Zambezi Resources to raise up to $A4.2m for Kangaluwi Copper Project development

Zambezi Resources (ASX: ZRL) will raise up to $A4.2 million through a non-renounceable rights issue for working capital, and for exploration and development of its Kangaluwi Copper Project in Zambia.

The rights issue offering will be completed by 31 December 2011 under the company’s A$10 million convertible note facility with LinQ Capital Limited, acting as responsible entity for the LinQ Resources Fund, announced on 25 July 2011.

If the rights issue does not raise A$4 million, the company will attempt to conduct a further equity raising for any shortfall before 30 June 2012.

Tranche A of the facility will be convertible into ordinary shares at a 20% premium to the rights issue. Tranche B will be issued at a 20% premium to the volume-weighted average price of Zambezi shares over the five trading days preceding the delivery by LinQ Resources Fund of a conversion notice.

Zambezi intends to hold a general meeting to approve the facility by 16 December 2011.

Zambezi also intends to conduct a pro rata non-renounceable rights offer to eligible shareholders aimed towards funding the feasibility study for the development of the Kangaluwi Copper Project, where recent diamond drilling assays delivered plus one per cent copper intercepts at two different prospects.

Shareholders will be invited to subscribe for one share for every three existing shares held on the record date of December 9 at $0.011 per share.

The price represents a 17% discount to the closing price of the company’s shares on ASX of $0.012 at closing on the 24th November 2011.

Any shortfall shares will be placed within two months of the closing date of December 29 on the same terms as offered to shareholders under the rights issue.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/22596/zambezi-resources-to-raise-up-to-a42m-for-kangaluwi-copper-project-development-22596.html