TIDMARS
RNS Number : 4893B
Asiamet Resources Limited
08 October 2020
8 October 2020
Heads of Agreement Signed for KSK
Asiamet Resources Limited ("Asiamet" or the "Company") is
pleased to announce it has entered into a non-binding Heads of
Agreement ("HoA") with PT Wasesa Indo Nusa ("PT WIN"), an
Indonesian private company, to acquire Asiamet's wholly-owned
subsidiary Indokal Limited ("Indokal") (the "Proposed
Transaction"). Indokal holds the Kalimantan Surya Kencana Contract
of Work ("KSK CoW"), including the BKM Copper Project, located in
Central Kalimantan, Indonesia.
As part of the Proposed Transaction, PT WIN will also acquire
Aeturnum Energy International PTE Limited's ("Aeturnum")
commodities trading business. PT WIN plans to undertake an Initial
Public Offering ("IPO") on the Indonesian Stock Exchange ("IDX") in
early 2021. Discussions are currently underway with several highly
rated Indonesian financial institutions to underwrite the IPO. With
its existing cash reserves and expected proceeds from the planned
IPO, PT WIN expects to have sufficient financial resources to
enable the development pathway for the BKM Copper Project.
Reputable third-party Indonesian company valuation experts with
experience in oil, gas and mining were used by Aeturnum to provide
an independent valuation of the assets to be acquired by PT WIN.
These valuations have been used to inform the HoA. The Proposed
Transaction is subject to receipt of a number of regulatory
approvals and the equity consideration valuations ascribed
throughout this release are subject to final underwriter
valuations.
All references to $ are US Dollars.
Proposed Transaction Highlights
-- Indokal to be acquired by PT WIN for a total staged consideration of $163.4 million.
-- The acquisition price will comprise:
-- $10 million paid in cash on the execution of a binding Sale
and Purchase Agreement ("SPA"), this payment is non-refundable
-- $40 million paid in cash upon the successful IPO of PT WIN on the IDX
-- A 22.5% shareholding in IDX listed PT WIN is payable to
Asiamet in two tranches; the first upon listing, the second upon PT
WIN releasing its 2020 Mineral Resources and Exploration Target
statements to the IDX. Aeturnum's independent valuers estimate PT
WIN to have an equity value of circa $500 million on a 100% basis
on IPO.
-- Asiamet will continue to manage the KSK CoW project for a
period of up to 12 months (extendable by mutual agreement)
following the IPO of PT WIN through a management services
contract.
As set out below, the Proposed Transaction is subject to, inter
alia, the completion of outstanding commercial and financial due
diligence by both parties, including but not limited to approvals
by the Government of Indonesia and all other regulatory bodies.
Upon satisfactory completion of all final diligence activities
the parties will enter into a binding SPA. This is expected to take
approximately 30 days, however due to the current restrictions
associated with Covid-19 the timeline may vary.
Following the execution of the binding SPA, Asiamet will seek
shareholder approval for the Proposed Transaction.
Tony Manini, Executive Chairman of Asiamet Resources
commented:
"The Asiamet Board fully endorses and supports this transaction.
While it is recognised that there are still a number of steps to
completion, the proposed transaction has the potential to unlock
very significant unrecognised value for Asiamet shareholders and
most importantly secures a clear road map for the funding and
development of the BKM copper project and the further advancement
of the wider KSK CoW for the benefit of all stakeholders. Asiamet
will retain a very meaningful exposure to the upside at BKM and KSK
and continue to manage all the value enhancement and development
related activities currently in progress.
Our work with Aeturnum to date has provided an insight into
their high level of professionalism and integrity and provided us
with the confidence to pursue this transaction and partner with
them as major shareholders in the proposed IDX listing and
development of PT WIN going forward. We now remain focused on
completing due diligence and binding documentation that allows for
shareholder approval."
Summary of the Proposed Transaction and other key terms
The key terms of the HoA allow for the completion of due
diligence activities, both parties entering into a binding SPA and
satisfaction of the relevant conditions precedent. These details
are set out below:
-- Aeturnum a 19.9% shareholder in Asiamet has entered into a binding agreement to acquire
PT WIN, an Indonesian private company, currently a shell
company.
-- PT WIN will acquire Aeturnum's commodities trading business
prior to undertaking an IPO on the IDX.
-- On satisfaction of the conditions precedent and payment of
the full acquisition price/consideration, PT WIN will immediately
acquire Asiamet's wholly owned subsidiary, Indokal, the holder of
the KSK CoW.
-- The total acquisition price will be paid in cash and equity
in PT WIN. The value of the equity in PT WIN on IPO is subject to
the final pricing of the IPO which is expected to be driven by
underwriter valuations, with the total estimated consideration of
$163.4 million being paid in four stages as follows:
-- $10 million paid in cash on the execution of the SPA, this
payment is non-refundable (Tranche A)
-- $40 million paid in cash upon the successful IPO of PT WIN (Tranche B)
-- A 22.5% shareholding in IDX Listed PT WIN payable to Asiamet
in two tranches, the first upon listing (10.7%) and the second upon
PT WIN releasing a 2020 Mineral Resource Statement to the IDX which
contains at least 400,000 tonnes of copper in JORC Compliant
Mineral Resources and Exploration Target (11.8%). Aeturnum's
independent valuers estimate that PT WIN is expected to have an
equity value of circa $500 million on IPO.
-- Certain sell down restrictions will apply to the sale of any
part of the Company's shareholding interest in PT WIN. Following a
lock-up period which will be finalised as part of the SPA, Asiamet
will be entitled to divest up to 50% of its initial holding in PT
WIN over any 12 month period should it wish to do so. The Company
intends to retain its shareholding and continue to work with PT WIN
on the development of the BKM Project while retaining the
flexibility to re-evaluate its position at any time.
-- On the basis that the IPO proceeds as planned PT WIN will
allocate at least $30 million from IPO proceeds towards the
development of the BKM project.
-- Asiamet will be entitled to at least two board seats in PT WIN or a 40% representation on the
PT WIN board.
-- PT WIN has the right at any time prior to satisfaction of all
conditions precedent, to acquire 100% of Indokal for cash at an
agreed price.
-- The Company will provide management services to PT WIN for up
to 12 months post IPO, extendable by mutual agreement. The Company
will be reimbursed for these services on a cost plus basis by PT
WIN.
-- Any statutory bonds or financial commitments required for
development permitting of the BKM copper project and all costs
associated with value enhancement initiatives currently in
progress, including any field work, will be reimbursed to Asiamet
by PT WIN upon listing.
-- It is proposed that the IPO will take place by 31 March 2021.
If it is extended beyond this date by mutual agreement, this
extension will be subject to PT WIN paying Asiamet 50% of
Tranche B, $20 million, or an otherwise mutually agreed
amount.
-- If the IPO of PT WIN does not proceed Asiamet will:
-- Be entitled to the non-refundable initial payment of $10 million
-- Provide PT WIN with a 30 day exclusivity period to purchase
Indokal for cash at an agreed price, less any funds already paid to
Asiamet.
-- The key conditions precedent are:
-- Asiamet satisfactorily completing its remaining due diligence
on PT WIN and Aeturnum and/or its affiliates
-- Customary and regulatory approvals as required in Indonesia
-- Asiamet shareholder approval will be sought following the execution of the SPA
-- Satisfactory IPO by PT WIN, which includes a minimum equity
value of $400 million and minimum free float of 20 per cent.
Following completion of the transaction Asiamet will have circa
$50 million cash and no debt on its balance sheet, and retain a
sizeable 22.5% interest in the KSK CoW through its shareholding in
PT WIN along with an 80% interest in the significantly larger
Beutong copper gold porphyry project located in Aceh, Indonesia.
The Company plans to continue working with PT WIN on the
development of the BKM copper project, to progress various options
for further exploration and development of the Beutong project and
assess additional growth opportunities that can create long term
value for shareholders.
Timeline
The timeline for key events/milestones is as follows:
-- Prior to execution of the SPA, Asiamet will need to complete
all remaining due diligence activities and obtain the necessary
regulatory approvals
-- Execute a SPA within 30 days of the HoA execution, subject to Covid-19 restrictions
-- Seek shareholder approval as soon as possible following the execution of the SPA
-- PT WIN to complete an IPO by end of Q1 2021
Related Party Information
Aeturnum is a substantial shareholder in the Company, currently
holding 19.9% of the issued share capital. The Proposed Transaction
is therefore a related party transaction pursuant to Rule 13 of the
AIM rules for Companies. The directors consider, having consulted
with its nominated adviser, that the terms of the transaction are
fair and reasonable insofar as its shareholders are concerned.
Shareholder Approval
The Proposed Transaction would also be deemed to be a disposal
resulting in a fundamental change to the business in accordance
with AIM Rule 15 and as such the Proposed Transaction is
conditional on the consent of its shareholders being given in a
general meeting. The Company, on signing of the SPA, or as soon as
practicable thereafter will publish a circular convening the
general meeting and containing details of the disposal and any
proposed changes to the business.
Description of Business
The Company has previously announced it was examining strategic
options for the KSK CoW, and was subsequently in discussions with
Aeturnum. Indokal Limited is the 100% owner of the Kalimantan Surya
Kencana Contract of Work ("KSK CoW"), covering 39,443 hectares,
including the BKM copper project, located in Central Kalimantan,
Indonesia. The Company delivered a robust a feasibility study for
the BKM copper project in June 2019, some key metrics include an
initial 9 year life of mine producing up to 25,000 tonnes of copper
cathode per annum from a Ore Reserves of 51.5Mt @ 0.6% Cu, for 303k
contained tonnes of copper in the Proved and Probable category (see
RNS's dated 14 June 2019). Total Measured, Indicated and Inferred
JORC Compliant Resources comprise 69.6Mt @ 0.6% Copper for 451.9Mt
of contained copper (see RNS dated 14 June 2019).
Further upside potential, including possible mine life
extensions, at BKM is evident through existing high potential
exploration targets adjacent to the proposed mine development area.
Asiamet has previously identified four key "near mine" targets,
notably the BKM-BKZ 'Link' Zone, IP geophysical targets at BKW, the
BKM 'Deep' Zone, and the BK 'South' Zone.
Shareholder Update
Tony Manini, Executive Chairman of Asiamet, will update
Shareholders on this Transaction, a webinar will be available on
the Company's website www.asiametresources.com by 2pm, 8 October
2020.
ON BEHALF OF THE BOARD OF DIRECTORS
Tony Manini, Executive Chairman
For further information, please contact:
-Ends-
Tony Manini
Executive Chairman, Asiamet Resources Limited
Email: tony.manini@ asiametresources .com
Investor Enquiries
Sasha Sethi
Telephone: +44 (0) 7891 677 441
Email: Sasha@flowcomms.com / info@asiametresources.com
Asiamet Resources Nominated Adviser
RFC Ambrian Limited
Bhavesh Patel / Stephen Allen
Telephone: +44 (0)20 3440 6800
Email: Bhavesh.Patel@rfcambrian.com / Stephen.Allen@rfcambrian.com
Berenberg
Matthew Armitt, Detlir Elezi
Telephone: +44 20 3207 7800
Email: Matthew.Armitt@berenberg.com / Detlir.Elezi@berenberg.com
Liberum
Clayton Bush, Kane Collings
Telephone: +44 20 3100 2000
Email: clayton.bush@Liberum.com
Optiva Securities Limited
Christian Dennis
Telephone: +44 20 3137 1903
Email: Christian.Dennis@optivasecurities.com
Blytheweigh Communications Limited
Tim Blythe/Megan Ray
Telephone: +44 (0)20 7138 3204
Email: Tim.Blythe@blytheweigh.com /
Megan.Ray@blytheweigh.com
Follow us on twitter @AsiametTweets
FORWARD-LOOKING STATEMENT
This news release contains forward-looking statements that are
based on the Company's current expectations and estimates.
Forward-looking statements are frequently characterised by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "suggest", "indicate" and other similar
words or statements that certain events or conditions "may" or
"will" occur. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause
actual events or results to differ materially from estimated or
anticipated events or results implied or expressed in such
forward-looking statements. Such factors include, among others: the
actual results of current exploration activities; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; possible variations in ore grade or
recovery rates; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing; and fluctuations in metal prices. There may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. Any forward-looking statement
speaks only as of the date on which it is made and, except as may
be required by applicable securities laws, the Company disclaims
any intent or obligation to update any forward-looking statement,
whether as a result of new information, future events or results or
otherwise. Forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on
such statements due to the inherent uncertainty therein.
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
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END
UPDUPGQCUUPUUAR
(END) Dow Jones Newswires
October 08, 2020 02:00 ET (06:00 GMT)
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