Hong Kong Xinhai Mining Services has paid £712 786 for shares in African Pioneer Plc, giving it a 10.99% stake in the London-listed company as the two partners move ahead with development of the Ongombo and Ongeama copper projects in Namibia.
African Pioneer announced on Monday that Xinhai had paid the subscription under the financing and technical services agreement the companies signed in July.
In return for the £712 786 investment, Xinhai will receive 61.98 million African Pioneer shares at 1.15 pence per share.
It will receive a further 3.33 million shares at 0.9 pence each through the conversion of £30 000 in intention money it had previously paid.
The combined 65.31 million new shares will leave Xinhai owning 10.99% of African Pioneer’s enlarged issued share capital.
The shares are expected to be admitted to trading on the London Stock Exchange on or around 2 October, after which African Pioneer will have about 594.05 million ordinary shares in issue.
The investment is part of a much larger agreement between African Pioneer and Xinhai to finance and develop the Ongombo and Ongeama copper projects near Windhoek.
Under the definitive agreement signed on 30 July, Xinhai is expected to provide the funding and technical services required to take the projects through a staged development programme towards mining and processing.
The agreement provides for Xinhai to finance the project through a secured loan to the project holding company, with the development programme previously estimated at approximately US$60 million.
The programme covers further exploration and resource work, mine design, engineering, construction and commissioning.
Xinhai’s latest investment also comes with 30.99 million warrants, exercisable at 1.6 pence per African Pioneer share during six months beginning after completion of Stage 4 of the development agreement.
The latest payment follows African Pioneer’s announcement on 21 September that the conditions precedent to the Xinhai agreement had been satisfied, clearing the way for the transaction to proceed.
African Pioneer and Xinhai are meanwhile advancing technical work on the Namibian projects, including preparations for further drilling at Ongombo and Ongeama.
The programme is intended to provide information for geotechnical studies and final open-pit and underground mine designs, while also supporting an update of the mineral resource at Ongombo.
Ongombo currently has a JORC mineral resource of about 29 million tonnes grading 1.1% copper equivalent.
The projects are located roughly 25 to 30 kilometres from Windhoek and form the centrepiece of African Pioneer’s Namibian copper portfolio.
The development agreement ultimately envisages a processing operation with a design capacity of about 720 000 tonnes a year.
