Strong support for project

WA-based copper producer Matrix Metals Limited has formally listed on the bourse after successfully raising $7 million with the issue of 28 million shares at 25 cents each.

The strength of its copper project was reflected in the support from investors, which saw the shares spike after listing to 30 cents, before falling back to 27¢ by mid-July.

Matrix CEO Andrew Chapman described the listing as making the most of the weak Australian dollar by hedging the dollar for its 2000/01 production receipts at 60¢, a level more favourable than the prospectus forecasts.

Mr Chapman said locking in the dollar and leaving the copper price open to the spot market was a key element of the company’s business plan.

“We have hit the ground running by hedging the dollar for our production receipts at 60¢ compared to 61¢ as detailed in our prospectus,” he said.

“By hedging now we are locking in the benefits of a lower exchange rate.

“This will have a direct and positive impact on bottom-line results.”

The copper price has moved into an upward cycle with worldwide demand increasing and stockpiles declining to five year lows.

Some industry analysts have indicated that the price of copper will rise to A$1 per ounce by the end of the calendar year from current levels of 80¢ to 85¢.

Mr Chapman said the company retendered the mining contract during the float process and has appointed a new mining contractor to take over a previous contract at the Mt Cuthbert mine, in Queensland.

The company plans to increase production from the present 5,500 tonnes per annum copper to 15,000tpa to 20,000tpa copper within the next three years.

Matrix, which was formed by combining the copper assets of profitable Cloncurry producer Murchison United NL and explorer Majestic Resources NL, is forecasting a dividend yield of 10 per cent on the back of strong earnings in 2000/01.

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