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Metorex's roller coaster ride is over Posted: Thu, 22 Jan 2009 [miningmx.com] -- SEASONED executive management at mining company Metorex took a hard fall last year following the crash in its share price due to commissioning delays and budget overruns resulting from higher input costs at its Ruashi Project in the Democratic Republic of Congo. That left Metorex cash strapped. Shareholders have blamed senior management for not having acted earlier. The result is the entire executive management team has been overhauled, save for chief financial officer Martiz Smith. Metorex requires additional capital to complete its Ruashi Project as well as to provide continued funding to the Copper Resources Corporation, in which it holds a majority stake. Further exacerbating liquidity concerns are higher input costs, particularly those of cement, stainless steel and diesel, together with the recent decline in metal prices. Management is acutely aware of the recent volatility and weakness in metal prices and its potential implications. However, Metorex does benefit from a diversified product base, with its principal non-copper operations at Verge-noeg and Barberton mines generating strong cash flows. Metorex will be implementing a rights issue, whereby 129 461 597 ordinary shares will be made available via a claw-back offer in the ratio of 34,94 new ordinary shares for every 100 ordinary shares held. At an offer price of 200c/share, Metorex hopes to raise R258,9m, the proceeds used to repay a R300m bridging loan facility from Standard Bank. A second tranche of capital of R485,1m is to be raised through a specific issue of 242 538 405 shares at 200c. The balance of the bridging facility will be converted to a term loan, which will be offset by the equity contribution arising from Standard's participation in the specific issue.
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