CUDECO AIMS TO RAISE ANOTHER $85 MILLION

CUDECO AIMS TO RAISE ANOTHER $85 MILLION

GOLD Coast resources company CuDeco has tapped investors on the shoulder for up to $85 million just weeks after the company secured $100 million from an Asian financier to help fund its new mine in north-western Queensland.

CuDeco, headed by colourful mining veteran Wayne McCrae, today announced a rights issue to be underwritten to the tune of $50 million by Hong Kong stockbrokers AM Capital and through which shareholders can participate in a share-and-option purchase pitched at $2.50 a share.

The funds will be used to progress CuDeco’s planned port facilities at Townsville and the rail-loading facility at its Rocklands copper project near Cloncurry.

CuDeco says intends to share the rail line under construction with other resource companies and says it has received a number of offers of intent from participants in the region to this end.

CuDeco says the rights issue is also aimed at minimising the company’s exposure to debt.

Two weeks ago, CuDeco secured a $100 million credit facility from China’s Minsheng Bank at a keen annual interest rate of 7 per cent.

“The funds raised from the rights issue will reduce CuDeco’s reliance on drawing down this entire facility,” the company says in a statement to the stock exchange.

CuDeco says a slump in its share price, following the exit from the company’s share register earlier this year of one of its largest shareholders, UK fund M&G Investment Management, has opened the way for what it sees as a heavily discounted offer to be made to existing shareholders.

The shares have been trading just above $2 a share for the past month, after slipping to a 12-month low of $1.37 in August from a high of $4.67 in November last year.

CuDeco has previously issued shares to Chinese investors for as much as $4.30 a share and as recently as July, it says.

CuDeco says it intends to issue 34 million new shares by allowing existing shareholders to subscribe for one new share for every six shares held.

Each new share, to be issued at $2.50 each, will have an attached option that is exercisable at $2.50 each within two years of issue.

The options will be listed on the stock exchange and will be trading on the stock exchange from December 20.

CuDeco shares, which jumped to a high of $2.20 after the rights issue was announced, closed 7c lower today at $2.08.

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