http://news.theage.com.au/business/more-junior-miners-to-go-under...

http://news.theage.com.au/business/more-junior-miners-to-go-under-this-year-20090109-7dkl.html

The steady stream of junior miners forced to enter voluntary administration due to the global financial market meltdown will continue to flow in 2009, receivers say.

"There will be a few more this year," Deloitte partner Gary Doran told AAP. Pitcher Partners managing partner Bryan Hughes agreed.

"There are going to be big challenges for junior miners," Mr Doran said.

"A lot will go into a deed of company arrangement because they just won't have the cashflow."

Failure to gain finance in frozen capital markets was the main reason a swag of junior miners came undone last year.

Mr Doran said the varying quality of these outfits showed that no miner was immune to the carnage, fuelled by low commodity prices as global demand softened.

The attrition list ranges from the operationally plagued gold miner View Resources Ltd to copper miner CopperCo Ltd, which has high quality assets in Queensland that are expected to be snapped up.

"CopperCo was in a strong position in July/August and everything looked rosy, but they got absolutely hammered with the copper price," Mr Doran said.

CopperCo went into administration in November after a finance deal fell through.

"The credit appetite for banks and financiers is just not there for these types of industries," Mr Doran said.

"What we're expecting is (that) there will be significant mergers and acquisitions in the mining sector ... so good projects that are cashflow challenged will merge with companies with stronger balance sheets.

"That's likely to be the best solution for these junior miners - identifying strategic partners - whether they are other mining companies, Chinese investors that have the need for commodities, or other players."

Mr Doran is the receiver of Matrix Metals Ltd, which came undone in November under the weight of its $4.4 million debt burden after the copper price slumped.

He said there was strong interest in Matrix's assets, including its Leichhardt mine in Queensland, with more than 30 expressions of interest received to date.

"We've got signed confidentiality agreements ... so we're quite hopeful that we will get some reasonable offers ... and close a sale," Mr Doran said.

The most recent casualty of the resources sector downturn is gold explorer Goldstar Resources NL.

Brett Lord and Craig Crosbie of PPB in Melbourne were appointed Goldstar's administrators on Thursday and were being sought for comment.

The junior company was close to starting production at its Walhalla-Woods Point gold field in Victoria but had only $1.8 million in cash at the end of September.

Mr Hughes said he hoped some of Monarch Gold Mining Company Ltd's assets would be sold before the end of the financial year.

They would be sold either as a package or individually, he said.

"We are well progressed on the sale of the Minjar project and we have significant interest in the other projects," he said.

Monarch was placed in voluntary administration in July due to poor production performance at its Davyhurst mine in Western Australia.

Mr Hughes also is the administrator of junior silver miner Macmin Silver Ltd, which flopped in November.

Mr Hughes said more than 50 expressions of interest had been received for the Macmin assets, which he hoped would be sold by June.

Silver was still being produced from stockpiles at Macmin's Twin Hills mine in Queensland, he said.

Another junior miner in voluntary administration is zircon producer Matilda Minerals Ltd which, along with View Resources, is being handled by Ferrier Hodgson.

Tiwi Island-focused Matilda went under in October after revealing it had less than $1 million cash in the bank and more than $12 million in debt at the end of June.

View called in the administrators in February after disappointing production at its Bronzewing gold mine in WA.