Australian Strategic Materials Ltd (ASX:ASM) is in a strong position to pursue opportunities in building an alternative supply chain for critical metals after finalising a A$92 million capital raising and a A$200 million letter of support during the June quarter of 2021.
The A$92 million capital raising has provided funding for ASM to focus on advancing key workstreams including engineering and development of the Korean Metals Plant and the FEED Study for the Dubbo Project in NSW.
ASM has also obtained conditional support from Export Finance Australia (EFA) for A$200 million of debt funding for the Dubbo Project.
Transformational quarter
ASM managing director David Woodall said the company was at a critical stage of its evolution as key projects matured and major milestones were reached.
“The last quarter and the period since then have been transformational for ASM, with key financial support from the Australian Government, the backing from investors for our equity raising, and the Framework Agreement with the South Korean Investing Partnership that sets us on a path to realizing our ‘mine to metal’ vision.
“I’d like to thank shareholders for their support of our equity raising, which puts us in a very strong position to pursue the great opportunities we have to create an alternative supply chain for the critical metals that will power modern industries such as electric vehicles, renewable energy and aerospace.”
High-calibre leadership team
Woodall added: “I’m also very pleased that we have recruited a high-calibre leadership team that is working with me and the board to drive ASM’s future.”
ASM’s newly appointed key leadership team comprise: Rowena Smith, chief operating officer; Jason Clifton, chief financial officer; Frank Moon, president Asia; Julie Jones, general counsel; Tess Lackovic, chief culture officer; and Peter Simko, chief information officer.
Offtake and supply agreements
ASM is progressing the optimisation study for the Dubbo Project, which remains on target to be completed in Q3 2021.
Meanwhile, advanced discussions are ongoing with several parties to supply critical metals to the South Korean manufacturing sector.
ASM is focused on finalising metal offtake agreements with titanium product consumers and permanent magnet producers in South Korea.
US$250 million framework agreement
Post the close of the June quarter, on 21 July 2021, ASM announced a US$250 million framework agreement with a South Korean consortium for a 20% interest in Dubbo Project and offtake from Korean Metals Plant.
Woodall said: “Looking forward, we expect to start production from our relocated pilot metals plant in Korea next quarter, while building towards the completion of the Korean Metals Plant.
“We will also complete the optimisation study for the Dubbo Project.
“Most importantly, we will be working with our new Korean partners to complete the conditions of our Framework Agreement, which will ultimately provide us with $250m of equity for the Dubbo Project, and a foundation customer for strip metal alloy from our Korean Metals Plant.”