Manuka Resources (ASX:MKR) said it reached an agreement with Tennant Metals South Africa Proprietary to restructure its existing AU$18.2 million trade finance facility, according to a Thursday Australian bourse filing.

Around AU$6.4 million will be converted to shares in Manuka, subject to shareholder approval, at a share price of AU$0.075 per share.

Also, around $3 million will be restructured as a subordinated debt facility with a tenor of two years and an interest rate of 14% per annum, while $4 million will be restructured as a subordinated, working capital facility able to be redrawn through mutual agreement.

The restructuring will result in a reduction in its cost of capital, which will free up cash for project development and exploration.