Consolidated Statement of Cash Flows

for the year ended 31 December����������������������

�	�	�	Note	2019 $'000	2018 $'000
Cash flows from operating activities	�	�	�	�	�
Cash generated from operations	�	�	32	105,143	130,131
Interest paid	�	�	�	(9,445)	(14,510)
Corporate income tax paid (net of refunds)	�	�	�	(14,845)	(31,833)
Cash flow generated from operating activities	�	�	�	80,853	83,788
Cash flows from investing activities	�	�	�	�	�
Balancing receipt from CMK Group acquisition	�	�	�	-	3,300
Purchase of property, plant and equipment	�	�	18	(11,042)	(15,019)
Proceeds from sale of property, plant and equipment	�	�	18	233	-
Deferred consideration paid	�	�	�	(6,500)	-
Purchase of intangible assets	�	�	19	(21)	(907)
Interest received	�	�	14	336	264
Decrease/(increase) in restricted cash	�	�	24	363	(1,564)
Net cash used in investing activities	�	�	�	(16,631)	(13,926)
Cash flows from financing activities	�	�	�	�	�
Proceeds from borrowings	�	�	30	-	60,809
Repayment of borrowings	�	�	30	(38,400)	(99,265)
Dividends paid to owners of the parent	�	�	34	(32,164)	(39,603)
Settlement on exercise of share options	�	�	27	(589)	(21)
Net cash used in financing activities	�	�	�	(71,153)	(78,080)
Effect of foreign exchange gain/(loss) on cash and cash equivalents	�	�	�	1	(248)
Net decrease in cash and cash equivalents	�	�	�	(6,930)	(8,466)
Cash and cash equivalents at the beginning of the year	�	�	24	34,707	43,173
Cash and cash equivalents at the end of the year	�	�	24	27,777	34,707

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Cash and cash equivalents at 31 December 2019 includes cash at bank and on hand included in assets held for sale of $106,000 (31 December 2018: $58,000) (note 21) and bank overdrafts of $895,000 (2018: nil) (note 30). The Consolidated Statement of Cash Flows does not include the restricted cash balance of $4,013,000 (2018: $4,376,000) (note 24).

The notes below are an integral part of the consolidated financial information.�

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Notes to the Financial Information

for the year ended 31 December 2019

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1.��� General information

Central Asia Metals plc ('CAML' or the 'Company') and its subsidiaries (the 'Group') are a mining and exploration organisation with operations primarily in Kazakhstan and North Macedonia and a parent holding company based in the United Kingdom ('UK').

The Group's principal business activities are the production of copper cathode at its Kounrad operations in Kazakhstan and the production of lead, zinc and silver at its Sasa operations in North Macedonia. CAML owns 100% of the Kounrad SX-EW copper project in Kazakhstan and 100% of the Sasa zinc-lead mine in North Macedonia. The Company also owns two further operations which are currently held for sale and this includes 80% of the Shuak copper exploration property in northern Kazakhstan and a 75% equity interest in Copper Bay Limited. See note 21 for details.

CAML is a public limited company, which is listed on the AIM market of the London Stock Exchange and incorporated and domiciled in England, UK. The address of its registered office is Masters House, 107 Hammersmith Road, London, W14 0QH.� The Company's registered number is 5559627.

2.��� Summary of significant accounting policies

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Basis of preparation of the Financial Information

The financial information set out herein does not constitute the Group's statutory financial statements for the year ended 31 December 2019, but is derived from the Group's audited financial statements. The auditors have reported on the 2019 financial statements and their reports were unqualified and did not contain statements under s498(2) or (3) Companies Act 2006 but did contain a material uncertainty in relation to COVID-19. The 2019 Annual Report was approved by the Board of Directors on 31 March 2020, and will be mailed to shareholders in April 2020. The financial information in this statement is audited but does not have the status of statutory accounts within the meaning of Section 434 of the Companies Act 2006.

�The Group's consolidated financial statements, which form part of the 2019 Annual Report, have been prepared in accordance with International Financial Reporting standards ('IFRS') and IFRS Interpretations Committee ('IFRSIC') interpretations as adopted by the European Union, and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention with the exception of assets held for sale which have been held at fair value. The Group financial information is presented in US Dollars ($) and rounded to the nearest thousand.

�The parent company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council.� The parent company financial statements have therefore been prepared in accordance with FRS 101 (Financial Reporting Standard 101) 'Reduced Disclosure Framework' as issued by the Financial Reporting Council. As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to share-based payments, financial instruments, fair value measurements, capital management, presentation of a cash flow statement, new standards not yet effective, impairment of assets and related party transactions.� Where relevant, equivalent disclosures have been given in the Group financial statements of Central Asia Metals plc.

�The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial information are explained in note 4.

Going concern

The Group sells and distributes its copper cathode product primarily through an off-take arrangement with Traxys Europe S.A. with a minimum of 95% of the SX-EW plant's forecasted output committed as sales for the period up until October 2022.�� The Group sells Sasa's zinc and lead concentrate product through an off-take arrangement with Traxys which has been fixed through to 31 December 2022.� The commitment is for 100% of the Sasa concentrate production.��

The Group meets its day to day working capital requirements through its profitable and cash generative operations at Kounrad and Sasa. The Group manages liquidity risk by maintaining adequate committed borrowing facilities and the Group has substantial cash balances as at 31 December 2019.�

The price of copper, zinc and lead have been impacted in 2020 by concerns over the outbreak of the COVID-19 pandemic and this will impact on Group revenue for the year ended 31 December 2020. Whilst there has been little impact of COVID-19 to the Group's operations at present, owing to the volatility of the commodity price environment, uncertainty regarding the future impact on operations and the uncertainty surrounding implementation of government policies to manage the outbreak it is difficult to determine and quantify the financial impact there may be on the business going forward.�

The CAML Board has considered and debated a range of substantial possible scenarios on the Group's operations, financial position and forecasts covering a period of at least the next 12 months considering potential impacts associated with:

a)��� Operational disruption that may be caused by restrictions applied by governments, illness amongst our workforce and disruption to supply chain and offtake arrangements;

b)��� Market volatility in respect of commodity prices;

c)���� Availability of existing credit facilities.�

These scenarios include the potential for significant downside to commodity prices and production levels at Sasa and Kounrad which may include periods with minimal or no revenue. Under these scenarios possible mitigations within the Group's control or which can reasonably be achieved have been considered by the Board to maintain liquidity and service debt and in light of COVID-19. As a result of the current market uncertainty the CAML Board has taken the decision not to recommend a 2019 final dividend. Under the forecast scenarios the Group is able to maintain liquidity and service debt assuming minimal or no revenue for a period of approximately 3 -4 months, reflecting its current cash resources. However, certain of the scenarios considered indicate a breach to the one of the Group's short-term loan covenants. However, management have engaged in continued dialogue with the lender and, whilst there can be no guarantee, anticipate that existing facilities would remain available where there is a covenant breach.� Should there be a period without production or sales in excess of the above scenarios the Group would require additional funding in the form of debt or equity the availability of which cannot be guaranteed.

After review of these 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 consolidated financial statements.� However, at the date of approval of the financial statements, the potential future impact of COVID-19 and the resulting forecast breach of covenants should such adverse scenarios materialise indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business.� The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Please refer to notes 6, 24 and 28 for information on the Group's revenues, cash balances and trade and other payables.

New and amended standards and interpretations adopted by the Group

The Group has adopted the following standards and amendments for the first time for their annual reporting period commencing 1 January 2019:

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IFRS 16 Leases has been applied from 1 January 2019. IFRS 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments.

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The Group has reviewed all leasing arrangements and contracts in light of the new standard to determine whether the arrangements fall under the definition of a lease per IFRS 16. The Group has applied the simplified transition approach from 1 January 2019 and therefore does not require to restate the comparatives for the 2018 reporting period, as permitted under the specific transition provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019 amounting to $853,000. On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of 1 January 2019.� All other right-of-use assets will continue to be measured at the amount of the lease liability on adoption.

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In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

-������ applying a single discount rate to a portfolio of leases with reasonably similar characteristics

-������ accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases

-������ using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

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The following amendments did not have any impact on the amounts recognised in prior years or the current year and on foreseeable future transactions:

������ Annual Improvements to IFRS Standards 2015-2017 Cycle

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Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2019 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

There are no other standards that are not yet effective that would be expected to have a material impact on the Group.

Basis of consolidation

The Group financial statements consolidate the financial statements of CAML and the entities it controls drawn up to 31 December 2019.

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised losses/gains on transactions between Group companies are eliminated. Unrealised losses/gains are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Business combinations

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets.� Acquisition-related costs are expensed as incurred and reported within other expenses.�

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The excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity, and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

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After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment, at least annually and whenever events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill is allocated to the cash-generating unit expected to benefit from the business combination in which the goodwill arose. Where the recoverable amount is less than the carrying amount, including goodwill, an impairment loss is recognised in the Income Statement.� The carrying amount of goodwill allocated to an entity is taken into account when determining the gain or loss on disposal of the unit.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

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Non-controlling interests

Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented separately within equity in the Consolidated Statement of Financial Position distinct from parent shareholder's equity.

�Where losses are incurred by a partially owned subsidiary, they are consolidated such that the non-controlling interests' share in the losses is apportioned in the same way as profits.

Where profits are then made in future periods, such profits are then allocated to the parent company until all unrecognised losses attributable to the non-controlling interests but absorbed by the parent are recovered at which point, profits are allocated as normal.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker which is considered to be the Board.

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Foreign currency translation

The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. The consolidated financial statements are presented in US Dollars, which is the Group's and Company's presentation currency. The functional currency of the Company is US Dollars.

Transactions in currencies other than the functional currency are initially recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date. All differences are taken to the Income Statement.

The results and financial position of all the Group entities that have a functional currency different from the US Dollar presentation currency are translated into the US Dollar presentation currency as follows:

������ assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the reporting date;

������ income and expenses for each Income Statement are translated at average exchange rates; and

������ all resulting exchange differences are recognised in other comprehensive income.

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On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the Income Statement.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended.

The cost of the item also includes the cost of decommissioning any buildings or plant and equipment and making good the site, where a present obligation exists to undertake the restoration work.

Development costs relating to specific mining properties are capitalised once management determines a property will be developed. A development decision is made based upon consideration of project economics, including future metal prices, reserves and resources, and estimated operating and capital costs. Capitalisation of costs incurred and proceeds received during the development phase ceases when the property is capable of operating at levels intended by management and is considered commercially viable. Costs incurred during the production phase to increase future output by providing access to additional reserves, are deferred and depreciated on a units-of-production basis over the component of the reserves to which they relate. Ore reserves may be declared for an undeveloped mining project before its commercial viability has been fully determined.� Development costs incurred after the commencement of production are capitalised to the extent they are expected to give rise to a future economic benefit.� Development costs are not depreciated until such time as the areas under development enter production.

Depreciation is provided on all property, plant and equipment on a straight-line basis over its total expected useful life. As at 31 December 2019 the remaining useful lives were as follows:

������ Construction in progress �������������������� - not depreciated

������ Land�������������������������������������������������������� - not depreciated

������ Plant and equipment ���������������������������- over 5 to 21 years

������ Mining assets�����������������������������������������- over 2 to 21 years

������ Motor vehicles ������� ������������������������������- over 2 to 10 years

������ Office equipment �� �������������������������������- over 2 to 10 years

������ Right of use assets ��������������������������������- term of lease agreement

Mineral rights are depreciated on a Unit of Production basis ('UoP'), in proportion to the volume of ore extracted in the year compared with total proven and probable reserves as well as measured, indicated and certain inferred resources which are considered to have a sufficiently high certainty of commercial extraction at the beginning of the year. Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on a straight-line basis.

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Construction in progress is not depreciated until transferred to other classes of property, plant and equipment.

The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed annually and where adjustments are required, these are made prospectively.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset is included in the Income Statement.

Leases

As per IFRS 16 Leases the Group have applied the simplified transition approach for recognising liabilities. On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate as of 1 January 2019.

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Until the 2019 financial year, leases of property, plant and equipment were classified as either finance leases or operating leases. From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

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Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

������ fixed payments (including in-substance fixed payments), less any lease incentives receivable and variable payments based on index or rate

������ amounts expected to be payable by the Group under residual value guarantees

������ payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

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Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

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The Group leases offices and equipment. Rental contracts are typically made for fixed periods of six months to five years and have extension options.

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Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

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Intangible assets

a)���� Exploration and evaluation expenditure

Capitalised costs include costs directly related to any Group exploration and evaluation activities in areas of interest for which there is a high degree of confidence in the feasibility of the project. Exploration and evaluation expenditure capitalised includes acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploration drilling, trenching, sampling and activities in relation to the evaluation of the technical feasibility and commercial viability of extracting a mineral resource.

Exploration and evaluation assets are measured at cost less provision for impairment, where required.

b)���� Mining licences, permits and computer software

The historical cost model is applied, with intangible assets being carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets with a finite life have no residual value and are amortised on a straight-line basis over their expected useful lives with charges included in either cost of sales or administrative expenses:

Computer software ��������������� ����� ���������- over two to five years

Mining licences and permits� � � � � � � � �- over the duration of the legal agreement

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The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Impairment of non-financial assets

The Group carries out impairment testing on all assets when there exists an indication of an impairment. If any such indication exists, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell or its value in use.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the Income Statement.

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In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

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The best evidence of an asset's fair value is the value obtained from an active market or binding sale agreement. Where neither exists, fair value less costs to sell is based on the best available information to reflect the amount the Group could receive for the cash-generating unit in an arm's length sale. In some cases, this is estimated using a discounted cash flow analysis on a post tax basis.

A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a reversal of the conditions that originally resulted in the impairment. This reversal is recognised in the Income Statement and is limited to the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised in prior years.

Goodwill is also reviewed annually, as well as whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Non-financial assets other than goodwill which have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

Revenue

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. These steps are as follows: identification of the customer contract; identification of the contract performance obligations; determination of the contract price; allocation of the contract price to the contract performance obligations; and revenue recognition as performance obligations are satisfied.

Under IFRS 15, revenue is recognised when the performance obligations are satisfied and the customer obtains control of the goods or services, usually when title has passed to the buyer and the goods have been delivered in accordance with the contractual delivery terms.

Revenue is measured at the fair value of consideration received or receivable from sales of metal to an end user, net of any buyers discount, treatment charges and value added tax.� The Group recognises revenue when the amount of revenue can be reliably measured and when it is probable that future economic benefits will flow to the entity. �

The value of consideration is fair value which equates to the contractually agreed price.� The off-take agreements provide for provisional pricing i.e. the selling price is subject to final adjustment at the end of the quotation period based on the average price for the month following delivery to the buyer.� Such a provisional sale contains an embedded derivative which is not required to be separated from the underlying host contract, being the sale of the commodity.� At each reporting date, if any sales are provisionally priced, the provisionally priced copper cathode, zinc and lead sales are marked-to-market using forward prices, with any significant adjustments (both gains and losses) being recorded in revenue in the Income Statement and in trade receivables in the Statement of Financial Position. ���

The Company may mitigate commodity price risk by fixing the price in advance for its copper cathode with the off-take partner and also its zinc and lead sales with the banks where a facility has been set up and agreed. The price fixing arrangements are outside the scope of IFRS 9 Financial Instruments: Recognition and Measurement and do not meet the criteria for hedge accounting.

The Group reports both a gross revenue and revenue line.� Gross revenue is reported after deductions of treatment charges but before deductions of off-takers fees and silver purchases under the Silver Stream.

Inventory

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method.

The cost of finished goods and work in progress comprises raw materials, direct labour and all other direct costs associated with mining the ore and processing it to a saleable product.

Net realisable value is the estimated selling price in the ordinary course of business, less any further costs expected to be incurred to completion. Provision is made, if necessary, for slow-moving, obsolete and defective inventory.

Non-current assets (or disposal groups) held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the Statement of Comprehensive Income.

Current and deferred income tax

The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the reporting date in the countries where the Group's subsidiaries operate and generate taxable income.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the Statement of Financial Position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are only recognised when they arise from timing differences where their recoverability in the short term is regarded as being probable.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

Restricted cash

Restricted cash is cash with banks that is not available for immediate use by the Group.� Restricted cash is shown separately from cash and cash equivalents on the Statement of Financial Position.�

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Investments

Investments in subsidiaries are recorded at cost less provision for impairment.

Share capital

Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

Treasury shares

Where any Group company purchases the Company's equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company's equity holders until the shares are cancelled or reissued. Where such Ordinary Shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.

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Share based compensation

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted, excluding the impact of any non-market service and performance vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At each reporting date, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement, with a corresponding adjustment to equity.

Trade and other receivables

Trade and other receivables are accounted for under IFRS 9 using the expected credit loss model and are initially recognised at fair value and subsequently measured at amortised cost less any allowance for expected credit losses.

Impairment of financial assets

The Group and the Company has adopted the general expected credit loss model for financial assets, e.g. trade receivables and intercompany receivables.�

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The allowance for expected credit losses for trade receivables is established by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The allowance is the sum of these probability weighted outcomes. The allowance and any changes to it are recognised in the Statement of Comprehensive Income within net operating expenses. A provision matrix is used to calculate the allowance for expected credit losses on trade receivables which is based on historical default rates over the expected life of the trade receivables and is adjusted for forward looking estimates. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables.� Subsequent recoveries of amounts previously written off are credited against net operating expenses in the Statement of Comprehensive Income.�

The Company assesses on a forward-looking basis the expected credit losses associated with its intercompany balances carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

�Trade and other payables

Trade and other payables are not interest bearing and are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.

Silver stream commitment

The silver stream arrangement has been accounted for as a commitment as the Group has obligations to deliver silver to a third party at a price below market value. On acquisition, following completion of the business combination, the silver stream commitment was identified as an unfavourable contract and recorded at fair value.� Payments received under the arrangement prior to the acquisition by the Group were not considered to be a transaction with a customer. Management has determined that the agreement is not a derivative as it will be satisfied through the delivery of non-financial items (i.e. silver commodity from the Company's production), rather than cash or financial assets. Subsequent to initial recognition the silver stream commitment is not revalued and is amortised on a units of production basis to cost of sales.�

�

The fair value of consideration received for delivered silver under the agreement is recorded as revenue.� In addition, silver produced in conjunction with the Group's lead and zinc production and sold under the off-take agreement is recorded in gross revenue with a corresponding deduction for silver purchased to deliver under the silver stream recorded in arriving at net revenue.

�

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

An amendment in a loan facility gives rise to a modification gain or loss to reflect the amended terms under the new facility. In 2018, the Group consolidated and restructured its borrowings into one corporate debt package. The total available amount under the facility was increased by $60,000,000. The refinancing resulted in the recognition of a modification gain of $836,000 which was recognised in the Income Statement during 2018.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Provisions

a)��� Asset retirement obligation

Provisions for environmental restoration of mining operations are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the cash flows incorporate assessments of risk. The increase in the provision due to passage of time is recognised as interest expense.

b)��� Employee benefits - pension

The Group, in the normal course of business, makes payments on behalf of its employees for pensions, health-care, employment and personnel tax, which are calculated based on gross salaries and wages according to legislation. The cost of these payments is charged to the Consolidated Statement of Comprehensive Income in the same period as the related salary cost. �

c)���� Employee benefits - retirement benefits and jubilee awards

Pursuant to the labour law prevailing in the North Macedonian subsidiaries, the Group is obliged to pay retirement benefits for an amount equal to two average monthly salaries, at their retirement date. According to the collective labour agreement, the Group is also obliged to pay jubilee anniversary awards for each 10 years of continuous service of the employee. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. In addition, the Group is not obligated to provide further benefits to current and former employees.

Retirement benefit obligations arising on severance pay are stated at the present value of expected future cash payments towards the qualifying employees. These benefits have been calculated by an independent actuary in accordance with the prevailing rules of actuarial mathematics. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to profit and loss over the employees' expected average remaining working lives.

�

3.��� Financial risk management

�

The Group's activities expose it to a variety of financial risks; market risk (including foreign currency exchange risk, commodity price risk and interest rate risk), liquidity risk, capital risk and credit risk.� These risks are mitigated wherever possible by the Group's financial management policies and practices described below.� The Group's risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units.

Foreign currency exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures.� The primary Group currency requirements are US Dollar, British Pound, Kazakhstan Tenge, Euro and North Macedonian Denar.�

The following table highlights the major currencies the Group operates in and the movements against the US Dollar during the course of the year:����������������������� �����

����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

�	Average rate			Reporting date spot rate
�	2019	2018	Movement	2019	2018	Movement
Kazakhstan Tenge	382.75	344.71	38.04	381.18	384.20	(3.02)
Macedonian Denar	54.96	52.12	2.84	54.95	53.69	1.26
Euro	1.12	1.15	(0.03)	1.12	1.18	(0.06)
British Pound	0.79	0.75	0.04	0.76	0.79	0.03

�

Foreign exchange risk does not arise from financial instruments that are non-monetary items or financial instruments denominated in the functional currency.� Kazakhstan Tenge and North Macedonian Denar denominated monetary items are therefore not reported in the tables below, as the functional currency of the Group's Kazakhstan-based and North Macedonian-based subsidiaries is the Tenge and Denar respectively.�

The Group's exposure to foreign currency risk based on US Dollar equivalent carrying amounts at the reported date:

In $'000 equivalent	� ��������������������������������������������������������������������������������������������������� Group					�
	���������������������������������������������������������������������������������������������������� 2019					�
	�	�	�	USD	EUR		GBP
Cash and cash equivalents	�	�	�	2,419	94		2,220
Trade and other receivables	�	�	�	1	-		-
Trade and other payables	�	�	�	-	(609)		(429)
Net exposure	�	�	�	2,420	(515)		1,791
�	�	�	�	�	�	�	�

�

In $'000 equivalent	� ��������������������������������������������������������������������������������������������������� Group					�
	���������������������������������������������������������������������������������������������������� 2018					�
	�	�	�	USD	EUR		GBP
Cash and cash equivalents	�	�	�	12,792	6		774
Trade and other payables	�	�	�	-	(452)		(2,522)
Net exposure	�	�	�	12,792	(446)		(1,748)
�	�	�	�	�	�	�	�

�

Trade and other receivables excludes prepayments and VAT receivable and trade and other payables excludes corporation tax, social security and other taxes as they are not considered financial instruments.�

�

At 31 December 2019, if the foreign currencies had weakened/strengthened by 10% against the US Dollar, post-tax Group profit for the year would have been $194,000 lower/higher (2018: $231,000 lower/higher).

Commodity price risk

The Group has a hedging policy in place to allow us to manage commodity price risk however the Directors elected not to hedge during 2019.

The following table details the Group's sensitivity to a 10% increase and decrease in the copper, zinc and lead price against the invoiced price.� 10% is the sensitivity used when reporting commodity price internally to management and represents management's assessment of the possible change in price.� A positive number below indicates an increase in profit for the year and other equity where the price increases.

Estimated effect on earnings and equity

�	2019 $'000	2018 $'000
10% increase in copper, zinc and lead price	18,853	20,526
10% decrease in copper, zinc and lead price	(18,853)	(20,526)

�

Liquidity risk

Liquidity risk relates to the ability of the Group to meet future obligations and financial liabilities as and when they fall due. The Group currently has sufficient cash resources to facilitate the debt and a material income stream from the Kounrad and Sasa projects. The Group has no undrawn borrowings as at 31 December 2019 (2018: nil).

Future expected payments:	�	�	Group
�	�	�	31 Dec 19 $'000	31 Dec 18 $'000
Trade and other payables within one year	�	�	8,981	17,637
Borrowings payable within one year (note 30)	�	�	44,684	47,868
Borrowings payable later than one year but not later than five years (note 30)	�	�	76,304	122,323
Lease liability payable later than one year but not later than five years	�	�	748	-
�	�	�	130,717	187,828

�

Capital risk

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal structure to reduce the cost of capital.

The Group manages its capital in order to provide sufficient funds for the Group's activities. Future capital requirements are regularly assessed and Board decisions taken as to the most appropriate source for obtaining the required funds, be it through internal revenue streams, external fund raising, issuing new shares or selling assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The debt is subject to financial covenants which include the monitoring of gearing and leverage ratios and these are all currently complied with.

�

Consistent with others in the industry, the Group monitors capital on the basis of the following gearing ratio:

Net debt

�	�	�	� Note	2019 $'000	2018 $'000
Cash and cash equivalents	�	�	24	28,566	34,649
Bank overdraft	�	�	30	(895)	-
Borrowings, variable interest rates - repayable within one year	�	�	30	(38,400)	(38,400)
Borrowings, variable interest rates - repayable after one year	�	�	30	(69,473)	(106,549)
Net debt	�	�	�	(80,202)	(110,300)
Total equity	�	�	�	335,106	325,866
Net debt to equity ratio	�	�	�	24%	34%

�

Changes in liabilities arising from financing activities

The total borrowings as at 1 January 2019 were $144,949,000 (1 January 2018: $181,914,000). During the year, total repayments were $38,400,000 (2018: $99,265,000) with nil (2018: $60,809,000) drawdowns during the year. There was a drawdown of an unsecured overdraft of $895,000 (2018: nil). Other changes amounted to $1,324,000 (1 January 2018: $1,491,000) leading to a closing debt balance of $108,768,000 (2018: $144,949,000). See note 30 for more details.

�

The cash and cash equivalents including cash at bank and on hand in assets held for sale brought forward were $34,707,000 (2018: $43,173,000) with a $6,930,000 outflow (2018: $8,466,000 outflow) during the year and therefore a closing balance of $27,777,000 (2018: $34,707,000).

�

Credit risk

Credit risk refers to the risk that the Group's financial assets will be impaired by the default of a third party. The Group is exposed to credit risk primarily on its cash and cash equivalents as set out in note 24 and on its trade and other receivables as set out in note 22.� The Group sells a minimum of 95% of Kounrad's copper cathode production to a credit-worthy off-taker and during the year 100% of Sasa's zinc and lead concentrate was sold to credit-worthy customers.� The Group sells Sasa's zinc and lead concentrate product through an off-take arrangement with Traxys which has been fixed through to 31 December 2022.� The commitment is for 100% of the Sasa concentrate production. �

For banks and financial institutions, only parties with a minimum rating of BBB- are accepted. 24% of the Group's cash and cash equivalents including restricted cash at the year-end were held by an A+ rated bank (2018: 15% by an A+ bank). The rest of the Group's cash was held with a mix of institutions with credit ratings between A to BB (2018: A to BBB-).

�

The Directors have considered the credit exposures and do not consider that they pose a material risk at the present time. The credit risk for cash and cash equivalents is managed by ensuring that all surplus funds are deposited only with financial institutions with high quality credit ratings.

The expected credit loss for intercompany loans receivable are considered immaterial (note 22).

Interest rate risk

The Group's main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk.� During 2019, the Group's borrowings at variable rates were denominated in US Dollars. ��The Group's borrowings are carried at amortised cost. The Group has borrowings at variable interest rates and a 1% point rise in market interest rate would have caused the interest paid to increase by $1,343,000 (2018: $1,666,000) while a similar decrease would have caused the same decrease in interest paid. �The Group does not hedge its exposure to interest rate risk.� ��

The Group had $14,494,000 of cash balances on short-term deposit as at 31 December 2019 (2018: $13,044,000).� The average fixed interest rate on short-term deposits during the year was 0.6% (2018: 1.2%).�

Categories of financial instruments

Financial assets

Cash and receivables:	�	�	Group
	�	�	31 Dec 19 $'000	31 Dec 18 $'000
Cash and cash equivalents including restricted cash (note 24)	�	�	32,579	39,025
Trade and other receivables	�	�	2,980	6,609
�	�	�	35,559	45,634

�

Trade and other receivables excludes prepayments and VAT receivable as they are not considered financial instruments.� All trade and other receivables are receivable within one year for both reporting years.

Financial liabilities

Measured at amortised cost:	�	�	Group
	�	�	31 Dec 19 $'000	31 Dec 18 $'000
Trade and other payables within one year	�	�	8,981	17,637
Borrowings payable within one year (note 30)	�	�	39,295	38,400
Borrowings payable later than one year but not later than five years (note 30)	�	�	69,473	106,549
Lease liability later than one year but not later than five years	�	�	748	-
�	�	�	118,497	162,586

�

Trade and other payables excludes the silver streaming commitment, corporation tax, social security and other taxes as they are not considered financial instruments.�

4.��� Critical accounting estimates and judgements

�

The Group has the following key areas where critical accounting estimates and judgements are required that could have a material impact on the financial statements:

Impairment of non-current assets

Significant accounting judgements

The carrying value of the goodwill generated by accounting for the business combination of the Group acquiring an additional 40% in the Kounrad project in May 2014 (the "Kounrad Transaction") and the CMK Resources Limited acquisition in November 2017 requires an annual impairment review. This review determines whether the value of the goodwill can be justified by reference to the carrying value of the business assets and the future discounted cash flows of the business.� The key assumptions used in the Group's impairment assessments are disclosed in note 19.

Key sources of estimation uncertainty

Estimates are required periodically to assess assets for impairment. The critical accounting estimates are future commodity prices, treatment charges, future ore production, discount rates and projected future costs of development and production. Ore reserves and resources included in the forecasts include certain resources considered to be sufficiently certain and economically viable.� The Group's resources statements include additional resources which are not included in the life of mine plan or impairment test.

�

Decommissioning and site rehabilitation estimates

Significant accounting judgements

Provision is made for the costs of decommissioning and site rehabilitation costs when the related environmental disturbance takes place.� Judgement and experience is used in determining the expected timing, closure and decommissioning methods, which can vary in response to changes in the relevant legal requirements or decommissioning technologies. ��

Key sources of estimation uncertainty

The discounted provision recognised represents management's best estimate of the costs that will be incurred, and many of these costs will not crystallise until the end of the life of the mine. Estimates are reviewed annually and are based on current contractual and regulatory requirements and the estimated useful life of mines. Engineering and feasibility studies are undertaken periodically and in the interim management make assessments for appropriate changes based on the environmental management strategy; however significant changes in the estimates of contamination, restoration standards, timing of expenditure and techniques will result in changes to provisions from period to period.

A 1% change in the discount rate on the Group's rehabilitation estimates would result in an impact of $781,000 (2018: $473,000) on the provision for environmental rehabilitation, and an impact of $781,000 (2018: $473,000) on the statement of comprehensive income.� A 5% change in cost on the Group's rehabilitation estimates would result in an impact of $420,000 (2018: $208,000) on the provision for environmental rehabilitation, and an impact of $48,000 (2018: $21,000) on the statement of comprehensive income.

Mineral reserves and resources

Key sources of estimation uncertainty

The major value associated with the Group is the value of its mineral reserves and resources.� The value of the reserves and resources have an impact on the Group's accounting estimates in relation to depreciation and amortisation, impairment of assets and the assessment of going concern.� These resources are the Group's best estimate of product that can be economically and legally extracted from the relevant mining property. The Group's estimates are supported by geological studies and drilling samples to determine the quantity and grade of each deposit.

Ore resource estimates may vary from period to period. This judgement has a significant impact on impairment consideration and the period over which capitalised assets are depreciated within the financial statements.

The Kounrad resources were classified as JORC Compliant in 2013 and mineral resources were estimated in June 2017 and the Sasa JORC ore reserves and mineral resources were estimated in December 2019.

Tax

Significant accounting judgements

Management make judgements in relation to the recognition of various taxes payable by the Group and VAT recoverability for which the recoverability and timing of recovery is assessed. The Group operates in jurisdictions which necessarily require judgment to be applied when assessing the applicable tax treatment for transactions and the Group obtains professional advice where appropriate to ensure compliance with applicable legislation.

�

�

�

5.��� Segmental information

�

The segmental results for the year ended 31 December 2019 are as follows:

�	Kounrad $'000	Sasa �$'000	Unallocated �$'000	Total $'000
Gross revenue	81,708	99,107	-	180,815
Silver stream purchases	-	(5,556)	-	(5,556)
Off-take buyers' fees	(2,424)	(1,087)	-	(3,511)
Revenue	79,284	92,464	-	171,748
EBITDA	61,720	59,564	(12,700)	108,584
Depreciation and amortisation	(4,533)	(25,308)	(239)	(30,080)
Foreign exchange (loss)/gain	(169)	698	(152)	377
Other income	182	30	-	212
Other expenses (note 10)	(40)	(441)	-	(481)
Finance income (note 14)	9	1	326	336
Finance costs (note 15)	(106)	(263)	(10,784)	(11,153)
Profit/(loss) before income tax	57,063	34,281	(23,549)	67,795
Income tax	�	�	�	(15,911)
Profit for the year after tax from continuing operations	�	�	�	51,884
Profit from discontinued operations	�	�	�	53
Profit for the year	�	�	�	51,937

*Depreciation and amortisation includes amortisation on the fair value uplift on acquisition of Sasa and Kounrad of $19.4m.

�

The segmental results for the year ended 31 December 2018 are as follows:

�	Kounrad $'000	Sasa �$'000	Unallocated �$'000	Total $'000
Gross revenue	92,644	111,508	-	204,152
Silver stream purchases	-	(6,023)	-	(6,023)
Off-take buyers' fees	(2,535)	(1,215)	-	(3,750)
Revenue	90,109	104,270	-	194,379
EBITDA	66,833	71,221	(12,746)	125,308
Depreciation and amortisation	(6,335)	(26,951)	(56)	(33,342)
Foreign exchange (loss)/gain	276	(4,165)	10	(3,879)
Other income	359	-	-	359
Other expenses (note 10)	-	(561)	(469)	(1,030)
Finance income (note 14)	10	3	251	264
Finance costs (note 15)	(140)	(8,555)	(6,304)	(14,999)
Profit/(loss) before income tax	61,003	30,992	(19,314)	72,681
Income tax	�	�	�	(18,822)
Profit for the year after tax from continuing operations	�	�	�	53,859
Loss from discontinued operations	�	�	�	(7,274)
Profit for the year	�	�	�	46,585

*Depreciation and amortisation includes amortisation on the fair value uplift on acquisition of Sasa and Kounrad of $20.2m.

�

A reconciliation between profit for the year and EBITDA is presented in the Financial Review section.

Group segmental assets and liabilities for the year ended 31 December 2019 are as follows:

�	Segmental assets		Additions to non-current assets		Segmental liabilities
�	31 Dec 19 �$'000	31 Dec 18 �$'000	31 Dec 19 �$'000	31 Dec 18 �$'000	31 Dec 19 �$'000	31 Dec 18 �$'000
Kounrad	76,118	80,384	1,850	1,395	(11,017)	(11,666)
Sasa	411,899	450,495	9,432	13,352	(55,269)	(78,720)
Assets held for sale (note 21)	219	61	-	907	(91)	(40)
Unallocated including corporate�	26,839	18,785	870	298	(113,592)	(133,433)
�	515,075	549,725	12,152	15,952	(179,969)	(223,859)

The assets and liabilities of the Copper Bay and Shuak entities were classified as assets held for sale during the comparative year ended 31 December 2018 (note 21).

�

6.��� Revenue

� Group	�	�	2019 $'000	2018 $'000
International customers (Europe) - copper cathode	�	�	78,848	90,376
International customers (Europe) - zinc and lead concentrate	�	�	97,199	109,451
Domestic customers (Kazakhstan) - copper cathode	�	�	2,860	2,269
International customers (Europe) - silver	�	�	1,908	2,056
Total gross revenue	�	�	180,815	204,152
Less:	�	�	�	�
Silver purchases from silver stream	�	�	(5,556)	(6,023)
Off-take buyers' fees	�	�	(3,511)	(3,750)
Revenue	�	�	171,748	194,379

�

Kounrad

The Group sells and distributes its copper cathode product primarily through an off-take arrangement with Traxys, which has been retained as CAML's off-take partner through to September 2022. The off-take arrangements are for a minimum of 95% of the SX-EW plant's output. Revenue is recognised at the Kounrad mine gate when the goods have been delivered in accordance with the contractual delivery terms.

�

The off-take agreement provides for the option of provisional pricing i.e. the selling price is subject to final adjustment at the end of the quotation period based on the average price for the month following delivery to the buyer, however during 2019 all sales prices were calculated at the LME price on the date of dispatch.� The Company may mitigate commodity price risk by fixing the price in advance for its copper cathode sales with the off-take partner (see note 3).

The costs of delivery to the end customers have been effectively borne by the Group through means of an annually agreed buyer's fee which is deducted from the selling price.

During 2019, the Group sold 13,100 tonnes (2018: 13,696 tonnes) of copper through the off-take arrangements. Some of the copper cathodes are also sold locally and during 2019, 500 tonnes (2018: 386 tonnes) were sold to local customers.

�

Sasa

The Group sells Sasa's zinc and lead concentrate product to two European smelters through an off-take arrangement with Traxys which has been fixed through to 31 December 2022.� For one of the smelters, revenue is recognised at the Sasa mine gate when the goods have been delivered in accordance with the contractual delivery terms and for the other smelter revenue is recognised on delivery to the smelter in accordance with the contractual delivery terms. The commitment is for 100% of the Sasa concentrate production. �The agreements with the smelters provides for provisional pricing i.e. the selling price is subject to final adjustment at the end of the quotation period based on the average price for the month following delivery to the buyer and subject to final adjustment for assaying results.� The impact of mark-to-market adjustments for forward prices on provisional sales was not significant in the current or prior year.

The Group sold 19,697 tonnes (2018: 18,792 tonnes) of zinc in concentrate and 27,875 tonnes (2018: 27,878 tonnes) of lead in concentrate.

The revenue arising from silver relates to a contract with Osisko Gold Royalties where the Group has agreed to sell all of its silver at a fixed price of $5.58/oz, significantly below market value and arising from the silver stream commitment inherited on acquisition (note 29).

�

7.��� Cost of sales

Group	2019 $'000	2018 $'000
Reagents, electricity and materials	19,931	19,676
Depreciation and amortisation	29,499	33,407
Silver stream commitment (note 29)	(2,285)	(2,627)
Royalties�	7,271	7,995
Employee benefit expense	12,862	12,053
Consulting and other services	5,398	5,412
Taxes and duties	422	502
�	73,098	76,418

�

�

8.��� Distribution and selling costs

�

� Group	2019 $'000	2018 $'000
Freight costs	1,550	1,670
Transportation costs	108	184
Employee benefit expense	61	76
Depreciation and amortisation	20	15
Materials and other expenses	84	100
�	1,823	2,045

�

The above distribution and selling costs are those incurred at Kounrad and Sasa in addition to the costs associated with the off-take arrangements.

9.��� Administrative expenses

�

Group	2019 $'000	2018 $'000
Employee benefit expense	8,867	9,709
Share based payments	1,085	4,904
Consulting and other services	6,084	6,345
Auditors remuneration (note 11)	378	409
Office-related costs	1,271	1,783
Taxes and duties	77	45
Depreciation and amortisation	561	755
Total from continuing operations	18,323	23,950
Total from discontinued operations (note 21)	170	153
�	18,493	24,103

�

10.�� Other expenses

�

Group	2019 $'000	2018 $'000
Loss on disposal of property, plant and equipment	481	561
Impairment of receivable from Orion	-	469
�	481	1,030

�

The impairment of receivable from Orion in the prior year relates to $5,969,000 of withholding tax payable relating to income from payments in 2016 and 2017. This tax relates to a period pre the Group's ownership and so due to the tax indemnity in place on acquisition was considered fully recoverable as per the acquisition accounting. A settlement was reached in March 2019 where Orion would pay $5,500,000 of the withholding tax payable and therefore the Group recognised a $469,000 write off in 2018.

�

11.� Auditors' remuneration

�

During the year, the Group obtained the following services from the Company's auditors and its associates:

�	2019 $'000	2018 $'000
�Fees payable to BDO LLP the Company's auditors for the audit of the parent company and consolidated financial statements	160	-
Fees payable to PWC LLP the previous Company's auditors for the audit of the parent company and consolidated financial statements	36	146
�Fees payable to BDO LLP the Company's auditors and its associates for other services:� - The audit of Company's subsidiaries	144	-
�- Tax compliance services	-	-
�- Other assurance services	-	-
�Fees payable to PWC LLP the previous Company's auditors and its associates for other services:� - The audit of Company's subsidiaries	� -	� 179
�- Tax compliance services	�	26
�- Other assurance services	38	58
�	�	�
�	378	409

�

�

12.� Employee benefit expense

�

The aggregate remuneration of staff, including Directors, was as follows:

�

Group	2019 $'000	2018 $'000
Wages and salaries	16,294	14,856
Social security costs	3,823	4,484
Staff healthcare and other benefits	2,424	2,266
Other pension costs	564	497
Share based payments (note 27)	1,085	4,904
Total for continuing operations	24,191	27,008
Total for discontinuing operations (note 21)	75	75
�	24,266	27,083

�

The total employee benefit expense includes an amount of $1,316,000 (2018: $1,137,000) which has been capitalised within property, plant and equipment. �The 2018 comparative has been reclassified due to the reallocation of costs to ensure consistent presentation of employee benefit expense.

Company	2019 $'000	2018 $'000
Wages and salaries	5,391	4,778
Social security costs	934	1,325
Staff healthcare and other benefits	533	479
Other pension costs	165	146
Share based payments (note 27)	1,085	4,904
�	8,108	11,632

�

Key management remuneration is disclosed in the Remuneration Committee report.

13.� Monthly average number of people employed

�

Group	2019 Number	2018 Number
Operational	901	906
Construction	8	8
Management and administrative	130	125
�	1,039	1,039

�

The monthly average number of staff employed by the Company during the year was 15 (2018: 14).

14.� Finance income

�

Group	2019 $'000	2018 $'000
Foreign exchange gain on intercompany borrowings	-	3
Bank interest received�	336	261
�	336	264

�

15.� Finance costs

�

Group	2019 $'000	2018 $'000
Provisions: unwinding of discount (note 31)	329	489
Interest on borrowings (note 30)	10,779	15,225
Bank charges	45	117
Gain on modification of the debt facility	-	(832)
Total for continuing operations	11,153	14,999
Total for discontinuing operations (note 21)	57	-
�	11,210	14,999

�

16.� Income tax

��������������������������������������������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������

Group	�	�	2019 $'000	2018 $'000
Current tax on profits for the year	�	�	17,234	20,391
Deferred tax credit (note 36)	�	�	(1,323)	(1,569)
Income tax expense	�	�	15,911	18,822

�

Taxation for each jurisdiction is calculated at the rates prevailing in the respective jurisdictions.

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

�

� Group	2019 $'000	2018 $'000
Profit before taxation including loss from discontinued operations	67,794	65,407
Tax calculated at domestic tax rates applicable to profits in the respective countries	23,287	27,410
Tax effects of:	�	�
Expenses not deductible for tax purposes	19,854	2,982
Non-taxable income	(27,194)	(15,827)
Movement on unrecognised deferred tax - tax losses	1,287	5,826
Movement on recognised deferred tax (note 36)	(1,323)	(1,569)
Income tax expense	15,911	18,822

�

Corporate income tax is calculated at 19% (2018: 19%) of the assessable profit for the year for the UK parent company, 20% for the operating subsidiaries in Kazakhstan (2018: 20%) and 10% (2018: 10%) for the operating subsidiaries in North Macedonia.�

�

Expenses not deductible for tax purposes includes share-based payment charges, transfer pricing adjustments in accordance with local tax legislation and depreciation and amortisation charges.� Non-taxable income includes intercompany dividend income.� The 2018 comparative has been reclassified to ensure consistent presentation with the current year.�

�

Deferred tax assets have not been recognised on tax losses primarily at the parent company as it remains uncertain whether this entity will have sufficient taxable profits in the future to utilise these losses.

�

17.� Earnings/(loss) per share

�

(a)�� Basic

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners 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 (note 25).

�

�	2019 $'000	2018 $'000
Profit from continuing operations attributable to owners of the parent	51,824	55,298
Profit/(loss) from discontinued operations attributable to owners of the parent	53	(7,274)
Profitable attributable to owners of the parent	51,877	48,024
�	�	�
�	2019 No.	2018 No.
Weighted average number of Ordinary Shares in issue	176,498,266	176,498,266

�

�	2019 $ cents	2018 $ cents
Earnings/(loss) per share from continuing and discontinued operations attributable to owners of the parent during the year (expressed in $ cents per share)	�	�
From continuing operations	29.36	31.33
From discontinued operations	0.03	(4.12)
From profit for the year	29.39	27.21

�

(b)�� Diluted

The diluted earnings/(loss) per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding after assuming the conversion of all outstanding granted share options.

�	2019 $'000	2018 $'000
Profit from continuing operations attributable to owners of the parent	51,824	55,298
Profit/(loss) from discontinued operations attributable to owners of the parent	53	(7,274)
Profitable attributable to owners of the parent	51,877	48,024
�	�	�
�	2019 No.	2018 No.
Weighted average number of Ordinary Shares in issue	176,498,266	176,498,266
Adjusted for:	�	�
-������ Share options	5,076,397	3,937,283
Weighted average number of Ordinary Shares for diluted earnings per share	181,574,663	180,435,549

�

Diluted earnings/(loss) per share	2019 $ cents	2018 $ cents
From continuing operations	28.54	30.65
From discontinued operations	0.03	(4.12)
From profit for the year	28.57	26.53

�

�

18.� Property, plant and equipment

Group	Construction in progress����� $'000	Plant and equipment $'000	� Mining assets $'000	Motor vehicles and ROU assets $'000	� � Land $'000	� Mineral rights $'000	Total $'000
Cost	�	�	�	�	�	�	�
At 1 January 2018	11,038	115,183	1,636	1,703	664	365,010	495,234
Additions	14,398	108	-	513	-	-	15,019
Disposals	(24)	(596)	-	(60)	-	-	(680)
Change in estimate - asset retirement obligation (note 31)	� -	� (159)	� -	� -	-	-	� (159)
Transfers	(7,439)	7,432	-	7	-	-	-
Transfer from stock	35	116	-	-	-	-	151
Exchange differences	(691)	(8,809)	(221)	(216)	(30)	(14,677)	(24,644)
Impairment	-	(43)	-	-	-	-	(43)
At 31 December 2018	17,317	113,232	1,415	1,947	634	350,333	484,878
Additions	10,566	481	-	1,084	-	-	12,131
Disposals	(214)	(732)	-	(32)	-	-	(978)
Change in estimate - asset retirement obligation (note 31)	� -	� 3,664	� -	� -	� -	� -	� 3,664
Transfers	(12,951)	12,951	-	-	-	-	-
Exchange differences	(345)	(941)	11	(14)	(15)	(8,532)	(9,836)
At 31 December 2019	14,373	128,655	1,426	2,985	619	341,801	489,859
�	�	�	�	�	�	�	�
Accumulated depreciation	�	�	�	�	�	�	�
At 1 January 2018	-	22,211	168	789	-	2,805	25,973
Provided during the year	-	13,086	89	201	-	18,399	31,775
Disposals	-	(66)	-	(30)	-	-	(96)
Impairment	-	(6)	-	-	-	-	(6)
Exchange differences	-	(2,229)	(32)	(108)	-	-	(2,369)
At 31 December 2018	-	32,996	225	852	-	21,204	55,277
Provided during the year	-	9,964	89	471	-	17,801	28,325
Disposals	-	(237)	-	(27)	-	-	(264)
Exchange differences	-	127	2	5	-	-	134
At 31 December 2019	-	42,850	316	1,301	-	39,005	83,472
�	�	�	�	�	�	�	�
Net book value at 31 December 2018	17,317	80,236	1,190	1,095	634	329,129	429,601
Net book value at 31 December 2019	14,373	85,805	1,110	1,684	619	302,796	406,387

�

The Company had $838,000 of office equipment at net book value as at 31 December 2018 (2018: $290,000).

The increase in estimate in relation to the Kounrad asset retirement obligation of $783,000 (2018: reduction of $159,000) is due to a combination of adjusting the provision recognised at the net present value of future expected costs using latest assumptions on inflation rates and discount rates as well as updating the provision for management's best estimate of the costs that will be incurred based on current contractual and regulatory requirements and the estimated useful life of mine (note 31).�

The increase in estimate in relation to the Sasa asset retirement obligation of $2,881,000 (2018: reduction of $10,000) is due a review of the provision for management's best estimate of the costs that will be incurred based on current contractual and regulatory requirements and the estimated useful life of mine (note 31).�

The Group has reviewed all the leasing arrangements and contracts in light of adopting IFRS 16 Leases and has capitalised $853,000 as right-of-use assets ('ROU') during the year and is included within additions. All right-of-use assets will continue to be measured at the amount of the lease liability on adoption.

During the year there were total disposals of plant, property and equipment at cost of $978,000 with accumulated depreciation of $264,000. The Group received $233,000 consideration for these assets and therefore a loss of $481,000 was recognised in other expenses (note 10).�

Amounts recognised in the income statement

The income statement shows the following amounts relating to leases:

�	�	�	2019 �$'000	2018 �$'000
Depreciation charge of right-of-use assets	�	�	�	�
Office	�	�	323	-
Other	�	�	19	-
�	�	�	342	-
�	�	�	�	�
Interest expense included in finance costs	�	�	54	-

�

As at 31 December 2019 there are no indications of impairment with the fair value of the assets exceeding the net book value.

19.� Intangible assets

Group	Goodwill $'000	Mining licences and permits $'000	Computer software and website $'000	Total $'000
Cost	�	�	�	�
At 1 January 2018	33,464	41,730	514	75,708
Additions	-	-	28	28
Disposals	-	-	(6)	(6)
Exchange differences	(2,285)	(4,096)	(17)	(6,398)
At 31 December 2018	31,179	37,634	519	69,332
Additions	-	-	21	21
Disposals	-	-	(12)	(12)
Exchange differences	(507)	(140)	1	(646)
At 31 December 2019	30,672	37,494	529	68,695
�	�	�	�	�
Accumulated amortisation	�	�	�	�
At 1 January 2018	-	5,728	65	5,793
Provided during the year	-	2,134	433	2,567
Disposals	-	-	(6)	(6)
Exchange differences	-	(325)	(8)	(333)
At 31 December 2018	-	7,537	484	8,021
Provided during the year	-	1,940	55	1,995
Disposals	-	-	(12)	(12)
Exchange differences	-	15	-	15
At 31 December 2019	-	9,492	527	10,019
�	�	�	�	�
Net book value at 31 December 2018	31,179	30,097	35	61,311
Net book value at 31 December 2019	30,672	28,002	2	58,676

�

The Company had nil of computer software and website costs at net book value as at 31 December 2019 (2018: $3,000).

Impairment assessment

�

Kounrad project

The Kounrad project located in Kazakhstan has an associated goodwill balance of $8,999,000 (2018: $8,928,000). In accordance with IAS 36 "Impairment of assets" and IAS 38 "Intangible Assets", a review for impairment of goodwill is undertaken annually or at any time an indicator of impairment is considered to exist and in accordance with IAS 16 "Property, plant and equipment", a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist. The discount rate applied to calculate the present value is based upon the nominal weighted average cost of capital applicable to the cash generating unit ('CGU'). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of the CGU is assessed by reference to the higher of value in use ('VIU'), being the net present value ('NPV') of future cash flows expected to be generated by the asset, and fair value less costs to dispose ('FVLCD'). The FVLCD is considered to be higher than VIU and has been derived using discounted cash flow techniques (NPV of expected future cash flows of a CGU), which incorporate market participant assumptions.

The discount rate reflects equity risk premiums over the risk-free rate, the impact of the remaining economic life of the CGU and the risks associated with the relevant cash flows based on the country in which the CGU is located. These risk adjustments are based on observed equity risk premiums, historical country risk premiums and average credit default swap spreads for the period.

The key economic assumptions used in the review were a five-year forecast average nominal copper price of $6,372 per tonne (2018: $6,985) and a long-term price of $6,595 per tonne (2018: $7,472) and a discount rate of 8% (2018: 8%). �Assumptions in relation to operational and capital expenditure are based on the latest budget approved by the Board.� The carrying value of the net assets is not currently sensitive to any reasonable changes in key assumptions. Management concluded and the net present value of the asset is significantly in excess of the net book value of assets, and therefore no impairment has been identified.

�

Sasa project

The SASA project located in North Macedonia has an associated goodwill balance of $21,673,000 (2018: $22,251,000). The business combination in 2017 was accounted for at fair value under IFRS 3 and therefore recoverable value is sensitive to changes in commodity prices, operational performance, treatment charges, future cash costs of production and capital expenditures.� In accordance with IAS 36 'Impairment of assets' and IAS 38 'Intangible Assets', a review for impairment of goodwill is undertaken annually or at any time an indicator of impairment is considered to exist and in accordance with IAS 16 'Property, plant and equipment', a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist.

The assessment compared the recoverable amount of the SASA Cash CGU with its carrying value for the year ended 31 December 2019. The recoverable amount of the CGU is assessed by reference to the higher of VIU, being the NPV of future cash flows expected to be generated by the asset, and FVLCD. The FVLCD is considered to be higher than VIU and has been derived using discounted cash flow techniques (NPV of expected future cash flows of a CGU), which incorporate market participant assumptions. Cost to dispose is based on management's best estimates of future selling costs at the time of calculating FVLCD. Costs attributable to the disposal of the CGU are not considered significant. The methodology used for the fair value is a level 3 valuation.�

�

The expected future cash flows utilised in the FVLCD model are derived from estimates of projected future revenues based on broker consensus commodity prices, treatment charges, future cash costs of production and capital expenditures contained in the life of mine ('LOM') plan, and as a result FVLCD is considered to be higher than VIU. The Group's discounted cash flow analysis reflects probable reserves as well as indicated resources and certain inferred resources which are considered sufficiently certain and economically viable, and is based on detailed research, analysis and modelling. The forecast operational and capital expenditure reflects the transition of mining method from sub-level caving to cut and fill stoping, which is expected to lead to improved reserve grades for both zinc and lead and increased metal production over the life of mine.�

�

At 31 December 2019, the Group has reviewed the indicators for impairment, including forecasted commodity prices, treatment charges, discount rates, operating and capital expenditure, and the mineral reserves and resources' estimates and an impairment is not necessary. For the purposes of the impairment review a discount rate of 8.07% (2018: 12%) was applied to calculate the present value of the CGU. The reduction in the discount rate from the prior year was supported by a detailed WACC calculation and due to the reduced country risk profile and asset specific risk factors through operational improvements, environmental and social plans having owned and operated the asset for over two years. The key economic assumptions used in the review were a five-year forecast average nominal zinc and lead price of $2,220 (2018: $2,441) and $1,986 (2018: $2,200) per tonne respectively and a long-term price of $2,358 (2018: $2,604) and $1,900 (2018: $2,264) per tonne respectively.� Zinc and lead treatment charges are forecast to rise significantly in 2020 with a significant reduction from these returning to historic averages by 2022.�

Management then performed sensitivity analyses whereby certain parameters were flexed downwards by reasonable amounts for the CGU to assess whether the recoverable value for the CGU would result in an impairment charge. The following sensitivities were applied:

Long-term zinc price reduced by 5%

Long-term lead price reduced by 5%

Discount rate increased to 9%

Production decreased by 2.5%

Treatment charges increased by 20%

Operational expenditure increased by 7%

Capital expenditure increased by 20%

�

In isolation, none of the changes set out above would result in an impairment. This sensitivity analysis also does not take into account any of management's mitigation factors should these changes occur or the planned production optimisation in future years. The Board considers the base case forecasts to be appropriate and balanced best estimates.

20.� Investments

�

Shares in Group undertakings:

��������������������������������������������������������������������������������������������������������������������������������������������������������� ������������������������������������������������������������������ Company

�	�	�	31 Dec 19 $'000	31 Dec 18 $'000
At 1 January	�	�	5,491	11,821
Investment in Shuak BV	�	�	2,800	35
Impairment of investment in Shuak BV	�	�	(2,800)	(143)
Impairment of investment in Copper Bay	�	�	-	(6,222)
At 31 December�	�	�	5,491	5,491

�

Investments in Group undertakings are recorded at cost which is the fair value of the consideration paid, less impairment.

Details of the Company holdings are included in the table below:

Subsidiary	Registered office address	Activity	� � CAML % 2019	� � CAML % 2018	� Date of� incorporation
CAML Kazakhstan BV	Herikerbergweg 238, 1101 CM Amsterdam, The Netherlands	Holding Company	100	100	23 Jun 08
Shuak BV	Herikerbergweg 238, 1101 CM Amsterdam, The Netherlands	Holding Company	80	80	20 Sep 16
Sary Kazna LLP	Business Centre No. 2, 4 Mira Street, Balkhash, Kazakhstan	Kounrad project (SUC operations)	100	100	6 Feb 06
Kounrad Copper Company LLP	Business Centre No. 2, 4 Mira Street, Balkhash, Kazakhstan	Kounrad project (SX-EW plant)	100	100	29 Apr 08
Ken Shuak LLP	Business Centre No. 2, 4 Mira Street, Balkhash, Kazakhstan	Shuak project (exploration)	80	80	5 Oct 16
Copper Bay Limited	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Holding Company	75*	75*	29 Oct 10
Copper Bay (UK) Ltd	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Holding Company	75*	75*	9 Nov 11
Copper Bay Chile Limitada	Ebro 2740, Oficina 603, Las Condes, Santiago, Chile	Holding Company	75*	75*	12 Oct 11
Minera Playa Verde Limitada	Ebro 2740, Oficina 603, Las Condes, Santiago, Chile	Exploration - Copper	75*	75*	20 Oct 11
CAML MK Limited	Masters House, 107 Hammersmith Road, London, W14 0QH, United Kingdom	Seller of zinc and lead concentrate	100	100	5 Sep 17
CMK Resources Limited	Cannon's Court, 22 Victoria St, Hamilton HM12, Bermuda	Holding Company	100	100	19 June 2015
CMK Mining B.V. �	Prins Bernhardplein 200 1097 JB Amsterham, The Netherlands	Holding Company	100	100	30 June 2015
CMK Europe SPLLC Skopje	Ivo Lola Ribar no. 57-1/6, 1000 Skopje, North Macedonia	Holding Company	100	100	10 July 2015
Rudnik SASA DOOEL Makedonska Kamenica	28 Rudarska Str, Makedonska Kamenica,�2304, North Macedonia	Sasa project	100	100	22 June 2005

*Fully diluted basis

�

CAML MK

For the period ended 31 December 2019, CAML MK Limited (registered number: 10946728) has opted to take advantage of a statutory exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies. The members of CAML MK Limited have not required it to obtain an audit of their financial statements for the period ended 31 December 2019. In order to facilitate the adoption of this exemption, Central Asia Metals plc, the parent company of the subsidiaries concerned, undertakes to provide a guarantee under Section 479C of the Companies Act 2006 in respect of CAML MK Limited.

�

Shuak

In February 2020, the Group reduced its effective interest in Ken Shuak LLP from 80% to 10%. The Group will not be required to contribute towards future costs of the project.� The asset has been fully impaired. ����

CMK Resources Limited

During 2019, CMK Mining B.V. (formally CMK Mining Limited (Bermuda) was reincorporated from Bermuda into the Netherlands.� Prior to this reincorporation, CMK Resources Limited transferred its shareholding in CMK Mining B.V. to CAML MK Limited.� CMK Resources Limited was liquidated in February 2020, see note 37.

�

21.� Assets held for sale

�

The assets and liabilities of the Shuak entities continue to be presented as held for sale in the Statement of Financial Position.� During the prior year, the exploration assets and property, plant and equipment held in Shuak were impaired in full.� In February 2020, the Group reduced its effective interest in the Shuak project from 80% to 10%.� The Group will not be required to contribute towards future costs of the project.���

The assets and liabilities of the Copper Bay entities continue to be presented as held for sale in the Statement of Financial Position following the decision of the CAML Board to sell the project in August 2017 and the Company progresses it's sale process.� The results of the Copper Bay entities for the year ended 31 December 2019 and the comparative year ended 31 December 2018 are shown within discontinued operations in the Consolidated Income Statement.� During the prior year, the exploration assets and property, plant and equipment held in Copper Bay were impaired in full as although the Group is confident of making a sale in the near future, it is not clear of the cash generative abilities of these assets.

�

Assets of disposal group classified as held for sale: �	31 Dec 19 $'000	31 Dec 18 $'000
Cash and cash equivalents	106	58
Trade and other receivables	113	3
�	219	61

�

�

Liabilities of disposal group classified as held for sale: �	�	�	�31 Dec 19 $'000	�31 Dec 18 $'000
Trade and other payables	�	�	73	40
Provisions	�	�	18	-
�	�	�	91	40

�

During the year the following have been recognised in discontinued operations:

�

Profit/(loss) from discontinued operations: �	�	�	2019 $'000	2018 $'000
General and administrative expenses	�	�	(170)	(153)
Foreign exchange gain/(loss)	�	�	280	(927)
Finance costs	�	�	(57)	-
Impairment of exploration and evaluation assets	�	�	-	(6,194)
Loss from discontinued operations	�	�	53	(7,274)
� Cash flows of disposal group classified as held for sale: �	�	�	� 2019 $'000	� � � 2018 $'000
Operating cash flows	�	�	48	(93)
Total cash flows	�	�	48	(93)

�

�

22.� Trade and other receivables

�

� Current receivables	�Group		Company
	31 Dec 19 $'000	31 Dec 18 $'000	31 Dec 19 $'000	31 Dec 18 $'000
Receivable from subsidiary�	-	-	381	215
Loans due from subsidiaries	-	-	341,005	373,182
Trade receivables	1,493	3,746	-	-
Prepayments	2,195	1,463	387	395
VAT receivable	1,101	2,006	90	189
Other receivables	1,487	2,863	220	211
�	6,276	10,078	342,083	374,192
�	�	�	�	�
Non-current receivables	�	�	�	�
Prepayments	441	71	-	-
VAT receivable	2,948	2,049	-	-
�	3,389	2,120	-	-

�

The carrying value of all the above receivables is a reasonable approximation of fair value.� There are no amounts past due at the end of the reporting period that have not been impaired apart from the VAT receivable balance as explained below.� Trade and other receivables and loans due from subsidiaries are accounted for under IFRS 9 using the expected credit loss model and are initially recognised at fair value and subsequently measured at amortised cost less any allowance for expected credit losses.

There are two loans due from subsidiaries. One loan is owed by CAML MK Limited, a directly owned subsidiary for $301,179,000 (2018: $315,116,000), accrues interest at a rate of 5% per annum and is repayable on demand.� There is another loan which is owed by CMK Mining B.V, a subsidiary, for $39,826,000 (2018: $58,067,000) which accrues interest at a rate of 4.75% per annum and is repayable on demand.� These loans have been assessed for expected credit loss under IFRS 9, however as the Group's strategies are aligned there is no realistic expectation that repayment would be demanded. The expected future cash flows arising from the asset exceed the intercompany loan values under various scenarios considered so it is believed these loans can be repaid and the expected credit loss is immaterial.

As at 31 December 2019, the total Group VAT receivable was $4,049,000 (2018: $4,055,000) which includes an amount of $3,086,000 (2018: $2,813,000) of VAT owed to the Group by the Kazakhstan authorities.� In 2019, the Kazakhstan authorities refunded $403,000 and a further $125,306 was received in March 2020 and this has been classified as current trade and other receivables as at 31 December 2019.� The Group is working closely with its advisers to recover the remaining portion. The planned means of recovery will be through a combination of the local sales of cathode copper to offset VAT liabilities and by a continued dialogue with the authorities.

23.� Inventories

Group	31 Dec 19 $'000	31 Dec 18 $'000
Raw materials	6,431	6,901
Finished goods	852	628
�	7,283	7,529

�

The Group did not have any slow-moving, obsolete or defective inventory as at 31 December 2019 and therefore there were no write-offs to the Income Statement during the year (2018: nil).� The total inventory recognised through the Income Statement was $4,955,000 (2018: $4,668,000).

24.� Cash and cash equivalents and restricted cash

��������������������������������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������� ���������������Group ������������������������������������������� ��Company

�	31 Dec 19 �$'000	31 Dec 18 �$'000	31 Dec 19 �$'000	31 Dec 18 �$'000
Cash at bank and on hand	14,072	21,605	3,340	2,253
Short-term deposits	14,494	13,044	14,494	13,044
�Cash and cash equivalents	28,566	34,649	17,834	15,297
Restricted cash	4,013	4,376	3,824	4,222
Total cash and cash equivalent including restricted cash	32,579	39,025	21,658	19,519

�

The restricted cash amount of $4,013,000 (2018: $4,376,000) is held at bank to cover debt service compliance and Kounrad SUC licence requirements.� Short-term deposits are held at call with banks.�

The Group holds an overdraft facility in Sasa and these amounts are disclosed in note 30 Borrowings.

Reconciliation to cash flow statements

The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year as follows:

� �	�		�Group
	�	�	31 Dec 19 $'000	31 Dec 18 $'000
Cash and cash equivalents as above (excluding restricted cash)�	�	�	28,566	34,649
Bank overdrafts (note 30)	�	�	(895)	-
Cash at bank and on hand in assets held for sale (note 21)	�	�	106	58
Balance per statement of cash flows	�	�	27,777	34,707
�	�	�	�	�

�

25.� Share capital and premium

�	�	� Number of shares	Ordinary Shares $'000	Share premium �$'000	Treasury shares $'000
At 1 January 2018	�	176,498,266	1,765	191,184	(7,780)
Treasury shares	�	-	-	-	1,254
At 31 December 2018	�	176,498,266	1,765	191,184	(6,526)
Treasury shares	�	-	-	-	-
At 31 December 2019	�	176,498,266	1,765	191,184	(6,526)

�

The par value of Ordinary Shares is $0.01 per share and all shares are fully paid.�

26.� Currency translation reserve

�

Currency translation differences arose primarily on the translation on consolidation of the Group's Kazakhstan-based and North Macedonian-based subsidiaries whose functional currency is the Tenge and North Macedonian Denar respectively.� In addition, currency translation differences arose on the goodwill and fair value uplift adjustments to the carrying amounts of assets and liabilities arising on the Kounrad Transaction and CMK Resources acquisition which are denominated in Tenge and Denar respectively.� During 2019, a non-cash currency translation loss of $11,019,000 (2018: $10,288,000) was recognised within equity.�

�

27.� Share based payments

�

The Company provides rewards to staff in addition to their salaries and annual discretionary bonuses, through the granting of share options in the Company. The Company effectively has two such option schemes in place, the Old Scheme and the New Scheme.

Old Scheme

The first share option plan was introduced by the Company in February 2008 and initially had an exercise price of $6.42. On the recommendation of the Remuneration Committee, the exercise price for the participants was reduced to $0.68 in February 2010 to reflect the changed economic circumstances of the Company and maintain some form of incentive for staff. Only those staff still employed by the Group at this time benefited from this decision and those participants who had left the Group maintained an exercise price of $6.42 on their options. The vesting of share options in the plan is purely conditional upon time served by the participant and as at 31 December 2019, all options have fully vested.

New Scheme

The Company introduced the second share option plan in October 2011. This scheme has an exercise price of effectively nil for the participants. �The share options granted during 2012 until 2018 under this scheme were based on the achievement by the Group and the participant of the performance targets as determined by the CAML Remuneration Committee that are required to be met in year one and then options could be exercised one third annually from the end of year one. Options granted during 2012 to 2018 had straight forward conditions attached and were valued using a Black-Scholes model.� �

�

Share options granted in 2019 vest after three years depending on achievement of the Group of performance target relating to the level of absolute total shareholder return compound annual growth rate of the value of the Company's shares over the performance period of three financial years ending 31 December 2021.� The fair value at grant date is independently determined using a Monte Carlo simulation model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the option, and the correlations and volatilities of the share price.

The assessed fair value at grant date of options granted during the year ended 31 December 2019 was $1,450,000 in total with an amount of $362,000 expensed for the year ended 31 December 2019.� An additional dividend related share option charge of $723,000 (2018: $699,000) was also recognised.� The number of shares covered by such awards is increased by up to the value of dividends declared as if these were reinvested in Company shares at the dates of payment.� The outstanding share options included in the calculation of diluted earnings/(loss) per share (note 17) includes these additional awards but they are excluded from the disclosures in this note.� In total, an amount of $1,085,000 (2018: $4,904,000) has been credited to retained earnings and expensed within employee benefits expense from continuing operations for the grant of stock options for the year ended 31 December 2019.

The model inputs for options granted during the year ended 31 December 2019 included:

Vesting period: 3 years

Vested options are exercisable for a period of 7 years after vesting

Exercise price: $0.01

Grant date: 30 May 2019

Expiry date: 29 May 2029

Share price at grant date: $2.71

Expected price volatility of the Company's shares: 15%

Risk-free interest rate: 1.84%

�

As at 31 December 2019, nil (2018: 16,000) Old Scheme options and 4,182,729 (2018: 3,295,600) New Scheme options (including those issued to Nurlan Zhakupov) were outstanding. Share options are granted to Directors and selected employees. The exercise price of the granted options is presented in the table below for every grant. The Company has the option but not the legal or constructive obligation to repurchase or settle the options in cash.

Movements in the number of share options outstanding and their related weighted average price are as following:

�

��������������� �����������������������	2019		2018
�	Average exercise price in $ per share option	Options� (number)	Average exercise price in $ per share option	Options� (number)
At 1 January	0.01	3,311,600	0.39	2,772,260
Granted	0.01	1,124,877	0.01	1,067,414
Exercised	0.08	(156,627)	0.01	(364,074)
Expired	-	-	6.42	(164,000)
Non-vesting	0.01	(97,121)	-	-
At 31 December	0.01	4,182,729	0.01	3,311,600

�

Non-vesting shares relates to options granted for which the performance targets were not met.� Out of the outstanding options of

4,182,729 (2018: 3,311,600), 2,149,192 options (2018: 1,505,830) were exercisable as at 31 December 2019 excluding the value of additional share options for dividends declared on those outstanding.� The related weighted average share price at the time of exercise was $2.73 (2018: $3.71) per share.�

Share options exercised by the Directors during the year are disclosed in the Remuneration Committee Report.�

�

Share options outstanding at the end of the year have the following expiry date and exercise prices:

������������������������������������������������������������������������������������������������������������������������������������ �� ����������������������

� � Grant - vest	� Expiry date of option	Option exercise price $	� ������� 2019 ���������������������������2018 ������������� Share options (number)
Old Scheme:	�	�	�	�
21 Feb 10	21 Feb 20	0.68	-	16,000
New Scheme:	�	�	�	�
8 May 12	7 May 22	0.01	100,000	100,000
24 Jul 13	23 Jul 23	0.01	60,155	60,155
3 Jun 14	2 Jun 24	0.01	196,355	196,355
8 Oct 14	7 Oct 24	0.01	214,354	214,354
22 Apr 15	21 Apr 25	0.01	358,948	358,948
18 Apr 16	18 Apr 26	0.01	533,157	621,790
21 Apr 17	21 Apr 27	0.01	642,376	676,583
2 May 18	2 May 28	0.01	952,507	1,067,415
30 May 19	2 May 29	0.01	1,124,877	-
�	�	�	�	�
�	�	�	4,182,729	3,311,600

�

Employee Benefit Trust

The Company set up an Employee Benefit Trust ('EBT') during 2009 as a means of incentivising certain Directors and senior management of CAML prior to the Initial Public Offering ('IPO'). All of the shares awarded as part of the EBT scheme vested on the successful completion of the IPO on 30 September 2010.

2,534,688 Ordinary Shares were initially issued as part of the arrangements in December 2009 followed by a further issue of 853,258 in September 2010. The shares were issued at the exercise price of $0.68, which was the best estimate of the Company's valuation at the time. Details of the awards to Directors of the Company are contained in the Remuneration Committee Report.

28.� Trade and other payables

�������������������� Group�� ��������������������� ����������������������������Company

�	31 Dec 19 $'000	31 Dec 18 $'000	31 Dec 19 $'000	31 Dec 18 $'000
Trade and other payables including accruals	8,981	11,137	4,760	4,805
Deferred consideration	-	6,500	-	-
Corporation tax, social security and other taxes	3,324	3,279	205	191
�	12,305	20,916	4,965	4,996

�

The carrying value of all the above payables is equivalent to fair value.

In April 2019, an agreement with the previous owners of CMK Resources Limited for receipt of $5,500,000 was finalised relating to the $5,900,000 withholding tax liability in North Macedonia that relates to the activities of CMK Europe prior to CAML ownership. During the year, the Group has paid the remaining $6,500,000 of deferred consideration.

The Group made a provision for the 2019 Kazakhstan corporate income tax liability of $424,000 (2018: $773,000) having paid an amount of $13,284,000 in advance during the year (2018: $13,588,000). $841,000 was also paid during the year in relation to 2018 corporate income tax (2018: $1,259,000 in relation to 2017).�

The Group made a provision for the 2019 North Macedonian corporate income tax liability of $nil (2018: $1,293,000) having paid an amount of $6,211,000 in advance during the year which exceeded the final liability (2018: $8,191,000). $792,000 was also paid during the year in relation to 2018 corporate income tax (2018: $2,840,000 in relation to 2017).

All Group and Company trade and other payables are payable within less than one year for both reporting periods.

�

29.� Silver streaming commitment

�

The carrying amounts of the silver streaming commitment for silver delivery are as follows:

�������������������� Group�� ������������������������������������������������� Company

�	31 Dec 19 $'000	31 Dec 18 $'000	31 Dec 19 $'000	31 Dec 18 $'000
Current	2,140	2,263	-	-
Non-current	20,755	22,905	-	-
�	22,895	25,168	-	-

�

On 1 September 2016, the CMK Group entered into a Silver Purchase Agreement. The Group acquired this agreement as part of the acquisition of the CMK Group and inherited a silver streaming commitment related to the production of silver during the life of the mine. The reduction in the silver streaming commitment is recognised in the Income Statement within cost of sales as the silver is delivered based on the units of production.

30.� Borrowings

�������������������� Group�� ������������������������������������������������� Company

�	31 Dec 19 $'000	31 Dec 18 $'000	31 Dec 19 �$'000	31 Dec 18 �$'000
Secured: Non-current	�	�	�	�
Bank loans	69,473	106,549	69,473	106,549
Secured: Current	�	�	�	�
Bank loans	38,400	38,400	38,400	38,400
Unsecured: Current	�	�	�	�
Bank overdraft	895	-	-	-
Total Current	39,295	38,400	38,400	38,400
�	�	�	�	�
Total borrowings	108,768	144,949	107,873	144,949

�

The carrying value of loans approximates fair value:

�	Carrying amount		Fair value
�	31 Dec 19 $'000	31 Dec 18 $'000	31 Dec 19 $'000	31 Dec 18 $'000
Traxys	107,873	144,949	107,873	144,949
Bank overdraft	895	-	895	-
�	108,768	144,949	108,768	144,949

�

The movement on borrowings can be summarised as follows:

�������������������� Group�� ������������������������������������������������� Company

�	31 Dec 19 $'000	31 Dec 18 $'000	31 Dec 19 �$'000	31 Dec 18 �$'000
�	�	�	�	�
Balance at 1 January	144,949	181,914	144,949	113,711
Drawdown of borrowings	-	60,809	-	60,000
Repayment of borrowings	(38,400)	(99,265)	(38,400)	(28,744)
Finance charge interest	9,455	12,065	9,455	7,142
Finance charge unwinding of directly attributable fees	1,324	2,323	1,324	814
Interest paid	(9,455)	(12,065)	(9,455)	(7,142)
Gain on modification of the debt facility	-	(832)	-	(832)
Overdraft drawdown	895	-	-	-
Balance at 31 December	108,768	144,949	107,873	144,949

�

During the year, $38,400,000 (2018: $38,500,000) of the principal amount of Group debt was repaid as well as a further $9,455,000 (2018: $12,065,000) interest. As at 31 December 2019, non-current and current borrowings were $69,473,000 and $38,400,000 respectively (2018: $106,549,000 and $38,400,000 respectively).

�

The Group holds one corporate debt package with Traxys Europe S.A. repayable on 4 November 2022. Interest is payable at LIBOR plus 4.75% and reduced to LIBOR plus 4.00% with effect from 27 March 2020. Security is provided over the shares in CAML Kazakhstan BV, certain bank accounts and the Kounrad off-take agreement as well as over the Sasa off-take agreement.

�

The debt is subject to financial covenants which include the monitoring of gearing and leverage ratios and these are all currently complied with.

�

In August 2019, an overdraft facility was agreed with Komercijalna Banka AD Skopje with a fixed interest rate of 3.80% denominated in Macedonian Denar. The overdraft was utilised for the first time in December 2019.

�

As at 31 December 2019, the Group measured the fair value using techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly (Level 2).

�

The different levels have been defined as follows:

������ Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

������ Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

������ Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

�

31.� Provisions for other liabilities and charges

�

�� Group��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

�	Asset retirement obligation $'000	Employee retirement benefits $'000	Other employee benefits $'000	� � Legal claims $'000	� � Total $'000
At 1 January 2018	4,576	180	154	455	5,365
Change in estimate	(159)	55	21	-	(83)
Settlements of provision	-	(31)	(3)	(108)	(142)
Unwinding of discount (note 15)	489	-	-	-	489
Exchange rate difference	(478)	(8)	(7)	(20)	(513)
At 31 December 2018	4,428	196	165	327	5,116
Change in estimate	3,664	39	36	-	3,739
Settlements of provision	-	(32)	(11)	(30)	(73)
Unwinding of discount (note 15)	329	-	-	-	329
Exchange rate difference	(23)	(4)	(4)	(7)	(38)
At 31 December 2019	8,398	199	186	290	9,073
Non-current	8,398	171	168	290	9,027
Current	-	28	18	-	46
At 31 December 2019	8,398	199	186	290	9,073

�

a)���� Asset retirement obligation

The Group provides for the asset retirement obligation associated with the mining activities at Kounrad, estimated internally to be required in 2034. The provision is recognised at the net present value of future expected costs using a discount rate of 8.07% (2018: 8.07%).� The increase in estimate in relation to the asset retirement obligation of $750,000 (2018: reduction of $159,000) is due to a combination of adjusting the provision recognised at the net present value of future expected costs using an inflation rate of 4.13% (2018: 5.59%) as well as updating the provision for management's best estimate of the costs that will be incurred based on current contractual and regulatory requirements and the estimated useful life of mine to 2034.�

�

Under current legislation entities operating mining and related activities in North Macedonia are required to take remedial action for the land where such activities have occurred based on a plan approved by the Ministry of the Environment as well as in accordance with international best practices.� In 2017, the Group engaged an independent expert to conduct an independent assessment on the environment of the mining activities of the Group and to prepare an assessment of the restoration and the relevant costs connected with the mine, and the mining properties and in 2019, the Group engaged the University of Shtip to assess future costs in relation to TSF3.2 and TSF4. The final asset retirement obligation used these external assessment as well as the Group's own internal calculations to estimate the future potential obligations.� The expected current cash flows were projected over the useful life of the mining sites and discounted to 2019 terms using a discount rate of 7.25% (2018: 7.87%). The cost of the related assets are depreciated over the useful life of the assets and are included in property, plant and equipment. ��The increase in estimate in relation to the asset retirement obligation of $2,914,000 (2018: reduction of $10,000) is from updating the provision for management's best estimate of the costs that will be incurred based on current contractual and regulatory requirements and the estimated useful life of mine to 2038.�

�

b)���� Employee retirement benefit

All employers in North Macedonia are obliged to pay employees minimum severance pay on retirement equal to two months of the average monthly salary applicable in the country at the time of retirement.� The retirement benefit obligation is stated at the present value of expected future payments to employees with respect to employment retirement pay. The present value of expected future payments to employees is determined by an independent authorised actuary in accordance with the prevailing rules of actuarial mathematics.

�

c)���� Other employee benefit

The Group is also obliged to pay jubilee anniversary awards in North Macedonia for each ten years of continuous service of the employee. Provisions for termination and retirement obligations are recognised in accordance with actuary calculations. Basic 2019 actuary assumptions are used as follows:

Discount rate: 3.0%

Expected rate of salary increase: 2.2%

�

d)���� Legal claims

The Group is party to certain legal claims and the recognised provision reflects management's best estimate of the most likely outcome.

�

32.� Cash generated from operations_{�������� ������}

Group	Note	�	�	2019 $'000	2018 $'000
� Profit before income tax including discontinued operations	�	�	�	67,847	65,406
Adjustments for:	�	�	�	�	�
Depreciation and amortisation	�	�	�	30,080	33,342
Silver stream commitment	�	�	�	(2,285)	(1,599)
Loss on disposal of property, plant and equipment	10	�	�	481	561
Foreign exchange gain/(loss)	�	�	�	(375)	3,879
Share based payments	27	�	�	1,085	4,904
Finance income	14	�	�	(336)	(264)
Finance costs	15	�	�	11,153	14,999
Other expenses	10	�	�	-	576
Impairment of held for sale assets	21	�	�	-	6,194
Changes in working capital:	�	�	�	�	�
Inventories	23	�	�	246	(683)
Trade and other receivables	22	�	�	(1,740)	(386)
Trade and other payables	28	�	�	(940)	3,550
Provisions for other liabilities and charges	31	�	�	(73)	(348)
Cash generated from operations	�	�	�	105,143	130,131

�

Non-cash investing activities

In April 2019, a settlement agreement with the previous owners of CMK Resources Limited was finalised in respect of the $5,900,000 withholding tax liability in North Macedonia paid in the prior year. The liability related to activities of CMK Europe prior to CAML's ownership. The settlement amounted to $5,500,000 and accordingly, during 2019, CAML agreed to pay only the balancing $6,500,000 due in respect of the $12,000,000 deferred consideration owed to the previous owners.

33.� Commitments

�

Significant expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

Group	31 Dec 19 $'000	31 Dec 18 $'000
Property, plant and equipment	851	475
Other�	340	570
�	1,191	1,045

�

�

34.� Dividend per share

�

In line with the Company dividend policy, the Company paid $32,164,000 in 2019 (2018: $39,603,000) which consisted of a 2019 interim dividend of 6.5 pence per share and a final dividend for 2018 of 8.0 pence per share (2018: interim dividend of 6.5 pence per share and a final dividend for 2017 of 10.0 pence per share).�

35.� Related party transactions

�

Key management remuneration

Key management remuneration comprises the Directors' remuneration, including Non-Executive Directors, disclosed in the Remuneration Committee Report.

Non-Executive Directors

During the year, the Group paid consultancy fees of nil (2018: $13,261) to Nurlan Zhakupov, a Non-Executive Director of the Company, under a consultancy agreement in terms of which Mr Zhakupov provides services over and above his normal duties.��

The Kounrad foundation, a vehicle through which Kounrad donates to the community, was advanced $195,000 (2018: $226,000). This is a related party by virtue of common Directors.

36.� Deferred income tax asset and liability

�

Group

The movements in the Group's deferred tax assets and liabilities are as follows:

�	�	� At 1 January 2019 $'000	Currency translation differences $'000	(Debit)/credit to income statement $'000	� At 31 December 2019 $'000
Other timing differences	�	(77)	-	(113)	(190)
Deferred tax liability on fair value adjustment on Kounrad Transaction	�	(6,681)	(51)	304	(6,428)
Deferred tax liability on fair value adjustment on CMK acquisition	�	(20,912)	575	1,132	(19,205)
Deferred tax liability, net	�	(27,670)	524	1,323	(25,823)
�	�	�	�	�	�
Reflected in the statement of financial position as:	�	�	�	31 Dec 19 $'000	31 Dec 18 $'000
Deferred tax asset	�	�	�	266	-
Deferred tax liability	�	�	�	(26,089)	(27,670)

�

A taxable temporary difference arose as a result of the Kounrad Transaction and CMK Resources Limited acquisition, where the carrying amount of the assets acquired were increased to fair value at the date of acquisition but the tax base remained at cost.� The deferred tax liability arising from these taxable temporary differences has been reduced by $1,436,000 during the year (2018: $1,535,000) to reflect the tax consequences of depreciating and amortising the recognised fair values of the assets during the year.

�	�	� At 1 January 2018 $'000	Currency translation differences $'000	(Debit)/credit to income statement $'000	� At 31 December 2018 $'000
Other timing differences	�	(121)	10	34	(77)
Deferred tax liability on fair value adjustment on Kounrad Transaction	�	(8,103)	1,056	366	(6,681)
Deferred tax liability on fair value adjustment on CMK acquisition	�	(22,972)	891	1,169	(20,912)
Deferred tax liability, net	�	(31,196)	1,957	1,569	(27,670)

��������������� �����������������������������������������������������������������������������������������������������������������������������������

�

�	�	�	�	�	� At 31 December 2019 $'000	� At 31 December 2018 $'000
Deferred tax liability due within 12 months	�	�	�	�	(1,345)	(1,017)
Deferred tax liability due after 12 months	�	�	�	�	(24,744)	(26,653)
Deferred tax liability, net	�	�	�	�	(26,089)	(27,670)

�

All deferred tax assets are due after 12 months.

Where the realisation of deferred tax assets is dependent on future profits, the Group recognises losses carried forward and other deferred tax assets only to the extent that the realisation of the related tax benefit through future taxable profits is probable.

The Group did not recognise other potential deferred tax assets arising from losses of $7,417,000 (2018: $8,465,000) as there is insufficient evidence of future taxable profits within the entities concerned. Unrecognised losses can be carried forward indefinitely.

At 31 December 2019, the Group had other deferred tax assets of $2,810,000 (2018: $2,085,000) in respect of share-based payments and other temporary differences which had not been recognised because of insufficient evidence of future taxable profits within the entities concerned.

There are no significant unrecognised temporary differences associated with undistributed profits of subsidiaries at 31 December 2019 and 2018, respectively.

Company

At 31 December 2019 and 2018 respectively, the Company had no recognised deferred tax assets or liabilities.

At 31 December 2019, the Company had not recognised potential deferred tax assets arising from losses of $7,417,000 (2018: $8,465,000) as there is insufficient evidence of future taxable profits. The losses can be carried forward indefinitely.

At 31 December 2019, the Company had other deferred tax assets of $2,810,000 (2018: $2,085,000) in respect of share-based payments and other temporary differences which had not been recognised because of insufficient evidence of future taxable profits.

37.� Events after the reporting period

�

On 6 February 2020, the Group reduced its effective interest in Ken Shuak LLP from 80% to 10%.� The Group will not be required to contribute towards future costs of the project.���

On 7 February 2020, the Group liquidated CMK Resources Limited, a wholly owned subsidiary.

The price of copper, zinc and lead have been impacted in 2020 by concerns over the outbreak of the COVID-19 pandemic and this will impact on Group revenue for the year ended 31 December 2020 and may impact future asset values should they remain depressed.� The CAML Board has considered and debated a substantial range of possible scenarios of the Group's operations, financial position and forecasts covering a period of at least the next 12 months from the date of this report and these are discussed in note 2.� Whilst there has been little impact of COVID-19 to our operations at present, restrictions on the movement of goods, people and services could impact the Group's operations and management.�

�

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