Antilles Gold Raises $650K Ahead of $29.5M EPC Contract with Xinhai Mining

Antilles Gold's Strategic Capital Raise

Antilles Gold Limited (ASX, AAU) has announced a two-stage capital raising initiative designed to underpin the development of its Nueva Sabana copper-gold mine in Cuba. The company is first placing 130 million shares at a modest price of $0.005 each, aiming to raise $650,000 before costs. This initial raise is intended to provide working capital and maintain operational momentum while the company finalises a larger funding arrangement.

Linking Funding to Major EPC Contract

Crucially, this smaller placement precedes a more substantial capital injection tied to a significant engineering, procurement, and construction (EPC) contract valued at US$29.5 million with Chinese mining and engineering firm Xinhai Mining. The contract, which represents approximately 85% of the development activities by value, is expected to be executed imminently. Following this, Antilles Gold plans to place 590 million shares at $0.007 each to a nominee of Xinhai, raising an additional $4.13 million before costs.

Innovative Financing and Risk Mitigation

Xinhai Mining is not only providing the EPC services but also extending significant credit support by deferring 60% of its monthly progress claims, amounting to US$17.7 million, for up to two years after the 12-month construction period. This arrangement alleviates immediate cash flow pressures on the project and demonstrates a collaborative approach to financing. Furthermore, the Cuban government's supportive stance and approval for funds to be held offshore reduce country risk, a notable concern for foreign investors in the region.

Broader Development and Exploration Outlook

The Nueva Sabana mine is the first stage of development under the 50, 50 joint venture Minera La Victoria SA, which Antilles Gold operates alongside the Cuban government’s GeoMinera SA. Beyond Nueva Sabana, the joint venture has ambitions to develop the La Demajagua open pit mine and explore significant copper targets such as the El Pilar porphyry system and the Sierra Maestra copper belt. The company plans to reinvest free cash flow from Nueva Sabana to fund these exploration activities, signaling a long-term growth strategy in Cuba’s mineral sector.

Next Steps and Market Implications

The immediate focus for Antilles Gold will be securing shareholder approval for the free options attached to the initial placement and finalising documentation with Xinhai Mining. The successful execution of these steps will be pivotal in advancing the Nueva Sabana project and unlocking the potential of Cuba’s copper-gold resources. Investors will be watching closely to see how these developments translate into operational progress and financial returns.