Forced exit of CuDeco founder gives investors pain
SHARES of struggling mining company CuDeco plummeted 41 per cent yesterday on fears it faced a “funding black hole” after Chinese investors forced the exit of founder Wayne McCrae.
Mr McCrae resigned as chairman, director and chief executive of the Gold Coast- based company on Friday after losing the confi- dence of Chinese shareholders, who together hold a 33.7 per cent stake in CuDeco.
There is growing concern the company’s $ 200 million Rocklands copper plant near Cloncurry could remain uncompleted if funding dries up.
CuDeco shares, which have been in a trading halt this month while the company considered new funding options, yesterday slumped 70.5¢ to a nine- year- low of 99.5¢. Its market capitalisation is now a mere $ 276 million from $ 1 billion during its heyday.
Newly appointed managing director Peter Hutchison said the Rockland’s project was expected to be profitable at current copper prices, helped by the lower Australian dollar. Copper prices have sunk 30 per cent in the past year.
“CuDeco is confident of obtaining the necessary capital to bring Rocklands into production, based on the support of our major shareholders and Minsheng Bank,” Mr Hutchison said.
IG market strategist Evan Lucas said shareholders were in a “world of pain” with uncertainties about how the Rocklands projects will be completed. The company reported a $ 13.7 million loss for the last six months of 2014.