Martin Jones, Darren Weaver and Steve Sherman were appointed as Joint and Several Voluntary Administrators to Compass Resources Limited (ASX:CMR) and to its wholly owned subsidiary, Compass Mining Pty Limited on 29 January 2009.

Keiran Hutchinson, Paul Campbell-Wilson and Chris Munday of Ernst and Young were appointed Joint and Several Receivers and Managers on 17 February 2009. (Refer to the Creditors circular dated 20 February 2009).

Compass owns and operates mining assets in Northern Territory as well as tenements in New South Wales, Australia and Peru.

The Administrators’ reports to creditors dated 22 April 2009 pursuant to section 439A of the Corporations Act 2001 can be found in the “documents available” section below.

Creditors are recommended to review these reports to understand the current status of the Administration.
At the second meeting of creditors held on 30 April 2009, creditors resolved that CMR enter into a Deed of Company Arrangement  ("DOCA") providing the Deed Adminstrators 12 months to:

• enhance the potential return to unsecured creditors through the sale of the company’s assets and / or a financial re-organisation of the company’s affairs;
• ascertain the size of the creditor pool (particularly as to the quantum of and validity of claims by shareholders who assert they are creditors of Compass Resources Limited); and
• further investigate the affairs of the company and as to the possible claims available to the company.

This Deed of Company Arrangement was executed by the company on 21 May 2009.

It should also be noted that the Receivers and Managers resigned from the Featherweight floating charge on 21 May 2009. The effect of this is that the Administrators now have control over the non-joint venture assets whilst the Receivers remain in control of the Oxide facility at Bachelor and of the Sulphide and Regional joint ventures.

In relation to Compass Mining Pty Limited, as no Deed of Company Arrangement was proposed, creditors resolved to place the company into liquidation.

A variation to the abovementioned CMR DOCA was accepted by creditors at a metting of creditors held on 6 January 2010 which provides for a reconstruction of CMR, subject to various conditions precedent being met or waived by the DOCA Proponent, YA Global.

Creditors whom are yet to do so are requested to lodge Formal Proofs of Debt with our office.

The Deed Administrators/Liquidators will work with the Committees of Inspection formed at the meeting of creditors held on 30 April 2009 (and since updated) with a view to maximising the return from the Companies’ joint venture and non-joint venture assets.

The Committee members’ details are as follows:

Subject to various matters, which are outlined in the Administrators’ reports referred to above, the expected dividend payment schedule is:

• Compass Mining Pty Ltd – Sulphide Joint Venture creditors – 100 cents in the dollar was paid in August 2009;
• Compass Mining Pty Ltd – Oxide Joint Venture creditors – 10 cents paid in August 2009; 10 cents payable on 24 February 2010; further 75 cents in the dollar estimated in June 2010.
• Compass Resources Limited – employee claims – 100 cents in the dollar piad in August 2009; and
• Compass Resources Limited – ordinary unsecured creditors – the likely return is subject to many variables and has been estimated at 32 to 100 cents in the dollar. Dividend timing is subject to the DOCA Proponent clearing the various conditions precedent, with the prospect of a first dividend as early as May 2010.

Creditors and shareholders should continue to visit our website for further updates.