Asiamet facing Covid delays in Indonesia

Asiamet Resources updated the market on its BKM copper development project and the Kalimantan Suraya Kencana contract of work in Indonesia’s Central Kalimantan on Friday, reporting that over the past two months there had been a “very significant and rapid” increase in the number of Covid-19 infections across Indonesia.

The AIM-traded firm said that as a result, the government of Indonesia had implemented a series of lockdowns and extensive travel restrictions, adding that infection had directly impacted a number of its staff and contractors, with travel restrictions slowing progress on various workstreams.

Value engineering activities, meanwhile, were progressing to plan, with a first pass detailed report received from NewPro Consulting, providing capital and operating cost estimates for both tank leach and copper-rich pyrite concentrate processing options compared with the heap leach option in the 2019 feasibility study.

An internal review of the report was in progress, and an update of the economic models for the BKM copper project was being run.

Asiamet said the metallurgical test work results indicated copper recoveries of 75% to 80% for the tank leach process, however that came with an increase in capital and operating costs.

Simplifying the process flowsheet to produce a copper-rich pyrite concentrate for sale into the large Indonesian nickel laterite industry or metals recovery plants appeared to be the most attractive alternative to heap leaching, the board said, as it would also enable deeper sulphide and polymetallic ores from BKM and BKZ to be processed through the same plant.

Trade-off economic studies were currently being run, and once complete, a final decision on the preferred project route to take to development would be made.

At the same time, refinements on the logistics and port access were being progressed, with “good support” reported from authorities, local businesses, and communities.

Mobilising personnel and heavy equipment for site preparation and drilling had been delayed due the Covid-19 restrictions in place, but the company said it had managed to get the programme underway, with the first hole of a 3,000 metre programme completed.

The planned drilling programme, designed by chief geologist Patrick Creenaune, aimed to “significantly expand” the copper and polymetallic mineral resources at both the BKM and BKZ deposits, which remained open in multiple directions.

Several “highly promising” targets generated from a review of previous work, combined with the geophysical survey data, would also be tested.

Following consultation with the Ministry of Environment and Forestry, the company said it had decided to delay progressing the borrow-to-use forestry permit to the conditional approval stage, until the current drilling and value engineering programmes were complete.

That, the board said, would enable all results and any adjustments to be incorporated into the BKM project footprint before the issue of the permit, after which no amendments could be made before the start of mining.

On the financing front, “solid progress” was being made for a project development partnership with a group of “high-calibre” investors.

Five parties had signed non-disclosure agreements, and were at various stages of due diligence.

Commercial partnering discussions were being advanced simultaneously for a deal aimed at seeing the project funded through to construction.

Discussions with a number of European and Asian mining finance banks had been progressing, with initial feedback said to be positive.

“While we have had some very real challenges with Covid-19 impacts in Indonesia, Asiamet is very pleased with the substantive progress being made on its development path for the BKM copper project,” said chief executive officer Tony Manini.

“With a strong focus on the health and wellbeing of our employees and contractors as our first priority, financing and development related activities are continuing at pace and closing in on a number of important project enabling milestones.

“Drilling underway to expand the BKM and BKZ Resources is expected to demonstrate the potential for significant production growth and mine life upside at this important time for project financing and partner discussions.”

At 1324 BST, shares in Asiamet Resources were down 7.33% at 2.34p.