REG - Asiamet Resources Ld - Material Capex Reductions for BKM Copper Project

Asiamet ResourcesAnnouncement

22/08/2024 11:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240822:nRSV4536Ba&default-theme=true

RNS Number : 4536B  Asiamet Resources Limited  22 August 2024

22 August 2024

 

ASIAMET RESOURCES LIMITED

("Asiamet" or the "Company")

 

Material Capex Reductions from BKM Copper Mine Development Engineering

 

Asiamet Resources Limited is pleased to announce that following the Company's
strategic decision to reduce the scale of the initial BKM Copper Project
("BKM" or the "Project"), that ongoing optimisation work has resulted in
substantial cost savings and efficiencies which are expected to significantly
strengthen project financing options.

Highlights:

·     Initial Capex Savings: Current optimisation work has identified
potential material capital cost savings of in excess of US$26 million, with
further cost savings expected.

·   Total Project Savings: Pre-production capex savings are expected to
range between US$50-80 million, significantly reducing the US$235.4 million
estimated in the 2023 Feasibility Study. The Company looks forward to
progressively advising the market on further results from this optimisation
work as it is received from our engineering partners over the coming weeks.

·    Strategic Financing Benefits: Reducing the upfront capital
requirements will significantly lower the total funding required for project
development.

·   Advancing Engineering Work: Revised equipment selection, reduced bulk
earthworks and flowsheet simplification by engineering groups Rexline
Engineering and BGRIMM is expected to deliver further material cost savings,
noted above.

·    Infrastructure Developments: An environmental permit has been
secured to commence a limestone resource definition drilling programme at the
proximal Rinjen Limestone area, immediately to the north of the Project, as a
local source of lime for copper processing. Strong interest has been received
from leading power equipment suppliers for the Biomass Power Station. These
are critical path items for the Project.

The optimisation process for the Project has been focused on a staged
construction strategy and reducing upfront capital expenditures to reduce the
total funding required for project development. These optimisation efforts
have identified significant cost savings in excess of US$26 million primarily
due to new equipment selection, process flowsheet simplification, and material
reductions in earthworks relative to the 2023 Feasibility Study ("2023 FS")
designs. A breakdown of key areas where savings have been realised to date can
be seen in the table below:

Table 1

 Key Area of Saving                       Amount Saved
 ARD Water Treatment:                     US$7M
 Crushing Circuit:                        US$5M
 Non-Process Infrastructure:              US$5M
 Heap Leach Saddle Dams/Spillways:        US$4M
 Agglomeration & Heap Leach Stacking      US$3M
 Project Indirects                        US$2M
 Neutralisation                           US$1M
 Total                                    US$27M

 

A key strategic objective for the Company is to reduce pre-production capex
and ultimately total funding requirements for the Project. The reductions
listed in this announcement plus ongoing capital optimisation work is aligned
with achieving this strategic objective.

In addition to the greater than US$26 million reduction in initial capex,
further data on reduced bulk earthworks volumes are expected to contribute
additional savings. Furthermore, adopting a higher grade, lower strip ratio
mine design will require a smaller mining fleet and workforce leading to
notable reductions in infrastructure costs.

The Company anticipates pre-production capital expenditure savings of between
US$50-80 million, representing a considerable reduction from the capex
estimate detailed in the 2023 Feasibility Study.

Engineering work continues to advance an updated capital cost estimate and the
further analysis of equipment pricing and assessments of bulk earthworks costs
that are in process now, will further refine the estimate.

The Company's 'front-end' process plant design partner, Rexline Engineering,
has successfully delivered an initial round of savings with a more detailed
update to follow shortly. The Company's 'copper recovery' engineering partner,
BGRIMM, is also expected to deliver further savings related to the BKM SX-EW
plant. The Company looks forward to progressively advising the market on
further results from this capex optimisation work as it is received from our
engineering partners over the coming weeks.

In addition to these engineering improvements, the Company has secured
environmental approvals necessary to commence the Rinjen Limestone deposit
evaluation, with the exploration forestry permit expected to be granted in Q4
2024, allowing drilling to commence shortly thereafter. This is a crucial step
for the Project as limestone is essential for the neutralisation process of
acid in the copper leaching process.

Securing a power solution is an important critical path item and the Biomass
Power Station project is progressing well with multiple major equipment
suppliers and EPC contractors working to provide inputs into a comprehensive
update of the capital and operating cost model for biomass power generation.
Strong interest from Independent Power Producers in delivering the preferred
Build, Own, Operate model enhances the Project's appeal. The Company will
select a preferred set of partners to deliver a long-term Power Purchase
Agreement for the Project.

Darryn McClelland, Chief Executive Officer, commented:

"Our key focus is on delivering material updates to shareholders, the first of
which is a reduction in upfront capex in excess of US$26 million. The resizing
of equipment, revisions of suppliers and simplification of the process
flowsheet for the staged construction of BKM are key drivers of these savings,
and we expect anticipate further updates to detail significant additional
capex reductions as we finalise our engineering assessments.

It is particularly exciting that these material savings will not only reduce
overall funding requirements but also enhance our ability to secure favourable
financing terms, which will be a positive development for our shareholders.

Solid progress is being made on multiple fronts, including evaluation of a
local process limestone source and advancing the Biomass Power Supply project.
These developments, combined with the optimisation programme, will enable us
to re-engage project lenders with a more highly competitive and financially
robust project in hand.

 

The medium to long-term fundamentals of the copper market remain strong and
BKM is well-positioned to benefit by delivering copper cathode into a future
market characterised by increasing demand and constrained supply. This
leverage to rising prices bodes well for longer term financial
outcomes.

 

Several workstreams have completed, and others are progressing extremely well.
As we report above, we are pleased that our optimisation plans have already
demonstrated savings in excess of US$26 million in capex, and we are confident
this number will grow. We look forward to building upon this momentum and
sharing more capex-related wins with shareholders in the near future."

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014, as it forms part of United Kingdom domestic law by virtue
of the European Union (Withdrawal) Act 2018, as amended.

 

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.

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCPPUCPRUPCGUP