PERTH (miningweekly.com) – ASX-listed Avalon Minerals has secured A$25-million in funding to see its Viscaria copper project, in Sweden, through to the completion of a bankable feasibility study (BFS).

Avalon reported on Monday that it had signed a memorandum of understanding with advisory group ZJ Advisory, under which ZJ would procure subscriptions for Avalon shares on behalf of its clients.

The share subscription would take place over two tranches, with the first consisting of 100-million Avalon shares, to generate some A$5-million in funding. The second tranche would consist of 400-million shares, for an aggregate consideration of A$20-million.

The first tranche was subject to Avalon and ZJ agreeing on the performance hurdles for the provision of the second-tranche funding, and ZJ completing due diligence. The performance hurdles would relate to a BFS being justified for the Viscaria project, as well as other terms to be agreed upon by both parties.

“The financing package with ZJ is a significant milestone for Avalon and confirms the strong financial support for the company, the Viscaria project and the company’s strategy to add value by completing a BFS on the Viscaria copper project,’ said Avalon MD Jeremy Read.

He noted that under the arrangement with ZJ, Avalon would be able to progress work on the Viscaria project, through to its BFS.

“In the current difficult financial market conditions, it is an extremely pleasing result for Avalon to obtain such a significant injection of funds and to be fully funded through to the completion of the Viscaria BFS,” Read said.

Meanwhile, Avalon would also undertake a nonrenounceable rights issue of one new share for every ten existing shares held, at an issue price of 5c a share, to raise a further A$3-million.

The rights issue would be subject to the prevailing market conditions, and an underwriting agreement. ZJ had the first right of refusal to underwrite the rights issue.

Avalon recently reported that an updating scoping study into the Viscaria project had increased the copper project’s net present value by some A$46-million. The updated study incorporated recent drilling results, and estimated a production of some 10 000 t of copper and 343 000 t of iron a year, at a cash cost of $0.65/lb, over a seven-year mine life.