ASX-listed Mustang Resources has secured A$19.95-million in funding from US institutional investor Arena Investors and announced a rights issue to further advance its projects in Mozambique.
Arena has agreed to invest the funding through an unsecured convertible note facility, to be drawn down in seven separate tranches, each with an 18-month term.
The first A$1.9-million will be received upon signing of the convertible note deed with the convertible note to be issued under the company’s existing placement capacity.
The second tranche of A$3.8-million may be drawn by the company four months after the first tranche issue date, while A$2.85-million will be drawn down in each of the remaining five tranches, with three to four months minimum between them.
Meanwhile, Mustang also announced on Monday that it was offering its shareholders a one-for-five nonrenounceable rights issue to eligible shareholders on the designated record date to raise up to A$4-million at an offer price of 2.6c apiece.
Mustang chairperson Ian Daymond said the funding arrangement and the proposed entitlement issue would 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. Both projects are located in Mozambique.