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CHINESE shareholders have had their way at CuDeco, forcing Wayne McCrae to relinquish control of the company in exchange for continued financial support.
McCrae today resigned as chairman and director of the Gold Coast-based copper miner. His right-hand man Peter Hutchison has been appointed interim managing director, while David Taylor has been appointed interim chairman.
In return, cornerstone investors China Oceanwide International Investment Co and Sinosteel Equipment & Engineering Co have agreed to support CuDeco in increasing its loan facility from the Minsheng Bank to $100 million in order to complete development of the company's Rocklands copper project near Cloncurry in north-west Queensland.
At the end of December, CuDeco had already drawn down the full amount of $65 million of its Minsheng Bank loan facility. It needs the support of Oceanwide and Sinosteel to increase the limit to $100 million.
Under the refinancing agreement, Oceanwide, Sinosteel and fellow cornerstone shareholder New Apex Asia Investment have agreed to lend CuDeco $1 million each in bridging finance over nine months to keep the company afloat.
The loan has been issued at a nominal interest rate of 4 per cent.
CuDeco says it is confident the new funding agreement will help it bring the Rocklands project to production. The company has had to cut shifts on the mine site to preserve cash.
McCrae has been contacted for comment, however his is currently overseas. A company spokesman says he will respond to questions from Gold Coast Business News as soon as he is able.
CuDeco shares, which have been suspended since the end of June, have resumed trading, although no trades were recorded today.
The share suspension came in the wake of major shareholders rejecting a $45 million capital raising with Focus Sun Holdings, in a deal that was pitched at $1.25 a share. At the time, CuDeco says the funds were needed to ensure the company's financial viability.
The company alluded to McCrae's impending departure in a notice to the ASX yesterday evening after the market had closed.
McCrae has endured the highs and lows of CuDeco for more than a decade. The highs came when he discovered rich copper deposits at Rocklands in 2006, news that propelled CuDeco shares above $10 in a market frenzy that created a media storm for the company.
The lows came in McCrae's battle to convince the Australian investment community that the discovery was of value.
Support later came from Chinese investors, hungry to get a foothold on a copper resource during the resources boom.
They jumped aboard to back the company, although delays in bringing the mine to production over the past year appear to have worn thin with the Chinese. Oceanwide alone controls just short of 20 per cent of the company's shares.
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