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Asiamet shares soar 50% after drill result

Last updated: 06:15 26 Aug 2015 EDT, First published: 03:06 26 Aug 2015 EDT

drill_rig
Drilling has uncovered some exciting results.

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Shares in Asiamet Resources (LON:ARS) soared more than 50% in morning trade after it said it had uncovered a high-grade copper zone at Beruang Kanan (BK), in Kalimantan, Indonesia, that has the potential to transform the economics of the project.

The latest hole produced an 11 metre section containing 2.96% copper. Significantly, it was intercepted from just six metres below surface.

Within that there were two metres at a bumper grade of 9.26% copper.

Significantly, this latest hole is just 125 metres from a similar high-grade, near surface discovery.

Follow-up drilling is being carried out in the immediate vicinity of these holes.

Chief executive Tony Manini told investors said the discovery of this high-grade, but shallow copper mineralisation presented an “excellent opportunity” to develop a low-cost starter pit that would “significantly enhance project economics”.

So far 53 holes have been drilled for a total of 4,424.5 metres from a planned campaign of 80 holes covering 6,500 metres.

The main zone of the BK deposit is estimated to be host to a 47mln tonne resource grading 0.6% copper.

It is a shallow dipping and follows the contour of a hill. Work going forward will concentrate on assessing the potential of the copper mineralisation within the first 50 metres from surface.

This suggests the strip ratio (i.e. how much soil has to be removed to expose the ore) ought to be extremely low.

In turn the low strip ratio ought to mean low cost of production – assuming the metallurgy works and the grade is economic.

CEO Manini has big plans for Asiamet, formerly known as Kalimantan Gold, and has called in long-time collaborator Stephen Hughes and Mansur Geiger, discoverer of the Kalimantan project, to help.

Their task is quite straightforward – to get the BKM copper deposit (part of the wider BK project) up and into production.

The new boss came on board at the turn of the year when Kalimantan Gold bought the Beutong copper-gold asset in Sumatra in an all share deal from private company, Tiger’s Realm Minerals, run by Manini and partner Hegarty.

Beutong is a potential monster and will be part of the longer term thinking of the company.

The plan is to apply for the mining licence before exploring and developing it further, possibly in tandem with a deeper-pocketed partner.

Likewise Jelai, Asiamet’s gold asset, could be partnered out. Equally it could be sold or even spun off as a separate entity if the market conditions improve.

Reacting to the earlier news, the shares rose 0.6p, or 52% to 1.75p.

VSA Capital in a note earlier repeated its ‘speculative buy’ on the stock and its 3.2p price target.

“These highlights are all above global average grades for copper and we expect further strong results in the near term,” VSA said in a note to clients.

“The current campaign is targeting an increase in the resource estimate before the year end.

“This would further demonstrate the potential for Asiamet to deliver a low cost high grade copper project.” 

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