Copper Development Corporation announces $30m AIM IPO

Friday, Apr 16 2010 by
4

Phillipines Copper Development corporationCopper Development Corporation has announced that it is seeking to raise up to $30m through an IPO as part of its admission to AIM in May. The company's principal asset is the Hinoba-an Porphyry Copper Project of which they own 92.5%. The Project was acquired by the company in 2009 and is located on Negros Island, c.700 km south of Manila in the Republic of the Philippines. The town of Hinoba-an is about a three hours drive on the paved coastal highway from Bacolod, the provincial capital of Negros Occidental.

Previous owners of the Project have spent in excess of US$20 million on extensive exploration and metallurgical testwork, including more than 65,000 meters of diamond and reverse circulation drilling. According to the report, prior exploration work and studies indicate that the Hinoba-an Project has approximately 1.6 billion pounds of in situ copper (172 Mt @ grade of 0.42% Cu), which could be mined by open pit method and processed in a 12Mtpa conventional flotation milling operation to recover copper concentrate and other by-products, for annual copper production anticipated at 35kt Cu.

The company said that there are other areas which could provide cost benefits, such as the exploration potential of molybdenum and pyrite or the sequential mining of the two pits - where the first pit mined can be used as either the waste rock dump for the overburden from the second pit or as a tailings dam, which would reduce rehabilitation costs and reduce capital requirements.

The company intend to spend the proceeds of the placing on the completion of a 12 month pre-feasibillity study and 12 month banking feasibility study on the Hinoba-an Project, on the acquisition of complimentary mineral projects and on general working capital.  The mine’s life is expected to be 13 years with a current annual production of 35,000 tonnes of copper. The initial capital costs are expected to be in the range of $310 million, with operating costs coming in at $1.50 per lb of copper.  The placing price is expected to be at $0.5 per share and raise between $15m and $30m.

The IPO is being handled by the company NOMAD Beaumont Cornish Limited, and broker Fox Davies Capital Limited.  The Admission date is expected to be the 7th May 2010 with the company trading under the symbol: CDC.

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Copper Development Corporation (CDC) is a copper mining and development company. The Company is engaged in exploration, development, mining and processing of minerals, petroleum and other minerals oils. The Company holds interests in two porphyry copper projects in the Philippines. The Hinoba-a Copper Project is located approximately 700 kilometers south of Manila on the island of Negros in the Philippines. The Basay Copper Project is located approximately 25 kilometers southeast of the Hinoba-a Project. The Company has a 70% interest in the Basay Project, which it is developing through a joint venture agreement with Solfotara Mining Corp. The Company also holds a strategic interest in Crazy Horse Resources Inc., which owns the Taysan Project, an advanced copper-gold porphyry deposit located 100 km south of Manila in the Philippines. more »

Share Price (AIM)
2.5p
Change
0.0  0.0%
P/E (fwd)
n/a
Yield (fwd)
n/a
Mkt Cap (£m)
6.0



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4 Comments on this News show/hide all

marben100 16th Apr '10 1 of 4
8

This is rather interesting development because.... per this announcement, AfNat Resources (LON:AFNR) invested US$2.75m in CDC in January of this year. I am trying to find out how much of CDC AfNat acquired in this transaction. AfNat's net tangible assets, comprising cash, Niger Uranium Ltd (LON:URU) shares and the CDC investment valued at cost add up to £10.6m, according to my calculations.

AfNat itself is being acquired by AXMIN (TSX-V:AXM), in an all-share transaction, which will result in AfNat shareholders owning ~40% of the merged company (NB: I am not expecting the merged company to be listed on AIM). AxMin's SP currently stands at C$0.11 - and ought to be discounting the merger already. At that SP, I calculate that the per AfNat share value of the 206m AXMIN shares that AfNat shares will be swapped for amounts to 3.5p - against a current AfNat SP of around 2.5p.

The combined group will have interests in range of early-stage projects with interesting potential, including AXMIN's Passendro Gold project in the Central African Republic (scary!), CDC's Hinoba-An copper project and AfNat's nickel & uranium projects in Zambia & Mozambique. I am expecting AfNat's stake in Niger Uranium to be liquidated in due course. AXMIN is currently somewhat cash-poor, so AfNat's cash (currently £6.3m by my reckoning + £2.6m worth of URU shares) will give it the wherewithal to make some real progress.

What is also interesting are the individuals involved. AXMIN is currently chaired by Swiss billionaire & Africa expert, J.C. Gandur and largely owned by his private Addax & Oryx group - of Addax Petroleum fame. AfNat is chaired by David Weill, also chairman of Niger Uranium,  Caledon Resources Plc (LON:CDN)  and on the Board of Kalahari Minerals (LON:KAH) . I have learned that the directors of CDC include: Mitch Alland, Denham Eke & Guy Elliott - MA & DE being on the Board of Emerging Metals (LON:EML) and GE on the Board of Polo Resources Ltd (LON:POL) - also companies associated with Stephen Dattels, Jim Mellon & Mike Beck. EML has today declared a very nice special dividend for its shareholders (of which I am one). The combination of Gandur, Dattels, Mellon & Beck is a formidable proposition.

Though there are still many unknowns, I could not resist taking a modest position in AfNat today, in the light of this development with CDC.

Regards,

Mark

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fordtin 16th Apr '10 2 of 4
2

Hi Mark,

did you know Ian Stalker was on the list of major shareholders in Lithic Metals before his holding was diluted by the merger with Amber Petroleum to form AFNAT? Stalker may still have an interest, which could add strength to your conclusion "The combination of Gandur, Dattels, Mellon & Beck is a formidable proposition."

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marben100 16th Apr '10 3 of 4

Thanks fordtin - no, I did not. :0)

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marben100 16th Apr '10 4 of 4

Thanks also to fordtin for pointing out this RNS from AfNat that I appear to have overlooked:

The Board also remains pleased with its investment in Copper Development Corporation ("CDC"), a private BVI company, that has positive financial projections in the Hinoba-an Copper Project over which it holds a controlling stake. Once again subject to market conditions, CDC is planning a listing on AIM in Q2 of 2010.


[my bold]

A controlling stake suggests to me over 30%, which could represent a very nice return on CDC's IPO!

Cheers,

Mark

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