Antilles Gold Secures $26M EPC Contract and $16M Financing for Cuban Mine
Antilles Gold has taken a major step forward in developing its Nueva Sabana copper-gold mine by signing a non-binding Letter of Intent with Chinese firm Xinhai for a $26 million EPC contract and $16 million in project financing. The agreement also includes a strategic $4.1 million share placement, signaling deeper collaboration and governance involvement.
- Non-binding Letter of Intent signed with Shandong Xinhai for $26M EPC contract
- Xinhai to provide or arrange approximately $16M in project financing
- Proposed $4.1M share placement to Xinhai with board representation rights
- EPC contract covers 500,000tpa concentrator and key infrastructure
- First rights granted to Xinhai for future La Demajagua mine development
Strategic Partnership Advances Nueva Sabana Project
Antilles Gold Limited (ASX, AAU) has announced a significant milestone in the development of its Nueva Sabana copper-gold mine in Cuba. The company has signed a non-binding Letter of Intent (LoI) with Shandong Xinhai Mining Technology Equipment Inc, a major Chinese mining and engineering group, and its Cuban joint venture partner Minera La Victoria SA (MLV). This agreement outlines plans for a $26 million engineering, procurement, and construction (EPC) contract alongside approximately $16 million in project financing.
The EPC contract will cover the construction of a 500,000 tonnes per annum concentrator, associated architectural and industrial buildings, electrical infrastructure, and supply of construction equipment and consumables. This fixed-price contract is expected to significantly de-risk the project by locking in costs for around 80% of construction activities.
Financing and Governance Implications
In addition to the EPC contract, Xinhai will provide or arrange financing amounting to roughly 60% of monthly progress payments under the EPC contract. Repayment terms include five equal quarterly installments starting three quarters after mine commissioning. To cement the partnership, Antilles Gold proposes a $4.1 million share placement to Xinhai at $0.007 per share, which would grant Xinhai the right to nominate a director to the company’s board, signaling a strategic governance role.
Chairman Brian Johnson expressed confidence that a binding Memorandum of Understanding (MoU) will be formalized by mid-August 2025, paving the way for a long-term and rewarding relationship. He highlighted that the combination of fixed-price construction and signed off-take agreements, announced earlier this year, will ease the path to securing the remaining $20 million in project funding.
Future Opportunities and Project Expansion
The LoI also grants Xinhai first rights of refusal to negotiate the EPC contract for the planned La Demajagua mine, anticipated to be developed between 2027 and 2028. This project aims to produce gold-arsenopyrite concentrate and antimony cathodes. Furthermore, Xinhai may participate directly in La Demajagua should opportunities arise, and Antilles Gold retains the option to purchase antimony products at prevailing Chinese market prices.
While due diligence and site visits are underway, the partnership reflects a strategic alignment between Antilles Gold, its Cuban partner, and a globally experienced EPC contractor. This collaboration not only advances the Nueva Sabana project but also positions the company to capitalize on Cuba’s mineral potential with reduced execution risk.
Looking Ahead
As Antilles Gold moves closer to finalizing the MoU and securing full project financing, the company remains focused on delivering on its production targets and resource assumptions, which remain unchanged from prior announcements. The evolving partnership with Xinhai marks a pivotal moment in the company’s Cuban mining ventures, with implications for operational execution, capital structure, and regional mining development.
Bottom Line?
Antilles Gold’s evolving partnership with Xinhai could redefine its Cuban mining prospects, but key financing and operational details remain to be finalized.
Questions in the middle?
- Will the binding MoU be signed by the mid-August deadline as planned?
- How will the remaining $20 million in project financing be secured beyond Xinhai’s commitment?
- What operational and geopolitical risks might impact project execution in Cuba?
