Key Highlights

  • Aldoro Resources has appointed Shenghuang Weiye Investment Management Consulting Centre (Shenhuang) as Strategic Development Adviser for the Kameelburg Project in Namibia.
  • No advisory fee is payable; consideration is 23,000,000 performance Options with an exercise price of A$0.00001, issued only if milestones are achieved.
  • Issue of the options is conditional on Shareholder approval, which the company intends to seek at its upcoming annual general meeting.

Aldoro Resources Limited (ASX:ARN) has formalised a strategic development Partnership for its Kameelburg Project in Namibia, appointing Shenghuang Weiye Investment Management Consulting Centre, referred to in the announcement as Shenhuang, as Strategic Development Adviser. The appointment covers the next phase of the project's development and commercialisation. The announcement spells the adviser's name in two ways; this article uses the company's principal form.

Aldoro says the parties have worked together for roughly six months. The mandate covers strategic partners and investment, project funding, pilot plant development, engineering, procurement and construction resources, product offtake and customers, commercialisation, and potential future Capital Markets transactions. The company says Shenhuang is already advancing several workstreams and negotiations with potential strategic and industry partners. The announcement does not name any counterparty or report any agreement reached with one.

Commercial terms

No advisory fee is payable by Aldoro. Instead, the adviser's consideration is a package of 23,000,000 performance options, issued only if specified milestones are achieved. Each option has an exercise price of A$0.00001 and expires five years from issue. The agreement runs for five years, and either party may terminate if the other commits a material breach that is not remedied within 20 Business days of notice, or becomes insolvent. The company describes its other terms as customary for an agreement of this kind.

The five option classes

Class A comprises 6,000,000 options, vesting on receipt of at least RMB100 million of strategic funding from a partner introduced or materially advanced by Shenhuang under a formal transaction arrangement, with the funds received and available for the project. Class B has 1,000,000 options, tied to further project funding being secured after Class A and additional funding beginning to be applied to Kameelburg's continued development.

Class C, also 1,000,000 options, relates to a material development or commercialisation milestone. Examples given include metallurgical optimisation, a pilot or demonstration plant, a material binding offtake or purchase agreement, or first product sales revenue. Class D, another 1,000,000 options, requires Aldoro's 20-day volume-weighted average share price to reach or exceed A$1.00. Class E has 14,000,000 options and depends on successful completion of an agreed Hong Kong or equivalent listing transaction.

Conditions and disclosure

Issue of all the performance options is conditional on Aldoro shareholder approval, which the company intends to seek at its upcoming annual general meeting. No options will be issued unless that approval is obtained. Aldoro says the full vesting conditions and option terms will be set out in the notice of meeting, which it expects to dispatch in the coming days.

The announcement gives no meeting date and does not define the terms "formal transaction arrangement" or "Listing Transaction". It discloses only a summary of the strategic development agreement. No strategic funding, offtake or listing has been announced as achieved.

Next steps

The sequence set out in the announcement is the dispatch of the notice of meeting with detailed terms, a shareholder vote on the option issue at the annual general meeting, and issue of the options only if approval is given. Vesting would then depend on the Class A to E milestones.

Aldoro Resources (ASX:ARN) has not said what the project's funding requirement is or how the milestones relate to any development timetable. The company also has not indicated how any funding from the RMB100 million threshold would be applied.