- Australian Strategic Materials (ASM) continued making strong progress at its Dubbo project and Korean Metals Plant (KMP)
- Korean investors completed due diligence on the NSW-based Dubbo project and a deal was signed with Hyundai Engineering Corporation (HEC) for a FEED and EPC contract
- ASM also received an expression of interest from the Korea Trade Insurance Corporation to potentially fund the development of the Dubbo project
- Despite COVID disruptions, phase one commissioning activities progressed at the KMP with work to continue throughout the year ahead of phase two activities in 2023
- ASM are trading 1.59 per cent higher at $6.39
Australian Strategic Materials (ASM) spent the first quarter of 2022 advancing its business goals.
The key focuses during the period were the Dubbo project in New South Wales and the Korean Metals Plant in Ochang, South Korea.
In January, a group of South Korean investors completed due diligence on the Dubbo project which is being developed to be a key global supplier of specialty metals and rare earths which are in high demand for clean energy and transportation.
Since then, ASM has been in discussions with the investors regarding a potential binding agreement.
Another important step was signing a deal with Hyundai Engineering Corporation (HEC) for a front-end engineering and design (FEED) and engineering, procurement and construction (EPC) contract for the project.
At this stage, the company expects to award the FEED and EPC contracts mid-way through this year with the delivery anticipated for mid-2023.
The company said the partnership with HEC will help it to successfully deliver the Dubbo project.
In regards to finances, ASM received an expression of interest from the Korea Trade Insurance Corporation (K-Sure) to potentially provide export credit insurance support to fund the development of the Dubbo project.
Korean Metals Plant
Despite experiencing COVID-19 disruptions, the buildings and facilities at the Korean Metals Plant (KMP) were completed during the March quarter and a plant registration certificate was received in early April.
Australian Strategic Materials progressed the installation and commissioning of the first
phase of the KMP which is planned to have an installed capacity of 2200 tonnes per annum.
The plant will initially produce neodymium and copper-titanium metal with production of key magnet alloys expected in the September quarter after the completion of the strip caster commissioning.
Managing Director David Woodall said he was “immensely proud of the team in Korea who have worked hard and with dedication to deliver this outstanding facility.”
“The impact of COVID-19 on staffing and the delivery of equipment and materials to the plant resulted in delays to both construction and production. Given these challenges, it is a significant accomplishment and credit to the team that we have achieved this stage of the plant’s construction and the new administration facility within nine months,” Mr Woodall said.
In the second half of 2022, phase one optimisation and ramp-up is planned and will align with the securing of customer sales contracts. Phase two is expected to commence next year with an installed capacity of 5200 tonnes per annum.
ASM spent $8.2 million on operating activities which mainly went towards staff and admin costs. A further $5.4 million went towards investing activities such as property, plant and equipment, and exploration an evaluation at Dubbo.
By the end of the quarter, the materials stock had $43.3 million in cash and an estimated 4.5 quarters left of available funding.
ASM shares were up 1.59 per cent to trade at $6.39 at 11:40 am AEST.