TIDMARS
RNS Number : 4947T
Asiamet Resources Limited
20 March 2023
20 March 2023
BKM Copper Project FS Update - Capital Cost Estimate
Asiamet Resources Limited ("Asiamet" or "the Company") is very
pleased to advise that the workstream relating to the Capital Cost
Estimate ("Capex" or "Capex Estimate") for the BKM Copper Project
("BKM Copper") has recently concluded with exceptionally positive
results.
The updated BKM Feasibility Study ("FS") capital cost estimate
based on high confidence, present day input cost forecasts is
$236.5 million[1] (including $26.6 million in growth allowance
& contingency), only slightly above the $223.4 million capital
estimate for the 2019 study. The Company considers this to be an
exceptional outcome in the current highly inflationary environment
being experienced by mining projects globally. Initiatives
undertaken to re-size the project and deliver a higher margin /
more profitable, smaller footprint project have also served to
significantly de-risk the project capital cost and are highly
encouraging for the overall economics of the BKM Copper
Project.
Highlights
-- Updated Capital Cost Estimate (inc. $26.6M contingency) of
$236.5M(1) considered to be an exceptional outcome vs significant
industry cost inflation,
-- Project capital costs significantly de-risked and highly
encouraging for the overall economics of BKM, which remains a
robust and attractive copper project which is forecast to generate
more than USD 1.3 Billion in revenues over its mine life higher
long term copper price projections,
-- Significant opportunity remains for further optimisation of Capex post delivery of FS,
-- Full BKM Copper Feasibility Study nearing completion pending
delivery of full operating cost model,
-- Completion of updated feasibility study enables financing
process for development of BKM which in turn unlocks the very
considerable upside potential identified on the KSK CoW, including
the larger BKM sulphide copper resource and the high-value BKZ
polymetallic project.
Key reasons control of Capex costs have been realised:
-- Reduced scope/size of the project leading to:
o Reduced mine/waste rock dump footprint (area reduced by 17%
compared to 2019 FS)
o Reduced heap leach facility footprint (area reduced by 59%
compared to the 2019 FS)
o Reduction in size of processing facility equipment (reduced
capacity from 8Mtpa to 4.5Mtpa)
-- Consolidation of several packages of work under BUMA
Infrastructure to deliver cost synergies, particularly in
overheads/indirect costs.
-- Engagement with an Indonesian EPCM Group, Rexline
Engineering, delivering a highly cost-effective solution for
packages relating to materials handling, various ancillary
facilities and some bulk materials.
-- Engagement with BGRIMM, a leading Chinese engineering design
group on SX-EW plant equipment and detailed Engineering and
Procurement costs.
Opportunities identified to further reduce BKM Copper
pre-production capex will be investigated as part of ongoing
project cost optimisation. These include:
-- Relocation and updated design of the Heap Leach Facility
("HLF") to reduce earthworks volumes and shorten the construction
period,
-- Optimisation of engineering services and construction
management costs through further review and assessment of source
and location of these services,
-- Potential for cost savings through financing heavy equipment
fleet used in project construction which can then be transferred to
the mining operation. This optimisation seeks to compare the
current base case scenario where all construction equipment is
rental fleet versus purchasing the fleet and amortising the cost
over the life of mine.
Delivery of the final BKM Copper FS update requires close out of
project operational costs. Detailed internal cost models have been
prepared for Processing and General & Administration areas with
the final component, Mining costs, currently under review and
pending third-party verification. There has been significant cost
inflation related to mining operations, most notably Ammonium
Nitrate used in blasting and biodiesel as required for mining
fleet. To assist in mitigating these cost increases the Company has
reviewed the scope of work under a contract mining scenario and
elected to take additional responsibility for certain activities
outside of the mining contract scope. A first principles cost
estimate for mining operations is being prepared to benchmark cost
estimates provided by third parties.
Finalisation of the pre-production capex cost for the BKM Copper
project is a critical step in the development of Asia's newest
producer of LME Grade A copper cathode direct to the growing copper
consuming markets across Asia.
Darryn McClelland, Chief Executive Officer commented:
"An enormous amount of high-quality work has been completed to
deliver this Capital Cost Estimate with the final outcome being
only marginally above the 2019 pre-production capex. The widespread
industry cost inflation seen across the global mining industry,
especially in the latter half of 2022 required us to revisit every
aspect of the project in considerable detail. As a result, we have
been able to deliver a Capex Estimate which we are confident will
support a robust and commercially viable project - one that is well
timed for a forecast major uptick in the copper cycle 2-3 years
from now.
We have successfully reshaped the entire project and thoroughly
reviewed all inputs to this cost estimate. The additional time
spent engaging with in-country engineering groups and honing the
considerable number of input variables to the estimate have saved
many millions in potential capital expenditure and delivered
tangible benefits for the project and its shareholders.
The favourable capex cost update ensures that BKM remains a
robust and attractive copper project which, when considering
nameplate production levels and higher long term copper price
forecasts of between $3.80 to $4.00/lb, is projected to generate
more than USD 1.3 Billion in revenues over its mine life. The Capex
estimate released today is not the end point and we will continue
to assess opportunities to further optimise the project throughout
the financing process and independent technical review.
We are in the final stages of developing the full operating cost
model and are looking forward to delivering the full BKM Copper
Feasibility Study and progressing to the next stage of project
financing. As one of the very few new sources of copper cathode
into the Asian market, interest in the BKM Copper Project is high
and the Company looks forward to progressing discussions once the
FS is delivered."
Tony Manini, Executive Chairman commented:
"On behalf of all stakeholders I would like to congratulate
Darryn and his wider team on the capital cost estimate delivered
today for the BKM copper project. By any measure this an
exceptional outcome given the very significant inflationary
pressures being experienced across the global mining industry. The
reshaped and re-optimised pit design has achieved significant
benefits across the spectrum of capital inputs and delivered
excellent results. While there is still further scope to improve
the capital cost, these assessments will take place after the
release of the updated Feasibility Study, which is our near-term
priority. Work on the last remaining operating cost inputs to
finalise the Feasibility Study update is nearing completion and we
are looking forward to closing these out and releasing the results
to market shortly.
Completion of the updated feasibility study not only provides
the backbone for securing finance for the initial mine development
at BKM, it also establishes a foundation to unlock the very
considerable upside potential identified on the KSK CoW, including
the larger BKM sulphide copper resource and the high-value BKZ
polymetallic project."
ON BEHALF OF THE BOARD OF DIRECTORS
Darryn McClelland, Chief Executive Officer
For further information, please contact:
-Ends-
Darryn McClelland
Chief Executive Officer, Asiamet Resources Limited
Email: darryn.mcclelland@asiametresources.com
Tony Manini
Executive Chairman, Asiamet Resources Limited
Email: tony.manini@asiametresources.com
Investor Enquiries
Sasha Sethi
Telephone: +44 (0) 7891 677 441
Email: Sasha@flowcomms.com / info@asiametresources.com
Asiamet Resources Nominated Adviser
RFC Ambrian Limited
Andrew Thomson / Stephen Allen
Telephone: +61 (0) 8 9480 2500
Email: Andrew.Thomson@rfcambrian.com / Stephen.Allen@rfcambrian.com
Optiva Securities Limited
Christian Dennis
Telephone: +44 20 3137 1903
Email: 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.
[1] Note the capital cost estimate provided in this market
release is subject to final board approval. All $ are US dollars
unless otherwise stated.
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