Exco completes Cloncurry sale to Xstrata

THE BOURSE WHISPERER: Australian exploration and mining company Exco Resources has successfully completed the sale of the Cloncurry copper project to Xstrata.

The price tag of $175 million has now been banked boosting Exco’s cash balance in excess of $220 million, pre-tax, which equates to approximately 62 cents per share, fully diluted.

As the company previously announced it will now progress to return $135 million, 39 cents per share, fully diluted, to Exco shareholders by the end of October, or under reasonable circumstances where a delay is experienced, as soon as is practicable.

Exco intends to return the $135 million in two steps.

The first will be in the form of an initial return of capital to an amount as permitted under taxation legislation, and subject to Exco shareholder approval.

The second will be paid to shareholders as a fully franked dividend.

Exco is currently arranging the procurement of a class ruling on the tax treatment of the return from the Australian Taxation Office and will inform shareholders as to the nature and timing of the returns as soon as possible.

“The board believes that cash retained by the company post distributions will fund the purposeful growth of its remaining asset base,” Exco said in its announcement to the Australian Securities Exchange.

“The board has already approved an initial exploration program of up to $10 million for its remaining tenements in the Cloncurry, Hazel Creek, and Soldiers Cap project areas in NW Queensland.

“Exploration activity is underway on a number of priority targets and will continue for the foreseeable future. The Company will keep shareholders informed on progress as results are received.”