MZI secures A$41.5m for WA mineral sands project
PERTH (miningweekly.com) – ASX-listed MZI Resources has secured $41.5-million in funding for the development of its Keysbrook mineral sands project, in Western Australia.
The miner reported on Wednesday that the funding package, from Resource Capital Fund, would provide the equity finance portion of the Keysbrook funding, and paved the way for MZI to complete the debt funding agreement with two joint lead arranger banks.
“This package provides the equity funding and when combined with the debt funding currently being finalised, is expected to provide all funds required to develop the Keysbrook project,” said MZI CEO Trevor Matthews.
He added that the package gave MZI confidence that the project financing process would be completed shortly, which would enable the start of development activities.
Once in full production, the Keysbrook project would produce 91 000 t/y of product from 110 000 t of dry heavy mineral concentrate. First production was currently scheduled for the December quarter of 2014.
The funding package agreed to with Resource Capital Fund would consist of three components. The first $3.5-million payment would be in consideration for the purchase of a 2% gross revenue royalty from all minerals produced from the Keysbrook project.
The second $21-million portion of the funding was classified as a convertible loan facility that would be used to fund development costs associated with the Keysbrook project.
The third portion of the funding consists of a $17-million bridging loan facility that would be split into two tranches. The first tranche of $7-million would go towards funding the debt service reserve account requirements, while the second tranche of $10-million would be used for corporate purposes.
The funding package was subject to the completion of further technical, financial and permitting due diligence work, as well as the satisfaction of certain conditions precedent.
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