Australian Strategic Materials Ltd (ASX:ASM) ended the December quarter in a strong financial position, well-funded with A$56.9 million in cash as it advances its critical metal assets across Australia and South Korea.
During the period, the company passed a significant milestone with the hot commissioning of the Korean Metals Plant producing its first ingots of neodymium metal.
In Australia, results from an optimisation study have delivered a strong go-forward case for the Dubbo Project in New South Wales.
Moving forward, the company is well-positioned to build its Korean Battery Metals Plant at its designed capacity of 5,200 tonnes per annum in the second half of 2022 and to progress the development and financing of its Dubbo Project.
Korean Battery Metals Plant
Neodymium ingots.
ASM has progressed the construction of the Korean Metals Plant and commenced the first phase of commissioning with the casting of the first ingots of neodymium metal completed in November 2021.
Notably, Deputy Prime Minister of South Korea, Hong Nam-ki, visited the Korean Metals Plant as hot commissioning commenced.
The first phase commissioning activities are planned to continue through the first half of 2022, with the full-scale, 5,200 tonnes per annum plant due for completion in the second half of 2022.
ASM has signed a Joint Statement of Cooperation with the Korean Mine Rehabilitation and Resource Corporation (KOMIR) to enable the supply of critical minerals and metals into Korea.
Looking ahead, updated production guidance will be provided once the first phase of commissioning is complete.
Dubbo optimisation summary
ASM’s optimisation study has confirmed strong financial results for the Dubbo Project with pre-tax NPV of A$2,361 million, pre-tax IRR of 23.5%, annual free cash flow (full ramp-up) of A$425 million and capital cost estimate of A$1,678 million.
The company has commenced the tender process for the engagement of an engineering group to complete the FEED study phase of the Dubbo Project.
ASM has continued to work with the South Korean investor consortium representatives to complete technical due diligence on the Dubbo Project.
Corporate updates
ASM chair Ian Gandel (third from left), at roundtable meeting on the Critical Minerals Supply Chain with the President of the Republic of Korea.
ASM has appointed Australian and New Zealand Banking Group Limited (ANZ) as financial advisor for the debt financing of the Dubbo Project.
The company also hosted the NSW Deputy Premier, Paul Toole MP, at ASM’s Toongi deposit for the launch of the NSW Critical Minerals and High-tech Metals Strategy.
Furthermore, a roundtable meeting was attended on the Critical Minerals Supply Chain with the President of the Republic of Korea, His Excellency Mr Moon Jae-in.