Trigon Metals Inc has announced that it has entered into a non-binding MOU with Shandong Xinhai Mining Technology & Equipment Inc pursuant to which Xinhai has agreed to invest in Trigon, in exchange for the right to be appointed as the engineering, procurement and construction (EPC) contractor for the open pit mining operations at Trigon’s Kombat copper project in northern Namibia. The open pit operations represent the first phase of Kombat’s life of mine strategy to bring both the open pit and underground mines back into production.

The statement said that Xinhai has a proven track record of successful implementation of large-scale engineering and construction projects in Africa and is well placed to partner with Trigon to support the restart of mining at Kombat. “Pursuant to the MOU, Xinhai has agreed to invest up to 10% of the capital requirements of the project by way of providing services in exchange for equity in Trigon. The structure and pricing of Xinhai’s investment will be determined by the parties, acting reasonably and in good faith.”

Further, Xinhai will assist Trigon in securing up to an additional 80% of the capital requirements of the Project through debt financing through Chinese export credit facilities. The structure and pricing of the debt financing will be determined by the parties, acting reasonably and in good faith. In exchange for the above funding support, Xinhai will secure the right to be appointed as the EPC contractor for the Project on commercial terms to be agreed between the parties. The proceeds of the financing will be used for advancement of the Project, including engineering design, acquisition or leasing of land surface rights, refurbishment and start-up of Kombat’s existing processing plant and management of open pit operations.

The proposed transaction is subject to further evaluation by Xinhai of the project, the entering into of definitive agreements on terms and conditions satisfactory to both parties, obtaining of the necessary regulatory approvals, including approval of the TSX Venture Exchange, and the approval of the boards of directors of both parties, as required.

Jed Richardson, President of Trigon, commented: “We are extremely pleased to have advanced our plans for the restart the Kombat Mine. In partnering with Xinhai, we have gained access to both the funding and technical services necessary for the restart of mining operations at Kombat. Xinhai has excellent credentials in implementing projects of this nature and we look forward to a long term relationship as we execute our plans to build Trigon into a mid-tier copper producer.”