Shares in Ariana Resources PLC (AIM:AAU, ASX:AA2) rose 9% to 1.5p after the miner unveiled a binding agreement with a Chinese mining services group that will inject an initial A$8 million into the business and help fund key technical work at its Dokwe gold project in Zimbabwe.
The AIM-quoted company said the deal marks a significant step towards completing a definitive feasibility study at Dokwe, which it owns outright, while also bringing in a long-term strategic partner.
Under the agreement, Hongkong Xinhai Mining Services, part of Shandong Xinhai Mining Technology & Equipment Inc, will acquire a 10.19% stake in Ariana following completion of the first tranche. Xinhai has already paid a non-refundable A$500,000 signing fee and is in the process of transferring the remaining A$7.5 million.
The equity is being issued at A$0.30 per CHESS Depositary Interest, the form in which Ariana’s shares trade in Australia.
Beyond the cash investment, Xinhai has committed to carrying out metallurgical sampling and testwork worth A$1 million and to completing the definitive feasibility study for up to A$2 million, both payable in shares and subject to shareholder approval.
Taken together, the package could be worth up to A$11 million.
Dr Kerim Sener, managing director, said the agreement had been fast-tracked following an earlier term sheet and would support progress at Dokwe. Xinhai will also receive share options and the right to nominate a director, subject to conditions.