site at Sasa through three aspects. The current tailings facility, which is a wet dam facility, the paste backfill, so putting the tailings back underground, and then the dry stack tailings plant which will start, and we've already started on some of the earthworks, late, earlier this month. We'll be completing the construction of that plant later this year with the intention of using dry stack tailings from, and commissioning it from Q1 2024. Those are the two operations.
Two very good operations, no debt on them, very cash generative. This slide here just shows what the company's about in terms of what drives us in terms of our strategic objectives. I've already mentioned targeting low-cost operations. We have got high margins at both of those operations. I'll touch on capital allocation in a minute, how we use the cash we generate from the operations, in terms of our capital allocation priorities. Also, we have a strong focus within the group on sustainability. We reported our, or distributed, should I say, our fourth sustainability report, earlier this year in April. Something we're particularly proud of. I think for the size of company, we do an extremely good job on managing all those aspects of sustainability, and we have five pillars to it.
Effectively, delivering value through good governance, through stewardship, as we call it. Maintaining health and safety on site. I've mentioned LTIF of 0.83, which is good by industry standards. Focusing on our people, making sure we recruit the right people. We look after those people, we train them and develop them well. Caring for the environment at both operations, making sure that we do the right thing by the environment and that we monitor everything we do closely. Unlocking value for our communities, investing money back into the local communities. Climate change progress. We've made good progress on this. We set ourselves a target a couple of years back now that on the 2020 base when we generated around about 100,000 tons of CO2, you can see the numbers there on the left-hand side of the waterfall chart.
We targeted that by 2030 we'd reduce that by 50%. Last year, we reported just south of 60,000 tons of greenhouse gas emissions, which is a 40% reduction. Most of that was because we have a 100% renewable electricity contract in North Macedonia. The solar farm will also contribute that at group level, around about a 6% reduction. Then we're looking at other opportunities around both sites to actually get to that 50% target by 2030. I mentioned the community is very important to us, important to most mining companies when you operate in these areas where the community is very dependent on the mine and the generation of income from that mine, the employment from that mine.
We've, in both operations, set up an independent charitable foundation which we contribute money into. We spent around about half a million dollars last year in 2022, and we've increased this year the contribution to 0.5% of our revenue at group level that will go back into those foundations for the relevant projects that we deem suitable for the communities. Capital allocation. Mentioned this before. Really four aspects to how we allocate our capital. One is dividends back to shareholders, the other one was paying off the debt. I mentioned before, we've now fully paid down our debt, so that's been removed. Investing back in the business, in the paste backfill projects that we've talked about at Sasa, the solar farm. Putting money back into the projects themselves to develop those projects.
Last but by no means least, probably the biggest challenge we face at the moment, growing the business from those current 2 profitable operations that we've got. In terms of returning money back to shareholders, again, something as a company we're very proud of. We've now paid back nearly $300 million back to shareholders since 2012 when we first started a dividend policy. That's £1.52 per share that it equates to. Our policy, just to remind everybody, is based on that free cash flow number. I mentioned that was $90 million for last year. Our policy is to return to shareholders 30%-50% of that free cash flow number. Last year, the amount we returned in terms of that 20 pence represented 47% of that Free Cash Flow number.
Business development activities, putting money back into that. We look at activities all the time or opportunities should I say, to actually grow the business. Making sure that when we do invest in another opportunity, it will be accretive to our shareholders and it's the right thing for the company to do. A big challenge, as I say, there's lots of opportunities out there, but getting the right ones in the right jurisdiction, at the right stage of development, with the right metals and all the other factors that go into it, is quite a challenge for the management team. We have a supportive shareholder base. There's just a few examples from the shareholders who've supported us. Institutional shareholders there. You can see J O Hambro, T. Rowe Price, BlackRock, T. Rowe Price, Fidelity, Polar Capital.
I think that represents around about 45% on that list. So we've got a pretty strong shareholder base, institutional shareholder base, should I say, in the city covering us and actually supporting us in what we do. Board of directors. You can see there from that picture of all the board of directors, we're not height sensitive at all. The people do actually look like that. We're not any photoshopping on the faces, you can see from the panel here. We're probably not all as tall as we indicate on that particular picture. There's the board of directors and they're all in front of you here. Finally, just to finish off before I open it up to any questions in terms of an outlook. We have got a strong sustainable business.
Two very good operations that generate good cash flows, and are fully invested in. Apart from at Sasa, we're investing more money to change the method of mining. We're producing metals essential for modern living safely and sustainably. We've got strong capital allocation priorities. I've mentioned the dividend already. GBP 0.20 represents about a 10% yield at the moment. We are investing in both the businesses that we currently own, and we're looking to grow the business and looking for growth opportunities. Our outlook for this year, we're on track for our production. We are debt-free. As I say, the two main challenges we've got this year is growing the business and also completing the construction projects at Sasa, which are on track to deliver and be completed later this year and into next year for commissioning.
On that note, that completes the presentation for Central Asia Metals. I'll hand over to the floor for any questions or online for any questions, or Louise, who's got a list of questions from various investors online.
Any questions from the room?
Monica Redman, shareholder. Could you give me an update as to whether there'd be any new opportunities in Kazakhstan, from the geological point of view? From the geopolitical risk point of view, is there any chance you might be nationalized 'cause your main operation's in Kazakhstan, it would actually destroy the company? I asked this of the Mongolian government representatives at Rio Tinto, and I didn't get a reply that I was very happy with.
Okay. Let me answer the second part of the question first, if you don't mind. I don't think there's any chance of us being nationalized. There's lots of state-owned enterprises in Kazakhstan, if anything, they're looking to try and privatize those through an IPO route. Actually getting a lot of those huge organizations in Kazakhstan into private hands and listing them rather than nationalizing. I don't think there's any chance of a little small company like CAML in Kazakhstan being privatized, sorry, nationalized by the country. In terms of the prospects in Kazakhstan, it is a highly prospective country. We are looking at opportunities.
I think where we are at the moment is looking for exploration opportunities. We are looking at companies out there and investing in companies that specialize in exploring and looking for other copper opportunities for ourselves. We are having various discussions, some of them fairly advanced, some not as advanced as others, to actually expand, if you like, our operations in Kazakhstan. We're comfortable operating there. We feel we can operate well there and have done now since 2007, as I've mentioned before.
Right. As an add on to that, when I flew into Almaty a few years ago, I was told it can reach minus 40 in the winter. Do the severe climatic conditions affect you too much on your cost base?
Very good question. You're right. It does get extremely cold. It goes from +40 to -40 in Kazakhstan. On the operation, what we have is boilers that actually heat the solution. When we put the, what we call the raffinate solution, which is to do the leaching, we actually heat it so that when it gets onto the dumps, it actually is heated up and then it cools down obviously as it goes through the process. We do get freezing, but as long as we have the kinetic energy to keep the solution moving, we operate. In fact, if you look at our production profile, we operate 365 days a year, every day of the year, even when it's down to -30, and with wind chill factors, sometimes -35, -40.
We continue to operate all the way through the year. That's actually been factored into the design of how Kounrad operates.
Related. I'm not an eco-warrior. I am pleased to see your use of solar panels. Last time I crossed the Gobi Desert, I couldn't see it for solar panels. I had a word with Antofagasta recently. They've had to put a huge investment into desalinations because of the ongoing drought in Chile.
Yep.
Obviously, you've got a climatic risk situation here.
You might be requested or encouraged to increase your solar panel production or your electricity production with the solar panels. Is this factored into the account predictions?
Sorry, into the accounts?
Well, is the bean counting, shall we say.
allowing for extra input for this sort of thing?
Well, we could certainly afford it. We've not factored it in the moment because the plant that I mentioned before, which is less than five megawatts, is very small by international standards. It's actually restricted because of regulations in country, how they distribute power, but so we can't actually build something without distributing it into the national grid, and we don't really wanna do that. We wanna feed it directly to the plant. I can see that changing in the coming years, so we've future-proofed the current facilities so that we could expand it maybe to a 10-megawatt site. Actually, I think we'd like to provide more power into the plant. It would never be 100%, I don't think, because you need it at certain peak times of power when at night you'll be able to operate the plants effectively.
I don't think we'll ever get that far, but we may indeed expand the solar farm. In terms of the water and climatic conditions, that's quite topical actually because there are reports that the Caspian Sea is reducing, I think by about 20 centimeters every year. There are some concerns about water in Kazakhstan. We take water from both Lake Balkhash and some underground sources close by to the mine. We're comfortable with how much we extract and how we use that water, and the government's comfortable with what we use. I think we're okay at the moment, but I think it's a warning potentially for the future that there may be some water, more stringent water regulations within Kazakhstan, I suspect.
Yes. The governments get very sensitive about this sort of thing. The only time I've been banned from taking a photograph out of an airplane is over the Aral Sea.
Right. Okay.
Thank you.
Well, thank you very much for your questions. Very good questions as well. Thank you.
Well, yeah, we'll go to the online questions. The first one was a pre-submitted question which is asking, is CAML continuing to look for opportunities in CIS countries?
Well, CIS is quite broad. We're certainly looking, as I mentioned before, for opportunities in Kazakhstan, but outside of Kazakhstan, we will keep our ear to the ground and look at places like Uzbekistan. It's not as attractive to us 'cause we know how to operate in Kazakhstan, but we'll look at opportunities. Certainly, we would never consider investing in Russia, that's for sure.
Similar question here. Resource-rich Uzbekistan has recently been relaxing foreign investment barriers. Is this a jurisdiction CAML has looked at or will look at in the future for opportunities?
Yeah, it's one that we have looked at. There are some good opportunities potentially in Uzbekistan, but it's got a bad track record in terms of its politics and governance. It's something that we'll continue to keep an eye on, as I mentioned before, and potentially look at if there's a right opportunity.
The last question that we've currently got online is one I don't think we can answer at the moment, I'm afraid.
No.
We're being asked what the current cash balance is, compared to the $60 million at the end of the year. We'll give our next cash balance update at the end of the with the Q2 production update, which will come out in early July.
Yeah. Yeah, I think that's all we can say at the moment.
Yeah. Those are all the questions that we have online.
Any more questions from the floor at all? Not basically. I'll now hand back, I suspect, to the Chairman to maybe close the meeting.
Yeah. Thank you. Thank you to my fellow board members for attending, and to those in the room and online, thank you very much. That concludes the press, proceeds this morning. Thank you.
Thank you very much indeed to the board of Central Asia Metals. If I may thank all those online as well. If I could ask you please not to close this session, as you'll now be automatically redirected for you to provide your feedback in order that the board can better understand your views and expectations. This may take a few moments to complete, but I'm sure will be greatly welcomed by the company. Good morning to you all.