West Perth based Matrix Metals will commence copper production at the Mt Watson and Cuthbert project after executing an agreement with Glencore International AG which will provide $2.5 million in equity funding and a debt facility of $10 million.
Matrix has also reached in-principle agreement with Hartleys Ltd to raise a further $2.35 million by way of a placement of Matrix shares at a price of 5.3 cents per share.
Matrix's two largest shareholders, Independence Group NL and the LinQ Resources Fund, have agreed to participate in the placement.
Of the funding, $10 million will be used to fund the stage one pre-production project capital expenditure and $5 million will be used to fund the stage two capital expenditure for the plant upgrade.
Stage one production levels will 5,500 tpa of Grade A LME copper cathode with a planned production rate increase up to 10,000 tpa in the stage two development.
Copper cathode production is expected to commence no later than 3rd quarter of 2007. The debt facility is subject only to the satisfaction of certain legal due diligence.
In consideration for its financial support of Matrix, Glencore will be granted cathode marketing rights for the Mt Watson / Cuthbert and White Range Projects and base metal marketing rights to identified resources, deposits and prospects that currently comprise those two projects.
Upon availability of a drawdown of the loan, a Glencore representative will be appointed to the Matrix Board of directors.
Matrix share price has risen 12 per cent to 6.5 cents in today's trade.
