REG - East Star Resources - Copper JV Agreement Signed with Xinhai Mining

East Star ResourcesAnnouncement

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RNS Number : 1923X  East Star Resources PLC  19 March 2026

19 March 2026

 

East Star Resources Plc

 

("East Star" or the "Company")

 

Copper JV Agreement Signed with Xinhai Mining

 

Leading EPC company to farm into Verkhuba Copper Deposit and advance it to
production

 

Further to the Heads of Agreement announced on 11 December 2025, East Star
Resources Plc (LSE: EST), the Kazakhstan-focused gold and copper explorer, is
pleased to announce the formalisation of the joint venture agreement ("JVA")
pursuant to which Hong Kong Xinhai Mining Services Limited ("Xinhai") will
farm into the Verkhuba Copper Deposit ("Verkhuba"), and advance it into
production.

Xinhai is a privately owned, global process engineering and contracting
company that specialises in providing engineering design, procurement,
construction ("EPC") services and contract services to the mining industry.

Highlights:

·    JVA with a market-leading EPC firm to finance, de-risk, and speed up
the development of the Verkhuba

·    East Star shall incorporate the joint venture company ("JVCo") in
Kazakhstan within 30 days under the Astana International Financial Centre and
Xinhai shall earn into 70% of the JVCo

·    Xinhai's estimated investment for the feasibility study, mine
development, and plant construction is approximately US$65 million

·    East Star is fully carried to production and will hold 30% of the
producing mine with a current JORC Inferred Resource of 20.3Mt @ 1.16% copper,
1.54% zinc and 0.27% lead

·    East Star retains 100% of its nearby advanced prospects, including
the Soviet-era Rulikha deposit, independently modelled to contain an upper
limit JORC Exploration Target of 23Mt @ 2.4% copper equivalent

Farm-In Stages

As previously announced, Xinhai shall have the right to earn an increasing
equity interest in the JVCo by funding 100% of the costs required for
Verkhuba, from additional resource definition drilling through to
commissioning and production.

Xinhai's equity interest in the JVCo shall increase in stages according to the
following schedule upon the satisfaction of the corresponding milestones:

 

                                                                                        Milestone                                                                    Resulting Shareholding (Xinhai / East Star)
 Stage 1:                                                                               Xinhai invests A$1.5 million for resource definition drilling                15% / 85%
 Establishment of JVCo & Initial Funding
 Stage 2:                                                                               Xinhai funds a feasibility study sufficient for Kazakhstan mining licence    20% / 80%
 Feasibility Study Completion                                                           application
 Stage                                                                                  Xinhai funds detailed engineering and design work                            30% / 70%
 3:
 Detailed Engineering Design
 Stage 4:                       Equipment Transfer                                      Transfer of ownership (Bill of Lading) of construction equipment to the JVC  51% / 49%
 Stage                                                                                  Successful commissioning of a 1 million tonne per annum capacity mining and  70% / 30%
 5:                                                                                     processing project
 Project Commissioning

 

Upon establishment of the JVCo, Xinhai and East Star will each appoint one
director. When Xinhai earns more than 50% of the shares of the JVCo, Xinhai
will have the right to appoint an additional director to the board of the
JVCo.

Xinhai will provide all necessary working capital and bear all costs incurred
up to commissioning and earning a 70% interest in JVCo. Upon the successful
commissioning of the project and issuance of the Completion Certificate, the
JVCo shall assume full responsibility for the operational management of JVCo
and the project.

The JVCo shall distribute dividends to its shareholders, at a time and in a
manner to be determined by the JVCo board of directors, in proportion to their
respective shareholdings.

Next Steps

East Star shall incorporate the JVCo in Kazakhstan within 30 days under the
Astana International Financial Centre and procure the transfer of Licence 1795
into JVCo.

The JVCo intends to commence, by June 2026, resource definition (infill)
drilling and collecting samples for metallurgical test work (Stage 1 above).
Part of the initial focus will be on the shallow open pit where previous
drilling intersected zones including:

·      VU_23_DD_001 2.9m @ 2.07% CuEq from 19.4m and 15.0m @ 1.56% CuEq
from 27.4m (including 10m @ 2% CuEq from 30.4m)

·    VU_23_DD_002: 11.8m @ 1.41% CuEq from 171.0m and 10.3m @ 1.77% CuEq
from 186.8m

·      VU_23_DD_003: 2.4m @ 2.45% CuEq from 74.0m and 5.0m @ 0.86% CuEq
from 101.4m

 

Near-term drilling will be designed to inform the feasibility study in Stage
2, sufficient for a mining licence application.

Alex Walker, CEO of East Star, commented:

"Formalising the JVA with Xinhai represents a significant milestone in
cementing the pathway for the accelerated development of Verkhuba. At no
further cost to East Star, upon commencement of production, our Company will
hold a 30% interest in a producing mine with an anticipated production profile
of more than 10,000 tonnes per annum of copper equivalent metal. As of
yesterday, copper was trading at around US$12,677 per tonne with a widely
predicted future supply deficit.

I am currently with our partner Xinhai in Yantai, China and am extremely
impressed with their facilities and capabilities. They are currently
manufacturing and installing another processing plant in Kazakhstan with a
development timeline of less than 12 months. With time frame and cost
increases being the greatest risk juniors face when transitioning to
production, partnering with a company that has completed more than 2,500
projects globally reduces these risks for East Star significantly.

East Star retains 100% of other nearby prospects including a JORC Exploration
Target of 20.4 million tonnes at 2.4% copper equivalent at Rulikha for which
we are progressing the permitting to hopefully commence exploration in 2026."

Figure 1: East Star CEO Alex Walker and Xinhai Chairman Elon Zhang at the JVA
signing ceremony in Yantai, China on 17 March 2026

- Ends -

 

East Star Resources Plc

Alex Walker, Chief Executive Officer

Tel: +44 (0)20 7390 0234 (via Vigo Consulting)

 

SI Capital (Corporate Broker)

Nick Emerson

Tel: +44 (0)1483 413 500

 

Vigo Consulting (Investor Relations)

Ben Simons / Peter Jacob

Tel: +44 (0)20 7390 0234

 

About East Star Resources Plc

 

East Star Resources is focused on the discovery and development of copper and
gold in Kazakhstan. The Company is pursuing multiple exploration strategies
including:

 

 ·         A joint venture with Hong Kong Xinhai Mining Services Limited to take the
           Verkhuba Deposit (20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead) into
           production (at no further cost to East Star) with East Star retaining 30%
           ownership in production
 ·         A second VMS Exploration Target with up to 23Mt @ 2.4% copper equivalent in
           the same region, with numerous other targets being advanced to drill-ready
           status
 ·         A $25 million+ strategic gold exploration joint venture with Endeavour Mining
 ·         Tier 1 potential copper porphyry targets and epithermal gold targets in a
           proven copper porphyry and epithermal belt

 

Visit our website:

www.eaststarplc.com (http://www.eaststarplc.com)

 

Follow us on social media:

LinkedIn: https://www.linkedin.com/company/east-star-resources/
(https://www.linkedin.com/company/east-star-resources/)

X: https://x.com/EastStar_PLC (https://x.com/EastStar_PLC)

 

Subscribe to our email alert service to be notified whenever East Star
releases news:

www.eaststarplc.com/newsalerts (http://www.eaststarplc.com/newsalerts)

 

About Hong Kong Xinhai Mining Services Limited

 Xinhai is a privately owned global process engineering and contracting
company that specialises in providing engineering design, procurement and
construction services to the mining industry.  It has completed more than 500
EPC contracts globally, many including mine construction and mine operation
management services.

http://www.xinhaimining.com/ (http://www.xinhaimining.com/)

 

The person who arranged for the release of this announcement was Alex Walker,
CEO of the Company.

 

This announcement contains inside information for the purposes of Article 7 of
Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market
Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the
publication of this announcement, this inside information (as defined in UK
MAR) is now considered to be in the public domain.

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