Antilles Gold Signs $29.5M EPC Contract and $17.1M Credit Facility with Xinhai
Antilles Gold has signed a binding agreement with Chinese firm Xinhai to advance the Nueva Sabana copper-gold mine in Cuba, including a major EPC contract and a substantial credit facility that reduces project risk.
- US$29.5M fixed-price EPC contract signed with Shandong Xinhai
- US$17.1M credit facility provided via deferred payments
- Additional funding efforts include A$4.13M share subscription by Xinhai executive
- MoU includes future collaboration on La Demajagua gold-silver-antimony mine
- Xinhai executive to join Antilles Gold board with 19% shareholding
Strategic EPC Contract Signed
Antilles Gold Limited (ASX, AAU) has taken a significant step forward in developing its Nueva Sabana copper-gold mine in central Cuba by signing a binding Memorandum of Understanding with Shandong Xinhai Mining Technology Systems Inc. The agreement secures a US$29.5 million engineering, procurement, and construction (EPC) contract, covering approximately 85% of the estimated US$35 million needed to complete the mine's development. This fixed-price contract notably reduces capital expenditure risks, providing greater financial certainty for the project.
Credit Facility and Funding Progress
In addition to the EPC contract, Xinhai has committed to a US$17.1 million credit facility by deferring part of its monthly progress payments for up to 18 months post-commissioning. This arrangement further de-risks the project's capital requirements. Antilles Gold and its joint venture partner Minera La Victoria SA (MLV) are actively working to secure the remaining US$18 million needed to fully fund the project. Efforts include a US$10 million pre-payment on concentrate sales, a US$6.5 million project loan, and a A$4.13 million share subscription by Mr. Zhang Zhongyi, a senior Xinhai executive who is set to join Antilles Gold's board with a 19% stake.
Operational and Governance Oversight
MLV will handle the remaining US$5.5 million in development costs, including early construction work such as access roads and power connections. Meanwhile, Xinhai will complete engineering for the concentrator during the financing phase. Antilles Gold Inc, a 50% shareholder in MLV, will oversee Xinhai’s performance and compliance under the EPC contract and manage project cash flow during construction and operation until repayment is complete.
Future Collaboration on La Demajagua Mine
The MoU also outlines plans for Xinhai to undertake a definitive feasibility study for the La Demajagua gold-silver-antimony mine in 2026, following resource expansion drilling. MLV has granted Xinhai first rights to negotiate a potential US$70 million EPC contract and credit facility for this project, as well as possible direct participation in its development. Antilles Gold retains an option to purchase antimony concentrates or cathodes from La Demajagua, potentially enabling production of high-purity antimony ingots outside Cuba or China.
Strategic Implications
Chairman Brian Johnson highlighted that Xinhai’s involvement and its connections with Chinese investors and concentrate buyers are expected to be pivotal in transforming the Cuban joint venture into a profitable mid-tier mining company. The immediate focus remains on securing full funding and commencing construction at Nueva Sabana, with anticipated cash flow from this project to support further development at La Demajagua.
Bottom Line?
With funding and construction poised to accelerate, Antilles Gold’s Cuban ventures are entering a critical phase that could reshape its growth trajectory.
Questions in the middle?
- Will Antilles Gold secure the remaining US$18 million in funding on schedule?
- How will Mr. Zhang Zhongyi’s board appointment influence strategic decisions?
- What are the timelines and risks associated with the La Demajagua feasibility study and development?
