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Corporate Spotlight

Aspire Mining Limited is an ASX listed (ASX: AKM) 100% metallurgical coal and rail company focused on developing world class premium coking coal deposits in Mongolia to deliver long term shareholder returns, and contributing to the social and economic enrichment of local communities.
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INTERVIEW WITH DAVID PAULL

MR TSERENPUNTSAG

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Additional Undertakings from Mr Tserenpuntsag 

ASX Announcement 11 November 2019 


Highlights

  • Commitment by Mr Tserenpuntsag to exercise all his 153.3 million 1.8¢ options to raise an additional $2.75 million for Aspire, subject to Shareholder approval at the AGM. 
  • Commitment by Mr Tserenpuntsag to maintain at least two Independent Directors on the Aspire Board to represent the interests of minority Shareholders, in the event the $33.5 million placement to Mr Tserenpuntsag is approved at the AGM.


Leading pure-play metallurgical coal project developer, Aspire Mining Limited (ASX: AKM, Aspire or the Company), is pleased to advise that it has received additional commitments from major shareholder Mr Tserenpuntsag in connection with his proposed $33.5 million equity investment in the Company.


Commitment to Exercise Options 

Mr Tserenpuntsag has provided a commitment to the Company to exercise his holding of 153.3 million 1.8¢ listed options, which are due to expire on 11 December 2019, subject to shareholders approving the exercise of these options at the upcoming AGM on 29 November 2019. The 1.8¢ exercise price is approximately 50% above the current share price of 1.2¢ and represents further evidence of Mr Tserenpuntsag’s ongoing financial support to the Company.


Exercise of these options will raise an additional $2.75 million which, when combined with the proposed $33.5 million placement of 1,595.9 million shares at 2.1c per share, will result in a total investment by Mr Tserenpuntsag in Aspire of $36.25 million. In the event that the proposed placement to Mr Tserenpuntsag is approved and no other options are exercised, Mr Tserenpuntsag’s shareholding in Aspire will be 52.5% post-placement and options exercise.


Commitment to Maintain Independent Directors 

Since the announcement of the proposed placement with Mr Tserenpuntsag on 6 September 2019, the Company has engaged with shareholders regarding the extent of minority Shareholder representation on the Company’s Board.


The Subscription Agreement with Mr Tserenpuntsag noted that if the proposed placement to Mr Tserenpuntsag completed, the Board of Aspire would be reduced to five Directors including two Directors nominated by Mr Tserenpuntsag. Mr Tserenpuntsag provided a commitment to maintain this Board structure for at least six months post completion of the placement. However, no assurances were provided regarding the structure of the Company’s board after the expiry of this six-month period.


In order to ensure ongoing fair representation for minority Shareholders, Aspire has engaged further with Mr Tserenpuntsag, culminating in Mr Tserenpuntsag agreeing to provide additional commitments with regards to the Company’s Board as follows: 


  • In the event that one or more of existing Directors Mr David Paull, Mr Neil Lithgow and/or Ms Hannah Badennach resign or are otherwise removed from the Board, the Company will promptly appoint a replacement Independent Director (in accordance with the ASX Corporate Governance Principles and Recommendations) to represent the interest of minority Shareholders so as to ensure there is at all times a minimum of at least two Directors who are not aligned with Mr Tserenpuntsag. For these purposes, any Director nominated by Noble Group is to be counted towards meeting this minimum number of Directors appointed to represent the interests of minority Shareholders. 
  • If additional Directors are required to be appointed to represent the interests of minority Shareholders, Aspire is to appoint a reputable Australian executive recruitment firm to provide a shortlist of potential candidates. Any Director aligned with or nominated by Mr Tserenpuntsag will not participate in any decisions to select and appoint the relevant candidate(s).


Mr Tserenpuntsag has confirmed that Noble will maintain a right to nominate a Director to the Company’s Board for so long as it holds more than 9.9% of the issued capital of Aspire.


Aspire’s Executive Chairman David Paull commented: “These two additional clarifications of intent from Mr Tserenpuntsag demonstrate the extent of his commitment to support Aspire to realise the substantial value present in the Company’s Ovoot coking coal project for all of the Company’s shareholders. Having an invested Mongolian partner to help achieve our ambition of delivering substantial value for all shareholders is paramount and we are delighted with the ongoing support provided by our largest shareholder, Mr Tserenpuntsag.” 


No change to Conclusions of the Independent Expert’s Report 

These additional commitments from Mr Tserenpuntsag, together with the Updated OEDP PreFeasibility Study results released to ASX earlier today, have been provided to the Independent Expert, BDO Corporate Finance (WA) Pty Ltd (BDO), to determine whether these developments would have any impact upon their opinion of the merits of the proposed share placement to Mr Tserenpuntsag that is to be considered by Aspire shareholders at the upcoming 2019 AGM. 


BDO have confirmed that notwithstanding this new information, their opinion remains unchanged and that the proposed share placement to Mr Tserenpuntsag is “not fair but reasonable” to Aspire shareholders in the absence of a superior offer.


Click here to view the full announcement

EXTENDED CASE UPDATE

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Ovoot Early Development Plan (OEDP) Extended Case Update to Pre-Feasibility Study (PFS) Mine Plan and Costs 

ASX Announcement 11 November 2019 


Highlights

The updated OEDP PFS Extended Case delivers improved financial outcomes: 

  • Recent mining contractor quoted rates have reduced mine gate costs pertonne by 19% from US$32.80\t down to US$26.40\t over the life of mine. 
  • Lower mining costs and deferred capitalised waste removal delivers a 34% reduction in the required up-front capital investment from US$47 million down to US$31 million. 
  • Logistics costs based on current contractor quotes essentially re-confirm cost estimates provided in the PFS. 
  • C1 cash costs fall from US$83\t to US$76\t for coal delivered to the China border. 
  • The combination of the above amendments increases the OEDP’s pre-tax NPV10 to US$878 million, a rise of US$120 million with all other assumptions remaining constant. The pre-tax internal rate of return increases to 49.4%.1 
  • Aspire shareholders to vote on A$33.5 million share placement to the Company’s largest shareholder, Mr Tserenpuntsag, in Perth on 29 November 2019. Independent expert BDO has concluded that the placement “not fair but reasonable” to shareholders and the Non-Aligned Directors2 continue to unanimously recommend that shareholders support the Placement to Mr. Tserenpunstag in the absence of a superior proposal.


Leading pure-play metallurgical coal project developer, Aspire Mining Limited (ASX: AKM, the Company or Aspire), is pleased to provide mine plan and cost updates for the Ovoot Early Development Plan (OEDP) Extended Case and an updated and re-stated OEDP Pre-Feasibility Study (PFS). 


The OEDP PFS was undertaken by the Company and its lead PFS consultant, FMS LLC (FMS) and reported in the 28 February 2019 and 1 March 2019 announcements. The OEDP PFS included a Base Case and an Extended Case with a longer mine life.


The PFS Update to the PFS Extended Case has been undertaken by the Company and reflects recently received mining contractor cost quotes, a review of logistic cost estimates and a revised mine schedule. As announced on 28 February 2019 and 1 March 2019, the OEDP Extended Case involves mining a relatively low ash, low strip ratio and high yielding “fat” coking coal from a starter pit that sits within the existing 255Mt Ovoot JORC ore reserve (Ovoot Project Reserves3 ). The OEDP Extended Case open pit utilises a 53.8Mt JORC ore reserve (OEDP Reserve4 ) carve out from the Ovoot Project Reserves and supports a 12.5 year mine life.


Up to 4 million tonnes per annum (Mtpa) of coking coal is to be delivered via a 560km special purpose haul road to be constructed to connect to a rail head at Erdenet. The coal will then be delivered on the Mongolian rail network that has confirmed the 4Mtpa available capacity for the OEDP coal through to the Mongolian/China border crossing of Erlian to Chinese end customers.


As previously announced, advancement of the OEDP remains subject to receipt of the necessary approvals to complete the Definitive Feasibility Study (DFS) and proceed to construction and mining. The DFS continues to be delayed due to continuing delays in receiving these necessary approvals from the local community level to complete infill and other technical drilling required to complete the DFS. Notwithstanding these ongoing delays, the Company is progressing with other components of the DFS including updating mining costs, the mine schedule and logistics costs.


Click here to view the full announcement

UPDATE TO PFS

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Ovoot Early Development Plan (OEDP) Extended Case Update to Pre-Feasibility Study (PFS) Mine Plan and Costs 

ASX Announcement 7 November 2019 


Highlights

The updated OEDP PFS Extended Case delivers improved financial outcomes: 


  • Recent mining contractor quoted rates have reduced mine gate costs per tonne by 19% from US$32.80\t down to US$26.40\t over the life of mine. 
  • Lower mining costs and deferred capitalised waste removal delivers a 34% reduction in the required up-front capital investment from US$47 million down to US$31 million. 
  • Logistics costs based on current contractor quotes essentially re-confirm cost estimates provided in the PFS. 
  • C1 cash costs fall from US$83\t to US$76\t for coal delivered to the China border. 
  • The combination of the above amendments increases the OEDP’s pre-tax NPV10 to US$878 million, a rise of US$120 million with all other assumptions remaining constant. The pre-tax internal rate of return increases to 49.4%.1 
  • Aspire shareholders to vote on A$33.5 million share placement to the Company’s largest shareholder, Mr Tserenpuntsag, in Perth on 29 November 2019. Independent expert BDO has concluded that the placement “not fair but reasonable” to shareholders and the Non-Aligned Directors 2 continue to unanimously recommend that shareholders support the Placement to Mr. Tserenpunstag in the absence of a superior proposal.


Leading pure-play metallurgical coal project developer, Aspire Mining Limited (ASX: AKM, the Company or Aspire), is pleased to provide mine plan and cost updates for the Ovoot Early Development Plan (OEDP) Extended Case.


As announced on 28 February 2019 and 1 March 2019, the Company received the results of a PFS for the first-stage Ovoot Early Development Plan by first constructing a haul road able to deliver up to 4 million tonnes per annum (Mtpa) of coking coal to the nearest rail head at Erdenet.


As previously announced, delivery of the OEDP remains subject to receipt of the necessary approvals to complete the Definitive Feasibility Study (DFS) and proceed to construction and mining. The DFS continues to be delayed due to continuing delays in receiving these necessary approvals from the local community level to complete infill and other technical drilling required to complete the DFS. Notwithstanding these ongoing delays, the Company is progressing with other components of the DFS including updating mining costs, the mine schedule and logistics costs.


Click here to view the full announcement

BOARD

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BOARD OF DIRECTORS & MANAGEMENT


The Board and Management Team has a combination of resource management, exploration, project acquisitions, financial and corporate experience with a successful background in identifying and developing  world class resource assets.


Mr David Paull
Managing Director and Chair

Mr Paull has over 25 years’ experience in resource business development and industrial minerals marketing.  Over the last eight years David has been the Managing Director of Aspire.  David holds a Bachelor of Commerce from the University of Western Australia and a Master of Business Administration with Distinction from Cornell University New York.  He is a fellow of the Financial Services Institute of Australia.


Mr Gan-Ochir Zunduisuren
Executive Director

Mr Zunduisuren has over 15 years of experience in mineral resource sector including zinc, gold mining, coal exploration and resource project development in Mongolia and Canada. Mr. Zunduisuren is General Director of GZ Capital LLC, a mineral resource focused investment and advisory firm and was a key part of the syndicate that made the Ovoot Coking Coal project discovery.

Mr Zunduisuren has a Degree in Mining Engineering from the Mongolian University of Science and Technology and a MSc in Global Finance from NYU Stern School of Business and HKUST.

Mr Zunduisuren has had no other public company directorships in the last three years.


Mr Boldbaatar Bat-Amgalan
Executive Director

Mr Boldbaatar Bat-Amgalan has had senior roles in public relations and publishing and was previously a director of Erdenet Mining Company. He also previously held senior roles in the Government of Mongolia, including the State Secretary for the Ministry of Foreign Affairs, and Chairman of the Communication Regulatory Commission.


Mr Neil Lithgow
Non-Executive Director

Mr Lithgow has over 25 years’ experience in mineral exploration, mineral economics and mining feasibility studies, covering base metals, coal, iron ore and gold.  Mr Lithgow has previously worked for Aquila Resources Limited and Eagle Mining Corporation NL.

Mr Lithgow is a founder and a Non-Executive Director of Bauxite Resources Limited.  Neil is a member of the Australian Institute of Mining and Metallurgy and the Financial Services Institute of Australia.


Ms Hannah Badenach
Non-Executive Director

Ms Badenach holds a Bachelor of Laws (Hons) and a Bachelor of Arts from the University of Tasmania. She currently acts as Vice President of Asset Development & Operations at Noble Resources Limited, a subsidiary of the Noble Group (SGX: N21).

Ms Badenach has considerable experience in management and development within Mongolia. Her previous roles have included practising law for several years in Asia, including two years in Mongolia with Lynch & Mahoney. Ms Badenach was also previously Managing Director of QGX Mongol LLC from 2006, a coal explorer and developer prior to its takeover in 2008 by Mongolia Holdings Corporation.


Mr Alex Passmore
Non-Executive Director

Mr Passmore is an experienced and well regarded corporate executive with a strong financial and technical background in the resource sector. Alex has a diverse background having held technical roles in the industry and then senior positions in both the institutional debt financing and equity capital market arenas. More recently he has assumed executive positions with listed resource companies.


Mr Achit-Erdene Darambazar
Non-Executive Director

Mr Darambazar is a financial adviser to Mr Tserenpuntsag and President and CEO of Mongolia International Capital Corporation LLC (MICC), a leading Mongolian investment banking firm. He is also a successful Mongolian businessman in his own right.


Mr Phil Rundell
Company Secretary

Mr Rundell is a former Partner of a big 4 accounting firm and is now a sole practitioner Chartered Accountant specialising in providing company secretarial, compliance, accounting and reconstruction services.


WWW.ASPIREMININGLIMITED.COM

VIDEOS

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