Central Asia Metals Regulatory News (CAML)

25 November 2013

Central Asia Metals plc(AIM: CAML)

Strategic Investment in Copper Bay Ltd

Central Asia Metals plc ("CAML" or the "Company") is pleased to announce that it has entered into an agreement with Copper Bay Ltd ("Copper Bay"), whereby CAML will acquire a 50 per cent equity interest on a fully diluted basis in Copper Bay for a cash consideration of £2.0 million (c.US$3.2 million) (the "Investment").

Copper Bay was established in 2010 and its principal asset is the 100 per cent owned Chañaral Bay Copper Project, located in the Atacama region of Chile (the "Project").

In early 2013 a Competent Person's Report ("CPR") was completed on the Project by Wardell Armstrong International Limited ("WAI"). The CPR noted that a comprehensive assessment of the mineral resource was carried out in 2008, which estimated a non-JORC compliant resource at the Project of approximately 116 million tonnes ("Mt") with an average grade of 0.25% copper, equating to approximately 288,000 tonnes of contained copper.

Copper Bay will use the proceeds from the Investment to prepare a pre-feasibility study for the Project over the next 12 months in order to assess the Project's economic viability. In accordance with the agreement, CAML then has an option to make a further investment of US$3.0 million, on completion of the pre-feasibility study for the Project, to increase the Company's equity interest in Copper Bay to 75 per cent. The additional funds would be used to complete a definitive feasibility study on the Project.

Nick Clarke, CEO of CAML commented:

"I am delighted to announce this investment, which follows on from our success at Kounrad. Since CAML's IPO in September 2010, the management team have worked hard to make the Company a successful low cost copper producer. The Kounrad copper project in Kazakhstan is currently producing 10,000 tonnes of copper cathodes annually and generating significant positive cash-flows. This has enabled CAML to develop a robust dividend policy and return material sums to its shareholders which will not be impacted by this particular investment.

Whilst CAML will continue to grow its current business in Kazakhstan, we feel it is now appropriate to look for opportunities elsewhere which have the potential to diversify our portfolio of assets and create value for our shareholders. The investment in Copper Bay is small but we believe the project may well provide the opportunity for such value creation.

The investment in Copper Bay is our first outside of Central Asia and provides CAML with an entry into Chile, which is one of the world's largest copper producing countries and which is widely regarded as having an attractive investment jurisdiction and stable economy.

Enquiries:

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

Nigel Robinson

Canaccord Genuity Limited Neil Elliot +44 (0)20 7253 8000

Christopher Fincken

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

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

Lorna Spears

Notes to Editors:

The Chañaral Bay Copper Project

Chañaral Bay is located in the Atacama Region of Chile, 800km north of Santiago and 120km northwest of the Regional Capital of Copiapó. Between 1938 and 1975, a period of approximately 40 years, it is estimated that 250 million tonnes of copper bearing tailings from the Potrerillos and Salvador mines were disposed of into the Rio Salado which flows into Chañaral Bay. These tailings now form part of the bay and beach at Chañaral in a deposit which is up to 10-15 metres thick and extends over an area 4.5km long and 3km wide.

The Project may be configured to reclaim and process the copper bearing tailings in a purpose built facility using low cost conventional technologies to potentially produce both copper cathodes and concentrates. As a result of the processing of the tailings, the copper sulphides and oxides contained within the beach and bay areas would be removed to a point whereby the treated materials could be disposed of safely. The Project has strong local and national support as it would contribute to a significant and lasting improvement to the local environment, which has been heavily polluted by the historical tailings deposits.

Historical exploration has taken place over several exploration campaigns incorporating a total of 253 drill holes. The most comprehensive assessment of the mineral resource at the Project estimates that there is a non-JORC compliant resource of approximately 116 Mt with an average grade of 0.25% copper. In the CPR, WAI stated that forrecovery estimates of approximately 80%, which were based on recent metallurgical testing, approximately 232,000 tonnes of copper could potentially be recovered at the Project. Whilst it was emphasised that this would be subject to successful test work and a positive definitive feasibility study, the initial modelling indicated a positive post-tax NPV of cUS$241 million (base case) and an IRR of 36.9%, assuming an estimated capital cost of US$236.5 million and a copper price of US$6,600 per tonne (US$3.00 per lb). Initial operating costs of US$1.44per lb have been assessed from the studies performed to date.

Competent Person Statement

The information in this announcement that relates to the non-JORC compliant resource has been compiled by WAI. Nick Clarke (CAML CEO), a qualified Chartered Engineer and member of the Institute of Materials, Minerals and Mining (MIMMM), has reviewed this announcement and agrees to the inclusion in the announcement of the matters based on the information in the form and context in which it appears.