Asiamet Resources Share Discussion Threads

[mr roper] 27/2/2018 20:14

Blue runner, if you look at the latest Ars presentation they were expecting I think, a 600k surplus in 2017, and 200k surplus 2018 before the deficit in 2019. It will be interesting to see what 2018 brings. If China grows at 6% and the US at 3% they will most likely be a deficit this year as well. Then...all hell will break loose for Cu.

[bluerunner] 27/2/2018 19:58

Mr Roper - yes, sorry my last point wasn't very clear.

The mid-2019 reference was based on an IC article at the start of this month.
It quoted analysts at BMO Capital Markets stating that "the supply-drive copper deficit ... is now only 18 months from fruition".
Later in the same article and referring to Chinese copper mining activity, it states that "such a problem would accelerate the emergence of a strong refined deficit, something we currently expect in mid-2019."

I guess the question at the end of my last post referred to any other events that might lessen the chances of the deficit deepening further with that mid-2019 timeline in mind.

[mr roper] 27/2/2018 19:28

Bluerunner, the copper deficit is happening now.

[bluerunner] 27/2/2018 17:32

At the back end of last year, IC published an article (sorry, can't find it) which I noted in my trading diary. As I recall, it referred to 2021 being the 100th anniversary of the Chinese Communist Party, the significance being that they will want a strong economy at that time and will stimulate in 2020. This may mitigate the effects of any slowdown that may occur in the next year or two.

This ties in pretty well with potential developments at ARS.
And, of course, as others have referred to on this board, there are many other potential tailwinds with US / India infrastructure build; EVs; copper deficit mid 2019 etc.

The more I read about ARS, the management team, the videos etc., the more compelling the story is here. But, when something appears almost too good to be true, I always consider the flipside.

Apart from a substantial market correction, global slowdown, early bid (hopefully the management will hold firm), what other headwinds are there? What are the chances that the mooted copper deficit won't actually happen?

[mr roper] 27/2/2018 13:56

Charles, you're not wrong. The grades are staggering as well. Some 10/11% Cu in areas! We should look to start drilling if Cu is at 3.50/lb.

TM and the team are going to have every major miner salivating over the ksk CoW.

[bluerunner] 27/2/2018 13:53

Many thanks to MR and HG for the comprehensive updates.It will be interesting to see how things evolve here with the various rns expected along the way.(This has to be one of the best bulletin boards on ADVFN for quality comments as well).

[charles clore] 27/2/2018 13:32

Mr R - thats going to take some drilling!

[mr roper] 27/2/2018 13:24

can see why Steve is lickin his chops at the thought of drilling Baroi. Veins that can extend for more than 1km!

Baroi Prospect
 Polymetallic (Cu-Zn-Pb-Ag-Au) vein system
 Vein zones up to 200m wide, comprising abundant sheeted to locally
stockwork, quartz-sulphide veins that can extend for more than 1km

 Zonation of copper-lode veins outward to lead-zinc-silver lode veins,
with individual veins up to 15m in width

 High grade polymetallic mineralization intercepted at four veins systems

 Forestry permit application submitted, scout drilling program to
commence upon completion of permitting

[mr roper] 27/2/2018 13:21

interestingly, when i posted the article below re: copper deficit for 2017 being 200kt, it's only when going back through my records that for 2017, the copper market was predicted to be in oversupply by 600kt. Pretty clear now what an 800kt swing can do for the copper price. If it's replicated in 2018, the price could be nearer 4 bucks/lb.

------------------------------

Metal News - Published on Fri, 23 Feb 2018

copper_market_records_deficit_in_january_to_december_2017_-_wbms_40319.jpg Image Source: steelguru.com

The copper market recorded a deficit of 212.6 kilo tonne in January to December 2017 which follows a deficit of 102 kilo tonne in the whole of 2016. Reported stocks rose during December and closed 1.5 kilo tonne higher than at the end of December 2016. No allowance is made in the consumption calculation for unreported stock changes, particularly in the Chinese government stockpile.

World mine production in January to December 2017 was 20.19 million tonnes which was 1.3 per cent lower than in the same period in 2016. Global refined production for January to December 2017 was 23.5 million tonnes up 0.9 per cent compared with the previous year with a significant increase recorded in China (up 453 kilo tonne) and a reduction in Chile (down 183 kilo tonne).

Global consumption for January to December 2017 was 23.73 million tonnes compared with 23.41 million tonnes for the same months of 2016. Chinese apparent consumption in January to December 2017 rose by 281 kilo tonne to 11923 kilo tonne compared to the same months of 2016 and represented just over 50 per cent of global demand. EU28 production rose by 3.0 per cent and demand was 3423 kilo tonne, 2.0 per cent above the January to December 2016 total.

In December 2017, refined copper production was 2094.0 kilo tonne and consumption was 2136.1 kilo tonne.

[haydock] 27/2/2018 10:20

HB.
Great to see you using your charts. I hope you can keep them updated, a fantatic help to those willing to follow.
Not sure i agree re- your next break up.
I follow as a novice the Japanese Cloud.
hxxp://www.ichimokutrader.com/

Yesterday was a bullish day.


26-Feb-18

Price crossed above Kijun Sen

10.050
Bull
Kijun Sen Cross
Neutral
"
"Bull
Kumo Breakout

Cheers Hay.

[mr roper] 27/2/2018 10:12

27 FEBRUARY 2018 Last Updated at 2:23 PM
Copper edges up on global cues


New Delhi, Feb 27 Copper prices inched up by by Rs 2 per kg at the non-ferrous metal market today, tracking a firm trend overseas.

Traders said buying activity in copper picked up as it improved in global markets, lifted in light trade by a weaker dollar ahead of Federal Reserve Chairman Jerome Powell's highly-anticipated first congressional testimony later in the day.

Globally, copper for delivery in three month edged up 0.3 per cent to USD 7,131.50 a tonne on the London Metal Exchange.

[mr roper] 27/2/2018 06:38

Blurunner

Bkm completing the bfs and securing financing
Bkz - two jorc
Beutong - deep drill and connection of east and west
Baroi - one or two results from there

Add on a copper price of 3.50/3.75/lb and I see 30p easily achievable.

Needless to say, if the copper price hits those n7mbers we will be firmly in the eyes of suitors. In the event of a bid, my 30p could be out by a factor of 2 or 3 times.

[highly geared] 26/2/2018 23:11

Blue runner.The attraction here is the embarrassment of riches across KSK.
Reading the Asiamet Presentation and listening to Steve Hughes, Baroi may be the jewel in the crown based on historic drilling. They won’t start scout drilling that until late 2018 once the forestry permit is granted but if you read through the presentation you’ll see two 10%+ copper results from surface(!) and numerous long 5% copper results from very shallow depth!

Essentially, Baroi shows phenomenal world class copper grades any mine developer would die for but it’s only been ‘ scratched’.

The same could be argued for The ‘BK’ area where BKZ has developed out of ‘ nothing’ and there’s still BKW/ BKS to go at + the potential deep porphyry feeder structure.

ARS , if left to drill for 2-3 years and with a big budget , could feasibly drill up several company makers across KSK collectively worth £billions.

The issue is how to tackle the huge prospectivity of the assets , drill them up with pace and develop in a structured but commercial way with a limited small company budget. Our BOD has done it before and have serious skin in the game , so I believe we’re in safe hands.

The macro picture and the commodities market is the overall driver and determinant of where this ultimately goes. China slowdown is a concern but hopefully balanced by the EV revolution and upcoming demand for copper. Add to that the 7-10 year under investment in new copper mines and the projected supply deficit and timing appears on our side.Mount Teide has posted some excellent stuff on the macro picture and commodities cycle.

Assets
BOD
Story
Commodities cycle

Ticks all the boxes.....

[bluerunner] 26/2/2018 20:59

Many thanks for that reply, Highly Geared.I received a long phone call mid thread so have just read it now.Very interesting and exciting stuff. Cheers.

[bluerunner] 26/2/2018 20:57

Thanks Mr Roper. I'd be happy with 30p this year but your comment is interesting.What do you think might be the main driver to such a rise this year? KSK contract? Further assay results?

[hawks11] 26/2/2018 20:41

Thanks HG, I am not to keen on Bees myself but when you line them up as you have in your post, they look as if they are going to bring in the Honey. My way of saying thanks for a brilliant summary.

[mr roper] 26/2/2018 20:37

hxxps://steelguru.com/metal/copper-market-records-deficit-in-january-to-december-2017-wbms/503109

[highly geared] 26/2/2018 20:16

Blue runner; I'd suggest your target, whilst sensible and conservative, is too low, certainly over a 3 year time line.

BKM should be in full production within 3 years; at 25k/ tonnes /annum and throwing off $40-50million cash flow, I'd expect the market to be valuing ARS around £300 million. Difficult to correlate to the share price now as there will be dilution to fund the 30% equity portion of BKM but I'd say BKM alone will ascribe 30p/share by 2021.

BKZ; different poly metallic deposit but based on the zinc/lead/copper/silver grades and the deposit size known to date (open in multiple directions, I'd expect BKZ to have similar overall economics (that's without the potential porphyry feeder structure). Call it 10p at 2020-21 to be very conservative.

Beutong;I did some calculations a while back and concluded, based on the current resource estimates, the PEA would come in around £1 billion NPV. The PEA will likely be out Q1 2019. Discount say 80% to align with how the market has valued BKM and that gives you c £200 million.

KSK - BKW, BKS, Baroi; allow say £20 million assuming they're drilled to provide outline inferred resources by 2021.

SUM OF PARTS;

BKM - 30P
BKZ - 10P
BEUTONG - 20P
BKW/BKS/BAROI/OTHERS - 5P

In summary, a path to 65p within 3 years seems logical. The scenarios around JV, finance, equity dilution to fund drilling/ mine development etc. are complex and we're reliant on the macro picture being ok.

My personal preference will be to see them take BKM into production alone, develop BKZ and KSK district whilst taking Beutong to PEA status then JV OR sell Beutong out right.

[mr roper] 26/2/2018 19:58

MOre likely this year blurunner. 3 yr timeline I’d be looking to nearer 80-100p. Those numbers could change dependent on what the cu price does.

[bluerunner] 26/2/2018 19:56

I've only been invested here a matter of weeks (I've held CAML for longer) but also added today.The copper narrative looks compelling and news flow here will be quite frequent which could drive price action.I've set a somewhat arbitrary target of 30p. I have no particular timeline but the next 3-5 years seems pivotal for base metals.I'm aware of the risks - this is a small company which could be taken out and the narrative may veer in a different direction. Without wanting to degenerate into ramping, how realistic a target is 30p over a, say, 3 year timeline?

[mr roper] 26/2/2018 19:50

THanks HB. Really appreciate all the effort you put in to this thread.

[horneblower] 26/2/2018 19:23

I have taken the liberty of putting a couple of charts with my own lines on at the bottom of the "More Charts" section of the header. They are not intended as advice.
They do not update automatically so I will update them periodically.

[mr roper] 26/2/2018 17:59

Pretty decent day. Hopefully get Beutong kicked off in the very near future to move us back through 11p

[okidokicoki] 26/2/2018 16:24

Good day today think it might be the start of the next leg up with the distressed seller now been gone . GL all