Exert from the West Australian Newspaper 12/5/2012The...

Exert from the West Australian Newspaper 12/5/2012

The administrators of Kagara are seeking up to $15 million to bankroll their campaign to restructure the base metals miner.

With Kagara's north Queensland mines all placed on care and maintenance, administrator Michael Ryan said he needed cash to keep paying remaining staff and fund a detailed examination.

Mr Ryan said administrators were talking to financiers about potential funding to bankroll a quick but measured fix for Kagara, including the possible sale of assets. "We want to go to the market and say we want to restructure the group, not fire sale it," he said.

Directors called in Mr Ryan and three other insolvency accountants as administrators 13 days ago after failing to secure a lifeline.

It has emerged since the collapse that secured creditor ANZ took all but $1.4 million of the proceeds of Karara's $68 million sale in March of its Lounge Lizard nickel mine.

Mr Ryan told a meeting of creditors in Townsville on Wednesday that Kagara's $21.2 million in cash was held by ANZ as security for performance bonds the bank had given to the Queensland Government for Kagara's environment and rehabilitation obligations. He said the distribution of the Lounge Lizard proceeds would be examined as part of investigations into the group.

Kagara had been squeezed by falling prices for copper, zinc and nickel, a rising Australian dollar and problems at its north Queensland mines.