HeBei Xinjian Construction CC has halted all the work at the Swanson Tantalum Project due to a lack of funds.
Arcadia Minerals Orange River Pegmatite (Pty) Ltd. owns the Swanson Tantalum Project EPL 5047 in the Karas Region, 15 km north of the Orange River.
HeBei Construction agreed to construct a plant, infrastructure, and execute mine development in May 2023 for a 38% equity in Orange River Pegmatite, where Arcadia Minerals holds an 80% interest.
According to Arcadia Minerals’ September 30, 2024, quarterly activities report, development at the Swanson Tantalite Mine slowed down significantly.
The report says HeBei Xinjian Construction CC is also delaying delivery of the multi gravity separators and spiral circuits due to non-payment of the final balance following previous deposits paid.
HeBei Construction has paid a deposit of US$2.141.150 to various Chinese suppliers.
The company paid US$645.450 for the multi gravity separation plant, spirals, and concentrators. It has also deposited US$1.091.00 for a jaw crusher, cone crusher, and vibrating screens. Additionally, HeBei Construction paid US$143.800 for slurry pumps and US$59.500 for vacuum filters and mixer boxes.
Other deposits are on conveyor belts, electronic belt scales, and a drill rig for US$103.400 and US$98.000, respectively.
Arcadia Minerals says HeBei Construction has contacted the supplier to ensure these remain on hold for future delivery while it investigates several available funding solutions in case a default occurs.
The roads to the site, including access roads and other works, were cleared and prepared for the plant installation to commence once funding is provided in terms of the agreement with Hebei or an alternate available funding option in case default occurs.
Arcadia Minerals further says it has reasonable grounds to believe that HeBei Construction may not fulfil all its obligations under the existing mine construction and funding agreement.
As a precautionary measure, Arcadia has begun seeking other interested parties to advance the Swanson Tantalum Project if HeBei cannot meet its contractual obligations, which remain in force and effect as of the date of this report.
To date, Arcadia has received unsolicited interest from several potential funders who can acquire HeBei Construction’s position by providing debt and/or equity to complete the construction of the Swanson Tantalum Mine.
Arcadia has begun to compile an information memorandum for these potentially interested parties.
According to the definitive feasibility study, the Swanson Tantalum Mine can generate A$6.38 million annually.
Arcadia believes there are substantial opportunities to optimise the operations at the proposed Swanson Tantalum Mine, as well as possibilities for extending the mine life through further exploration of the ~200 pegmatites identified within the Swanson Tantalum Project.
Additionally, Arcadia continues to receive unsolicited offtake requests due to the Swanson Tantalum Mine’s status as a non-conflict source of tantalum.
