Arcadia Grants Xinhai Option to Propel Swanson Tantalum Project into Production
Arcadia Minerals has secured a binding term sheet with Hongkong Xinhai Mining Services, granting Xinhai an exclusive option to advance the Swanson Tantalum Project in Namibia towards production through a strategic partnership and investment.
- Exclusive option granted to Xinhai to build and commission a gravimetric plant at Swanson
- Xinhai to explore EPL 5047 for lithium and tantalum-bearing pegmatites
- Xinhai to earn up to 70% equity in the project through staged milestones
- Strategic placement to raise $750,000 strengthens Arcadia’s balance sheet
- Partnership aims to deliver ethical, non-conflict tantalum supply from Namibia
Strategic Partnership to Unlock Production Potential
Arcadia Minerals Limited (ASX, AM7) has taken a significant step towards transitioning its Swanson Tantalum Project from exploration to production by executing a binding term sheet with Hongkong Xinhai Mining Services Limited. This agreement grants Xinhai an exclusive option to enter into a definitive agreement to construct and commission a gravimetric processing plant at the Swanson site (ML223) in Namibia, with capacity aligned to the 2023 Definitive Feasibility Study (DFS) parameters.
The partnership also includes exploration rights over the adjacent EPL 5047 license, which hosts promising lithium and tantalum-bearing pegmatites. This exploration upside could enhance feedstock availability, potentially increasing throughput or extending the mine’s life beyond current projections.
Aligning Interests Through Investment and Earn-In Milestones
Upon signing a definitive agreement, Xinhai will invest in Arcadia through a strategic placement, acquiring a 5% stake at A$0.036 per share. Additionally, Xinhai can earn up to 70% equity in the project via a staged earn-in process tied to service delivery, plant commissioning, and operational milestones. Performance options linked to these milestones provide Xinhai with the opportunity to increase its stake further, aligning both parties’ interests closely.
Arcadia benefits from Xinhai’s extensive global mining services experience, having completed over 600 projects worldwide. This collaboration is expected to bring technical expertise and operational depth, reducing upfront capital requirements and shareholder dilution for Arcadia.
Ethical Supply Chain and Market Positioning
The Swanson Project represents a rare source of ethically sourced tantalum outside conflict zones, a critical consideration for industries such as defence electronics, aerospace, semiconductors, and medical devices. With approximately 40% of global tantalum production currently concentrated in higher-risk regions like the Democratic Republic of Congo, Arcadia’s Namibian project offers a transparent and stable alternative supply.
Executive Chairman Jurie Wessels highlighted the strategic importance of this partnership, noting the potential to optimise project parameters beyond the DFS and contribute responsibly to global supply chains.
Strengthening Financial Position and Growth Prospects
Alongside the Xinhai agreement, Arcadia has secured firm commitments for a $750,000 placement at $0.03 per share, bolstering its balance sheet to support ongoing operations and growth initiatives. The company continues to pursue additional farm-ins, joint ventures, and acquisitions across its Namibian portfolio, focusing on gold and critical minerals to complement its existing assets.
This disciplined capital management approach aims to maximise shareholder value while minimising dilution, positioning Arcadia for sustainable growth in a competitive market.
Bottom Line?
Arcadia’s collaboration with Xinhai marks a pivotal move towards production, but the definitive agreement and milestone achievements will be critical to watch.
Questions in the middle?
- Will Xinhai exercise the option and proceed to a definitive agreement within the 45-day exclusivity period?
- How will exploration results from EPL 5047 impact the project’s scale and mine life?
- What are the potential dilution effects on existing shareholders from the strategic placement and performance options?
