What Asiamet does
Asiamet Resources Limited (LON:ARS) is an AIM-listed mine developer. It owns large copper-gold and polymetallic deposits on the Indonesian islands of Kalimantan and Sumatra. The deposits are adjacent to the key growth markets in Asia.
The Beruang Kanan Zinc (BKZ) polymetallic project is within the south-eastern area of the KSK, less than 800 metres north of the BKM copper project.
The wider KSK district also incorporates a number of targets in addition to BKM and BKZ, including the BK South (BKS) and BK West (BKW) copper prospects, and the Baroi polymetallic system prospect.
On Sumatra, the Beutong Project - in which Asiamet has an 80% equity interest – comprises the Beutong East Porphyry (BEP), Beutong West Porphyry (BWP) and the Beutong Skarn (BSK).
How’s it doing?
In January, Asiamet Resources announced the termination of the binding sale and purchase agreement (SPA) entered into with PT WIN, as signed and announced on December 24, 2020, for the acquisition of Indokal Ltd, the owner of the Kalimantan Surya Kencana Contract of Work, located in Central Kalimantan, Indonesia.
Under the SPA, the first tranche payment of US$2.5mln was not transacted by PT WIN within the agreed timeframe of 10 business days following the signing of the SPA and a subsequent extension period.
What the boss says
Tony Manini, chairman: "While there is risk in every transaction, the termination of a sale process after investing a very significant amount of board and management time is always difficult.
“However, in this situation of material breach and non-compliance with clearly agreed terms of a binding SPA, and the lack of reasonable explanation or reasonable alternative, the Asiamet board was left with little choice but to terminate the agreement to protect the interests of our shareholders and all stakeholders associated with the KSK CoW and BKM copper project"
And in other news
In March, the company released the results of recent metallurgical testwork related to its BKM copper project in Central Kalimantan, Indonesia.
Results from the work completed to date “are highly promising”, according to the company, and indicate significant potential benefits from a concentrate tank leach process flowsheet verses heap leach processing.
The use of a concentrate tank leach process has the potential to increase total copper recoveries by up to 40%, and to help maintain copper production at full capacity of 25,000 tonnes per year for a full eight years, exclusive of any further exploration and resource conversion.
Accordingly, it would further enhance the current robust project economics.
“Asiamet is very pleased with the outcomes of the metallurgical value enhancement work completed to date,” said Asiamet’s executive chairman Tony Manini.
What the broker says
Asiamet can reap substantial benefits from a change at the BKM copper project to a concentrate tank operation from heap leach, according to broker Optiva.
A detailed review of the flowsheet for the new process at the deposit in Kalimantan is to start shortly, Asiamet said last month.
Changing the processing method can mean higher copper recoveries (40% more) through significantly faster rates of production of copper cathode, said Optiva in a note.
It would also enable production to be maintained at 25,000t per annum for the full eight years of the initial mine life, extending the life of mine from existing reserves before the conversion of resources.
Optiva also applauded the action of Asiamet’s directors in terminating the Indokal Limited SPA and securing additional funding to strengthen the company’s financial position.
Buy with a price target of 8.9p per share is Optiva’s recommendation.