As per the investment agreement, the funds will be provided in two tranches of about $20m each.
The first tranche will be offered by the issue by the company of 188,897,000 new ordinary shares at a subscription price of £0.07 per share to raise gross proceeds of nearly £13m. The second tranche will be provided by Zhongrun subscribing for $20m of secured loan notes.
Zhongrun currently owns 37,800,000 ordinary shares in the company and after the completion of this equity funding will hold 226,697,000 ordinary shares, representing about 66% of the enlarged share capital of the company.
Vatukoula Gold Mines CEO David Paxton said that the new agreement provides financing support on competitive terms in line with recent financings.
"The US$40 million will provide us with the balance sheet flexibility to embark on our capital investment programme early in the coming fiscal year. We look forward to working with Zhongrun as we deliver our Company strategy to grow our production to sustainable and profitable level," Paxton added.
