Energy & Minerals Australia has ended a long-standing stalemate with note holders after securing support to overhaul the uranium hopeful's capital structure.

The changes are likely to include the assumption of $4 million in extra debt but also a binding commitment for a major equity raising early next year, by which time EMA expects its share price to have rebounded.

The shake-up of EMA's capital structure will see the dilution of controlling shareholder Mike Fewster's stake from 74 per cent to below 45 per cent by next April.

Equally importantly, the EMA plan should see it funded to complete a pre-feasibility study for the Mulga Rock uranium project north-east of Kalgoorlie-Boulder. A resource upgrade, to incorporate a maiden JORC figure for the Princess deposit, is imminent.

EMA is expected to emerge from a trading halt today with news of the proposed restructure. Its shares last traded at 6.2¢.

Key to the restructure is an agreement with Acorn Capital, Macquarie Bank and Element Resources Fund, which own $10.2 million of convertible notes between them, to acquire a further $4 million of new notes. In return for the extra cash, which EMA needs until it embarks on a $15 million equity raising early next year, the 18¢ conversion price of the existing notes will be more than halved.

Mulga Rock is one of the biggest uranium deposits in WA and the only major one not owned by Canada's Cameco. However, EMA's progress has been hindered by a lengthy ownership dispute as well as a cash squeeze. It is likely EMA will seek a strategic investor to participate in next year's equity raising.

The West Australian

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