REG - Asiamet Resources Ld - BKM Capital Cost Estimate Reduced by US$58 Million

Asiamet ResourcesAnnouncement

23/12/2024 15:00

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RNS Number : 1702R  Asiamet Resources Limited  23 December 2024

23 December 2024

Asiamet Resources Limited

("Asiamet", "ARS" or the "Company")

 

BKM Copper Project: Capital Cost Estimate Reduced by US$58 Million

Well Positioned for Project Financing in 2025

 

 

Following the completion of engineering design and cost estimation (as
announced 14 November 2024), Asiamet is pleased to announce an updated capital
cost estimate for its BKM Copper Project ("BKM" or the "Project"), located in
Central Kalimantan, Indonesia. The completed programme of works has delivered
a significant reduction in front-end construction capital, providing a robust
platform for project financing discussions in early 2025.

 

HIGHLIGHTS:

 

·    Total pre-production capex estimate reduced by $US58m to US$176.9m.
Previously US$235.4m for the May 2023 BKM feasibility study.

·    Robust contingencies and allowances: Revised capex estimate includes
US$22m in project contingency and a further US$10m allowance has been made for
project scope growth.

·    Streamlined design and layout reduce project complexity: Site design
improvements, updated material flows, and a shift to a target copper cathode
production rate of 10-11ktpa seek to significantly reduce project execution
risk.

·    Lower funding hurdle: Significantly reduced upfront capital cost
reduction positions BKM well for project financing in 2025.

·    Operational enhancements deliver stronger fundamentals: Revised mine
plan (compared to  25 June 2024) increases ore processed to 28.9Mt at a
strip ratio of 0.72, for total copper cathode production of 124,500t over a
13.3-year mine life.

·    Path to advancement: With core project design and key development
partners now established, an updated feasibility study report will be
finalised and published in early 2025. Project financing discussions based on
the updated feasibility study results will be advanced thereafter.

 

Darryn McClelland, Chief Executive Officer of Asiamet, commented:

 

"This is a pivotal achievement for Asiamet. Through detailed planning and
collaboration with key engineering and execution partners, we have
successfully reduced pre-production capex costs by US$58m while maintaining
project integrity.

 

The updated and lower capital cost estimate reflects a more advanced and
reduced-risk project configuration.  This will enable us to progress project
financing discussions in 2025.

 

Our upcoming deliverables include an updated feasibility study report which
will be released in early 2025 prior to engagement with financiers.

 

The global demand for copper remains strongly aligned with the energy
transition and electrification themes. With limited new copper industry supply
forecast to come online over the next 3-5 years and a fully optimised BKM
copper project in place, Asiamet is entering a transformative phase."

 

FEASIBILITY REPORT RELEASE

 

Upon the release of an updated feasibility report for the BKM Project in early
2025, Asiamet will host an Investor Meet Company presentation. This
presentation aims to provide a comprehensive overview of the project
economics, key milestones, and path to financing.

 

Shareholders are encouraged to register their interest to receive notification
of the event and secure their place for the live session:
https://www.investormeetcompany.com/companies/asiamet-resources-limited.

 

Further details, including the event date and time, will be announced in due
course.

 

CAPITAL COST ESTIMATE

 

This BKM Project capital cost estimate incorporates all changes arising from
the strategic decision taken by the Company to reduce pre-production capex by
relocating the BKM heap leach facility and processing a smaller volume of ore
at higher soluble copper grades, to deliver 10-11ktpa copper cathode output
compared to 17-18ktpa delivered in the 2023 Feasibility Study. The table below
highlights key changes from the 2023 Feasibility Study (see announcement dated
10 May 2023) to the 2024 BKM Stage 1 Optimised Project:

 

 

 PRE PRODUCTION CAPEX SPENDING   2024 (US$m)    2023 (US$m)   Difference (US$m)

 (excl. Working Capital)
 Mining                          $14.1          $5.4          $8.7
 Process Plant                   $61.9          $87.5         -$25.6
 On-Site Infrastructure          $17.2          $30.4         -$13.2
 Off-Site Infrastructure         $4.1           $14.2         -$10.1
 Field Directs + Freight         $30.8          $36.1         -$5.3
 Indirects                       $16.8          $35.1         -$18.3
 Provision - Growth              $10.3          $14.9         -$4.6
 Provision - Contingency         $21.7          $11.8         $9.9
 Total Pre-Production Capex      $176.9         $235.4        -$58.5

 

CAPITAL COST REDUCTION: KEY DRIVERS AND IMPROVEMENTS

 

Asiamet has achieved an overall approximate US$58m capital cost reduction
through a comprehensive reshaping of the project. Whilst decreases in capex
commensurate with the reduction in scale were seen across most areas of the
project, three cost areas are of particular significance:

 

Construction Mobile Equipment - Permanent Fleet

 

The new capital cost estimate incorporates the use of mining fleet for project
construction, a strategic shift aimed at driving long-term cost efficiency.
This approach reduces the amount of more expensive short-term rental fleet
need for construction leading to cost savings realised in this capital cost
estimate. As the project advances, there is potential to expand the mining
fleet mobilised early for construction unlocking additional savings.

 

Mining Area Costs

 

Mining costs have increased due to the re-assignment of all mine acid rock
drainage ("ARD") management infrastructure. These costs were previously
reported under on-site infrastructure in the 2023 feasibility study capital
cost estimate. The removal of the reverse osmosis ARD water treatment plant
has further reduced costs and simplified the flowsheet.

 

Contingency

 

Following recommendation of the Independent Technical Expert (ITE),
contingency provisions have been increased from 5% to 15%, ensuring the
project has a stronger financial buffer to manage variability in costs related
to equipment, materials, freight, and construction activities. This adjustment
provides enhanced protection against fluctuations in raw material prices,
supply chain challenges, and currency movements, supporting stronger risk
management across the Project.

 

ENHANCEMENTS IN PROJECT DEFINITION

 

Significant improvements in the Project's definition and design have enabled a
more robust approach to cost forecasting. These refinements have enhanced the
Company's ability to accurately scope and budget major project components. Key
areas of improvement include:

 

Crushing and Agglomeration Circuit:

 

Detailed design refinements have improved cost definition for key construction
inputs, notably concrete and steel. As a result, Asiamet now has greater
confidence in forecast material quantities, reducing the risk of cost
variation for key structural elements.

 

Earthworks Planning:

Substantial improvements have been made in earthworks planning, with greater
clarity on the placement and sequencing of excavated and fill materials. This
more detailed approach to material handling has led to a leaner and more
efficient construction schedule, supporting better cost management for one of
the most material-intensive parts of the Project.

 

Project Partner Alignment

 

A key factor in maintaining project momentum is the continuity of project
partners. Asiamet has confirmed that key engineering and design partners,
including Rexline Engineering and BGRIMM, will remain engaged throughout the
next phase. This strategy avoids the cost and time impact of re-engaging new
engineers and contractors, allowing for a relatively seamless progression into
Detailed Engineering Design (DED).

 

PROJECT PHYSICALS

 

Ongoing optimisation of the Project has refined and improved the final pit
design enabled an increase in ore to be mined relative to the physicals
reported in the Company's announcement of 25 June 2024. An additional smaller
height lift has been designed for the heap leach facility to accommodate the
additional ore tonnes.

 

 Project Physical                       Dec 24  Jun 24
 Ore Mined                       Mt     28.9    28.0
 Waste Mined                     Mt     20.9    20.0
 Total Material Mined            Mt     49.8    48.0
 Strip Ratio                     #      0.72    0.72
 Maximum Mining Rate             Mt/yr  5.4     5.5
 Maximum Ore Treatment Rate      Mt/yr  2.6     2.6
 Soluble Copper Grade            %Cu    0.54    0.55
 Ore Stacking/Copper Production  Years  13.3    12.8
 LOM Cathode Produced            Kt     124.5   122.4
 Average Cathode Production      ktpa   10.1    10.1

 

All metrics for the Project remain in line with an additional 2kt of copper
cathode production delivered. These updates are the result of strategic
planning and design adjustments, further positioning Asiamet as a
cost-competitive, mid-tier copper producer.

 

 

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
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 announcement 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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