PERTH (miningweekly.com) – ASX-listed minerals developer Heron Resources has inked an agreement with a London-based mining and metals equity fund for up to A$20-million in funding.

Greenstone Resource would invest some A$6.8-million in Heron by way of a private placement. The shares would be priced at 12.6c each, which was a 22% premium to the 30-day volume weighted average price.

The placement of some 54.1-million shares would be undertaken within the company’s 15% placement capacity and would not require shareholder approval.

Following the completion of the initial placement, Greenstone would hold a 13% interest in Heron.

The agreement also envisaged a potential additional investment of a further A$13.2-million towards funding the staged construction of the Woodlawn zinc/copper project, in New South Wales.

The additional funding would be obtained through either a share subscription, which would take Greenstone’s share in Heron to 19.9%, or through a potential underwriting of a pro rata issue to be conducted by Heron.

Any additional funding would be subject to Heron deciding to proceed with the staged development of Woodlawn, as well as Greenstone being satisfied with the proposed terms of any fundraising.

“We are very pleased to have the support of this well-respected resource-focused investment group as we advance the development of the high-grade Woodlawn project,” said Heron chairperson Stephen Dennis.

“The Greenstone team has a formidable record of creating value and so this commitment provides further independent endorsement of the quality and potential of the project. The cornerstone funding package and strategic alliance marks another significant milestone as we pursue the potential staged development of the project.”

A preliminary economic study on the Woodlawn project had estimated that the project would have a post-tax net present value of some A$300-million. Over the 11-year mine life, the Woodlawn project was expected to produce some 353 000 t of zinc, 77 000 t of copper, 112 000 t of lead, 8.9-million ounces of silver and a further 59 000 oz of gold.