Asiamet Resources Limited (LON:ARS) is now in a position to attract third-party investment following a feasibility study at its Beruang Kanan Main (BKM) copper project in Indonesia, according to analysts at Liberum Capital.
In a note to clients, the broker said while Asiamet shares have by fallen around 24% since last Friday on the back of increased operating and capital expenditure numbers for the project, this was an “over-reaction” and the project had only formed around a third of their initial 20p per share valuation of the company.
Liberum’s analysts said they view the BKM project as a platform to prove the company’s in-country operational capabilities and ultimately explore what they said was the “target rich” Kalimantan Surya Kencana (KSK) area of Indonesia where numerous outcroppings of high grade copper oxide and a large magnetic anomaly below the BKM project remain untested.
Following the completion of the Feasibility Study, Asiamet is planning to re-engage with interested Asian investors and partners as a priority to progress the next stage of works in the KSK area prior to construction.
The use of this investment would include investigating the value enhancement initiatives highlighted in the Feasibility Study together with exploration at both KSK and at what Liberum said was the “significantly larger” Beutong copper-gold project in Sumatra.
In parallel with this work, the company would look to commence detailed engineering and design for the BKM copper project. At the completion of this work, it would then look to seek funding for the construction of the BKM project.
While Liberum did trim its target price to for Asiamet to 16p from 18p on the back of the reduced valuation for BKM, this was still a 274% premium to its closing price on Tuesday.
In mid-morning trading on Thursday, Asiamet shares were 1.2% higher at 4.2p.