Central Asia Metals Regulatory News (CAML)

13 June 2013

Central Asia Metals plc

(the "Group", the "Company" or "CAML")

Proposed Share Premium Cancellation and Notice of Extraordinary General Meeting

Central Asia Metals plc (AIM:CAML), a copper producing company focused on base metals in Central Asia, today announces a proposed Share Premium Cancellation in order to restructure the Company's balance sheet so as to, subject to the protection of creditors, increase the amount of distributable reserves. The Share Premium Cancellation will permit the Company to continue to pay dividends and to repurchase its Ordinary Shares as and when the Directors decide this is appropriate.

The Company is today posting to Shareholders a circular (the "Circular") containing details of a proposed Share Premium Cancellation, together with formal notice of the Extraordinary General Meeting, to be held at 10.00 a.m. on 2 July 2013 at the Company's offices at 4/5 Park Place, London SW1A 1LP to consider and vote on the Resolution. The Circular will also shortly be available for inspection at www.centralasiametals.com.

Enquiries:

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

Nigel Robinson

Canaccord Genuity Limited Andrew Chubb +44 (0)20 7523 8000

Christopher Fincken

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

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

Lorna Spears

Background to and reasons for the Share Premium Cancellation

The Group has developed and brought into production the Kounrad Project. Construction of the plant at the Kounrad Project was completed in early 2012 and the production of copper commenced on 29 April 2012. The plant has produced over 10,000 tonnes of copper in just over twelve months since operations started.

The successful commencement of production has enabled the Board to return significant funds to Shareholders through the combination of a share buy-back programme and dividend payments. A share buy-back authority was approved by Shareholders at the 31 May 2012 annual general meeting. As at 31 December 2012, 1,318,929 Ordinary Shares had been purchased under this authority for a total of $1,982,677 at a value weighted average price of 93.059 pence per share. A further buy back authority was approved on 22 May 2013.

On 13 December 2012 the Board announced a dividend policy based on the Company's annual dividend being calculated as a percentage of the attributable revenues earned from the Kounrad Project at a minimum level of 20 per cent. of such revenues, subject to the Company's cash reserves providing a dividend cover of three times or greater. Due to strong cash-flows generated by the Kounrad Project during 2012, the Board set a target for 2012 to distribute 30 per cent. of the attributable revenue. On 27 March 2013, the Directors recommended a final dividend for the year ending 31 December 2012 of 3.7 pence per Ordinary Share bringing, with the previous payments of a special and an interim dividend, total dividends for 2012 to 10.7 pence per share.

As at 31 December 2012, the Group had $33.8 million of cash in the bank following the repayment to the parent company of $28.4 million from intercompany loans used to finance the Kounrad Project.

Share Premium Cancellation

The Act restricts the circumstances in which a company may pay dividends or return funds to its shareholders. In particular, it provides that a public company may only purchase its own shares out of distributable reserves or out of the proceeds of a fresh issue of shares. Furthermore, a public company may only pay a dividend on its shares out of its accumulated distributable reserves. It also imposes limitations on the use of a company's capital reserves including its share premium account.

As at 31 December 2012, the Company had an accumulated positive balance on its profit and loss account of $7,994,686 while the balance on the Company's share premium account at that date was $61,431,533.

In order to create further distributable reserves (subject to the protection of creditors), the Company is proposing to cancel the whole of its share premium account. If confirmed by the Court in the manner anticipated, this will create a reserve of $61,431,533, which, once all Relevant Creditor Amounts have been paid or the creditors owed such amounts have consented to the Share Premium Cancellation or they have otherwise been provided for (as more particularly described below), will be credited to the profit and loss account of the Company thereby increasing available distributable reserves by such amount. This will enable the Company to continue with its dividend policy and share buyback programme for as long as it is prudent to do so.

Under the Act, a public company may reduce or cancel its share premium account if so authorised by its articles of association, providing that it obtains the approval of its shareholders by special resolution in general meeting and that the Court confirms the reduction or cancellation. The Company is therefore seeking the approval of Shareholders at the EGM to cancel the Company's share premium account.

If approved by Shareholders the Company will, as soon as practicable, apply to the Court for an appropriate Court Order. It is expected the Court Order confirming the Share Premium Cancellation will be made on or around 31 July 2013. The Share Premium Cancellation will become effective on the Effective Date soon thereafter.

The Court will be concerned to ensure that the interests of the Company's creditors (if any) as at the Effective Date are not prejudiced. The Court may require the Company to give an undertaking to, amongst other matters, transfer the Cancellation Amount to a non-distributable reserve until such time as all creditors of the Company on the Effective Date have either consented to the Share Premium Cancellation, have been satisfied or have otherwise been provided for. The Company will give such an undertaking as it may be advised is appropriate in the circumstances. For so long as the reserve remains undistributable pursuant to the above undertaking, it will be unavailable for the purposes of paying dividends and financing repurchases of Ordinary Shares. On the basis that the Company does not trade of its own account and has relatively few creditors who are of a short-term nature, it is anticipated that the reserve arising on the Share Premium Cancellation should be treated as distributable within a month of the Effective Date.

Following the Share Premium Cancellation, and subject to any undertaking given to the Court, the distributable reserves of the Company will be increased as a result of the distributable reserve resulting from the Share Premium Cancellation. This, together with future distributable profits generated after the Effective Date, will ensure that the Directors are able to continue the Company's dividend policy. It should be noted that the Share Premium Cancellation will not, in itself, involve any distribution or repayment of capital by the Company to any Shareholder or other person, and will not reduce the Company's underlying assets

Circular and Notice of Extraordinary General Meeting

A circular setting out the background to Share Premium Cancellation and a notice convening the EGM for at 10.00 a.m. on 2 July 2013, is being sent to Shareholders today and will also be made available shortly for inspection at www.centralasiametals.com.

APPENDIX 1

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

APPENDIX 2

DEFINITIONS