PT Wasesa Indo Nusa (PT WIN), currently a private Indonesian shell company, is to acquire Asiamet’s wholly-owned subsidiary company Indokal, which holds the Kalimantan Surya Kencana (KSK) Contract of Work which in turn hosts the BKM project.
It will be a phased transaction with an aggregate deal consideration of US$163.5mln.
At first, US$10mln of cash will be paid to Asiamet upon execution of a binding sale agreement. The next US$40mln of cash will come as PT WIN completes an intended stock market IPO onto the Indonesian Stock Exchange in early 2021.
Asiamet will then subsequently receive PT WIN shares equating to 22.5% of the company, in two tranches.
It is agreed that Asiamet will continue to manage the project over a twelve-month period, under a management services contract.
"The Asiamet Board fully endorses and supports this transaction,” said Tony Manini, Asiamet executive chairman in a statement.
“While it is recognised that there are still a number of steps to completion, the proposed transaction has the potential to unlock very significant unrecognised value for Asiamet shareholders and most importantly secures a clear road map for the funding and development of the BKM copper project and the further advancement of the wider KSK CoW for the benefit of all stakeholders.
“Asiamet will retain a very meaningful exposure to the upside at BKM and KSK and continue to manage all the value enhancement and development related activities currently in progress," he added.
The transaction remains subject to commercial and financial due diligence by both parties. It also requires approval by the Indonesian government, as well as Asiamet’s shareholders.
Due diligence work is slated to take around 30 days but the company noted that coronavirus (COVID-19) restrictions may see the timeline vary.
PT WIN is at the same time acquiring Aeturnum Energy International PTE, a commodities trading business that owns a 19.9% shareholding in Asiamet.
The planned IPO has been projected to seal an equity value of around US$500mln for the whole company.
Shares in PT WIN issued to Asiamet will be subject to lock-up restrictions for 12 months. Thereafter, the AIM-quoted company can sell up to 50% of its shareholding over the course of any 12 month period.
It will receive a stake of around 10.7% as PT WIN begins its listing on the IDX, and, will be due a further 11.8% when PT WIN releases a mineral resource statement containing at least 400,000 tonnes of copper in a JORC compliant mineral resources and exploration target.
Nonetheless, the company said it intends to retain its shareholding and continue to work with PT WIN on the development of the BKM Project, whilst retaining flexibility to re-evaluate its position at any time.
Beruang Kanan Main (BKM) is located northwest of Palangkaraya, the regional capital of Central Kalimantan, and it is part of the Kalimantan Surya Kencana (KSK) district projects
At the end of 2019, Asiamet said BKM boasted an ore reserve of 21.1mln tonnes grading 0.6% copper in the proven category, and 30.4mln tonnes grading 0.5% copper in the probable category.
A subsequent feasibility study highlighted the operating parameters of a potential mine at BKM, including an initial nine year production run producing 25,000 tonnes of copper cathode per year, to generate revenue of US$1.27bn.
The company has also worked on four strategic targets in close proximity to the BKM copper project to further add life through satellite discoveries.