article in the west australian

9/12/08

Analyst wants CopperCo probe
9th December 2008, 7:30 WST

Research house Fat Prophets has called on regulators to investigate the collapse of CopperCo two weeks ago, describing the failure as “diabolical”.

Fat Prophets resources analyst Gavin Wendt says the sudden collapse of the Perth-based producer has raised questions over its disclosure to investors and a late flurry of trading in its shares in the days before it went into a trading halt.

The collapse of CopperCo, chaired by Keith Liddell, has been blamed on its failure to refinance $45 million due to Macquarie Bank. The debt was inherited in the merger with Mineral Securities three months ago.

Mr Wendt told subscribers to Fat Prophets’ latest mining report that CopperCo had never cited the refinancing as a concern. “The situation with respect to CopperCo, which right up until the end was trumpeting its robust financial position and seemingly no mention of its debt position, has us perplexed, angered and continuing to ask many questions of both the company and market regulators,” he said.

CopperCo completed the merger with MinSec in September. A refinancing deal fell through at the last minute, prompting directors to call in voluntary administrators from McGrath Nicol on November 27.

Macquarie then appointed receivers and managers from Ferrier Hodgson to safeguard its $135 million total exposure.

The merged group’s assets include major stakes in Niplats, Corvette Resources, Platmin and Tianshan Goldfields.

Mr Wendt said the Australian Securities Exchange and the Australian Securities & Investments Commission needed to have a close look at the company, including “highly irregular movements in its share price”.

Shareholder casualties of the collapse include company promoter Tony Barton, Queensland mining magnate Nathan Tinkler and east coast boutique investment bank Lazard Carnegie Wylie.
LOUISE BURKE