Zambezi Resources (ASX: ZRL) is looking to progress the highly prospective Kangaluwi Copper Project in Zambia, after launching a funding package of up to A$15 million to finance a Feasibility Study and continued exploration.
Zambezi has accepted an offer from LinQ Capital for the provision of a secured A$10 million convertible note facility, with the company also looking to conduct a A$5 million rights issue.
Subject to shareholder approval, the convertible note is proposed to be in two $5 million tranches, with the first tranche for a term of 24 months and an annual coupon of 10%, converting into shares at the lower of $0.027 per share and a 30% premium to the final rights issue price.
The second tranche is convertible into shares at the volume-weighted average price of Zambezi shares over the 5 days preceding the delivery by LinQ Capital of a conversion notice at that time.
The proposed rights will offer 1 new Zambezi share for every 5 existing shares held on the record date at $0.02, a 20% discount to the current market price.
Zambezi is seeking an underwriter.
The potential funding injection will allow for additional step out and infill drilling for resource expansion and definition at the Chisawa, Kangaluwi and Kalulu deposits within the Kangaluwi project.
Zambezi will also conduct deeper drilling of the structures for stratigraphic control as well as to determine the down dip extent of the mineralisation, while testing for additional oxide potential above the mineralised sulphide material with a near surface drilling program.