Exco Resources lands funding for Copper Gold Projects in Queensland
Exco Resources (ASX: EXS) has executed an agreement to raise A$4.9m through the issue of approximately 16.4 million fully paid ordinary shares at 30 cents each to a subsidiary of Sin-Tang Development Pte Ltd of Singapore.
Exco last traded at $0.35.
Funds raised from the
placement will fund exploration and resource development activities at
its portfolio of Copper-Gold Projects in north-west Queensland.
Michael
Anderson, managing director, said the issue of the subscription shares
is an initial step. The parties have also agreed to use their best
endeavours to reach agreement in the next three months with regard to a
proposed strategic investment by the subsidiary in the company’s
Cloncurry Copper Project in north-west Queensland.
Negotiations
between the parties for the second stage will encompass both the
purchase of an interest and the provision of debt financing for the
project.
If agreement is reached in respect of the proposed
strategic investment, it will also provide the terms on which the
Subscriber may acquire further interests in the Exco's Cloncurry Copper
Project and up to a further 32.9m fully paid ordinary shares (10% of the
total fully paid ordinary shares currently on issue) under the same
terms as the placement of the Subscription Shares.
From their
date of issue, the subscription shares will rank equally in all respects
with the fully paid ordinary shares of the Company then on issue. The
company will not seek shareholder approval for the issue of the
Subscription Shares.
The company expects to complete the issue of the shares to Sin-Tang on or about Friday, 13 August 2010.
With the deal, Exco's Michael Anderson is taking a staged approach to the Cloncurry Copper Project, retaining the ability to consider all strategic options, not only with Sin-Tang, including the possibilities with Xstrata or indeed any other party.
The approach is consistent with the company’s stated objective of selecting a definitive development option for the CCP in the coming months, ahead of finalising both the Definitive Feasibility Study and securing the relevant approvals for the project (expected later this year).
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