Microsoft Word - ASX Announcement 14 Dec Chairmans address
ACN. 000 317 251
MARKET RELEASE 14 December 2015
CuDeco Limited AGM 2015 - CHAIRMAN'S ADDRESS
Ladies and gentlemen, thank you for attending today's Annual General Meeting of CuDeco Limited and my first as Interim Chairman.
It is no secret that 2015 has been an incredibly tough year for the resource sector. The world's top 10 miners have lost half their market value. Prices of key commodities, including copper, have hit six- year lows. We have seen job cuts, mine closures and project cancellations, as the industry adjusts to China's transition and amid a sluggish global economy.
As an emerging miner, CuDeco is not immune to these global influences. We cannot control the price of copper or other minerals. But importantly, the Board and management are aligned with the interests of all shareholders and we share both the good times and bad. Right now, the industry is suffering and we are all hurting.
But despite the current weak sentiment and negative headlines, we know that the resource sector is a cyclical business. It will bounce back, stronger than before.
So-called "doctor copper" is a bellwether for the global economy, and we know that conditions will improve in 2016. The United States is showing stronger growth, while the Eurozone is moving out of recession. And Asia continues to expand, particularly the emerging stars of India and ASEAN. Meanwhile, Australia is set to continue its 25-year economic winning streak.
Queensland is Australia's largest copper producer, and helped by new projects such as our Rocklands Group Copper Project will remain the nation's top producer. According to the Queensland Resources Council, global copper demand continues to rise, with demand for primary copper forecast to reach 28 million tonnes by 2020, up from 22 million tonnes in 2014.
Meanwhile, resource analysts CRU have predicted a widening supply gap from 2019 due to limited production growth, with demand growth led by India, China and Western Europe.
These forecasts all point to better times ahead for the copper industry and our flagship project.
However, since we cannot control external factors, we can only focus on what we can control: completing the construction and commissioning of our flagship project.
With this in mind, it is pleasing to report our recent progress:
* * Pre-commissioning activities such as running individual motors and valves are well advanced at Rocklands. The Company anticipates providing some feed onto the process plant before the end of
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December, with staged ramp up proceeding from then and full process flow at the end of February 2016;;
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CuDeco's leadership team has been strengthened with the appointment of Mark Roberts as General Manager of Rocklands, under the leadership of Managing Director Peter Hutchison. Both are highly experienced in mining operations and are focused on making Rocklands a success;
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CuDeco has attracted substantial new investment, which adds to the strong investor interest seen in our upcoming $63 million rights issue;
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Finally, we have announced a maiden Ore Reserve estimate for Rocklands, which underpins the project's Stage 1, 10-year operation and provides greater confidence in the project's economics. This will be followed soon by the project's Feasibility Study, which will be released prior to the closing of the Rights Issue, giving investors even more proof of Rocklands' value. The Feasibility Study will include revenue projections that I am sure will change perceptions.
Operationally, we have conducted trial shipments of native copper from Rocklands to overseas smelters which have reaffirmed confidence in the native copper product, which has the comfort of confirmed offtake and sales agreements. And we also recently signed a new logistics and fuel supply deal for Rocklands with Townsville Bulk Storage and Handling, who we welcome as a new partner to the project. This agreement offers substantial cost savings to the Company and further reaffirms our commitment to the North Queensland region.
By early 2016, we anticipate successful commissioning of the Rocklands process plant and our first large-scale commercial shipments of concentrate. After 10 years of exploration and development, this will mark a major milestone for the Company and I wish to thank all those responsible for this tremendous achievement.
Importantly for Cloncurry and the state, Rocklands will generate around 180 jobs at full production, which will create up to 400 new jobs in the North Queensland region due to economic spin-offs.
CuDeco has already injected significant amounts into the Queensland economy, while Rocklands will also contribute millions of dollars of royalties over its operational life, highlighting the importance of the mining industry to the state.
We have pledged to maximise the economic benefits for the Cloncurry community by employing local residents, offering scholarships to Indigenous youth and using local suppliers and services to the fullest extent possible. This stance is crucial in winning a "social licence" to operate and we are committed to being a responsible corporate citizen.
Nevertheless, the past year has also seen changes at CuDeco, none more so than the departure in July of one of our founders, Mr Wayne McCrae. The discovery of the Rocklands deposit and the Company's successful growth simply would not have been possible without Wayne's tireless efforts, and I wish to thank him again for his endeavours. I would also like to thank outgoing directors Mr Gerald Lambert, who served for five years, and Mr Jiang Yongmin, who retires at the conclusion of this meeting.
I would also like to thank all our staff and contractors for their efforts over the past year, along with my fellow directors and importantly, shareholders. The Board is humbled by your continued support, and I believe I have demonstrated today that CuDeco has a strong future.
We are also excited about the prospect of recommencing exploration endeavours, continuing the Company's strong success in the exploration arena.
In summary, our project is set to commence production soon, delivering substantial revenues for shareholders' benefit; we have revitalised our management and Board with an experienced new team; and we have gained the necessary investment to secure our Company's financial future.
Ladies and gentlemen, 2015 has been a major year in CuDeco's development as Australia's next copper exporter. 2016 will be the year in which we achieve this goal, and I hope you will stay with us to enjoy the benefits for many years to come.