MZI clinches $US110 million finance

Mineral sands explorer MZI Resources is one step closer to production following shareholders approving a $US110 million debt and equity package today.

Private equity group Resource Capital Fund will provide $US58 million through a $US33.5 million bridge finance facility, a $US21 million convertible loan facility and a royalty purchase of $US3.5 million.

The convertible loan may be converted by RCF for MZI shares at a price between 1.0 cents and 1.6 cents and means RCF will increase its voting power up to 82.9 per cent.

RMB Australia Holdings will provide $US51.5 million in debt facilities through $US37.5 million senior finance facilities, an $11.5 million bank guarantee facility, a $US3 million working capital facility and foreign exchange hedging facilities.

In front of a handful of shareholders at a meeting in Perth today chairman Mal Randall said the support from RCF and RMB showed a foresight seldom seen these days.

“Bottom line is if they weren’t involved we wouldn’t be here,” Mr Randall said.

MZI’s 100 per cent owned Keysbrook project 70 kilometres south of Perth is expected to cost $70.5 million to develop.

GR Engineering Services is the preferred contractor for the construction of the Keysbrook project.

Keysbrook could produce 110,000 tonnes per annum of high-grade mineral concentrate, which can be turned into zircon, Leucoxene L88 and Leucoxene L70.

Zircon is used in the manufacturing of ceramics and tiles, while the leucoxene products are used in pigment products.

Mr Randall said a final investment decision on Keysbrook was imminent and that MZI was close to announcing a deal for its most significant offtake agreement for its Leucoxene L88 product.

It already has an offtake agreement with Tricoastal Minerals for zircon concentrate and DuPont for it L70 product.

MZI Resources will hold its annual general meeting on November 25.