Vimy finds $30m for uranium mine

Uranium miner Vimy Resources has received a $30 million financing package from a mining-focused private equity fund, to advance ongoing development of its flagship Mulga Rock project near Kalgoorlie.

The financing package comprises a $5 million placement to Resource Capital Fund, which will be issued about 17 million shares at 30 cents each.

RCF has also conditionally offered to provide an additional $25 million loan, $10 million of which would be in cash in exchange for a 1.15 per cent royalty on revenue gained from the uranium project, and $15 million in the form of an unsecured bridging loan.

Vimy plans to use the proceeds of the $5 million placement to fund a pre-feasibility study on Mulga Rock, which is expected to be delivered in the third quarter of the year.

The issue price represents a 14 per cent discount to Vimy’s 30-day volume weighted average price.

Following the placement, RCF will hold nearly 8 per cent of Vimy, and will have the right to nominate a director to the company’s board.

Vimy expects the total $30 million package would fund the company through to project financing of Mulga Rock.

“RCF’s funding package will provide the funds we need to complete our studies and secure project financing for Mulga Rock,” chief executive Mike Young said.

“The recently released scoping study confirmed our belief that we have one of Australia’s best undeveloped uranium projects, viable at today’s long term pricing.”

Mulga Rock has a total resource estimate of 72.7 million pounds of uranium and a life of mine of 16 years with an estimated production of 47 million pounds.

Shares in Vimy were 2.5 per cent lower to 39 cents a share at 10:50am.