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Pan Asia Metals Limited: THE INVESTMENT CASE

Pan Asia Metals lines up for London listing, bearing lithium and tungsten in Thailand

Pan Asia Metals is building strength in depth in South East Asia
Pan Asia Metals lines up for London listing, bearing lithium and tungsten in Thailand
INVESTMENT OVERVIEW: PAM The Big Picture
Pan Asia's lithium asset could provide the platform for further growth

Outside of China, there’s only one lithium project in all of South East Asia.

It’s called Reung Kiet and it’s situated in Southern Thailand. It is held by Pan Asia Metals, a privately-held Singaporean company that’s due to list on London’s AIM market in the first half of next year.

WATCH: Pan Asia Metals raising US$1.5M to advance drill-ready projects in Thailand

It’s a choice asset, and for the foreseeable future will certainly be Pan Asia’s flagship. But it’s not the only project. There’s also a high grade tungsten project not far away, and in due course more assets will likely be brought in.

“We’ve been working in South East Asia for five years,” says managing director Paul Lock.

“Our key focus is to identify projects which are relatively advanced but pre-drill, and we like Thailand because of the low country costs in terms of labour, energy and infrastructure.”

Indeed, the area in which Reung Kiet and the Khao Soon tungsten project are located is familiar enough with mining. Until the 1980s, it was a major tin producing district, and work on Pan Asia’s prospects identified lithium mineralisation as long ago as the 1960s.

This mineralisation had initially been mined for tin, of course, but was shown at the time to contain grades of between 3% and 4% lithium oxide in concentrate. Back then, lithium grades like that were of less immediate significance.

But 50 years on, with lithium batteries continuing their onward march for global dominance, those historic grades can be viewed in a whole new light.

And these are not just isolated occurrences.

“Our lithium occurs across more than 2.5 kilometres of strike” says Lock. “We now have our own rock chip and channel samples that show grades averaging around 1.5% lithium oxide. And it’s in mica, not spodumene, which means that instead of roasting you can do an acid leach, which on the cost curve will be cheaper.”

It’s a good foundation upon which to build a project, and work is already getting underway. Ahead of next year’s listing, the company has embarked upon a US$1.5mln pre-IPO fundraise to get the drill rigs turning both at Reung Kiet and at Khao Soon.

“We’re working with Medea Natural Resources raising money from European, Asian and Australian investors,” says Lock.

“With that US$1.5 mln we can add a lot of value. We’re ready to drill as soon as we get the first US$500,000 in. The idea is to move both assets up to the status of strong Exploration targets, and potentially with Inferred Resources by the time we get to IPO.”

And there’s more

“These assets can become a beach-head for new acquisitions,” says Lock.

A static, two-asset company was never something the directors of Pan Asia had in mind. Rather Reung Kiet and Khao Soon represent just the start.

“We’ll look at each project individually,” says Lock. “If we think we can get into the lower third of the cost curve then we’re really interested. We’re commodity agnostic, but we’re not interested in bulks.”

In the case of Thailand though, the geography and the commodities in question dovetail nicely.

Valued-added business

“We can mine in Thailand and produce lithium carbonate in Thailand and the lithium carbonate will likely go into batteries that are manufactured in Thailand,” says Lock.

There’s economies of scale to be had there, for sure, but also the benefits of keeping government agencies on side by offering downstream value adding in Thailand.

Thailand hasn’t been one of the most prominent of mining jurisdictions in recent years, but its resources are now coming back into prominence with the work of Kingsgate Consolidated and Metal Tiger.

Still, the region remains relatively open.

“We know South East Asia well,” says Lock. “There are perceptual barriers to entry there for some reason – in Canada, Australia and Africa we’re crawling all over each other looking for ground.”

But in South East Asia there’s still room for manoeuvre and assets to go around. So, if not precisely enjoying a first mover advantage, what Pan Asia has got is pretty close.

It starts with a good suite of assets to base its future growth around. What happens next will be crucial to the pace and the trajectory that growth takes. Pan Asia expects to be drilling before the end of 2017.

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