Adamas pleased with progress at Future Metal Holdings

Adamas Finance Asia updated the market on its investment in Future Metal Holdings on Friday, which was previously known as Hong Kong Mining Holdings.

The AIM-traded firm has an 85% shareholding in Future Metal, representing its largest investment by value in the portfolio.

It said the quarry's processing line had now been installed and commissioned, and the initial run of the processing plant had been successfully conducted.

The equipment and transmission system were working well, with approximately 200 tonnes of dolomite produced during the initial run.

Further ramping up of production began in the third week of December, and production was said to be on track to achieve the daily production target of 800 to 1,000 tonnes over the coming quarter.

By mid-next year, the management team said it expected daily production capacity to reach around 2,000 tonnes, due to increased operational efficiency to be extracted from the current configuration of equipment onsite.

The actual level of output would be configured based on contracts for the sale of product, which management would look to secure in the first half of 2020.

Based on the successful initial production run, the company was constructing a steel structure to enclose its stockpile site, installing dust removal equipment and commencing the process of land hardening to comply with the local environmental requirements.

Those initiatives remained on plan for delivery after the initial production run, and the ramping up of daily production.

Future Metal entered its first sales contract on 30 November with a local construction company for an order of 1,000 tonnes of wall rock at a price of RMB 48 per tonne, or $6.80 per tonne.

Meanwhile, the quarry said it had also been contacted by other potential buyers with respect to the availability of its products, now that initial production had commenced.

The local management team said it intended to obtain a work safety permit and discharge permit, which, according to local regulations, could only be applied for after production had started.

Those initiatives were expected to complete in the first half of 2020.

“We are pleased to have commenced production at the quarry and begun initial sales of Future Metal's products before the year end as planned,” said chairman John Croft.

“Full production is continuing to ramp up well with strengthening levels of interest from potential buyers of the quarry's products with prices in line with previous guidance given by the company.

“We look forward to updating shareholders in Q1 2020 as production ramps up and further sales contracts are agreed.”