is this good news for kzl???

At least three investment banks are vying for a central role in digging zinc and copper miner Kagara Mining out of a hole, after the one-time stock market darling was placed in administration at the end of April.

Rothschild, Argonaut and Investec are seeking the mandate to provide financial advice to Kagara’s administrators and weigh up options that include a restructuring, fresh injection of capital or sale of assets, two people familiar with the matter told Deal Journal Australia.

Submissions were due to be lodged with administrators Taylor Woodings earlier this month.

Investec’s agreement in mid-May to refinance Kagara’s debts to ensure costs such as salaries and maintaining mine sites are met while Taylor Woodings lay the groundwork for a review of the business may give it an edge over competitors.

Investec’s commitment at the time included an immediate 3 million Australian dollars (US$3.06 million) injection of funds for use as working capital, and a A$23 million bank guarantee facility.

Perth-based Kagara, which owns copper and zinc mines and deposits in Queensland state, was once valued at more than 1 billion Australian dollars before the financial crisis took its toll.

But the company’s s cash flow and profitability has been squeezed badly by a combination of soft commodity prices and the high Australian dollar, prompting it to appoint Taylor Woodings as voluntary administrators on April 30. Its market value stood at just A$95 million at the time.

Kagara is also the controlling shareholder of Brisbane-based explorer Mungana Goldmines with a 62% interest after spinning out its Queensland gold assets into the firm in a 2010 initial public offering.

Late May, the Federal Court of Australia ordered an extension of the “convening period” of the administration up to Nov. 25. The revised date adds an extra six months to the original timetable to assess Kagara’s options and get best value for creditors and other stakeholders.

Taylor Woodings says it needs “time to properly assess and implement the best available option with respect to the restructure, recapitalisation or sale of assets with a view to maximising the outcome for all stakeholders,” but adds the final arrangements should be well known before the Nov. deadline.

In a statement early May, the administrators said their initial assessment of Kagara found that the book value of its assets is A$411 million, including the interest in Mungana Goldmines. Total creditors were estimated at the time at more than 830.

Aussie nickel producer Western Areas earlier bought Kagara Nickel–attracted by its Lounge Lizard site, adjacent to Western Areas’ Flying Fox mine–for A$68 million in March.