From todays SMH...Copper stopperJust a few months ago the...

From todays SMH...

Copper stopper

Just a few months ago the Queensland miner CopperCo seemed to have everything going for it.

Its Lady Annie operation is producing copper at cash costs of $US1.08 a pound and total costs of $US1.35 a pound, meaning it remains profitable despite much lower copper prices. Until the end of 2010 about two-thirds of its production is hedged at high prices, placing it in a much better situation than its unhedged counterparts.

And it has been working on expanding the project to 30,000 tonnes of production a year by the middle of next year.

But not all has been rosy with its share price. Its shares have fallen from a peak of $1.07 last December to just 5c because of lower commodity prices and dissatisfaction with its recent scrip acquisition of the listed mining investment house Mineral Securities.

And now the miner has borrowed about $140 million to fund its project, and of that, $35 million is due to be repaid by next June.

CopperCo entered a trading halt on Thursday to work on a "potential financing transaction". The Drum has heard that Macquarie Bank wants the debt repayments made as soon as possible and CopperCo is negotiating a strategic alliance with Xstrata or Glencore - possibly involving convertible notes - but the company declined to comment before a deal was completed.