Asiamet’s Final Push
Copper, Capex, and a Clear Path to Financing
Good morning everyone and welcome to Wednesday.
After yesterday, I think it’s worth considering where Asiamet (AIM: ARS) goes next. In a race with arguably more hurdles than track, it’s worth considering just how close the company is to its breakthrough moment.
For those not quite up to speed, consider my original coverage and recent interview with Chairman Tony Manini, alongside recent investment case improvements.
Caught up? Good.
Let’s dive in.
Asiamet Resources’ flagship remains highly valuable
Let’s quickly reconsider the May 2023 feasibility study for BKM:
The asset currently has an ore reserve statement consisting of:
19.0Mt @ 0.7% Cu for 137kt contained copper in the Proved Reserve Category.
21.8Mt @ 0.6% Cu for 135kt contained copper in the Probable Reserve Category.
40.8Mt @ 0.7% Cu for 272kt of contained copper in the Proved and Probable Reserve Category.
In terms of financials:
$162.8 million net present value, 21% IRR (post tax and excluding closure costs)
$1.4 billion initial Life of Mine revenues
EBITDA of $655.3 million
156kt LOM copper produceable
Capital cost of $208.7 million (excluding contingency)
3.4 years payback period
10 years of copper production
$1.91/lb C1 cash costs
AISC of $2.25/lb
And perhaps the key: an initial 9.2-year life of mine and 19.6ktpa of copper cathode production. And this is a springboard project for the wider KSK Contract of Work; once up and running, further exploration and development can be self-funded.
Asiamet now has a £20 million market capitalisation, There is a clear, severe disconnect between asset value and company value.
Funding Gap Sorted
Asiamet has now raised $3 million from DOID, alongside $295,000 from management at 0.77p per share. DOID now holds a 40.9% interest in Asiamet.
There is also an ongoing retail offer to raise £600,000 at the same 0.77p, which closes at 4pm tomorrow. You can buy in through various brokers including with IG.
This capital should be more than sufficient to get project level financing for BKM.
We know management has been working on the necessary optimisation for some time now: as of the end of August, $26 million has been shaved off the $235.4 million capex requirement from the feasibility study - the hope is for a total of between $50 million and $80 million of savings.
And further optimisation results are out this quarter: this should all have a positive effect on further project metrics including NPV and IRR.
Project Level Financing is Coming
Let’s say we get to a capex figure of circa $170 million (or even lower). In the mining world, capex reductions of this magnitude are no small feat. And when you couple that with a copper project in a jurisdiction like Indonesia - where the cost of doing business remains relatively low - you’ve got a project that’s starting to look a lot more attractive to lenders.
CEO Darryn McClelland enthuses:
‘We recognise that our development journey has taken considerably longer than we had planned. This funding round allows us to complete the project optimisation this year and marks a pivotal final push to secure the financing required to take the project into the mine construction stage…
…we believe this is a critical moment that will unlock substantial value. With exceptional additional resource development opportunities in our portfolio at both KSK and Beutong, and this final push into financing for BKM, we are soon going to be exceptionally well-positioned to deliver long-term growth at a crucial time in the market.’
A Clear Path to Financing
Before yesterday’s placing (at a premium) there was an anchor of sorts on the share price. It was perhaps strategically wise to raise capital before the coffers ran too low - but investors knew one more placing would be needed.
Now, there is a timeline set in stone:
We should see final optimisation work be announced this quarter and project finance negotiated through H1 2025. Potentially there will be an announcement on first phase credit as early as next quarter:
Of course, there has been significant pain for long term investors - but light looks like it may finally be at the end of the tunnel. For perspective, negotiations for project level funding has been a organic process with lead banks for months now.
The uncertainty is gone: DOID wants this project over the line, and investors have a timeline. The capital raised will cover Asiamet until at least mid-2025 by which point project level financing *should* be achieved.
This makes it (not advice) a no-brainer from these levels assuming you have any risk appetite at all.
The Copper Bull Case
We also shouldn’t forget the bigger picture here. Copper is essential to the global energy transition, powering everything from electric vehicles to renewable energy infrastructure.
The demand is there, and supply shortages are only going to exacerbate this in the years ahead. With the world’s appetite for copper showing no signs of slowing down, Asiamet’s BKM project is perfectly positioned to meet that demand.
For a company sitting on one of Asia’s most advanced copper development projects, the potential upside is massive. As the supply gap widens, copper prices are expected to rise, and companies like ARS will be among the first to benefit.
Analysts predict that the copper supply gap could reach 17 million metric tons by 2050, in percentage terms up to 35% by the end of the decade. In 2021, the shortage gap — the difference between copper mined and demand — came to just 2% of production, enough to push up copper prices by 25%.
Ivanhoe founder Robert Friedland famously thinks that more than 700 million MT of copper will need to be mined in the next 22 years just to maintain typical 3.5% GDP growth, without even considering the electrification of the global economy.
This is equivalent to all the copper ever mined in history.
Why This Matters for Investors
Asiamet is offering investors a rare opportunity to get in on a copper project that’s nearing the finish line. The capex reductions, ongoing optimisation work, and strong backing from DOID have set the stage for what could be a pivotal year for the company.
With management fully committed — having personally participated in the latest fundraising round — retail investors now have the chance to get involved at a critical moment.
This isn’t just another junior miner raising funds to stay afloat. Asiamet is gearing up for the next phase of its journey—from developer to producer—and investors who act now will be positioning themselves to ride the wave of copper demand in the coming years.
Of course, there’s also a decent chance that once financing is in place, takeover offers will come in.
The Bottom Line
Asiamet Resources is now cashed up and ready to run the final stretch. We can go through all the technicals for a hundredth time, but our bottom line is that project level financing will be agreed within the next eight months, and potentially much sooner.
As expectations rise, so too should the share price.
This is the floor.
The only caveat? Management have set a timeline. They need to stick to it.
What type of funding announcement do you expect in Q1 2025?