Marenica funding deal with Chinese firm

Marenica Energy says it has signed a debt and equity funding deal with China's Sichuan Hanlong Group to advance its namesake uranium project in Namibia.

Shares in the junior explorer fell on the news, down two cents, or 16.67 per cent, at 10 cents at 1415 AEDT.

Marenica said it had signed a deed with Hanlong for immediate funding of $3 million through a $2 million convertible note and a $1 million share placement at seven cents per share.

Hanlong will also underwrite a $2 million rights issue at seven cents per share to existing shareholders, increasing total funds raised to $5 million.

Marenica said the companies had also executed a memorandum of understanding encompassing further funding support, development financing, uranium offtake and support for strategic acquisitions up to December next year.

"Hanlong is committed to supporting Marenica to become a successful uranium mining company," Marenica said in a statement.

It said the funds were sufficient for the next phase of pre-feasibility work at the Namibian project, which it expects will be a 13-year operation producing about 3.5 million pounds of uranium oxide per year.