The Asia Miner

JUN 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 18 of 51

the asia miner • volume 15 • issue 2 17 REGIONAL FOCUS: Indonesia Asiamet Resources Limited (Asiamet), through its Indonesian operaƟng subsidiary PT Kalimantan Surya Kencana (KSK), has reported that ahead of moving into the project financing and development phase for its BKM copper project in Central Kalimantan, it has successfully concluded long running negoƟaƟons with the Government of Indonesia to amend its exisƟng KSK Contract of Work (CoW) to secure long- term mining tenure. The tenure was secured for up to 50 years, with no divestment required unƟl aŌer the tenth year of producƟon. The KSK property hosts the BKM Copper Project currently in the Feasibility Study stage with planned study compleƟon in mid-2018, together with a pipeline of opportuniƟes such as the BKZ polymetallic discovery and the BKS, BKW and Baroi prospects along with numerous other gold and base metal targets. Securing long term-tenure for the KSK CoW places Asiamet in a strong posiƟon to deliver the BKM copper project and unlock further value through focused regional exploraƟon work at a number of other targets within the KSK CoW. Peter Bird, Asiamet's Chief ExecuƟve Officer acknowledges that working closely with the Indonesian Government to achieve this outcome represents a significant milestone for Asiamet. CoW REVISION Asiamet has been working closely with the Indonesian Government to align the KSK CoW with the New Mining Law which was introduced in 2009. The key amendments that were agreed to include an iniƟal contract term of 30 years being granted at commencement of producƟon from the CoW area. The Company has the opƟon of extending for two addiƟonal 10-year periods under the current Mining Law – the IUPK system. AddiƟonally, KSK will retain 40,000 hectares under the KSK CoW (currently 61,003 hectares) and the fiscal framework will remain highly compeƟƟve on a global scale. Foreign ownership laws mandate that Indonesian NaƟonals or Companies be offered the opportunity to invest in a Foreign Investment Company. KSK is a PMA and will be required to divest 51% of its foreign owned shares at fair market value aŌer 10 years of producƟon. Divestment may take various forms including a parƟal lisƟng on the Indonesian Stock Exchange or introducƟon of a local partner(s). Asiamet has clearly stated its preference for partnering with suitable Indonesian companies at the development and operaƟons stage. The amended CoW requires Asiamet to work towards, and assist, the Indonesia Government in supporƟng the policy of establishing metals processing faciliƟes in Indonesia. To saƟsfy this criterion, Asiamet plans to produce LME Grade (99.99%) copper cathode at BKM. The amended CoW currently contemplates the priority use of local labour, products and registered mining service companies. Indonesian naƟonals currently comprise 98 % of the KSK workforce. KSK has strong community engagement and will conƟnue to support the development of local communiƟes in the areas in which it operates. "Signing the amendment to the KSK CoW is a major de- risking milestone for Asiamet as we head into the project financing and development stage for our flagship BKM copper project," said Mr Bird. "The Company is firmly of the view that the KSK CoW has the potenƟal to host a district scale pipeline of copper-gold and polymetallic mineral prospects, which are yet to be fully understood or appreciated. "Achieving security of tenure and the fiscal framework for the KSK project significantly enhances our ability to deliver value for all our stakeholders both through the development of the BKM Copper Project and the discovery of further nearby value creaƟng opportuniƟes such as the recent BKZ polymetallic deposit. Asiamet is very commiƩed to building sustainable long-term value for all its stakeholders and looks forward to conƟnuing its work with the GOI and the local communiƟes to build a significant business in Indonesia," said Mr Bird. 2018 WORK PROGRAMME On 13 March 2018, Asiamet successfully completed an off-market placing of GBP7.2 million, (approximately US$10 million) before expenses. This will provide Asiamet with a strong plaƞorm to execute its near-term strategy for 2018 including: • CompleƟon of the BKM Copper Project Feasibility Study • Delivering a maiden resource for the BKZ polymetallic project • AcceleraƟng exploraƟon at addiƟonal targets on the KSK CoW • Securing a strong finance package for development of the BKM project • Increasing Asiamet's equity posiƟon in the Beutong Cu-Au project from 40% to 80% • Drilling to expand the Resource base and advance development studies at Beutong Asiamet Resources completes CoW amendment negotiations Prospects within the Beruang Kanan area. This resource esƟmate reports the esƟmated mineralisaƟon within the Beruang Kanan Main Zone.

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