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

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

Posted on by Tim Highley

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

Posted on by Tim Highley

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

Posted on by Tim Highley

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.

 

Download the Full Quarterly Report

ASM completes acquisition of Ziron Tech

Posted on by Tim Highley

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

Posted on by Tim Highley

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

Posted on by Tim Highley

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

 

Download the Full Quarterly Report

ASM to acquire 95% of Ziron Tech

Posted on by Tim Highley
Highlights:
  • ASM to acquire a 95% interest in joint venture partner Ziron Technology Corporation (Ziron Tech)
  • ASM to acquire the ownership of all associated intellectual property including patented metal-refining technology
  • Ziron Tech team will continue development of metallisation technology within ASM

ASM has entered into a binding heads of agreement (HOA) to acquire 95% of its joint venture partner Ziron Tech, which owns patented low emission, high purity metal-refining technology. ASM will also acquire the pilot plant constructed in 2020 to confirm the technology.

The patented technology is a more environmentally friendly, sustainable and cost-effective alternative to existing conventional, energy-intensive metallisation processes. The technology has been successfully applied during pilot plant testwork to all major metals found within ASM’s Dubbo Project including zirconium, hafnium, and rare earths for permanent magnet alloys. In addition, it provides an opportunity to expand its business with the production of titanium metal and associated alloys.

Under the HOA ASM will appoint Ziron Tech’s founder, Professor Jonghyeon Lee as Chief Technical Advisor to lead the Ziron Tech team and the continued development of clean metal processing. ASM is progressing negotiations to commence a feasibility study for larger scale development and commercialisation of the plant.

ASM Managing Director, David Woodall said: “Our joint venture and strong relationship with Ziron Tech since 2016 has achieved significant milestones, with the successful production of metals using this clean technology. This agreement marks the start of the next phase of this positive partnership with Ziron Tech as it becomes part of ASM.”

“With Professor Lee and his team on board, we are looking forward to establishing the first commercial scale metal plant in Korea using the technology, which will help meet the growing demand for ASM’s range of high-purity and value-added critical metals used in advanced technologies, including electric vehicles and clean energy,” Mr Woodall said.

Ziron Tech founder and major shareholder, Professor Jonghyeon Lee said: “We are pleased to further formalise our partnership with ASM and become an integral part of the company. The metal production method we have been testing is set to transform the traditional process of metal production, with it being more efficient and environmentally friendly.”

ASM and Ziron Tech expect to finalise the detailed documentation in relation to this transaction by the end of September 2020 and complete the transaction by the end of October 2020.

Read the full ASX announcement

ASM’s results for the financial year ended 30 June 2020

Posted on by Tim Highley

ASM’s results for the financial year ended 30 June 2020 can be downloaded below.

The principal activities during the course of the year were mineral evaluation activities for the Dubbo Project, a large in‐ground resource of zirconium, hafnium, niobium and rare earth elements. ASM’s subsidiaries include Australian Strategic Materials (Holdings) Limited that continues to focus on mineral evaluation activities for the Dubbo Project and Toongi Pastoral Company Pty Ltd that continues to focus on managing the farm activities (breeding and grazing of sheep and cattle) and biodiversity offsets as part of the Dubbo Project activities.

The Dubbo Project is development ready, subject to financing, with the mineral deposit and surrounding land acquired and all major State and Federal approvals in place.

Download the full report

 

ASM