CUDECO SHARES SUSPENDED AS $80M FUNDING FINALISED
Written on the 2 March 2015 by Nick Nichols
GOLD Coast copper miner CuDeco is tapping into more Chinese cash with plans to raise another $80 million to bring its Rocklands project in north-west Queensland to commercial production.
But, in the meantime, shareholders will be unable to trade shares in the company until the two-stage capital raising has been completed.
The funding is being sourced in part from one of CuDeco's biggest shareholders, China Oceanwide International Investment Co, which has agreed to buy $30 million in new shares.
CuDeo is also seeking to raise a further $50 million from a number of other investors to fund its working capital needs at Rocklands.
CuDeco shares, which have been in a trading halt since the end of January, have now been voluntarily suspended from trading pending the completion of the share placements.
China Oceanwide has agreed to buy 24 million new shares in CuDeco at $1.25 each for a total of $30 million, as approved by shareholders at an extraordinary general meeting held on January 30.
The placement will lift China Oceanwide's stake in CuDeco to 19.9 per cent and will require approval by the Foreign Investment Review Board, which is expected to take 30 days.
Meanwhile, CuDeco says it is in discussions with as yet undisclosed parties interested in taking part in a separate $50 million share placement of 40 million shares at $1.25 each.
"The company is in the final stages of negotiations with a number of interested parties for the new placements and expects to finalise these placements by mid-March," says CuDeco in a statement to the ASX.
"The new placements allow the company to fund the ongoing working capital obligations and to provide funds for the completion of the mineral processing facility and to allow the company to enter into commercial production."
CuDeco says commissioning of the first stage of the mineral processing facility is expected in late June.
"The company is aware that the voluntary suspension from trading on the ASX may cause some disruption to some CuDeco shareholders," the company says.
"The board's paramount concern is to remain committed to ensuring that the best possible outcome for shareholders is achieved in these current negotiations."
Meanwhile, CuDeco says mining is continuing at Rocklands, located near the township of Cloncurry, on a non-stop, 13-hour-day basis over seven days a week.
"The mining has concentrated on stripping the waste, in tandem with mining and stockpiling of the sulphide ore ready for processing operations," it says.
CuDeco says stockpiling of the copper-rich sulphides began in late January, while mining, stockpiling and processing also continues with ore from the native copper zone, mining of which began last year.
CuDeco shares last traded at $1.41.
Author: Nick Nichols