December 10, 2008 - 5:59PM OZ Minerals Ltd says it may sell...

December 10, 2008 - 5:59PM
OZ Minerals Ltd says it may sell prized mining assets after a lender indicated it could not refinance one of its debt facilities.

Australia's third largest diversified miner is struggling under a debt burden of more than $1 billion.

Its shares have been suspended from trade for the rest of the year, and possibly through January, as it negotiates to refinance two debt facilities, worth $US420 million and $US140 million.

The company's shares last traded at 55 cents before they were suspended on November 28 amid concern about its ability to roll over the debt that was largely brought into the group by Oxiana Ltd.

OZ Minerals said on Wednesday that it has had several serious expressions of interest to acquire the Martabe gold project in Indonesia and enter into joint venture arrangements for the Prominent Hill copper mine in South Australia.

However, one of the prospective lenders, whose deadline was December 29, will no longer refinance OZ Minerals.

"Completion by December 29 is now highly unlikely," the company said in a statement.

OZ Minerals last Thursday had said it expected it would be able to extend the maturity of its debt facilities totalling $1.28 billion by one month and use its "best endeavours" to secure the extension.

The company also said on Wednesday that its cash position had deteriorated.

OZ Minerals had cash on hand of $279 million on December 8, down from $405 million on November 30.

The company, which was formed in July through the merger of Oxiana and Zinifex Ltd, last week moved to allay market concerns about its $1.28 billion debt burden, saying at the time that it was not behind in its payments or in default.

It said at the time that it was confident it could extend the maturity of some of its debt facilities even though the decline in the Australian dollar since June 30 had caused its debt to grow by about $365 million.