Australian Strategic Materials (ASX:ASM) has completed the acquisition of a 95% stake of its Korean-based joint venture partner Ziron Technology Corporation.
Through the acquisition, ASM, through subsidiary ASM Technology Corporation Pty Ltd, now owns Ziron Tech’s patented low emission, high purity metal-refining technology and the pilot plant in Korea.
The acquisition also delivers the ownership of all associated intellectual property associated with the Korean company while the Ziron Tech team will be integrated into ASM.
“Talented team”
ASM managing director David Woodall said: “We welcome the Ziron Tech team to ASM.
“This talented team, led by Professor Jonghyeon Lee, has successfully produced metal from all products of our Dubbo Project in Central West NSW.
“Having the Ziron Tech team continue the innovative work on a range of high-purity and value-added critical metals used in advanced technologies, including electric vehicles and clean energy, gives ASM a strong foundation for success.
“With the recently announced development of our first commercial metallisation plant in South Korea, the Ziron Tech team is now progressing towards a continuous production process at scale in Korea where there is an established tech manufacturing industry and the market for these metals.
“With the changing dynamics of the critical metals supply chain, ASM is well placed to play a significant role in the global critical metals market, with significant benefits for both Australia and Korea.”
ASM shares have been almost 7.5% higher to $3.60 intra-day while market cap has increased to approximately $398.8 million.
Terms of acquisition
As a part of the acquisition, ASM has acquired RMR Tech Corporation, the joint venture company that has completed the acquisition of 95% of the shares in Ziron Tech.
This has lifted ASM’s ownership of RMR Tech from 10% to 100%.
As a part of the consideration for the transaction, ASM will:
- Issue 1,306,417 ASM shares worth for consideration of US$2 million to current Ziron Tech shareholders at an issue price of A$2.068 per share based on a 10-trading day VWAP to September 2, 2020, and using an AUD:USD exchange rate of 74 cents. These shares will be subject to voluntary escrow for 12 months.
- Grant existing Ziron Tech shareholders (via a holding entity) a net smelter return of 5% from any global commercial metallisation facility established using the technology, subject to a 50% step-down of the royalty after payments of US$20 million have been made.
Following the acquisition, the ASM group now owns all of Ziron Tech's patents and related intellectual property and technology that were the subject of the RMR Tech joint venture, as well as any intellectual property rights or interests that may be developed by Ziron Tech in the future.
Patented technology
Ziron Tech’s patented technology is a more environmentally friendly, sustainable and cost-effective alternative to existing conventional, energy-intensive metallisation processes.
This technology has been successfully applied during pilot plant test-work to all major metals found within ASM’s Dubbo Project including zirconium, hafnium, and rare earth for permanent magnet alloys.