Ariana Resources PLC's (AIM:AAU, ASX:AA2) shares rose 5% at 1.61p after the company struck a funding term sheet that brings a major Chinese partner into its Dokwe gold project in Zimbabwe and injects A$8 million of fresh capital.
Hongkong Xinhai Mining Services, part of Shandong Xinhai Mining Technology & Equipment, will invest via Ariana’s Australian depositary interests at A$0.30 each, including an immediate A$500,000 signing fee.
Xinhai will also run a A$1 million metallurgical sampling and testwork programme and complete a definitive feasibility study worth up to A$2 million, both paid in shares at the same issue price. A definitive feasibility study is the detailed technical and financial assessment that determines whether a mine can be developed profitably.
The term sheet gives Xinhai up to 18.3 million options on a one-for-two basis, exercisable at A$0.50 until the end of 2027. Ariana expects definitive agreements to be signed by 31 January, after which Xinhai will be able to nominate a director.
A follow-on placing of up to A$2 million on the same terms may also be run by Shaw and Partners.
Managing director Kerim Sener said the partnership recognises the strength of the Dokwe project and will help accelerate progress toward production. Xinhai chairman Yunlong Zhang said the deal reflects its commitment to developing long-life mineral assets in emerging markets.