GOLD Coast-based copper and gold explorer Coppermoly (ASX: COY) has had to lean on its biggest shareholder for a short-term loan which it expects to repay before Christmas.
The company, which has been in a voluntary trading halt pending the news, says it has secured a $500,000 bridging loan from Jelsh Holdings Pty Ltd due to what non-executive director Ben Faulkner says is the “current difficulties for junior resource companies raising capital”.
The announcement has coincided with the departure of long-time CEO and managing director Maurice Gannon who has been with the Bundall-based company since it listed six years ago.
Coppermoly, which has lucrative copper and gold exploration permits in Papua New Guinea’s New Britain Island, has yet to announce a replacement for Gannon.
The company has been under pressure for more than a year to secure funding for the staged buyout of PNG partner Barrick (PNG Exploration) Ltd.
Coppermoly and Barrack hold interests in three exploration permits in PNG.
The Bundall-based company paid $1 million to Barrick for the first stage of the planned exit last year, while Barrack has just agreed to receive $1.33 million in Coppermoly shares for the second stage.
Coppermoly’s interest in the PNG permits are expected to reach 72 per cent by August this year, while the remaining 28 per cent will require a further $3 million cash payment by August 2018.
Coppermoly had planned to raise $5 million through a rights issue that closed in May, but only managed to secure $202,382 from investors.
Jelsh, the underwriter to last year’s $2 million undersubscribed share issue, holds 56.3 million Coppermoly shares, or 26.6 per cent of the company.
Despite a challenging time at the helm, Gannon says he leaves Coppermoly with a sense of pride.
“Not personal pride, but pride in the people who have built the company, the shareholders, the PNG authorities, and especially the exceptionally faithful and supportive employees and the landowner communities with which we have worked,” Gannon says in a statement.
“The company has achieved great things, most of which is still yet to be recognised and realised.
“I can say that I have always worked hard to achieve what I believed to be in the best interests of all stakeholders.
“The time has come for me to pursue other interests.”
Faulkner has paid tribute to Gannon’s commitment to the company, but he could not be contacted for further comment.
The Coppermoly board now comprises Faulkner and fellow non-executive director Michael Howard.
Coppermoly also has appointed finance specialist Kevin Grice as a non-executive director.
Grice has had various executive roles with Renison Consolidated Mines Ltd, now known as Laneway Resources Ltd (ASX: LNY) and Highlands Pacific Ltd (ASX: HIG).
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