fh- circular to creditors.

From FH - in relation to CMR
I recieved this, so are shareholders creditors ??
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20 February 2009
COMPASS RESOURCES LIMITED ACN 010 536 820 (“CMR”)
(Administrators Appointed)(Receivers and Managers Appointed)
COMPASS MINING PTY LTD ACN 099 550 259 (“CMPL”)
(Administrators Appointed)(Receivers and Managers Appointed)
(Collectively “the Companies”)
CIRCULAR TO CREDITORS
I refer to previous correspondence in relation to the Companies.
I advise that on 17 February 2009, Keiran Hutchinson, Paul Campbell–Wilson and Chris
Munday, all of Ernst and Young, were appointed Joint and Several Receivers and
Managers (“Receivers and Managers”) of the assets and undertakings of the Companies
pursuant to the terms of a number of registered charges held over the Companies in
favour of HNC (Australia) Resources Pty Ltd (“HNC”).
The appointment of Receivers and Managers to the Companies by HNC has given HNC
control over the operating companies for the Oxide, Sulphide and Exploration Joint
Ventures. While the appointments are a significant change in the way in which the JVs
have been handled to date, they are understood to have been done by HNC with a view
to providing for the immediate JV capital (plant improvements) and operational costs and
so enhancing any potential to move the operations toward a future positive cashflow
position.
Even since the appointment of the Receiver and Managers, HNC has confirmed its
commitment to working with the Administrators towards an outcome for creditors of both
CMR and CMPL. We understand HNC considers the best way to achieve this is for HNC
to remedy Oxide plant deficiencies and operate the plant with a view to then establishing
a positive cashflow from which debts can be paid. Given the current low metal prices,
the need to “see the site rectification issues through” (estimated to take 2 months), and
the very recent appointment of Receiver and Managers, we consider progressing any
proposal with HNC is, realistically, likely to take some weeks.
Accordingly, we will be making an Application to the Court for an “extension of the
convening period” in order that the Administrators’ Reports may be provided to creditors
once we are in possession of better information. We consider it more appropriate that the
“decision meeting” (otherwise to be held on or before 6 March 2009) be held at a time
(we anticipate late April 2009) when there is sufficient reliable information upon which
creditors may determine the future of the Companies. If you have any objections to the
Application for an extension of time for convening that meeting, please submit details of
same in writing to my office without delay.