+++++++++++++++++++++++++ Matrix Metals Limited today lodged a prospectus for a 2 for 1 renounceable pro rata offer to shareholders of 183,394,054 shares at an issue price of 4.5 cents per share, to raise in excess of $8 million (the "Issue"). The Issue is fully underwritten by Hartleys Limited. Summo Minerals Corporation, the Company's major shareholder will, following the Issue, convert its $3.25 million loan to Matrix into equity at a conversion price of 16 cents per share, leaving the Company debt free. Summo will also subscribe $3 million pursuant to the Issue.
While Matrix has proven its ability to produce premium quality copper cathode from its Mt Cuthbert Operation, the project's relatively limited economy of scale, combined with the weak copper price, has resulted in the achievement of limited operational returns. Matrix has had to service significant debt and accordingly has had minimal funds to apply towards exploration and development activities.
Matrix is delighted to announce that following the Issue it will commence an extensive and principally brownfields exploration program aimed at substantially increasing its oxide copper resources at Mt Watson and at other known copper deposits in the region. Achieving the resultant increase in resource inventory, and a simultaneous upgrade of the Mt Cuthbert plant, will allow the Company to significantly enhance the project's economics, targeting a profitable and sustainable long-term copper production profile.
It is also intended that the funds raised will be applied to exploration and pre-development activities including finalising the feasibility study at the Company's White Range Project at a copper cathode production capacity greater than previously envisaged.
Matrix's copper reserves are unhedged, and the Company is well positioned to take advantage of the anticipated upturn in the world copper price.
Summo CEO Greg Hahn said today "Our initial investment in Matrix was based on our view that the Company had outstanding production capability and tremendous potential for growing its copper resources. Since that time our vision has been confirmed. We believe that Matrix will move to become a very significant mid-tier producer of copper cathode".
Full details of the Issue are presented in the Prospectus, which will be dispatched to Shareholders on 6 August 2002.
A Chapman CHIEF EXECUTIVE OFFICER
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