PERTH (miningweekly.com) – Uranium developer Vimy Resources has executed legally binding agreements with financier Resource Capital Fund (RCF) to gain access to the remaining A$25-million of a A$30-million funding package.

Vimy secured the A$30-million funding package to finance its Mulga Rock uranium project, in Western Australia, in May.

The funding package comprised a A$5-million placement, under which RCF would subscribe for 16.67-million shares in Vimy, at a price of 30c each. An additional 1.5-million shares would also be issued in satisfaction of the upfront fee associated with the overall funding package being offered.

RCF had also offered, in principle, an additional A$25-million in funding to Vimy, comprising A$10-million in cash in exchange for a 1.15% royalty and all revenue produced from the Mulga Rock project, and a A$15-million unsecured bridging loan, with a March 2017 repayment date and an interest rate of 15% a year.

Vimy MD Mike Young on Monday said the completion of the funding agreement with RCF complemented the progress the company had been making on ore beneficiation and environmental approvals.

“We are now well placed from a funding perspective to continue to progress the Mulga Rock uranium project to project financing,” he added.

The A$15-million bridging loan would be used to fund the capital and operating expenditure of the Mulga Rock project and for Vimy’s working capital purposes.

A scoping study estimated that the Mulga Rock project would generate average earnings before interest, taxes, depreciation and amortisation of A$161-million a year, at a price of $75/lb uranium oxide (U₃O₈), and would have a pretax net present value of A$764-million and an internal rate of return of 39%.

The project was expected to produce some 47-million pounds of U₃O₈ over a mine life of 16 years.