Matrix Metals appoints administrators Wednesday, 12 November 2008 Charlotte Dudley
PERTH-based copper miner Matrix Metals has gone into administration, unable to ride out the dramatic drop in copper prices.
Matrix, which operated the Leichhardt copper project in Queensland, emerged from a trading halt this morning to announce the appointment of voluntary administrators to the company, after crumbling under the weight of debt obligations and falling copper prices.
The miner said the significant drop in copper prices resulted in Matrix having to make a substantial partial repayment of a provisionally paid invoice from commodity trader Glencore International. The payment is due at the close of business today.
However, Matrix has other provisionally paid invoices from Glencore which it is likely to have to repay over the coming months.
Matrix said it had hoped to work out a plan to keep the company afloat, but such strategies were to prove unsuccessful.
“Following discussions with the representatives of Glencore in Perth late last week, the board had anticipated that it would be possible to restructure the arrangements with Glencore such that Matrix would be able to continue to trade,” Matrix said in a statement.
“However, it has now become clear that this will not be possible within a reasonable timeframe.”
Matrix began production at Leichhardt late last year when the copper price was trading at around $US6600 a tonne. An expansion plan was in full swing to lift Leichhardt output to 9000t per annum.
Since debuting production, however, the price of copper has plunged down to $US3602 on the overnight spot market.
And while Matrix had joined the ranks of producers, it also had to face up to its financial commitments.
According to the company’s September quarter report Matrix had $1.685 million in cash plus unsold finished goods of $800,000. However, the miner closed the quarter with $4.4 million in secured debt.
In an interview with MiningNews.net last year, Matrix managing director Shane McBride talked up the mineral riches of the Mount Isa region and the company’s just debuted Leichhardt operation.
“You can easily see a mine life of more than 10 years, there's no doubt about that," he said.
Today the miner told the market its decision to appoint administrators was “appropriate in the circumstances”.
Last month copper miner Tamaya Resources slid into administration after weeks of creditor talks failed to get the company on a stable financial footing.
MRX Price at posting:
$1.15 Sentiment: None Disclosure: Held
