Central Asia Metals flags $120m impairment after Sasa mine update

(Sharecast News) - Central Asia Metals reported an updated mineral resource and ore reserve statement for its 100%-owned Sasa zinc-lead mine in North Macedonia on Tuesday, confirming a shorter life of mine and flagging a non-cash impairment charge of up to $120m for 2025.

As at 31 December, total mineral resources at Sasa stood at 20.5 million tonnes at an average grade of 2.2% zinc and 3.9% lead, including Indicated resources of 11.4 million tonnes at 2.8% zinc and 4.2% lead and Inferred resources of 9.1 million tonnes at 1.5% zinc and 3.6% lead.

Contained metal across the total resource amounted to 452kt of zinc, 810kt of lead and 16,451koz of silver.

The AIM-traded firm said the ore reserve, derived from the indicated resource, was estimated at 6.9 million tonnes at average grades of 2.5% zinc and 3.5% lead, containing 170kt of zinc, 244kt of lead and 5,782koz of silver.

It said the revised reserve compared with 9.2 million tonnes at 2.4% zinc and 3.4% lead at the end of 2024, reflecting revisions to mine design, higher net smelter return cut-off values in response to increased operating cost assumptions, updated metal price and treatment charge assumptions, and around 0.8 million tonnes of mining depletion in 2025.

The updated life-of-mine plan envisaged mining of about 830,000 tonnes per annum over the next eight years, followed by a reduction in 2034, implying a current mine life to 2034 based solely on the Svinja Reka reserve and resource.

"Over the course of 2025 and continuing into this year, we have been working hard to improve the operating and financial performance of our Sasa operation," said chief executive Gavin Ferrar.

"As part of this work, we have comprehensively updated the life-of-mine (LoM) plan, which has resulted in a five-year reduction in the LoM as currently envisaged."

He added that the shorter mine life and revised assumptions were expected to result in "a downwards revision to the carrying value of Sasa in the Group's consolidated financial statements for the year to 31 December, leading to a non-cash impairment charge anticipated to be no greater than $120m".

Ferrar stressed that the charge would not affect cash generation or dividends.

"Although the expected impairment charge will negatively impact CAML's reported 2025 earnings, I would stress that this is a non-cash charge and does not in any way affect the Group's cash generation nor its intention to continue to distribute dividends to shareholders.

"As previously reported, CAML ended 2025 with cash of just over $80m and only a minor overdraft drawn."

The company confirmed there was no change to its dividend policy.

Operationally, Sasa had faced increasing geological challenges at depth, including narrower and more variable orebody geometry and grades, which have affected head grades and profitability.

The mine was transitioning from sub-level caving to cut-and-fill and long-hole stoping with paste backfill to improve flexibility and control dilution.

CAML said a comprehensive business review in 2025 examined mine planning, grade control, processing throughput, productivity and cost control.

Staffing levels have been reduced by around 10%, productivity per employee-shift has improved, and measures including inventory optimisation and re-tendering of procurement contracts have been implemented.

Additional exploration drilling, increased drilling density for mine planning, expanded on-site assaying capacity and further personnel training were planned for 2026.

A project to test ore sorting was also under way, targeting potential value uplift from lower-grade portions of the resource, particularly at Golema Reka.

"Meanwhile, the work at Sasa continues, and these efforts are expected to deliver a material improvement in the operation's performance in the years ahead," Ferrar said.

At 1308 GMT, shares in Central Asia Metals were down 21% at 189.6p.

Reporting by Josh White for Sharecast.com.