Asiamet invites retail investors to join management and a major Indonesian backer in latest funding round

You can tell when the professionals are at work.

Asiamet's (ARS) latest fundraising isn’t for the nickels and dimes that junior mining companies have been scrabbling around for all year.

It’s for meaningful money – up to US$4 million, in fact.

And, almost like the mining bear market wasn’t here, there’s no discount either.

The lack of discount is reflective of three significant aspects about this fundraising.

First, there’s a major cornerstone investor in place – existing shareholder PT Delta Dunia Makmur, known as DOID, which is following its money with another US$3 million.

Second, management is adding to already significant holdings in a major way, with chairman Tony Manini buying 6.7 million shares, non-exec Bruce Sheng buying 19.5 million, and chief executive Darryn McClelland buying 3.35 million. That accounts for the next US$295,000 of the raise.

Third, rather that hacking around the brokers for discounts, in a breath of fresh air for the way things are done in the sector, the company is actually involving retail investors, offering £600,000 ( worth of shares on the same terms as DOID and management – 0.77p each. 

All of which produced a most unusual spectacle at the smaller end of the mining market – an announcement of a fundraising which actually produced a substantial rise in the share price – up more than 7% on the day, peaking at 14% at one point.

In a tough market, not many companies can pull off a fundraise without a discount. Management’s extensive experience in mining capital markets has kept Asiamet focused on delivering a high-margin, lower-risk project. The company’s ability to adapt to challenging conditions is what will drive its progress moving forward. It’s been tough going but this team has played and won big with other companies before. 

Asiamet knows Indonesia, knows its asset, and knows how to trim its coat-tails according to prevailing conditions. 

The bull case for copper remains almost unassailable in the medium-to-long term, even if short-term worries about Chinese stimulus and the upcoming US elections are adding some volatility. 

And KSK has plenty of copper. So much, in fact, that the new plan for the project doesn’t even envisage mining it all in the first go-round, the revised pit design targets the higher-grade material first, dramatically reducing mining volumes and the strip ratio—from 1.34 to 0.72—slashing costs in the process.

Significant Capex Reductions

Asiamet has spent much of the past year or two working out how to trim the proposed capex requirement for KSK, with recent proposals potentially stripping out as much as US$80 million from the original US$235 million total budgeted last year. 

Of that, around US$26 million of savings are already locked in, to help target a potential US$160-US$180 million initial upfront capex.

The latest fundraise will ensure that Asiamet has the funds to complete the studies required to lock in the rest and advance its financing process with a leaner, high margin project - Asiamet is well-positioned for the next stage of development.  

With significant newsflow over the coming two quarters - including optimisation work expected to be completed this quarter, and major progress on financing in Q1 2025.

A Pivotal Moment for Asiamet

Like many in the sector, Asiamet has experienced slower momentum in recent years. But with significant optimisation work behind it and a clear financing pathway ahead, the pieces are falling into place.  With this fundraise retail investors are being offered one final way in at the same levels before the transition from developer to producer gets underway in earnest.

It is very uncommon to do a retail bookbuild let alone a non-discounted fundraise.  However, in the current market conditions it may be that the brokers found the option of a non-discounted raise unappealing. But so much the better for existing shareholders, and as we noted, the premium at which DOID and management are coming in at has already pulled the share price upward. 

Investors have noticed. Even though at the current 0.75p the shares are still slightly cheaper on the open market than the bookbuild price volumes remain modest, and more investors are holding on than selling - a further vote of confidence in Asiamet’s strategy.

A Solid Entry Point

Retail investors who want to buy too can participate in the bookbuild via any one of a familiar litany of retail brokers, including but not limited to AJ Bell, Hargreaves Lansdowne, Interactive Investor, Redmayne Bentley and Shore Capital. Given the number of fundraises not made available to retail investors, it is pleasing to see efforts to see a good example set by Asiamet and one that more companies should follow. 

View from Vox

It’s encouraging to see Asiamet moving forward with positive intent. Delivery of the additional cost-savings will clearly be key to keeping investors onside in the coming months, but so far the signs are positive on that. And could it be that the copper price starts to take a major upward swing at just about the time Asiamet goes into production? – it’s not out of the question. Much of the current uncertainty may have washed its way out of the economic system by then, and major new copper projects - such as KSK – that will be available to feed any uptick in demand are few and far between.