- Arcadia Minerals (AM7) receives a letter of intent from China-based HeBei Xinjian Construction CC (HeBei) for a potential offtake deal and funding arrangement
- HeBei has proposed to offtake tantalum and lithium from Arcadia’s Swanson project in Namibia, as well as fund the construction and commissioning of a tantalum and lithium plant, in return for sharing the profits
- Arcadia Minerals plans to enter negotiations with HeBei right away to finalise a potential transaction in the first quarter of 2023
- AM7 shares are trading steady at 25.5 cents at 1:15 pm AEDT
Arcadia Minerals (AM7) has received a letter of intent from China-based HeBei Xinjian Construction CC (HeBei) for a potential offtake deal and funding arrangement.
Under the letter of intent, HuBei has proposed the offtake of tantalum pentoxide concentrate with a minimum metal content of 25 per cent and lithium dioxide with a minimum grade of one per cent from Arcadia’s Swanson project in Namibia.
The Chinese multinational company has also proposed to potentially fund the construction and commissioning of a tantalum multi-gravity-separation concentrate plant and a lithium concentrate plant in return for sharing in the profit of the operations.
AM7 Executive Chair Jurie Wessels said the letter of intent validated the company’s confidence in the Swanson project to become a potential early cash generator.
“We are particularly emboldened by the expression of intent to conduct a profit-sharing arrangement aimed at both the tantalum and lithium credits of the Swanson project and to purchase both product streams,” Mr Wessels said.
“Our next steps are to engage with HeBei and other suitors through negotiation to possibly conclude a transaction as early as is reasonably possible.”
The proposed transaction relates only to ore mined from the Swanson project, located under Mining License ML 223.
Arcadia said it intended to “immediately” enter into negotiations with HeBei to finalise a potential transaction in the first quarter of 2023.
In other news, the company’s definitive feasibility study (DFS) for the Swanson project has been delayed from October to some time during the March 2023 quarter. The company said the HeBei transaction may “greatly support” the potential financial metrics of the Swanson project.
AM7 shares were trading steady at 25.5 cents at 1:15 pm AEDT.