THE BOURSE WHISPERER: MZI Resources (ASX: MZI) has inform the market that private equity group Resource Capital Fund has taken a 12 per cent cornerstone stake in the company through a $3 million share placement at 1.296 cents per share.
As part of the placement, RCF has the right to appoint a representative to the MZI Board.
MZI indicated it is currently in further discussions with RCF concerning a larger funding package that will help underpin development of MZI’s Keysbrook mineral sands project in Western Australia.
“RCF’s decision to invest in the company is an immense vote of confidence in Keysbrook and will play an important role in securing the full funding for the project’s development,” MZI Resources chief executive officer Trevor Matthews said in the company’s announcement to the Australian Securities Exchange.
“MZI is in the process of finalising the Keysbrook debt arrangements with the Joint Lead Arranger banks, and is also assessing proposals for the construction and mining contract works at Keysbrook.
“There is a high level of activity and confidence in the company, and we look forward to finalising the funding arrangements and moving Keysbrook into development.
“The SPP gives shareholders the opportunity to take up further shares at the same price as RCF, and we look forward to their ongoing support.”
The price of the placement represents a 14 per cent discount to the volume weighted average price (VWAP) of MZI shares in the five trading days immediately prior to the company’s recent trading halt.
The placement will result in approx. 231.5 million new shares issued.
The placement to RCF will be followed by a Share Purchase Plan (SPP) to eligible MZI shareholders at 1.296 cents per share.
The SPP will be offered to eligible shareholders registered on 28 June 2013.
Resource Capital Funds invests exclusively in the resources industry.
The group currently manages US$3.4 billion of assets.