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What started as a search for tin and tungsten projects in South East Asia also unearthed some promising lithium assets for ASX-listed Pan Asia Metals.
The South East Asian tin and tungsten belt that runs from Myanmar, through Thailand and Malaysia and into the Indonesian tin islands to the south is ideally positioned to capitalise on changing market needs.
That’s according to Paul Lock, Chairman and Managing Director of recently listed Pan Asia Metals (ASX:PAM).
In 2013, Paul and the Company’s Technical Director and Chief Geologist David Hobby commenced looking for opportunities in Myanmar.
Paul admits they were not entirely sure what they were looking for at first, but on entering into an arrangement to access 20 years’ worth of data compiled by Canadian-based Ivanhoe Mines, the pair realised there were some good opportunities.
“We liked the area for its geology and could see it was under-explored,” Paul said.
“But we remained a bit cautious about Myanmar at the time as it had only just opened to foreign investment and still seemed politically unstable.”
The result, quite fortuitously, was to follow the tin and tungsten belt further south to the Thai side of the border where the duo found some promising lithium projects as well.
Today, the Company holds 100 per cent interest in three core projects in Thailand, one focused on tungsten and two on lithium.
Pan Asia Metals’ plan has always been to identify and develop low-cost assets focused on specialty metals and the three current projects look promising.
The cost analysis has several layers, and given Paul comes from a banking background and David has significant experience in the economic side of geology, the company is well equipped to make informed decisions.
“When we look at Thailand and Malaysia, they are key industrial centres,” Paul said.
“Both rank in the top 30 according to Harvard’s Atlas of Economic Complexity and that is evident by the number of multinational manufacturers operating in the region.
“We’ve also worked out from a salary perspective that building in-country workforces costs us about a third of what it would in Australia, and local employment has always been part of our strategy to ensure good community and government relationships, as well as being the best path to understanding local business culture.
“There is also a very talented pool of highly educated and skilled mining professionals in Thailand and Malaysia.”
“In addition, all the inputs and markets are on the region’s doorstep so we are seeing a lot of bang for every investor dollar we spend.”
Other factors that add to the cost efficiencies include a high standard of infrastructure that allows all-year access to the project sites, strong government support as well as rapidly evolving industries for electric vehicles, batteries and other high-demand products.
Pan Asia Metals intends to develop downstream opportunities to leverage demand in the South East Asian region. The company completed drilling at its Khao Soon Tungsten project in February and, subject to assay results reflecting what the Company anticipates, the intention is to produce a JORC resource and move toward a Pre-Feasibility Study by the end of the year.
In addition, Paul says there are plans to release a JORC resource for Pan Asia Metals’ Reung Kiet Lithium project this year as well.
“We have a lot of work on our plate but it takes time to put your foot on a good project so we don’t want to let any of the opportunities go,” Paul said.
“As required, we’ll continue to staff up in-country and may need to bring in consultants as we get closer to some of the critical milestones, but we’re handling it well.”
So much so that Pan Asia Metals is actively looking for other projects across the South East Asian Region, with a focus on Thailand, Malaysia, Laos and Vietnam.
While the recent Myanmar coup does not appear to have impacted the country’s southern provinces where Pan Asia Metals has focused its investigations to date, Paul says the Company remains cautious of committing capital.
The COVID-19 crisis had little impact for Pan Asia Metals given its active projects are in less populated regions and Thailand was quick to bring the spread under control.
China is currently the world’s largest tungsten producer and from a geopolitical perspective, countries are looking to diversify their supply chains.
Paul says that places Pan Asia Metals in a very good position.
“We’re the only lithium project in South East Asia and as markets look to secure critical minerals in-country or within their immediate regions, there are plenty of opportunities for companies like PAM,” he said.
“We’ve overcome the various barriers to entry and by remaining focused on low-cost operations, as well as ensuring we maintain positive relationships with the communities and governments where we work, we believe we have a very good formula for success.”