Asiamet Resources : 2021 Annual Report and Financial Statements

2021 Annual Report

For the year ended 31 December 2021

In USD unless otherwise noted

Contents

Company Information ........................................................................................................................................................................ 3

Overview .................................................................................................................................................................................................. 4

2021 Highlights .................................................................................................................................................................................... 4

Chairman's Statement........................................................................................................................................................................ 5

Strategic Report .................................................................................................................................................................................... 8

Overview of Operations .................................................................................................................................................................... 8

Board of Directors ............................................................................................................................................................................. 19

Risk Management Report ............................................................................................................................................................... 24

Stakeholder Engagement Statement ......................................................................................................................................... 27

Corporate Governance Statement .............................................................................................................................................. 29

Directors' Responsibility Statement ........................................................................................................................................... 34

Financial Statements ......................................................................................................................................................................... 35

Consolidated Statement of Financial Position .................................................................................................................. 36

Consolidated Statement of Comprehensive Loss ............................................................................................................ 37

Consolidated Statement of Cash Flows ............................................................................................................................... 38

Consolidated Statement of Changes in Equity ................................................................................................................. 39

Notes to the Consolidated Financial Statements ............................................................................................................. 41

Independent auditor's report .................................................................................................................................................. 75

Sam Quinn, Silvertree Partners LLP 20 North Audley Street

London W1K 6LX

Registered address Thistle House

4 Burnaby Street Hamilton HM12 Bermuda

Independent auditors Crowe UK LLP

2nd Floor, 55 Ludgate Hill London, EC4M 7JW

Company solicitors (UK)

Bird & Bird LLP

12 New Fetter Lane London EC4A 1JP

Nominated advisor RFC Ambrian Limited Level 48, Central Park 152-158 St Georges Terrace Perth WA 6000

Australia

Brokers

Optiva Securities Limited 49 Berkeley Square London W1J 5AZ

Registrars

Computershare Investor Services Plc The Pavilions

Bridgewater Road Bristol BS13 8AE

Overview

Asiamet Resources Limited (the "Company" or "Asiamet") is an emerging mid-tier exploration and development company focused on copper and copper-gold deposits in Indonesia, with its key projects located on the islands of Kalimantan and Sumatra, adjacent to the key growth markets in Asia.

• • The KSK Contract of Work ("KSK CoW") is 100% owned and located in the Kalimantan Volcanic Arc, a highly endowed and prospective region of Kalimantan, Indonesia. The KSK project comprises:

  • o BKM copper project ("BKM Project" or "BKM"):

    Development ready heap-leach Solvent Extraction-Electrowinning ("SX-EW") project. Completed Feasibility Study demonstrates a technically viable and economically robust copper cathode project with significant upside potential for mine life extensions through Resource growth and development of satellite deposits.

  • o BKZ polymetallic project:

    Emerging high-grade polymetallic zinc-lead-silver-gold-copper and copper-silver deposits (800 metres north of the BKM Project).

  • o Exploration portfolio:

    The KSK CoW covers a large and highly prospective area where Asiamet has identified a pipeline of fifteen copper, polymetallic and gold targets including the BKM Project and the BKZ deposit.

• • The Beutong project ("Beutong Project") is 80% owned and is held under an Izin Usaha Pertambangan Operasi Produksi (Operation Production Mining Business Licence) ("IUP-OP") in Aceh Province, Indonesia. The Beutong Project represents a rare opportunity given its key characteristics, that include:

  • o Large high-quality copper-gold porphyry development project located in close proximity of existing infrastructure;

  • o Contained metal in JORC compliant Resources (100% basis) of 2.43Mt Cu, 2.11Moz Au and 20.9Moz Ag; and

  • o Significant Resource expansion and exploration upside potential.

Coupled with its exciting project portfolio, Asiamet has a strong technical and commercial team with extensive experience in South-East Asia and a proven track record of bringing mining projects into production.

2021 Highlights

• • Approval of the key environmental permit (AMDAL) for the BKM Project

• • Completed a capital placing, raising gross proceeds of approximately $14.0 million in February 2021

• • Appointment of Eva Armila Djauhari as Non-Executive Director

• • Appointment of Andrew Neale as General Manager for the BKM Project

• • Termination of the Sale and Purchase Agreement ("SPA") with Aeternum Energy following material breach of the performance obligations as part of the SPA

• • Entered into a Heads of Agreement with PT Delta Dunia Makmur Tbk. to earn up to 51% interest in the KSK CoW by contributing up to $50 million towards the development of the BKM copper mine

• • Commenced a resource extension and exploration drilling program at BKZ and adjacent to the proposed BKM copper mine

Chairman's Statement

2021 Overview

2021 was a solid year of growth for the Company. Notable milestones included raising gross proceeds of $14.0 million through an oversubscribed placement in February 2021, securing PT Delta Dunia Makmur Tbk ("Delta Dunia") as a major shareholder and development partner for the BKM project, obtaining the key environmental permit for BKM, and the appointment of Eva Armila Djauhari to the Board and Andrew Neale as General Manager for the BKM Project.

The period of uncertainty and volatility before and during the initial global pandemic lockdown dissipated and was followed by a strong rebound in global markets commencing at the end of the first lockdown in the UK and continuing throughout 2021 and into 2022. Commodity prices performed strongly due to a significant increase in demand, coupled with supply chain delays and staff shortages due to the ongoing impacts of Covid-19.

At Asiamet, we moved quickly to ensure that business activities were managed and conducted in a manner which continued to provide a safe working environment and enable continuity of operations. Our health and safety policies and procedures were all updated for covid management, including PPE requirements, protocols for testing, isolating and medical treatment and working from home requirements. Staff and contractors were provided with appropriate training and all personal visiting and operating on our sites were updated on the covid protocols as part of health and safety inductions.

Government imposed lockdowns and extensive travel restrictions resulted in many businesses and government departments working at reduced capacity, remotely or from home. The onset of Covid-19 impacted a number of our staff and contractors and certain work was delayed due to travel restrictions. Despite these challenges our team continued to make good progress on project enabling permitting activities and discussions with potential strategic partners.

In January 2021, the Sale and Purchase Agreement ("SPA") with Aeternum was terminated following a material breach of performance obligations under the terms of the SPA.

Following this setback we completed a private placement to raise gross proceeds of $14.0 million (£10 million) in February 2021. The placing was oversubscribed and supported by institutional investors as well as existing shareholders.

In October 2021, we welcomed PT Delta Dunia Makmur Tbk ("Delta Dunia"), a leading mining contractor in Indonesia as a strategic investor and major shareholder in the Company. Delta Dunia acquired a 15.36% interest in the Company and strategic discussions for a BKM project level partnership were quickly advanced to reach a Heads of Agreement, announced in November 2021. The proposed transaction which is subject to satisfaction of conditions precedent enables Delta Dunia to earn up to 51% interest in Indokal Limited which holds the KSK CoW, by contributing up to $50 million towards the development of the BKM copper mine. This transaction and ultimate strategic partnership with Delta Dunia is expected to generate significant value for the Company and allows it to build a strong platform for growth whilst also adding significant commercial and technical experience to the operating teams. The transaction is subject to regulatory and shareholder approval.

BKM and BKZ projects

The BKM Project is a Feasibility Study stage copper project with a production profile of up to 25,000 tonnes per annum over an initial nine-year mine life. The BKM Project lies in a highly mineralised area in Central Kalimantan, Indonesia and has significant scope to add resources and mine life though through the conversion of existing Inferred Resources and new discoveries on identified prospects adjacent to the proposed BKM mine development.

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