Underwritten Pro Rata Rights Issue to Shareholders
The Directors of Matrix Metals Limited are pleased
to announce the Company will proceed with a 1 for 2 Pro Rata Rights
Issue ("Issue") of ordinary shares to Shareholders.
The Issue, if fully subscribed, will result in 25,980,000 ordinary
shares being issued at a price of 4 cents per share with one free
attaching option for every two shares subscribed, and will raise
up to A$1.04m before costs of the Issue. A decision on whether
the Issue will be renouceable or not is yet to be confirmed. Resource
Capital Fund II LP will unconditionally underwrite the minimum
subscription for the Issue of A$750,000, for a fee of A$60,000.
The Resource Capital Fund group is the major shareholder of Summo
Minerals Corporation, who in turn holds a 47.3% shareholding in
Matrix.
As reported in the Matrix June 2001 Quarterly Report and in consideration
of the amended operating plan as announced to ASX on 21 May 2001,
the Mt Cuthbert Operation has been demonstrating sustained copper
production rates in excess of the nameplate capacity in recent
months, with this performance continuing at this time. Equally
and potentially more importantly, exploration drilling at the
Mt Watson prospect has been highly successful with an initial
inferred resource of 837,000 tonne @ 1.3% copper estimated from
the first drilling program. It is noted exploration expenditure
to date at Mt Watson totals less than $100,000. Ongoing interpretive
work continues to confirm the potential for Mt Watson to produce
a long life ore supply for the Mt Cuthbert Operation.
The recent dramatic drop in the copper price has reduced revenues
from copper sales and has consequently reduced working capital
to an unacceptably low level. This has the potential to have a
negative effect on the mine sites operations in general, but more
specifically it will restrict progression of the Mt Watson exploration
program, which is critical for efficient copper production into
the year 2002 and beyond.
The underwriting of the Issue by Resource Capital Fund II LP
is a positive demonstration of support for Matrix and its' assets
and although the issue price is at a low level, it is reflective
of the state of the market at this time. Nevertheless, the Issue
is critical to ensure the Company is able to pursue its operational
and exploration activities and thereby potentially adding shareholder
value.
A Prospectus in regard to the Issue will be completed
as soon as possible.
Andrew Chapman
Chief Executive Officer
