Where to from here for collapsed miners?Friday, 13 February...

Where to from here for collapsed miners?
Friday, 13 February 2009
Kristie Batten

FALLING metal prices and tough market conditions in the second half of 2008 saw a swag of Australian companies fall into the hands of administrators and receivers. MiningNews.net looked at how asset sales are progressing and if there is any chance the companies can be recapitalised.

Earlier this week, Cape Lambert Iron Ore paid around $A72.7 million to take on the outstanding secured debt failed copper miner CopperCo owed to Macquarie Bank and LinQ Capital.

CopperCo collapsed in late November after it was unable to secure new debt facilities.

Cape Lambert executive chairman Tony Sage told MNn on Monday the company was not interested at this stage in acquiring CopperCo’s assets, which include the Lady Annie copper mine in Queensland.

Still on copper miners, the administrators of Matrix Metals have received more than 30 expressions of interest for the company’s assets which include the Mt Watson and Mt Cuthbert mining pits and a production facility, all in Queensland.

“We’ve now shortlisted half a dozen parties to conduct detailed due diligence on straight asset purchase proposals and there’s another eight or nine that have expressed interest in some of the assets and possible recapitalisation of the company, given that it’s an ASX-listed company,” administrator Vincent Smith of Ernst & Young told MNn.

Smith said the expressions of interest received are different in nature and are from local and international parties.

Some parties are flying to Queensland next week to conduct onsite due diligence and will have until February 27 to submit a binding offer.

Smith said administrators don’t expect to report back to creditors until mid-March at the earliest but are providing regular updates.

“We’ve gone and sought an extension of the timeframe in which we have to report to creditors because we don’t have detailed information to report until we know the outcome of the sales process,” he said.

“We are very much in waiting mode at the moment until parties come back at the end of this month with proposals.”

Recapitalisation could also be on the cards for Monto Minerals after the administrators announced in December that all shares in Monto would be transferred to Belmont Park Investments and Panorama Ridge by March 2009.

The deal does not include the listed company shell and a shareholder meeting will be held in the coming months to discuss recapitalisation.

A PricewaterhouseCoopers spokesperson told MNn that the administrators are still working through the deed of company arrangement, and, once that was finalised, the next step would be transfer of ownership.

The administrators of unlisted miner GBS Gold Australia recently provided an update, saying due diligence and site visits to the company’s Northern Territory gold operations are underway with interested parties.

Administrators from Ferrier Hodgson said they received just over 90 initial expressions of interest.

The Tom’s Gully gold mine was placed on care and maintenance after administrators determined the mine would be operating at a significant loss in the December 2008 quarter.

A meeting of creditors will be held by March 3 to consider any final offers made or to enter a deed of company arrangement.

If no acceptable offers are made, the administrators said directors will likely declare Toronto-listed parent company GBS Gold International insolvent and its shares will be delisted.

Fellow precious metal miner Monarch Gold fell into the hands of administrators in July and, to date, Pitcher Partners has received more than 140 expressions of interest for its assets.

More than 40 interested parties have paid a $500 fee for a copy of the information memoranda and administrators are awaiting final offers.

At the third meeting of creditors in December, creditors allowed the deadline for the sale process to be delayed until no later than June 30.

The company’s gold operations are still on care and maintenance, and any sale will be subject to creditor approval.

The future fate of recently collapsed explorer Goldstar Resources is still unclear, though administrators from PPB were seeking expressions of interest for assets including the company’s joint venture interests in Western Australia and Queensland, tenements in Victoria, plant and machinery and motor vehicles.

PPB could not be contacted by MNn.

Compass Resources is the latest victim of the financial crisis, appointing administrators on January 29, just months after bringing its delayed and over-budget Browns oxide project into production.

The first meeting of creditors was held on Wednesday in Darwin, with the second to be held on or before March 5.

A spokesman for administrators Ferrier Hodgson was unable to confirm if the Browns oxide operation has been placed on care and maintenance, and if offers or expressions of interest for the project have been made.

Receivers of Tamaya Resources and administrators for Matilda Minerals were unavailable for comment.