Universal will raise $6.6 million by issuing 30 million shares to Xstrata at 22c per share, nearly double the price the shares were at when CopperCo launched a six-for-one scrip takeover bid late last year. At the time the bid valued Universal’s shares at an implied 13.88c.

Two-thirds of the new funds raised will go towards the current feasibility study that’s considering a 7-10 million tonne per annum mining and processing operation at Roseby, while the balance will be spent on an exploration seeking a large copper sulphide system beneath the copper oxide resource.

Xstrata may subsequently earn a 51% in this aspect of the project by sole funding $15 million worth of exploration, or a minimum of $10 million plus a feasibility study. At the same time it acquire a 51% interest in the rest of the Roseby project, at a price to be agreed at that time.

Universal’s managing director Peter Ingram said in a market statement that negotiations with Xstrata began last November.

MiningNews.net was unable to reach directors of CopperCo this morning.

Shares in Universal were up 3.5c (22%) to 19.5c in early afternoon trade, while CopperCo was unchanged at 2.3c.