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Central Asia Metals (CAML) has finally lined up a “transformative” acquisition, after years of hunting for a replacement for its ageing Kounrad operation in Kazakhstan.

The pick is a yet-to-be-built copper mine in Arizona, to be acquired through the $119mn buyout of New World Resources (AU:NWC). This could double CAML’s copper output if built before the Kounrad operation shuts down as expected in the mid-2030s.

The offer represents a 98 per cent premium on New World’s undisturbed share price, and will be paid for using a new $120mn loan and cash reserves. CAML was in a net cash position of just under $70mn as of 31 December.

The company’s last major acquisition was the Sasa mine in North Macedonia in 2017, and since then, management has looked all over Europe and beyond for another opportunity.

The Antler project, a prospective underground mine around two hours from Las Vegas, is currently in the permitting stage. It now needs sign-off from the Bureau of Land Management, given that parts of the project are on federal land.

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Central Asia Metals PLC

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Much of the infrastructure for the mine will be on private property, however, “which [New World] either owns or currently has the right to purchase”, CAML said.

A previous study forecast production of around 30,000 tonnes a year for 12 years, with the total cost of the build around $300mn.

New World is working on a definitive feasibility study that will probably update these numbers. The company put out a new mineral resource estimate this month, which is 543,000 tonnes of contained copper, at a grade of 3.8 per cent. This is a high grade compared to other copper mines, which are mostly open-pit operations.

CAML chief executive Gavin Ferrar said Antler was “the right asset, the right size” for the company.

The company has not built an underground mine from scratch before but Ferrar said CAML had “all the skills in-house to execute on this project”. The miner has done major work underground at the Sasa project in recent years.

Ferrar added that the premium CAML will pay for New World’s shares compared with the discount to the net present value of Antler, which the Australian company put at $500mn in a pre-feasibility study from last year, on a post-tax basis.

Potential returns are hard to gauge, but RBC Capital Markets analyst Marina Calero said the acquisition would be “positive for the CAML investment case”. She flagged the need for clarity on project financing, however, given that the potential cost is not far off CAML’s current market value.

CAML CFO Louise Wrathall said the debt-funded arrangement for the deal left the door open for future equity financings. She said the project would be “eminently financeable”.



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