The convertible notes have a face value of $10 million and have been secured with Arena Investors, said to be a US institutional investor with US$600 million in assets under management.
The A$8.5 million is to be provided in four tranches, starting with $1.7 million when the convertible note deed is signed.
Mustang says it has a current ruby inventory of 132,000 carats and previously stated it was targeting 200,000cts from its operation in Mozambique by the October tender.
Brokerage Hartleys, which initiated coverage of the stock this week, estimates Mustang could receive US$10 million in revenue.
Shares in Mustang closed Wednesday down 3.5% at at A5.5c, capitalising the company at $29 million.
The stock was trading at 4-5c 12 months ago.