Under the Agreement, Zijin will invest in both the Xanadu corporate level and the Kharmagtai project level
Xanadu Mines Ltd (ASX: XAM, TSX:XAM) (Xanadu or the Company) is pleased to announce a strategic partnership (Agreement) with Zijin Mining Group Co., Ltd (Zijin) to progress the Company’s flagship Kharmagtai Copper-Gold Project (Kharmagtai) through its next phase of project evaluation and decision on future development.
Under the Agreement, Zijin will invest in both the Xanadu corporate level and the Kharmagtai project level through a series of transactions commencing with the subscription of 139 million fully paid ordinary shares in Xanadu (New Shares) to provide Zijin with a 9.9% shareholding in the Company (Phase 1 Placement). The Phase 1 Placement will be conducted at an issue price of A$0.04 per share, representing approximately a 38% premium to Xanadu’s last traded price of A$0.029, and will raise approximately A$5.56 million.
Two subsequent phases are then proposed (subject to formal documentation) including a second placement of ordinary shares at A$0.04 per share to increase Zijin’s total shareholding in the Company to 19.99% (Phase 2 Placement) and the creation of a 50/50 Joint Venture in Khuiten Metals Pte. Ltd., the entity currently 100% owned by Xanadu that holds a 76.5% effective interest in Kharmagtai (Phase 3 JV)1, for a cash payment of US$35 million.
Executive Chairman & Managing Director, Colin Moorhead, said, “We are delighted to have attracted Zijin, a global top 10 copper producer and highly capable mine developer as our partner, and we look forward to finalising negotiations to move Kharmagtai forward and realise its potential on an accelerated path. This partnership is a good outcome for our shareholders, for Mongolia and for a world looking to fill a global copper supply gap.”
- Partnership with Zijin Mining Group, a global mining company and top 10 copper producer.
- Staged investment by Zijin to inject up to approximately A$11 million1 into Xanadu and up to a further US$35 million into the Kharmagtai project.
- Phase 1 and Phase 2 Placements to be priced at A$0.04 per share, approximately a 38% premium to Xanadu’s last traded share price of A$0.029.
- Phase 1 Placement expected to settle by no later than Wednesday, 27 April 2022 with a four-month exclusivity period to negotiate and finalise terms for the two remaining phases, subject to Australian Foreign Investment Review Board (FIRB) approval, People’s Republic of China (PRC) regulatory approvals, Xanadu shareholder and other regulatory approvals.
- Following completion of all phases, Kharmagtai will be well funded for its next phase of development, leading to a decision to construct.
Source: Company Press Release