Under plans for the new raising, the company will initially make a $30 million offer with a seven year term at a fixed interest rate of 11.5% per annum.

It can then issue additional notes up to $30 million in a second offer for a total $60 million.

AusAmerican said early indicative interest in the offering had been strong, and the move had the support of its investment bankers.

The lead arranger for the transaction is Australian Capital Investment Group Corporation, and the offer is only eligible to professional and sophisticated investors.

The initial offer will be underwritten by AusCap to a minimum $12.5 million, which guarantees payment of the first $US10 million ($A11.5 million) instalment of the Shenglong deal.

“Given the difficulties associated with traditional equity capital for junior resource companies these days, we are seeing more and more focus to alternative instruments which suits AusAmerican given that the current and forecast operations of the Moubiri mine demonstrates strong cash flow from day one and supports the company raising debt,” AusAmerican executive chairman Peter Landau said.

“We are targeting the bond issue to sit alongside a pre-paid offtake facility which would mean that the company will deliver the funds required to fund the initial $49 million of the Shenglong transaction.

“The bond issue also delivers a more balanced debt profile managed over a longer time frame. It diversifies our funding sources and gives us greater certainty over the short to medium term.”

AusAmerican announced plans to acquire up to 77.58% of Shenglong in September, but the Australian Securities Exchange has advised the deal needs shareholder approval before it can go ahead.

As a result, the timeframe for the first $10 million payment has been extended until December 1.

Shenglong is focused on exploration and production of copper, lead and zinc in the Republic of Congo, and also holds a 90% interest in the Moubiri and Mindouli polymetallic exploration permits in the ROC.

AusAmerican shares exited a trading halt 66.7% higher at 0.5c today.