Client News

Asiamet Resources Limited (Asiamet or the Company) is pleased to announce the results of the updated Feasibility Study (FS) for its 100% owned BKM Project located in Central Kalimantan, Indonesia.  

In line with significant changes in the macro-environment for new projects, a very comprehensive update to the previously announced 2019 FS for the BKM copper deposit has now been completed. The updated 2023 study is based on open pit mining, and heap leaching of crushed ore followed by solvent extraction and electrowinning (‘SX-EW’) to produce LME Grade-A copper cathode (the ‘Project’) for sale into local and export markets.

Completion of the updated study enables the Company to accelerate its engagement with key financial institutions, commodity traders and equipment suppliers for a project finance package to develop the BKM copper mine. The proposed development timeline for the BKM Copper Project is well timed to take advantage of the looming copper supply constraints predicted by leading industry analysts. Development of this initial mine and associated infrastructure is expected to unlock significant potential for further mine developments based on deposits already identified within the KSK Contract of Work.

A summary of the highlights of the Feasibility Study are detailed below and the Executive Summary of the Feasibility Study is available on the Company’s website at www.asiametresouces.com

Highlights – 2023 BKM FS Update:

·        Initial 9.2 year mine life producing up to 20ktpa of copper cathode per annum

·        Life of Mine (‘LOM’) Revenue of $1.4 billion and EBITDA of $655.3 million

·        Capital cost of $208.7 million (excluding growth and contingency $26.7 million)

·        Post Tax NPV₈ $162.8 million, IRR 21.0% (post tax, excluding closure costs)

·        Payback Period 3.4 years

·        C1 cash costs of $1.91/lb and AISC of $2.25/lb

·        Base case uses consensus long term copper price of $3.98/lb

·       Total Measured, Indicated and Inferred Resources unchanged at 69.6Mt @ 0.6% Cu for 451.9kt of contained copper.

·        Updated Ore Reserves of 40.8M tonnes @ 0.7% total Cu (272kt contained total copper) and 0.5% soluble Cu (198kt contained soluble copper).

·        Additional opportunities identified to further reduce capital will be explored through the engineering design phase.

·      Strategic starter project – establishes infrastructure springboard for delivering future phases of development from the Beruang Kanan district and KSK Contract of Work.

·         (approval to use forest area) permit requirements well advanced. All aspects of the project maintained in compliance with regulatory requirements.

The majority of commodities analysts are predicting elevated long term copper prices primarily driven by the inability of mine supply to meet demand as the build out of renewable energy infrastructure and transport systems accelerates to meet the 2050 net zero emissions targets committed to by many of the advanced economies. Development of the BKM copper project is well timed to capture this opportunity.

Table 1 compares 2023 BKM FS key economic metrics using a US$3.98/lb long term copper price, the year to date (1 January 2023 to 28 April 2023) average of $4.06/lb, and a recent Goldman Sachs long term copper price forecast of $10,000/t ($4.54/lb). 

Table 1 BKM Copper Project Sensitivity to Copper Price

1.     Average YTD copper price 1 January 2023 to 28 April 2023

2.     Goldman Sachs Copper Top Projects 2022, A Deficit on the Horizon

Next Steps

The release of this 2023 Feasibility Study is a significant de-risking milestone for the Company. Along with the indicative timeline (as per appendix) the following key milestones are expected to be completed leading into the first phase construction:

·    Completion and compilation of all Chapters of the 2023 BKM Project FS Update.

·    Formally appoint lead bank for the project financing.

·    Lead bank-appointed Independent Technical Expert (‘ITE’) will complete a detailed review of the 2023 FS documentation.  Likely to be the same ITE that reviewed the 2019 FS on behalf of the Company prior to commencing the update studies.

·    Close out outstanding work on capital and operating costs savings opportunities as outlined in the Project Opportunities section (as detailed in the Appendix).

·    Commence engineering design works.

·    Commence formal project financing including engaging parties in relation to product offtake finance, equipment finance, and export credit finance.

·    Commence early works at site.

Darryn McClelland, Asiamet’s Chief Executive Officer commented:

I am pleased to be able to release the details of the 2023 BKM Copper Project FS update today, delivering what is a significant milestone for the company. The time has come to deliver BKM to the market, with a project that not only has strong operating and financial fundamentals on current long-term copper pricing, but offers significant upside considering forecast supply/demand imbalance in the copper market looking 2-3 years into the future. The work completed during the BKM copper project Feasibility Study (BKM FS) update has given all those involved greater confidence in the execution of this important project with risk areas investigated, understood, and accounted for in the current project design. Delivering a smaller footprint project with higher grade has delivered a robust technical and financial outcome, reduced the disturbance area, and contributed to a lower overall level of environmental impact for the development. 

Formally releasing the outcome of the FS update is a trigger to progress several activities related to project finance. The Company can now accelerate discussions with banks on debt financing and commence the engagement with a bank-appointed ITE as soon as practicable. In parallel with this the Company will engage with various groups on opportunities for delivering the significant equity funding component of the project financing including those interested in securing the Grade-A copper cathode BKM will produce. The Company is looking forward to discussing opportunities for co-operation with parties who see the value of advancing BKM to production and unlocking the much bigger opportunity to develop multiple mines within the broader Beruang Kanan mineral district and greater KSK Contract of Work.

To reiterate, we are very pleased to be able to share the positive outcomes of the BKM FS update, however, this is just one step on the exciting journey towards becoming Asia’s newest copper mine. Asiamet greatly appreciates the strong support received from all its stakeholders to date. We are now focused on delivering the project in a safe, environmentally conscious manner, and effectively engaging with our local communities to ensure the benefits of development are realised.  I would like to thank all who have contributed to the BKM FS Update and look forward to working with them as we take the project into the next phase of development.

Investor Call

A management presentation to discuss the results of the updated Feasibility Study on the Investor Meet Company platform will take place at 11am-12pm tomorrow (Thursday 11 May 2023). To register for the presentation, investors can sign up to Investor Meet Company and add to meet ASIAMET RESOURCES LIMITED via: https://www.investormeetcompany.com/asiamet-resources-limited/register-investor

Investors who already follow ASIAMET RESOURCES LIMITED on the Investor Meet Company platform will automatically be invited.

Qualified Person and Competent Person’s Statement

The Ore Reserves referred to in this release have been completed by Australian Mine Design and Development Pty Ltd (“AMDAD”) and are reported in accordance with the requirements of the JORC Code (2012) (see RNS dated 10 May 2023).  

The information in this release and the report to which this statement is attached that relates to the estimation of Ore Reserves is based on information compiled by Mr John Wyche, a full-time employee of AMDAD, and who has acted as the Competent Person on the Ore Reserve Estimation of the BKM Project.  Mr Wyche is a Member of The Australasian Institute of Mining and Metallurgy. He has 35 years of relevant experience in operations and consulting for open pit metalliferous mines, being sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  Mr Wyche consents to the inclusion in the report and this release of the matters based on his information in the form and context in which it appears.  Mr Wyche confirms that he is not aware of any new information or data that materially affects the information included in the relevant market announcements, and that the form and context in which the information has been presented has not been materially modified. 

Data disclosed in this press release has been reviewed and verified by Mr John Wyche, FAusIMM (Fellow of the Australian Institute of Mining and Metallurgy) acting as a qualified appointed adviser to Asiamet.  Mr Wyche is a Competent Person within the meaning of the JORC Code 2012 and a Qualified Person for the purposes of the AIM Rules for Companies.

Updated BKM FS Delivers Excellent Economics – 10:30:02 10 May 2023 – ARS News article | London Stock Exchange

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