Asiamet Resources Share Discussion Threads

[bluerunner] 04/3/2018 19:20

Many thanks for the replies earlier on. So many articles / news items that point strongly to the positive and timely aspects of this sector.I'm off here now until the next RNS (which might well be tomorrow with the way things appear to develop here).

[highly geared] 04/3/2018 18:49

Matt; interesting reference to ‘copper powering the green revolution’. Looks like world copper demand is underpinned for the next decade...

[knobbly] 04/3/2018 13:28

¯_(⊙ʊ87;⊙)_/¯

Adorling, thought you had suggested you were going to be selling-out of ARS from 17p?

[adorling] 04/3/2018 11:48

Bluerunner - TM said he would not accept less than 32-35p in Dec 2016 when we just had BKM. With BKZ as a stand alone asset and Beutong now licensed I cannot see our Board selling out now for less than 50-60p now if an approach was made or less than 200p post BKM producing 25,000T copper pa and results of Beutong PEA being published.

It is one hell of a challenge to have the maturity to just hold this amazing share for the next few years but this is what is needed to make life changing fortunes & future life decisions. I always remember reading Buffetology many years back where Warren talks about if you could only ever own 1 stock for the rest of your life what would it be? - ARS is that stock for me!

[highly geared] 04/3/2018 11:44

Bluerunner; I’d say ‘not a chance’...

I can’t see them wanting to accept anything less than 50p-70p/share and will be disappointed if a cheap bid is accepted. I believe the BOD are set on building a $ billion company over the next 3-5 years.

[highly geared] 04/3/2018 11:40

We really don’t want any acquirers until this time next year when we’ll have BKM finance and mine construction well advanced, know much more about whether BK is part of a bigger system ‘ Beutong 2’, know more about how big Baroi might be.

More importantly, we should have PEA for Beutong and confirmation around metallurgy ( any acquirer will want to know principles of mining/recoveries and costs). This enables us and the market to ascribe a value for the portfolio.

4 potential scenarios:

1. ARS finance BKM, get into production, then use cash flow to fund starter pit at Beutong and develop ‘ slowly’ with first production probably 2023-25.
2. ARS finance BKM , JV Beutong for a ‘ free carry’ or lower finance commitment on diluted ownership.
3. ARS finance BKM , sell Beutong outright ( mid 2019), special dividend, use BKM revenues to develop KSK (Baroi).
4. ARS accept offer for entire portfolio, mid 2019 onward.

The language used by TM recently about someone needing deep pockets to develop Beutong suggests to me they will look to sell / JV it once sufficient data is available to optimise value for an early stage purchase by a major.

[bluerunner] 04/3/2018 11:30

I'm hoping monttim is correct and that shareholders - long-standing and more recent - get to realise something approaching the full potential of their holding.This is obviously a hot sector currently but I'm hoping to be here for at least a tripling of the price from here. (I tend to add on the way up). That could take a year or two as existing holders sell into the rise and take profit.Speculative question of the day - If a buyer offered the management team 20p now (Liberum's target price) how likely would the management be to accept that at the moment?

[monttim] 04/3/2018 02:45

Hi Mount,
Knowing most of our Board and senior management and their ambitions, I feel very confident any of us that want to be ARS holders even in a few years and into production , WILL STILL BE HOLDERS. A mix of partners and finance, however ASIAMET will still be ours.
Just my opinion.
Cheers.

[mount teide] 04/3/2018 01:19

HG 'ARS will be a sitting duck for a T/O later this year/2019.'
Agree - as mentioned in a previous post, the Copper market fundamentals make it increasingly unlikely that we will be ARS shareholders when BKM generates first production.

'EV revolution; copper required may offset any general economic slowdown?'

Sustainable energy is this century’s most pressing issue. More and more, sustainable energy systems are being installed throughout the World, driven by diminishing costs and government incentives.

Consequently, the EV and Renewable Energy Sectors will likely be the key demand drivers for additional copper supply over the decade ahead (A Coal Thermal or Gas Fired Power Station needs 1 tonne of Copper/MegaWatt to build whereas Solar PV 4 Tonnes and Wind 3.8 tonnes). China is currently carrying out a huge programme of renewable energy development to replace high pollution generating coal fired plants.

With Global investment and productivity growth on a 2 year rising trend, and Global GDP forecasts revised up to 3.9% for 2018 and 2019, provided inflation doesn't take off(which would probably still be good for industrial metals in the short term), I'm increasingly of the view that the risk of a general economic slowdown before the end of next year is unlikely.

'Graph showing supply v demand for the next 15 years; we are right in the deficit sweet spot aren’t we, especially if Beutong is taken through to production!'

Agree - by any objective analysis the timing and market fundamentals to bring BKM and Beutong through to production is the stuff of mining sector investment dreams - the absolute optimum timing in a 15 - 20 year cyclical market (CAML in 2010 could not have picked a worse time to bring Kounrad into production - the extremely low C1 Cash cost being their passport to success in a copper price environment where prices fell for another 6 years before finding a bottom).

Remain firmly of the view the Copper market fundamentals(in deficit, stocks near decade lows, investment in new production at record lows and majors increasingly awash with cash), will mean that ARS's high grade, world class copper assets at BKM/BKZ and Beutong will be unlikely to see first production with any of us as shareholders unless, Beutong is developed as a joint venture with a much larger operator.

AIMHO/DYOR

[lauders] 04/3/2018 01:14

Thank you for your feedback on the "correct company" point MT and for the links in the following post. I have looked at CAML but do not hold as investing funds are limited as I have a property purchase underway and need to be sensible in planning for the associated costs looming. Once it is out of the way I will look at my portfolio again and see what to do with regards to my holdings. ARS, HCM and BVXP will remain without question.

[tomcorvid] 03/3/2018 23:56

MT, thank you for your valuable information. I think for metals I would mention Uranium as well. It is still bumping along its bottom and although catalysts are starting to shift the story, there is a little to go before the inflection of supply/demand balance changes the current narrative, therefore providing those of us who are into time arbitrage a chance to take up positions.

HG, thank you for the breakdown. While the value might well be there (and then some!) it is going to take a while for the general market to catch onto the commodity bull story as these things take a while to filter into the consciousness, Only then will true value be realised. I am expecting that any approach towards $4/lb is what it will take.

I would also add that as Mr Roper pointed out there are two JORCs due in May and for me really, although I very much welcome the BKZ resource (anyone care to guess the tonnage?! I'm in a fiver at 2mt) it is the underlying copper structure that fascinates me. There is a poster on LSE called Updo (he has been following the story for about 20years) who has recently summarised the structural mineralised corridor at KSK and I am going to go out on limb and say that what is yet to be uncovered there has a chance of being more than one Beutong tonnage equivalent within KSK, also from surface, also with considerable Au credit. I'm probably wrong and living in a fantasy world of my own making but if I'm not, it isn't unreasonable to be thinking in terms of $10bn market cap in the next 5-10years. We would need a significant partner, of course, and there will be fund raises along the way but it is my intent in to keep up with the dilution as we go as long as my resources allow. I am going to be brave with this one as long as the fundamental story doesn't change.

[mr roper] 03/3/2018 23:17

Bidding can start at 1bn quid please.

[highly geared] 03/3/2018 23:12

MT ; good articles.

Copper;

Based on the comments, ARS will be a sitting duck for a T/O later this year/2019.
EV revolution; copper required may offset any general economic slowdown?
Graph showing supply v demand for the next 15 years; we are right in the deficit sweet spot aren’t we, especially if Beutong is taken through to production!

[mount teide] 03/3/2018 22:33

James Catlin has published a long list of high quality Shipping Sector research articles over many years on the Seeking Alpha website - recently, he expanded his area of research to include Macro/Commodities.

Two recent research articles on the outlook for the Copper and Zinc Markets are, like his shipping sector articles, of a very high standard and well worth a read for those invested in the sector or considering an investment

Can The Copper Bull Keep Running? - 29 Jan 2018



Zinc Macro Outlook - 26 Feb 2018

[highly geared] 03/3/2018 21:41

Thanks for the kind words guys.

If the BKZ deep copper is part of a bigger feeder structure and continuous to BKM and Baroi scout drilling reinforces and enhances the historic results, we’ll have multiple ‘company makers’ on our hands. I think the phrase ‘embarrassment of riches’is apt...

[mr roper] 03/3/2018 21:23

Top,post, HG.

I listened to TM again this morning. Very interesting on Beutong production option. Talking about possibly going it alone and producing up to 40kt/pa or bringing partner in to do up to 70kt/pa.

Either way we look at it, it’s a monster.

[okidokicoki] 03/3/2018 20:52

HG great post the numbers are ridiculous for the Market Cap we have now, This will be a life changing investment as long as people just take a long term view on this. Saying that the short term view also looks fantastic. Thanks for sharing that again with us and the best bit is that we now do have the production licence on this beast. All bets are off on where this share price will be in the future 100p 200p is not far fetched.DYOR

[highly geared] 03/3/2018 20:26

Posted this just over 3 months ago. Timing of Beutong PEA a bit optimistic. Useful personal reminder and perhaps useful if any new posters/lurkers have joined recently. The exciting thing( not that we need any more) is that forthcoming drilling is aimed at enhancing Beutong:

‘Just been having a look at the Beutong numbers in a bit more detail:

Measured and indicated at 0.3% cut off:
- 1241 millions lbs copper at say $3.50 = $ 4.343 billion
- 373,000 oz gold at $1250 = $466 million
- 5.698million oz silver at $18 = $102 million
- 20 million lbs Moly at $7 = $150 milllion

Total in the ground gross value = $ 5.054 billion

Including inferred resource, it gets very interesting ( albeit lots more drilling needed to the East and West Porphyry’s:

- 4091 million lbs copper = $14.318billion
- 1,746,000 oz gold = $2.183 billion
- 14.9 million oz silver = $268 million
- 113 million lbs Moly = $791 million

Total gross in the ground value = $ 17.56 billion

Grand total north of $22 billion.
Based on CPR and 30,000 metres of drilling to date

Ars currently have 40% and can convert to 80% subject to certain project development commitments (I’m assuming they’ll take it to 80%).

Taking a middle position on conversion of inferred , that gives an in the ground value of c $14 billion. But, based on long term copper projections and assuming earliest production is c. 2022 , copper is likely to be higher, ditto gold/silver.

Capex will be considerable but working right back to PEA , assuming they do further drilling to move some inferred up to indicated, when comparing a likely doubling/ tripling of the copper inventory ( when compared to BKM) and including the precious metals and Moly, it,s hard to envisage a PEA NPV lower than $1 billlion based on an 80% interest.

Assuming the production licence lands in the next 2 weeks , they should be able to generate a PEA by summer 2018 and a BFS by 2020. Assuming the market ascribes say 25% of the NPV , this should add say $250 million to the share price over the next 9 months. That will be c 26p/ share.Add BKM post BFS finance, say 30p and 5-10p spec value for BKS, BKW, BKS, then it’s possible to see a path to a share price of c. 65p by summer 2018.

If copper continues to rise then all bets are off ( on the upside).
All IMO, DYOR’.

[okidokicoki] 03/3/2018 18:49

Fantastic week . All the ducks a certainty lining up perfectly . We have massive assets one of the best management teams that have done all this before . Copper and zinc on a bull run and and going more into deficit. Demand on EV front is going to be a game changer ,think of all the charging stations that are going to have to be built and 3 times as much copper in every new Ev . Not many mining company(about a 10 year lead time from exploration to mine build at least) that can open a new mine in the next few years to cope with the demand . Management have a huge finger in the pie owning at least 5% of the shares maybe more so their interests are in line with ours. The top management not taking wages for last few years proves they believe the project . Not many company's can say that about management . I have not even mentioned JPM . DYOR but dont take too long . GL to all that are already invested and welcome to the new investors that have recently boarded the Tony Train

[mount teide] 03/3/2018 14:13

Lauders - 'You have to pick the correct companies of course'

With good stock picking there is probably no other asset class that gets close to the returns generated from a LTBH equity investment strategy - Terry Smith's Fundsmith Fund is a great example( he rarely incurs dealing charges because he hardly ever changes the Fund constituents - all carefully selected for long term growth).

However, LTBH(5-10 year) stockpicking success can be materially increased by focusing on highly cyclical sectors with business cycles measured in decades not years as it helps to minimise the downside risk!

In particular, I look for cyclical industries/sectors that I am familiar with and understand with early stage rising flood tides and, new technology sectors with a strong tail wind.

Would currently place shipping and commodities/industrial metals(particularly shipbroking, Copper and Zinc) in the first category and the Mobile Ad Tech sector in the second group.

The last shipping sector business cycle bottomed in early 2016 about 18 years after the previous low.

The Baltic Dry Index after crashing a staggering 98% is up about 400% from its lows but still circa 89% below its 2008 peak. Likewise, the last commodity market peak pricing in Zinc(2007), Lead(2007) and Copper (2010), after inflation adjustment is 54%(Zinc), 87%(lead) and 65%(Copper) ABOVE current pricing!

As a result of low barriers to entry(anyone can buy a ship or a mine), the shipping/commodity markets have charted a remarkably reliable 15-20 year boom and bust life cycle during the last 70 years - consequently, in an average human lifetime investors may get 2 or 3 small windows of opportunity to time an investment in the sector perfectly. Once every 3 or so shipping/commodity cycles, industry and global economic fundamentals conspire, to produce a super recovery/boom phase - with shipping, zinc, copper and the oil markets coming off near decade long falls of 98%, 66%, 56% and 76% respectively, I strongly suspect this latest cycle recovery phase may turn out to be such an event.

By any objective assessment, only Mobile Ad Tech companies run by totally incompetent management could have failed to grow strongly over the last few years. Taptica (TAP) CEO Hagai Tal may be a very impressive business executive with an outstanding track record of tech industry success but, would be the first to admit, as he recently did to his credit, that TAP is extremely fortunate to be in the "right place at the right time with the right product!" . The mobile ad tech market has quadrupled in size during the last 10 years and is currently growing at its fastest rate since 2011, and forecast to continue growing at 20% plus through to at least 2022.

My investment dry powder is usually around 10% but has been higher recently after selling out of a long term top 5 portfolio position in CMS - held for 7 years, (during which shareholders who invested at the time have since received more than their original investment back in dividends and 450% capital growth).

Never hold more than 10 positions - not really concerned with equity investment diversity - I mainly look for exceptional management and companies with high quality assets in industries/sectors with early/strongly rising tides as it helps to minimise the downside risk and maximise upside potential.

With highly cyclical industries like commodities(oil and metals) and shipping, when the tide changes from an ebb to flood, I look to go all-in with an initial investment as in these sectors the recessions and recovery time periods tend to be 5-10 years once the tide turns.

If i had to pick a quoted company to double in valuation over the next 5 years for my life - i would go for a top quality company in the Shipping and Copper Mining Sectors as both have recently seen the back of a devastating near decade long cyclical recession and are now in the early stages of what is likely to be a very strong 6-8 year cyclical recovery period.


PS - the award for the most impressive valuation performance for a company in the Commodity Sector during the brutal 2007 - 2016 recession? CAML is in a league of its own with daylight second.

CAML raised $60m at IPO in September 2010; after paying the 2017 dividend CAML has since returned during a 7 year mining sector recession an astonishing $100m to shareholders in dividends and share buy-backs.

Shareholders have received 60% of the IPO price in dividends and seen 200%+ capital growth DURING a severe, more than half decade long mining sector recession. With extremely low C1 Cash operating costs - it does not require a PhD in Applied Mathematics to work out what they would be able to do during a half decade long strongly rising asset price environment.

CAML is a very rare bird - an incredibly well managed, low operating cost, high cash generating, high dividend paying copper/zinc/lead producer which has demonstrated to the market it can make serious money and pay huge dividends even in the depths of the longest and deepest recession to hit the sector for decades - a recession so brutal it saw mining sector titan Glencore lose 85%+ of its valuation, suspend the dividend and heavily dilute its shareholders with a huge placing to strengthen its balance sheet.

No Investment advice offered, intended or inferred

AIMHO/DYOR

[mr roper] 03/3/2018 07:05

HG, note, there are two Jorc updates for bkz in May

[lauders] 03/3/2018 05:20

LTBH may be deeply unfashionable today BUT unlike short term trading(gambling), with good stock-picking it is an investment strategy that continues to prove the test of time.

You have to pick the correct companies of course MT. I have held SIA for years and so far it has been a mistake. Managed to get some nice dividends over the years but I am still well down. It has no debt and I thought good management but the market isn't interested and oil companies (some of them) are not in fashion at present.

Now CKN is another story. I used to hold but sold many years ago. Big mistake. I now have two main "hopefuls" at opposite ends of the share price spectrum. ARS and HCM. I will try holding them for years and hope that they can replicate CKN's model. May even buy back some CKN on any significant weakness too.