MZI to raise $45m for Keysbrook

MZI Resources will raise up to $45 million to repay loans and fund ongoing work, as its Keysbrook mineral sands project moves into production.

MZI says it has received ‘irrevocable’ commitments for the discounted placement of about 106.8 million shares at 40 cents each to raise $43 million, and a share purchase plan at the same issue price to raise up to a further $2 million.

Shares in MZI were 12 cents, or 22.2 per cent, lower to 42 cents each at 10am.

The mineral sands miner will use the funds to repay a loan provided by major shareholder Resource Capital Funds and for general working capital.

RCF has also underwritten the placement for up to $20.7 million, and will boost its stake in MZI to 39 per cent if all three tranches of the placement are completed.

MZI managing director Trevor Matthews said RCF continued to play a vital role in the funding and development of Keysbrook.

“RCF’s support and participation in the placement will enable MZI to substantially simplify its capital structure and broaden its investor base,” he said.

“With mining now under way at Keysbrook, MZI is well positioned to become a long life and high-margin mining company.”

The placement was joint lead managed by Argonaut and Bell Potter Securities.

Mining is already under way at the Keysbrook project, while commissioning of the wet concentrator plant is due to start this week, allowing the first batch of final leucoxene and zircon products to be produced next month.

MZI is also in discussions with its customers with the hope of achieving its first product sale before the end of the year.