Asiamet Resources has received a positive preliminary economic assessment (PEA) on its Beruang Kanan Main (BKM) copper deposit in Kalimantan, Indonesia. It demonstrates excellent potential for developing a robust, low strip ratio, low capital intensity copper project.
The positive aspects include low operating costs, strong cash flow generation capacity and significant upside potential through further resource growth.
The PEA is the first study undertaken to evaluate the economics of developing an open pit mine and heap leach solvent extraction electro-winning facility (SX-EW) to directly produce copper cathode based on the near-surface copper deposit reported in the 2015 BKM resource estimate.
The study has been finalized in compliance with the guidelines of Canadian NI 43-101 by independent Australian mine planning consultants Orelogy.
The PEA base case highlights include targeted annual production of 25,000 tonnes of LME grade A (99.999%) copper metal. The after-tax net present value (NPV) is US$204.3 million (10% discount rate) and the after-tax internal rate of return (IRR) is 38.7%. There is estimated gross revenue of US$1.27 billion based on a US3.25/pound copper price over the life of mine while the C1 operating cost has been estimated at US$1.28/pound.
The robust mine plan is derived from indicated resources (29%) and inferred resources (71%). The initial 8+ year mine life is at a low average strip ratio of 1.23.
Asiamet Resources’ CEO Tony Manini said, “Asiamet is extremely pleased with the results of the PEA. To exceed our expectations on this most important milestone speaks volumes for the quality of the asset and the potential of the BKM deposit. The opportunity to develop a robust, low strip ratio, low capital intensity copper mine with low operating costs at a time when the copper market is forecast to be in supply deficit and a stronger price environment is highly compelling.
“The company considers the PEA base case economics to be highly attractive and is firmly of the view that additional detailed study work and exploration in and around BKM will further enhance the value of the project. The BKM deposit remains open in several directions and the adjacent high potential prospects at BKS, BKW and BKZ represent excellent targets for additional copper mineralization as demonstrated by the strong surface and drilling results returned to date. Our confidence in delivering this upside has provided strong support for assessing a larger project in the PEA than originally envisaged.
“We look forward to building on the strong momentum we have established over the past year with a continued flow of news from ongoing project optimization and study work, drilling to increase resource confidence and to test some of the exciting targets around BKM, and various corporate initiatives focused on partnering and funding for the ongoing development of the company and its projects.
“Success in developing BKM to its full capacity will provide the foundations for Asiamet to continue building a leading Asian copper and gold company through the exploration and development of its large asset base in Indonesia.”