Asiamet Resources : 2023 Annual Report and Financial Statements

2023 Annual Report

For the year ended 31 December 2023

In USD unless otherwise noted

Contents
Company Information	3
Overview	4
2023 Highlights	5
Chairman's Statement	6
Chief Executive Officer's Statement	9
Strategic Report	11
Overview of Operations	11
Board of Directors	22
Directors' Report	24
Risk Management Report	27
Stakeholder Engagement Statement	30
Corporate Governance Statement	32
Directors' Responsibility Statement	38
Financial Statements	39
Consolidated Statement of Financial Position	40
Consolidated Statement of Comprehensive Loss	41
Consolidated Statement of Cash Flows	42
Consolidated Statement of Changes in Equity	43
Notes to the Consolidated Financial Statements	45
Independent auditor's report	71

Company Information

Directors
Antony (Tony) Manini	Director, Executive Chairman
Dominic Heaton	Non-Executive Director
Peter Chambers	Non-Executive Director
Matthew Doube	Non-Executive Director
Feng (Bruce) Sheng	Non-Executive Director
Eva Armila Djauhari	Non-Executive Director
Chief Executive Officer
Darryn McClelland

Corporate office

7th Floor, Gedung Graha Simatupang Tower Block 1D, Jl. TB. Simatupang Kav.38 Jakarta 12540, Indonesia

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

Strand Hanson Limited

26 Mount Row

London W1K 3SQ

Brokers

Optiva Securities Limited

7 Harp Lane

London EC3R 7DP

Registrars

Computershare Investor Services Plc

The Pavilions

Bridgewater Road

Bristol BS13 8AE

Asiamet Resources | 2023 annual report | 3

Overview

Asiamet Resources Limited ("Asiamet" or the "Company") 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. Indonesia itself is projected to see GDP growth of 4.7% to 5.5% in 2024 (Bank Indonesia), making it one of the fastest growing economies in the region and an excellent location to develop natural resources.

The Company holds two assets in its portfolio:

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

1. BKM copper project ("BKM Project" or "BKM"):
   Development ready heap-leach Solvent Extraction-Electrowinning("SX-EW") project. An updated Feasibility Study was completed during the year demonstrating a technically viable and economically robust copper cathode project with significant upside potential.

1. BKZ polymetallic project:

Emerging high-grade polymetallic zinc-lead-silver-gold-copper and copper-silver deposits (800 metres north of the BKM Project). BKZ contains JORC compliant resources of Lead, Zinc and Copper.

• 1. 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.
     Specifically, the drilling programme at BKZ has identified "Exploration Targets" for the Upper Zinc Zone,
     Lower Copper Zone and new Precious Metals (Gold/Silver) zone.
• 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:
• 1. Large high-qualitycopper-gold porphyry development project located in close proximity of existing infrastructure;

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

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2023 Highlights

• Memorandum of Understanding signed with BGRIMM Group in relation to engineering and procurement for the Solvent Extraction and Electrowinning (SX-EW) plant.
• Updated Ore Reserve statement issued on 10 May 2023 for BKM delivered the following: o 19.0Mt @ 0.7% Cu for 137kt contained copper in the Proved Reserve Category.
  o 21.8Mt @ 0.6% Cu for 135kt contained copper in the Probable Reserve Category; and
  o 40.8Mt @ 0.7% Cu for 272kt of contained copper in the Proved and Probable Reserve Category.
• Updated Feasibility Study on the BKM project demonstrating a technically viable and economic robust copper project with:

• 1. An initial 9.2-year life of mine and 19.6ktpa of copper cathode production o Life of Mine ("LOM") revenues of $1.4 billion and EBITDA of $655.3 million.
     o Capital cost of $208.7 million (excluding growth and contingency $26.7 million) o Post tax NPV8 $162.8 million, IRR 21% (post tax excluding closure costs)
     o Payback Period 3.4 years
     o C1 cash cost of $1.91/lb and AISC of $2.25/lb
• Appointment of corporate advisors, Grant Samuel Corporate Finance to support the BKM project finance process and China Zenith Capital Limited to assist with China sourced funding including offtake, equipment finance, project construction and strategic sourcing relating to finance.
• Appointment of Non-Executive Directors, Matthew Doube, based in Singapore and Peter Chambers, based in Jakarta as representatives of major shareholder PT Delta Dunia Makmur Tbk.
• Completed a capital placing, raising gross proceeds of approximately $4.0 million with PT Delta Dunia Makmur Tbk. in November 2023.

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Chairman's Statement

2023 Overview

I am pleased to report on our progress for 2023 which was a pivotal year for the Company. Notable achievements included full updates of both the BKM Copper Project Mineral Reserve statement and Feasibility Study ("BKM Feasibility Study"), continued progress towards the final forestry permit, the appointments of Matthew Doube and Peter Chambers as Non-Executive Directors and a capital raising of $4.0 million (gross) through a placement to our major shareholder, PT Delta Dunia Makmur Tbk in November 2023.

The year started with strong commodity prices due to a significant increase in demand, coupled with the anticipation of strong economic growth, particularly in China, post the pandemic. In January 2023 copper prices touched a year-high of $9,037/tonne before tailing off to close 2023 at $8,608/tonne. Continued supply disruptions, a lack of new copper mine developments and the closure of First Quantum Minerals largescale c.600ktpa Cobre Panama copper mine has elevated the copper price targets of many commodity analysts. The $160 billion per annum global copper market (the largest base metal market), a key pillar of global energy transition and decarbonisation efforts, is now considered to be moving towards a moving towards a structural deficit with demand growth out pacing new supply.

During the year the Company achieved excellent safety standards across all parts of its business. For the first half, Company activities were predominantly focussed on working with our selected team of expert consultants to deliver key workstreams and associated studies for the update of the BKM Feasibility Study. Simultaneously, we advanced project financing initiatives for the development of the BKM Project with both debt and equity providers and potential off-take partners. This included the selection of a bank endorsed independent technical expert ("ITE") as well as working with the ITE to ensure that the BKM Feasibility Study satisfactorily covered the key requirements of potential debt financiers.

BKM Feasibility Study

The BKM Project is a feasibility-study stage mine development project with a production profile of up to 20,000 tonnes of copper per annum over an initial 10 year operating life. The Project lies in a highly mineralised district on the Company's KSK Contract of Work ("KSK CoW") in Central Kalimantan, Indonesia, with significant scope to extend mine life.

In May 2023, the Company announced an updated Feasibility Study for the BKM Project which confirmed a technically viable and economically robust Copper Project. The updated BKM Feasibility Study is a major milestone for the Company and positions it favourably given the scarcity of development ready copper projects globally. The Study focussed on a smaller footprint, high grade initial Project with reduced environmental disturbance while also providing for significant opportunities for mine life extensions through the conversion of existing inferred resources and new discoveries on identified prospects.

The BKM Project is considered a starter project for the wider Beruang Kanan district on the KSK CoW, which to date remains very underexplored. There is significant potential for further resource growth through expansions of existing deposits and new discoveries.

Directly to the north of the BKM project lies the BKZ deposit where we completed a drilling program and an updated mineral resource estimate in 2022. BKZ is a new high-gradezinc-lead-copper-gold-silver deposit discovery located 800 meters north of the BKM deposit and forms part of the same +3km mineralized system.

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Beutong Project

The Beutong Project in Aceh province, Indonesia is a large, high-quality porphyry copper-gold-molybdenum deposit which benefits from proximity to infrastructure and remains a key asset in the Company's portfolio. In 2024, the Company will continue to increase its community engagement at Beutong and subject to market conditions and evaluate known extensions of the resource and conduct metallurgical test work to better understand development options for the Beutong Project.

Corporate Governance

At a Corporate level, the Board was strengthened with the appointments of Matthew Doube and Peter Chambers. Both Matthew and Peter bring significant mining development and financial-commercial expertise to the Company as it transitions from exploration into the development stage.

Long serving directors, Faldi Ismail and Peter Pollard, both retired from the Board. Faldi served the Company for 14 years, including as CEO of the predecessor Company Kalimantan Gold, and as a Non-Executive Director since 2015. Similarly, Peter has made significant contributions to the Company over an extended period as a Non- Executive Director and also Chairman of the Audit Committee. The Company thanks them both for their service and wishes them well with their future endeavours.

As the Company moves into project finance and transitions to a mine development Company, it will continue to evolve its Board and grow its senior management, finance and operations teams.

Outlook

At the time of writing this report, many of the major economies have committed to large infrastructure development programmes focussed on decarbonisation through the transition to renewable energy and electrification of the transport and industry.

Copper as a critically important metal for the global energy transition is expected to be a major beneficiary of these policies and significant additional new supply is required at a time when global copper production, constrained by prolonged underinvestment in exploration and new mine development, is struggling to meet existing demand. In addition, supply is continuing to be constrained by large mine disruptions and closures. Most commodity analysts are forecasting a widening gap between supply and demand in the near term and a prolonged period of stronger copper prices to support the new development in supply needed.

Indonesia as an investment destination continues to consolidate its position as a mining powerhouse. The country has attracted very significant foreign investment in its nickel mining and metal processing industries with over $30 billion of investment commitments received for mining and battery metal production over the past five years. Multiple large-scale process facilities have been built and several others in the advanced construction stage.

With our portfolio of development ready and advanced stage copper assets in Indonesia, the Company is very well positioned to benefit from a sustained period of stronger copper prices driven by the energy transition.

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Acknowledgements

I would like to extend my gratitude to our shareholders for their continued support over the past year and look forward to reporting further on our progress during 2024.

As a final note, I thank our employees, consultants and contractors for their contributions to the Company over the past year and express my sincere gratitude to all our stakeholders in Indonesia and internationally for their ongoing support. It is much appreciated.

Tony Manini

Executive Chairman

Asiamet Resources | 2023 annual report | 8

Chief Executive Officer's Statement

2023 Overview

I am pleased to report on our progress during 2023. During the first half of the year, we finalised the updated BKM Copper Project Feasibility Study which we delivered in May along with the supporting updated Ore Reserve.

The BKM Feasibility Study demonstrates a technically and financially robust copper project and I am pleased to that the technical work has been performed to a high standard at a time of industry wide capital and operating cost inflation which provided a challenging time for accurate cost estimation. The BKM copper project delivered a strong production profile and good initial mine life with significant upside for extension.

Completion of the BKM Feasibility Study triggered several workstreams relating to project finance and we have been working with our advisers on the optimal funding package for the project. We are fortunate that the delivery of the BKM Feasibility Study happened at a time when there are few new copper mines coming online across the world and less so in the Asian region, hence we have seen significant interest in our project.

In parallel, we also progressed our forestry permit which is the last key permit required for BKM's development. We continue to work with all stakeholders on successful conclusion of all elements required for issuance of the permit.

Sustainability

From a sustainability perspective, I am proud to report that the Company completed its first ESG Materiality Assessment as part of the development of the BKM Feasibility Study. The assessment was completed by ERM Consulting as part of a broader body of work on ESG requirements for the Company. This work represents the first detailed assessment of ESG materiality issues related to the business and has outlined a series of programmes and initiatives on which the company can commit to as we move beyond the exploration/studies into development, construction and operation of our first mine. It was particularly pleasing to advance the viability of biomass as the source of energy for electricity production for the BKM Copper Project.

The Company continues its commitment to social development initiatives in and around the KSK CoW through its long-standing partnership with the Yayasan Tambuhak Sinta ("YTS") foundation, a highly respected organisation which has attracted funding from a range of donor agencies including the World Bank and other international Non-Governmental Organisations.

The YTS foundation supports capacity building, education and agricultural initiatives designed to help deliver tangible benefits to the lives of the local Dayak communities while simultaneously developing a broader awareness of mining in preparation for project construction and operations.

In the case of Beutong, in 2024 we will continue to increase our levels of community engagement in the immediate project area.

Financing

Upon release of the BKM Copper Project Feasibility Study, the Company engaged an Independent Technical Engineer ("ITE") for the purpose of thoroughly reviewing the study's compliance to various project standards on behalf of a potential project financing partner. This work concluded that the study had been completed to a high standard although several key items were identified and required some additional work during progression of project financing. Engagement with a potential project finance lead was advanced by year end with an updated, detailed project financing model close to being finalised and several items referenced in the ITE report as needing further work or clarification also completed.

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With respect to financing Company operations, the Company completed a further follow-on placement of $4.0 million (£2.649 million) with PT Delta Dunia Makmur Tbk. in November 2023, increasing its stake to 34.5% in the Company. This investment enables Asiamet to continue to advance the BKM copper project through the next stages of financing and engineering work streams.

Acknowledgements

I would like to take this opportunity to thank our shareholders for their patience and continued support during this exciting time in the Company's development and look forward to reporting on our progress during 2024. The Company's asset base, founded on significant copper resources strategically located in one of the world's strongest economies will be appreciated by all stakeholders as the search for copper intensifies over the next 3 to 5 years from the world's progression to a more electrified economy.

Darryn McClelland

Chief Executive Officer

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