HeBei Xinjian Construction grabs offtake deals in Namibia's Tantalite Valley




HeBei Xinjian Construction CC is seeking to expand its offtake deals in the Tantalite Valley in Namibia after offering a letter of intent to Arcadia Minerals Ltd to negotiate sales for tantalum pentoxide and lithium oxide from the Swanson Tantalum/ Lithium project.

The Swanson mine under licence 223 is in the Tantalite Valley area, about 30 km south of Warmbad settlement, Karasburg East, in Karas region. 

There are two farms - Umeis Farm 110 and Kinderzitt Farm 132 - measuring about 50 square kilometres.

HeBei Xinjian Construction CC was established in August 2013 in Namibia, but its parent company HeBei Xinjian Construction Group, was founded in July 1952.

The companies' core business has been housing construction, decoration, industrial and civil equipment installation, plumbing, electrical and instrument installation, real estate development, overseas project contracting, labour export, import and export trading. 

Arcadia Minerals Ltd is an Australian company with exploration interests in Namibia, where it owns tantalum, lithium, nickel, copper and gold projects.

HeBei already has another offtake agreement in the Tantalite Valley with the London Stock Exchange-listed Kazera Global to invest US$7,5m in return for a 49% interest in lithium offtake from the Homestead Tantalum and Lithium mine close to Swanson.

The Kazera agreement signed in July 2022 stipulates that HeBei invests in cash, machinery and services with a minimum of US$2.5m payable to Kazera in instalments until 31 January 2023. 

HeBei made the latest overture to Arcadia on 28 November 2022 in a deal that would see Arcadia delivering tantalum pentoxide concentrate with a minimum of 25% metal content (Ta-Product) and lithium oxide with a minimum of 1% metal content.

In return, Hebei is expected to construct and commission a tantalum concentrate and a lithium concentrate plant to be included in a profit-sharing scheme.

The letter says Arcadia will deliver the products according to a quarterly quotation period in one metric tonne bags at international commercial terms with the point of delivery at mine-gate per TIC Transport Policies. 

HeBei will pay monthly, or as per other quotation, periods as agreed, within seven days of delivery secured by an irrevocable secured letter of credit issued by a major Namibian bank.

There will be no product right-of-rejection and no penalties; a price variation (up or down) pro-rata to specified content will be conducted over an agreed sliding scale.

The agreement will take effect once the parties sign and last until the licence has been legally terminated or when it becomes unproductive.

Arcadia will bear the risk associated with production up to the stockpile, while the risk from the stockpile to the product would be pro-rata to profit-sharing proportions. 

Arcadia said they want to conclude the deal with Hebei and finalise a potential transaction during Q1 in 2023.

Arcadia executive chairperson Jurie Wessels said receiving the letter of intent from a company of a calibre such as the HeBei Xinjian Construction CC validates confidence in the Swanson Project becoming a potential early cash generator. 

"We are particularly emboldened by the expression of intent to conduct a profit-sharing arrangement aimed at both the Tantalum and Lithium credits of the Swanson project and to purchase both product streams. Our next steps are engaging with HeBei and other suitors through negotiation to conclude a transaction as early as possible," Wessels said. 

Swanson's indicated mineral resource is 1,439mt at an average grade of 498 ppm tantalum, 72 ppm nickel and 0.14% lithium, while the inferred mineral resource is 1,145mt at an average grade of 472 ppm tantalum, 75ppm nickel and 0.17% lithium. 

An inferred resource is based on limited sampling and assumption, while indicated mineral resource refers to estimates made with confidence.

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