http://www.theaustralian.news.com.au/business/story/0,28124,24717...

http://www.theaustralian.news.com.au/business/story/0,28124,24717690-643,00.html

COPPERCO, which operates the Lady Annie copper mine in Queensland, has joined a growing list of junior miners calling in administrators as banks close their doors to debt refinancing.

Industry insiders expressed concern that CopperCo, which has a quality asset and copper sales hedged for another two years at double current prices, could not raise around $50 million to service a debt.

"They have an operating mine that is on time and on budget and it is still generating strong revenue," one insider said.

The move underlines the tough stance being taken by banks as the global financial crisis deepens.

It is understood the Perth-based miner acquired the debt when it merged with Mineral Securities earlier this year, when credit conditions were healthier and CopperCo believed it could service that debt.

CopperCo, whose share price was down to 5c, was said to have considered all options to meet the debt requirements, which had to be serviced by December.

In an announcement to the Australian stock exchange late yesterday, CopperCo -- which had been in a trading halt since November 20 -- said negotiations for financing fell apart on November 25.

CopperCo appointed McGrath Nicol as voluntary administrators and the bankers to the company appointed Ferrier Hodgson as receivers.

The junior mining sector has been badly hit by the stark credit conditions. Copper producer and explorer Matrix Metals, zircon miner Matilda Minerals, Monarch Gold and View Resources have all been placed into administration, and a long list of others have cut staff and placed mines on care and maintenance.

In the past six months analysts including Citi, DJ Carmichael and Fat Prophets had all recommended CopperCo as a buy.

Fat Prophets analyst Gavin Wendt said he had recommended CopperCo because it appeared to be a robust company, with a good hedge position. In all the detail the company had presented there was no sign it would be heading towards administration.

"Everything the company has ever put out has been positive," Mr Wendt said. "Even its report late last month was very bullish and nowhere was there this mention of the poison pill that it had to refinance a debt that was significant enough that it has put them into administration.

"This should have been highlighted to the market. It is staggering that a company with a robust operating margin and a solid hedge position could not cover their debt.

"This leaves the market scratching its head, because what company could be next?"

In its September quarter report released only a month ago, CopperCo emphasised the copper price protection that it had in place, which would ensure that revenue generated from copper sales delivered into the company's hedge contracts would cover 100 per cent of operating costs, debt servicing, overheads and minimum exploration expenditure for the next two financial years.