The alarming OZ Minerals implosion appears to be gathering momentum, with the company announcing yesterday that its cash burn rate is actually increasing. Not only that, the struggling miner was also forced to embarrassingly correct the contents of its previous announcement on 4 December, 2008.

In an announcement released to the ASX last night, OZ Minerals noted that it “has had a number of serious expressions of interest to acquire the Martabe project and in respect of joint venture arrangements for Prominent Hill.” One suspects that the prices offered for the assets are not overly generous — generally, entities on the brink of insolvency do not have a significant degree of bargaining power. If you try to pawn a Harry Winston diamond at Cash Converters, you probably won’t receive full “market value”.

The company also noted that its primary debt facility is drawn to $420 million and an attached letter of credit of $25 million (drawn to $15 million). A week ago, OZ Minerals claimed that the same facility had a limit of $525 million. Somehow, in the space of a week, the facility limit has dropped by $80 million. When a company doesn’t know how much their debts are, it usually isn’t a good sign.

OZ Minerals has to refinance the $420 million facility (and a separate $140 million facility) by 29 December, 2008, with an “option to extend the refinancing date to 31 January 2009, subject to the satisfaction of certain conditions.” Worryingly, OZ Minerals confessed that while it is using its “best endeavors” to complete the refinancing by 29 December, the “risk of the company not being able to satisfy the conditions has increased.”

Given that OZ also noted that “completing the refinancing negotiations … by 29 December is now highly unlikely”, there appears to be an increasing likelihood that OZ Minerals may go the way of its predecessor, Pasminco. The company also helpfully noted that “a default in one facility may trigger default of the Company’s other facilities and … convertible bonds.”

If all that news wasn’t bad enough, OZ Minerals also appears to be heading towards insolvency, burning cash in an unprecedented manner. Cash on hand has dropped from $405 million on 30 November to only $279 million on 8 December — a drop of $126 million. At that rate, OZ Minerals is bleeding $15 million per day and will have no cash by Boxing Day. The company blamed “reduced cash flow from lower commodity prices” and accelerated redundancy and closure costs.

The company made no disclosure whether it would be seeking to recover the $8.35 million cash paid in August to former CEO, Owen Hegarty, who was a key architect of the company’s demise. In a delicious irony, the company previously noted that the payment to Hegarty was based on his “outstanding contribution to Oxiana’s growth and success”.