Coppermoly bid for control halted

 COPPERMOLY has run into problems in its bid to take control of three key Papua New Guinea mining tenements after one of its shareholders called on the takeover regulator to stop the deal.

Shareholder William Stanley Yeaman was part of an ugly battle over board positions at the Gold Coast-based junior copper explorer last year.

His latest move threatens to derail a A$5 million (K10.4 million) deal stitched up by Coppermoly to fund a buyback of the major stake in tenements from Canadian mining giant Barrick, which acquired its interest in a farm-in arrangement.

It could also delay Coppermoly’s bid to gain immediate access to the tenements, one with a 40-million-tonne copper resource.

The Takeovers Panel on Monday said it had agreed to make interim orders preventing Coppermoly going ahead with a one-for-four non-renounceable rights issue to shareholders, at an issue price of A$0.045, underwritten by Jelsh Holdings.

The offering was part of a financing package which would allow Coppermoly to fund the first A$2 million (K4.1million) tranche of A$5 million buyback of the Nakru, Simuku and Talelumas tenements from Barrick.

Coppermoly previously said acquisition of the tenements was conditional on it raising A$2 million by today (July 31).

Under the deal, Jelsh Holdings could also increase its stake in Coppermoly from 12.06%to 26.63%.

However, Yeaman Nominees, as trustee for the Yeaman Super Fund, asked the Takeovers Panel to intervene, arguing the rights issue discouraged other shareholders from participating.

It said Coppermoly also appeared to have “taken no steps to mitigate the control effects of the rights issue and underwriting”, and submitted that the prospectus disclosures were deficient.

Yeaman asked the panel to make interim orders that Coppermoly extend the offer period for the rights issue and not allot any shares.

Late Monday, the panel ordered Coppermoly not to issue or allot any new shares under the offer without its approval, and to postpone the deferred settlement trading of new shares.

Coppermoly said, as a result, the offer would close today and there would now be a delay in the timetable for the rest of its prospectus. It said it would hold all subscription money in trust.

Yeaman is also seeking final orders to have the rights issue cancelled and all subscription monies refunded.  – goldcoast.com.au