REG - Asiamet Resources Ld - BKM Copper Project Optimisation

Asiamet ResourcesAnnouncement

25/06/2024 07:00

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RNS Number : 7463T  Asiamet Resources Limited  25 June 2024

25 June 2024

 

 

BKM Copper Project Optimisation

BKM Stage 1 Project Physicals to Considerably Reduce Upfront Capital

 

Asiamet Resources Limited ("Asiamet" or the "Company") is pleased to provide a
further update on optimisation work for the BKM heap leach project in Central
Kalimantan, Indonesia ("BKM" or the "BKM Copper Project").

Following the recent announcement of the BKM heap leach facility ("HLF")
earthworks optimisation results, the Company has made further significant
advancements to lower the initial capital expenditures required to reach first
production.

As previously announced, a revised HLF location allows for a staged
construction of the HLF pad, significantly reducing bulk earthworks and
upfront capital costs. This strategic change is expected to shorten
construction timelines, move HLF construction off the critical path in the
project development schedule and expedite timelines to first revenue and
cashflow.

Following on from this HLF optimisation work, the Company has focused its
efforts on additional opportunities identified to further reduce
pre-production capital expenditure and execution risk in the initial phase of
the BKM mine development. The first stage of the BKM Copper Project will focus
on developing a smaller capacity, higher-grade, higher-margin mine centred
around a revised open pit design which sits entirely within the footprint of
the 2023 BKM Feasibility Study (FS) pit. The new pit design is expected to
considerably lower the upfront capital cost, improve operating efficiencies
and lower construction risk.

The major benefits emanating from these optimisation works are expected to
flow through to significantly enhanced project economics for BKM, as the
Company continues to advance financing for the initial BKM mine development.
The highlights below detail the key changes to the 2023 FS, based on the
Company's internal work.

Highlights

Mining Physicals:

·    47% Decrease in Total Material Mined. LOM Strip Ratio Reduced from
1.37 to 0.72: New pit design moves 28Mt material compared to 38.4Mt. These
large reductions in material movement reduce the total mining costs and
accelerate project timelines. As the volume of waste material moved per tonne
of ore extracted reduces, the life of mine ("LOM") strip ratio improves
significantly from 1.37 to 0.72, improving mining efficiency, reducing
operating costs, and enhancing project economics.

 

·    Flexibility for Future Expansion: Crucially, the new pit design sits
entirely within the 2023 FS pit design and allows for seamless future
expansion of the mine to lift copper production capacity.

Processing Physicals:

 

·    Higher Soluble Copper Grade: Ore processed is 28Mt at 0.55% soluble
copper grade compared to 38.4Mt at 0.51% in the 2023 FS. Heap leach pad lift
heights are reduced from 10m to 6.6m, allowing for earlier copper extraction
and potentially accelerating first production of cathode. Although total
cathode production direct from the heap leach reduces from 154.1kt over 10
years to 122.4kt over 13 years, the higher processed soluble copper grades and
reduced heap leach pad lift heights are expected have the potential to enhance
early-stage project cash flow and economics.

 

Heap Leach Facility Design:

·    Staged Construction for Cost Efficiency: The new design of the BKM
HLF allows for the first three years of stacking operations to be conducted on
a much smaller area, reducing upfront construction requirements. In year
three, the HLF pad will be extended to accommodate remaining stacking needs.
The current total height of the HLF is 66.3m, which could be extended to
approximately 72m to accommodate a total capacity of 29.2 million tonnes of
ore stacked. This phased approach lowers initial capital expenditure, aligns
construction with an expedited production timeline, and ensures cost-effective
scalability.

The Company's engagement with Rexline Engineering and BGRIMM is advancing
engineering design on the basis of the optimised BKM Copper Project plan,
following completion of which updated cost estimates will be delivered.
Further announcements will be made in due course.

Darryn McClelland, Chief Executive Officer, commented:

"The decision to optimise the development of the BKM Copper Project in stage 1
is a prudent approach which builds upon beneficial opportunities identified
for an innovative redesign of the projects open pit and heap leach processing
facility. This approach maximises operating efficiency and minimises upfront
capital expenditures, while maintaining full flexibility for future
expansions. By reducing pre-production capital costs and project footprint
through the development of a smaller first stage heap leach facility, we are
not only accelerating our path to production but also enhancing project
economics and environmental sustainability. A more capital efficient, lower
risk approach to the development of BKM sets a strong foundation for
completing project financing and developing our first copper mine.

Updated cost estimates for the project will flow through from the detailed
design and engineering currently underway with Rexline Engineering and BGRIMM
and the Company looks forward to providing regular updates to shareholders
from ongoing works as they become available. These project optimisation
outcomes together with work underway to lock down a fully baked power solution
feed into the bank financing process."

BKM Copper Project Stage 1 Optimisation

The fundamental change of position and design for the heap leach facility has
led to an optimised approach to developing the BKM mine with a clear focus on
reducing pre-production capex. Earthworks represent a major component of the
upfront capital cost for the project and the new position, which sits within
the current footprint of the BKM site, enables staging of the earthworks for
developing the heap leach pad which was not possible in the previous position.
Taking this into account, the approach to mining, processing and copper
production was able to be compressed into a smaller footprint, smaller
capacity and higher-grade stage 1 project which is expected to deliver a
significantly lower pre-production capex cost and subsequently reduces the
risk profile of the project. Project economics are expected to be
significantly enhanced as a result of the physical design changes.

Table 1: Comparison of Key Production Physicals

 Project Physical                        2024 BKM Stage 1  2023 FS Update
 Ore Mined                        Mt     28.0              38.4
 Waste Mined                      Mt     20.0              52.5
 Total Material Mined             Mt     48.0              90.9
 Strip Ratio                      #      0.72              1.37
 Maximum Mining Rate              Mt/yr  5.5               15.5
 Maximum Ore Treatment Rate       Mt/yr  2.6               4.5
 Heap Leach Facility Lift Height  m      6.6               10
 Soluble Copper grade             % Cu   0.55              0.51
 Copper Production Period         Years  12.8              10
 LOM Cathode Produced             kt     122.4             154.1
 Avg Cathode Production           ktpa   10.1              17.0

 (Less First and Final Years)            (11 years)        (8 years)

 

Key points emanating from optimisation works compared to the 2023 FS are:

·    An incremental 10.4Mt of ore is available to mine at a strip ratio of
3.1. The updated approach does not preclude the Company from completing an
expansion of the BKM pit to any feasible size dependent on future approach to
economic ore extraction.

·    The reduction in material movement leads to a large reduction in
annual mining volumes. A flow on reduction in the overall capital and
operating expenditure is expected from a reduction in the size and scale of
the mining fleet required for the revised project bulk earthworks.

·    The stage 1 mine plan considers only copper ore which can be
recovered via low-cost heap leach processing. The Company continues to
evaluate the best approach to maximizing copper extraction and creating value
from the larger BKM JORC compliant resource base which sits outside the stage
1 mine plan.

·    The significantly reduced footprint offers greater flexibility for
the future allowing for a phased approach to development. Future expansions
will be based on the ability to treat the primary sulphide copper resources at
BKM and the integration of the BKZ polymetallic deposit.

·    All process equipment is being scaled down to reflect the change in
capacity and production requirements. The maximum copper production rate as
defined by the Electrowinning Circuit design parameters is circa 11,000tpa.

 

ON BEHALF OF THE BOARD OF DIRECTORS

Darryn McClelland, Chief Executive Officer

-Ends-

 

For further information, please contact:

 

Darryn McClelland
Chief Executive Officer, Asiamet Resources Limited

Email: darryn.mcclelland@asiametresources.com
(mailto:darryn.mcclelland@asiametresources.com)

 

Tony Manini
Executive Chairman, Asiamet Resources Limited

Email: tony.manini@asiametresources.com
(mailto:tony.manini@asiametresources.com)

 

Investor Enquiries

Sasha Sethi

Telephone: +44 (0) 7891 677 441

Email: Sasha@flowcomms.com (mailto:Sasha@flowcomms.com) /
info@asiametresources.com

Nominated & Financial Adviser
Strand Hanson Limited

James Spinney / James Dance / Rob Patrick

Telephone: +44 20 7409 3494

Email: asiamet@strandhanson.co.uk (mailto:asiamet@strandhanson.co.uk)

 

Broker

Optiva Securities Limited
Christian Dennis

Telephone: +44 20 3137 1903

Email: Christian.Dennis@optivasecurities.com
(mailto:Christian.Dennis@optivasecurities.com)

 

Follow us on twitter @AsiametTweets

 

FORWARD-LOOKING STATEMENT

This news release contains forward-looking statements that are based on the
Company's current expectations and estimates. Forward-looking statements are
frequently characterised by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other
similar words or statements that certain events or conditions "may" or "will"
occur. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause actual events or results to
differ materially from estimated or anticipated events or results implied or
expressed in such forward-looking statements.   Such factors include, among
others: the actual results of current exploration activities; conclusions of
economic evaluations; changes in project parameters as plans continue to be
refined; possible variations in ore grade or recovery rates; accidents, labour
disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing; and fluctuations in metal prices.  There
may be other factors that cause actions, events or results not to be as
anticipated, estimated or intended.  Any forward-looking statement speaks
only as of the date on which it is made and, except as may be required by
applicable securities laws, the Company disclaims any intent or obligation to
update any forward-looking statement, whether as a result of new information,
future events or results or otherwise. Forward-looking statements are not
guarantees of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty therein.

 

 

 

 

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