Cape Alumina (ASX:CBX) has announced that its Initial Public...

Cape Alumina (ASX:CBX) has announced that its Initial Public Offer (IPO) has closed fully subscribed, raising $15 million and attracting approximately 500 new shareholders. The Company’s shares are scheduled to list on the Australian Securities Exchange by the end of January.

Cape Alumina is a Brisbane-based, Cape York-focused emerging bauxite company. Cape Alumina has international support from Chinese alumina majors including Xinfa, one of China’s largest aluminium and alumina producers. Cape Alumina is evaluating the development of the Pisolite Hills bauxite project, which is located 50km NE of Weipa on Cape York in Queensland, and plans to complete an Indigenous Land Use Agreement, environmental impact study and bankable feasibility study in 2009 prior to seeking project permits and approvals in 2010.

With the Cape Alumina IPO listing, Metallica Minerals (ASX:MLM) will have an approximate 32% interest in what will be Australia's newest listed resource company. Metallica’s stake in the imminent new bauxite listing comprises 42.3 million ordinary shares, and will be valued at listing at approximately $A21 million based on the IPO share price.

The bauxite stake will be in addition to Metallica’s other major Queensland interests in nickel-cobalt development feasibility, coal exploration including evaluation for underground coal gasification (UCG), and coal gas to liquids (GTL) projects.

Chairman elect of Cape Alumina, Mr George Lloyd, said he was delighted with the response from the public, predominantly people of Queensland and particularly Far North Queensland and Weipa, who had supported the Company and its project by investing in the IPO.

“This is a great result in a very difficult financial market and enables Cape Alumina to confidently progress the feasibility study into the development of a significant new Australian resource project in Cape York,” Mr Lloyd said.

Cape Alumina CEO Paul Messenger said Cape Alumina was now in the fortunate position of starting life as an ASX-listed company with cash in the bank, no debt and an advanced resource project which, subject to feasibility, will position the Company to play a major role in the supply of bauxite to the Chinese alumina-aluminium market.

That market had grown rapidly over recent years and became increasingly dependent on imported bauxite, Dr Messenger said. The 100% owned Pisolite Hills project is planned to come on stream in 2012/13 at a time when China is expected to require increasing supplies of imported bauxite.

“In addition to building a valuable business for its shareholders, Cape Alumina intends to have significant indigenous participation in the project,” Dr Messenger said.

Dr Messenger said the Company was now focused on completing the key tasks listed in the prospectus, which included preparing a bankable feasibility study for the Pisolite Hills project, finalising an Indigenous Land Use Agreement with the traditional owners of the project area and completing the environmental impact study of the area.

Dr Messenger said the Company would also progress the exploration of its regional tenements, throughout the Weipa Bauxite Province, with the goal of expanding its bauxite resource base which currently stood at 101 million tones (Mt) in situ (76 Mt Indicated Resources + 25 Mt Inferred Resources) with average washed grade of 53.5% Al2O3, 12.2% SiO2and over 68% beneficiation recovery.

“This is an exciting time for Cape Alumina which is very proud of its achievements to date,” said Mr Lloyd.

Subject to a positive feasibility study and successful financing, construction is expected to be carried out between 2011 and 2012 and bauxite production is planned to commence in 2012/13 at the rate of 7 million tones per annum of bauxite product.