Asiamet the 'best kept secret in copper', says Liberum

Copper explorer Asiamet Resources was tipped as a 'buy' by Liberum on Wednesday as it has assets near to production and "globally significant" in scale, with its valuation implying it is the "best kept secret in copper".

Asiamet has 2.9m tonnes of attributable contained copper equivalent resources in the ground across two projects in Indonesia at an average 0.62% copper.

Exploration is ongoing and further resource additions are expected in 2018, Liberum said, as is the financing of its initial 25,000 tonnes per year SX-EW mine at Beruang Kanan Main, in Kalimantan. A bankable feasibility study is due in the second quarter and if it proves the resource would deliver 50% of the company’s current market cap in free cash slow by 2021 at $3 per lb of copper, analysts said.

Raising the entire equity portion required for development of BKM on AIM would be particularly dilutive, they admit, but believe Asiamet will look to sell a minority stake in its Kalimantan Surya Kencana (KSK) license to a local partner, "which should contribute materially towards the equity required for development of BKM and be highly accretive". If Asiamet sold a 40% stake in KSK this could be valued at $172m.

Their sum-of-the-parts valuation of 20p was double the last closing price, with comparisons with other stocks in the region "imply similar levels of mispricing", said analysts, pointing to a recent bid for ASX-listed Finders Resources, which operates in Indonesia.