Copper Strike Terminated Loan Agreement Ahead Of Scheduled time

  • Feb 22, 2019 AEDT
  • Team Kalkine
Copper Strike Terminated Loan Agreement Ahead Of Scheduled time

Copper Strike Limited (ASX: CSE) has today announced that it has terminated the Loan Agreement announced on 4 October 2017. The stock price closed at 4.545% above the previous day close and has a market capitalization of circa A$11.75 million.

Copper Strike Limited is a mineral exploration and production company. The Company owns interests in various exploration properties. Mr. Mark Hanlon is the Non-Executive chairman of the company. The company was listed at ASX on 24 November 2004. Its registered office is 100, Albert Road, Level 4, South Melbourne, VIC 3205 Australia.

The company had borrowed money to take up 100% of the retail entitlement in Syrah Resources (ASX: SYR); the entitlement was 1,047,619 new shares at $3.38 per share. The loan agreement was secured by the provision of 1.8 million Syrah shares. The company received an advance of $3.55 million, and the loan was repayable after two years.  

CSE announced that it has terminated the Loan Agreement. This closure of loan is earlier than the stipulated 2-year term at the Company's option and was on a non-recourse basis. The Lender will be taking possession of 2,281,782 Syrah shares that was held as security, and $4.2 million loans have now been terminated. Post this action in place the company has no obligation outstanding.

The termination of loan agreement results in a gain of approximately $1.3 million. The company incurred approximately $264,000 on total interest and fees paid during the loan term.

With the settlement of the loan agreement, the company is contemplating entering into a new loan arrangement, and the details of the same will be announced soon.

The company announced its half-yearly reports on 1st February 2019, the details of the reports highlighted the view that the company management holds about its Syrah investment.

The share purchase of Syrah had an impact on the companies consolidated working capital, resulting in a working capital deficiency of $3,702,093 (30 June 2018: deficiency of $3,472,681). Due to the loan taken to fund Syrah shares purchase.

In the half-yearly report, Copper Stroke had elaborated on the rational of holding the investment in Syrah, and the Directors are of the view that the Syrah share has more scope to go up since Syrah is ramping up its production of flakes and fine graphite at the Balama Project. Also, the management of Copper Stroke believed that any further positive announcements by Syrah with regards to its operations may provide significant share price momentum. The directors believe that it is in shareholders’ best interests for the company to continue to hold this investment to ensure that the potential upside in relation to the development of the world-class Balama Project is reflected within the Syrah share price.

The company’s stock price closed at A$0.115 (22 February 2019) with the 52-week low price of A$ 0.090 and the 52-week high price of A$0.275. The EPS of the company stands at -0.003 AUD. The stock generated the positive return of 1296.83% in the last ten years.


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