Mustang Resources is preparing to advance its projects in Mozambique after secured funding from US-based Arena Investors.

Under the deal, Arena will invest up to a net A$19.95m ($15.68m) through an unsecured convertible note facility to be drawn-down in seven separate tranches, with each having an 18-month term.

The first tranche will see Mustang receive A$1.9m ($1.49m) upon signing of the convertible note deed with the convertible note to be issued under the company’s existing placement capacity.

The company will then receive A$3.8m ($2.98m) under the second tranche, which may be drawn four months after the first tranche issue date, while A$2.85m ($2.24m) will be made available in each of the remaining five tranches, with three to four months minimum between them.

“Funding will provide the company the ability to accelerate advancement of the high-grade Caula Graphite project in northern Mozambique.”

Mustang Resources executive chairman Ian Daymond said: “The funding arrangement and the proposed entitlement issue will provide the company with the assurance of substantial capital to continue the development of its Montepuez Ruby project and the ability to accelerate the advancement of the high-grade Caula Graphite project in northern Mozambique.”

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The company’s projects in Mozambique include the Montepuez Ruby and Caula Graphite.

Located within the Montepuez Complex in the Cabo Delgado Province of Northern Mozambique, the Montepuez project is said to contain ruby mineralisation.

Mustang also revealed that it will offer a one for five non-renounceable entitlement issue for its shareholders to raise up to A$4m ($3.14m).