Arcon International has said it intends to subscribe for a $4.5 million debenture in the Canadian exploration company, Princess Resources, which is listed on the Vancouver stock exchange.

In addition, Arcon has been granted a warrant entitling it to purchase 41.4 million shares in Princess. If the company decides to convert the debenture and exercise the warrant, it will own 49 per cent of Princess.

The debenture permits Arcon to subscribe for a minimum of $3 million or up to a maximum of $4.5 million.

The company describe the move as a "strategic investment" giving Arcon a minimal cost entrance into established mining districts in China, Tanzania and Zambia.

"Princess has indentified and proved significant potential for gold, silver, lead, zinc, copper and diamond mineralistation within its exploration licences in China, Tanzania and Zambia," said Arcon chief executive, Mr Tony O'Reilly Junior last night.