Central Asia Metals Regulatory News (CAML)

27 June 2013

CENTRAL ASIA METALS PLC

("CAML" or the "Company")

New Framework Agreement for 100% of the Kounrad Project

Central Asia Metals plc (AIM:CAML), a copper producing company focussed on base metals in Central Asia, is pleased to announce a new framework agreement for the acquisition of the remaining 40 per cent. of the Kounrad Copper Project in Kazakhstan (the "Kounrad Project" or "Kounrad") (the "Acquisition").

The Kounrad Project is currently operated by two subsidiaries of CAML. CAML Kazakhstan BV ("CAML BV") is the 60 per cent. owner of Kounrad Copper Company LLP ("KCC"), which is the operator of the SX-EW facility, and Sary Kazna LLP ("SK") is the 60 per cent. holder of the Subsoil Use Contract ("SUC"), which conducts the dump leach operations.

The new framework agreement supercedes the previous agreement which was entered into with JSC SAT & Company(the "SAT Group") as announced on 2 February 2012.

Highlights

·; Acquisition to result in CAML owning 100 per cent. of Kounrad; including all revenues and production

·; Acquisition to be effected by the transfer of the 40 per cent. ownership interest in the Kounrad Project from Central Asian Investment Consulting Company LLP ("CAICC"), a subsidiary of the SAT Group, to Mr Kenges Rakishev; then a subsequent transfer of the 40 per cent. interest to CAML's subsidiaries

·; CAML expects to receive the transfer of the remaining 40 per cent. ownership interest (the "KCC Interest") in Kounrad Copper Company LLP ("KCC") to its wholly owned subsidiary CAML BV by the end of Q3 2013. KCC is the main revenue generating company for the Kounrad Project

·; Completion of the Acquisition (including the SUC) ("Completion") is targeted by the end of 2013 with a longstop date of 31 March 2014

·; On Completion, CAML will issue 21,211,751 ordinary shares in the capital of the Company ("Ordinary Shares") to Mr Rakishev (representing 20 per cent. of the post-Acquisition enlarged share capital) (the "CAML Shares") as well as a cash payment of up to £904,120 in lieu of any dividends

·; Mr Rakishev to be appointed as a Non-Executive Director of the Company on the transfer of the KCC Interest

·; Mr Rakishev is a prominent business leader in Kazakhstan who serves as chairman of the board of directors of several large companies, including the SAT Group which is a diversified industrial holding company in Kazakhstan

Deferred consideration

The CAML Shares will be allotted in two tranches, with one tranche of 15,336,096 Ordinary Shares (72.3 per cent. of the CAML Shares) for the transfer of the 40 per cent. of KCC to CAML BV (the "Tranche 1 Shares"). The remaining 5,875,655 Ordinary Shares (27.7 per cent. of the CAML Shares) for the transfer of the 40 per cent. interest in the SUC to SK (the "Tranche 2 Shares").

Mr Rakishev will be entitled to a cash payment on Completion of up to £904,120, in lieu of any CAML dividends to which Rakishev might have been entitled to had the CAML Shares been issued to Rakishev on the transfer of the KCC Interest to CAML BV, rather than on Completion (the "KCC Cash Consideration").

Kounrad Project

The Kounrad Project had profit before tax of US$35.9 million for the year ended 31 December 2012, and a gross asset value of US$75.4 million as at 31 December 2012, of which, US$14.4 million of profit before tax and US$30.1 million of the gross asset value were attributable to the assets which are the subject of the Acquisition (representing the remaining 40 per cent. of the Kounrad Project that CAML does not currently consolidate).

Shareholder approval

The Acquisition is conditional on: (i) the approval of CAML shareholders at an Extraordinary General Meeting ("EGM") to approve the issuance of the CAML Shares; and (ii) the receipt of all necessary consents and waivers for the relevant transfers and issue of shares from the Government of the Republic of Kazakhstan.

A Circular and Notice of EGM will be sent to shareholders in due course and will be made available at the Company's website at www.centralasiametals.com.

Nick Clarke, Chief Executive Officer commented:

"There has been extremely encouraging operational progress at Kounrad over the last year and we have always stated our commitment to full ownership of the Kounrad Project. We believe that this transaction is deliverable within the stated timeframe with the help and support of Kenges. The Acquisition will provide the platform for the Company to continue to deliver value and growth to all our shareholders.

Although we have announced revised terms for the Acquisition, the new agreement entered into with Kenges, brings with it a strong local partner who is prepared to support and represent the Company's interests, deliver the deal in a timely fashion and to identify new potential opportunities for the Company across the region."

Kenges Rakishev commented:

"I am very pleased to have signed the agreement for the Kounrad Project and look forward to being involved in the Company and working with the strong management team that exists at CAML. The progress achieved at Kounrad in delivering the project on time and budget demonstrates the commitment of the Company to provide value and growth to all shareholders. I look forward to being a shareholder in CAML and developing and growing the Company in the future for the benefit of all shareholders. I will make every effort to ensure that the completion target for the Acquisition is achieved."

Enquiries:

Central Asia Metals plc Nick Clarke +44 (0) 20 7898 9001

Nigel Robinson

Canaccord Genuity Limited Andrew Chubb +44 (0)20 7253 8000Christopher Fincken

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

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

Lorna Spears

Notes to Editors:

CAML

Central Asia Metals plc ("CAML" or the "Company") is an AIM-listed UK company based in London. Its countries of operation are Kazakhstan and Mongolia. CAML is a copper producing company focussed on base metals.

Mr Kenges Rakishev

Mr Rakishev is a prominent business leader in Kazakhstan. He is a founder of Genesis Angels, a private investment fund dedicated to early stage advanced technology companies. He serves as chairman of the board of directors for a number of large companies including SAT & Company (KASE: SATC), a diversified industrial holding company, Jinsheng SAT (Tianjin) Commercial and Trading Co.,Ltd, Baicheng Jinsheng Nickel Industry Co.,Ltd, Taonan City Jinsheng Metallurgical Products Co., Ltd, Ulanhot Jinyuanda Heavy Chemical Industry Co.,Ltd. He also serves as chairman of NASDAQ listed Net Element.

Mr. Rakishev holds a B.A. (Law) from the Kazakh State Law Academy and a B.A (International Economics) from the Kazakh Economic University. He also holds an AMP Diploma from Oxford University.

Background to, and reasons for, the Acquisition

CAML currently owns 60 per cent. of the Kounrad Project. As announced in the Company's most recent audited results, the Kounrad Project was stated to have over 600,000 tonnes of contained copper as at 27 March 2013 and an anticipated "life of mine" in excess of 25 years. Copper production at Kounrad commenced in late April 2012 and by mid-May 2013 over 10,000 tonnes of copper had been produced. The plant is operating beyond the Company's expectations and the production achieved in 2012 and the first quarter of 2013 is testament to the efficiency of its operations and the significance of the Kounrad Project to the Company and its subsidiaries ("Group") in the long term.

In November 2011, the Company was informed by its joint venture partner for the Kounrad Project, SaryArka Social Entrepreneurial Corporation National Company JSC ("SaryArka"), of its intention to sell its 40 per cent. interest in the Kounrad Project pursuant to a tender process. After discussions with SaryArka, the CAML Board concluded that it was in the best interests of the Company and its shareholders to waive its statutory pre-emption rights in relation to the purchase of the 40 per cent. interest in the Kounrad Project and not to participate in the tender process.

As set out in the Company's announcement dated 2 February 2012, the Company recognised the ongoing need for a strong Kazakhstan based partner and accordingly in January 2012, entered into a preliminary agreement with the SAT Group (the "Preliminary Agreement") to purchase the 40 per cent. balance of the Kounrad Project were CAICC to win the tender, which they subsequently did. The conclusion of the purchase of the balance of the Kounrad Project was dependent upon receipt of waivers from the Government of the Republic of Kazakhstan of its pre-emptive rights in relation to the proposed transfers and Kazakhstan anti-monopoly consent. The original transaction process took longer than CAML's management expected due to the local statutory requirements associated with the transfers and finalising project documentation with the SAT Group.

As an individual, Mr Rakishev (a significant shareholder in the SAT Group) proposed himself as an alternative partner for the Company. Mr Rakishev and the SAT Group agreed between them that Mr Rakishev would acquire CAICC's 40 per cent. interest in the Kounrad Project. Noting the significant delays experienced thus far in the transaction, CAML agreed with Mr Rakishev that it would consent to CAICC transferring its 40 per cent. interest in the Kounrad Project to Mr Rakishev and subsequently would acquire the 40 per cent. interest in the Kounrad Project from Mr Rakishev.

The current success and status of the Kounrad Project is reflected in the consideration which has been agreed with Mr Rakishev. The consideration payable by CAML also reflects that Mr Rakishev has waived any entitlement to dividends payable by KCC prior to Completion.

The Kounrad Acquisition

The Company, CAML BV, Mr Rakishev and Sary Kazna have entered into an English law governed legally binding framework agreement, which contains the agreed material terms of the Acquisition (the "Framework Agreement").

Mr Rakishev has agreed to use all reasonable endeavours to obtain all necessary consents and waivers to complete his acquisition of the 40 per cent. interest in the Kounrad Project from CAICC as soon as reasonably practicable.

Consideration

CAML will satisfy the consideration payable in connection with the Acquisition on Completion for and on behalf of its subsidiaries as follows:

(a) by allotting and issuing the Tranche 1 Shares and paying the KCC Cash Consideration to Mr Rakishev as consideration for the KCC Interest; and

(b) by allotting and issuing the Tranche 2 Shares to Rakishev as consideration for the SUC Interest.

No consideration will be payable to Rakishev until both parts of the Acquisition have become wholly unconditional and completion has taken place in accordance with the provisions of the Framework Agreement (save only in respect of the issue and allotment of the CAML Shares and the payment of the KCC Cash Consideration).

Upon Completion, the CAML group will own 100 per cent. of the Kounrad Project and Rakishev will hold 21,211,751 Ordinary Shares, amounting to 20 per cent. of the enlarged share capital of the Company.

Relationship Agreement, Lock-in and Standstill Provisions

Upon Completion, Mr Rakishev will enter into a relationship agreement, pursuant to which Mr Rakishev will undertake, inter alia, not to exercise his voting rights in relation to any transaction, agreement or arrangement between any member of the Group and Mr Rakishev(or any of his associates).

Mr Rakishev will also enter into a subscription agreement on Completion pursuant to which Mr Rakishev will agree not to sell his Ordinary Shares for a period of twelve months from Completion and for a further period of twelvemonths thereafter, he will not be permitted to sell any additional shares in CAML, except in an orderly fashion through the Company's brokers.

The Framework Agreement also contains standstill provisions pursuant to which Mr Rakishev agrees not to acquire any additional shares in the Company, make any offer for, or any approach to the Company without CAML's prior consent. These standstill provisions will be applicable during the periodfrom the date of this announcement up to the date falling twelve months after Completion.

Longstop Date

The parties to the Framework Agreement have agreed to use all reasonable endeavours to complete the Acquisition as quickly as the required statutory procedures permit. However, should the transfer of the KCC Interest be effected but Completion not occur on or before 31 March 2014 (the "Longstop Date"), then under the Framework Agreement:

(a) CAML BV has an obligation to re-transfer the KCC Interest to Mr Rakishev in consideration for Mr Rakishev releasing CAML from all claims he may otherwise have to any consideration payable to him in connection with the Acquisition; and

(b) Mr Rakishev has an obligation to tender his resignation from the board of directors of CAML.