Central Asia Metals Regulatory News (CAML)

02 February 2012

Central Asia Metals plc

("CAML" or the "Company")

Kounrad: Project Update and Ownership Increase

Central Asia Metals plc (AIM:CAML) is pleased to announce an operational update on the Company's Kounrad Copper Project in Kazakhstan ("Kounrad" or the "Project") and an increase of its ownership of the Project to 100% conditional upon documentation.

HIGHLIGHTS

• Construction of the Project plant is materially complete with capital expenditure below budget

• Commissioning of the Solvent Extraction-Electro Winning ("SX-EW") plant commences at the end of February 2012

• First copper production expected April 2012 with production for the year scheduled to be approximately 5,000 tonnes of copper cathode

• SaryArka Social Entrepreneurial Corporation National Company JSC ("SaryArka") has conducted a tender process for the sale of its 40% ownership of the Project and JSC Central Asian Investments Consulting Company ("CAICC"), a 100% subsidiary of JSC SAT & Company (together with CAICC the "SAT Group"), won the tender

• CAML has an agreement with the SAT Group to subsequently acquire the 40% ownership of the Project in exchange for 8,616,593 CAML shares which equates to 9.1% of the enlarged share capital on completion of the transaction

Nick Clarke, Chief Executive Officer commented:

"There has been extremely encouraging progress at Kounrad over the last quarter. The ability to achieve material completion of the Project under budget and broadly in line with our initial schedule is a testament to our staff and partners in Kazakhstan. We remain confident that we will achieve our goal of commercial copper cathode production at Kounrad in April 2012 without additional funding.

Additionally we are delighted that the SAT Group will become a major shareholder in the Company and that the Company will gain 100% control of Kounrad."

KOUNRAD PROJECT UPDATE

At the end of January 2012, the construction of the 10,000 tonne per annum Kounrad SX-EW copper project designed by Beijing General Research Institute of Mining and Metallurgy ("BGRIMM") reached material completion. The Company has taken just 16 months to reach this point being only a few months behind the schedule set out at the time of the Company's IPO in September 2010.

The following milestones have been achieved at Kounrad:

• Installation, commissioning and hand-over of a 4.5km 35kV overhead power line and electricity sub-station capable of delivering 8MW of power to the Project

• Installation and full testing of an 8km water pipeline drawing water to the Project from an old mine shaft at a depth of 120 metres below surface

• Installation, commissioning and hand-over of a 900 metre twin-track railway extension connected to the main Kazakhstan rail network

• Installation and commissioning of 9,000 metres of irrigation distribution piping and over 700,000 metres of drip irrigation piping on the first target dump leach pad

• Excavation and lining of in excess of 2,000 metres of solution interceptor trenches

• Excavation and lining of four solution storage ponds containing 40,000m3 of copper bearing solutions to be utilised through the start-up phase

• Installation of a coal fired boiler house with an equivalent heat output of 8.5MW allowing year round operations

• Completion of the electro winning ("EW") tank house comprising 50 EW cells

Commissioning of the SX-EW plant is expected to begin in late February 2012 with first copper cathodes expected to be produced in April 2012. The Company has appointed PPM Solutions Pty Ltd, an Australian based organisation highly experienced in the start-up of SX-EW plants worldwide, to oversee and assist CAML employees in the phased commissioning of the plant. Mechanical and electrical dry commissioning of equipment has already commenced under 'no load' conditions and piping is being subjected to pressure tests. The Company intends to water test and punch list the EW and SX circuits from late February through to the end of March.

Start up reagent requirements are all on site, with agreements for on-going supplies of reagents and power already in place. The plant operating and maintenance teams are on site and are now in the phase of assuming responsibility of the plant from the construction team.

The Company believes it will deliver first production and complete the construction phase for less than the budgeted amount of $46.9m advised in March 2010 in the Kounrad feasibility study.

The Company has received a number of proposals regarding the off-take of copper cathode from Kounrad, which it continues to review.

KOUNRAD OWNERSHIP INCREASE

In November 2011, the Company was informed by its Joint Venture Partner for the Project, SaryArka, of their intention to sell their 40% interest in Kounrad. Due to SaryArka's corporate regulations the sale had to be conducted by means of a tender process (the "Tender"). 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% interest in Kounrad and not participate in the Tender.

The Company recognises the ongoing need for a strong Kazakhstan based partner and, accordingly, on 12 January 2012, entered into a preliminary agreement with the SAT Group (the "Preliminary Agreement") to purchase the balance of the Project it does not already own should the SAT Group win the Tender. SaryArka has now notified the Company that the SAT Group won the Tender.

Consequently, the Preliminary Agreement has become binding and the SAT Group are now obliged to transfer their newly acquired 40% ownership in the Project to CAML in exchange for 8,616,593 ordinary shares in the Company. This will result in the SAT Group becoming a 9.1% shareholder in the enlarged Company (the "Transaction").

In accordance with the Preliminary Agreement, the Transaction would take effect as follows:

• The SAT Group will transfer its newly acquired 40% share in the Subsoil Use Contract for the Kounrad Waste Dumps (the "SUC") to Sary Kazna LLP (a wholly owned entity of the Company) and the current holder of the remaining 60% share of the SUC)

• The SAT Group will transfer its newly acquired 40% interest in Kounrad Copper Company LLP (the joint operating company for the Project) currently owned 60% by CAML Kazakhstan BV, a wholly owned subsidiary of the Company.

On completion of the two transfers above, CAML will issue 8,616,593 Ordinary Shares to the SAT Group.

The Company and the SAT Group will now prepare documentation to effect the Transaction as set out in the Preliminary Agreement. The timing to conclude the Transaction is dependent upon completion of the documentation and receipt of a waiver from the Government of the Republic of Kazakhstan of its pre-emptive rights in relation to the Transaction. The Company will endeavour to complete this process as quickly as the required statutory procedures permit, which is expected before the year end.

Upon the completion of the Transaction, the CAML group will then hold 100% of the Kounrad Project and the SAT Group will own 9.1% of the Company. Pursuant to the Preliminary Agreement, 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.

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