Arcadia (ASX:AM7) receives off-take and funding LOI for Swanson Tantalum/Lithium project - Kalkine Media

Highlights:

• Arcadia Minerals (ASX:AM7 DAX: 8OH) has received a letter of intent (LOI) from HeBei for the off-take of tantalum and lithium products from its Swanson Project in Namibia.
• The LOI is also aimed at providing funding for the construction of tantalum and lithium plants at Swanson.
• The company plans to finalise a transaction during Q1 in 2023.
• HeBei recently concluded a similar transaction with neighbouring licence holder Kazera Global PLC (KZG.L).
• AM7 expects to finalise the Swanson definitive feasibility study in the first quarter of 2023.
• Ongoing and incomplete discussions remain on foot with several parties.

In a major development, Arcadia Minerals Ltd (ASX:AM7 DAX: 8OH) has received a letter of intent (LOI) from HeBei Xinjian Construction CC, a Chinese multinational group. 

The company expects a potential transaction with HeBei to greatly support the potential financial metrics of the Swanson Project. 

Triggered by the update, AM7 shares jumped nearly 6% to trade at AU$0.270 apiece on 28 November 2022.  

LOI for Swanson offtake and funding  

The LOI is intended for the offtake for tantalum pentoxide concentrate with a minimum of 25% metal content (Ta-Product) and lithium oxide with a minimum of 1% Li₂O metal content (Li-Product) from the company’s Swanson project in the Karas Region of the Republic of Namibia. 

Moreover, the LOI is designed to provide funding for Swanson’s tantalum and lithium plants. The facilities covered are tantalum multi-gravity-separation concentrate plant (MGS plant) and lithium concentrate plant through DMS or Flotation (lithium plant). 

The company intends to finalise a transaction in the first quarter of 2023.

LOI validates Arcadia’s confidence in Swanson project

(Source: © 2022 Kalkine Media®, data source: company update, 28 November 2022)

The proposed transaction is focused on ore mined from the Swanson Tantalum/Lithium Project located in, on and under Mining License ML 223 (ML223).

The project has an existing JORC Mineral Resource comprising an Indicated Mineral Resource of 1,439Mt @ an average grade of 498 ppm Ta₂O₅, 72 ppm Nb₂O₅ and 0.14 % Li₂O. Additionally, the Inferred Mineral Resource stands at 1,145Mt @ an average grade of 472 ppm Ta₂O₅, 75 ppm Nb₂O₅ and 0.17 % Li₂O

The company plans to focus on the D1 pegmatite for the production of lithium. The D1 pegmatite contains the highest lithium grade, highlighted the company.

Letter of intent: terms and conditions

As per the LOI, the feedstock for Swanson’s tantalum and lithium plants is:

• MGS Plant: Run of Mine Ore from the E-F and D Pegmatites as well as any potential JORC reserves defined from pegmatites under ML223.
• Lithium-Plant: lithium-containing waste derived from the MGS plant.

The LOI has also incorporated the pricing for Ta-product and LI-products. The Ta-product is estimated to be priced in line with the quoted price by Argus Media Group for 25% minimum Ta₂O₅, adjusted for delivery at mine gate.

Whereas the Li-Product is to be benchmarked by the quoted price by Fast Markets for minimum 5% Li₂O concentrate delivered at mine gate.