CopperCo Ltd ACN 004 434 904 CopperCo Queensland Operations Pty Ltd ACN 120 883 285 Lady Annie Pty Ltd ACN 073 222 045 Lady Annie Operations Pty Ltd ACN 076 289 097 Savannah Resources Pty Ltd ACN 096 358 735 Mineral Securities Operations Ltd ACN 091 158 593 Mineral Securities Holdings Pty Ltd ACN 092 525 614 Platmin Holdings Pty Ltd ACN 117 927 965 Kadina Pty Ltd ACN 009 633 096 (All Receivers and Managers Appointed) (All Administrators Appointed) Report to Creditors 12 June 2009 C O R P O R A T E ADVISORY | FORENSIC | TRANSACTION SERVICES | CORPORATE RECOVERY Contents List of Appendices 5 Glossary of terms 6 1 Executive Summary 8 1.1 Context ..................................................................................................................... 8 1.2 CopperCo‟s Business ............................................................................................... 8 1.3 Reasons for failure ................................................................................................... 8 1.4 Results of investigations .......................................................................................... 9 1.4.1 CopperCo Companies .............................................................................................. 9 1.4.2 MinSec Companies .................................................................................................. 9 1.5 Options available to creditors ................................................................................... 9 1.6 Recommendations and returns ................................................................................ 9 1.6.1 CopperCo Companies .............................................................................................. 9 1.6.2 MinSec Companies ................................................................................................10 1.7 Creditors‟ meetings ................................................................................................10 2 Introduction 11 2.1 Appointment of Administrators ...............................................................................11 2.2 Appointment of Receivers and Managers ..............................................................11 2.3 Object of Administration .........................................................................................11 2.4 Purpose of report ...................................................................................................12 2.5 Extension of convening periods .............................................................................12 2.6 Nature of forecasts and estimates .........................................................................13 3 Background 14 3.1 History ....................................................................................................................14 3.2 Structure of the CopperCo Group ..........................................................................16 3.3 Statutory and company specific information ..........................................................16 3.4 Books and records .................................................................................................16 3.5 Financial information ..............................................................................................17 3.6 Administrators‟ prior involvement ...........................................................................17 4 Financial Statements 18 4.1 Context ...................................................................................................................18 4.2 Statements of financial performance .....................................................................18 4.2.1 CopperCo Companies ............................................................................................18 4.2.2 MinSec Companies ................................................................................................19 4.3 Statements of financial position .............................................................................20 4.3.1 CopperCo Companies ............................................................................................20 4.3.2 MinSec Companies ................................................................................................22 4.4 Statements of cash flow .........................................................................................24 4.4.1 CopperCo Companies ............................................................................................24 4.4.2 MinSec Companies ................................................................................................25 4.4.3 Administrators‟ Conclusion.....................................................................................25 5 Report as to Affairs 26 Report to Creditors CORPORATE ADVISORY | FORENSIC | TRANSACTION SERVICES | CORPORATE RECOVERY 2 5.1 Summary ................................................................................................................26 5.2 Consolidated RATA ................................................................................................26 5.2.1 CopperCo Companies ............................................................................................26 5.2.2 MinSec Companies ................................................................................................28 5.3 Explanation for difficulties ......................................................................................29 5.3.1 Administrators‟ comments ......................................................................................30 5.4 Outstanding winding up applications .....................................................................30 5.5 Related entities ......................................................................................................30 5.5.1 CopperCo Companies ............................................................................................30 5.5.2 MinSec Companies ................................................................................................31 6 Offences, insolvent trading and voidable transactions 32 6.1 Overview ................................................................................................................32 6.1.1 Administrators‟ obligations .....................................................................................32 6.1.2 Focus of work .........................................................................................................32 6.1.3 Offences .................................................................................................................32 6.1.4 Insolvent trading .....................................................................................................32 6.1.5 Voidable transactions .............................................................................................33 6.1.6 Recovery from company officers ...........................................................................34 6.2 CopperCo Companies‟ findings .............................................................................34 6.2.1 Offences .................................................................................................................34 6.2.2 Insolvent trading .....................................................................................................34 6.2.3 Voidable transactions .............................................................................................37 6.2.4 Recovery from company officers ...........................................................................38 6.2.5 Funding to pursue insolvent trading, voidable transactions or company officers ..38 6.3 MinSec Companies‟ findings ..................................................................................38 6.3.1 Offences .................................................................................................................38 6.3.2 Insolvent trading .....................................................................................................38 6.3.3 Voidable transactions .............................................................................................39 6.3.4 Recovery from company officers ...........................................................................39 7 Progress of Receivership 40 7.1 Background ............................................................................................................40 7.2 Sale of assets .........................................................................................................40 7.2.1 CopperCo Companies ............................................................................................40 7.2.2 MinSec Companies ................................................................................................40 7.2.3 Administrators‟ comments on the sale process .....................................................41 7.3 Remaining assets ...................................................................................................41 7.3.1 Insurance claim relating to the flooding of the Lady Annie mine ...........................41 7.3.2 Debt owed to CopperCo by Brian Rear, former Managing Director ......................41 8 Proposed DOCA for the MinSec Companies 42 8.1 Key Terms of DOCA ..............................................................................................42 8.2 Creditors‟ Trust .......................................................................................................43