Namibia Secures Nonbinding Term with Xinhai to Advance Copper Projects

Namibia-focused exploration and resource development company, African Pioneer has signed a nonbinding term sheet with engineering, procurement and construction (EPC) and mine development group Hong Kong Xinhai Mining Services to provide financing and technical services for the Ongombo and Ongeama copper projects.

Under the term sheet, Xinhai has been granted an exclusivity period of up to 60 days to enter into definitive documentation in exchange for a nominal payment. The company cautioned that the proposals may either not complete or be subject to material variation.

African Pioneer described the agreement as a major milestone in its strategy to fast-track Ongombo-Ongeama into commercial copper production through an integrated financing, engineering, construction and commissioning solution.

Xinhai is an internationally recognised mining EPC group with a global track record, having completed more than 500 EPC projects worldwide, including mine construction, processing plant development and operational management across multiple jurisdictions.

African Pioneer chairperson Colin Bird said Xinhai's financial strength, engineering capability and operational experience provide a unique platform to unlock the full value of the company's Namibian copper assets.

"The arrangements will embrace every critical aspect of project evaluation, development, financing, engineering, construction and commissioning under a single integrated framework. The objective is clear: to fast-track Ongombo-Ongeama into a modern, efficient and environmentally responsible copper mining operation in the shortest practical timeframe. Therefore, there is no requirement for additional project funding by African Pioneer if development milestones are successfully processed achieved."

Under the definitive agreements, Xinhai will provide 100% of the funding required to achieve agreed development milestones. Xinhai will subscribe for 10% of the then-issued ordinary share capital of African Pioneer on a fully diluted basis at a subscription price of 1.15p per share – subject to adjustment if there is a material movement of share price before the signing of the definitive agreements – and provide a project facility through a 10% secured loan which may be repaid by issuing up to about 74% of the project holding company.

"The project is situated only 30 km from Windhoek, one of Africa's most accessible mining jurisdictions. We believe the combination of location, infrastructure, financing and world-class engineering expertise provides a compelling opportunity to create a new copper producer for Namibia," Bird added.