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Asiamet Resources to prioritise ‘value adding opportunities’ now that feasibility is clear

With feasibility clear and project financing on the agenda, attention will turn to opportunities to boost the asset valuation.

copper
Optimisation and exploration aims to boost the copper project

After Asiamet Resources Ltd (LON:ARS) on Friday released its feasibility study for the Beruang Kanan Main (BKM) copper project in Indonesia, attention will now turn towards a number of new initiatives.

Along with funding efforts and thoughts on future mine development, the AIM-quoted firm is also seeking laid out opportunities to boost the project.

Speaking over Skype to the Proactive studio Tony Manini, Asiamet’s chairman, highlighted the significant potential remaining at the project – beyond that detailed within today’s feasibility study.

READ: Asiamet’s BKM copper project clears feasibility

In the interview, Manini emphasised that company funds have been focused on the completion of the feasibility work rather than continual exploration.

“We’re a junior company, we’ve had limited [cash] resources,“ Manini said.

“You crawl before you walk, and you walk before you run. So, we’ve prioritised our cash to get the feasibility study done to a very high quality … and we’ve done that give ourselves the best chance of actually financing the project going forward.”

“Peter [Bird] has got plenty of work to do [with the value opportunities] and the exploration upside is huge. And every extra tonne of copper that we can add now is actually going to hugely impact the valuation.”

The company, in this morning’s statements, noted that a strategic review had been carried out and as part of this process some twenty-five value enhancement opportunities were identified. They exclude upside targeted through exploration.

Asiamet pointed out that the opportunities with ‘highest value and ease of implementation’ have the potential to increase the project’s net present value (set at US$133.5mln in the feasibility study) by US$35mln.

The group now intends to prioritise the investigation of these opportunities.

The opportunities highlighted by Asiamet include the potential pre-treatment of the currently discarded, less-leachable heap leach ore types, which could add US$20mln.

An improvement in geological controls on mineralisation is another possibility, with a new detailed structural geology model potentially allowing US$5mln to be added.

Alternate electricity options - switching to generation based on locally supplied coal, rather than gas - could enhance also the valuation by US$4mln.

Enhancing metal and commercial returns, by refining the methodology of ore block classification, can boost the project by US$3.5mln. While the use of local contractors could cut the cost of construction earthworks could provide a US$3mln benefit.

Aside from these project enhancements the project could be further expanded through exploration, according to Asiamet.

It sees the potential for a near mine target, within 3 kilometres, to “add very significant value” as successes could extend the mine life beyond 2030.

The company said it will start with the exploration of the BKM 'link zone target', between the BKM and BKZ deposits, and, it will test geophysical targets located about 800 metres north-west of the deposit. Also ‘depth extensions’ will be drilled and the company will explore near surface targets in the BK South area.

Chief executive Peter Bird said: “The value enhancement initiatives together with the exceptional exploration upside identified proximal to the BKM project have the potential to extend mine life and provide a substantial uplift in overall project value.

“Evaluation of these items is next on the agenda with resultant outcomes to be considered and followed by the detailed engineering and design phase.”

Quick facts: Asiamet Resources

Price: 2.65 GBX

AIM:ARS
Market: AIM
Market Cap: £24.58 m
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Full interview: ''Value in Asiamet's asset base many multiples of current...

Asiamet (LON:ARS) executive chairman Tony Manini caught up with Proactive London's Andrew Scott soon after signing up a well-connected Chinese engineering, procurement and construction management contractor to work on optimisation work related to the recent feasibility study on the firm's BKM...

on 22/8/19

3 min read