PERTH (miningweekly.com) – Uranium hopeful Vimy Resources has secured a A$30-million funding package from private equity fund Resource Capital Fund (RCF) to finance its Mulga Rock uranium project, in Western Australia.

The funding package consisted of 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 up-front fee associated with the overall funding package being offered.

The issue price for the placement represented a 14% discount to the 30-day volume-weighted average price of Vimy shares. Following the placement, RCF would hold a 7.98% interest in Vimy.

RCF had also offered, in principal, 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.

The additional funding was subject to the completion of formal documentation and customary conditions precedent, including a due diligence and, if necessary, Foreign Investment Review Board approval.

Vimy CEO and MD Mike Young said on Wednesday that the initial A$5-million investment by RCF would allow the company to complete the prefeasibility study on the Mulga Rock project, which would likely be delivered in the third quarter of 2015.

The funding package was expected to provide sufficient funds to complete further studies at the project, and to secure project financing for the Mulga Rock project.

A scoping study estimated that the Mulga Rock project would generate average yearly earnings before interest, taxes, depreciation and amortisation of A$161-million, at a uranium 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.