ASM signs Joint Statement of Cooperation on Critical Metals with KOMIR (KORES)

Australian Strategic Materials Limited (ASX: ASM) is pleased to announce that it has signed a Joint Statement of Cooperation with the Korean Mine Rehabilitation and Resource Corporation (KOMIR), the renamed Korean Resources Corporation (KORES), to enable the supply of critical minerals and metals into Korea.

Under the Joint Statement of Cooperation, ASM and KOMIR have agreed to work together to expand the use of rare earths and critical metals in Korea and develop import opportunities that will secure the supply of these metals for Korean industry.

ASM Managing Director, Mr David Woodall, said:

“This builds on the cooperative and collaborative relationship between Korea and ASM, creating further opportunities to engage on the strategic issue of critical minerals and metal supply.”

“This Joint Statement of Cooperation is another firm sign of Korea’s commitment to securing its supply of critical metals and to working with ASM to deliver an outcome that is beneficial to the Korean supply chain.”

“ASM welcomes this opportunity to work with KOMIR to provide an alternative, secure and sustainable supply of critical metals. ASM will commence production of critical metals at ASM’s Korean Metals Plant in 2022.” 

CEO of KOMIR, Kyu-yearn Hwang, said:

“To improve the supply and demand of rare earths in South Korea, the South Korean government supports the operation of South Korean critical metals plants. Partnering with ASM will enable us to deliver on our strategy to ensure a stable, secure supply of critical minerals and metals for the South Korean industry.”

The key areas contemplated for cooperation under the Joint Statement of Cooperation include:

  • Importation of rare-earth products into Korea, including for strategic stockpiling.
  • Supplying ASM with rare-earth products to enable Korean domestic production of rare-earth magnet feed metal at ASM’s Korean Metals Plant.

The term of the Joint Statement of Cooperation is for five years, and the term will automatically extend for an additional one-year period unless the parties agree otherwise.

Under the Joint Statement of Cooperation, both ASM and KOMIR have a right to terminate the agreement on three months written notice to the other party.

KOMIR is the Korean Government Agency responsible for national resource security, including developing overseas mining and processing capacity to supply the Korean market. One of KOMIR’s strategic objectives is to upgrade the country’s access to critical minerals.

 

Download the ASX Announcement

Dubbo Project Optimisation Delivers Strong Financials

Key points

  • Optimisation Work for Dubbo Project confirms a strong expected rate of return with pre-tax NPV of AUD 2,361 million, pre-tax IRR of 23.5%, and annual free cash flow (full ramp-up) of AUD 425 million
  • Capital cost estimate of AUD 1,678 million consisting of direct capital of AUD 1,307 million, indirect capital of AUD 208 million, and a contingency of AUD 163 million
  • Forecast annual operating cost of AUD 287 million
  • Forecast based on 20-year life of mine at 1Mtpa plant feed rate based on existing ore reserves. Measured and Inferred mineral resources, which have the potential to extend the mine life, have been excluded for this study
  • Oxides of zirconium, hafnium, niobium, didymium (i.e. neodymium and praseodymium), dysprosium and terbium to be produced
  • Inclusion of major infrastructure to optimise environmental, social and governance (ESG) performance and deliver operating cost savings

Australian Strategic Materials Ltd (ASX: ASM or the Company) is pleased to confirm strong financial results as an outcome of the Optimisation Study and Enhanced Project Addendum (Optimisation Work) for the Dubbo Project (Dubbo Project). The Optimisation Study was based on Alkane Resources Ltd’s optimisation study released to the market in 2018 (ALK: ASX Release 4 June 18 Dubbo Project Engineering and Financials Update) (2018 ASX Release). A summary of the outcomes of the Optimisation Work is included at the end of the ASX announcement entitled Dubbo Project: Project Summary (Project Summary).

The revised financials are based only on the initial ore reserve of 18.9 Mt. Substantial additional measured and inferred mineral resources beneath the ore reserve are excluded from this study.

The Optimisation Work simplifies the Dubbo Project process flow sheet and incorporates new operating strategies that will reduce operating costs and improve the ESG performance of the Dubbo Project. These strategies now include increasing the brine concentrator capacity (halving water consumption), refurbishment of the railway line (which simplifies project logistics and will provide new categories of local entry-level jobs) and development of a chlor-alkali plant (which reduces the cost of reagents and their handling and transportation). These strategies facilitate ESG benefits by reducing water consumption, reducing the handling and quantum of process chemicals, and reducing the number of trucks on local roads, required for the Dubbo Project.

The updated Dubbo Project base case for the 20-year life of mine is expected to achieve a pre-tax NPV of AUD 2,361 million and a pre-tax project internal rate of return of 23.5%. This is a pre-tax IRR improvement of 6.0% compared to the 2018 ASX Release.

ASM Managing Director David Woodall said, “I am delighted with the outcomes of the Optimisation Work which demonstrates the financial strength of the Dubbo Project and ASM’s focus on a sustainable future delivering improved performance and ESG outcomes.”

ASM