() has entered into a binding heads of agreement (HOA) to acquire 95% of its Korean joint venture partner Ziron Technology Corporation, which owns patented low emission, high purity metal-refining technology.

The HOA will see ASM acquire the ownership of all associated intellectual property including patented metal-refining technology as well as the pilot plant constructed in 2020 to confirm the technology.

Ziron Tech’s team will continue the development of metallisation technology within the ASM umbrella.

“Start of next phase”

ASM managing director David Woodall said: “Our joint venture and strong relationship with Ziron Tech since 2016 has achieved significant milestones, with the successful production of metals using this clean technology.

“This agreement marks the start of the next phase of this positive partnership with Ziron Tech as it becomes part of ASM.”

Ziron founder to lead team

Under the HOA, the company will appoint Ziron Tech’s founder, Professor Jonghyeon Lee as chief technical advisor to lead the Ziron Tech team and the continued development of clean metal processing.

Woodall said: “With Professor Lee and his team on board, we are looking forward to establishing the first commercial-scale metal plant in Korea using the technology, which will help meet the growing demand for ASM’s range of high-purity and value-added critical metals used in advanced technologies, including electric vehicles and clean energy.”

Ziron Tech founder and major shareholder Professor Jonghyeon Lee said: “We are pleased to further formalise our partnership with ASM and become an integral part of the company.”

Sustainable technology

The patented technology is a more environmentally friendly, sustainable and cost-effective alternative to existing conventional, energy-intensive metallisation processes.

This technology has been successfully applied during pilot plant test-work to all major metals found within ASM’s Dubbo Project including zirconium, hafnium, and rare earths for permanent magnet alloys.

Lee said: “The metal production method we have been testing is set to transform the traditional process of metal production, with it being more efficient and environmentally friendly.”

In addition, the HOA provides an opportunity to expand the business with the production of titanium metal and associated alloys.

Key terms

The HOA and transaction are subject to the approval of ASM and Ziron Tech boards, including formal documentation, as well as receipt of any required regulatory approvals and authorisations.

Key terms include:

• ASM will acquire 100% of the current joint venture company RMR Tech Corporation from its initial investment of 10%;
• RMR Tech will then acquire 95% of the shares in Ziron Tech;
• Professor Lee will retain a 5% stake in Ziron Tech and become chief technology advisor for ASM’s metallisation business with ASM to have a call option over Professor Lee’s 5% stake in Ziron Tech.

In addition, as consideration for the transaction, ASM will issue 1,306,417 ASM shares for consideration of US$2 million to current Ziron Tech shareholders (via a holding entity) at an issue price of $2.068 per share based on a 10-trading day VWAP to September 2, 2020, and using an AUD:USD exchange rate of 74 cents.

These shares will be subject to voluntary escrow for 12 months.

The company will also grant existing Ziron Tech shareholders (via a holding entity) a net smelter return of 5% from any global commercial metallisation facility established using the technology, subject to a 50% step-down of the royalty after payments of US$20 million have been made.

Next steps

Detailed documentation is expected to be finalised by the end of September 2020 and complete the transaction by the end of October 2020.

ASM is also progressing negotiations to commence a feasibility study for larger-scale development and commercialisation of the plant.

Shares have been up more than 12% in early trading to $2.30.