PERTH (miningweekly.com) – Mineral sands developer MZI resources will raise some A$45-million through a share placement and share purchase plan (SPP) to repay its existing bridge loan facilities and to fund working capital.

The company reported on Tuesday that it had received irrevocable commitments to subscribe for more than 106.8-million ordinary fully paid shares, priced at 40c each.

When combined with a A$2-million SPP offered to the company’s existing eligible shareholders, the placement would raise some A$45-million.

MZI MD Trevor Matthews told shareholders the success of the placement was a great vote of confidence in MZI and its flagship Keysbrook project.

The placement would be completed in a series of tranches, subject to shareholder approval.

The first tranche would comprise 12.5-million shares and would be issued under the company’s placement capacity. The second tranche, comprising 66.3-million shares would be subject to shareholder approval, with a general meeting scheduled for November 24.

A third tranche of 28-million additional shares would be issued to shareholder and bridge loan facility provider Resource Capital Fund (RCF), subject to the successful completion of the second tranche placement and shareholder approval.

Should the approval be obtained, RCF’s stake in MZI would reach 39%.

RCF would participate in each of the tranche placements and would satisfy its subscription obligations by setting off amounts owing under the placement against amounts outstanding under the bridge loan facilities.

“As a long-term supporter of MZI, RCF continues to play a vital role in the successful funding and development of the Keysbrook project. Its support and participation in the placement will enable MZI to substantially simplify its capital structure and broaden its investor base,” Matthews said.

He added that, with mining now under way at the Keysbrook project, MZI was well positioned to become a long-life and high-margin mining company.

MZI aims to produce more than 95 000 t/y of leucoxene and zircon from Keysbrook over its 5.5-year life span, which could be extended by a further 15 years based on mineral resources and pending further approvals and land arrangements.