Shareholders hear of a brighter future for CBH Resources
Wednesday September 2, 2009
Shareholders have approved a recapitalisation plan for CBH Resources that will see the company almost double production at its Endeavor Mine by 2011.
Shareholders at Monday’s extraordinary general meeting approved a number of “recapitalisation” initiatives which raised a total of $20.54million.
At the meeting CBH also released its full year financial results, showing a loss for the year of $96.6million.
However, CBH managing director Stephen Dennis said he is “confident” the “worst is behind us”.
“Importantly our operating loss at Endeavor in the second half of the year was $6.2million, which is a substantial improvement compared to the first half loss of $30.8million, confirming that at long last we are emerging from what has been a very dark period for this company,” Mr Dennis told shareholders.
According to the company’s preliminary final report on the 2008-09 year, the mine will continue with the current “lower cost structure” in place as it prepares to ramp up production.
Following a drop in metals prices last year, the company reduced its workforce from 605 (including contractors) to 120, however is now planning to employ a further 90 people after the production is increased.
The mine’s future plans include a continued mining rate of 420,000 tonnes per annum for the 2010 financial year, to be increased to 850,000 tonnes per annum for the 2011 financial year (dependant on sustainable metals prices).
The mine’s paste plant is expected to be recommissioned in January next year, with the company to spend $20million in development capital to restore production levels.
“Had we not undertaken severe production cutbacks at Endeavor, and implemented other drastic cost saving measures right across the company, then I am sure we would not have made it here today,” Mr Dennis said.
“Some 480 people, including contractors, lost their jobs at CBH in a one year period, and this is a sobering and regrettable number for a company of our size.”
Following the extraordinary meeting major CBH Resources shareholder Toho Zinc Co will reduce its holding of shares after electing not to subscribe for additional shares as part of CBH’s fundraising efforts.
Toho previously held 28.4 per cent of shares in the company, but following the approval of a share allotment plan will now hold 23.1 per cent of CBH shares.
CBH has also announced it will not be
seeking to sell its Newcastle Shiploader
Facility, after the move was previously considered.
According to the company report, the sale is “unlikely, given its strategic importance”.
The shiploader handles concentrate export from Endeavor as well as Peak Gold Mines, CSA Mine and Tritton Mine and generates around $2million in operating cash flow per annum.
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