Ariana Resources PLC (AIM:AAU, ASX:AA2) managing director, Kerim Sener, talked with Proactive about a new A$8 million equity investment deal that will help fund the Definitive Feasibility Study (DFS) at the Dokwe gold project in Zimbabwe.
Sener explained that the investment is coming from a Chinese EPC contractor with substantial expertise in metallurgical test work and engineering. He noted: “There’s a $500,000 signing fee being paid, which is part and parcel of that AUD 8 million equity investment.” The deal is structured through Ariana’s listing in Australia and will involve technical services agreements covering metallurgical sampling and contributions to the DFS.
The investment includes AUD 1 million in CDIs for metallurgical test work and up to $2 million on completion of the DFS. Sener described it as a “very strong endorsement of the Dokwe project and what we’re doing in Zimbabwe.”
He added that Xinhai, the Chinese partner, already has a presence in-country, having built a 2 million tonne per annum lithium plant and is constructing its own gold mine in central Zimbabwe. With Xinhai’s involvement, Ariana expects to accelerate the DFS timeline, potentially completing it in late 2026.
While the Dokwe project will eventually require substantial additional capital, this package funds Ariana through to a potential investment decision.
Proactive: Kerim, very good to speak with you. Could you start by breaking down the A$8 million funding package? What does it cover and how long does it keep Ariana funded for?
Kerim Sener: We're really excited about this development for the Dokwe project. The company with which we were entering into this arrangement is a well-known Chinese EPC contractor, with substantial facilities and capabilities in engineering and metallurgical test work as well. So it's an $8 million equity investment to be undertaken in Ariana CDI.
So over here in Australia, through our listing here, there's a $500,000 signing fee, which is being paid, which is part and parcel of that 8 million equity investment. We have to go through the process now of completing definitive documentation. So that's a process that's now underway associated with that — technical services agreements relating to metallurgical sampling and test work, in addition to their contributions to the definitive feasibility study for the Dokwe project.
Those latter two components are paid in shares — or CDIs, rather — for $1 million in value for the metallurgical sampling and test work program, and up to $2 million paid in CDIs on completion of the definitive feasibility study. So it's a very strong endorsement of the Dokwe project and what we're doing in Zimbabwe.
The other important point here, of course, is that Xinhai have a substantial in-country presence. They've been involved in building the 2 million tonne per annum plant at Bikita — that’s the lithium beneficiation plant — and they've had a workforce certainly in excess of a thousand people at peak.
They're also building their own gold mine in central Zimbabwe in Gweru. And that's due to go live in January of next year.
Proactive: Kerim, with the feasibility study now funded, what's the realistic timeline from here to first gold?
Kerim Sener: So we can obviously accelerate the whole DFS program. Our original view was that we'd get it through by 2026, in the latter part of the year. I think with Xinhai's inputs — in particular their very specific expertise and understanding of the requirements for metallurgical sampling and test work, and the design work that goes into that — we’ll be able to accelerate those aspects of the program, which is great.
So while we have the RC drilling program continuing at site to extend the known mineralisation — particularly at Dokwe Central and around Dokwe North — that can continue to answer some questions around the exploration upside opportunity. But we can now start planning for the drilling program associated with the metallurgical sampling.
So we plan to get that underway very early next year.
Proactive: Does the $8 million get you all the way to a production decision, or will you need to raise more capital down the track, Kerim?
Kerim Sener: Sure. So, Dokwe is a big project. It requires substantial capital, and what routes we choose to raise that capital — whether that's in further equity or in debt — is an open question at the moment. But what this does is it arms us significantly to be able to see through the whole DFS program to a successful conclusion.
On the back of that, we could make an investment decision based on those sorts of questions — where we’ll be raising the major capital required to go ahead and build the Dokwe project. But having a shareholder like Xinhai also arms us substantially, in the sense that they are a sort of financial backstop in a sense.
Because it would be their intention, in partnership with us, to see Dokwe built as quickly as possible.
Proactive: Kerim, congratulations on this latest development. I hope you'll keep us posted on your progress.