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Mustang Resources attracts $19.95 million funding for ruby, graphite projects

Funding ensures that Mustang is financed for further exploration and development.
Mustang Resources attracts $19.95 million funding for ruby, graphite projects
First tranche of $1.9 million

Mustang Resources (ASX:MUS) has secured a $19.95 million funding facility under a convertible note facility with Arena Investors LP, a U.S. institutional investor.

Based in New York City, Arena has more than US$750 million in assets under management.

Importantly, the funding arrangement ensures that Mustang is financed for further planned exploration and development work on its Montepuez Ruby and Caula Graphite Projects in Mozambique.

READ: Mustang Resources improves quality of graphite mineralisation with further testing

Under the terms of the convertible note deed, Arena has agreed to invest up to a net $19.95 million (face value $21 million) through an unsecured convertible note facility.

Mustang can draw down the funds in seven tranches with the first tranche of $1.9 million to be received on signing the convertible note deed.

The follow-on tranche of $3.8 million will be available to the company in May 2018.

Mustang will receive the balance of $14.25 million in five further draw-downs of $2.85 million over two years.

Opportunity for existing shareholders to participate

The company will also be offering existing shareholders a one-for-five non-renounceable rights issue to raise up to circa $4 million at an offer price of $0.026 per share.

Ian Daymond, executive chairman, said: “The funding arrangement and the proposed entitlement issue will provide the company with the assurance of substantial capital to continue the development of its Montepuez Ruby Project and the ability to accelerate the advancement of the high grade Caula Graphite Project in northern Mozambique.”

READ: Mustang Resources outlines ruby strategy

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