CuDeco secures A$22m facility to repay debt

PERTH (miningweekly.com) – Copper miner CuDeco has secured financing of A$22-million, to repay debt owed to China Minsheng Banking Corporation.

CuDeco on Monday announced that it had entered into an agreement with Gemstone 101 for the provision of a A$22-million convertible note facility, with some 44-million notes to be issued.

The facility will have a 24-month term and will have an interest rate of 6% a year.

Gemstone 101 will also be entitled to receive 4.4-million free options after the completion date, which will be exercisable at 80c each during the term of the facility.

Once Gemstone 101’s holding in CuDeco exceeds 7%, the company will be entitled to appoint a director to the CuDeco board.

Funds from the convertible note facility will be used to repay $15-million in debt owed to Minsheng Banking, which had been due by the end of March.

Minsheng Banking has provided its written approval for CuDeco’s entry into the transaction, with the anticipated transaction completion date, and the loan repayment date, targeted for mid-April 2017.

Mining at CuDeco’s Rocklands copper project, in Queensland, resumed in mid-March, after the Queensland Department of Natural Resources and Mines in February temporarily suspended operations pending the submission of an updated safety and health management system, after a review found that the current systems were out of sync with activities taking place at the mine site.

The suspension order was lifted on February 24 and operations restarted on the same day.