TIDMARS
RNS Number : 7402M
Asiamet Resources Limited
25 January 2021
25 January 2021
Termination of SPA for Acquisition of Indokal Limited
Asiamet Resources Limited ("Asiamet" or the "Company") announces
the termination of the binding sale and purchase agreement ("SPA")
entered into with PT WIN as signed and announced on 24 December
2020 for the acquisition of Indokal Limited the owner of the
Kalimantan Surya Kencana Contract of Work, located in Central
Kalimantan ("the Transaction").
Under the SPA, the first Tranche payment of US$2.5 million was
not transacted by PT WIN within the agreed timeframe of 10 business
days following the signing of the SPA and a subsequent extension
period. The Company used best endeavours to ensure this payment was
made, however this was not complied with and no reasonable
explanation was provided other than a request for further changes
to the terms of the binding SPA which were considered to be
unacceptable and detrimental to the best interests of the Company.
As a result the Asiamet Board and management considered that
following this default and material breach of the SPA it had no
other course of action but to terminate the transaction. Asiamet is
considering all options available to it in respect of this matter
and the impact on its business.
General Meeting
As a result of termination of the SPA the general meeting of
shareholders as announced on 30 December 2020 to be held on 29
January 2021 for the approval of the transaction has been
cancelled.
KSK Contract of Work
The KSK Contract of Work (KSK CoW) contains the development
ready BKM Copper project with a completed feasibility study along
with the polymetallic (Cu-Zn-Pb) BKZ resource, 800 metres north of
BKM ore body. The KSK CoW also has significant upside potential
through identified exploration targets.
Through the recent independent valuation work undertaken as part
of the failed PT WIN transaction, the KSK CoW was valued in the
range of $155-165 million for known ore reserves and mineral
resources with no value attributed for exploration targets. Using
the current spot copper price of $3.60/lb for the 2019 Feasibility
Study, the attributable NPV(8) and IRR is $191 million and 24.4%
respectively, excluding inferred resources and with no value
assigned for exploration targets.
Significant value remains to be unlocked through the technical
value enhancement work which has continued throughout 2020 and
further exploration of highly prospective targets to increase the
KSK CoW mineral inventory.
Value Enhancement
Value enhancement (VE) work has been ongoing over the past 5-6
months with further metallurgical test work being undertaken in
laboratories in Indonesia and Australia. Initial results indicate
significantly increased copper recoveries using an alternate
leaching process to that selected for the BKM feasibility study.
Final test results and associated consultants reports are expected
to be received shortly. Other VE work including modifications to
mine design and capital works will be further evaluated based on
the final results of the metallurgical test work. With
significantly better copper prices and the likelihood of improved
recoveries and mine life extensions flowing from this study work, a
positive impact on the economics for the BKM copper project is
anticipated.
Business Development
Copper prices have risen by 74% to since the COVID pandemic
induced market collapse of March 2020 when the initial investment
in Asiamet was made by Aeternum Energy. Likewise markets and
general investor sentiment, particularly for copper investments and
commodities more generally, has rebounded very strongly.
Development ready copper projects such as the KSK CoW with a
robust feasibility study completed are scarce in the current
market. Following the overall uplift in market sentiment over the
past six months, the Company has received increasing inbound
interest in the project and these options are being further
explored. As the value enhancement work and project permitting are
advanced towards completion over the next few months, the Company
will be re-engaging with various debt and equity financiers on a
project financing package.
The Company will simultaneously continue with its strategy of
evaluating various options to maximise shareholder value through
partnerships, asset or trade sale (partial or full), business
combination or a potential IPO in Indonesia.
Tony Manini, Executive Chairman of Asiamet Resources
commented:
"While there is risk in every transaction, the termination of a
sale process after investing a very significant amount of board and
management time is always difficult. However, in this situation of
material breach and non-compliance with clearly agreed terms of a
binding SPA, and the lack of reasonable explanation or reasonable
alternative, the Asiamet board was left with little choice but to
terminate the agreement to protect the interests of our
shareholders and all stakeholders associated with the KSK CoW and
BKM copper project.
Asiamet remains well positioned with a strong portfolio of
copper and copper-gold assets in a strong copper market. Being of
the few Company's holding 100% of a near term copper development
project in the Asian region, investor interest has significantly
increased in recent times and the Company intends to leverage this
enhanced level of interest to secure development funding for BKM
and continue building value for stakeholders across our portfolio
of high quality projects."
ON BEHALF OF THE BOARD OF DIRECTORS
Tony Manini, Executive Chairman
For further information, please contact:
-Ends-
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
Bhavesh Patel / Stephen Allen
Telephone: +44 (0)20 3440 6800
Email: Bhavesh.Patel@rfcambrian.com / Stephen.Allen@rfcambrian.com
Optiva Securities Limited
Christian Dennis
Telephone: +44 20 3137 1903
Email: Christian.Dennis@optivasecurities.com
Blytheweigh Communications Limited
Tim Blythe/Megan Ray
Telephone: +44 (0)20 7138 3204
Email: Tim.Blythe@blytheweigh.com /
Megan.Ray@blytheweigh.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 announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
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