Flagship Minerals secures second $1.25m Xinhai tranche on Chilean gold project
- Doug Bright
- 9 minutes ago
- 3 min read
Flagship Minerals (ASX: FLG) has received its second $1.25 million tranche from global EPC (Engineering, Procurement, and Construction) firm Shandong Xinhai Mining Technology & Equipment after it completed its due diligence on the company’s Pantanillo gold project in northern Chile.
Flagship announced in October it had secured binding commitments to raise $4 million before costs, via a strongly subscribed share placement, comprising $1.5m to professional and sophisticated investors and a strategic placement of $2.5m to Shandong Xinhai.
Xinhai’s investment was to be split into two equal tranches of A$1.25m (12.5 million placement shares) each, with the 2nd tranche payable after completion of a site visit to the Pantanillo gold project.
The Pantanillo project is an advanced oxide gold project in the prolific Maricunga Gold Belt in northern Chile’s arid Atacama region, about 700km north of Santiago and 125km east of the regional hub of Copiapo, a city with a population of 175,000.
The project hosts a resource of 47.4 million tonnes at an average grade of 0.69 grams per tonne gold for 1.05 million ounces of gold, supported by a foreign (non-JORC compliant) National Instrument (NI) 43-101 resource estimate. About 98 per cent of the resource is considered amenable to heap leach gold extraction and processing.
The Pantanillo resource estimate has an effective date of July 9, 2010, and was reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum standards and NI 43-101 by Orosur Mining Inc. on October 15, 2010.
A five-person delegation from Xinhai, led by vice president and mineral processing engineer Qingmin Wang, visited the site in mid-December, inspecting the core shed in Copiapo and the project area to assess geology, topography, access and infrastructure.
Following investment committee approval, Xinhai completed the second strategic funds allocation this week and nominated major shareholder Zhongyi (John) Zhang for appointment to Flagship’s board in January.
Zhang, who holds mathematics degrees from Oxford University and is an industry MBA mentor at the University of International Business and Economics in China brings experience in mining, processing technologies and EPC projects across more than 100 countries.
The Xinhai partnership will provide Flagship with high-level engineering and construction expertise as it advances toward feasibility studies in 2026.
Separately, Flagship has appointed leading Chilean environmental consultant Ambiental Y Sectorial to conduct the project’s Environmental Impact Assessment (EIA), with baseline studies now underway and submission targeted for early 2027.
The company is also on track to deliver a JORC-compliant mineral resource estimate in the coming weeks to convert the existing 1.05 million ounce gold foreign estimate at Pantanillo to Australian standards.
“We’re pleased to confirm receipt of the second $1.25 million tranche from our strategic partner Xinhai, following their on-site due diligence and board-level review. Their support affirms the scale and potential of Pantanillo as a future gold development. Baseline environmental studies are now underway with Ambiental Y Sectorial, marking a key milestone as we position the project for the next phase of growth under Chile’s streamlined approvals framework.” Flagship Minerals managing director Paul Lock
Modern exploration of the project began in 1983 and has been undertaken by Anglo American, Empresa Minera Mantos Blancos - a Chilean subsidiary of Anglo American - Kinross Gold Corporation, Fortune Valley Resources and Orosur Mining Inc.
Completed work includes geological mapping, soil and rock geochemical surveys, ground magnetics, trenching, reverse circulation drilling, diamond core drilling, metallurgical testwork and other related and supporting studies.
The Pantanillo gold deposit exceeds 850m in length, ranges between 200m and 600m wide and remains open along strike and down-dip. The mineralised zone strikes northeast-southwest and dips between 30 and 45 degrees. Mineralisation is hosted in weathered and altered andesitic porphyry with sheeted and stockwork quartz veins.
Flagship’s resource re-estimation program follows its August 2025 acquisition of Anglo American’s comprehensive exploration dataset which includes 183 drill holes totalling 32,827 metres, of which 48 diamond drill holes delivered 13,949m.
Metallurgical testwork on a 690kg sample is progressing in China, while discussions with drill contractors are advanced ahead of planned resource extension and infill drill programs next year.
Flagship’s share price reached a 23 cent high today before settling to 21.5 cents, a 4.9 per cent hike on yesterday’s close.
With a major global EPC player now firmly in its corner, an imminent JORC resource upgrade and environmental baseline work underway, Flagship Minerals is wasting no time driving its million ounce Pantanillo gold project toward feasibility and potential development in 2026.
The project’s northern Atacama location is already home to a number of multi-million-ounce deposits operated by many key players including Kinross, Barrick-Newmont and Gold Fields. With a heavy development schedule on the calendar for next year, including resource extension drilling and feasibility studies, Flagship looks likely to become this gold-rich region’s next big heap-leach opportunity.
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