ASM - Australian Strategic Materials

[Dona Ferentes]

ASM looking raise $30 million via a placement at $1.73 each. Using Bell Potter, with money going:

• to secure feedstock inventory at the company’s Korean Metals Plant,
• to enable accelerated offtake marketing and strategic partner discussions for its Dubbo Project, and
• to commence works.

 

[mullokintyre]

ASM hit another 52 week low today.
Hard to imagine that earlier this year, it was over 13 bucks.
Just shows that when there is a crazy scramble to get on to a stock, there will just as likely be a crazy scramble to get off it again!
Those instos who plonked down 30mill back at the end of October are either no better judges than the rest of us, or know something we don't
On the plus side, the demand for rare earths and the processing thereof is not going to go away.
I will be looking at plonking some hard earned down for this one if I ever see signs of it bottoming out.
Mick

 

[mullokintyre]

ASM put out another one of those press releases that does not really tell us anything significant.
We knew they had engaged Hyundai to do the design work for the Dubbo project.
This PR just tells us they will be paid in three stages.
Big deal.
Mick

 

[bk1]

They are going to need a few more of those, but you cant ignore sentiment.
REMX etf was up by almost 6% on Friday.
Watching this one...

 

[frugal.rock]

Like NVX, ASM seems to have found it's bottom and is sharply reversing currently.

 

[frugal.rock]

After a pullback, it's off again.
I missed an entry yesty morn.
(I should have actually placed the order Monday night when mentioned elsewhere.)

From here, I'd like to see it supported by a $1.60 pullback test, then push up again before I'd enter.

 

[mullokintyre]

ASM in the news, but not for the reasons investors may have hoped.
From , of all things, ABC News

A billion-dollar mining project will be financially unsustainable unless the company receives more funding, an independent auditor has found.

Key points:​

• A billion-dollar mine is facing an uncertain future, with an auditor warning it needs to receive more funding to continue running
• Over 1,000 jobs depend on the Dubbo Project, which is run by the company Australian Strategic Minerals
• The company says it is in "positive" talks with the government and other potential debt partners

More than 1,000 jobs are riding on the Dubbo Project, a proposed rare earth minerals mine by the company Australian Strategic Minerals (ASM).

An independent audit from PricewaterhouseCoopers (PwC) found the company needed to raise more money in order to continue running.

The company's interim report, which was released this week, found its overall loss increased 38 per cent from June to December 2022.

"The continuing viability of the group and its ability to ... meet its debts and commitments as they fall due are dependent on the group [raising more capital, sourcing new customers, and qualifying for financial support]," the report found.

The Dubbo Project aims to mine rare earth and critical minerals in Toongi, near Dubbo, and export them to Korea.
The company has estimated the construction phase will cost $2.5 billion and employ 1,000 workers, with 270 full-time jobs expected when the mine is up and running.


The Dubbo Project has been in the works for more than 20 years.(Supplied: ASM)
In a statement, a company spokesperson said they were confident it would be able to secure additional funding.

"We continue to undertake positive discussions with potential equity and debt partners, including governments, to source funding to develop Dubbo," the spokesperson said.

"Dubbo is a world-class project with strong financials that will generate great returns for shareholders and opportunities for the Dubbo region."

The report noted the company's loss included $3.5 million from the reduction in Korean raw materials prices.

Supplier competition flagged​

It also noted growing competition from new minerals suppliers, which it said "could adversely impact on financial performance and growth if ASM is unable to adapt".

The Australian Securities Exchange shows the ASM's share price has fallen nearly 83 per cent in the last 12 months.

An analysis by Morningstar Sustainalytics found ASM had a "high" ESG risk rating, meaning the company has a high level of Environmental, Social, and Governance risk.

Professor Tim Harcourt, who interviewed ASM's managing director for an episode of his video series The Airport Economist, said the company had been "leading the charge" into the Korean mineral markets.


Tim Harcourt has a book and a video series called The Airport Economist.(ABC News: Dan Irvine)
"Australian Strategic Minerals in Dubbo is a perfect example; they've been the flagship of the Australia-Korea relationship in recent years, particularly during COVID times," Professor Harcourt said.

"Some of the geopolitical issues in China have really brought South Korea to the fore along with India, Japan, and some of the ASEAN [Association of Southeast Asian Nations] countries.

"I think a lot of exporters in Australia are looking more broadly at the north-east Asian, and south-east Asian markets."

So basically, unless the co gets a big injection of funds , and real soon, it will likely go belly up.
Then, I will bet that a Chinese co will come and buy up the carcass, and the ore will be sent to China instead of Korea.
Mick