Investors go for silver lining

WA investors are among close to 100 people funding an innovative but ambitious bid to help resurrect failed silver miner Cobar Consolidated Resources.

Cobar, Australia's biggest pure silver producer, went into voluntary administration on March 18 after a failed refinancing.

Administrators from PPB Advisory have since suspended mining at Cobar's $29 million Wonawinta mine in central NSW and sought expressions of interest with a view to either restructuring the company or selling its assets to repay creditors.

The collapse has left share- holders stranded. However, some have not given up hope of recovering their positions.

One, Victoria's Nigel Goh, has marshalled grassroots support for a recapitalisation and re- listing of Cobar under new leadership via a website campaign, which has secured commitments for $264,000 from 92 shareholders and supporters.

Mr Goh said the commitments from "firm believers" were a demonstration of support from minority shareholders for a recapitalisation.

While they are insufficient on their own to revive Cobar, he said company founder and former chief executive Ian Lawrence had agreed to merge the funds into his own proposed rescue via a deed of company arrangement.

Mr Lawrence could not be contacted last night and PPB did not return phone calls.

Mr Goh said his campaign also aimed to highlight concerns around Cobar's sudden collapse. He and other shareholders have been angered by recent disclosures Cobar had been in talks with PPB since November.

"Had we known about this we would have acted differently," Mr Goh said. "If they were concerned enough to contact (PPB), they should have let us know."

However, Cobar had been dogged by processing problems at Wonawinta since it entered production in 2012 and those difficulties were exacerbated by the fall in silver prices.

It admitted in February to a "tight" cash position after finishing the December quarter with an operating cash-flow deficiency of $300,000 despite record silver production of 469,000 ounces.

Its major shareholder, Magna Resources - controlled by Indonesian billionaire Prajogo Pangestu - had provided a $3 million bridging loan in September, repayable by June 30.

Also, Commonwealth Bank, owed $10 million, had deferred scheduled repayments of $2.6 million to March 31.

The West Australian

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