By Barbara Lewis
LONDON (Reuters) - Central Asia Metals (CAML) <CAML.L>, which has just bought a lead and zinc mine in Macedonia, would consider further purchases but not for six months, its chairman said on Monday.
The $402.5 million acquisition of Lynx Resources, completed on Nov. 6, adds diversity to a miner that until now based its revenues on copper in Kazakhstan and whose chairman had spent around three years looking for a purchase.
In the mining sector, still bruised by the commodity price crash of 2015 and early 2016, the Macedonia acquisition is one of this year's standout deals among smaller companies that can still find it hard to raise financing.
"Absolutely not currently, but in six months' time when we've fully integrated the mine, absolutely," Executive Chairman Nick Clarke said in an interview on the sidelines of a mining conference, when asked if he would buy anything else.
The biggest criterion is not which mineral but how cost-effective any mine is to ensure profit is possible when volatile commodity prices fall.
Clarke said any purchase had to be operating in the lowest cost quartile, which is already true of the newly-acquired Sasa underground zinc-lead mine in Macedonia, although he said he would look at whether productivity could be improved.
Other assets he considered buying were copper, but Clarke said nothing was available that was cost-effective enough. Lead and zinc also offered more diversification for London-based CAML.
"We have been a single country, single asset company and that is not without risks," he said.
Zinc <CMZN3>, lead <CMPB3> and copper <CMCU3> prices have all risen by roughly a quarter so far this year.
In Kazakhstan, CAML's focus is on low-cost copper extraction from waste dumps accumulated from open-cast mining.
The company raised $60 million through a stock market listing in 2010 and, since it began producing copper in 2012, it has returned $105 million through dividends to shareholders, which include U.S. investment managers BlackRock and Fidelity.
The Macedonia deal was financed through debt and equity, taking the net debt to EBITDA (earnings before interest, tax depreciation and amortisation) ratio to a still modest 1.65, a much-watched indicator in the capital-intensive mining industry.
(Editing by Adrian Croft)