Chinese mining giant Chinalco has committed to spend at least US$1 million on exploration and metallurgical work at Namibia’s Opuwo Cobalt-Copper Project before completing its proposed US$15 million acquisition of the asset, signalling confidence in the project’s long-term potential despite the transaction still awaiting regulatory approvals.
The funding commitment forms part of the binding Share Sale Agreement signed between Australia’s Celsius Resources and Chinalco (Xiong’an) Mining Corporation Limited, under which the Chinese company will acquire Celsius’ 95% interest in Opuwo Cobalt Holdings, the owner of the Opuwo Cobalt-Copper Project in the Kunene Region.
As part of the agreement, Chinalco has undertaken to spend a minimum of US$750,000 on exploration and a further US$250,000 on metallurgical test work while the conditions precedent to the transaction are being satisfied.
The expenditure is non-refundable and will support the renewal of the project’s Exclusive Prospecting Licence (EPL) and Environmental Clearance Certificate (ECC), with the exploration results to be shared with Celsius and submitted as part of the licence renewal process.
The commitment means exploration activities will continue even before ownership of the project changes hands, reducing the risk of delays while the parties seek the approvals required to complete the acquisition.
The proposed transaction values Celsius’ interest in the project and an associated intercompany loan at US$15 million (approximately A$21.7 million), marking one of the most significant recent transactions involving a critical minerals project in Namibia.
The Opuwo Cobalt-Copper Project is regarded as one of Namibia’s largest advanced cobalt-copper exploration assets and has been the subject of exploration for several years. Situated in the Kunene Region, the project is being evaluated for its potential in cobalt and copper at a time when demand for battery and energy transition minerals continues to rise globally.
Chinalco (Xiong’an) Mining is a specialised international base metals subsidiary of the Aluminium Corporation of China (Chinalco), one of China’s largest state-owned mining and metals groups.
The subsidiary focuses on developing large-scale international non-ferrous metal projects and is expected to leverage its technical and financial capacity to advance the Namibian project.
The transaction remains subject to several conditions precedent before it can be completed. These include approval by Celsius shareholders under the AIM Rules for Companies, renewal of the project’s Exclusive Prospecting Licence and Environmental Clearance Certificate by the Namibian authorities, approval by the Namibian Competition Commission and the Bank of Namibia for exchange control purposes, as well as regulatory approvals from China’s National Development and Reform Commission, Ministry of Commerce and State Administration of Foreign Exchange.
The parties must also confirm that warranties remain true and correct and that no material adverse event has affected the project before the acquisition can proceed.
Celsius said the sale would allow it to sharpen its strategic focus on its copper-gold portfolio in the Philippines while providing a significant near-term funding source. Subject to the resolution of the ongoing arbitration involving Makilala Mining Company Inc., the company intends to use the proceeds from the sale to advance the development of its MCB Copper-Gold Project in the Philippines.
