shareholders plan to lead relisting of ccu, page-11

Thought it might help if we could set out a possible outline of what might be needed to get CCU relisted - helping to save much of the value of current shareholders, as well as offering new investors the chance to join a newly comissioned silver producer on Australian soil.

First. if we look at what the recent SPP was trying to achieve:

CCU's recent capital raising via SPP generated $3m+ out of the targeted $8m, and due to it being insufficient to meet creditor's demand as at 30 March 2014, it was forced into voluntary administration. (the SPP Investor Presentation file is here :- http://ccrlimited.com.au/wpcontent/uploads/2014/03/20140305-Investor-Presentation.pdf)

Keep in mind that under ASX listing rules, the number of shares on offer in the SPP was limited, and each individual shareholder could invest no more than $15,000. That included Magna Resources (35% shareholding, and the rest of the top 20 (in total 57% shareholding. Large shareholders were limited in what they could put in, and also were going to be significantly diluted.

If a re-listing takes place, not only will large shareholders have more opportunity to maintain their percentage holding, but NEW shareholders, including substantial or new cornerstone investors can get involved.

So if previous large shareholders still support the entity, and want to protect their investment, there could be potentially a large inflow. If some wish to dilute their holding, there is the option for new substantial investors to enter at a stage where the company has reached producer status.

The amount sought in the SPP was A$8million. This was to cover the March repayment to the CBA, plus outgoings to the end of this month, plus some general working capital.

Following the indicative share price that would have resulted from the SPP (if successful) of about 4.5cents, a re-listing at this pricing would involve about 178 million new shares - a dilution of existing shares by about 37%

For existing shareholders, who do not take part in purchasing new shares in a re-list, they still have considerable value in CCU. For those who take part,there will be less dilution. Some may wish to increase their percentage holding. (Whats the opposite of dilution?)

But what about the repayment of the balance of the CBA loan and guarantee. (now due June 30 this year.)

During the SPP it was announced that Sprott Resources Lending Partnership had signed a "credit facility terms sheet" (a MOU if you like)for US$12.5M - intended to replace the balance of the CBA project finance facility (A$7.4M) and rehabilitation guarantee (A$5.5M) and provide general working capital. Terms include monthly repayments starting November 2014, to be fully repaid by October 2016, with options for early repayment. After due diligence the credit facility was expected to be signed by the 30th April 2014.

If you accept the plans outlined in the SPP presentation (link above), even if the silver price stays at current levels, the repayments are comfortable.

If Sprotts (who are very bullish on silver) or another institution, maintain their interest, the relisting becomes feasible, and the operation has every chance of success.

The plant was steadily improving production, and the biggest risks would be some major event or a significant drop in the POS (CCU would not be the only casualty). Potential upsides would include a lift in the POS, and/or further drilling success somewhere on their large tenements.

Now the above is one option of how it might work - it would provide a good balance of benefits to existing and new investors.

For those (like me) who expect silver to have it's day in the sun sometime soon, it's an interesting proposition.

I don't wish to see my investment down the drain

I am very grateful to Nigel Goh (gelxi) for the leadership role he has taken up on behalf of minority shareholders in CCU, and I am supporting him in this campaign. Some more shareholders joined the campaign yesterday, but we need even more.

Save your shares, visit the forum at the link below and join up

:http://re-listing-ccu.forumotion.com/

Alpaka