LONDON (Alliance News) - Asiamet Resources Ltd shares rose on Tuesday as it published the results of the preliminary economic assessment for the Beruang Kanan Main copper deposit in Indonesia which forecasts the company can deliver USD1.27 billion of revenue over an eight-year mine life.
Asiamet shares were trading down 1.9% to 4.00 pence per share on Tuesday morning, after having initially spiked to a new 52-week high of 6.00p at the open following the announcement.
The study evaluated the the economics of developing an open-pit mine and heap leach solvent extraction electro-winning facility to produce copper cathode from the near-surface copper deposit.
"Results of the preliminary economic assessment study demonstrate excellent potential for developing a robust, low strip ratio, low capital intensity copper project with low operating costs, strong cash flow generation capacity and significant upside potential through further resource growth," said the company in a statement.
The company plans to build a project capable of producing 25,000 tonnes of copper metal classed as grade A material of 99.99%, which will cost the company around USD163.8 million in initial capital expenditure.
That gives the project a net present value after tax of USD204.3 million and an after-tax internal rate of return of 38.7%, providing a 2.4 year payback period.
The company said the cash operating cost is estimated to be around USD1.28 per pound, and said based on a copper price of USD3.25 per pound, would yield USD1.27 billion of revenue over the eight-year mine life.
Production will be taken from the company's resources, of which 71% are inferred resources whilst the other 29% is classified as indicated resources. Asiamet said there is potential to grow its resource base at the project.
"Copper mineralization at Beurang Kanan Main remains open in several directions and locally at depth. Adjacent high-potential prospects at Beruang Kanan South, Beruang Kanan West and BKZ Polymetallic also represent attractive targets for additional mineralization as demonstrated by the strong surface and drilling results returned to date," said the company.
"Increasing the mineral resource base, and thus the potential feed available to the processing facilities evaluated in the current [study], is likely to have a strongly positive impact on the BKM copper project value and will be a key focus for Asiamet going forward," it added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Asiamet Res (ARS)