A state-owned Chinese company has agreed to acquire a 45% interest in Australian diversified resources company Meridian Minerals through an A$10.5m share placement.

Meridian will place 131,250,000 shares, at A$0.08 a piece, to Northwest Mining and Geology Group for Nonferrous Metals (NWME).

The proceeds from the deal will be used to accelerate development at the Lennard Shelf zinc project in Western Australia, Meridian said.

The deal also offers NWME the right of first refusal to acquire up to 35% of any mineral concentrates produced from the Lennard Shelf on international benchmark terms.

Meridian plans to begin a drill programme of 20,000m and above in August to extend the currently defined inferred, indicated and measured resources of 8.2m at 7.4% Zn and 4.5% Pb.

The deal is awaiting formal approval from shareholders and authorities.