MZI Resources scores $US41m funding deal

MZI Resources has secured $US41.5 million in funding from international private equity group Resource Capital Funds for the development of its Keysbrook mineral sands project.

RCF emerged as MZI's largest shareholder earlier this year after purchasing $3 million worth of the company's shares.

The funding package will consist of a $US21 million convertible loan facility, a $US17 million bridge finance facility split into two tranches and a $3.5 million consideration for the purchase of a 2 per cent gross revenue royalty from all minerals produced from the Keysbrook project and surrounding area.

MZI said today that the deal, which is subject to further due diligence and approval from MZI shareholders, would put the company in a position to commence construction at Keysbrook later this year and target production by late 2014.

The Keysbrook project, located around 70 kilometres south of Perth, is expected to produce around 91,000 tonnes of product annually from 110,000 tonnes of dry heavy mineral concentrate.

MZI chief executive Trevor Matthews said the RCF funding deal was a testament to the attractiveness of the project.

"This package gives us confidence that the project financing process will be completed shortly which, following completion of certain financing conditions, will enable us to commence development activities at Keysbrook," Mr Matthews said.

Mr Matthews said the RCF deal was expected to provide the equity finance portion of the Keysbrook funding, paving the way for MZI to complete a debt funding agreement with banks.

MZI shares were up by 14 per cent at 1.6 cents at 11:00AM WST.