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SHARES in Gold Coast copper miner CuDeco surged more than 28 per cent to a high of $1.80 ahead of a trading halt after shareholders failed to approve a new capital raising.
The shares last traded at $1.70, up 30c from Monday's close, with more than 1.9 million shares changing hands before the two-day trading halt took effect.
The latest development in CuDeco's ongoing funding campaign has seen shareholders reject a bid by Chinese investment group Focus Sun Holdings to lift its interest in the company to 18 per cent. This is despite the investor receiving Foreign Investment Review Board approval to do so earlier this month.
CuDeco, which is headed by Wayne McCrae (pictured), announced in May that Focus Sun Holdings planned to subscribe for $50 million worth of shares in two tranches at $1.25 each.
The first tranche of $5 million had already been received, while shareholders needed to approve the second tranche totalling 36 million shares. The second tranche also comprised 20 million options exercisable at $1.25.
Shareholders today rejected the share issue, leading to a surge in the company's share price, despite the company announcing the failed capital raising has created immediate uncertainty for CuDeco.
However, the company says it is confident it can produce an alternative funding proposal by Thursday when it meets with major shareholders.
"The funds from these capital raisings were required to fund the completion of capital works for the Rocklands copper project and provide sufficient working capital for the listing of the company on the Hong Kong Stock Exchange," says the company in a statement to the ASX as it requested the trading halt.
"Due to the obvious continuance of financing required and the uncertainty facing the company we believe it is important that the trading halt is provided to allow for a definitive and informative announcement to be made to the market at the appropriate time.
"Any reinstatement of trading prior to this information being able to be provided would result in trading occurring in a market not fully and properly informed.
"The planning is essential to the company's financial viability as it seeks funding to complete the final works before mining production commences and the company can generate income."
CuDeco says it expects to finalise a smaller capital raising this week, although gives no further details. As part of the original funding deal with Focus Sun Holdings, CuDeco agreed to an introducing fee to an undisclosed party totalling $1.5 million and comprising the issue of 1.2 million shares at $1.25 each.
UPDATE:
CuDeco's shares were expected to resume trading on Thursday morning but have since been voluntarily suspended pending the outcome of discussions with key shareholders.
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