CUDECO FREEFALLS AFTER 10 MONTHS IN WILDERNESS

Written on the 12 May 2016 by Jenna Rathbone

CUDECO FREEFALLS AFTER 10 MONTHS IN WILDERNESS

SHARES in copper miner CuDeco (ASX:CDU) slumped more than  40 per cent as the company finally resumed trading on the ASX after a 10-month halt.

The shares fell to a low of 65c, well below the 80c strike price of a $63 million rights issue that was finalised ahead of the lifting of the extended share freeze.

Funds from the rights issue will help fund completion of the company's Rocklands copper project near Cloncurry. CuDeco says the funds will facilitate final commissioning and ramp-up working capital requirements and subsequent first shipment of copper projects.

The company's three cornerstone Chinese investors have taken up their full entitlement in the one-for-four rights issue.

"Shareholders' strong support for the rights issue is evidenced by the applications received, totalling approximately 42 million shares from eligible shareholders, with the remainder to be allocated to the sub-underwriters," says CuDeco managing director Peter Hutchinson.

"With significant support from our major shareholders and careful management of expenditure, we have been able to steer the company through a challenging 10 months or so.

"With funding now available, I see no impediment to completing the final stages of commissioning, through to first product deliverance.  It has been a herculean effort from all involved at Rocklands."

A feasibility study undertaken by Mining Associates earlier this year revealed the Rocklands project will generate around $2 billion in revenue over the next decade and create annual net free cashflow of $631 million for CuDeco.

CuDeco chairman Dr Noel White says with the lifting of the share suspension, the company is closer to generating significant free cashflow for the benefit of shareholders.

"Management changes and an improved level of disclosure, as underlined by the recent releases of Rocklands Maiden Ore Reserve and Feasibility study, should provide shareholders with a new sense of confidence," says White.

"Once CuDeco starts generating revenue, we expect there will be a re-rating in the company's shares."

The Gold Coast-based company has been in a trading halt since August last year after the ousting of colourful founder Wayne McCrae as executive chairman.

His departure was instigated by the company's major Chinese investors, most notably China Oceanwide International Investment Co and Sinosteel Equipment and Engineering Co.

The company says it has about 2.4 million tonnes of ore stockpiled on site since it began excavations in 2012.


Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.
Connect via: Twitter

Latest News

1700 BRISBANE APARTMENTS NOW MANAGED BY FORTUNE 500 COMPANY JLL

MULTINATIONAL and Fortune 500 company JLL (NYSE: JLL) has expanded its Australian dominance in the property managemen...

HARVEY NORMAN HITS OUT AT 'FALSE NEWS' OF ASIC INVESTIGATION

RETAIL giant Harvey Norman (ASX: HVN) has vehemently rejected reports its accounts are under investigation by ASIC, s...

RARE GOOD NEWS FOR SLATER AND GORDON AS ASIC CLOSES INVESTIGATION

ASIC has cleared Slater and Gordon of deliberately falsifying its accounts after a three-month investigation.

It s...

Q & A WITH FACEBOOK GURU ANDY MCKEON AS HE JOINS AUSTRALIAN SOFTWARE COMPANY LIVETILES

HE was creative director at Apple under the legendary Steve Jobs, and is now a senior Facebook executive. In his n...

Related News

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

CHINA CONTINUES TO COLLECT AUSSIE PROPERTY ASSETS

CHINESE coin continues to dominate Australia's offshore real estate investment market, accounting for almost h...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter