Tembo Capital, a mining-focused private equity fund group, has agreed to invest $6.6m in Strandline Resources to ensure that the firm is fully funded to advance its portfolio of high value Tanzanian mineral sands projects over the next two years.

Under the Strategic Relationship and Subscription Agreement, Tembo will cornerstone a funding package comprising: up-front firm investment of $2.3m 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 $4.3m at 0.5c per share.

Strandline Resources is an Australian Stock Exchange listed company, that is focused on mineral exploration and development in Australia.

Strandline controls a dominant (2000km²) mineral sands exploration position along the coast of Tanzania, within a major world class mineral sands corridor.

These projects are located along the coast of Tanzania and surrounded by some of the world’s major world-class mineral sands mines, located in neighbouring Kenya, Mozambique, Madagascar and South Africa

The initial funding and Tembo’s long term commitment gives Strandline the capacity to fast track development of the high grade 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.

Tom Eadie, Strandline’s Managing Director, said: “The Board of Strandline is delighted to welcome Tembo as a supportive major shareholder, which also has the capacity to provide valuable technical and strategic support.”

“Tembo’s investment and ongoing support strongly endorses the high potential of Strandline’s mineral sands projects and our highly capable team. The company is very excited about having the financial capacity to progress these high potential projects in the manner that they deserve,” he said.

Strandline believes that Tembo can add strategic, technical and financial value to the Company and its projects, to the benefit of all Strandline shareholders.

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 $15m over the medium to longer term.

Strandline has agreed a mandate with Hartleys Limited to act as underwriter and lead manager in relation to the Rights Issue (subject to execution of formal underwriting and sub-underwriting agreements, which are currently being finalized and are expected to be executed imminently).

Tembo has agreed to fully sub-underwrite the rights issue, subject to execution of the relevant formal sub-underwriting documentation.

Strandline will announce the rights issue timetable (including timing for trading of entitlements) and dispatch the associated offer documentation to eligible shareholders in the near future.

“We encourage all eligible shareholders to consider participation in the Rights Issue. Following its completion, Strandline will be well funded for significant activity over the coming 24 months to unlock the value of our Tanzanian portfolio,” said Eadie.