Strandline Resources - Cornerstone investor Tembo Capital underpins Tanzania strategy
Strandline Resources (ASX:STA) has announced a significant transaction with the introduction of developing market-focussed private equity house, Tembo Capital, to the register as a significant shareholder. Tembo has committed A$2.3m at 0.7c per share, with a further A$4.3m via underwriting a 0.5c per share renounceable rights issue. Following the A$6.6m funding, the Company plans to accelerate exploration at Tanga North and development plans for Fungoni.
Strategic Relationship and Subscription Agreement (“SRSA”) signed with Developing Market - focussed private equity fund group, Tembo Capital (“Tembo”), by which Tembo will become a significant shareholder.
Under the SRSA, Tembo will cornerstone a funding package comprising:
- Up-front firm investment of $2.3 million by way of placement of ordinary shares at an issue price of 0.7c per share (a 17% premium to the last closing price of Strandline shares); and
- A fully underwritten pro-rata renounceable rights issue to all eligible Strandline shareholders to raise up to $4.3 million at 0.5c per share.
The aggregate cash injection of approximately $6.6 million (“Initial Funding”) will ensure that Strandline is fully funded to advance its portfolio of high value Tanzanian mineral sands projects over the next two years.
Strategic, long term relationship with Tembo includes:
- Appointment of John Hodder of Tembo as a non-Executive Director of Strandline;
- Access to Tembo’s strategic & financing networks within Emerging Markets; and
- Potential access to future development funding of up to a further $US15m over the medium to longer term.
The Initial Funding and Tembo’s long term commitment gives Strandline the capacity to:
- Fast track development of the high grade, low cost Fungoni deposit;
- Undertake extensional drilling and feasibility studies of the high grade Resources at Tajiri; and
- Continue exploration and discovery drilling across Strandline’s high value Tanzanian mineral sands portfolio.