Xanadu Mines (ASX:XAM) has engaged Bacchus Capital Advisers to act as a strategic and project funding adviser as the company looks to complete a Pre-Feasibility Study (PFS) for the Kharmagtai Copper-Gold Project in Mongolia.
New York-based financial services firm Jefferies (NYSE:JEF) will remain as the company’s M&A advisor.
“Bacchus has significant experience helping companies of similar scale and complexity navigate through opportunities and partnerships like ours,” Xanadu’s Executive Chairman and Managing Director Colin Moorhead says.
“We believe that with Bacchus onboard, together with Jefferies, our M&A adviser, we have the right team to create the most value for our shareholders from our Kharmagtai copper-gold project.”
Located in Omnogovi Province, around 420km south-east of Ulaanbaatar, the Kharmagtai Project is held under a 50-50 joint venture with Zijin Mining Group (SHA:601899).
The PFS is scheduled for completion in Q3 2024, resulting in a ‘gating decision’ to both a Feasibility Study (FS) and financial investment decision. Upon completion, Xanadu has defined several pathways to carry the project forward.
These include funding its 50% share of the FS and construction costs through project financing, which may include debt, equity, and streaming components. Xanadu may also execute a put option with Zijin to sell half of its share for US$25 million, with a loan carry from Zijin to commercial production at a 6-month secured overnight financing rate (SOFR) plus 5%.
The loan will be repaid from 90% of Xanadu’s share of project cashflow.
Other options include Xanadu executing a put option with Zijin to sell its entire stake for US$50 million.
Xanadu is an ASX and TSX-listed explorer operating in Mongolia. The company maintains a portfolio of exploration projects and remains one of the few junior explorers on both exchanges which jointly controls a copper-gold deposit.
Write to Adam Drought at Mining.com.au
Images: Xanadu Mines
