Central Asia Metals Regulatory News (CAML)

21 September 2011

Ticker: CAML (AIM)

Central Asia Metals plc ("the Group" or "the Company")

Unaudited Results for the Six Months Ended 30 June 2011

Central Asia Metals plc, a mining and exploration organisation with operations in Kazakhstan and Mongolia and a parent holding company based in the United Kingdom, announces its unaudited results for the six months ended 30 June 2011.

Highlights

Kounrad SX-EW project ('Kounrad')

·; $28.8 million committed and spent to date and project forecast to be completed within $47 million budget.

·; Construction 60% completed on site with Mechanical Completion scheduled for late December 2011.

o All earthworks (solution ponds, collection trenches and concrete foundations) completed;

o All key infrastructure improvements (Power, Rail and Water supply) substantially completed

o All SX-EW plant equipment, structural steel and panelling fully manufactured and in the process of delivery to site for installation;

o Structural steel and panelling to be delivered to site by the end of September 2011.

·; Exploration focussed on a JORC compliant resource statement for all the Kounrad dumps commenced during the period and is expected to be completed by the end of 2012.

·; Kounrad pilot plant moved to sulphide dumps and testing commenced in July 2011.

·; Negotiations at an advance stage for the sale of the copper off-take from 2012.

Mongolia (Alag Bayan, Handgait, Ereen)

·; Planned exploration works at Alag Bayan completed

o IP anomalies identified by additional geophysical survey undertaken by GoviEx;

o 3 holes drilled;

o Assays returned low trace amounts of copper with no economic mineralisation intercepted;

o Negotiations remain on-going with GoviEx regarding drilling an additional two holes to test geological structures to the east and north of the licence area.

·; 1,500 metre drilling programme commenced at Handgait in September

·; Ereen currently in exclusive due diligence period with potential purchaser.

Financial

·; Consolidated net loss down from $4.9 million (H1 2010) to $1.8 million (H1 2011).

·; Group cash as at 30 June 2011 of $33.2 million with no outstanding debt.

Nick Clarke, Chief Executive Officer, commented

"This has been a productive period for the Company and I am extremely pleased with the progress made at Kounrad, where we are targeting completion of construction by the end of 2011. We have consistently remained on track to deliver the 10,000 tonne per annum SX-EW facility on budget.

The focus of management continues to be on Kazakhstan where commissioning of Kounrad will commence during Q1 2012 and we anticipate that within six months the SX-EW plant will be up to full production of 10,000 tonnes per annum of copper cathode. We expect to complete negotiations for the sale of copper cathode from Kounrad via an off-take contract, which will provide a source of cash flow for the Company from 2012 onwards."

 For further information please visit www.centralasiametals.com.

Enquiries:

Operating and Financial Review

Kounrad Solvent Extraction - Electro Winning (SX-EW) plant - construction progress

Having raised $60.0 million at the Initial Public Offering (IPO) in September 2010, the primary objective for the Company during 2011 is to complete the construction of the 10,000 tonne per annum copper cathode SX-EW facility at Kounrad, Kazakhstan on time and on budget. Construction commenced on site during 2010 and continued throughout the winter months and consequently significant progress has been made towards the construction of the facility.

A total of almost 4,000 m3 of concrete has now been poured at the project site since November 2010 which is in excess of 95% of the total amount planned for the whole SX-EW facility. The SX area, office buildings and bulk sulphuric acid tank base have all been completed whilst the EW area is 98% complete. The boiler house foundations are completed and there are only minor areas still to be poured on several ancillary building bases. Brickwork associated with the SX and EW buildings is near completion and the quality and finish is of a very high standard.

Solution ponds and collector trenches have been dug and lining with HDPE is nearing completion. The leaching system for irrigating the oxide dumps is in place with only minor works remaining.

The majority of the infrastructure improvements have been completed to facilitate the water and power supply to the site and the extended railway line has also been successfully commissioned and is now operational.

The equipment and materials for the SX-EW facility have now all been manufactured and are either stored on site ready for installation or in the process of delivery from the various suppliers around the world. The construction teams are still awaiting the arrival on site of approximately 700 tonnes of structural steel and panelling. These bulky items have been delayed due to logistics issues within the Chinese railway network compounded by a backlog at the border area with China.

By late August approximately 10% of these structural items had been delivered to site and management instructed the supplier to deliver the critical EW and main office block steel sections by road rather than by rail in order to expedite their delivery. It is anticipated that barring any further delays all the steel sections will be available on site by the end of September.

Despite the unanticipated delay in the delivery of the structural steel to the site, management remain confident that they will complete the erection of the main SX and EW buildings ahead of the winter months. Completion of the construction phase of the project remains a key objective for the second half of the year and the Mechanical Completion date is still scheduled for late December 2011.

The budget for the construction project at Kounrad was $47 million and $28.8 million had been committed and spent at the end of August 2011 with an estimated 60% of the project complete. Current indications are that the project will be completed within the capital budget, although management remain conscious of the financial uncertainties associated with construction projects and continue to monitor and control costs closely.

Kounrad Exploration & Resource Evaluation

As planned and in order to test the characteristics of the sulphide dumps on the western part of the site, the pilot plant was moved from the oxide areas during June. The pilot plant is now operational again as a testing facility after the move and commenced producing copper cathodes again in July 2011.

In March 2011, the Company commissioned Wardell Armstrong International (WAI) to oversee the preparation of a JORC compliant resource statement for the dumps. Their initial work identified areas of the dumps where additional sample data is required and accordingly a dump drill campaign was conducted in July and August. The results from this drilling should enable an Inferred resource statement to be published in 2012 in line with the commitment made in the Company's IPO document in September 2010.

Review of Operations - Mongolia

Alag Bayan

The Company conducted exploration activity at Alag Bayan in Mongolia as planned during the period and a second Induced Polarisation (IP) survey was also conducted on site in May by Govi Ex Mongolia LLC. Based on an analysis of the results of this survey the specific locations for a three hole drilling campaign were determined and drilling commenced in June 2011. In total 2,419m was drilled in the three holes.

The assay results returned low trace amounts of copper with no visible mineralisation. Despite these disappointing results for the three holes drilled so far this year, Govi Ex is considering the possibility of funding an additional two holes to the east and north of the licence area. The terms and conditions of such an arrangement are yet to be finalised by the Company management and GoviEx.

Handgait

During the first half of 2011 there was no activity at Handgait although a limited drilling campaign commenced in early September 2011. 6 holes are planned to a combined depth of 1,500m. They will be targeted at further proving up the resources in the area prior to management making a strategic decision on the way forward for the asset.

Ereen

Following on from a strategic review of the Company's assets in late 2009 a decision was taken to sell the Ereen project. In July 2011 the Company signed an agreement with a potential purchaser to allow them exclusive due diligence for a non-refundable deposit of $250,000 and discussions are continuing with this potential purchaser.

Financial

The Group had no debt as at 30 June 2010 (Nil - 31 December 2010) and had $33.2 million in cash and cash equivalents (31 December 2010: $47.4 million). No funds were raised during the 6 months to 30 June 2011 and there were no changes to the equity in the Group during this period.

The consolidated net loss after taxation of the Group in respect of the 6 months period ended 30 June 2011 amounted to $1.8 million (6 months 2010: $4.9 million) due to a reduction in General and Administrative charges to $2.4 million (6 months 2010: $3.9 million) and the removal of the fair value charge associated with the convertible loan note. A charge of $2.3 million was made during the 6 month period to 30 June 2010. The loan was fully converted at IPO.

Sales of copper cathode from the pilot plant remained similar during both periods at $1.1 million. This represented 140 tonnes (6 months 2010: 184 tonnes) being sold at an average price of $8,094 per tonne (6 months 2010: $6,390 per tonne).

Outlook

Commissioning of the SX-EW plant is planned to commence during Q1 2012 and expected to take up to 6 months to complete. During this time it is expected that the copper cathode output will ramp up to full production of 800 tonnes per month starting from an initial target of 200 tonnes per month.

Management will also be reviewing the data from the test facility relocated at the sulphide dumps during the first half of 2012 with a view to taking a decision on a second SX-EW facility at Kounrad with a capacity of up to 15,000 tonnes per annum.

The Company management remain positive on the prospects for the copper price over the coming years and once the Company has established a track record with the first SX-EW facility management is keen to replicate their success on other suitable sites.

The company will continue to progress the sale of Ereen in Mongolia whilst also exploring their options to maximise value from the remaining Mongolian assets at Alag Bayan and Handgait.

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2011

INTERIM CONSOLIDATED INCOME STATEMENT (Unaudited)

for the six months period ended 30 June 2011

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

for the six months period ended 30 June 2011

INTERIM CONSOLIDATED STATEMENT OF CHANGES OF EQUITY (Unaudited)

for the six months period ended 30 June 2011

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

for the six months period ended 30 June 2011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6 months ended 30 June 2011

Nature of Business

Central Asia Metals plc ("the Company") and its subsidiaries ("'the Group") are a mining and exploration organisation with operations in Kazakhstan and Mongolia and a parent holding company based in the United Kingdom. The Group's principal business activities are the exploration and subsequent development of mines primarily in the Central Asia region. The Group currently has mining interests in gold, copper and molybdenum.

Basis of Preparation

The interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and implemented in the UK and in accordance with the AIM Rules.

The accounting policies, methods of computation and presentation used in the preparation of the interim financial information are the same as those used in the Group's audited financial statements for the year ended 31 December 2010, which this interim consolidated financial information should be read in conjunction with.

This Interim condensed consolidated statement for the six months ended 30 June 2011 and 30 June 2010 is unaudited and does not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006. The Interim condensed consolidated statement incorporates the results of the Group for the period from 1 January 2011 to 30 June 2011. The results for the year ended 31 December 2010 have been extracted from the statutory financial statements for the Company for the year ended 31 December 2010 which are prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union. The interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2010.

After review of the Group's operations, financial position and forecasts, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the unaudited interim financial information.

1. Segmental Information

The adoption of IFRS 8 resulted in the change in the reportable segments. Previously segments were reported on a geographical basis (by country). Management has determined the operating segments based on the reports reviewed by the Board and decided that it would be more appropriate to identify reportable segments on a project by project basis.

As at 30 June 2011, the Group consisted of the following 4 main business segments:

·; Kounrad - copper production and development in Kazakhstan;

·; Handgait - molybdenum exploration in Mongolia;

·; Alag Bayan - copper and gold exploration in Mongolia; and

·; Ereen - gold exploration in Mongolia.

All projects represent separate geographical areas and have separate independent revenue streams from sales of different metals or independent expenses structure related to exploration or development.

Project Ereen, at 30 June 2011 has been classified as held for sale.

The Group operates out of three key geographical areas, being Kazakhstan, Mongolia and the UK, even though they are managed on a worldwide basis.

The Board assesses the performance of the operating segments based on a number of operational and financial measures relevant to the stage of development of the project:

Exploration and Evaluation

The main indicators used for these projects relate to the numbers of holes drilled and the depth achieved together with the associated assay results and their impact on the assessment of potential reserves and resources. Financial performance is based on the estimated costs per metre for the drilling and the associated site overheads and any required infrastructure expenditure.

Development and Production

Once a project reaches this stage of maturity, the emphasis for assessing the performance of the projects switches to the measurement of product output and the associated revenues, operating costs or the monitoring of the estimated capital costs to develop the project.

Segmental revenues and results

The segment information of segmental results provided to the Board for the reportable segments for the year ended 30 June 2011 is as follows: 

The segment information of segmental assets and liabilities provided to the Board for the reportable segments for the 6 months ended 30 June 2011 is as follows:

2. Property, Plant and Equipment

3. Intangible Assets

4. Share Capital and Premium

The total authorised number of ordinary shares as at 30 June 2011 is 100 million shares (31 December 2010: 100m shares) with a par value of $0.01 per share (2010: $0.01). All issued shares are fully paid.

The Company did not issue any ordinary shares during the 6 month period ending 30 June 2011.

5. Earnings per share

Basic earnings per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares.

6. Cash Generated from operations

7. Commitments

At 30 June 2011 amounts contracted for but not provided in the financial statements amounted to $7,772,153 for the Group (2010: $4,300,439).