Quarterly Activities Report to 31 March 2020

Highlights

ASM Metals Business

  • Successful production of pre-sintered permanent magnets, with properties and quality confirmed by the Korean Institute of Rare Metals (KIRAM).
  • A 75kg/day run of titanium (Ti) metal powder was successfully produced by Ziron Tech at a pilot scale (metal purity 99.918%, O2 < 300ppm).
  • Quality and significant environmental benefits of high purity titanium powders confirmed by independent 3D-printed metal part producer HANA AMT. Completion of the 5,200tpa Korean Metals Plant (KMP)1 study confirming strong economics
    • Estimated capital: approximately US$35-45 million
    • Estimated annual revenue: approximately US$180-190 million
    • Estimated annual EBITDA: approximately US$45-$50 million
  • Signing of a Memorandum of Understanding (MoU) with the Chungcheongbuk-do (Chungbuk) Provincial Government and Cheongju-si (Cheongju), City Government to locate ASM’s first metals plant (KMP) within the Ochang Foreign Investment Zone in South Korea.
MoU Signing Ceremony with Chungcheongbuk-do Provincial Government and ASM’s David Woodall

Dubbo Project Optimisation

  • South Korean companies identified to progress a build, own, operate (BOO) development for the provision of renewable power, chlor-alkali plant, directly for the Dubbo Project.
  • Progressing opportunities to leverage the full breadth and depth of South Korean manufacturing capabilities to provide valuable support in the development of the Dubbo Project.

Corporate

  • Announced an equity raising to primarily fund the final engineering and construction of the proposed 100% owned KMP, and accelerate the Dubbo Project’s detailed construction design.
  • Executed non-disclosure agreements and advanced discussions with several large South Korean corporations as prospective partners.
  • Continued discussions with potential strategic, and engineering and construction, partners in South Korea to present the potential economic benefits of ASM’s “mine to manufacturing” strategy.
  • Progressing discussions with South Korean Government and financial groups regarding the financing of the Dubbo Project.
  • Advanced discussions and negotiations with South Korean metals manufacturers about titanium, NdFeB, dysprosium and zirconium offtake arrangements.
  • Strategic engagement with key South Korean Government departments (Korean Institute of Technology, KORES and Ministry of Trade and Industry) on the development of the Dubbo Project.

 

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1 Refer to ASX announcement 2 March 2021. The material assumptions underpinning the scoping study continue to apply and have not materially changed

Completion of non-renounceable entitlement offer and shortfall notice

ASM announces the Company’s pro-rata non-renounceable entitlement offer (Entitlement Offer) of new ordinary shares in the Company (New Shares), closed on 16 April 2021 and proceeds of $26,919,096 have been raised pursuant to the Entitlement Offer.

The Company received applications from eligible shareholders for 5,608,145 New Shares at the issue price of $4.80 per New Share, representing an approximate 65.23% take-up. Together with the placement to institutional and sophisticated investors of $65,000,000 (refer ASX release 26 March 2021), the gross proceeds under the capital raising are $91,919,096 (Capital Raising). The placement to institutional and sophisticated investors completed on 6 April 2021.

 

The proceeds of the Capital Raising will be used to provide funding for ASM to focus on advancing key workstreams including engineering and development of the Korean Metals Plant (KMP) and the FEED Study for the Dubbo Project, while also providing additional working capital and funding of corporate costs.

Managing Director, David Woodall stated “This Capital Raising builds on the momentum that ASM has generated through the technical milestones achieved since listing in July last year. The funds raised will cover important work on both the KMP and the Dubbo Project as ASM advances its critical metals strategy.”

The Directors wish to thank shareholders for their continued support of the Company, and again welcome new shareholders who participated in the Capital Raising.

New Shares are expected to be issued on Friday, 23 April 2021, with normal trading of the new shares expected to begin on Monday, 26 April 2021.

ASM maintains the flexibility to place shortfall under the entitlement offer but has made no decision to do so at this stage.

For further information regarding the Offer please contact Company Secretary, Dennis Wilkins, on +61 8 9227 5677 or via email at dennis@dwcorporate.com.

 

Download the ASX Announcement

 

ASM to bolster balance sheet through $65m placement and up to a further $41m through entitlement offer

ASM is pleased to announce that the Company has received firm commitments from sophisticated, professional and institutional investors for the placement of approximately 13.5m fully paid ordinary shares (New Shares) at $4.80 per New Share, raising $65m in gross proceeds (Placement).

Managing Director, David Woodall, commented: “We are delighted to have completed the placement component of this raising from existing and new international and Australian institutional investors. I am very pleased to welcome new shareholders to the Company, who join our register at a truly exciting time as we finalise plans to develop our first metallisation facility in Korea.

The funds raised significantly bolster our balance sheet, placing the Company in a strong position as we progress key workstreams which include the development of the proposed Korean Metals Plant and advancing key FEED workstreams on the Dubbo Project in New South Wales.

Importantly, we continue to advance our strategy for sustainable growth, with a primary focus on developing ASM into a globally relevant, independent and integrated metals producer by 2022.”

Highlights

  • Firm commitments received to raise approximately $65m through Placement at $4.80 per share
  • Strong international and domestic demand, with several high-quality institutions participating in the Placement
  • Funds raised from the Placement significantly strengthens ASM’s existing cash position, with further funds expected to be raised from the Entitlement Offer
  • Proceeds provide funding for ASM to focus on advancing key workstreams including engineering and development of Korean Metals Plant and the FEED Study for the Dubbo Project, while also providing additional working capital and funding of corporate costs
  • 1 for 14 Entitlement Offer will now proceed, at the same pricing as the Placement, to raise up to a further $41m, with some of ASM’s largest shareholders committing to take up approximately 29.4% of entitlements under the Entitlement Offer

The Placement

A total of 13,541,667 New Shares will be issued under the Placement at a price of $4.80 per New Share (Offer Price) under ASM’s ASX Listing Rule 7.1 placement capacity.

New Shares issued under the Placement will rank equally with existing ASM ordinary shares. The Offer Price represents a discount of:

  • 4% to the Company’s last closing price on 23 March 2021 of $4.99; and
    10% to the 5-day volume-weighted average price of $5.35.

Settlement of the Placement is scheduled to occur on Thursday, 1 April 2021.

Entitlement Offer

ASM is also undertaking a 1 for 14 pro-rata non-underwritten, non-renounceable entitlement offer to eligible shareholders to raise up to approximately a further $41m (before costs) (Entitlement Offer).

Eligible shareholders as at the Record Date of Wednesday, 31 March 2021, with a registered address in Australia or New Zealand, will be invited to participate in the Entitlement Offer at the Offer Price (being the same price as the Placement). The Entitlement Offer is expected to open on Wednesday, 7 April 2021, and close at 5pm (Perth time) on Friday, 16 April 2021, unless extended. As the Entitlement Offer is non-renounceable, entitlements will not be tradable or otherwise transferable.

Certain large shareholders (including ASM’s largest shareholder Abbotsleigh Proprietary Limited) who hold a combined voting power of 29.4% have committed to take up their full pro-rata entitlements under the Entitlement Offer, totalling approximately $12m.

The terms and conditions and further details of how to participate in the Entitlement Offer will be set out in the Offer Booklet which is expected to be sent to eligible shareholders on Wednesday, 7 April 2021. The Offer Booklet will include a personalised entitlement and acceptance form. Copies of the Offer Booklet will also be available on the ASX and the Company’s website.

Proceeds from the Placement and Entitlement Offer will be primarily used as follows:

  • To fund the final stage of engineering and construction of ASM’s proposed Korean
    Metals Plant (KMP);
  • Further engineering (FEED) work in relation to the Dubbo Project in NSW;
  • Corporate costs; and
  • Working capital and offer costs.

Timetable

The indicative timetable for the Placement and Entitlement Offer is set out below:

 

Download the ASX Announcement

Download the Equity Raising Presentation

ASM signs MOU with South Korean provincial government for metals plant location

ASM has signed a memorandum of understanding (MoU) with the Chungcheongbuk-do (Chungbuk) Provincial Government and Cheongju-si (Cheongju), City Government to locate its first metals plant (Korean Metals Plant or KMP) within the Ochang Foreign Investment Zone in Korea.

The Chungbuk Provincial Government MoU covers supply of utilities, administrative licenses and permit procedures, including the Korean Standard Industrial Classification code for rare metals and rare earth metals. The MoU also includes a government grant, in accordance with the Foreign Investment Promotion Act.

Chungbuk is located 115km south of the Korean capital, Seoul, and 20km north of Daejeon, the site of the metalisation pilot plant. The region has substantial existing infrastructure and a competent technical workforce.

Provincial Governor Si-Jong Lee said, “To sustain the growth of the Chungcheongbuk-do economy, we strongly support this investment. ASM is establishing its Korean headquarters, R&D centre and metals plant in the Ochang Foreign Investment Zone. This will provide key rare earth metals to the Korean economy and local employment to revitalise our local economy.”

ASM Managing Director, David Woodall, said “This MoU, along with the strong support from the Korean Ministry of Trade, Industry and Energy (MOTIE) and the Chungbuk Provincial Government, provides ASM with confidence to build the metals plant in the Ochang Foreign Investment Zone. With key Korean manufacturing companies like LG Chemical, Samsung SDI, SK Hynix, and Hyundai Mobis within close proximity, we are confident that building our first metal plant in this well established industrial area will provide significant benefits.”

ASM’s Korean Metals Plant will initially produce high-purity neodymium-iron-boron powder and titanium powder using the innovative, low-energy metallisation process developed by ASM’s Ziron Tech team.

Last week, ASM announced it had completed an internal scoping study for the initial 5,200tpa metals plant, with the results demonstrating the feasibility of the Korean Metals Plant (ASX announcement, 2 March 2021).

 

Download the ASX Announcement

Quarterly Activities Report to 31 December 2020

Highlights

ASM Metals Business

  • Completed acquisition of 95% interest in joint venture partner Ziron Technology Corporation (Ziron Tech)
  • Produced 8.6kg of high-purity zirconium metal powder at 98% Zr and 1.5% Hf
  • Korean Atomic Energy Research Institute (KAERI) confirmed de-hafniated zirconium metal meets Korean market requirements
  • Agreement with Dongkuk Refractories & Steel to design, develop, assemble, install and verify a 250kg/day commercial plant
  • Produced 120kg of titanium copper alloy (99.5% purity)
  • Confirmed commercial scalability of the innovative metallisation process
  • Confirmed significant environmental benefits of innovative metal process
  • Produced 200kg of ferro-neodymium (FeNd – Nd 80%, Fe 20%), a key constituent of strip cast permanent magnet alloys
  • Produced 6kg of a neodymium iron boron (NdFeB) magnet alloy at the Korean Institute of Rare Metals (KIRAM) facility
ASM’s Chairman Ian Gandel and Managing Director David Woodall with the successful Ziron Tech team that delivered commercial metal production.

Dubbo Project Optimisation

  • Optimisation Feasibility Study (OFS) on track for completion at the end of Q1 2021
  • Confirmed the simplification of the Zr circuit, with negligible impact on de-hafniated zirconium circuit
  • Independent review of rare earth processing circuit confirmed the validity of the Dubbo Project flow sheet and also identified opportunities for optimisation
  • Optimisation of the flow sheet informed finalisation of the OFS scope, with Hatch proceeding on this basis
  • Mining consultants engaged for OFS mining costs update
  • Utilities, reagents, and consumables quantities have been confirmed, with potential providers invited to quote on supply, capital costs, and delivery
  • Requests for quotations for the supply of the processing plant have been sent to key suppliers, with updated pricing information expected by the end of February 2021
  • Logistics analysis is well advanced with no major issues identified in delivery and export

Corporate

  • Cash position totalled A$ 12.4 M
  • Executed and progressed non-disclosure agreements with large Korean EPC companies during the quarter
  • Executed agreement with Dongkuk Refractories & Steel to complete the design, development, and construction of a commercial metal plant. Detailed engineering is expected in Q2 2021
  • Progressed discussions with potential strategic partners
  • Continued discussions about metal offtake agreements with potential Korean manufactures
  • Continued discussions with key Korean Government departments Korean Institute of Technology, Korean Institute of Rare Metals, Ministry of Trade and Industry.

 

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ASM completes acquisition of Ziron Tech

Highlights

  • Acquisition of a 95% interest in joint venture partner Ziron Tech
  • Acquisition delivers the ownership of all associated intellectual property including patented metal-refining technology
  • Ziron Tech team integrated into ASM

ASM has successfully completed the acquisition of 95% of its joint venture partner Ziron Tech, and through the acquisition now owns Ziron Tech’s patented low emission, high purity metal-refining technology and the pilot plant in Korea.

ASM’s Chairman Ian Gandel and Managing Director David Woodall with ASM’s Ziron Tech Team

ASM Managing Director, David Woodall said: “We welcome the Ziron Tech team to ASM. This talented team, led by Professor Jonghyeon Lee, has successfully produced metal from all products of our Dubbo Project in central west NSW. Having the Ziron Tech team continue the innovative work on a range of high-purity and value-added critical metals used in advanced technologies, including electric vehicles and clean energy, gives ASM a strong foundation for success.

“With the recently announced development of our first commercial metallisation plant in South Korea, the Ziron Tech team is now progressing towards a continuous production process at scale in Korea where there is an established tech manufacturing industry and market for these metals. With the changing dynamics of the critical metals supply chain, ASM is well placed to play a significant role in the global critical metals market, with significant benefits for both Australia and Korea.”

Key terms of the restructured arrangements relating to Ziron Tech are as follows:

  • ASM has acquired 100% of the current joint venture company RMR Tech Corporation (“RMR Tech”) (increased from its previous holding of 10%).
  • RMR Tech has completed the acquisition of 95% of the shares in Ziron Tech.
  • As consideration for the transaction, ASM will in due course:
    • issue 1,306,417 ASM shares for consideration of USD 2 million to current Ziron Tech shareholders (via a holding entity) at an issue price of AUD 2.068 per share based on a 10-trading day VWAP to 2 September 2020 and using an AUD:USD exchange rate of 0.74. These shares will be subject to voluntary escrow for 12 months; and
    • grant existing Ziron Tech shareholders (via a holding entity) a Net Smelter Return of 5% from any global commercial metallisation facility established using the technology, subject to a 50% step-down of the royalty after payments of USD 20 million have been made.
  • The ASM group now owns all of Ziron Tech’s patents and related intellectual property and technology that were the subject of the RMR Tech joint venture, as well as any intellectual property rights or interests that may be developed by Ziron Tech in the future.

 

Read the full ASX Announcement

ASM and Dongkuk sign agreement to construct a 250kg/day commercial plant

Highlights

  • Design, develop, assemble, install and verify a 250kg commercial grade continuous reduction system using the Ziron Tech patented metal-refining technology
  • ASM will retain ownership of intellectual property and commercial rights to the Ziron Tech technology

ASM and Dongkuk Refractory and Steel (DK R&S) have signed a joint development agreement for a 250kg/day metal plant incorporating the innovative and patented low emission, high purity metal-refining technology in Korea to be acquired by ASM through the acquisition of a 95% interest in Zirconium Technology Corporation (Ziron Tech).

ASM Managing Director, David Woodall said, “The agreement with DK R&S brings together the strengths of ASM with its innovative metal technology and DK R&S, a leading innovative manufacturer of metals and refractory products within the Korean and global markets.

“This production facility will prove Ziron Tech’s patented low emission, high purity metal-refining technology at scale, paving the way for a 3,000 to 5,000 tonne per year metal plant in Korea. Our team in Korea is now progressing the confirmation of the continuous commercial metal production process with significant benefits for Korea, Australia, and the global customers that are faced with changing dynamics in the critical metals supply chain.”

Established in 1974, DK R&S, a subsidiary of DKI, has been supplying refractories, fine ceramics, steel manufacture to various industries globally and domestically within Korea for over 46 years. Dongkuk Industries Group was founded as Daewonsa in 1967, and is recognised as a global leader of cold rolled steel, refractories, and tubular wind power towers.

The Dongkuk Industries Group (“DKG”) includes Dongkuk Industries, Dongkuk Refactory and Steel, Dongkuk Structural and Construction, and DK DongShin. The DKG is recognised in Korea for innovation and the development of technology.

Key terms of the ASM and DK R&S Joint Development Agreement for the Commercial Test Plant are as follows:

  • Design, develop, construct, install and verify a 250kg per day commercial grade continuous reduction system
  • 250kg reduction furnace, design, assembly, and verification will be undertaken at facilities operated by DK R&S under the supervision of a temporary Joint Task Force, with the completed furnace jointly owned by ASM and DK R&S
  • The total budget for designing, developing, assembling and installing of the Commercial Test Plant is USD 1 million paid in a 60:40 ratio between DK R&S and ASM
  • Basic and detailed design of the Commercial Test Plant to be complete within four months from the date of the Agreement
  • Ownership of relevant intellectual property is retained by ASM
  • The agreement will terminate if the testing is not successful within 12 months of signing.

ASM is continuing to progress strategic partner, offtake and financing discussions in Korea. The discussions are preliminary and remain incomplete and it is uncertain whether any of these discussions will lead to a proposal for the consideration of ASM’s directors or shareholders.

 

Read the full ASX Announcement

Quarterly Activities Report to 30 September 2020

Highlights

ASM Korean Metals Technology

  • High purity titanium (Ti) metal 20.8kg produced assaying 99.83%
  • Innovative metals process confirms 70% lower energy consumption
  • Ziron Tech optimisation increases metal efficiency by 50%
  • Significant environmental benefits of innovative metal process confirmed
  • Production of 7.6kg of neodymium metal at 99.8% purity
  • Production of 5.3kg praseodymium metal assaying 99.3% purity
  • Production of 9.2kg of titanium metal powder assaying 99.83%
  • Production of 9.0kg of Neodymium Praseodymium (NdPr) alloy assaying 99.65%
  • Production of 7.5kg of heavy rare earth dysprosium metal assaying 99.53%

Optimisation of the Dubbo Project

  • Work completed on initial flotation test work programme to deliver an increased ore feed grade to the solvent extraction plant. The integration of flotation into the proven flowsheet is a key part of targeting a reduction in the capital and operating costs for the development of the Dubbo Project.
  • Production of metals from the Dubbo Project products have confirmed the proven flowsheet.
  • Key products defined as zirconia, dehafniated zirconia for zirconium metal production and hafnium oxide; rare earths in the form of oxides for neodymium, praseodymium, dysprosium and terbium, and niobium.
  • Hatch engineering has been engaged to complete the optimisation study by the end of the first quarter 2021.

Corporate

  • Successful demerger from Alkane Resources Ltd
  • Cash position totalled A$16.5M
  • Acquisition of a 95% interest in joint venture partner Ziron Technology Corporation (Ziron Tech)
  • Ziron Tech acquisition gives ASM ownership of all associated intellectual property including patented metal-refining technology
  • Ziron Tech team will continue development of metallisation technology within ASM

 

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