CopperCo unwinds big copper hedge to stay afloatThe sudden and...

CopperCo unwinds big copper hedge to stay afloat
The sudden and severe plight that emerging copper mining house CopperCo Ltd found itself in has already produced its first dose of medicine - the receivers and managers have jettisoned 60% of the company's copper hedge contracts.

Author: Ross Louthean
Posted: Wednesday , 31 Dec 2008

PERTH -

Darren Weaver of Ferrier Hodgson, the joint receiver-manager of CopperCo Ltd (ASX: CUO), announced today that the administrators had closed out copper hedges for a consideration of $A43.4 million ($US30.06 M).

The proceeds received, he said, have been applied against the outstanding senior debt facility with Macquarie Bank Ltd.

Weaver said a total of 11,680t of copper remains hedged at a weighted average forward price of $A7,019.91/t ($US4,861.71/t).

CopperCo was involved in a marriage to Mineral Securities Ltd in a link up involving global project developer Keith Liddell and, until recently, former Australian corporate developer Robert Champion de Crespigny, now living in the United Kingdom.

Intierra's Minmet service shows that CopperCo has a large package of projects, led by its operating Lady Annie copper mine in north west Queensland and the advanced blueprint for the partly owned Lady Loretta lead-zinc-silver project and other deposits in the same region.

When CopperCo presented at the Mining 2008 conference in Brisbane in October the global banking crisis and the meltdown in base metal and ferro metal prices was well into swing, but CopperCo was still smelling of roses.

The paper presented by CopperCo's respected managing director Brian Rear pointed to developments ahead for the new CopperCo (with the planned marriage consummation with Mineral Securities) pointed to mine operations in Zambezi and the Tianshan gold projects in China and the Platmin company's M'Phatlele and Groothoom feasibility studies and a start to Platin's Pilanesberg operation in South Africa in March 2009.

Copper output was to expand to 30,000t per annum of copper cathode at Lady Annie, and Rear pointed out that September quarter results for Lady Annie saw cash costs of $US1.08/lb which was "near the industry median."

He pointed out that 60% of Lady Annie's revenue to the end of financial year 2010 was protected by a hedge structure - one that the administrator is currently unwinding.

Meanwhile, since news that CopperCo had become one of the surprise victim's of the current market malaise there is speculation that cashed up Ivanhoe Australia Ltd (ASX: IVA) which raised an amazing $A120 M last August to list, is looking at CopperCo's assets.

Ivanhoe Australia is one of the cash rich Australian explorers, and its major focus is on copper and copper-gold developments in northern and north west Queensland.

Darren Weaver has been quoted in the media as saying international companies have expressed an interest in the assets of platinum-focused Mineral Securities.


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