Hong Kong Xinhai Mining Services Limited’s financing and technical services agreement covering African Pioneer’s Ongombo and Ongeama copper projects in Namibia has met all conditions required for the transaction to proceed, leaving Xinhai’s £712,786 share subscription as the next step.
African Pioneer Plc announced that all conditions precedent attached to the definitive agreement signed with Xinhai on 30 July have now been satisfied.
Those conditions included obtaining any required regulatory approvals in China and any necessary approvals from African Pioneer shareholders, the London Stock Exchange and the Financial Conduct Authority.
The agreement also required that no material adverse change had affected African Pioneer, the Ongombo and Ongeama projects, their licences, or the companies holding the projects.
A local shareholder was also required to waive any pre-emptive rights, rights of first refusal or similar rights relating to the project companies or licences.
African Pioneer had said on 1 September that administrative processes required to satisfy the outstanding conditions were being finalised. The latest announcement confirms that process has now been completed.
Attention now shifts to Xinhai’s £712,786 share subscription in African Pioneer.
The company made clear that it had not yet reported the money as received, saying it would make a further announcement once Xinhai made the payment.
After receiving the subscription, African Pioneer will arrange the issue of Xinhai’s subscription shares and warrants.
It will also issue 3.33 million African Pioneer shares to Xinhai in conversion of £30,000 in intention money previously paid by the Chinese mining services company.
The share subscription forms part of the wider financing and technical services arrangement between the companies to develop African Pioneer’s Namibian copper interests.
Under the 30 July agreement, Xinhai’s involvement goes beyond taking shares in African Pioneer and extends to financing and technical services for the development programme.
The agreement sets out a staged programme covering further exploration and resource work, engineering and eventual mine development.
African Pioneer said earlier this month that it was preparing to deploy up to four diamond drill rigs across Ongombo and Ongeama.
At Ongombo, the drilling is intended to generate geotechnical information for final open-pit and underground mine designs and support an update of the project’s existing mineral resource.
Ongombo has a reported JORC mineral resource of about 29 million tonnes grading 1.1% copper equivalent.
The broader development programme under the Xinhai agreement envisages detailed engineering at Ongombo and, subject to achieving the agreed development milestones, eventual construction and commissioning of a processing plant capable of treating at least 720,000 tonnes of ore annually, together with the first phase of an underground decline.
