Half-Year Results 2017 with Management Comments

RNS Number : 8670Q

Asiamet Resources Limited

15 September 2017

 

For Immediate Release

Symbol "ARS"

15 SEPTEMBER 2017

ASIAMET RESOURCES LIMITED

INTERIM FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2017

SIGNIFICANT VALUE IS BEING DELIVERED 

__________________________________________________________________________________

Further to the news release issued at 7:00 am today please find attached the Interim Financial Report for the Six Months Ending 30 June 2017 with management comments included.

EXECUTIVE CHAIRMAN TONY MANINI OVERVIEW:

"Over the past three years Asiamet has made enormous progress towards delivering on its vision of building a leading Asia Pacific copper-gold company. Employing the same strategy used to build Oxiana Limited from a junior explorer into a multi- billion-dollar mining company, we are leveraging the collective knowledge and experience of our team to develop our exploration discoveries into profitable mining operations for the benefit of all stakeholders. Our high quality, pre-development stage BKM copper project has been significantly de-risked through detailed drilling and feasibility studies in this first half year and this enhanced momentum will continue throughout 2017. Against a background of increasingly stronger underlying commodity prices and with new investment from globally recognised institutional investors and our highly supportive shareholder base post-period end, Asiamet is strongly positioned to deliver further significant value uplift from its portfolio of exciting copper, gold and polymetallic assets.

Our main focus for the rest of 2017 and beyond is to bring BKM through the value curve by delivering a high-quality Bankable Feasibility Study, and to daylight the inherent value in some of our other assets including the BKW and BKS copper prospects, the BKZ polymetallic prospect, and our large high-quality Beutong copper-gold-molybdenum porphyry deposit.

We look forward to building upon the momentum established during the first half of the year with a continuous flow of news from the BKM feasibility study, drilling on our other projects and strategic initiatives relating to project partnering and financing" 

OPERATIONAL HIGHLIGHTS:

Beruang Kanan Main (BKM) Copper Project

·      BKM - successful completion of resource infill and expansion drilling program at BKM comprising a total of 122 holes for 12,480.9 metres of diamond core drilling delivered at extremely low industry cost. Resource confidence was significantly upgraded with contained copper in Measured and Indicated Resources increased by 207% to an estimate of 49.2 million tonnes at 0.70% copper containing 711.3MIbs (322,600 tonnes) of copper at a 0.2% copper cut-off grade.

·      BKM Metallurgical Test Work - positive results reported from both short and long column tests at the 100-day point for both 180-day and 270-day leach column test work.

·      Detailed program to thoroughly evaluate metallurgical parameters developed as part of the Preliminary Economic Assessment (PEA).  Copper recoveries in the early phase of the test work program are in line with expectations. (see release dated 22 May 2017)

·      Leaching response curve used in the PEA assumed 85% recovery of soluble copper in 270-day leach cycle; test work objectives are to confirm initial assumptions of interpreted from the PEA evaluations. Positive results from test work to date have supported initiation of additional metallurgical test work

·      BKM Feasibility Study

·      Positive results generated from early engineering and design studies

·      Geotechnical program completed with no major issues identified

·      Numerous options to reduce pre-production capital and favourable conditions to support low mining costs identified

·      Project Definition Study (PDS), focused on mining engineering completed, indicating:

·      Significant value for BKM project with strong positive cash flows from first year of operations and project life of at least nine years.

·      Significant potential upside with further updates of Resource model, definition of leachable copper and improvements to the mine sequencing to maximise early copper production, while deferring waste mining costs.

Beruang Kanan Zinc (BKZ) Polymetallic Prospect

·      Analysis of historical BKZ rock channel sampling returned exceptional high grade polymetallic results including 11.5 meters @ 16.50% Zn, 6.16% Pb, 0.48% Cu, 0.55g/t Au and 106g/t Ag (see release dated 23 February 2017)

·      BKZ rock channel sampling also returned exceptional high grade polymetallic results averaging 19.5% Zinc, 8.1% Lead, 121g/t Silver, 0.69g/t Gold and 0.50% Copper (see release dated 09 June 2017)

·      Expanded the footprint of high grade polymetallic zone immediately south of BKM with rock chips assaying to 35.6% Zinc, 26.2% Lead, 2.94% Copper, 1.0g/t Gold and 3440g/t Silver (see release dated 09 June 2017)

Beruang Kanan West (BKW) Copper Project

·      Systematic mapping and rock chip sampling was completed at BKW. A rock grab sample from a 30-cm wide quartz -sulphide vein assayed 26.1% Copper and 57.1g/t Silver (see release dated 19 July 2017).

·      Rock chip grab samples from sericite altered breccia cut by quartz-bornite-chalcocite-pyrite veins assayed up to 4.1% Copper.

·      High priority drill targets identified for testing over the coming months.  Targets with potential to add mine life and enhance economics of BKM will be rapidly advanced to achieve initial Resource status.

Beutong (ARS 40% Equity)

·      Continuing to progress approval of IUP Production License for Beutong Project All appropriate documentation has been submitted and now awaiting Indonesian Government review and approval.

·      Upon receipt of the IUP Production License field programs will be immediately initiated seeking to extend the significant near surface copper gold Resources thus progressing development of the project.

CORPORATE HIGHLIGHTS

·      Appointment of new CEO - on 21 February 2017 Mr. Peter Bird joined the Asiamet team as CEO, further strengthening the Asiamet Board and management team. (see release dated 21 February 2017).

·      Delisting from TSX Venture Stock Exchange - on 28 February 2017 the Company voluntarily delisted from the TSX-V to focus principally upon its London AIM listing. This decision was undertaken to better reflect the geographical spread of its shareholders and to achieve administrative cost savings. (see release dated 25 January 2017)

·      Sale of Jelai Gold Project - on 9 May 2017 the sale of the Jelai Project was announced. Jelai was considered to be non-core to the Company's overall strategy and although its sale provided for some interim working capital, more importantly the divestment has allowed the management team to better focus on key value generating objectives in relation to the BKM and Beutong initiatives.

CEO PETER BIRD COMMENTS:

"To reflect retrospectively upon the period 1 January to 30 June 2017, Asiamet had an excellent first half to the financial year, continuing to deliver significant advances in value for our stakeholders not only in our market valuation but in the inherent value of our assets.  This has been accomplished by making important strides forward in our efforts to advance our flagship asset, the BKM Copper Project, through the development curve and towards delivery of the Bankable Feasibility Study in early 2018. This will be a crucial milestone and a point at which we expect to take a decision on transitioning towards becoming a mine developer and ultimately producer of an expected 25,000 tonnes of copper cathode per annum. 

Our operations on the ground have often exceeded expectations and although sometimes timelines might have slipped (for example delays in drilling due to an extended rainy season), results have conformed to high quality standards and have been delivered to budget, a credit to all our employees and industry-leading consultants. From a macro point of view, our long-standing predictions of a significant rise in the price of copper began to ring true in this first half and at the time of writing the price of copper has reached levels in excess of US$3/lb - a healthy margin to indicated C1 operating costs of $1.28/lb as estimated in our April 2016 Preliminary Economic Assessment. This not only evidences the robust economics of the BKM project, but, validates our initial counter cyclical approach in progressing this exceptional asset at a time where limited exploration expenditure had been undertaken in the base metals sector. This has resulted in a paucity of advanced investment alternatives such as BKM being available for investors currently.

The highlight of this first half year must have been the successful completion of the Resource infill and expansion drilling program at BKM, the discovery of a new high-grade zone BK044 and the subsequent significant resource upgrade where contained copper in the Measured and Indicated category was increased by 207% to an estimate of 49.2 million tonnes at 0.70% copper. This is in addition to Inferred Resources of 17.7 million tonnes at 0.6% Cu. Most importantly 75% of the contained copper is now in a high confidence Resource category and 73% sits inside the PEA pit design. As such the conversion to Mineral Reserves is anticipated to be strong when mining and metallurgical studies are completed in coming months. We were very pleased with the outcome of Resource work and expect it will provide a solid base to build upon an already very robust Preliminary Economic Assessment.

Asiamet, has a strong pipeline of high potential projects on its properties which will require more work. These are in addition to our advanced pre-development stage BKM project which is in feasibility. Each project is well positioned. The objective is to continue adding shareholder value.

Within this half year period, we identified additional high-grade polymetallic potential approximately 1km north of the BKM copper deposit at our BKZ prospect and also to the immediate south of BKM where systematic mapping and channel sampling of outcropping massive sulphide mineralisation was completed. Zinc (in addition to our primary focus of copper) has been one of the best performing metals of 2017. Like copper it is widely forecast to be entering a major supply deficit. We have real potential for additional discoveries close to the BKM property.

The BKM project discovery is not an isolated occurrence but rather the first prospect that now has defined Resources within a large, approximately 15sqkm area, of anomalous copper mineralisation in rocks and soils.  Any additional targets with potential to add mine life and enhance the already attractive economics (outlined in the PEA) of BKM will be rapidly advanced in order to achieve initial Resource status.  We look forward to reporting the results of our exciting exploration work over the coming months."

OPERATING RESULTS

The loss from continuing operations for the half-year ended 30 June 2017 was $2,014,057 (2016: $808,752) was net of a $708,089 gain on sale of its subsidiary.

The loss results from $2,096,264 of exploration expenditure incurred and expensed, $492,005 of administration costs and $96,910 of non-cash share-based compensation expenditure. The exploration expenditure incurred and expensed mainly relates to the ongoing feasibility study work on the Beruang Kanan Main zone and peripheral exploration and on advancing the conversion of the IUP at Beutong from an exploration IUP to a production IUP.

Liquidity and capital resources

The Company began the current fiscal year with $1,747,530.  During the six months ended June 30, 2017 the Company expended $3,065,431 on operations and brought in $699,195 from the sale of its Jelai IUP and expended $13,500 on equipment and refundable security deposits and repaid $233,290 related party loans made in 2016, collected the $801,840 subscription receivable from the private placement closed in December 2016 and $201,101 from the exercise of broker warrants in 2017 to end on June 30, 2017 with $137,445.

Subsequent to the half-year end, the Company placed a total of 139,534,884 new common shares ("Placing Shares") to raise a total of £6.0m (approximately $7.7m) (before expenses) (the "Placing") at a price of £0.043 (the "Placing Price") on 11 August 2017.  The Placing Shares were admitted for trading on AIM on 15 August 2017. Insider purchasers included Antony Manini, a Director and Executive Chairman of the Company, Stephen Hughes, a Director and Vice President Exploration of the Company, and Faldi Ismail, a Director of the Company, who purchased 1,000,000, 418,605 and 283,395 Placing Shares respectively at the Placing Price. In addition, Significant Shareholders Asipac Group Pty Ltd. and Namarong Investments Pty Ltd. participated in the Placing and purchased 7,441,860 (4.9%) and 7,209,302 (4.25%) Placing Shares respectively, at the Placing Price.  JP Morgan Asset Management purchased 71,010,118 (8.31%) Placing Shares at the Placing Price to become a new Significant Shareholder.   

At the date of this half-year report, the Company has 35,082,200 stock options outstanding and 11,031,344 share purchase warrants outstanding, some of which are "in-the-money".  Upon a further increase in the Company's share price, it would be expected that the stock options and warrants would likely be exercised, thereby contributing additional cash to the treasury.

Dividends

No dividends were paid or proposed to be paid to shareholders during the half year 30 June 2017.

SIGNIFICANT CHANGES IN OPERATIONS

Management

On 20 February 2017, the Company strengthened its Board and management team to oversee the advancement the BKM feasibility study and ramp up project financing and mine development related activities.  Peter Bird, a highly experienced mining company executive joined the Board of Directors and assumed the role of Deputy Managing Chairman and Chief Executive Officer with Tony Manini stepping up from that role to Executive Chairman.  Peter Pollard, the former non-executive Chairman remains on the Board along with Faldi Ismail, Raynard von Hahn and Steve Hughes, the Vice President of Exploration.  Further changes to the Board will be made in due course as the focus of Company activities transitions from exploration and feasibility studies to project financing, mine construction and operations.

Marketplace

The Company is a "designated foreign issuer" as that term is defined under National Instrument 71-102 - Continuous Disclosure and Other Exemptions Relating to Foreign Issuers ("NI 71-102"). The Company is subject to "foreign disclosure requirements" (as such term is defined in NI 71-102) of the Financial Conduct Authority of the United Kingdom and the London Stock Exchange.  The Company is relying on the exemptions contained in Part 5 of NI 71-102.  The Company's shares were de-listed from trading on the TSX Venture Exchange on 28 February 2017, and continue to trade on the AIM market of the London Stock Exchange ("AIM") under the symbol "ARS".  In 2017, the Company will only prepare and file half-year and annual financial statements within the time deadlines regulated by AIM.

Beruang Kanan Main ("BKM") Zone

On 15 August 2017, the Company filed a technical report titled "Beruang Kanan Main Zone, Kalimantan Indonesia: 2017 Resource Estimate Report", prepared by Duncan Hackman of Hackman and Associates Pty. Ltd. as at 28 June 2017 and the report is dated 28 July 2017.

As announced on 28 June 2017 the highlights of the updated Resources are:

·      Resource confidence significantly upgraded with contained copper in Measured and Indicated Resources increased by 207% in comparison to the October 21, 2015 BKM Mineral Resource estimate. The BKM copper deposit is now estimated to contain Measured and Indicated Resources of 49.2 million tonnes at 0.70% copper containing 711.3MIbs (322,600 tonnes) of copper at a 0.2% copper cut-off grade (see Table 1 for details).

·      Additional 66Mlbs (30,000 tonnes) of contained copper (0.2% copper cut-off grade) added to the BKM Resource inventory.

·      Beruang Kanan Main Resources are now estimated as:    

·      Measured Resources of 20.5 million tonnes at 0.7% Cu containing 325.7MIbs (147,700 tonnes) of copper at a 0.2% copper cut-off grade (refer Table 1). The October 21, 2015 BKM Mineral Resource estimate contained no Measured Resources.

·      Indicated Resources of 28.7 million tonnes at 0.6% Cu containing 385.6MIbs (174,900 tonnes) of copper at a 0.2% copper cut-off grade (refer Table 1). The October 21, 2015 BKM Mineral Resource estimate contained 15.0 million tonnes at 0.7% Cu containing 231MIbs (105,000 tonnes) of copper.

·      Inferred Resources of 17.7 million tonnes at 0.6% Cu containing 241.0MIbs pounds (109,300 tonnes) of copper at a 0.2% copper cut-off grade (refer Table 1). The October 21, 2015 BKM Mineral Resource estimate contained 49.7 million tonnes at 0.6% Cu containing 657MIbs (298,000 tonnes) of copper.

·      73% of the copper contained in Resources is within the April 2016 BKM Preliminary Economic Assessment ("PEA") conceptual open pit mine design.

The 2017 updated Mineral Resource estimate will be the subject of ongoing mining engineering and metallurgical studies as part of a BKM Feasibility Study and further optimisation of the BKM PEA open pit design is expected. A leachable copper model for the BKM deposit will be constructed using sequential copper analysis data from all post 2013 drill core samples and an initial Mineral Reserve will in turn be generated from the Measured and Indicated component of this leachable copper Resource model. The Company expects to complete the feasibility study in early 2018 and make a development decision at that time. 

The BKM Mineral Resource estimate is based on assays from 269 diamond drill core holes that were drilled from 1998 to 2007, from 2012 to 2013 and by ARS from 2015 to 2017. Mineralisation is contained within a near-surface, shallow-dipping and strongly mineralised system, that extends over an area of 1300m (N-S) and 800m (E-W) with depth extents ranging from surface to between 100m and 400m below surface (top to bottom). The 2015 Resource drilling programme undertaken by ARS was designed to delineate the extent and continuity of the BKM mineralisation and the 2016-2017 Resource drilling program designed to test for geological and grade continuity of the BKM mineralisation.  Both programmes were completed successfully, meeting their objectives of both expanding and increasing the robustness and integrity of the Mineral Resource estimate.

Exploration Potential in vicinity of BKM

Other priority targets in the vicinity of the BKM deposit are the focus of planned scout drilling programs, and include Beruang Kanan South ("BKS"), Beruang Kanan West ("BKW") and KSK's standalone polymetallic BKZ (BKZ) prospect; each within 1.5km of the BKM Mineral Resource (Figure 1).  Geologic observations during field mapping and geochemical data from drill core and/or surface rock chip samples at BKS and BKW prospects indicate near surface and similar style copper mineralisation to BKM. Prospect details are summarised as follows:

·      BKS prospect: Drill hole KBK-28 (151.30m end of hole 'EOH') intersected 10.5 metres @ 0.88% Cu from 14.5 metres depth and BKM30500-01 (63.9m EOH) intersected 10.0 metres @ 2.52% Cu from 19.5 metres depth.  Drill hole KBK-28 also intersected high grade gold mineralisation from 11.5m, returning 3m @ 11.52g/t Au, including 1.5m @ 21.7g/t Au (refer ARS Release February 23, 2017).

·      BKW prospect: Multiple copper mineralised sheeted vein zones with wide spread alteration approximately 1km west of BKM and similar to BKM are observed within a 2.5 sqkm area, and three well defined copper in soil anomalies occur coincident with these sheeted vein zones, the largest measuring 1.7km x 1km. Historic rock chip sampling yielded highly anomalous copper values, with individual rock chip samples assaying up to 7.1% Cu.  As announced on 19 July 2017, results received to date at BKW confirm a copper in soil anomaly in the northern part of BKW is associated with a zone of quartz-chalcocite-bornite veins hosted in a polymict breccia.  A rock grab sample collected from a 30-cm wide quartz-sulphide vein cutting sericite altered breccia assayed 26.1% copper and 57.1g/t silver.  Approximately 200m west is a sericite altered breccia cut by quartz-bornite-chalcocite-pyrite veins, with individual rock chip grab samples assaying up to 4.1% copper.

·      BKZ Polymetallic prospect: A continuous 15m rock channel sample averaged 19.5% zinc, 8.1% lead, 121g/t silver, 0.69g/t gold and 0.50% copper (refer ARS Release June 9, 2017).  Drill hole BKZ-1 (300.0m deep) tested outcropping massive sulphide style mineralisation and intersected 16m @ 5.75% Zn, 2.78% Pb, 0.64g/t Au, 57.5g/t Ag and 0.16% Cu, including 6m @ 11.63% Zn, 5.99% Pb, 0.71g/t Au, 98g/t Ag and 0.32% Cu (refer ARS Release February 23, 2017).  A grid-based soil sampling program defined a 400m by 200m anomalous zone of Pb-Zn soil geochemistry, which remains untested.

Beutong

Efforts to convert the Beutong IUP from exploration to production continued in the first half of 2017.  All requested information and reports have been delivered to the Government of Indonesia and it is hoped that the production IUP will be in hand soon.  Funds from the August 2017 private placement will also be used to conduct drilling aimed at expanding the Beutong Porphyry Cu-Au-Mo deposit (40% owned by the Company with the option to own up to 80%) to the west, east and at depth where strong mineralisation remains open (for example hole BEU0700-03 in Beutong East Porphyry intersected 385m at 0.68% Cu, 0.21g/t Au from 74m to 459m incl. 148m at 0.81% Cu, 0.15g/t Au open to depth). See ARS RNS dated 26 November 2014 for the Resource details.

Technical data disclosed in this Press Release have been reviewed and verified by Asiamet Resources Limited's qualified person, Stephen Hughes, P. Geo. a director of Asiamet Resources Limited and a Qualified Person within the meaning of NI 43-101 and the AIM Rules for Companies.

Enquiries:

Tony Manini
Executive Chairman, Asiamet Resources Limited
Email: [e-mail]

Peter Bird

Director & CEO, Asiamet Resources Limited
Email: [e-mail]

Optiva Securities Limited
Christian Dennis 

Telephone: [phone]

Email: [e-mail]

NRG Capital Partners
Mick Oliver, Rita Adiani

Telephone: [phone],4504

Email: [e-mail], [e-mail]

FlowComms Limited

Sasha Sethi

Telephone: [phone]

Email: [e-mail] 

Asiamet Resources Nominated Adviser
RFC Ambrian Limited

Andrew Thomson / Stephen Allen

Telephone: [phone]

Email: [e-mail] / [e-mail]

Important notice

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.

The content of this announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA").

Forward looking statements

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's business strategy, plans and objectives of management for future operations, or any statements proceeded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by applicable law or the AIM Rules.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

Qualified Person

Data disclosed in this announcement have been reviewed and verified by ARS's qualified person, Stephen Hughes, P. Geo, Vice President Exploration of the Company and a Qualified Person within the meaning of NI 43-101 and for the purposes of the AIM Rules for Companies.

Glossary of Technical Terms

"Mineral Resource"	A "Mineral Resource" is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
"CIM"	The reporting standard adopted for the reporting of the Mineral Resources is that defined by the terms and definitions given in the terminology, definitions and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral resources and Mineral Reserves (December 2005) as required by NI 43-101. The CIM Code is an internationally recognised reporting code as defined by the Combined Reserves International Reporting Standards Committee.
"intersection"	Refers to a sample or sequence of samples taken across the entire width or an ore body or mineralised zone. The intercept is described by the entire thickness and the average grade of mineralisation
"lbs"	Pounds (measure of weight)
"Mlbs"	Million pounds (measure of weight0
"g/t"	grams per tonne; equivalent to parts per million ('ppm').
"grade"	The proportion of a mineral within a rock or other material. For copper mineralisation this is usually reported as % of copper per tonne of rock (g/t)
"intersection"	Refers to a sample or sequence of samples taken across the entire width or an ore body or mineralised zone. The intercept is described by the entire thickness and the average grade of mineralisation
"rock samples"	Rock chip samples approximately 2kg in size that are typically collected from surface outcrops exposed along rivers and mountain ridgelines
"porphyry"	an igneous rock containing coarse crystals, as phenocrysts, in a finer-grained groundmass
"Cu"	The chemical symbol for copper
"Au"	The chemical symbol for gold
"Ag"	The chemical symbol for silver
"Zn"	The chemical symbol for zinc
"Mo"	The chemical symbol for molybdenum

 

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