REG - East Star Resources - JV Agreement for Development of Verkhuba

East Star ResourcesAnnouncement

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RNS Number : 1734L  East Star Resources PLC  11 December 2025

11 December 2025

 

East Star Resources Plc

 

("East Star" or the "Company")

 

JV Agreement for Development of Verkhuba

 

Market leading EPC company to farm into Verkhuba Copper Deposit and advance to
production

 

East Star Resources Plc (LSE: EST), the Kazakhstan-focused gold and base
metals explorer, is pleased to announce it has signed binding Heads of
Agreement ("HoA") to establish a joint venture company ("JVCo") pursuant to
which Hong Kong Xinhai Mining Services Limited ("Xinhai") will farm in, in
five stages, for up to 70% of the Verkhuba Copper Deposit ("Verkhuba"), taking
the project 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 mining services to the mining
industry.

 

Highlights

 

 ·             Binding HoA with a market leading EPC firm to finance, de-risk and speed up
               the development of the Verkhuba copper deposit.
 ·             Xinhai's estimated investment for the feasibility study and mine and plant
               construction costs is approximately US$65 million.
 ·             With positive results from a Feasibility Study, no further funding is required
               for East Star to become a copper producer.
 ·             East Star retains 100% of the Rulikha and Talovskoye prospects including the
               soviet era Rulikha deposit, independently modelled to contain an upper limit
               JORC Exploration Target of 23Mt @ 2.4% copper equivalent (CuEq)

 

Farm-In Stages

Xinhai shall have the right to earn an increasing equity interest in the JVCo
by funding 100% of the costs required for the project, 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 & 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:                                                                               Transfer of ownership (Bill of Lading) of construction equipment to the JVC  51% / 49%

Equipment Transfer
 Stage                                                                                  Successful commissioning of a 1 million tonne per annum capacity mining and  70% / 30%
 5:                                                                                     processing project
 Project Commissioning

 

 

Alex Walker, CEO of East Star, commented:

 

 "This transaction brings a world class EPC company to Verkhuba, validating
East Star's view that this asset is already worth significantly more that our
current market capitalisation. The transaction brings both financial capacity
and development expertise to Verkhuba, derisking and accelerating its
development without further dilution at the Company level. Further, it allows
East Star to reconcentrate its efforts on making its next discovery as we aim
to bring more gold and copper projects to development. We look forward to
working with Xinhai on Verkhuba and potentially other projects in Kazakhstan
in the future.

 

Importantly, East Star retains 100% of its other Rudny Altai Belt VMS licences
incorporating the Rulikha Deposit and exploration areas, as well as the Snowy,
Piket, and Judzha licences in Karaganda which are prospective for porphyry and
epithermal mineralisation.

 

We're also very excited to be starting work on the Endeavour Mining Joint
Venture which, when combined with the Xinhai investment, will expose East Star
to more than US$3 million in exploration in 2026 without funding from the
Company."

 

About Hong Kong Xinhai Mining Services Limited

 

Xinhai is a leading global process engineering and contracting company that
specialises in providing engineering design, procurement and construction
services to the mining industry. Xinhai has completed more than 500 EPC
contracts globally, many including mine construction and mine operation
management services. Xinhai has been very active this year, signing
partnership agreements and/or equity investments in six ASX listed companies.

 

Farm-In

 

East Star and Xinhai have signed a binding HoA, pursuant to which the parties
intend to enter into a full Joint Venture Agreement whereby Xinhai intends to
farm into Verkhuba. Under the terms of the JV, circa 5,000 metres of drilling
will be conducted, funded by an initial investment from Xinhai of A$1.5
million into the JVCo, to inform a Feasibility Study. East Star will continue
to assist with the management of the licence, the mining licence application,
and other permitting and ESG requirements.

 

The binding HoA provides Xinhai with exclusivity over East Star's Licence
1795, which incorporates Verkhuba, for up to 180 days while the parties
negotiate and execute a binding Joint Venture Agreement ("JV Agreement").
After the execution of the JV Agreement, East Star will be responsible for the
establishment of the JVCo (within 90 days) to be registered at the Astana
International Finance Centre (AIFC). 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 shall provide all necessary working capital and bear all costs incurred
during the commissioning period of the project. Upon the successful
commissioning of the project and issuance of the Completion Certificate, the
JVCo shall assume full responsibility for the operational management of the
project.

 

Should the JVCo require any additional funding for its operations after
commissioning, and the JVCo does not have the financial capacity to service
this requirement through debt or equity, both Xinhai and East Star shall
contribute such funds pro rata in proportion to their respective shareholdings
in the JVCo at the time of the contribution.

 

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.

 

Contacts:

 

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.

 

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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