Asiamet Resources (LSE:ARS) enjoyed a boost today following the much-anticipated announcement that it has begun drilling at its Beutong Copper-Gold Project in Indonesia. With Beutong currently offering JORC compliant resources containing 2.4Mt copper, 2.1Moz gold, and 20.6Moz silver, the news caught investors’ eyes and Asiamet’s shares rose 12pc, or 1.3p, to 12.5p.
Beutong is a large, high-quality copper, gold, silver, and molybdenum deposit that outcrops at surface and remains open in several directions including to depth. Geological observations have indicated the potential for the presence of a high-grade copper-gold core at a depth similar to that seen in some of the giant Asia-Pacific porphyry systems. Unlike Asiamet’s other sites – BKM and BKZ – where it has complete ownership, the firm only holds a 40pc equity interest in Beutong. However, subject to meeting certain expenditure and site-based activity milestones, it will be given the option to increase this to 80pc.
The initial drill is designed to simultaneously test for extensions of copper and gold mineralisation at east Beutong, where previous drilling has intersected both metals, and to get samples for metallurgical test work. This test work will assess the potential for developing a large-scale heap leach mining operation at Beutong to produce copper cathode.
Asiamet also plans to drill up to 4,000m of core in eight holes up to a depth of 750m depending on conditions to provide information on Beutong’s secondary sulphide mineralisation and test its strike and depth potential.
Peter Bird, Asiamet’s chief executive, said: ‘We have been looking forward to the opportunity to daylight the intrinsic value of this asset since it was acquired in 2015 and having recently secured long-term tenure we are now well placed to re-activate drilling and development activities at a time when copper prices are rising and advanced, large-scale projects with excellent nearby infrastructure are scarce.’
‘We look forward to reporting the results of the drilling and metallurgical programmes at Beutong, along with results from Feasibility studies at BKM and further exploration at BKZ and other prospects in the BK district.’
Bird also said he expects to see ‘a significantly enhanced level of interest’ in Asiamet and its activities as the scale and grade of the Beutong deposit becomes more widely recognised. This is an interesting point, and we highlighted last month that interest in Asiamet has begun to increase over the last year, with shares more than doubling. In recent times, most of the firm’s news has been driven by strong updates at its copper-rich BKM asset, which is on the verge of beginning production. This marks Asiamet’s first big step towards becoming a low-cost metal producer at a time where a long-term rise in copper prices seems a safe bet due to a looming deficit in supply as demand grows.
Investors have also warmed to the business’s zinc-rich BKS site, where steady exploration progress is being made. Asiamet deftly navigated a difficult copper environment and boasts strong management and ambitions to increase its asset base beyond its three primary resources in the future. If Bird is right, and investors do start to catch on to the whopping potential on offer at Beutong – Asiamet’s least developed asset – then today’s jump could just be the beginning of a long rise in its share price.
Author: Daniel Flynn
The author of this piece does not hold shares in the company mentioned.