Central Asia Metals Regulatory News (CAML)

CENTRAL ASIA METALS PLC

("CAML" or the "Company")

2011 Full Year Results

Central Asia Metals plc (AIM:CAML), a mining exploration and development company focused on base metals in Central Asia, today announces its full year results for the 12 months ended 31 December 2011.

Highlights:

·; Construction of the Solvent Extraction - Electro Winning ("SX-EW") plant at the Kounrad copper project is now materially complete and delivered under budget

o First cathode copper production is now imminent

o Commissioning commenced in February 2012 and is progressing well

o Pregnant Leach Solution ("PLS") was added to the plant in mid April 2012

·; Agreement reached with JSC SAT & Company, subject to regulatory approval, for the acquisition of the remaining 40% of the Kounrad Project which would increase CAML's ownership to 100%

·; Cash balance of $16 million as at 31 December 2011 with no outstanding debt

·; The exploration licence at the Alag Bayan copper/gold exploration project has been extended for a further year until April 2013.

·; No lost time injuries during the construction phase of the Kounrad Project

Nick Clarke, Chief Executive Officer of CAML, commented:

"We are extremely pleased that the SX-EW plant at Kounrad is now being commissioned. Cathode copper production is imminent with PLS from the leaching of the dumps being added to the tanks in the SX-EW plant.

The delivery of this world class, low cost copper production plant represents an important step in CAML's development as a copper producer. With the completion of the SX-EW plant under budget, Kounrad is now on track to reach its production target of 10,000tpa of copper cathode.

Test work on the dumps to the west of the current plant is underway, and will enable the Board to make a decision by the end of 2012 on a potential second SX-EW plant to significantly increase copper production.

The pending acquisition of the remaining 40% of the Kounrad project that the Company does not already own is an important development for the Company. The transaction is currently going through due legal process within Kazakhstan and we hope to be able to complete it by the end of this year."

Enquiries:

Central Asia Metals plc Nick Clarke +44 (0)20 7183 5402Nigel Robinson

Canaccord Genuity Limited Andrew Chubb +44 (0)20 7253 8500Rob Collins

Mirabaud Securities LLP Peter Krens +44 (0)20 7878 3362

Pelham Bell Pottinger Charles Vivian +44 (0)20 7861 3232Lorna Spears

Chairman and Chief Executive's statement

Dear Shareholders

The primary focus for the Company during 2011 was the construction of a 10,000 tonne per year Solvent Extraction -Electro Winning (SX-EW) copper cathode plant at Kounrad in Kazakhstan. By 31 December 2011, the plant had reached material completion and following mechanical commissioning in the first quarter of 2012 first copper production is expected imminently within the projected capital cost of $46.9 million.

Kazakhstan

Work commenced on the Kounrad site in late summer 2010 with the excavations for the building foundations and it has taken just 18 months to complete the overall construction phase despite the harsh winters. The CAML Board is pleased to confirm that the project has been completed well below the original capital expenditure budget of $46.9 million. In addition, they  are also extremely pleased that during construction, site personnel worked 627,000 man-hours without any lost time injuries. The Company commenced commissioning the plant in early March 2012 and the first copper cathodes are expected imminently. There will then be a phased ramp up in order to bring production to full capacity by Q4 2012.

On 9 December 2011 the Kounrad copper project was opened by the Governor of the Karaganda region and the ceremony was linked via satellite to the office of the President of Kazakhstan, Mr Nursultan Nazarbayev. This was a prestigious event within the country and provided the Company with a high profile during the country's 20 year independence celebrations. The Kounrad project has been included in the State Programme of Innovation and Accelerated Industrial Development of Kazakhstan for 2010-2014 and is the first SX-EW plant to be built in Kazakhstan.

In late 2011, the Company was also informed by its Joint Venture Partner, SEC Sary Arka, of their intention to sell their 40% interest in the Kounrad project. The CAML Board were advised that the sale would have to be conducted through an official tender process. After discussions with SEC Sary Arka, the CAML Board concluded that it was in the best interests of the Company and its shareholders to waive its statutory rights in relation to the purchase of the 40% interest in Kounrad and not participate in the tender.

Recognising the need for a strong Kazakhstan based partner, the CAML Board entered into discussions with JSC SAT & Company (collectively with its subsidiaries, the "SAT Group") who had expressed an interest in acquiring this 40% stake. In January 2012, an agreement was reached whereby CAML would acquire this 40% from the SAT Group should they be successful in the tender process. The agreed consideration is the issue of 8,616,593 ordinary shares in the Company. CAML has now been informed that the SAT Group won the tender process and consequently, the transaction is currently undergoing due legal process in Kazakhstan.

Looking to the future, the Company has commenced dump leach testwork on the sulphide dumps situated on the western portion of our licence area and this data will enable the Board to make a decision by the end of 2012 on a potential second SX-EW plant to significantly increase copper production. During the year the sale of the Tochtar gold project was also finally concluded.

Mongolia

During the summer of 2011, CAML conducted a targeted drilling programme at Alag Bayan. Three holes were drilled to a combined total depth of 2,419 metres but no economic mineralisation was located. Subsequently, a further target area was identified which is currently being drilled by Ibex Mongolia LLC (formerly Govi-Ex Mongolia LLC) with assay results expected in April 2012. Ibex have an earn-in agreement with the Company for the Alag Bayan licence. 

During 2011, the Company took the strategic decision to sell the Handgait exploration project following on from a limited drilling programme on site. The Ereen gold project also remains for sale and the CAML Board has appointed Cutfield Freeman & Co to oversee the sale process for both assets.

Financing

The Company started the year with $47.4 million of cash in the bank being sufficient funds to complete the construction of the Kounrad SX-EW plant in Kazakhstan. Capital expenditure on the project and general overheads have been tightly controlled over the course of the year in order to ensure that Company can achieve its objectives without further recourse to additional finance. As at 31 December 2011, the Company still had $16.3 million of cash in the bank.

Outlook

Forecast copper production for 2012 is 5,000 tonnes rising to 10,000 tonnes in 2013. It is hoped that the company should generate sufficient cash from the production of copper at Kounrad for the investment in new projects and potentially for the commencement of the payment of dividends to shareholders.

Chairman, Nigel Hurst-Brown Chief Executive Officer, Nick Clarke

Operating Review

Central Asia Metals plc ("CAML" or the "Company") has interests in copper, gold and molybdenum mineral assets in Kazakhstan and Mongolia. Both of these countries border and enjoy positive relationships with China and Russia. They have stable governments and have benefited from progressive trade policies over the past decadewhich have delivered strong economic growth during that period.

Kazakhstan

·; Ninth largest and the largest landlocked, country in the World, equivalent in size to Western Europe.

·; Significant progress made towards developing as a market economy post the breakdown of the former Soviet Union.

·; Credit risk rating of 'BBB+' and a stable outlook ( Standard & Poors).

·; Extensive mineral and metal resources in the country - in top ten in the World for copper reserves.

·; Averaged 8% growth per annum since 2000.

ü CAML has just completed the construction of a 10,000 tonnes per annum SX-EW plant at the site of the former Kounrad copper mine.

ü Copper will be produced by the in-situ leaching of the oxide and sulphide dumps created by over 70 years of mining at the Kounrad open pit mine.

ü The cathode copper produced from an SX-EW process will be low cost by world standards and the facility is expected to be in the lowest quartile of world producers from the C1 cash cost of production.

ü The Company has recently closed its office in Almaty and moved all staff in country to Balkhash close to the mine site. CAML has had an office here since the commencement of the project in 2007. It currently employs 277 people at Kounrad.

Mongolia

·; Nineteenth largest and second largest landlocked, country in the World.

·; Extensive mineral deposits including copper, coal, molybdenum, tin, tungsten and gold.

·; Largest trading partner is China, which accounts for over two-thirds of all exports.

·; The country is taking progressive steps towards becoming a free market economy.

ü CAML has three exploration opportunities in Mongolia.

ü Ereen and Handgait are currently held for sale.

ü The third exploration opportunity, Alag Bayan, is a prospective copper/gold porphyry target in the southern Gobi and exploration works will continue.

ü The Company has had offices in Mongolia since 2007 and currently employs 14 people in the country.

CAML strives to maintain good working relationships with host Governments as well as with its local partners in all its areas of operations. The Company considers the mining regimes in each country where it operates to be favourable to foreign investment. All of the Company's exploration licences and permits are current.

The Company recognises that the local communities in the areas in which it operates are key stakeholders in the projects and is committed to implementing environmental and safety standards in accordance with best industry practice

Review of Operations - Kounrad , Kazakhstan

Background

During 2007, CAML began the technical evaluation studies for an in-situ dump leach project at Kounrad, Kazakhstan. Kounrad is an old open pit copper mine located 17 km north of Balkhash in central Kazakhstan. The site has been mined since 1936, originally by the State, and more recently by Kazakhmys plc. In total 2.9Mt of finished copper was produced between 1936 and 2006 and the material that was mined and not deemed suitable for processing at the time was dumped on the surface close to the open pit.

Detailed mining and processing records have been maintained relating to the classification and grades of the various waste dumps at the site. These records exist for all the material contained within the dumps and they are classified as either oxide, sulphide or mixed/waste rock.

Originally the sulphide ores from the open pit were treated by conventional flotation, whilst oxide and low-grade sulphide material were stockpiled around the site. The oxide material was dumped entirely on the eastern margin of the open-pit mine whilst all of the sulphide, and the bulk of the mixed/waste dumps are located in the western area.

A number of previous estimates of the quantities of residual copper contained in these materials have been calculated, using archived material by both State and private organisations over the past two decades.

In September 2007, following the technical evaluation of the dump leaching project, CAML won the tender process for the right to acquire the sub soil user licence and process the copper contained within the dumps. CAML entered into a joint operating agreement (JOA) with SEC Sary Arka, a government entity, whereby CAML acquired a 60% interest in the sub soil user licence. As part of the JOA, CAML was obliged to provide the technical management and finance for the whole project from the testing and development stage through to the construction and subsequent commissioning of the 10,000 tonne per annum SX-EW plant.

The sub-soil use contract covers an area of 23.5 km2 (2,350 hectares) and is valid until 20 August 2034.

Update on Kounrad Resources and pilot plant sulphide testing

At the time of the IPO, the Company agreed to undertake a programme to transfer dump material to a JORC compliant resource statement. The intention is to have all of the presently estimated resources drilled and assayed during 2012 with the aim of then classifying all material to an acceptable international standard by the end of the first quarter of 2013. In July 2011 Wardell Armstrong International (WAI) were commissioned to oversee a drilling and sampling programme for the western dumps. A 3,200m drill campaign was completed in 2011 and the Company has planned a further 2,500m drill campaign for 2012. The Company is on track to provide a JORC compliant resource statement by Q1 2013.

The Company has successfully operated a pilot plant on site at Kounrad since the summer of 2008. The plant was initially located at the eastern part of the site and was used as a test basis for the leaching of the oxide dumps and the subsequent data used in the design of the main SX-EW plant now being completed.

In July 2011, the pilot plant was moved to a suitable testing area on the sulphide dumps in the western part of the site. The intention is to use the facility to provide test data on how the sulphide dumps react to leaching and management plan to assess this data in late 2012 in order to make a commercial decision regarding the viability of a second SX-EW plant to process these ores.

As at 31 December 2011, 460 tonnes of cathode copper had been produced at the pilot plant since August 2008 of which 139.3 tonnes were produced in 2011. During 2011, 140 tonnes were sold at an average price of $8,190 per tonne and a further 74 tonnes were held in stock due to the relatively depressed copper price at the year end and also to potentially use the stock for a trial run with potential off-take suppliers for the main SX-EW plant.

Environmental Matters

Given the nature of the operations at Kounrad, there are a number of environmental aspects that need constant monitoring and CAML management constantly strive to ensure that they remain a focus of attention.

A total of 76 monitoring boreholes have been installed in three zoned rings close to the collection trenches. Within this sanitary protection area the monitoring of the boreholes is conducted on a 10 day cycle. Scheduled environmental monitoring of soil, air and water samples continues to be taken and analysed on site. To date no adverse results have been noted and during 2011 specialists from the local ecological department undertook an inspection of the site's environmental measures and plans. No negative remarks were reported and a 5 year plan, as required by the State authority, has now been developed and agreed with the local Department of Ecology.

Project Ownership changes

In November 2011, the Company was informed by its Joint Venture Partner, SEC Sary Arka, of an intention to sell their 40% interest in the Kounrad project. Due to SEC Sary Arka's internal regulations the sale had to be conducted by means of a tender process within the country. After discussions with SEC Sary Arka, the CAML Board concluded that it was in the best interests of the Company and its shareholders to waive its statutory rights in relation to the purchase of the 40% interest in Kounrad and not participate in the tender.

The Company recognised the ongoing need for a strong Kazakhstan based partner and, accordingly, entered into discussions with the SAT Group who had expressed an interest in participating in the tender process. Consequently, in January 2012, a preliminary agreement was reached with the SAT Group whereby CAML agreed to purchase the balance of the 40% shareholding it did not already own should the SAT Group win the tender.

CAML has now been informed that the SAT Group won the tender process and consequently, the transaction is currently undergoing due legal process in Kazakhstan. As a consequence, the agreement reached between CAML and the SAT Group became legally binding and the SAT Group became obliged to transfer their newly acquired 40% ownership in the Project to CAML.

The value agreed between the parties for the exchange was a consideration of 8,616,593 ordinary shares in the Company which will result in the SAT Group becoming a 9.1% shareholder in the enlarged Company once the transactions are completed.

The Company and the SAT Group in conjunction with SEC Sary Arka are now preparing the documentation to seek the approval of the transactions by the various ministries within Kazakhstan as required by law. The timing to conclude the transactions is totally dependent upon the receipt of the relevant waivers required from the Government of the Republic of Kazakhstan. These waivers are necessary as the government has a pre-emptive right with respect to all transactions associated with entities that operate under the sub soil user laws of the country. The Company will endeavour to complete this process as quickly as the required statutory procedures permit.

Upon the completion of the transactions, the CAML Group will then hold 100% of the Kounrad Project and the SAT Group will own 9.1% of the Company. The SAT Group has undertaken not to sell its CAML shares for a period of six months from completion and, subject to certain conditions, not to purchase any additional shares in CAML for a further period of 12 months. The parties have also agreed to work together to explore the possibility of undertaking new projects.

Construction of the 10,000 tonne per annum SX-EW copper plant at Kounrad

The primary focus during the year for the Company has been the completion of the construction project at Kounrad. By the end of December 2011, the 10,000 tonne per annum Kounrad SX-EW copper cathode plant had reached material completion. Work commenced on site in the summer of 2010 with the excavation of the building's foundation and it has taken just 18 months to complete the construction phase with the project only a few months behind the schedule as set out at the time of the Company's IPO in September 2010.

During the construction phase a total of 4,206 m3 of mass concrete was poured and a total 725 tonnes of structural steel erected. The work continued throughout the winter months in extremely cold conditions and management are extremely pleased that site personnel worked 627,000 man-hours with no lost time injuries. In addition, the project remains below the original capital expenditure budget of $46.9 million.

A brief review of some of the construction project achievements and milestones are summarised below;

Engineering Design and Approvals

An engineering design study was commissioned with Beijing General Research Institute of Minerals and Metallurgy (BGRIMM) in November 2009 and completed in Spring 2010. Following a review of information provided by CAML from its own mini-plant operation and from previous test work, together with their own experience in the design of several SX-EW plants in China, BGRIMM developed a detailed leaching schedule and designed a plant capable of treating a range of flow rates and solution grades to produce 10,000 tonnes per annum of copper cathodes at a minimum 99.99% quality. The plant design has taken the extremes of climate into consideration to ensure all year round operations are possible.

Solvent Extraction (SX) Building

The SX building steel work and cladding was 100% complete at the year end and good progress had been made on the lining of the concrete solution sumps and the tanks for wash water, organics, raffinate and rich electrolyte solutions. Final installation works together with all the relevant quality checks were completed in March 2012.

The steelwork associated with the 5 mixer-settler units was also 100% completed at the year end with two of the settler pool units fully lined. The lining of the settler pool units was of critical importance throughout in this part of the plant and the very highest quality of installation techniques and plastic jointing was essential so a specialist installation crew was brought in from China for this work.

The 5 mixer settlers have a solution capacity of 1,500m3 in total and have been water tested for integrity.

Electro Winning (EW) Building

As at 31 December 2011, the EW building was fully completed and all 50 EW cells had been installed and the associated piping completed. The EW cells had been installed and aligned with great precision and accuracy to a tolerance of 10mm over a distance in excess of 30 metres. The acid mist ventilation pipes and scrubbing tower system plus the walkways around the EW cells were fully completed and all the acid mist hood covers positioned.

All cathode and anodes have been loaded and the cells have been flow tested.

Boiler House and Pump Stations

The SX-EW plant design incorporated a coal fired boiler house which would serve the dual purpose of keeping the buildings warm throughout the harsh winters as well as providing economical heating for the leach solutions. The three boiler units have a combined equivalent heat output of 8.5MW which will facilitate all year round operations.

As at the year end all the three boiler units had been installed together with the ash removal conveyor, exhaust fans, cyclone boxes plus various pipes and valve fittings. The testing and pre-commissioning work on the boiler house was completed in March 2012.

Two main water pump stations have been installed on site, one for the main SX-EW process and one for the fire water pump process.

Main Office Building

An office building capable of accommodating all operational site management staff was completed in March 2012.

SX -EW Process Equipment and Logistics

By May 2011 the vast majority of the SX-EW equipment had been placed on order either with BGRIMM or with a specialist manufactures and by June 2011 goods started to arrive on site. Initially, the logistics chain worked well from BGRIMM based in Beijing, a distance of over 5,000km from the project. However, a series of problems were encountered during the summer which had a damaging knock on effect throughout the project supply chain for the rest of the year.

The logistics were disrupted firstly by the volume of goods being imported into Kazakhstan from China which led to a serious backlog of goods at the border. In addition, routine inspections then all took far longer than usual for containerised loads. By late June 2011, it was estimated that the backlog had grown to almost 1,000 wagons and this congestion was then compounded during the summer by a high speed rail crash within China which caused the whole rail network to be suspended for about two weeks pending a safety review. This situation had a considerable adverse impact on construction progress on site during the summer of 2011 as key items of equipment were stranded within China.

In August, CAML management took the decision to commence the transportation of significant quantities of materials by road from Beijing to Kounrad. The logistics situation slowly improved such that October saw a dramatic increase in the speed of installation works on site. CAML management early on in the project had decided to undertake all the installation and erection work using CAML's own staff and resources. Consequently, the experienced local construction manager on site hired his own personnel and plant as required and managed to both save money on sub contract costs and expedite the installation process by working long hours once the equipment was delivered to site.

Aside from the items of equipment ordered through BGRIMM, a number of key components were ordered from specialist suppliers throughout the World. These included the anodes and cathodes for the electro winning cells which were ordered from Chile, a specialist rich electrolyte filtration system from the USA and an overhead crane for the electro-winning building from Russia.

Commissioning, First Fill Reagents and Spares

CAML management were always mindful of the fact that attempting to commission the SX-EW plant in the depth of a Kazakhstan winter would be difficult. Consequently, the Company scheduled a phased start-up of the plant from late February 2012 with the commencement of mechanical and electrical dry commissioning of selective equipment under 'no load' conditions. The Company completed the rest of the initial commissioning tests by early April and pregnant leach solutions were introduced into the SX-EW plant in mid-April 2012. The first copper cathodes are expected to be produced imminently.

The Company has appointed PPM Solutions Pty Ltd, an Australian based organisation experienced in the start-up of SX-EW plants worldwide, to oversee and assist CAML employees in the phased commissioning of the plant.

A number of specialist reagents are required for the SX-EW processes and supply contracts have been signed for the majority of these materials. As at the 31st December 2011, the organic compounds, cobalt sulphate salts and guar gum had all been delivered to site in sufficient quantities for the first fill of the various tanks within the SX-EW plant. Also, in preparation for the commencement of leaching acid had been purchased to fill the storage tank on site.

Dump Leaching and Irrigation System

The leaching system for the first stage of the Kounrad project consists of the excavation and lining of 2 kilometres of solution interceptor trenches around the base of ore dumps 6, 9 and 10. These dumps will be the first ones to be leached and during 2011 a total of 9 kilometres of irrigation distribution piping and over 700 kilometres of drip irrigation piping were installed and commissioned in readiness for the leaching process to commence.

The pregnant leach solution will be collected in the interceptor trenches and pumped to the four solution storage ponds which have been constructed close to the plant and contain up to 40,000m3 of copper bearing solutions at any one time.

Infrastructure Improvements - Water, Rail and Power

The supply of water to the site has been facilitated by the installation of an 8km water pipeline drawing water from an old mine shaft at a depth of 160 metres below surface. The mine shaft water pumping station was designed and constructed by the site management team. In August 2011, water was pumped to the surface from depth and this represented a major achievement in sourcing water for the project.

The system has been fully tested and an average flow rate in line with the design parameters achieved. In order to facilitate movements of heavy goods into and out of the site a 900 metre twin-track railway extension has been installed and commissioned. The track connects to the main Kazakhstan railway network.

Over the year the Company has installed and commissioned a 4.5km 35kV overhead power line and electricity sub-station capable of delivering 6.3MW 35 / 10kVa of power to the plant. The power line was fully energised and tested in September 2011.

Official opening of the Kounrad plant

On 9 December 2011 the Kounrad copper project was opened by Mr Serik Akhmetov, the Governor of the Karaganda region. The ceremony was attended by senior CAML personnel and local government officials and was also filmed and linked via satellite to the office of the President of Kazakhstan, Mr Nursultan Nazarbayev. This was a prestigious event within the country and provided the Company with a high profile. The Kounrad project was one of several Kazakhstan projects that were included in the 'National Iinitiative of State Programme of Innovation and Accelerated Industrial Development of Kazakhstan for 2010-2014'. The television footage of the opening ceremony formed part of a report that was broadcast on Kazakhstan national television on 16 December 2011, celebrating the 20th anniversary of Kazakhstan's independence.

Offtake proposals for the copper cathodes

The Company has received and reviewed a number of proposals regarding the off-take of copper cathodes from Kounrad. All the proposals received were very competitive and the Company remains confident that an offtake deal will be completed shortly.

Review of Operations - Mongolia

Alag Bayan

The 39.4km2 Alag Bayan licence (3,941 hectares) is located in the middle of Mongolia's prolific copper-gold porphyry mineralisation trend, 100km from the Oyu Tolgoi copper/gold deposit and 80km from the Tsagaan Suvarga copper deposit.

During 2011 CAML planned a drilling campaign with the primary intention of converting the exploration licence into a mining licence by April 2012. An additional IP survey was conducted by GoviEx Mongolia LLC with the intention of targeting anomalies within a specific part of the licence area. Following the results of the consultations with both CAML's own geologists and the GoviEx team, a targeted drilling campaign commenced in July 2011 and comprised 3 holes for an aggregate of 2,419 metres. The results were inconclusive.

After a further review of the licence area and in discussions with GoviEx, a further target area was identified in late 2011. CAML were not prepared to spend additional funds on the proposed new drilling campaign and accordingly an agreement was reached whereby GoviEx ( subsequently renamed Ibex Mongolia LLC) would fund this additional drilling campaign for an enhanced earn in to the project ownership. The drilling campaign commenced on site in early January and results are expected in Q2 2012. In late March 2012, the Company secured a 1 year extension to the Alag Bayan licence.

Assets held for sale

Following on from a strategic review of the Company's assets in 2009, a decision was taken to sell the Ereen project. At the time of this review it was also decided that Handgait warranted some additional drilling on site and that this would be conducted during 2011 once IPO funds were available. During 2011, CAML conducted this additional drilling and concluded that Handgait should also be sold as the asset was peripheral to CAML's long term goals. The sale process has thus far been managed internally and following on from the decision to also sell Handgait, CAML decided to appoint Cutfield Freeman & Co, an M&A specialist to oversee the sale process.

 Ereen is a gold exploration project located between Centerra's Boroo mine and the Gatsurst project in the Selenge province of Mongolia approximately 140 km north of Ulaan Baatar. In May 2007, CAML acquired its interest in the Ereen project through the acquisition of an 85% share of Zuun Mod UUL Ltd, a Mongolian company.

 Handgait is a molybdenum deposit located in the Bulgan province 500 km northwest of Ulaan Baatar near the Russian border. CAML holds 80% of the Handgait project through its local subsidiary, Mon Resources Ltd. The exploration licence covers an area of 17.91km2 in northern Mongolia, adjoining the Russian border. The licence area hosts a significant molybdenum resource which has undergone extensive exploration using soil geochemistry, detailed geophysics, and a substantial core drilling programme to delineate preliminary resources. During 2011, a drilling campaign was conducted that completed 7 holes to a combined depth of 1,489 metres.

Financial Review

Income Statement

The consolidated net loss after taxation of the Group in respect of the year ended 31 December 2011 amounted to $11.2 million (2010: $5.8 million). A number of material items influenced this increased loss with the most significant being a $2.8 million unrealised loss on foreign exchange differences and a $2.6 million impairment charge for Handgait. The loss per share increased to $0.13 (2010: $0.11).

Revenues during the year were negligible and as in previous years consisted of the sales of cathode copper produced by the pilot plant on site at Kounrad. Total revenue of $1.1 million (2010: $1.4 million) was the result of 140 tonnes being sold at an average price of $8,190 per tonne (2010: 225 tonnes / average price $6,426). A decision was taken in December 2011 to retain 74 tonnes of cathode copper in stock due to the relatively depressed copper price during that month and also to potentially use the stock for a trial run with potential off-take suppliers.

General and Administration costs decreased significantly over the year although again there were some marked changes in the cost base compared to 2010. Overall, across the Group ongoing costs remained similar year on year at $5.2 million (2010: $5.2 million) after excluding IPO related charges and the share based payments for staff rewards from 2010.

Employment costs were significantly increased during 2011 to $5.8 million (2010 : $2.7 million) but this was primarily related to the construction activities on site at Kounrad as can be seen from the average number of staff employed which increased to 212 (2010 : 134).

Balance Sheet

The total assets of the Group as at 31 December 2011 amounted to $69.4 million (2010: $76.6 million). Given that the main focus over the course of the year was the construction activity at Kounrad, the balance sheet reflects a reduction of cash into non-current assets.

Overall there was a decrease in net cash to $16.0 million (2010: $47.4 million) with an increase in non-current assets to $43.7 million (2010: $22.5 million). The main Group assets into which the funds were invested during 2011 is the Kounrad SX-EW project which due to the 60:40 joint venture ownership structure is proportionately consolidated. Non-current account trade and other receivables increased significantly in 2011 to $12.4 million (2010: $3.0 million) and the majority of this balance, $10.8 million, represents funds that will be recovered once the SX-EW plant is constructed. The balance of $1.6 million is VAT accumulated during the construction of the plant and this is expected to be recovered during the normal course of the business.

Intangible assets decreased to $8.9 million (2010: $13.0 million) primarily reflecting the impairment of Handgait and its subsequent reclassification as being held for sale. The Group spent $1.6 million on exploration during 2011 (2010: $0.3 million), primarily at Alag Bayan in Mongolia. Overall assets held for sale also increased to $8.4 million (2010: $4.9 million) primarily due to the reclassification of Handgait as mentioned.

There was no movement in the Group's equity base during 2011 and the main increase in liabilities was a $1.7 million increase to the provision made for the asset retirement obligations for the Kounrad Project.

 Whilst the Group had no external debt as at 31 December 2011 (2010: nil), the Company's loans to related parties within the Group increased to $73.6 million (2010: $50.4 million). This effectively breaks down into $56.6 million loaned to subsidiaries in Kazakhstan and $17.0 million to subsidiaries in Mongolia. It is expected that the recoveries of these inter-company loans will commence in 2012 from the production of copper at Kounrad and potentially the disposal of two of the Mongolian exploration assets.

 Consolidated Income Statement for the year ended 31 December 2011

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company income statement and statement of comprehensive income. The Company's loss in 2011 for continuing operations is $6,314,361 (2010: $2,316,770)

Statements of Financial Position at 31 December 2011

Consolidated Statement of Changes in Equity for the year ended 31 December 2011

Statements of Cash flows for the year ended 31 December 2011

Notes

1. Basis of Preparation

CAML is a public limited company, which is listed on the Alternative Investment Market of London Stock Exchange and incorporated and domiciled in the UK. The financial information is abridged and does not contain the Group's full financial statements for the years ended 31 December 2010 and 2011.

The consolidated financial statements have been prepared in accordance with IFRS and adopted by the EU, IFRIC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention with the exception of assets held for sale which have been held at fair value.

Full financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies. Financial statements for the year ended 31 December 2011 were approved by the Board of Directors on 18 April 2012 and will be presented to the shareholders at the forthcoming Annual General Meeting.

2. Expenses by nature

General and administrative expenses

During 2011 the Kazakhstan based subsidiary Sary Kazna LLP made a donation of $33,693 (2010: $Nil) to a charitable fund in Karaganda for construction of a Mosque.

 Cost of sales

3. Property, Plant and Equipment

In 2010 the Group commenced construction of a commercial 10,000 tonne per annum SX-EW plant, which continued in 2011. At 31 December 2011 construction in progress accounted for $19,356,507 (2010: $4,397,589).

The Company had $6,624 of office equipment at Net Book Value as at 31 December 2011 (2010: $3,747).

4. Intangible Assets

Amortisation of mining licences and permits is charged to the appropriate project. Amortisation of software is all charged to general and administrative costs.

Deferred exploration and evaluation costs as at 31 December 2011 are represented by Alag Bayan of $4,334,860 (2010: $3,439,125) and Kounrad of $1,158,798 (2010: $1,166,441). The increase in deferred exploration and evaluation costs in Alag Bayan is the result of exploration program completed during 2011. At the same time, the Handgait project as at 31 December was impaired by $2,397,870 based on a third party valuation and was classified as an asset held for sale of $3,300,000 (2010: $Nil).

As at 31 December 2011 the Company impaired mining licenses and permits of project Asgat (Mongolian based held for sale subsidiary Mongolian Silver Mountain Ltd) of $152,124 (2010: $Nil).

As part of the Kounrad JOA, prior to the commissioning date, Sary Kazna LLP is responsible for 100% of the liabilities and yet only 60% of the assets relating to the exploration activity at Kounrad. The impact of this arrangement results in an addition of $999,946 to intangible assets as at 31 December 2011. Following commissioning in 2012, all exploration assets and liabilities at Sary Kazna LLP will be owned and accounted for on a 60:40 basis.

The Company had $1,000,000 of intangible assets as at 31 December 2011 (2010: $1,154,238). The amount is represented by the Alag Bayan exploration licence.

5. Assets held for sale

The assets and liabilities related to the following companies have been presented as held for sale:

Handgait

In December 2011 CAML Board made a decision to classify Project Handgait as held for sale.

A molybdenum deposit located in the Bulgan province 500 km northwest of Ulaan Baatar near the Russian border.

CAML holds 80% of the Handgait project through its local subsidiary, Mon Resources LLC. The exploration licence covers an area of 17.91km2 in northern Mongolia, adjoining the Russian border. The licence area hosts a significant molybdenum resource which has undergone extensive exploration using soil geochemistry, detailed geophysics, and a substantial core drilling programme to delineate preliminary resources.

Ereen

This gold exploration project is located between Centerra's Boroo mine and the Gatsurst project in the Selenge province approximately 140 km north of Ulaan Baatar, Mongolia. During 2009 a drilling programme of 1,792m was conducted on the site in order to obtain further geological data and thereby enable the conversion of the exploration licences associated with the project to be converted into 30 year mining licences. This was successfully achieved in April 2010.

A decision was taken to actively sell the mine during 2009, however during various offers the deal has not been completed. CAML actively continue marketing the asset. In February 2011, CAML has signed an agreement with Canaccord Genuity Limited, which will assist in the marketing and disposal of Ereen and Handgait.

Other

As at 31 December 2011 the Group classified two further 100% controlled Mongolian subsidiaries as held for sale:

New CAML Mongolia Ltd is a Mongolian based management company and Mongolian Silver Mountain Ltd, was set up for a prospective silver project. None of the above subsidiaries hold exploration or mining licenses.

The Handgait project, which is part of the intangible assets held for sale, as at 31 December 2011 was impaired by $2,397,870 based on third party valuation and was classified as asset held for sale of $3,300,000 (2010: $Nil).

As at 31 December 2011 the Company impaired mining licenses and permits of project Asgat (Mongolian based held for sale subsidiary Mongolian Silver Mountain Ltd) of $152,124 (2010: $Nil).

The investment carried directly in the Company's accounts relating to the Ereen project at 31 December 2011 is $100,000.

The Loss from discontinuing operations for 2011 was $5,251,189 (2010: Gain $845,667).

6. Trade and Other Receivables

The carrying value of all the above receivables is a reasonable approximation of fair value.

All trade receivables are with counterparties that management considers to be of high credit rating in that they are either government agencies or related parties with whom the Group has a strong business association.

Management's policy is to assess all trade receivables and receivables from related parties for collectability and a provision is made where doubt exists. Amounts are fully written off when information comes to light that the amounts due will not be recovered.

The Group's non-current accounts receivable from related parties represent a portion of investments into the Kounrad Project on behalf of its Joint Partner Sary Arka. The balances are expected to be recovered by CAML through a priority repayment of intercompany loans used to finance development of Kounrad Project.

7. Cash and Cash Equivalents

96.6% of the Group's cash and cash equivalents at the year end are held at a AA-rated bank (2010: 93.9%).