The sale of failed base metals miner Kagara's assets risks becoming a political football, with outspoken North Queensland MP Bob Katter yesterday launching a broadside at the company.

He said he had reported unspecified "serious issues" at Kagara to the corporate watchdog and to Treasurer Wayne Swan.

Mr Katter's comments come as Kagara's administrators close the first sale of its assets, with Hong Kong investment company Snow Peak Mining about to sign a deal worth $40 million to buy Kagara's central North Queensland assets, including the Mt Garnet processing plant, the Balcooma and Baal Gammon mining areas and the Einasleigh and Maitland exploration projects.

When first announced in December administrator Taylor Woodings said the purchase price, which includes the assumption of $10.7 million of environmental bonds, would be enough to extinguish Kagara's secured debt, trading costs and administration expenses.

Mr Katter said in a statement yesterday he opposed the sale as he understood unsecured creditors, which he said included more than 800 Queensland contractors, were still reportedly owed $95 million and may never see their debts paid.

"Serious questions raised by these contractors are being brought to the attention of relevant government instrumentalities," he said. "These matters have been referred to the attention of both the commissioner of the Australian Securities and Investment Commission as well as the Treasurer. If this sale were to proceed, these creditors would be left high and dry. Many may not be paid a single cent."

It is unclear what, if anything, Mr Katter's intervention could achieve given the foreign investment review board signed off on the Central Region sale late last year. But he is certainly reflecting growing anger among Queensland creditors at the slow pace of dealing with their debts.

Sources say that almost nine months after the collapse of the one-time market darling, creditors still have no clear picture of how much is owed because Taylor Woodings is still assessing proof of debt claims. Also unclear is how much of Kagara's debt is effectively owed to itself, through inter-company loans from the parent to operating subsidiaries.

And the Queensland politician has weighed in at a delicate moment in the sale process, with administrators last week relaunching an effort to sell Kagara's North Queensland assets, which include the Mungana gold mine and the Mt Garnet, Balcooma and Thalanga base metals projects.

The 2.7 million ounce gold Mungana project, in particular, is expected to attract interest after a complex gold rights deal with Kagara spin-out Mungana Gold Mines was unwound in November.

Initial expressions of interest in the North Queensland projects close the middle of next month. Sources say Jake Klein's Evolution Mining - known to be on the hunt for expansion opportunities - has taken a close interest in the project and is considering a bid for the gold project, tipped to be in the region of $50 million.

A spokesman for Evolution said the company would not comment on the speculation.