Arcadia Minerals (ASX:AM7, FRA:8OH) lands funding from HeBei for Swanson Tantalum Mine construction and production - Kalkine Media

Highlights

• Battery metals explorer and developer Arcadia, has partnered with HeBei to construct and commission the Swanson Tantalum mine
• The agreement covers construction funding of not less than US$7 million from HeBei in return for an interest in the Swanson Tantalum Mine (ML 223)
• HeBei would build and commission a multi-gravity separation (MGS) plant designed to receive a monthly feed of 20,000 tonnes
• HeBei can earn a 38% interest in the mining licence (ML 223) by funding the construction and steady state production at the plant
• AM7 has the right to transfer any existing EPL’s currently held, into a new private company, where AM7 will continue to hold the same 80% interest in these projects
• AM7 is advancing offtake discussions with several interested parties

Arcadia Minerals Ltd (ASX:AM7, FRA:8OH) -- which is into exploration in Namibia (tantalum, lithium, nickel, copper and gold) -- has announced a major update concerning its Swanson Tantalum Mine.

In a significant development, Orange River Pegmatite (Pty) Ltd has executed a subscription agreement with HeBei Xinjian Construction CC. Notably, AM7 holds 80% of the issued shares in Orange River. This new development relates to putting the Swanson Tantalum Mine into a steady state of production, AM7 states.

As per the update, construction funding of not less than US$7 million has been secured from HeBei. In return, HeBei would receive newly issued Orange River shares (subscription shares) equal to the latter company's 38% issued share capital. More details on this are below.

Agreement scope and terms

The development comes against the backdrop of Mining License ML 223 for the Swanson Tantalum/Lithium Project, which is owned by Orange River in the Karas Region (Republic of Namibia).

Data source: company update

Under the terms of the transaction, HeBei can earn 38% in ML 223 by constructing the MGS plant and putting the mine into a steady state of production. Orange River will have the right to transfer exclusive prospecting licences EPL 5047 and EPL 7295 to a new private company. In this arrangement, the existing shareholders (80% held by Arcadia) would hold shares in the same proportion in the new entity as they do currently in each of the two EPL’s.

It is also stated that HeBei would need to deliver certain documents including a processing plant completion certificate from a professional engineer, a finance completion certificate (minimum spend of AU$10.4 million for construction and commissioning of the MGS processing plant), and a processing plant production certificate before the transaction becomes effective. These conditions are to be met within 18 months of the signing of the agreement unless Orange River gives a waiver.

Source: Company update

Compliance

It is further mentioned that Hebei would use its own funds to begin the construction and commissioning of the MGS processing plant independently, subject to compliance with detailed engineering and design specifications provided by Orange River and other conditions like abidance by the laws of Namibia.

Hebei must construct and commission the MGS plant (design capacity of 20,000t feed) no later than 12 months from the signing of the agreement. Hebei would also indemnify and hold Arcadia and Orange River harmless from all losses/ damages and claims or demands.

Agreed Outcome

Notably, under the transaction, Hebei must provide Orange River with a MGS plant strictly in accordance with the specifications, both with respect to the nature and components of the plant, and the operational functionality (to be demonstrated by a processing plant production certificate). Only on meeting this and other criteria would Hebei be entitled to subscribe to and be issued with the subscription shares.

Source: Company update 

Production is expected to commence by the first quarter of 2025. Arcadia would retain a see through 49.6% project interest in Swanson following construction and commissioning.