SHARES in copper miner CuDeco (ASX:CDU) slumped more than 40 per cent as the company finally resumed trading on the ASX after a 10-month halt.
The shares fell to a low of 65c, well below the 80c strike price of a $63 million rights issue that was finalised ahead of the lifting of the extended share freeze.
Funds from the rights issue will help fund completion of the company's Rocklands copper project near Cloncurry. CuDeco says the funds will facilitate final commissioning and ramp-up working capital requirements and subsequent first shipment of copper projects.
The company's three cornerstone Chinese investors have taken up their full entitlement in the one-for-four rights issue.
"Shareholders' strong support for the rights issue is evidenced by the applications received, totalling approximately 42 million shares from eligible shareholders, with the remainder to be allocated to the sub-underwriters," says CuDeco managing director Peter Hutchinson.
"With significant support from our major shareholders and careful management of expenditure, we have been able to steer the company through a challenging 10 months or so.
"With funding now available, I see no impediment to completing the final stages of commissioning, through to first product deliverance. It has been a herculean effort from all involved at Rocklands."
A feasibility study undertaken by Mining Associates earlier this year revealed the Rocklands project will generate around $2 billion in revenue over the next decade and create annual net free cashflow of $631 million for CuDeco.
CuDeco chairman Dr Noel White says with the lifting of the share suspension, the company is closer to generating significant free cashflow for the benefit of shareholders.
"Management changes and an improved level of disclosure, as underlined by the recent releases of Rocklands Maiden Ore Reserve and Feasibility study, should provide shareholders with a new sense of confidence," says White.
"Once CuDeco starts generating revenue, we expect there will be a re-rating in the company's shares."
The Gold Coast-based company has been in a trading halt since August last year after the ousting of colourful founder Wayne McCrae as executive chairman.
His departure was instigated by the company's major Chinese investors, most notably China Oceanwide International Investment Co and Sinosteel Equipment and Engineering Co.
The company says it has about 2.4 million tonnes of ore stockpiled on site since it began excavations in 2012.