Doral has walked away from a $5.75 million equity investment in MZI that formed part of last year's "game-changing" deal between the Japanese giant and the WA mineral sands hopeful.
In a release to the market after close yesterday, MZI said the proposed investment by Doral, which was announced in May, had lapsed. Doral was to have taken up 250 million shares in MZI, at 2.3ï¿½ a pop, to becomes its second-biggest shareholder with a 15 per cent stake.
MZI said it understood Doral's decision was because of "corporate reasons" and unrelated to its Keysbrook mineral sands project, 70km south of Perth.
The deal is a blow to MZI as it would have provided welcome boost to its coffers, as well as diluting the 29 per cent stake held by the company's major shareholder, Stirling Resources. Tension has been rising between Stirling and MZI , with Stirling voting against MZI's remuneration report at its annual meeting. The two parties are also locked in a legal battle over ground in the Tiwi Islands.MZI said the lapse of the share placement had no bearing on a previously announced toll treatment agreement with Doral. This will allow MZI to use Doral's Picton plant rather than having to build its own for its Keysbrook ore. Last month MZI announced a $54 million debt deal for Keysbrook.